I'm off to get married...

...and so this blog will now go 'on hiatus' (as they say in TV) for a week and a half. Never fear, though - the ranting and the gnashing of teeth (and some history and policy stuff) will recommence in the week beginning Monday 11 June.

In the meantime, I leave you with the words of the singer, songwriter and actor Nick Cave, who's been married for over a decade now:

Getting married, for me, was the best thing I ever did. I was suddenly beset with an immense sense of release, that we have something more important than our separate selves, and that is the marriage. There's immense happiness that can come from working towards that.

Wish me luck! And see you soon - you, the readers, have powered the blog to stratospheric (well, good) readership figures this month... Easily the highest of its eighteen-month run. Thanks to all of you, and au revoir - for now.

How big is the UK's output gap?

So what is the British economy's 'output gap'?

Sounds arcane, doesn't it? One of those economics stories you turn over before you get to the comment pages? Something that's for statistical pedants and economic technocrats?

Nothing could be further from the truth.

The 'output gap', as any A-Level economist can tell you, is basically the difference between an economy's potential - where it should be on its long term growth trends - and the reality. Any layman would have the impression that, right now, that gap is massive. We might not be as wealthy as we were in 2007 any time soon - until after the next election, possibly - so there must be a massive gap, right? Well, not if you listen to some of the more gloomy prognostications, which paradoxically argue that permanent harm might have been done to the UK's economy, lowering the output gap between where we are and where we might be to a very small number indeed.

This matters. If the gap is large, we can inflate, spend, borrow and party. If it's small, there's no point - and a broad measure of austerity really is a good idea.

The outgoing Labour government thought that the output gap was pretty wide (scroll down to page twenty in the report if you want a quick look). Now the new Office for Budget Responsibility has looked back over the last thirty years (PDF) and concluded that the economy was operating above capacity in the early 2000s, meaning that the output gap can't be as wide as it looks. If we've tumbled from unsustainable heights, so the argument goes, we should maybe get used to thinking of our trend rate of growth as rather slower than we imagined. That makes the 'output gap' between our wealth and our potential wealth that bit smaller.

What do I think? Well, it's a statistical artefact. Different ways of looking at it - in accounting for wages, credit and inflation - will make the output gap look different (above). The output gap is highly unstable, and might change rather more slowly (PDF) than we used to think. And the effects of commodity-hungry developing countries may make it smaller, by stoking world inflation and lowering non-inflationary growth, or bigger, by fuelling world demand. Certainly we may have over-estimated our room for manouevre - if the structure of the economy has taken a permanent hit.

But there's no need to think that the output gap has shrunk as small as two per cent - the Treasury's very, very cautious view. The respected Institute for Fiscal Studies think it's five per cent; the EU four per cent. The growth outlook may well be weak. But we've been here before - in despair during 1929-32, 1975-76 and 1992-94 - before a vigorous new growth spurt came along and proved the naysayers and doomsters wrong. Perhaps pessimism can be overdone.

But we can take this lesson at least: something as boring as the nature of obscure numbers is vital to the health of our nation, polity and economy.

Technical? Yes. Important? You bet.

British governance: more success stories

Simon Jenkins, in this month's Prospect magazine, points out something that I've been writing about here for the last couple of weeks: the way in which we're richer, better housed, and probably better governed than we've ever been. As he puts it (registration required):

Britain's GDP today (adjusted for inflation) is roughtly four times what it was in 1952 [at the time of the Coronation]. Its welfare state, though straining at the edges, is incomparably more extensive. Its health and education are better. Brtain is not just more prosperous for virtually all its citizens, it is more tolerant, generous, caring, creative and outward-looking. It is almost certainly more fun. 

Quite right too... And while I'm about it, here are some more success stories of British governance:

Right-to-roam. The legal presumption is now that ramblers and walkers are allowed to roam pretty much wherever they please in the British countryside. Naysayers said it couldn't work. It'd be challenged in the courts. It'd be a tangle. Government would have to retreat. The result of the Countryside and Rights of Way Act 2000? More people accessing the great outdoors, more easily, as of right.

Long-distance national trails. Another Labour Government, that of 1945-51, passed the National Parks and Access to the Countryside Act of 1949. This not only set up our National Parks, but also the fifteen long-distance National Trails that snake across the English and Welsh countryside, from the South West Coast Path (above) to Hadrian's Wall. They're wonderful examples of community power in action, building on the defiance of inter-war campaigners who insisted that access to the land belonged to the people as citizens.

Children's Commissioners. One group that's often not listened to in the legislative process is children. Who will benefit cuts hurt the most? Often children, as their parents are forced back into work, as their child tax credits are cut, and as school access in England becomes ever more competitive and chaotic. The Welsh Government's 2000-2001 decision to appoint an advocate for children, and the Scots and English following suit, has been universally welcomed as providing a new voice and a new vision for public policy.

Cynical? Not me. There's lot that can be done, and lots to be done.

Making it easier to fire people: no answer at all

The Report on Employment Law commissioned by the Government, and delivered by Adrian Beecroft (above) has just been published. It's split the government between free-market Conservatives and Lib Dems (such as the Business Secretary Vince Cable) that Beecroft has since decried as 'socialists'. A great deal of political blood has been shed and will be shed about this - mainly on the Coalition side. You can read the whole thing here (PDF), if you've got a spare hour or so.

But I just emitted a weary sigh. No-one listens to economic historians, of course. But if they did, any second-year undergraduate could immedately come up with three reasons why the report's just wrong. 

Number one, there's a massive great hole where demand should be. No amount of mucking about with any labour market laws (or, indeed, planning laws) is going to change that situation any time soon. And as Vince Cable pointed out, Beecroft's proposals will do nothing at all to boost demand - especially consumer demand - and may even make things worse.

Number two, Britain doesn't have a labour productivity problem. It stands in the world top twenty in any labour flexibility league table you care to look at. It's just not true that inflexible labour markets are holding the UK back, a key reason why unemployment hasn't risen as much in this recession as in previous downturns. Honda in Swindon reacted to the recession by going on short-time working and shutting down for two months at a time, not by laying everyone off. Britain probably did have a labour productivity problem in the 1970s (though it was more evident in services than manufacturing). Today? Nope.

Number three, and most important, whoever said that making it easier to hire and fire people made the labour market more flexible and more efficient in any case? There is a mountain of evidence that making labour more expensive can lead to demand gains in the short term and efficiency gains in the long run, since wage rises mean that employers will economise on employment and invest in plant, machinery and new techniques (this also helps to explain why productivity and wages can fall at the same time). Ask the German car industry.

Beecroft Report? In the bin, please.

Prime Ministers need to have a life

Some of the criticism of David Cameron these days - and believe me, I'm one of the critics - is spectacularly wrong-headed.

Right-wing critics of the Prime Minister are developing a significant narrative that he's basically too wedded to being normal. That's right, you read that correctly. He has preserved the idea of a 'date night' with his wife (above). He plays Fruit Ninja on his iPad. He likes to watch a DVD and play snooker.

Wow. I'm scandalised. And one day the Prime Minister's rather cavalier acquaintance with policy detail may do him enormous damage. But I would have said that having a nap and having a glass of wine with dinner was more likely to help him do his job, not hinder him.

Mrs Thatcher, who famously said she needed only four hours sleep a night, has done us a great disservice in this regard. We have forgotten the entreaties of Denis Healey, Defence Secretary between 1964 and 1970 and Chancellor between 1974 and 1979: that politicians must have a 'hinterland'. In Healey's case it was photography. Harold Macmillan famously read Trollope, and was probably all the better a national leader for it. Attlee loved the cricket. Churchill's ultimately successful wartime Premiership reads like one long boozathon compared to this lot.

'Dave' should ignore the Daily Mail and continue to live his life as if it means more than his Ministerial Red Boxes. The office will be gone soon: his wife and children won't. And he'll be a better Prime Minister with a bit of chillaxing thrown in anyway.

I would prefer our leaders to have a hinterland, get some rest and to have a life. Wouldn't you?

Britain's government: some success stories

It won't have escaped the more eagle-eyed among you that I've been blogging for The Independent again, this time pointing out that Britain is pretty well governed, right near the top of international league tables for clean government and economic efficiency. This gives the lie to the Conservative picture of an 'over-regulated' country, but that's an argument for another day.

Lots of public comments at the bottom of my piece took issue with me. 'Ha, is this article a joke?' someone wrote. And you can see what they mean. But I want to shoot right back.

Lest I be berated as some Martyn-Lewis style 'good news' ideologue, I'd be the first to say that many initiatives have bitten the dust. I've written books about it, don't you know. Avoiding devaluation in 1964-67? Er, that went well. Industrial relations reform in 1971-72? What a disaster. The European Exchange Rate mechanism? Oops. The Iraq War? Erm. The world is complex. Governments make mistakes. Sometimes they're just wrong.

But I'd stick to my original point in The Indy. Have a look at the following success stories and tell me that British governance is all bad:

The Clean Air Acts. London in particular was choking by the 1950s. Deaths from respiratory diseases hit new highs. Huge smogs of industrial pollution enveloped the capital. But now? A sequence of Clean Air Acts and their successors have decreed smokeless zones, high chimneys and industrial zoning. Oh, you can breathe the air in your city can you? Thank Whitehall and Westminster.


Staying out of the Euro. Ed Balls and Gordon Brown have their fans. They have many more detractors. No-one can say that all that stuff about 'abolishing boom and bust' was't hugely ill-advised. But you know what? They looked at the Euro and they said, 'we don't rule it out for all time, but Britain's economy isn't in synch with the core of the Euro-zone, and we'll sit it out for now'. If only Greek politicians had been so wise.

Cleaner beaches. I'm writing about this at the moment, so don't let me bore you. But Britain's beaches (above) were disgusting between the 1950s and the 1970s. They were some of the dirtiest in the world. Successive campaigns eventually forced London to come into line with European standards, and indeed in most cases to better them. Inspection and testing regimes are some of the tighest in the world, especially since the 1990s. Today, 97 per cent of UK waters met minimum EU standards. Only 66 per cent did in 1988.

The Montreal Protocol. CFCs from aerosols and fridges threaten to fry the world in the 1970s and 1980s. The Thatcher Government (to its great credit) helped to lead an internal coalition that signed the Montreal Protocol reducing their use in 1987, which led to enormous reductions in the use of ozone-depleting chemicals and to a gradual healing of the hole in the ozone layer.

So, you can breathe; you have a job; excrement doesn't float past your head on holiday; you haven't got skin cancer. Thank your governments, citizens.

Three good reasons why Germany should help Greece

There's a currency crisis going on, apparently. Well. Who knew? Regular readers, you'll know that I've long prophesied that Greece can and will default, and at the beginning of the year I said there was a 50/ 50 chance that Greece would also leave the Euro. Make that about 75 to 80 per cent now.

But whatever happens, northern Europeans should put their current fury about Greek corruption, 'laziness' and 'lack of competitiveness' to one side. Why? Well, it's an absurd caricature, for one thing, born partly of understandable annoyance among Germans when they see their national name and flag insulted by a country they've poured money into.

But - and this is the most important point - in it's in all our self-interest that Greece doesn't collapse altogether. Even if it leaves the Euro - and at this late hour, it could still be pulled back from the brink by a big enough cash injection - we're all going to have to meet its debts.

Why? Well, consider these three points.

1. All our banks are exposed. Who do you think is going to lose money if Greece leaves and defaults from its debts at the same time? Er, you. Through your banks. Through your governments' loans to the IMF. If you're a citizen of a Euro-area country, through the loans you've made via the European Central Bank. You're never going to see a cent of that again if the Greeks leave in a disorderly or a chaotic manner. Want to lose your shirt? Go ahead, force the Greeks into penury and then push them out. See just how much good it'll do you. They're not going to pay much anyway, it's true. But this way, they'll pay nothing.

2. Greece (and the other so-called PIGs - Portugal and Ireland, but increasingly Spain as the 'S' too) have been artificially devaluing the German currency. Do you wonder at all those washing machines, dishwashers and cars pouring out of Germany? Ask yourself why they're so competitive? Well, one of the reasons is that the Euro is worth much, much less than the Deutschmark would be. If the Euro area breaks up, a new German currency will shoot up, and the so-called 'export miracle' all those Bavarian businessmen boast about all the time will dissolve. A new D-Mark? Sure, be our guest - make everyone else's day.

3. We can all give ourselves a great big holiday. As Paul Krugman has been pointing out, what the Greeks, Irish, Spanish and Portuguese need is a great big shot of competitiveness, without being able to devalue their currencies. So let's have a big party. So let's print more cash. Let's have some inflation. Let's take more time off - especially in Germany. Northern Europeans should get their feet up while patting themselves on the back for being such good Europeans, if that's not anatomically impossible.

So there are three reasons there no-one should gloat about the crisis that's unfolding. In any case, who thinks that structural economic reform will occur with most the Euro-zone's periphery flat on its economic back? Hands up... Oh, I can't see any.

Greece is probably going to leave. But all the people who've been riding on its back won't be cheering for very long.

'Work harder': the worst political line in the world

William Hague (above) is a good Minister. Clever, articulate, hard-working and insightful, he would make a good Prime Minister. Place on one side his disastrous reign as the Conservatives' actual leader, and his CV is just about as good as you get.

So why on earth did he just say 'work harder' when asked about the reasons for the continuing recession? 

So now, as Zoe Williams has it today in The Guardian, government ministers say: 'it's all your fault, voters and businesses'. So... leave aside the banking crisis, which then became a sovereign debt crisis, which then transmogrified into a crisis of the European single currency, which now threatens to bring down the European banking system.

It's all your fault. Do that extra hour's overtime. Get up an hour earlier.

This is just about the worst political line I've ever heard. Not only does it make no sense - it's demonstrably untrue - but it's the political equivalent of vomiting on citizens' collective carpets. Other Ministers have even compounded the fault. Instead of saying 'oh yes, that was an unguarded remark, sorry', they've piled in behind the Foreign Secretary.

What next? Strangling puppies on prime time TV? No wonder Ed Miliband chose to go with this issue at Prime Minister's Questions yesterday.

Though this approach has a historical precedent. Remember Normal Lamont and his ill-fated 'je ne regrette rien' remark at the Newbury by-election of spring 1993? That didn't chime with the voters either. At a moment when, for the first time, more voters say they'd like a Miliband-led Labour government than a Cameron-led Tory one, you'd think senior politicians would be more cautious. Not that caution is this government's watchword.

Why do they do it? I think our leaders sometimes think such talk makes them look hard. Worldly. Practical. Tough. Actually, it creates a very dangerous impression, and one with which Labour is making hay: that they're 'out of touch'.

Memo to Ministers: don't blame citizens. Blame bankers, the Euro (more on this tomorrow), 'world economic conditions' and the credit drought. A better slogan than 'work harder' would be: 'go out and borrow and spend'. But that wouldn't fit in with the wider prescription for our demand-strapped economy, now would it?

Should Ed Miliband start dreaming about Downing Street?

With Britain's Labour Party now polling at levels they haven't dreamed of since the 2001-2005 Parliament, Ed Miliband must have to pinch himself to believe his luck. The Government's been so busy smashing itself in the face with a mallet that it hasn't had time to focus its energies on attacking Labour, which has now surged to a double-digit lead in the opinion polls.

So should Ed Miliband start sizing up the mythical Downing Street curtains? Probably not.

Part of the reason for this is obvious from the Government's present tragi-comic travails. Ed's looking like a winner at the moment - maybe. But when the Conservatives and Lib Dems come to their senses and start questioning his policies and his records? It'll get harder. The Prime Minister is even less popular than Ed at the moment - but the Leader of the Opposition's ratings are dire too. As the pollster Peter Kellner has pointed out, the public still blames Labour (rightly or wrongly) for the present economic crisis. In that situation, and with a bit of growth in 2013-15, the most likely outcome is still a Conservative victory.


Even so, the Conservatives are going to have a tough time winning the next election outright. In that situation, Ed might well end up leader of the biggest party in the Commons - and Prime Minister. The main reason for this is the collapse in the Lib Dem vote. It's becoming increasingly clear that most of those switchers are moving over to Labour, who can rely on a good quarter or more of the 2010 Lib Dems to vote for Red Ed next time. In that situation, they're unlikely to get less than 35-36% of the vote. On my reckoning, and given a smaller Commons of 600 after seat redistribution, that'll give Labour 267 seats to the Conservatives' 293 (assuming a bit of uplift on their last performance, to 39%). Cameron back in No. 10. Again. But with no majority. Again. Coalition. Again. Unhappy marriage. Again. And that's on the new boundaries. With the Lib Dems clearly signalling that they'll be happy to scupper boundary reform if they don't get their way on an elected House of Lords, fighting on the old boundaries will make Labour's task much, much easier. If we give Labour 36% of the vote on the old boundaries, and the Conservatives 40%, that gives Labour 295 seats and the Conservatives (less the Speaker) 305. Who wants to bet on a Labour-Lib Dem coalition then? Yes, me too. 

It'll be 1970 all over again, when unloved and vote-repelling Ted Heath ended up in the top job because voters just didn't believe Harold Wilson any more. Or 2012 in France, another election that has seen a rather geeky technocrat ascend to unlikely heights.

It's happened before. It might not happen again. But it's become possible. And we couldn't have said that until a few weeks ago.

Child benefit and the chaos of unintended consequences

It may not have escaped the attention of regular readers that the present writer has a book out (cough, cough, looks embarrassed).

It's about the unintended consequences of complexity - the manner in which governments 'puzzle', as well as 'power', and get tied up in loads of unexpected tradeoffs as they inch forwards into the quicksands of policy and an uncertain world.

Well, Child Benefit changes are a good example. Launched (chaotically) at a Conservative Conference to show that 'we're all in it together', at their heart they have the relatively good intention of making sure that upper middle-class earners pay for some of the deficit reduction that would have come whoever was in power.

But it swiftly became crystal clear that just withdrawing the benefit from all higher rate taxpayers - taking away a payment has always been a flat-rate payment to all mothers - was riddled with inconsistencies. It meant that a household might have £80,000 coming in, but still get the benefit as both earners were just under the threshold, whereas the £50,000 household next door would lose the lot.

So the Chancellor (above) has 'softened' his reforms.You only start to lose the benefit when you earn £50,000. And then there's a 'taper', as it runs out, to £60,000.

So far, so explicable. But what he's done is a classic 'complexity trap' - tying himself up in knots as he tries to correct a problem he caused in the first place. This is not to impute malign motives to anyone involved - simply to say that it's a recurrent dilemma as to how complicated, or how straightforward, policy should be.

Where does one start? Well, for a start the new 'taper' doesn't get rid of the fact that it's one person's income that we're looking at - so households with more money coming in might still keep Child Benefit, while those less well-off next door will lose it. So the fundamental problem hasn't gone away. The changes are expensive to administer - perhaps costing up to £100m. If you want to go into more detail, and the Institute of Chartered Accountants has published a report on the whole mess today, you can look at the problems up close and personal here. Have a think about just this one on its own: what happens if a couple breaks up, and the children are with the mother? She'll have to find out how much the father earns for at least one tax year. How will she do it? Answers on a postcard, because no-one else knows.

It's a foul-up. All governments have them - witness the 10p tax rate debacle under Gordon Brown. Though they're worse when an administration goes for 'breakneck government' - trying to change the public services all at once. It's rumoured that Mr Osborne thought that he might be able to row back from this one once the public finances improved. With the European outlook darkening markedly, there's no chance of that now.

So I think you'll see immediately what I think this means for Universal Credit - the Government's 'joined-up' welfare system 'fit for the twenty first century'. It's going to be an expensive disaster on both procurement and political grounds, and that's a prediction you can take away, laminate and wait for the storm clouds to roll up.

Complexity is a tough master. It makes fools of everyone in the end. That's why William Beveridge recommended flat-rate, as-of-right benefits in the first place. That's why the Government wants to return to a much simpler pension system.

It's just a pity that no-one told Mr Osborne when he was doodling his notes on Child Benefit.

Moderate US Republicans: where have they all gone?

While we've been navel-gazing in the UK about our local election results (well, all right then - while I have been busy reading the runes) far more serious electoral news has been emerging on the other side of the Atlantic Ocean.

I've written here before about the dearth of moderate Republican conservatives in the US Senate. But now they've taken another blow, with the defeat of Senator Richard Lugar (above) of Indiana by a right-wing opponent who basically condemned him for working with Democrats. You know - actually governing, compromising, bargaining, treating other people with respect, conducting politics with dignity, that sort of thing. Now Indiana should probably be moved from 'safe Republican' to 'likely Republican' in terms of November's elections.

Well done, Republicans. They've done this before, of course, dominating Sharron Angle in Nevada and Christine O'Donnell in Delaware in 2010 - losing two seats they might have taken. So they have form in this respect.

But much more seriously, the entire constitution is being threatened by these right-wing insurgencies. The founding fathers - whose name Tea Party activists take so breathtakingly in vain - never intended that there should be two parties in the state. While the two parties that did emerge were great big-and-baggy coalitions, the system Washington and Adams built could just about rub along. But now? What are Americans going to do if - for instance - Republicans start vetoing every single Obama judicial appointment on principle? It's become a constitutional crisis just waiting to happen.

I don't think I would have voted for Senator Lugar. He's a bit right-wing for me. But he has lots of sensible ideas over the years. He's worked for arms control for over two decades, and he's the sponsor of the (bi-partisan) Nunn-Lugar Act which helped to fund the dismantling of Soviet-era weapons across the Eastern bloc. And he grew in my eyes by refusing to take on his Tea Party opponents on their own terms.

Without politicians like Lugar, the US Government is threatened with near-permanent gridlock. In 2007 27 'moderate' Republicans, who actually wanted to do crazy things like pass legislation, sat in the Senate. After primary defeats, retirements and deaths, at most six will be returned to Congress in November.

As sage observers have noted, even if the Democrats in the House started to vote tax cuts for millionaires, Republicans would oppose even that on the basis that they don't go far enough. If the Republicans in the Senate follow suit, I fear that nothing will get done in Washington - ever, ever again. 

Want the Americans to pull the rest of us out of economic crisis? Don't hold your breath.

Local elections: small earthquake, some Liberal Democrats hurt

So. Britain's local elections.

Last year I set Labour a high bar that they completely and utterly failued to clear - leading the present writer to conclude that they had pretty much no chance of forming a majority government at the next General Election.

This time? They did rather better. They took more than 800 council seats from their rivals, held on to Glasgow (where the Scottish National Party foolishly announced that they might take control) and - most importantly - started to appeal to voters in the South of England. They took Harlow, where until 2010 they (rather uncertainly) held the Parliamentary seat - and that's exactly the sort of place, and precisely the sort of voters, they need to win back if they are truly to pose as a national force. The man and woman in the Harlow Water Gardens (above) are the most important people in British politics right now, and they seem willing to give Labour at least a hearing. Let's not get carried away with this progress, though. It was more of a B+ than an A. Labour's vote share, at 38 per cent, was okay, but no triumph. They were coming from a low base. Many of their gains were made in their historic strongholds, especially Wales. They failed to prise Boris Johnson's fingers off the London mayoralty - though they did better than they thought they were going to.

Labour in Opposition? Well. There was nothing on the scale of the Conservative triumph of 1968, which was the first indication at the ballot box that the Tories were indeed going to win the next General Election. Or the torrent of voters that rained down on John Major's derided and dishevelled administration in 1993 and 1994. So. Labour: not bad. Must try harder.

The Conservatives felt, for the first time, the hot wind of public disapproval. Six weeks or so of Keystone Cops-style sliding around on a sequence of unlikely (and often pasty-shaped) banana skins did them no good. But much, much more importantly, Britain is back in recession - and shows little sign of getting back to the prosperity of 2007 any time soon. Everything else - and especially the siren Tory voices urging the Prime Minister to turn rightwards - is just fluffy (or not-so-fluffy) distraction.

And the Liberal Democrats? Oh dear, oh dear, oh dear. It was no wonder that Nick Clegg looked sad. Said he was sad. Practically radiated sadness. He must be realising that he has to change something - shake up almost anything - or his party are going to get absolutely obliterated come the main event in 2015 (if the Coalition makes it that far). His party's losses again amounted to nearly half the seats they were defending. True, they often did better where they have sitting MPs - in Eastleigh, say, or in Portsmouth. At this rate of attrition, the party will cease to exist at local grassroots level by the end of the decade. That's just no way to be going on. It's no wonder that the Lib Dems are rumoured to be considering an early exit from Coalition, well before the next election - and that they're willing to abandon Lords reform in return for the Tories delaying boundary changes that will hurt them the most. If they're to survive at all, they're going to need both of those eventualities to ride to their rescue. Last year I said that the party might end up meeting in a phonebox. I'm very much afraid that it's going to be a shoebox. Or a matchbox. Which is a pity, really.

English Higher Education: Head in Hands, Heads in Sand

Well, I haven't written about English Higher Education for a while, have I? Let's have another go round the block marked 'Ministers don't know what they're doing' then, shall we?

Every day that goes by shows ever more clearly that the present system cannot work, and will not work. You heard it here first, folks. Expensive, bureaucratic, giving the Government more and more powers to interefere and muck about with their so-called 'market', it's now just a total mess. It'll have to be completely revisited in the next Parliament, though much damage will probably have been done by then.

What are the latest signs of this disarray? Well, the Government has now expanded the pool of high-tariff places that will not be subject to the numbers cap in 2013/14. Anyone with at least ABB in their A-Levels can now pretty much go wherever they want. Put aside the fact this encourages all the expansion in institutions that perceive themselves to be 'research-intensive' rather than 'teaching-intensive'. Ignore the fact that there are only so many students in any case, and they're all pretty much in the part of the sector they wanted to go to anyway. No. The major consequence of this is that the Government is slashing back the 'core and margin' policy they only embarked upon a year ago - whereby low-cost providers (mostly FE colleges) can have more and more of the places. So a 'strategy' we were told would constrain costs just a few months ago is now in the bin. Way to go, guys - as our American friends would say.

This at a time when the Government's claim to be enhancing social mobility has basically been laughed out of court, as universities try to cut bursaries and increase fee waivers to reduce the immediate 'up front' cost of each course - in response to a policy that's now been shredded. And when it looks ever more likely that the sector (and indeed, all public services) will be on the end of another round of very large public spending cuts in 2014-17.

Oh, and by the way, just as a little coda... The ultimate insanity of the UK's new tuition fees 'policies' (if they can be dignified with this word) is that if you live in Northern Ireland, or you have a Northern Ireland or Irish grandparent, you can get an Irish passport and then get a free Higher Education in Scotland. Another great big loophole just opened up in a set of arrangements that look more and more like a tissue-thin set of compromises that might not even last out this administration, let alone the next.

If there was a little symbol I could draw for putting my head in my hands, I'd draw it.

The following will have to suffice for now: :-(

Local elections: expect the opposite of last year

This year's local elections across England, Wales and Northern Ireland are going to be different to last year's. Last year, Labour looked like it had done okay, winning hundreds of council seats across the country. Regular readers will remember, however, that your correspondent was very unimpressed, and held the party to a high standard that they totally and utterly flunked.

This year, Labour's going to look like it's had a drubbing. Boris is going to re-elected as Mayor of London (barring a major, major upset), and the Scottish National Party might be able to take over Glasgow City Council (above).

Both debacles will make Labour look weak. But actually, and especially after the successes of the last few weeks (when the Government has looked not only nasty, but incompetent with it) they're set to have an 'under the radar' triumph. They're probably going to win many hundreds of council seats. Polling gurus reckon that Labour should make 700 gains on Thursday night. In fact, they might do even better than that. Straws in the wind - local by-elections, for instance - and sub-national polls (for instance one in Wales) suggest that Ed Miliband's people are doing very well. They'll be helped by defecting Lib Dems, of course. But throw in a general fall in the Conservative vote, already noticeable at local by-election level (mainly caused by voter defections to UKIP and probable stay-at-home abstentions) and you're looking at a lot of gains.

This stuff matters. It creates momentum. It fosters an impression of where we're going politically. Perhaps most importantly, council election victories create armies of campaigners for the 'ground war' to come in 2014 and 2015. If Labour can marshall its forces properly, its retreat in London and Glasgow will only mask the intriguingly rapid incoming of the red tide.

When Prime Ministers attack

Yesterday's House of Commons statement by the Prime Minister (above) was fascinating. David Cameron raged (above). He shouted. He growled. He snarled. His hands shook. He smacked his folder down. He waved his arms about. He insulted older members of the House. He patronised female members of the House (not that this was anything new). He went red. He went redder.

He's making a bit of a habit of all this. When challenged, he can lose his rag. He's been steadily alienating Members on all sides when they say or do things he doesn't like - men and women who, he will discover, have long, long, long memories. They won't forgive. They won't forget. When he needs them, they'll disappear.

But that's beside the point, really. All PMs alienate people - though Mr Cameron should note that the best among our leaders do not shout, insult and berate. Mr Wilson and Mrs Thatcher were rather scrupulous in their personal dealings. Mr Blair hated to sack people. No-one could be more solicitous of secretaries' and doormen's welfare and feelings than The Lady, except perhaps Mr Callaghan and Mr Major.

In fact, what's so intriguing is that we're looking through a little window onto the soul of our leader. Historians are only just beginning to uncover the hidden emotional and psycho-social histories of the premiership, and fascinating they are too. Winston Churchill's depression. Anthony Eden's mania and breakdown. Harold Macmillan's outward laconic and Edwardian poise - matched in private only by his teeth-grinding, crying and weeping over his wife's affair with another Conservative MP. Harold Wilson's (perhaps sometimes justified) paranoia. Mrs T's drinking. Gordon Brown's titanic and bullying eruptions.

Mr Cameron is unusual in that he's letting us see into his soul. The thing to note? What we're seeing isn't that edifying.