Tag Archives: intergenerational-equity

Russell Brand and the Emperor’s new thong

Russell Brand holds aloft the cover to his issue of the New StatesmanSo, Russell Brand’s interview on Newsnight and New Statesman editorial has caused an awful lot of brouhaha, and I’d kind of like to join in. I find a lot of what he has to say on the subject of voting not only wrong but actually quite offensive. His assertion that my grandparents’ and great-grandparents’ generation were “conned” in fighting for the vote is simply factually not true, unless you consider the welfare state, universal education and a national health service to be a “con” (as far as I’m aware, Russell Brand is not an Ayn Rand aficionado).

The fact that we’ve just lived through the deepest recession since the Great Depression and not seen the level of starvation and grinding poverty that destroyed people’s lives in the 1930s suggests that, for the most part, democracy has actually worked out quite well for most people in a lot of ways. Combine that with Brand’s obvious hypocrisy (opting out of the political system he despises while very much opting into the capitalist system which he claims to equally hate – yet very much profits from) and casual misogyny, and you have a pretty loathsome end product. Instead of miscrediting Billy Connelly with the quote “don’t vote, it encourages them,” just once I would have liked to see him engqge with Gandhi’s equally miscredited “be the change you want to see in the world” – it is all very well calling for a revolution of the mind, but if that’s where it stays, what is the point?

Here’s the thing though. Siding against Russell Brand means siding with an awful lot of rather distasteful people. I might not agree with his prescription, but I agree with a lot of the sentiment and many of the people whose pious critiques of Brand’s position I’ve read over the last few days have been the very people who I think are part of the problem.

Piously telling Russell Brand that he’s wrong is one thing, but if you’re one of the people who subscribes to the view that the current voting system is fine and dandy, and that your political party should be slavishly attempting to fix itself in the centre ground, or jump on whichever populist bandwagon which might get you the next short term voting fix, then you actually have less credibility than he has. Voting and political engagement can make a difference, but in spite of such people not because of them. Most people in the political establishment are not democrats, but rather technocrats who spend their time actively seeking ways to shut down public debate, not open it up.

And voting, especially for young people, is a bit of a prisoner’s dilemma. For individuals, voting is a cost in time and effort. It’s only if a critical mass of a certain demographic start voting that they are likely to make an impact, and no-one knows in advance how many people it will take (especially with our broken and random single member plurality voting system). If like me you voted in 2010 in the hope that we were on the verge of seeing a fundamental shift in voting patterns, you can understand why it is hard for people get their hopes up that they are a part of something bigger.

The benefits of democracy are indirect, long term and fundamentally collective. It is ironic that a self-proclaimed lefty such as Russell Brand can’t get beyond the very individualist and consumerist mindset that he claims to want a cultural revolution to overthrow, but he is by no means alone. And the political establishment has done nothing but encourage precisely this mindset over the past 35 years. The fact that Brand and so many other wannabe revolutionaries are creatures of this atomisation of society may suggest that their ideas are not so radical after all, but it ought to give the establishment pause for thought because it has the potential to cause them a lot of problems.

Young people aren’t voting. More than that, it seems to me that an entire swathe of young people are effectively opting out. It’s no surprise as they are being systematically shut out of the economic system. Mainstream politicians are obsessed with forcing them to run in ever decreasing circles trying to find jobs which don’t exist, only to find that even if they succeed in that they will have none of the economic security that their parent’s generation take for granted. When I was turning 30, I was in a minority in my peer group of people who didn’t own their own house (admittedly, most of whom were dependent on their parents’ for support); now I don’t personally know anyone under 30 who owns property. I can however tell you tales of people forced to move out of their over-crowded HMO because the landlord insisted on putting the rent up by an exponential amount and the stress that substandard housing and long term unemployment is causing people.

All of this amounts to a massive deal for our society, yet if you take a gander on Twitter, you won’t find many mainstream politicians talking about it at all. Instead they are determinedly issuing blandishments with hashtags such as #ForHardWorkingPeople, #StrongerEconomy or #FairerSociety and, urgh, #coalicious.

In Paul Mason’s response to Russell Brand’s intervention, he predicts that we will see increasing social unrest over the next decade. It isn’t a new prediction; the BBC produced a documentary 10 years ago saying broadly the same thing. Such dire forecasts don’t have to be 100% correct to be a cause for concern and it certainly looks to me as if we are starting to see signs that it could be happening.

So, ultimately, it isn’t enough to dismiss Russell Brand’s views. If an idiot child starts proclaiming that the emperor has no clothes, expending so much energy to point out that, in fact, he is wearing an extremely snug bright pink thong is to badly miss the point.

Regeneration: intergenerational Justice for the next generation

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On Thursday I attended the Foyles launch of Regeneration, a collection of essays focusing on the theme of intergenerational equity. A number of my more talented past colleagues from the Yes campaign we’re involved in the book (one or two are even brave enough to admit this past affiliation in their biographies!), so I thought I should show up in support. Having got back, I thought I would write a short post, not to criticise a book I haven’t read (indeed I encourage people here to read it, which is free to download after all), but to pose some questions which the discussion at the launch provoked and which I hope to come back to later.

Long term readers will know that this has been one of my pet subjects; indeed in 2006 I contributed a chapter on the subject for a pamphlet. It is interesting to read that chapter five and a half years later, with all it’s dire predictions of the housing market collapsing and the credit bubble bursting. Thank goodness that never happened, eh?

The main frame of this new book is to look at intergenerational justice from the perspective of the cohort born from 1979 onwards, the so-called Thatcher generation. I can understand why they chose this frame, but I’m not entirely sure it is that helpful.

For one thing, it airbrushes my cohort out of existence entirely. The baby boom is generally held to have ended in 1964, ten years before I was born. While the nifty rewrite of history would have you believe that no one (apart from St Vince) predicted that the economic model was actually working, particularly for young people, before the crunch, the fact is that there were indeed growing anxieties being expressed by people my age who were struggling to understand how they were possibly going to get onto the housing ladder. The economic crisis may have lead to the creation of a “jilted generation” but it is at least worth spending a few minutes considering the experience of the cohort before them and ask why precisely their concerns failed to capture the public imagination. It will be interesting to see how the book tackles that, if at all.

But my main concern with the 1979 boundary is that it invites a narrative which I worry is spectacularly unhelpful – and indeed one which has been actively encouraged by many baby boomers. That is, that by treating the rise to power of one Margaret Hilda Thatcher as a sort of Year Zero, the reflexive response is to think along the lines of merely having to get back to those halcyon days before she took charge.

Let’s be clear about one thing: Thatcher did not emerge in a vacuum. She took control, and had a particular agenda, precisely because of the abject failure of the left in the 1970s. For pretty much a decade before, successive governments of different hues attempted to appease the trade union movement and failed. Now, you can argue until you are blue in the face that the trade unions were all a bunch of misunderstood pussycats, and you can certainly argue that Thatcher was the wrong solution, but you can’t claim that the left had done a remotely good job at inspiring popular solidarity during that period.

Nor would I argue that the problems were limited to the 70s. However great an achievement the post-war consensus was, the fact is that it was funded off the back of foreign debt (of a model which we should perhaps be revisiting) and extremely high income taxes. Adam Ramsey suggested at the launch that universalism as failed to unite the middle and working classes; I would argue that one of the reasons it failed was because it was paid for by people’s hard work. Perhaps because of the Cold War and anxiety about communism, the notion of funding universal welfare from wealth was never really broached since the Lloyd George’s plans for a land value tax burned two ashes on the fields of the First World War.

In short, what I’m suggesting is that perhaps the post war consensus was not quite the rose garden that those baby boomers who benefited from it before tearing it to shreds would have us believe, and that if we analyse everything purely within the frame of how we can get away from post-Thatcher neo-liberalism we risk simply repeating the mistakes of our forebears. Once again, it will be interesting to see how the book deals with the wider historical perspective.

Finally, one of the things that surprised me about both the discussion at the book launch and from searching through the PDF of the book itself, was the lack of attention given to intellectual property. My search function can find no references to IP itself, to “piracy” or to “copyright”. I’m genuinely surprised by this; what issue better demonstrates the intergenerational divide than online piracy?

I wrote a few years ago that I thought that copyright would be a key political battleground in the 21st century and I still think that. More to the point, if the key to our future well being is to embrace cooperation and co-ownership (as would appear to be one of the key arguments in the book), how can we hope to do that if the very concepts that rattle around inside our heads are to remain in private hands for long after we’re dead. Whatever criticisms you may have of the Spirit Level, I was impressed that Richard Wilkinson and Kate Pickett seemed to get this.

In my view, the future worth fighting for is not only one in which we have a more active level of participation in the running of our supermarkets and banks but one in which culture itself has been restored into public hands. The result of that may be fewer Lady Gagas and fewer Avatars but, aficionado I may be of both, I really can’t see us being the poorer for it. We can’t expect people to embrace a more collaborative future until the arts equip people with the ideas necessary to be able to imagine it. And they won’t do that while the arts are ultimately working in the interests of big business and the status quo.

So the final thing I will be looking out for when I read this book is how it deals with culture and the creative sphere.

Overall though, I’m delighted to see intergenerational equity finally starting to get the attention it deserves. As was made quite clear repeatedly by the authors, this is a frame by which to consider the troubled times we live in rather than a new model which supersedes all the others; it is often a revealing frame nonetheless.

Why aren’t landlords “in this together” as well?

The government’s response to its defeat in the Lords last night over benefit caps has been notable for its lack of substance. Iain Duncan Smith has taken two lines: that the policy is enormously popular, and that Bishops and left-leaning peers ought to be as concerned by the people paying for the benefits as they are of the people who receive them.

The popularity argument is, well, true. But it is a pretty hollow one. It is hardly surprising that public attitudes have hardened following years of rightwing propaganda emanating from what passes for the British press and, given the small amounts of money involved, this is rather a bread and circuses argument. Throw a couple more Christians to the lions to keep the plebs happy.

They are on stronger ground when they argue that peers ought to consider the needs of hardworking taxpayers more. But this looks like crocodile tears from the Conservatives who appear only willing to raise regressive taxes like VAT, are pressing to cut the upper rate of income tax and won’t even consider the introduction of wealth taxes. The fact that Vince Cable’s Mansion Tax is considered radical within the cabinet, which would only be levied on properties worth over £2 million, shows you how far we need to go to make the case for a fundamental shift from income to wealth taxation.

Fundamentally, this cap saves very little (and may even cost money), applies only to especially large families and undermines the concept of a universal child benefit. It is ironic that Iain Duncan Smith, the great proponent of symbolic taxes designed to encourage marriage is attempting to force through a benefit change which would give the poorest a major financial incentive to break up their families. It is a complete distraction from the real debate which is needed about benefits reform.

One thing that appears to be getting lost in this debate about the benefits bill is how much money is being wasted not to help the poor but to subsidise the privileged. I touched on the way the welfare state subisidises large companies who refuse to pay decent wages – thus ramping up the tax credit bill – last week. When it comes to housing benefit, too few politicians seem prepared to question why we are shelling out so much money which goes straight into the pockets of private landlords and only propose to tackle this issue by forcing people into worse accommodation.

This blind spot isn’t limited to the coalition; after all the housing benefit explosion continued unabated throughout the Labour years. The only justification for it appears to be that policies designed to tackle this problem at the landlord end of the telescope might harm property prices. And property prices help drive the economy.

There is some truth to this: no-one doubts that a collapse in property prices would damage growth. But it does rather bring all this talk of “ethical capitalism” into perspective. Because who is actually benefiting from this racket? Not taxpayers, who have to pay inflated housing benefit bills. Not the poor on welfare, who don’t see a penny from this spending. Not hard working people struggling (and mostly failing) to get onto the first rung of the property ladder. The beneficiaries are, once again, the very people who have managed to insulate themselves from every other aspect of the economic downturn.

If the introduction of land value taxation – which would discourage the speculative ramping up of rents – is not to be contemplated, then the very least we should be considering is the return of rent controls. The introduction of such a policy would mean many more winners than losers. The only real barriers to doing so is dogma about distorting the housing market (which one could argue has already failed chronicly) and fear about how the financial sector might react in its customary intimidatory way.

Instead, we seem hellbent on driving through policies designed to stigmatise the poor and provide everyone with less security. Until politicians on all sides are prepared to take on this beggar-thy-neighbour form of rentier capitalism, I won’t be getting too excited by this ‘new ethics’.

Intergenerational equity and the perils of groupthink

As the implications of what it appears that the coalition is about to do in the upcoming budget sinks in, I have to admit to growing increasingly concerned. No-one – outside of the Labour leadership contest anyway – denies that the structural deficit needs to be tackled or that we don’t face some unpleasant spending cuts over the next few years. But I’m mystified by the economic strategy behind what the government apparently has planned.

If the government does have a game plan, thus far it has not been spelled out. Nick Clegg’s speech on Monday was remarkably void of much of an argument, resting as it did on two points:

1. There is no alternative: “to do anything else would not only be irresponsible, it would be a betrayal of our progressive values”.

2. It is a matter of intergenerational equity: “There is nothing progressive about condemning ourselves and our children to decades of debt, higher interest rates, fewer jobs.”

Nick Clegg and company keep emphasising how shocked they were by the state of the country’s finances, but thus far – despite all the welcome transparency – they have offered nothing to explain why they were quite as shocked as they were. The report of the Office of Budget Responsibility was mixed: it suggested that the structural deficit was worse than we’d thought but that public spending was actually under better control. Clegg himself keeps talking about this meeting he had with Mervyn King and how it made him see the light; it is almost as if he has come back from Mount Sinai carrying tablets of stone. But Mervyn King is just one man, and not one whose prognostications in the past have proven to be infallible. What is King saying in private that he can’t tell us in public? Why wasn’t it being said before the election? And how has it shattered Clegg’s and Cable’s own views of economic policy so irrevocably? I always knew that both of them were fiscally conservative, but this is radical neo-liberalism. It is the most spectacular policy volte-face I’ve ever seen.

More to the point, why does no-one else in the world appear to be pursuing a similar strategy. The UK is not in the mess that Greece is in, yet the coalition government is behaving as if it is. We know why the Tories want to do this: they’re Tories. I’ve yet to hear a single, coherent Liberal Democrat argument for why we should be going along with this.

The thing is, we do have choices here; lots of them. The government have made two fundamental choices which, on the face of it, contradict the advice of a very large number of economists and thus urgently need to be explained. Firstly, they are seeking to tackle the whole structural deficit within five years (something which the Lib Dems denounced during the election). Secondly, they are seeking to do this overwhelmingly by cutting rather than taxing (something which, to be brutally frank, the Lib Dems fudged during the election). I can see nothing in the OBR figures which suggest that such a strategy would be madness; quite the opposite. If the structural deficit is larger than we imagined, then surely there is a case for tackling it over the longer period of time, and an even greater scope for tax increases? To do otherwise would just risk damaging the economy, surely?

It is one thing to cut £6 billion this year: frankly I was pretty unfazed by that. But the numbers the government has started talking about really will risk – if not guarantee – a double dip recession. Withdraw the amount of money from the economy that we are talking about, and it is hard to see how the outcome will be anything other than negative growth. It actually looks as if, despite all the reassurances a few weeks ago, the government’s agenda is to actually engineer a new recession, seeing it as a necessary bit of pain with a view to long term benefits.

The last time that was done was the early 80s, under Thatcher. The result? In some parts of the country a whole generation was left on the scrapheap. Far from tackling the structural deficit, we’re still paying for it. That shocking welfare bill that Frank Field and Iain Duncan Smith have been given the task of slashing? A large proportion of it is due to the government plonking a large proportion of ex-miners onto incapacity benefit. The price has not just been financial; lives were shorn of value overnight; communities were destroyed; the following generation grew up with no hope and no aspiration. Social mobility fell. This is what shock doctrine economics does to a country and even the Tories pledged we would never return to it.

This brings into question the claims that such a hard and fast approach is progressive from an intergenerational perspective, and also causes us to consider some other worrying trends emerging from the government. Leaving aside David Willetts’ extraordinary views that higher education is an intolerable burden on the taxpayer, we have the fact that one of the main things the government has slashed over the past month has been youth employment schemes. Clegg’s argument that it is progressive to cut now to ensure that future generations don’t end up paying for our mistakes are only actually convincing if the future of those generations are not being curtailed by the same economic policies. Deny a graduate or teenager a chance of either employment or training now, and it won’t matter to them how high taxes are in the future because their own earning potential will go through the floor.

All of this flatly contradicts Clegg’s emphasis on social mobility, or does it? Because when he talks about social mobility, as he did on Thursday, Clegg’s emphasis is all on children. We can all agree that the most effective time in a person’s life to invest in is their early years, but this truism appears to have fallen victim to doctrinal reductionism. Simply put, it makes no sense whatsoever to invest in early years and schools while having nothing to offer people once they hit 16. What is the value in the government creating the most aspirational dole queue in history?

All of this adds up to an emerging picture of futures of the current crop of teenagers and young adults being sacrificed in the name of their younger and older generations. You’ve got to ask what they’ve done to deserve it? Equally, you’ve got to wonder if Clegg and Cameron would be quite as ready to do this if Antonio, Alberto, Miguel, Nancy and Arthur were a little older.

No-one else seems to be taking as much of a hit. Wealth taxes have been almost entirely ruled out, despite the fact that taxes on property values (or, better yet, land values) would have the least negative economic impact. And yet, far from being an economic burden, it is the 14-22 generation that we will largely depend on to make our economic recovery over the next decade a swift one. I am completely mystified; it makes no sense to me whatsoever. It seems to have been concocted by a bunch of people more concerned with sounding tough and being seen to make grown up decisions than actually steering the country down a fair and economically sustainable path. In short, it screams of groupthink; I pray that I’m wrong.

Late last week I spoke to someone on the “inside” and painted them a rosy picture. I speculated that all this doom and gloom that had been coming out of the Treasury and Downing Street over the past fortnight was a shadow play designed to placate the Tory headbangers and that what would emerge would be something surprisingly progressive and far-sighted; people like me all breathe a collective sigh of relief.

I still like to think that is a distinct possibility, but my source didn’t seem to find my theory anything more than charmingly off the ball. If they would at least offer us an actual economic argument, it would be something. Instead we just get echoes of Thatcher’s There Is No Alternative.

The 10p rate “compromise” stinks to me

Since I’ve been blogging light in recent weeks, I’ve not commented on the ongoing mess that Labour have got themselves into over the scrapping of the 10p rate of income tax. There isn’t much I can add that hasn’t been said a thousand times before. It is of course ludicrous that the Labour backbenchers have suddenly woken from their slumber on this issue, a year after we warned them what the implications of this reform would be. That the BBC have given the rebels such an easy ride for their johnny-come-lately rebellion is just par for the course.

But they do appear to have been bought off remarkably easily. The main measures for helping those hurt by scrapping the 10p rate seem like a total crock.

Let’s start with the retrospective raising of the winter fuel allowance. This is going to apply to all pensioners between 60 and 64, including my partner’s mother who is already roughly £50 a week month* better off due to her enjoying the full impact of cutting the basic rate from 22p to 20p. This is just throwing money around at random in the hope that some of it will stick.

And then there is the pledge to raise the national minimum wage for younger workers. First of all, this will only help those earning the absolute minimum wage for 18-21s. Someone working full time on the London “living wage” (£7.20 an hour) will still be whacked by the tax rise and yet only earns £13,000 a year. Secondly, it should be pointed out that any such an increase will mean that at least some of the cost of raising the winter fuel allowance is going to be paid out of increased tax revenue generated from young earners. The very lowest earners are going to be subsidising a benefits rise that will help many of the wealthiest (and yes, I do accept that the winter fuel allowance helps poor people as well, but still).

I’m all for raising the NMW for young people so it is comparable to the NMW for older workers, but this rise is happening for all the wrong reasons: getting the government out of a fix rather than doing what is right in the first place.

Surely it is unacceptable to have people on minimum wage paying income tax anyway? It is just a deadweight cost to the economy. The government should be working to narrow the gap between personal allowance and the NMW, not widen it. What possible economic reason is there to make employment even more expensive and wages even more inflationary?

But my greatest fear is that if the Labour rebels really are so easily bought off, they will capitulate over 42 days quite easily as well. They really are a useless shower. Give them a totemic act of class warfare like fox hunting to get self-righteous about and they will push the government to the limit. But helping poor people? Defending civil liberties and the rule of law? What is the bloody point of them?

* Oops! Good job I corrected that before anyone else spotted it.

Comment is Free: Share the wealth!

My latest article on Comment is Free is now up:

Instead of doggedly trying to outpace property prices, imagine if the exchequer went the other way. And imagine if it used the extra revenue that resulted to cut income taxes. Wouldn’t it be fairer to allow people to keep more of the money that they earn in exchange for having less inheritance to look forward to? Wouldn’t that be better for the economy: lowering the costs of labour while doing more to capture unearned wealth? Shouldn’t at least one of the main political parties be championing such a position?

In glorious crappyvision…

Chris Rennard wants your questions to put to the Lib Dem candidates.

Now, I’m sure I could have borrowed a video camera from somewhere and done this with all the bell and whistles, but instead I thought I’d try to encourage other people by demonstrating how incredibly easy it is to record a video on your mobile phone and have it up on YouTube within 5 minutes.

Have to admit, it was a struggle to fit everything into the 10 seconds my phone will allow, but here it is:

I hasten to add that the handbags in the background are not mine! Well, not all of them.

I see there’s already a growing number of videos up. Great news. Now – what will the candidates have to say for themselves?

Age concern – the Liberal Democrats and generational equity

I wrote this article in Summer 2006 for Liberalism – something to shout about, published by Graham Watson MEP and edited by Simon Titley. I’m taking the liberty of republishing it here, but if you want to read the other articles – by Graham, Simon, Ros Scott, Jonathan Calder and Simon Bryceson, follow the above link for an order form.

Any article on this topic will inevitably date quickly, so please bear that in mind. In particular, “Hands off our future” is a reference to an abortive attempt of mine to set up a campaign website on the topic which in the end I didn’t have the time to keep going.

Demographic change is creating a dangerous situation, one where younger generations are suffering increasing economic injustice. A system of ‘neo-feudalism’ will emerge unless radical steps are taken. Do the Liberal Democrats have the courage to campaign for justice – or will they miss the boat?

Introduction
There’s no easy way to put this, and I can almost hear the shrieks of outrage as I type, but young people are being expected to shoulder too much of the UK economy while older people are getting away with shouldering too little.

That isn’t to say that pensioner poverty doesn’t exist, nor is it to deny that some young people are extremely wealthy. As in any discussion on economics, we are talking in generalities here. It is however to say that, as well as being unfair, it is having a deleterious effect on our economy and stands to reinforce class barriers and social immobility at a time when we are flattering ourselves that such things have been relegated to our past.

Young people are hit by a sextuple whammy of costs that older people do not have to worry about to the same extent. These are: graduate debt, credit, saving for the future, environmental taxation, income-based taxes and housing costs. We should take a moment to consider each one in turn:

The problems
Housing costs
The owner-occupier dream of the Thatcherite 1980s is coming to an end. Only 20% of 20-24 year olds are homeowners, compared with 34% in 1994. First-time buyers now make up only 38% of total buyers1.

Why is this? Simply enough, house prices have got out of control. According to the Department for Communities and Local Government2, the average house price across the UK is now £190,051; in London it is £279,418. Median earnings meanwhile are £22,412 (less than one-eighth of the average house price) across the UK and £28,912 in London (less than one-ninth of the average London house price)3. According to Nationwide, the median home loan is now worth 3.21 times the incomes of those buying the property, compared with just 2.39 in 19944. That of course means that half of new loans are being lent at even higher multiples. According to the Halifax5, public sector workers cannot afford average priced homes in 65% of towns, compared with just 24% five years ago. Mortgage repayments typically now use up 42% of take home income.

Unsurprisingly, 40% of first-time buyers now get parental help6. For many more people however, the solution is to simply rent. There again, the options available to people 20 years ago simply do not exist. The right-to-buy policies of the 1980s, which got so many people onto the housing ladder (earning many of them small fortunes in the process), were unsustainable as they depended on selling council housing that was not replaced.

One other option is buy-to-let: buy a house in a more affordable area than the one you live in and use the income from that as security. This in turn of course helps bloat the housing market even further, pricing even more first-time-buyers out of the market.

Ultimately, all of this must be unsustainable, although the bubble is still looking fairly robust at the moment. If the housing market does crash however, it is again young people who will predominantly suffer.

The obvious solution to all this is to build more affordable homes. Yet that has been official government policy for years now and little progress is being made. We cannot escape the fact that, under the current system, property developers have very little interest in building large numbers of affordable homes.

Graduate debt
People graduating from university this year owe an average of £13,500, according to the Association of Investment Trust Companies (AITC)7. As with many of these figures, it needs to be emphasised that this is an average: graduates from wealthy families typically have far less debt to repay, while poorer graduates will have significantly more. This figure also does not take into account variable top-up tuition fees, introduced this year: at a stroke, such fees will increase debt for graduates from the top universities by £9,000 to £12,000.

Liberal Democrat policy is to scrap tuition fees. This has been very popular, but it should be remembered that students from the poorest backgrounds don’t pay fees anyway while students running up average debts and paying full tuition fees would still end up graduating with £10,000 hanging over their heads.

One argument used to justify the increased burden that individuals themselves pay is that graduates earn more; the Dearing Report8 claimed that graduates would, on average, earn £400,000 more over their lifetime. Yet, as higher education has expanded, so the worth of each individual degree has fallen. The University of Swansea estimates9 that the ‘value’ of a degree for a male arts graduate is now just £22,000. Yet with degrees now a minimum requirement for so many jobs these days, non-graduates find themselves severely disadvantaged regardless of their ability.

Credit
71% of young people (aged 18-29) have an overdraft facility and one-in-five are permanently overdrawn10. 18.7% of all bankrupts were aged 18-29 in 2004/5, compared with just 7.8% in 2001/2.

There is a temptation to dismiss these figures as simply young people spending irresponsibly, yet that is to ignore how credit has been promoted quite as fiercely as it has been over the past couple of decades. It is also to ignore the fact that banks will tend to refuse lower interest loans to customers with little credit history while being quite happy to give them credit cards. Borrowing is treated as a rite of passage that young people are expected to go through and, whether individuals struggle or not, banks are guaranteed a profit.

To his enormous credit, Vince Cable MP has been making a noise11 about the problems associated with unsustainable levels of debt for some time now. The party should pay him more attention.

Saving for old age
Young people are now expected to save for their own old age in a way that their parents’ generation never need worry about. Final salary pension schemes are a thing of the past. The Turner proposals12, largely accepted by the government, offer some hope for the future, but there is no escaping the fact that, for them to work, people must contribute more out of their own salaries.

Yet as the importance of saving for the future has increased, in fact the opposite has happened. According to Pensions Minister James Purnell in July 200613, the number of young people saving for a pension has fallen from one-in-three to one-in-four since 2000. Purnell was quick to pin the blame on young people themselves for their “live fast, die poor” lifestyles. Can we really simply dismiss this trend as shortsightedness, or are young people simply expected to cope with debt? This is a vital question for politicians to answer if they hope to make opt-out stakeholder pensions – one of the lynchpins behind the government’s new pensions strategy – a success. If it is financial pressures that are putting young people off from taking out second pensions, there is a real risk that a disproportionate number will opt-out under the new scheme.

Income-based taxes
There is no denying that income taxes fell significantly during the 1980s and 1990s. I mention them here because it needs to be emphasised that this form of taxation is paid predominantly by economically active middle-income earners: the rich avoid them while the poor and economically inactive pay very little.

In the recent past, income taxes have begun to creep up again, under the guise of national insurance contributions. Liberal Democrat policy in 2005 would have added an additional 4p in the pound due to the introduction of a local income tax.

Climate change and resource taxation
It is now largely accepted that the human race is responsible for global warming and climate change. Because of inaction in the past and little scope of major improvements in at least the short term, significant climate change is also now regarded as all but an inevitability. Mean temperatures are expected to increase by two degrees Celsius by 205014. Today’s young people, their children and their grandchildren will be paying the price in the future.

Today’s young people, however, are also expected to pay the price now; environmental taxes will either creep up if the timidity of the current government continues, or significantly increase if a more environmentally responsible government takes control. Either way, today’s young people will be expected to bear the brunt, on top of everything else, in a way that their parents’ generation was never expected to.

The future – neo-feudalism?
What no-one should be blind to here is that these factors do not affect all young people equally. Families with assets are able to help their children out by subsidising student costs, housing and ultimately by passing on an inheritance. They help out in other ways too. A recent report from the Sutton Trust15 found that 54% of top journalists went to public school, up from 49% in 1986. Similar statistics can be found for the legal profession and other white-collar jobs.

One factor driving this is that, as more and more people have degrees, employers are increasingly dependent on other ways of assessing candidates. A simple mechanism used by a lot of employers is to offer internships and most young people who take up unpaid work experience in this way are dependent on their families to see them through. Thus the expansion of higher education seems to be doing little to improve opportunities for young people from poor backgrounds; indeed, it could actually be entrenching privilege.

There are other ways as well in which the ‘haves’ can consolidate their position. The subsidised loans available to students may be intended to help poorer students feed and house themselves at university, but increasingly they are used by wealthier families as an investment: invest the money in an ISA and pocket the difference. Inheritance tax, properly managed, is effectively voluntary, with wealth handed down the generations long before the aging relative dies – and the bigger the estate, the greater the likelihood that families will have made such provision.

The important question we should be asking ourselves is, where is this taking us? I have dubbed the (avoidable) nightmare scenario ‘neo-feudalism’. Through a combination of some talent, some hard work and a large amount of luck, some families are consolidating their position at the expense of other families. The current fad for buy-to-let could be the tip of the iceberg: there is every reason to believe that the people who play the system well will increase their property portfolios over time, pricing ever more people out of the property market in turn.

For the new underclass, the future is bleak, with the rising middle-class operating an effective closed shop in a way that would make the most militant shop steward baulk. Meanwhile, the children within these ‘landed’ families will be trapped in a cycle of dependency. These mini-Princes of Wales will be forced to wait impatiently for their inheritances to come through, conflicted by love for their parents and the desire for freedom and independence. Entrepreneurship, creativity and hard work will be stifled by an economy dominated by class and privilege.

Policy solutions
Higher education policy
The Liberal Democrats’ policy to scrap tuition fees has served the party well, but there are at least two major reasons for reviewing it.

A principled reason is that it doesn’t actually help the poorest. We may well wish to argue that students from lower middle class backgrounds can ill-afford the tuition fees they are forced to pay under the present system, but it is highly doubtful that scrapping fees will see a massive influx of students from the poorest backgrounds.

The pragmatic reason is that tuition fees have been with us for seven years now. Hundreds of thousands of young people have already paid them, and there is an increasing danger that this policy will decline in popularity as young people and their families increasingly ask themselves “well, we had to pay fees, so why shouldn’t they?”

One equitable solution to this would be to offer tax relief on student debt repayments. The full amount may not be affordable, but a significant proportion would not only amount to the same thing as paying full tuition costs, but would benefit all graduates.

Going further, we could replace our existing spending commitment to scrap fees with a return to the means-tested maintenance grant. This would target our funding at those least able to pay.

It is unlikely to amount to much while the massive expansion of higher education continues however, and this leads me to consider an even more radical proposal. Why not remove the universal state subsidy on university tuition altogether, replacing it with means-tested cover for both tuition and maintenance? This more targeted approach would enable us to help students most in need, while giving the market a greater role in determining demand for higher education.

There are bound to be howls of protest regarding this proposal and I have to admit I am not fully convinced of it myself: how would we preserve liberal arts departments for instance? How can the market determine how many medievalists the country to fund? I am merely throwing these ideas in to provoke a discussion I believe the party desperately needs to be having.

The bottom line for me is that, at the next general election, we need to have much more to say to both graduates and the poorest students. With the party committed to keeping spending commitments down to a minimum, this cannot be done without significantly changing our existing policy of tuition fees.

Taxation
Just as we are sometimes guilty of portraying our policy of tuition fees as a social justice issue when the poorest are unaffected, so the same is true with our policy to replace council tax with a local income tax. The claim is frequently made that it would benefit the poorest, and specifically pensioners. Yet the poorest are entitled to Council Tax Benefit and are thus exempt.
We aren’t, to be fair, alone in this. Help the Aged’s website16 claims that an elderly couple with just £182 per week income “could end up paying the same level of Council Tax as their neighbours, a young and wealthy couple with an income of tens of thousands”. Yet if you look elsewhere on this website, it helpfully explains that an elderly person on that level of income is exempt from the tax. A curious game of deception is at hand here, and unfortunately the Lib Dems bear much responsibility for it.

The real problem with our existing policy is that it represents a massive tax cut for the owners of some of the most valuable properties in the country, while shifting the entire burden of taxation onto economically active young people. This makes no economic sense at all and will help to increase property prices still further, enriching the wealthy and pricing even more people out of the housing market.

We are frequently told that this policy is important because it helps old people who may have large wealth, but have little income. In fact, asset rich, cash poor pensioners form a tiny minority. In his submission17 to the Tax Commission report, Prof Iain McLean cited research from Warwick University, which shows that just 1.2%-2% of the population fits into this category. There are other ways to ensure that this small group does not unduly suffer without introducing a system that would unfairly penalise others.

The signs coming from the party’s Tax Commission unfortunately sound remarkably confused. By the time you read this essay, its final report18 will have been published but, at the time of writing, it looks as if it will be a strange mix, calling for national income taxes on the one hand while introducing even higher local income taxes on the other. This strange, hybrid ‘pushmepullyou’ is unlikely to please anyone and is likely to confuse seriously both journalists and the general public.

So what’s the solution? Simply put, our new taxation policies have a property tax-shaped hole in them. We should fill it with our historical commitment to introduce a system of land value taxation. This would encourage greater efficiency of land, lower property prices, and discourage second home ownership and buy-to-lets. Safeguards could be introduced to ensure that old people would not be taxed out of their homes, such as a system whereby people could voluntarily choose to defer tax payments until after they realise the asset.

Funding the future
Britain is appalling at squandering its assets. North Sea oil, now rapidly drying up, has been used as a cash cow by successive chancellors for the past 30 years, with Gordon Brown using it to fund spending commitments last winter. Yet once this natural resource is gone, it’s gone.
Other countries have a more enlightened view. Since 1995, Norway has invested its North Sea oil receipts into its National Petroleum Fund (recently renamed the National Pension Fund)19. This fund, worth 1.48 trillion Kroner (about £125 billion or €185 billion) in 2006 and administered by the Central Bank, is designed to ensure that this short-term windfall is enjoyed by future generations.

Alaska operates a similar scheme called the Permanent Fund20. Though much smaller – $32 billion (about £17 billion or €25 billion) at the end of 2005 – the fund is enough to pay out a dividend to Alaskan residents of around $1,000 per capita per year.

It is mostly too late to put Britain’s North Sea oil receipts into a similar fund, but as climate change is taken more seriously, this could be a useful way to handle receipts from environmental taxation.

Using environmental taxes to fund general expenditure is problematic at best, particularly at high levels, because if they are successful we can find ourselves with a shortfall. Climate change is likely to make the twenty-first century a very unstable period. Establishing a fund in this way would help give future generations a helping hand.

Getting our message across
One major objection to the party shifting its policy more towards young people is that older people vote in greater numbers and should therefore be our main target. I would repeat that I am not calling for us to ignore old people in elections, and strongly support our policy positions on a Citizens’ Pension and increasing the basic rate.

But, despite the fact that we all but stuffed their mouths with gold coins in the last election, old people did not generally vote for us. This is partly because of tribal loyalty, and partly because of a perception of the party brands – indeed, where we do well amongst older voters it is because they recognise our strengths as community campaigners. By contrast, younger people flocked to us in the last general election, despite us having very little to offer them. We have a real opportunity here not simply to capitalise on the votes of under-40s but to create lifelong Liberal Democrat supporters.

For such a campaign to work, however, it cannot simply be conducted by the occasional press release. At the moment, the media is largely unaware of this issue, normally reporting rises in property prices as an unequivocally good thing. For us to make an impact on this issue, our frontbench team must be seen championing it. It should get mentioned in every speech Ming Campbell makes between now and polling day.

The good news about a campaign aimed specifically at young people is that much of our target audience is web-savvy. What’s more, the people whom these issues affect are getting increasingly organised – see websites such as housepricecrash.co.uk, pricedout.org.uk and Hands Off Our Future. It is clear from reading the forums on sites such as these that there is a real sense of injustice out there and that people are crying out for a political party to take these issues on. If we miss this opportunity now, we may find ourselves paying the price in the future.

References
1 BBC (2006). How hard is it to afford a house? BBC News Online, 6 July; http://news.bbc.co.uk/1/hi/business/5145090.stm
2 UK Department for Communities and Local Government (2006). House Price Index – May 2006 (DCLG Statistical Release 2006/0051). Press release, 10 July; www.communities.gov.uk/index.asp?id=1002882&PressNoticeID=2197
3 Bachelor, L. & Flanagan, B. (2005). On average, you can’t afford it. Observer, 4 December; http://money.guardian.co.uk/houseprices/story/0,1456,1658132,00.html
4 BBC (2006). ibid.
5 Halifax plc (2006). Halifax Key Worker Housing Review. Press release, 29 July; www.hbosplc.com/economy/includes/KeyWorkerAffordability(UK).doc
6 BBC (2006). ibid.
7 AITC (2006). Press release, 9 August; www.aitc.co.uk/press_centre/default.asp?id=5439
8 The National Committee of Enquiry into Higher Education (1997). www.leeds.ac.uk/educol/ncihe/
9 O’Leary, N. & Sloane, P. (2005). The Changing Wage Return to an Undergraduate Education. IZA Discussion Paper No. 1549. http://ssrn.com/abstract=702781
10 Credit Action (2006). Debt statistics. www.creditaction.org.uk/debtstats.htm
11 Cable, V. (2006). Press release, 23 July; www.libdems.org.uk/news/young-peoples-debt-spiralling-out-of-control-cable.html
12 The Pensions Commission (2005). Second report. www.pensionscommission.org.uk
13 Purnell, J. (2006). Speech, 12 July; www.dwp.gov.uk/aboutus/2006/12-07-06.asp
14 UK Department for Environment, Food and Rural Affairs (2001). Literature review of the implications of climate change for species, habitats and the wider UK countryside. www.defra.gov.uk/wildlife-countryside/ewd/rrrpac/lreview/06.htm
15 The Sutton Trust (2006). The Educational Background of Leading Journalists. www.suttontrust.com/reports/Journalists-backgrounds-final-report.pdf
16 Help the Aged (2006). www.helptheaged.org.uk/en-gb/Campaigns/PensionsAndBenefits/CouncilTax/
17 McLean, I. (2006). www.libdemsalter.org.uk/archives/000078.php
18 Liberal Democrats (2006). Fairer, Simpler, Greener. Policy paper 75. www.libdems.org.uk/media/documents/policies/PP75%20Fairer%20Simpler%20Greener.pdf
19 Wikipedia (2006). The Government Pension Fund of Norway. http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway
20 Wikipedia (2006). Alaska Permanent Fund. http://en.wikipedia.org/wiki/Alaska_Permanent_Fund

Clegg: a bad way to make a good point

Nick Clegg repeated his claim yesterday that under Ming the party was too inward-looking. To quote Elspeth Campbell: “I don’t know if you’re being helpful or not.”

I’ve already rebutted that argument and don’t intend to repeat myself. But I’m not blind to the fact is that by repeating this nonsense argument, Clegg is subtly contrasting himself with Chris Huhne and his stance on Trident. The subtext is that he’s the candidate that will concentrate on the issues that matter to the public, while Huhne would have the party revisiting old policies in an act of ideological purity.

And as I said yesterday, in that respect he’s right. Huhne’s Trident stance is, in my view, good policy but bad politics. This isn’t a debate the party should be having during this contest. It smacks of vanity, and at 11% in the polls, vanity is something we can ill afford.

If Huhne wants to talk about policy, he should concentrate on issues which have immediate relevance to large sections of the public. I’ve already mentioned two interrelated ones – housing and intergenerational equity – I’m sure he could come up with others. He should be concentrating his firepower on Clegg’s inability to make his own rhetoric match his detail, calling on the party to move out of its comfort zone and reach out while being apparently afraid of saying anything of substance along those lines in case it alienates a wing of the party.

Huhne’s advantage is that by going for the big tent approach, Clegg has compromised himself. In a large number of areas he will struggle to say anything at all that won’t alienate either David Laws or Steve Webb and their respective camps. He should be pressing that advantage home, not making Clegg’s points for him.

While at the start of this campaign I was guilty of a bit of policy arson myself by rubbishing our existing commitment to replace council tax with local income tax, even I wouldn’t expect either candidate to use this opportunity to set out detailed policy in that area. This is a good opportunity to signal areas that need revisiting, not to spell out solutions.

How Nick Clegg meets his own standards

Okay, I admit it. If I hadn’t been hungover yesterday morning I probably would have resisted the temptation to use the word “meltdown” in my blog about Team Clegg yesterday. A wobble it certainly was however, and while I of course accept Richard Allan’s apology, he still has not explained where the email addresses they were using had come from. One suggestion has been that it was Ming Campbell’s supporter list (something which I was signed up to as I was certainly an ABH voter).

The fact that I claim to be undecided in this election despite the fact that I express warmth to Chris Huhne’s campaign and am rather more critical of Nick Clegg seems to cause some people a lot of confusion, so let me be more explicit: my default position is that unless Nick Clegg badly alienates me, or Chris Huhne does something bloody spectacular, my vote will be going to the former not the latter.

Chris Huhne was the right candidate in 2006 and everything that has happened since has vindicated that fact. We wouldn’t be where we are now if he had been elected. But Nick Clegg is not Ming Campbell. That Clegg is the better communicator is clear. One person who was at the South Central conference last Saturday put it to me yesterday thus: both candidates spoke with passion about social justice but while Huhne barraged the audience with statistics, Clegg talked about a woman on a housing estate in his constituency. The best part of Ming Campbell’s speech at party conference – the part that signified that he finally got it – was when he talked about the people he had met since becoming leader, and their experiences.

Chris Huhne ought to set himself a challenge: when he next does a keynote speech he should make it a statistics-free zone. Clegg’s speech this week certainly was.

Saying all that however doesn’t make me an uncritical flag-waver of Nick Clegg by default, a fact which appears to cause a number of readers of this blog great difficulty. Where did all this bullshit about undeclared bloggers having to be impartial come from? What’s wrong with being inclined to vote Clegg but having a sense of loyalty to Huhne? And what’s wrong with pointing out that the Golden Child has feet of clay?

For feet of clay he certainly has. His campaign launch last week didn’t merely not impress me, it pissed me off because I felt he was insulting the intelligence of a very significant section of the party. Extolling the party to move out of its ‘comfort zone’ does not ring true coming from a candidate who, two years ago, was telling us to do the opposite. It was simply not true to claim that the party has been locked up in “internal self-analysis.” And claiming to be anti-establishment whilst having the clear backing of most of both the party and media establishment was simply bizarre. He should hire Antony Hook as his personal BS-detector.

But let’s take the two key ideas that came out of his Sheffield speech – the need for the party to move out of its comfort zone and the need for us to extend our supporter base – and apply it to his speech this week at the National Liberal Club. The latter speech has five main themes – empowering individuals, extending opportunity, balancing security and liberty, protecting the environment, engaging with the world – and I’ll take each one in turn, giving each a rating out of five for comfort (5 – the Liberal Democrat equivalent of a plush sofa in front of a roaring fire), reaching out (5 – the political equivalent of Mr Tickle) and my personal opinion. Generally speaking, a low comfort rating and a high reaching out rating suggests that the substance broadly matches the rhetoric:

Empowering Individuals

First of all, “empowering individuals” is horrid language. Of course, Huhne has already bagged “people in charge” so maybe he was stuck with how to put it. And to be fair, he recovers well with this important distinction:

“Our objective isn’t simply to bring power closer to people. It is to give power to people.”

I’m also not sure about this stuff about favouring communities over bureaucracies. Of course the former is always preferable over the latter, but they are hardly opposites and communities can be pretty oppressive things. One of the key features of “proper” community politics as opposed to communitarianism is that the latter lionises community while the former critiques it. Indeed, at worst, communities can be pretty bureaucratic themselves: there is an order of things, and woe betide anyone who does not go along with that. My parents’ experience of joining a village community 7 years ago would confirm that.

Much of the rest of this section is firmly in the comfort zone: change the electoral system and localism. No great surprises there. The key paragraph in this section is here:

“We need to set some ground rules here: our universal public services must be free to use and accessible to all. But beyond that, I want us to think afresh about how they should be funded and delivered.”

It is a shame he does not expand on this. How does this differ from, say, the Huhne Commission on Public Services which the party adopted four years ago? Does he side with Steve Webb or David Laws (Chris Huhne’s own position on this is spelt out here)? This is a crucial area we need to hear much more detail from him on.

Comfort rating: most of it is pretty safe ground and even the rhetoric about public services is pretty similar to what Kennedy was saying five years ago. 4/5

Reaching out rating: talked about PR without mentioning PR, which is good politics. But mostly this is well trod territory for the Lib Dems. 2/5

Personal rating: nothing new, but little I object to. 4/5

Extending Opportunity

This section, to me, is particularly confused. First of all, it’s a red rag to a bull, I’m afraid, to call for the Lib Dems to work ceaselessly for a meritocratic society, for reasons that I’ve already outlined on this blog. Saying you believe in a society where everyone gets their just deserts is another way of saying that some people ‘deserve’ to be poor. You can comfort yourself that you strive for equality of opportunity, but ultimately it is social Darwinism by any other name.

Much of this section is taken up discussing the pupil premium policy, which is already party policy and wholly uncontroversial within it.

On benefits, Clegg seems to be, well, confused. In particular, I simply don’t understand this bit:

“Tony Blair famously promised ‘a hand up, not a hand out’, but Gordon Brown’s obsession with means tested benefits has had precisely the opposite effect.

“The Liberal Democrats will deliver where this government has failed. We must take people on higher earnings off means tested benefits and use the money to help the poorest pupils in our school system.”

What he’s actually calling for here is more means testing, not less, but he presents it as if he opposes means testing. Again, what it boils down to is a restating of party policy, shortening the taper of tax credits. But then our policy isn’t quite as simple as that as we are also in favour of raising child benefit, which higher earners would also be entitled to.

This bit is also confused:

A higher basic pension, linked to earnings, will get our pensioners out of poverty and off welfare for good.

Well, I suppose. If you don’t regard the basic state pension as welfare – a position which is pretty unsustainable since the link between NI and pensions became so eroded. And again, there’s nothing new here.

We have, to be fair here, a slightly confusing policy (not a criticism, just a statement of fact), but Clegg’s role here is to provide clarity not obfuscation.

But in a section on social mobility, it is striking what Clegg does not mention here: housing. How can you do a speech about social mobility and not reflect on housing? This is an issue that effects hundreds of thousands of people across the country and is shooting up the political agenda. We can’t afford to be silent on it. What is his position on the number of houses we need to build nationwide for instance? What does he have to say about council housing?

Linked to that is another of my pet issues: intergenerational equity. Linked inextricably with social mobility, what does Clegg have to say about the fact that wealth is increasingly being locked up within families, causing wider mobility problems and causing the burden of taxation to lie unfairly on incomes?

Neither housing nor intergenerational equity are obscure issues. Read any national newspaper and you’ll see these cropping up again and again. There are votes in these areas for a party leader looking to reach out beyond the Lib Dems’ normal supporter base.

Comfort rating: there doesn’t seem to be anything here that the party didn’t back overwhelmingly at conference last month. 5/5

Reaching out rating: education and pensions are hardly new territory for us. 2/5

Personal rating: no mention of housing or intergenerational equity is a major disappointment for me, and much of the rhetoric seems confused. 1/5

Balancing Security and Liberty

First of all, since when did Liberal Democrats talk about “balancing security and liberty”? Indeed, I challenge any liberal to demur with this statement from our recent governance policy paper (pdf):

“Security can only be genuinely realised if liberty, justice and human rights are upheld as the cornerstone of our democratic system, to be enjoyed by all on an equal basis. Liberal Democrats believe that ceding liberty to attain security jeopardises both.”

With that said, this lazy formula is not returned to in the body of the speech itself. Indeed, not surprisingly for our Shadow Home Secretary, this section is one of the strongest parts and I think he gets the balance right.

What I’m less convinced by however is that there is anything here that Simon Hughes or Mark Oaten weren’t saying before him. One of Clegg’s selling points is that he isn’t afraid to talk about crime but I’m simply not convinced that he’s bringing anything particularly new to the table.

What he is probably better at doing is articulating our policies. Credit to him is due for ditching Oaten’s stance about “tough liberalism”. But again, is this reaching out to people and knocking the party out of its comfort zone? Oaten at least could be credited with attempting to do that with his rhetoric; the problem was his rhetoric was utter balls.

Comfort rating: nothing new here, and a comfortingly liberal approach. 4/5

Reaching out rating: I know how the media works and that simply by saying that the Liberal Democrats must not be afraid to talk about crime makes it sound like he’s being much more radical than he is. 3/5

Personal rating: I can’t fault the rhetoric, but the slogan about balancing security and liberty has got to go the same way as Tony Blair who loved it so much. 4/5

Protecting the Environment

This is turf that Huhne has made his own, so it is interesting to see how Clegg’s position contrasts. What he does not do is make the case for climate change – that battle has already been won. What he does instead is discuss how we can win people over to make personal sacrifices for environmental gains. I have to give credit where it is due: this is an important topic to highlight and a good tactical stance to try and put some water between the two candidates.

Once again: notice the complete absence of statistics in this section, even in a section on climate change of all topics. His broad theme, that government must practice what it preaches, reminds me of the running battles that Donnachadh McCarthy used to have with the Ashdown and Kennedy regimes to persuade them of the same thing. How far we’ve come.

But for all that, once again, I’m also very conscious that there is almost nothing here that is new. It is also unclear where he ultimately stands on the party’s green tax switch policy – the line about people hearing only “tax” when you talk about green taxes is well made but almost suggests an antipathy to this approach. There is almost nothing in this section that David Cameron wouldn’t be comfortable about saying, with the obvious exception of the last two paragraphs of course.

Comfort rating: a gentle critique of the current party stance. 3/5

Reaching out rating: the emphasis on practicing what we preach and international efforts don’t hurt. But ultimately, talking about the environment at all will switch a lot of people off. 3/5

Personal rating: I don’t disagree with his line of argument, but wonder where it leads us. 3/5

Engaging with the world

Another strong section which I struggle to find fault with. Indeed the final three paragraphs are quite stirring stuff for any internationalist:

“But the great external threats that we face – from climate change to terrorism to cross border crime – are all linked by one fact: that power has been globalised, but our methods for controlling it have not.

“The challenge before us then is to construct a system of global governance capable of controlling global power.

“Only Liberalism, with its easy accommodation both with the market economics that drive globalisation and the internationalist politics needed to regulate it, is capable of guiding us in this process.”

But once again I return to my two tests: in what way is this breaking free of the party’s comfort zone or reaching out to new supporters? This is traditional Lib Dem policy in traditional Lib Dem territory.

Comfort rating: stirring internationalist stuff which conveniently avoids any talk of referendums. 5/5

Reaching out rating: even the populist globalisation stuff such as international development (I thought it was required by law that all senior politicians must pay homage to Make Poverty History in any speech on globalisation these days?) is barely touched on here. And what about that referendum? 1/5

Personal rating: Great stuff, but then I’m weird. 5/5

TOTAL COMFORT RATING: 21/25
TOTAL REACHING OUT RATING: 11/25
TOTAL PERSONAL RATING: 17/25

Conclusions: the rhetoric does not match the detail. There is very little that I could find in this speech that was new or challenging. This was a well articulated speech that will do little to persuade members of anything other than of Nick Clegg’s presentation skills and accord with core party values. Some of his rhetoric – about balancing security and liberty, a rose-tinted view about community and a mild scepticism about green taxes – sound conservative, but there is more than enough evidence here to suggest that Clegg is firmly liberal.

If he wants a rightwards shift in our policies on crime and public services (for example) now is the time to start talking about them and to seek a mandate for change. But he hasn’t. There is little I object to here and much that I strongly applaud. But if Clegg is going to continue to make speeches like this, he should drop the hyperbole about shaking up the party.