Monthly Archives: October 2005

I wouldn’t join any cult that would have me as a member…

I got the latest issue of the British Humanist Association‘s newsletter in the post today. Weird, since I don’t recall asking for a copy. As a secularist and an atheist, I happen to also believe that data protection is a pretty important thing as well, so whoever decided to pass on my contact details, bad move pal. I very much hope it wasn’t the newly formed Liberal Democrat Humanist and Secularists Society, which I may or may not have contacted at some point (it certainly didn’t include a covering letter from them).

It’s a bizarre newsletter, and reads like a parish magazine. On the left hand column on page one, they’ve included a list of recent opinion polls that suggest that religion is a bit shit. One of the most spurious is a phone in poll of New Statesman readers, 96% of whom are against faith schools. Big surprise there then! Then there’s the frankly surreal article about a humanist families day out in York, where concerned humanist parents got to share horror stories about religious images and propaganda “even at toddler group.” For shame.

A few things really bugged me. For starters, why is “Humanism” presented as a proper noun? Another is a quote from a Concerned Parent about an RE lesson: “In his second RE lesson of the year the RE tacher wrote the word ‘Atheist’ on the board (I guess ‘Humanist’ is a bridge too far) as part of a questionaire about Year 6 children’s beliefs and values…” What the bloody hell is wrong with the term “atheist”?!

It all smacks me as a little cultish, and that’s coming from a subscriber to Liberal Democrat News (bdum, tshhh!). In fact, what it reminded me most of all was the stuff I read at university (doing my, um, religious studies degree), about Auguste Comte and his attempt to replace Christianity with Positivism, which to all intents and purposes resembled another religion. As an atheist, I don’t have any hole in my life that needs filling with something. I don’t need to give my lack of believe a sense of importance by capitalising the first letter in the term commonly used to describe it. All it is is a lack of belief, period.

One thing I never realised was that humanists, as part of their unceasing campaign against idolatry, seem to want to replace the Christian cross with a Humanist stick man, shaped like an H. The only problem with that symbol is it looks like the poor fellow is being tortured on a rack. It’s hardly a step on from crucifiction, is it?

Finally, they helpfully provided me with a flyer of Christmas, sorry, “Winterval” cards for me to send to friends and family. However, unlike the charity cards I usually buy (and always fail to send), the money raised from these cards appear to go towards enriching an individual. Perhaps they should call themselves Materialists, capital “M”?

Tax Commission Response 2: Personal Taxation

My first tax commission response post proved to be a modest success resulting in quite a few useful comments. This post deals with the next section.

The third chapter of the consultation paper (pdf) deals with personal taxation, leaving aside local taxation which is dealt with in the following chapter. Here we deal with the review of the party’s 50p upper rate, personal allowance, capital taxes (in which category the paper includes land value taxation, mutter, grumble…) and, just for fun, briefly explore flat taxes before making it quite clear how preposterous the idea is.

I think it would be unwise to sit here typing some detailed wishlist of how exactly I’d like to see the taxation system reformed. In any case, what is relevant is the party’s response to the taxation system circa 2009, not 2005, and so it is largely irrelevant to go into too much detail. Instead, I thought I would attempt to restrict myself to some broad strokes and see what broad principles I can come up with.

In general, I support the party’s long term overall aim of shifting the burden of taxation off incomes and onto resource use. The way I see that working is through significant increases in environmental taxation (in which I explicitly include land) offset by a combination of tax breaks and direct per capita payments/allowances/dividends (see previous post).

One aspect of this would be to provide a decent alternative to tax credits which are horrifically complicated and, as we have seen, are creating huge problems with fraud, over payments and disincentives. Bundling these together on their own into a single benefit/negative income tax would mean that each individual would have relatively little. But combine this with a proportion of the revenue raised through environmental taxes, and it starts to look more realistic.

I would actually argue that this should be a higher priority than raising personal allowance, which barely benefit the least well off (as the paper itself makes clear, the bottom quintile only pays 3.2% of gross income in income tax – it is the other quintiles that will mainly benefit from raising personal allowance). That isn’t to say that raising personal allowance isn’t desirable – it certainly is – just that it is of secondary importance to providing a simple and adequate safety net.

Lowering the other rates of tax should be a third priority. If we were to radically shift taxes off income however, I would agree that there is probably a case for reducing the upper rate before considering the basic rate. Certainly it would tend to be the very rich who will be stung the most by a proper system of land value taxation and we should at least recognise this. I don’t believe in squeezing the rich until their pips squeak, if nothing else than because they will simply move their pips elsewhere.

With that said however, I don’t see that as being a first term priority; if we introduced a fully fledged land value taxation system overnight it would cause enormous problems and hurt a lot of people simply for attempting to do the best for themselves. In the first term of a Lib Dem government, I don’t see us reaching the stage where shifting the tax burden from higher levels of income tax to LVT and on that basis am fairly comfortable with us sticking with the 50p rate for incomes over £100,000. I can wait.

The paper does have a point however, which is that our current policy means that high incomes are effectively exempt from local income tax. I’ll come onto exactly what I think about LIT in my next post, but in principle I am in favour of local government raising a proportion of its income through income tax and feel that it should be a single rate on all levels of income (a flat tax even! :)). I also agree with the principle that we shouldn’t tax incomes at above 50%.

On that basis, if mean nationwide LIT were to be, say 3.5% (the current party position), then the higher rate for national income tax should be no higher than 46.5%. To the wealthy taxpayer, this will not make a difference; as far as the average tax payer is concerned however, this would be significant as the current LIT system is regressive. Every pound local authorities can’t raise from high income earners is a pound it has to raise from the rest of us.

After dealing with income tax, the paper then goes on to consider capital taxes, specifically on inheritance, capital gains and property.

At the risk of sounding like a stuck record, personally I’d be quite happy to be radical here: introduce LVT, which is a far fairer system of property taxation than council tax or the old rates, abolish inheritance taxation and capital gains (and for that matter, other taxes such as stamp duty), and let a combination of income tax and LVT pick up the slack.

As the paper suggests, inheritance tax has become a voluntary tax for the rich and a headache for the middle classes. I’m no fan of inherited wealth, but don’t think that the one-off nature of inheritance tax particularly solves the problem. In the case of land, it makes far more sense to use an annual tax to ensure that the upper classes can’t simply live off the fat of the land.

I’m open minded about the idea about an “accessions tax” – switching the tax from the giver to the inheritor – but why not simply regard it as income?

I can’t claim to be an expert in capital gains tax (or anything for that matter, but particularly capital gains), and am happy to be persuaded either way.

I’ll go into some of this in more detail when I deal with the next chapter, “decentralisation”.

Revolutionaries

I finally got around to reading Simon Titley‘s article in the latest Liberator about Lib Dem “Maoists” and “Trotskyists” (his argument is that there are two mindsets within the Lib Dems that are roughly analagous to two Marxist factions: Maoists for whom campaigning has become an end in itself and Trotskyists who seek to cause a purifying revolution by engineering splits and adopting a fundamentalist approach to liberalism). It is absolutely spot on; Liberator and/or Simon should do us all a favour and make the article more widely available.

I was particularly tickled by the idea of (the now departed?) Liberal Future being the Trotskyists. I’ve been saying that for years. Simon misses a point here though: a common tactic of Trotskyists is to jump on every passing bandwagon and claim it for their own (hence: student politics, the Anti-Nazi League, Stop the War, all strikes, all asylum extradition case, etc.).

So it is that Mark Oaten, formally one of the most stringent supporters of the Lib Dems forming a permanent coalition with our “social democrat” partners in Labour, suddenly reemerged in 1999 as the defender of the liberalism flame when he founded LF. And at the same time he felt comfortable being the President of the Peel Group, which ostensibly exists to convince people that the Liberal Democrats are the true inheritors of One Nation Conservativism.

It isn’t just Mark; compare the personel of LF, the Peel Group, the Pro-Euro Conservatives and the Yes Campaign and you’ll find a remarkable number of the same names crop up.

I shouldn’t be too churlish about the Trots though; at least I know where they stand. It is the Maoist tendency that is the real problem the Lib Dems need to sort out now. The party needs to rediscover the ideological roots behind community politics (on which note, every Lib Dem should read this); as of 2005 we are about as far from them as we ever have been.

Unnaccountable Ken

Well, that’s three less fags tomorrow.

The Northern Line was a nightmare last night, as it has been to a greater or lesser extent all week; I caught the very last train home before they shut the whole line down and even that was touch and go. And what’s being done about it? Well, the GLA is flexing its muscles and (sharp intake of breath) forcing Ken to write a report.

It sounds pathetic, but it is pretty much all the GLA can do given its puny powers. The way the system has been set up, the GLA has almost no ability to hold the Mayor to account, who in turn has almost no powers, all of which are dependent on the good will of the government.

Livingstone knows this, so it is pretty bloody cheeky of him to suggest, as he did today, that the GLA should be scrapped and replaced by a small sub-committee of council leaders.

Always be suspicious of politicians who bemoan that they aren’t being held to account; in my experience it invariably means that they think they’re out of reach, when in fact the’re out of touch. There is little doubt that the GLA has failed to make any significant impact, but that is how it was set up. And there is no doubt that a group of council leaders would do an even worse job. Apart from the fact that it would be entirely dominated by Labour, council leaders by their very nature go native as soon as they accept the job. They won’t be representing you or I to the Mayor but their political class and the interests of local government.

Once again, Livingstone knows this. He gives the game away by attacking the Lib Dems and Conservatives; surely it is the job of Labour GLAMs to hold him to account as well? London Labour appears to be learning from its Welsh counterpart, attempting to exploit disatisfaction with the system to force through measures to make the system less open, democratic and accountable, and entirely under their thumb. So we have the situation in Wales where legitimate concerns about how the Additional Member System works (allowing people who lose constituency elections to get elected on the list) are being abused to force through a measure (forcing candidates to choose between party list or constituency) which will simply undermine the other political parties while its own Commission had provided it with a solution that would have alleviated everyone’s (legitimate) concerns: change the electoral system.

The Welsh shouldn’t fall for this; Labour’s proposed system means that a system that is already undermined by the closed list system becomes essentially random in any region where there are marginal constituencies.

Londoners shouldn’t be fooled either. However imperfect, and genuine democratic reforms would be welcome, the GLA is the best thing we have to hold the Mayor to account outside of elections. If Livingstone wants it to hold him to account better, he should lobby for it to be given more powers over him. But of course he won’t.

Tax Commission Response 1: Principles

One of the reasons I decided to resume blogging was that the Lib Dems have a number of major policy consultations going on at the moment and I thought this would be a good place to develop my personal responses. Rather than write it all in one go however, I thought it might be better to develop in a number of bite-size chunks which should be both easier to read and write. I’m also hopeful that people will provide me with (constructive) criticism so I can hone it. So, without further ado, here’s my first response to the Taxation Working Group/Tax Commission/Williams Commission (delete as appropriate to your degree of pretension – pdf).

The first major section in the consultation paper is about principles, and it identified four major principles a liberal tax system should feature:

  • Fairness
  • Simplicity
  • Decentralisation
  • Economic efficiency

I have absolutely no problem with the latter three, but I will outline why I feel that “fairness” is unsatisfactory below – including my alternatives – and explain why “sustainability” ought to be a feature of the taxation policy of at least this liberal party.

In *ahem!* fairness to the paper, it does recognise that fairness is an ambiguous term. It is a shame therefore that it chooses to stick with such a vacuous phrase rather than attempt to come up with something more comprehensive. So I will explain my definition of fairness with a view to establishing a more precise term.

For me, for a taxation system to be fair, it has to pass two tests. Firstly, it has to be intergenerationally equitable (which the paper does allude to). We shouldn’t squeeze the wealth-creators of today, simply because we didn’t squeeze the wealth-creators of yesterday enough. I have no objection to my taxes going on basic pensions because we live in a civilised society with a welfare safety net. I have a very major objection to my taxes going on ensuring that pensioners who own large assets that will, in the main, be untaxed until they die, get to keep those assets. Lib Dem policy currently pays lip service to asset-poor, income-poor pensioners, while concentrating entirely on providing subsidies to the asset-rich, income-poor (via the abolition of council tax and free nursing care). This is theft, pure and simple, which has almost nothing to do with social justice: it isn’t the poorest who actually benefit.

Secondly, it has to be environmentally equitable. This concept, which of course goes wider than simple taxation, is based on the premise that everyone is entitled to the same natural resources as everyone else. This is the founding principle behind ideas such as contraction and convergence.

I’m not that fussed about redistribution of wealth; I certainly see the case for allowing wider society to see some return from the private wealth it has helped create but am not sold on the idea that tax-and-benefits are the best way to go about achieving this. What I am sold on is the idea that finite natural resources belong to no-one and that it is one of the roles of the state to ensure that when they are used, the wider society benefits.

Yes, that means land. Land values are not based on the inherent value of the plot itself, but the value society ascribes its location. But it goes much wider, and it should be one of the ‘big ideas’ that informs Lib Dem policy.

The principle of environmental equity also lies at the heart of thinking behind personal carbon allowances/domestic tradable quotas. Instead of taxing carbon usage, everyone is given a carbon allowance based on the total carbon limit of the country (according to international treaties) distributed equally on a per capita basis. People who need more than their “fairshare” simply buy extra credits from people who underspend on the open market. The point is that individuals have a real financial incentive to minimise their carbon usage, not through some crude system of taxation setting, but through a dynamic and flexible market mechanism. This idea should be looked at, both for its own inherent value and for how it could possible be applied in other areas as well as carbon.

In Alaska they take this idea one step further, by providing each citizen an annual dividend based on their share of environmental taxes.

Many people argue against environmental taxation on social justice grounds: poor people are effectively taxed at a higher proportion of their incomes than rich people. That argument can be exaggerated, poverty tends to breed more sustainable living in any case, but a taxation system that is steeped in environmental equity at the very least takes the hard edge off environmental taxation by essentially allotting everyone an “allowance” that they are encouraged to live within.

Environmental equity is not the same thing as sustainability however, although they are linked. If we all consumed the earths resources at the present rate we will face enormous difficulties in the future, whether we do it equitably or not. So sustainability has to be at the heart of our taxation system. That means gradually lowering our consumption of natural resources until we have reached a sustainable rate. It also means not making government dependent on environmental taxation to such a degree that its very purpose has been forgotten.

One could argue that is the present case with, for example, petrol taxes. Set at too low a rate to discourage car at a considerable degree, the revenue raised by them are completely swallowed up by general spending. By behaving in this way, the present government has done enormous harm to our ability to impose environmental taxes in the future, embedding the concept of “stealth taxes” firmly in the public consciousness.

It is disappointing that the paper does not even mention the environment in its section on principles. Indeed, the section on environmental taxation consists of 2 pages of a chapter on “indirect taxation”. In my view, it is indicative of the party’s “green box” approach to environmental policy. The initial, well-intentioned idea of including a special subsection of environmental policy in every chapter of our manifestos has become tokenistic at best and has limited the party’s ability to think about wider environmental issues. We need a green thread to run throughout our policy, shaping our overall approach, not just the occasional nod to Friends of the Earth.

The Left versus Liberalism 2

In my post on Sunday, I forgot to include a fairly important point:

The Left abuses liberalism at is peril. Despite the tendency for socialism to disregard individual liberty, I have no doubt that the majority of left-wingers don’t want to see us end up with a Police State. Yet every time they portray negative caricatures of liberalism, they are doing the right’s job for them and making it increasingly difficult to defend basic human rights.

The last thing we want is to end up with the situation in the US where the word “liberal” has lost all meaning. We aren’t there yet, but a conspiracy of the Nick Cohens and David Blunketts may yet succeed where the William Hagues failed.

Cigarettes and alcohol

Matt Turner hailed my return to blogging by saying:

Champagne on me. But not after 11 if you lot get your way today, I guess.

I presume that by this, he’s referring to the decision by the Lib Dem Parliamentary Party yesterday to “pray” for the government not to introduce the new licensing laws, which have already gone through parliament.

Unfortunately, this is one of those issues that demonstrates quite how arse-over-tit British politics is at the moment. The arch-regulators are defending a liberalising initiative while the liberals (both Lib Dem and Tory varieties) are falling over themselves to oppose it. This is of course a completely random circumstance, which has nothing to do with principle on either side. Labour committed themselves to this move in the 2001 General Election famously via text message as part of their execreble “ruup4it” initiative aimed at targeting the yoof vote. At the time it resulted in no audible objection from the opposition, indeed I’m not aware of a single Lib Dem at the time who thought it was a bad idea.

A few years later, and the Parliamentary Party is falling over itself to decry what they appear to believe will actually lead to the Apocalypse. The big joke is counting the number of Scots MPs who have signed the EDM, despite the fact that they already have relaxed licensing laws and this law doesn’t affect their constituents either way.

Just what exactly is it that we’re terrified of here? I can positively guarantee that in the short term drinking will increase. In the longer term however, do people really believe it is going to lead to an increase of drinking overall? I seem to recall we were promised that would happen when licensing laws changed in the late 80s, yet I have yet to see any evidence of it.

If we have a problem with binge drinking in this country, and I have no doubt that we do, we need a cultural change. I think the government seems to have it basically right in its approach of liberalising hours while cracking down on things like happy hours. It would be nice, for example, if pubs sold non-alcoholic soft drinks at approximately the same level of markup as everything else, instead of blatantly profiteering on them to appease their brewery masters. I’d even accept there is a case for restricting how alcohol is marketed, but that is a debate for another time.

But before I start sounding too generous to our Labour masters, it cannot be said enough that Labour’s support of liberalising drinking hours has nothing to do with principle; they’re not exactly reknowned for relaxing regulation are they? And just when you thought they might finally have grasped that the nanny state does not always know best, they go and say stupid things like this:

Shaun Woodward, Labour MP for St Helens South, today called on Liberal Democrat leader Charles Kennedy to condemn a member of his Lib Dem frontbench team for “irresponsibly pushing a Lib Dem plan that would escalate teenage binge drinking,” after it emerged that the Lib Dems want to lower the legal drinking age to 16.

The lack of self-awareness of all this is breathtaking. Reducing the drinking age would be a highly useful tool for tackling the binge-drinking culture. Allowing 16 year olds to drink beer in pubs rather than sitting huddled in parks fucking their brains with White Lightning is hardly going to make matters worse. The laws restricting under-18s access to alcohol is a mild annoyance that is easily bypassed, as anyone who has ever been under-18 can testify. Reducing the age at which people can buy alcohol will reduce the taboo factor and, in time, play a part in promoting responsible drinking.

Liberalising drinking hours and reducing drinking ages are both part of the same solution which have ended up on opposite sides of the political fence through sheer chance. The fact that the parties and their tabloid masters can’t see this illustrates what an age of confusion we really live in.

Of course, it isn’t just alcohol that politicians are hopelessly confused about. Smoking in public places has already been banned in Scotland and looks set for a near total ban down south. This time Labour are back in their traditional role as the regulators. Sadly, the Lib Dems are calling for them to go even further.

Don’t get me wrong: I’m a non-smoker and find the habit disgusting. I could be convinced by a law that banned smoking, but still allowed a minority of pubs to allow it, possibly through some kind of licensing system.

What I’m not convinced by is that it is a priority. Smoking is on the decline anyway, and I’m not convinced that five more years of market forces won’t achieve pretty much the same thing as another bureaucratic law. I’m also not convinced that the health affects are that great (and don’t start on pub workers – the vast majority of people who work in a pub choose to do so because of their lifestyle, and only work there a limited amount of time anyway).

According to this report, the average punter absorbs the equivalent of 1 cigarette in a pub every three hours. My first reaction to this is, is that all? Compare that to this statistic:

A 20-minute journey on the Northern line through central London had the same effect as smoking a cigarette.

That makes me a 3-a-day man, even if I don’t go near a pub. Why are the politicians concerned about the air quality in pubs when the average Londoner is being slowly killed by toxins on their way to work every single day? Why? Because NGOs like ASH get paid to lobby politicians about cigarettes, and nobody is there to lobby on behalf of tube commuters. For all this talk about corrupt tobacco companies disrupting the democratic process, the other side seems to have just as much of a corrupt effect.

It’s not that I’m against regulations per se, it’s that politicians seem to be hitting the wrong targets, consistently, and seemingly at random without any kind of overall, systematic approach. This is not rule of law, it is arbitrary nit-picking.

The Left versus Liberalism

Nick Cohen has written another of his hack pieces in the Observer today about how wicked “liberals” are blaming the Iraq War for terrorist atrocities, and how this proves they’re a dreadful shower, etc. As Matt points out, this contrasts with his pre-Iraq War pieces when he condemned “liberals” for supporting a war in Iraq, warning that it would make us a target for terrorists.

I’ve always found it curious how the Left Commentariat tend to use the term “liberal” to mean ostensibly progressive but deeply mistaken people. Cohen isn’t the only one, indeed, I first became conscious of it in the writings of his Observer colleague Cristina Odone. Tony Blair was famously known during his earlier days as “The Liberal” by his then-Shadow Cabinet colleagues. Paddy Ashdown took this to mean he was someone with whom he could do business, misunderstanding that this was less a description of Blair’s views as a casual (if affectionate) insult. Indeed, the latest issue of Progress has an article on how the “liberal-left” is its own worst enemy, citing *ahem* (you will forgive my mild amusement) George Galloway, Ken Livingstone and in an historical tangeant, Stanley and Beatrice Webb, as examples. When you are reduced to describing the Webbs as liberals, your argument really is beginning to look shaky.

That article highlights all too acutely that the real problem lies in shaky socialist thought, not liberalism. Cohen, Odone and Progress would never betray the left’s party line by admitting it, but it is nonetheless the case. The faulty collectivist logic that leads Galloway into the arms of Saddam Hussain and Livingstone into the arms of Yusuf al-Qaradawi is the same collectivist logic that directs Blair and Christopher Hitchens into the arms of George Bush and Nick Cohen and Hitchens into the arms of Ahmed Challabi.

Far from being The Liberal, Blair proved early on in his leadership that he was a member of the left. The battle over Clause 4 may well have been a fight between Old and New Labour, but the new version is unmistakably socialist. What liberal would be comfortable being a member of a party which defines itself as:

“…a democratic socialist party. It believes that by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential and for all of us a community in which power, wealth and opportunity are in the hands of the many, not the few. Where the rights we enjoy reflect the duties we owe. And where we live together, freely, in a spirit of solidarity, tolerance and respect.”

There is no room individual endeavour there. The one reference to “freedom” is included almost as an afterthought, and with the caveat that no dissent from “solidarity, tolerance and respect” will be tolerated (George Orwell eat your heart out).

New Labour’s headlong rush towards Anti-Social Behaviour Orders, detention orders, a national database, CC-TV all chimes entirely with Clause 4. Reading Clause 4 ten years later, it almost seems like this is exactly what Blair planned all along. The only antidote to it is liberalism, not a “purer” version of socialism. Cohen can blame liberals all he likes, but the reality is he is defending an ideology that has reached a dead end.

UPDATE: I forgot to include this.