international

Australian Liberal leader defends capitalism's achievements during red carpet trip to London

The Leader of Australia's Liberal Party, Malcolm Turnbull, has been in London this week. He has met all of the key figures in David Cameron's Conservative Party, including an hour long meeting with David Cameron, George Osborne and William Hague. There is probably no closer relationship between any two conservative parties in the world and it is now the UK Tories - on the edge of power - who are repaying the enormous help that the Australian Liberals gave them when them when John Howard was Prime Minister.

Mr Turnbull, trailing in opinion polls back home, gave a major speech during his visit to the Policy Exchange think tank. It was standing room only on Tuesday night to hear the Liberal leader, wearing R M Williams boots, give a stout defence of free enterprise. He began by noting that Australian Prime Minister, Kevin Rudd, had vowed to put government at the centre of the economy.

Mr Turnbull listed the achievements of capitalism before warning against the dangers of government being at the centre of economic life. He argued that capitalism had had a transformational effect on world poverty over the last thirty years and government intervention had been at the heart of the last year's banking crisis:

"Throughout the 20th century, the strongest and most successful, most vibrant, most interesting societies were those infused with the principles of political, economic and religious freedom. The best-performing economies were those where citizens were given the maximum incentive, under the rule of law, to make the choices they considered best for themselves and their families. This is not a matter of ideology of faith. It is an unassailable fact of history. The Berlin Wall did not fall by accident. It fell because millions of people living in societies crippled by the failures of excessive government control yearned for the freedoms they saw in the West. The socialisation of the means of production and distribution had manifestly failed them, and they aspired to something better...

There have been few periods in human history where we have witnessed, in the space of a single generation, such enormous economic advances across so much of the world. Many hundreds of millions of people have been lifted out of poverty, as great and ancient societies such as India and even the world’s largest Communist state, the People’s Republic of China, opened their economies to global trade, accepting that free market has a great deal to offer, the principles of the free market has a great deal to offer. The freest societies have proved themselves prosperous, creative and dynamic, while societies which restrict freedom have been paralysed by social and economic failure – the most extreme contemporary example being North Korea – but history abounds with others. The fruits of greater economic freedom have been spectacular – in the 20 years to 2004 the percentage of the world’s poor living on $1 a day or less halved. That is a quantum leap by any measure, on any conceivable index of human happiness. And it is a record of achievement, a measure of progress, not to be demeaned or dismissed in the scramble to find scapegoats for last year’s collapse of confidence in global financial markets...

What has happened in this past year does not as Kevin Rudd has claimed demonstrate that the ”neo-liberal experiment of the last thirty years has failed”. Now I should note at the outset the absurdity of declaring a failure of capitalism because of a crisis in one industry sector alone and of course there will be libraries built to fill the books written on the global financial crisis and its causes. But we should note that it was a crisis in the banking sector which had it origins in the United States property market, where an asset bubble was fuelled by imprudent, sub-prime lending to people whom banks would not normally have rated as creditworthy.  In other words, loans were being made to people whose best, if not only, prospect of repaying the loan was out of the sale or refinancing of the house, which in turn depended on the value of the house rising materially. Far from being a product of unbridled ”free market extremism,” as Mr Rudd is fond to say, this irresponsible lending could not have occurred had it not been for the fact that the United States Government, in the shape of Fannie Mae and Freddie Mac, was actually underwriting two thirds of the entire mortgage market.."

Download a PDF of Malcolm Turnbull's full address.

During Q&A Mr Turnbull expressed his "admiration" for David Cameron and said that he admired the way he had broadened conservatism's appeal.

He confirmed that he was still a republican but did not see Australia choosing to alter its constitutional status until the present Queen's death.  That will be a "watershed moment", he said.

Could the British Conservatives have better friends than Australia's Liberals?

The Australian Liberals have sent the above email to their supporters in Australia urging them to encourage their British friends to register to vote as part of the Conservatives' dontleaveyourvoteathome project.  Thank you Mr Turnbull!

Australian Liberals copy British Tories' 'baby in debt' campaign

The new Australian campaign:

The original British campaign:

The Australian Liberals are also circulating a Kevin Rudd credit card:

James McGrath's very recent move to Canberra will only see more such campaign exchanges.

German CDU joins attack on Gordon Brown's unfunded fiscal stimulus (as Angela Merkel becomes 'Frau Nein')

The British Conservative Party was delighted yesterday when Germany's left-leaning finance minister, Peer Steinbruck, used an interview with Newsweek to describe Gordon Brown's large fiscal stimulus as "crass Keynesianism" and "breathtaking".  In today's Independent, Shadow Chancellor George Osborne writes:

"How ironic. In the very same week that Gordon Brown stood up in Parliament and claimed that he was saving the world, the world answered back. In a matter of just a few days, the German Finance Minister described Mr Brown's reckless borrowing as "crass" and "depressing", international currency markets sent the pound to a new low against the euro, and it has become clear that the British bank recapitalisation plan is the most expensive in Europe."

Senior Labour figures attempted to suggest that Herr Steinbruck's intervention was all about internal German politics but his view has been backed overnight by the CDU half of Berlin's Grand Coalition.  Steffen Kampeter, who speaks on economic policy for Chancellor Angela Merkel's CDU party, described moves to raise debt as "a failure of Labour policy".  The BBC reports Herr Kampeter as saying:

"Peer Steinbruck's comments have nothing whatsoever to do with internal German politics, as Prime Minister Brown has suggested. The tremendous amount of debt being offered by Britain shows a complete failure of Labour policy. In questioning the British government's approach, Peer Steinbruck is exactly expressing the views of the German Grand Coalition. After years of lecturing us on how we need to share in the gains of uncontrolled financial markets, the Labour politicians can't now expect us to share in its losses. The tremendous amount of debt being offered by Britain shows a complete failure of Labour policy."

Angela Merkel is supportive of a fiscal stimulus across the EU but insists, like Britain's Conservatives, that it be fully-funded.  Rosemary Righter in The Times points to German history to explain the caution:

"Germans are profoundly averse to debt and, since the collapse of the currency in the Weimar Republic in the 1920s, they have remained terrified of inflation. Nor do they trust pump-priming; they tried that after the 1973 oil shock, they point out, and all it did was drive up public debt. Their reaction to emergency spending by government is to save against the day when the bills come due. More debt today, they reckon, means higher taxes tomorrow. A Chancellor who keeps her powder dry is just their cup of chocolate."

The Guardian has labelled Angela Merkel 'Frau Nein' after she adopted 'go-it-alone' positions on a range of issues.  In addition to her attitude to borrowing she "opposes any common EU policy that could be seen as confrontational towards Russia"; "has led resistance to the European commission's carbon trading proposals"; and "has frustrated Washington, London and Paris by resisting the imposition of meaningful economic sanctions on Iran over its nuclear programme".

What America's Republicans can import from Britain's Tories

By Tim Montgomerie, Editor of ConservativeHome.com and a speechwriter to two former Tory leaders.

A number of US commentators - including Fred Barnes, David Brooks and Mike Gerson - have suggested that the Republicans should study the renaissance of Britain's Tories as they plot their own way back to popularity.  That's good advice because - despite recent setbacks - the Conservatives are likely to be Britain's next government.  Although there's much to learn the study needs to be careful and learn from the mistakes as well as the more evident successes.  Jonathan Freedland wrote an article for the New York Times that - if absorbed - would have sent the GOP in a very unbalanced direction.  Here are eight observations on what the GOP should learn from David Cameron's Conservatives:

(1) Patiently build for the long-term
This is probably the most important lesson - and one made by The Spectator's James Forsyth in another very useful look at this subject.  It may be difficult to hear this but Americans are unlikely to turn against Barack Obama quickly.  The Conservatives wasted our first four years in opposition - believing that voters would soon reject Tony Blair and we consequently failed to begin the work of serious policy renewal. There was too much tactics, too little strategy.

All over the world we see voters re-electing incumbents at the first time of asking.  Think Tony Blair, George W Bush, Jacques Chirac, Gerhard Schroeder, Stephen Harper, John Howard.  Republicans don't need to complete their rethink quickly.  Take time.  Don't rush to conclusions.  Debate thoroughly.  Undertake serious - academically respectable - policy making.  And don't throw your best long-term prospects (eg Bobby Jindal) into the line of fire too quickly, as we did with William Hague.

(2) Aim for greater breadth of appeal...
David Cameron's change agenda can be summarised by four 'C's:

• Candidates: He has relentlessly promoted women candidates and candidates from minority backgrounds (and with some success).
• Conservation: A famous visit to a Norwegian glacier - complete with huskies - was the most memorable moment in David Cameron's conversion of his party to the cause of combating climate change.  Voters were encouraged to vote blue (the Tories' colour) and 'go green'.  Conservatives have been most successful electorally when they've focused on local, practical green measures rather than 'change the world' environmentalism.
• Compassion: In echoes of George W Bush's 2000 campaign David Cameron has presented himself as a gentler conservative, concerned about the many poorer communities failed by Labour's big state. The first visit of his leadership was to a project working with disadvantaged youths and his first announcement was a major commission into the causes of persistent poverty.
• Civil liberties: Once the party of authoritarianism the Conservatives have about-turned and become a vigorous opponent of Labour's plans for a national ID card and for an extended period of detention without charge.  A more respectful view of same-sex relationships has also bought David Cameron greater opportunity to make the case for traditional marriage.

All of these changes have helped the Conservative Party connect with the many wealthier British voters that had deserted it.

(3) ...BUT not a different narrowness
Under Michael Howard - David Cameron's predecessor as Tory leader - the party had become too narrow; talking only of crime, immigration, tax and Britain's relationship with Europe.  David Cameron has rightly added to the Conservative appeal by addressing quality of life issues (the 'CCCC' agenda referred to above).  But - although necessary - it left the Conservative Party almost as unbalanced in the summer of 2007 as it was under Michael Howard in 2005.  More core Tory Party members were unhappy with David Cameron in September 2007 than were happy.  Only when the Tory leadership started simultaneously talking about the familiar and 'the change' messages was David Cameron able to unite the core vote and the new members of his coalition*.

Australian John Howard's rule of thumb was to spend as much time keeping his base happy as wooing new voters.  David Cameron neglected the first half of the task until a year ago.

(4) Neutralise the left-leaning media
In our earliest days of opposition, the Tories just seemed to get angry - attacking the left-liberal media and retreating under the comfort blanket of the Daily Mail and Telegraph (Fox News and Talk Radio would be the nearest US equivalents).

David Cameron realised that an election victory would be very difficult if the BBC and The Guardian (as the journal of the ideas class, it is Britain's most important newspaper) remained hostile.  He has courted both extensively - not just giving them constant exclusives but also addressing 'their issues' - 'the CCCC quartet'.  Labour reacted furiously when a recent Guardian leader entertained the mere possibility that its readers should consider voting Tory.

Centre right parties squeezed by economic crisis

The economic crisis is hurting centre right parties as Dan Hannan predicted it would:

"In the current climate, what people see are fat-cat bankers being bailed out by hard-pressed taxpayers. And, instead of objecting to the bail-out, they object to the bankers and, by extension, to the free market culture they are thought to embody. The world over, Left-of-Centre parties are benefiting: Obama in the US, Brown here."

Since the onset of the crisis John McCain has fallen significantly behind Barack Obama.

The possibility of Prime Minister Stephen Harper winning a majority in Canada have also declined.  The opposition Liberals have moved up in recent polls.

It's not just an anti-incumbent effect either.

In the UK Labour's opinion poll disadvantage has been halved.  20% behind six weeks ago the Tory lead is now just 10%.  Labour now lead the Tories on some measures economic trust.

New Zealand's Labour Prime Minister Helen Clark has also stormed back in the polls.  With just four weeks to go until polling day one poll has the Nationals down 7% to 40.5% and the governing Labour Party up a point to 37.5%.  If repeated in November 8th's General Election that would produce a hung parliament.

UK Tories deepen relations with centre right parties in Europe

David Cameron met Angela Merkel yesterday (library photograph) in the latest example of the increasing cooperation between UK Tories and continental, centre right parties.

The FT reports that the UK Tory leader and German Chancellor agreed to resist protectionism as a response to international economic turmoil.  The newspaper also suggests that despite differences on the EPP and Lisbon, Mrs Merkel has unfrozen relations with Mr Cameron since it has become increasingly likely that he'll be Britain's next Prime Minister:

"Ms Merkel’s allies say she remains suspicious of Mr Cameron’s intentions in Europe and fear that he could lead Britain into isolation, but she is said to admire his “green conservative” outlook and is intrigued by the way he has revived his party."

Beneath the high profile meetings between the party leaders are a number of formal joint working groups (formally established last September) with Tory MPs sat on policy committees with representatives of the German CDU and French UMP.