The Lib Dems should back a state investment bank to regain the initiative on the economy

Vince Cable MP addressing a Liberal Democrat c...

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One major concern the public has is with the economy. One major problem them Lib Dems have is with the economy as the leadership changed its mind on the situation and what needed to happen to provide the security the population needed. The Lib Dems have been seen as sell-outs to the Tories as a result. The Lib Dems need a new angle on the economy to get the initiative back.

Vince Cable was first to propose to nationalise the UK’s failing banks. He subsequently called on them to lend to small and medium sized enterprises. He now finds himself frustrated that they are saying they are not getting the funds they need while the banks say they are lending to those who are asking for it. Perhaps the Lib Dems could learn from the Germans who have had a very good system in place which they are continually rewarded for.

KFW was founded in 1948, a bank to promote the industrial rebuilding of a country wrecked by war. It now operates in a straightforward, linear fashion. Corporate customers apply to their own, private bank for financing. The bank then forwards the application to KFW which then assesses the project for the “fit” with its key strategic targets to promote SMEs, entrepreneurialism, clean-technology, nationally important infrastructure projects and international project finance. The bank can then re-finance the loan at favourable rates because of its government guarantee and its access not only to the capital markets but also to federal budgets. Its board is partly made up of politicians but its management team are banking executives (see the Daily Telegraph’s write up here)

This has not gone unnoticed with Lord Mandelson backing a state investment bank. A state-run bank would stand the private finance initiative on its head. Instead of getting the private sector to raise expensive finance, build assets and lease them to the public sector, a new public sector entity – a national investment bank – would raise cheap finance to procure growth enhancing assets, then lease or sell them back to the private sector. 

Such an initiative would be complementary to efforts to cut the deficit, which must be serviced out of future taxes. By expanding commercial borrowing it would also sustain aggregate demand and boost growth in the long-term. The important distinction is not whether investment is public or private, but whether it generates revenues and is self-financing, or is a charge on future tax-payers.

So it is pleasing to see Vince Cable proposing a National Infrastructure Bank as this could help the government square the circle of reducing a deficit which burdens future tax payers while supporting growth. A further state investment bank would also give alleviate people’s fears about jobs and growth and therefore let them see the Lib Dems as a force for good in the Coalition.

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In Praise of the Ecologist: Finding stengths in Chris Huhne


The environmental agenda is one which both the Lib Dems and the Tories would like to lay claim to in the Coalition so the ecologist finding strengths in Chris Huhne is a positive sign:

But actually, from a purely environmental perspective, it’s hard to stay too depressed because (whisper it) there are some signs that this government may really be serious about its green agenda. The simple presence of the redoubtable Chris Huhne at DECC is cheering for a start: this is a serious and intelligent politician who is showing encouraging signs of knowing how to maneuvre and fight to get what his department wants. DECC didn’t do nearly as badly in the cuts as some had expected; he preserved the scheme to build a Carbon Capture and Storage plant, albeit in a smaller form; he has reiterated, over and over again, his support for renewable energy, and he recently set out the Green Deal in a landmark speech to the London School of Economics.

Notes for Activists: Learning from behavioural science to increase the Lib Dem vote


Nudge Theory may have found its way into the government but there are lessons we can learn for activists on the doorstep to increase our campaigning effectiveness. Psychological experiments into political campaigning have shown that about eighty percent of what we’ve done in the past doesn’t work  so what should we be doing?

Behavioural science experiments have shown the following:

  • The most effective direct mail might not be the most eye-catching in the mailbox but the least conspicuous. It is better to have an anonymous, chatty volunteer remind voters it’s Election Day than a recorded message from the Party Leader or Jay-Z.
  • The most winnable voters may be soft supporters of the opposition, not the voters who polls say are undecided (“Undecided” may just be another word for “unlikely to vote”).
  • Voters respond better to everyone-is-doing-it messages emphasizing high turnout
  • Traditional telephone calls have no effect at all on voter turn out
  • Peer pressure as a motivational tool

See article here.

In Praise of the Daily Mail: Finding strengths in Nick Clegg

There was a time when papers like the Guardian and the Independent wrote articles in support of Mr Clegg. Things seem to have changed. Today the Daily Mail tells us how difficult Clegg is finding things right now but comes to his defense in another article here. This seems to a pattern as the right wing media have come to his defense in recent weeks, whether this is welcome praise or not, it is worth highlighting what some consider to be his strengths right now

Without the leadership of Clegg, there would not be a Coalition, nor would it have been possible to win support for the Government’s economic policy. Britain would be in danger of losing international confidence, as Ireland has done.

No one can know whether the student fees issue will be a prelude to a split within the Lib Dems, or whether they will be able to maintain their unity in the Coalition.

What is clear is that the enemies of the Coalition, inside and outside the Lib Dems, see Clegg as the Minister to attack. He is at the heart of the storm. I hope he will survive it.

Notes for activists: Increasing voter turnout


A simple technique to increase voter turnout for those living alone:

In one behavioural science experiment they called voters and asked them 3 questions:

  • Around what time do you expect you will head to the polls on Tuesday?
  • Where do you expect you will be coming from when you head to the polls on Tuesday?
  • What do you think you will be doing before you head out to the polls?

The researchers did not care what voters’ answers were to the questions, only whether they had any. He was testing a psychological concept known as “implementation intentions,” which suggests that people are more likely to perform an action if they have already visualized doing it.

The phone calls had little impact on multiple-voter households, but for those living alone, the effect was a 10 percentage points increase in turnout. The reason is hypothesised to be that making plans is a collaborative activity; spouses and roommates already talk through issues like child care as a condition of voting. For those who live alone, rehearsing their Election Day routine with a stranger helped them make a plan.

Could the Lib Dems become the party of happiness?

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Image by Laurie Pink via Flickr

David Cameron has recently tried to get the idea of measuring the populations well-being off the ground in the UK with the ONS now collecting data in various areas in an attempt at what some are calling a ‘happiness index’. The first official happiness index will be published in 2012.  Yet could this open up a big opportunity for the Lib Dems to be seen as the party of happiness?

The concept of gross national happiness was developed in an attempt to define an indicator that measures quality of life or social progress in more holistic and psychological terms than gross domestic product. Once this starts to be measured it will begin to throw up some interesting policy dilemmas which would be good for any party to be ‘ahead of the curve’.

Self-determination theory may offer us some useful ways of understanding how to develop policy in an attempt to improve people’s sense of well-being. It would say that at the root of human aspiration, there are three core psychological needs: autonomy, competence, and relatedness (the need for social connection and intimacy).

The Huffington Post uses this as a way of understanding what people need to do; satisfy your three core needs and you’ll be happy. It states that you can have all the external success in the world, but you’ll remain unfulfilled if even one of the core needs is unaddressed. The catch is that you can only satisfy these needs through intrinsic motivation. You seek no payoff, only the inherent interest of the activity itself — for learning, fun, growth. Do it just to do it and you’ll get an internal reward in the form of the lasting version of happiness, gratification.

However, currently we are taught to go for the payoff. Everything has to get us somewhere socially, financially, emotionally. The Government has a new Behavioural Insight Team, popularly called the nudge unit (for using nudge theory). Yet have a look at its aims and it actively seeks to encourage citizens to behave in social ways relying on market incentives.

So the Conservative Party is going down the road of trying to measure happiness while using incentives which may reduce people’s ability/motivation to increase their own happiness. External rewards aren’t a payoff but an endless come-on that only delivers the need for more payoffs.

If local councils could find policies which promote the 3 fundamental needs then they may find their areas being seen as happier places to live. Imagine a report that states that Lib Dem councils have improved the happiness of the people in their areas. Now people would vote for that.

First signs of improvements in the Lib Dems


If you ask a Lib Dem member or voter how they will know when the Lib Dems are doing as they wanted or imagined, they often describe a final result, a finish line as it were. They describe a situation in which lots of things will be better. When they describe such a final result they may become aware of the contrast between that good situation and the current not-so-good situation, which may demotivate them to get involved or vote Lib Dem. So as someone who talks to people about politics and the Lib Dems what can we do to try and change this?

One type of question can be the first-sign-of-improvement question which focuses their attention on the small details, on what they should be looking for, what is achievable. This moves people’s focus away from the demotivating and overwhelming end result. The question is something like this:

What will be the first small sign that will tell you that things are starting to move in the right direction?

This will give Lib Dem members, activists, and supporters a different way to talk about the Lib Dems as well as valuable information about what people want from them in their new situation. It gives small steps to change which lead to larger changes overall. We can ask this of the local party, local council, MP or national party. This is a solutions focus question.

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