Daily Archives: 6 December 2005

Meeting the Challenge 4/2: Fairness

FAIRNESS: what should we do to reduce inequalities in health, education and prosperity?

Full paper.

This is in many ways one of the weakest sections of the paper, taking a very narrow view of fairness with none of the deliberation of different definitions that was found in the Tax Commission and I have already made my comments there. So instead, and because I’m massively behind schedule on this project, I thought I’d just run through the specific questions:

4.3.4 This is in some ways an inevitable result of focusing on the most vulnerable groups in society, and needing to target limited resources and priorities – as any political party has to do. A significant question for us, then, is whether this policy package is adequate to address the barriers to freedom and social mobility identified in Chapter 2, many of which derive from social class – poor education, poor health standards, low pay. Do we believe the balance of our antipoverty strategies, focused on pensioners and the causes of poverty, is appropriate?

Firstly, I would seriously question that the Lib Dems have a strategy to reduce pensioner poverty. Notwithstanding any changes that will no doubt now be made as a result of the Turner Report, the fact remains that the Lib Dem’s commitment to poor pensioners was limited to the over-75s and those people whose circumstances meant that they did not make full contributions in their lifetime to warrent a full pension (in the form of the introduction of a Citizen’s Pension). While I don’t dismiss either of these, our strategy to pensioners was aimed squarely at attracting relatively affluent pensioners; notwithstanding the paperwork, our policies don’t make poor pensioners any better off than they would be if they we in full receipt of the Pension’s Credit – it is pensioners whose assets exclude them from this who benefited from our policies. Add to that our commitment to scrap council tax (again, only affecting pensioners who are relatively well off – poor pensioners get CT benefit) and free personal care (irrelevant if you don’t have assets), and what emerges is a sop to the middle classes. Until the party’s leadership is willing to acknowledge this, we aren’t going to get anywhere.

I have a counter question to the working group: why should a first term Lib Dem government target resources towards asset-rich, cash-poor pensioners where there is a more urgent need to help asset-poor, cash-poor pensioners?

As for the causes of poverty, I’m not convinced that party has much to say on this either. Preventative health and quality education is fine and dandy, but what are we saying about housing, communities, families? What are we doing about giving people a stake in their future? Labour’s baby bonds may be a meaningless sop, but they wouldn’t be if instead of scrapping them we were committed to backing them up with real resources.

Do we need more attention to the short-term problems faced by adults living in poverty? If so, does this require more attention to policy on benefits, wages, or other areas of policy?

Interesting to note that this question doesn’t bringe up the possibility of tax cuts. Yet a lot of the real problem here would appear to be that people find themselves having to choose between benefits and getting a job (in fairness, I think Vince Cable gets this and expect to see some real progress in this area).

Is existing policy adequate to address the growing pensions crisis?

The Turner Review and David Laws’ response is a strong basis for progress on this and I’m not proposing to go into it now. But this isn’t the real crisis. The crisis is that the country’s assets are being bought up by investors and families which is leading to a situation where we are creating a new underclass whose only crime was not to be in the right time and the right place in the 80s and 90s. That’s where your long term poverty is going to come from in the next century if we do nothing about it. The privileged, landed-class may be a lot larger than it was 200 years ago, but it is still stopping social mobility.

4.3.5 Underlying all this is the tension between freedom and equality touched on above in para 4.3.1. How unequal a society are we prepared to tolerate? What liberties should we be curtailing – for example,though a higher tax rate for high earners – to reduce inequalities that restrict others’ freedom?

I think I’ve already dealt with this in my Tax Commission proposals.

Was the reduction in the total burden of local taxation we envisaged adequate to address the impacts of moving from Council Tax to Local Income Tax?

Again, covered (but I thought we wanted to increase the overall burden of local taxation; we just wanted it to be fairer?).

4.3.6 A fair society is also one in which discrimination on the basis of race, religion, gender, sexual orientation or disability is not tolerated. The current government has a reasonably good record in trying to make such forms of discrimination illegal, but there is still a long way to go – for example, in ending inequalities in pay between men and women (women’s hourly pay rates are 82% of those of men). Perhaps most pressingly, overt racism seems to be on the rise following the series of terrorist incidents since 2001. How can we deal with these problems and create a society which is genuinely a fair one for all its members?

This is big concept stuff! I have to say, I think we’ve got much of this covered already. We have anti-discrimination laws on the basis of race, sex, disability status and now age. Labour are generally good at this sort of thing, even if they do go to far as they have done with religious hatred.

Ultimately, you can’t legislate to make people love each other. All you can do is create opportunities for all, promote enlightenment values and reduce anxieties and ignorance wherever they can be found. But there is no easy answer; indeed, I’m not convinced this paper should be overly concerned at finding one.

Losing the plot

For once, I find myself agreeing with John Prescott. For once, I find myself understanding John Prescott:

A lot of ruddy builders shout about planning, but find it more profitable to hold on to land in tremendous land banks. They are on to a damn good thing. They blame planning, but I wish they would tell us how much land they have got in the bank.

You needed to put £5,000 as a deposit 20 years ago and now it is about £35,000. If you look right across the country with prices in the last couple of years, it has now got to be impossible for people to buy.

Mr Prescott added: “What we are now finding is that people who could properly buy a home before are completely eliminated from that process. Where are they turning to? Local authority housing lists.

But what is Prezza’s solution? Planning Gain Supplement. The problem with this system was summarised by Andrew Duffield in a letter in the Times on Monday:

The proposed windfall tax on planning permissions (report, Dec 2) is fatally flawed and will deliver the exact reverse of the affordable housing the Chancellor seeks.
Postwar Labour governments have made several failed attempts to legislate in this area. The planning gain supplement proposed in Kate Barker?s report to the Bank of England?s Monetary Policy Commission on the UK housing supply crisis will no doubt suffer the same fate and exacerbate the problem of unaffordable homes.

Landowners take a much longer view than government cares to. Faced with such an impost, they will simply withhold the sale of development land. A shortage of suitable sites will ensue, and the price of land will rise. Housing will become less affordable.

As it happens, Mark Braund was in the Guardian this weekend to promote his new book. Both he and Andrew advocate land value taxation (and you will be unsurprised to know that I agree with them). Apart from anything else, even if you reject the more strident claims of Georgists, there is surely no argument that it has got to be better than PGS and Council Tax?

Vince Cable‘s response to the Government’s proposals thus leave a little to be desired:

“If a planning gain supplement is to be introduced it must be done at a local level. The Chancellor must not be allowed to simply use revenue from this tax to bolster Treasury coffers. The supplement must be set locally and collected locally to deliver improvements to local infrastructure.

“It is right in principle that the community should derive benefit where property developers see a large increase in the capital value of land, not as a result of their own efforts but due to the granting of planning permission.

“However the Treasury must be careful with how it frames the legislation the track record of similar schemes in the past is far from impressive. Legislation has previously had to be abandoned because it has been ill thought out.

“If the Chancellor gets the application wrong it could slowdown new house building and the development of much needed affordable housing. Consultation with the property industry on the structure of tax is vital to ensure compliance.”

In short, yes to PGS, but it has to be a nice Lib Dem PGS, not a nasty Gordon Brown PGS? What tosh! The problem with PGS is PGS, not implementation. Why is Vince being so cagey when the Lib Dems, at least in this limited area, are already signed up to site value rating (a localised version of LVT)?

This is the problem with Cable and Kennedy’s “Three Bears” strategy. Nothing too far to the left of Labour or to the right – just squarely in the middle, only nicer. The wheels are starting to come off and the Tax Commission hasn’t even written its report yet.

Christian brainwashing? Yes please!

Jonathan Calder beats me to it and does a much better write up on Polly Toynbee‘s article on Narnia today than I could hope to aspire.

I planned to merely say this: Toynbee here falls for the same inconsistency and double standard that a lot of atheist/humanist writers fall for (I write as an atheist myself): that of getting apopleptic about Christian didactism while being infinitely forgiveable of the secular version.

I don’t have the slightest problem with bombarding children with religious allegory, even dodgy ones. Anything that encourages kids to think about ethics is surely a good thing? Reading the Narnia Chronicles when I was 8 didn’t make me into a rabid Christian, but I have no doubt that it helped my development.

Another thing: surely anything that encourages Christians in Bible Belt America to think about their religion in terms of allegory and move away from the paucity of believing in the literal truth of the Bible has got to be a good thing? That is the first step towards taking on a more nuanced view of Christianity that isn’t threatened by scientific facts of life such as evolution. Muscular Christianity or not, the concept that a book can contain truth and yet not be literally true is an acid we ought to be quite comfortable to have burning away inside of the minds of Redneck America.