I’ve just trawled through Nick Clegg’s speech on localism to the LGA today. A few thoughts:

1. He lets the Tories off too easily (unintentionally I’m sure). He is of course perfectly right to give them a hard time for refusing to even contemplate devolving spending, but the truth is it’s far, far worse than that. To quote Gideon Osborne’s interview in Prospect this month:

But surely this devolution process just means the health and education services are captured once more by the professionals? Not at all, says Osborne. “Accountability will come through payment by results.” This, he says, is a superior approach to the Labour model of targets. “Targets mean you have a big monolithic service and the secretary of state decides how you achieve something—how much time you spend on a task and how many times you do it. This is a different approach, where you say to a private company that is, say, running a prison: we will pay you according to reoffending rates. So we will choose the objective, but they will decide how to achieve it.”

Replacing targets with “payment by results” is an oxymoron. What he means is that he wants to replace the government’s present system of targets by a new system of targets. The fundamental problem with targets - that it creates an incentive to game the system - will remain. Contrast this with Clegg’s definition of the role of central government:

The central state has a vital role – of course.

It must intervene to allocate money on a fair basis, to guarantee equality of access in our schools and hospitals, and to oversee core standards and entitlements.

But once those building blocks are in place, the state must back off.

This is genuine localism. Osborne’s prescription is for more, but different, centralisation. If he and his colleagues are going to insist on uttering such drivel, we have a duty to point and laugh.

2. There is still an LVT-shaped hole in Lib Dem policy. Clegg’s redefinition of local income tax in this speech is actually quite encouraging, in that it is clear that his real enthusiasm is not for replacing council tax with LIT but replacing national income tax with local income tax. I share his enthusiasm.

His problem is that he is extremely unclear about how inverse the current 3:1 national:local tax raising ratio without creating a system that would reward rich areas while penalising poor ones. Indeed he only mentions this dilemma once:

The government needs some leeway to make up the differences between needier and wealthier councils with a grant that varies between areas.

… and doesn’t even allude to the fact that localising business rates will actually make this even more pronounced.

The question is how do you create a clear, transparent way of squaring this circle. The solution, in principle at least, is obvious: create a national tax on wealth and redistribute it on a per capita basis. That means a national system of Land Value Taxation. The alternative is lots of complex formulas which can be manipulated by the government of the day. You couldn’t redistribute a national income tax in this way equitably because, as we all know, a lot of the richest in society don’t actually pay a penny.

You couldn’t introduce a fully fledged LVT system in a single term of office, but we could at least talk about it. As I said before, it is curious that we are so shy about doing this while at the same time so enthusiastic about rolling out a system of national road pricing over a 10 year period.

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The battlelines over localism are being formed in Scotland. What happens there directly affects the debate over decentralisation in England.

I haven’t been following this closely but my understanding is this: the SNP, which over time plan to replace council tax with a system of local income tax, have worked out a deal with local government whereby local authorities agree to freeze council tax in exchange for a very significant reduction in ringfencing by the Scottish executive. Labour are now hopping up and down making scary predictions about how this will hurt vulnerable people.

In a sense, they both have a point. Local government in Scotland as well as England has very few revenue raising powers and any squeeze will necessitates cuts being made somewhere, and it would not be surprising if the quietest voices had their funding cut the most. But Labour’s solution to this problem is simply to clobber local government with red tape, not to give it more freedom.

There’s another factor that needs to be considered as well: electoral reform in local government last year and the huge numbers of balanced councils it has produced will mean that this year’s budgets will be under more intense scrutiny than ever before. If Labour wishes to defend the vulnerable, by and large they will have their chance, but in the council chamber not Holyrood.

On balance then, I side with the SNP here. Sadly, if Labour are like this in opposition, it doesn’t bode well for getting localism out of them in government either.

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Polly Toynbee is waging her war against local democracy once again, insisting that only centralised super-states can be socially progressive and blithely ignoring the fact that all the Scandinavian countries she worships so much are far more decentralised that we can even dream.

This week, she has come up with the bizarre hypothesis that ‘localism’ and electoral reform are two mutually exclusive proposed solutions to democratic renewal. Of course, apart from the recent Tory and Labour converts to localism, the two reforms have always tended to go hand in hand. Indeed, how can you truly claim to want to bring decision making down to as low a level as possible while defending an electoral system that tends to ignore the votes of the majority of the people?

She bases her assertion on the fact that people voted on broadly national issues in the local elections, not local ones. Leaving aside the fact that I happen to think that isn’t true - the results varied wildly from council to council - why should we expect people to vote on local issues when local authorities don’t have any power? It’s not far off from bemoaning the fact that the votes cast in the Eurovision Song Contest aren’t about the quality of the music. Yes indeed they aren’t, but as it doesn’t really matter either way, so what?

If further prove were needed that Toynbee doesn’t really know what she’s talking about, she claims that the Lib Dem’s performance in the local elections was worse than Labour’s (it wasn’t), and that her preferred model for electoral reform is the Jenkins System which, erm, isn’t actually a proportional voting system. Indeed, it makes the partially proportional system used in Wales look representative.

While we’ll never know, I’m convinced that if Roy Jenkins was alive today he would be pleading for people to ignore the proposals he drafted for Blair back in 1999. They were an attempt to fudge the issue and come up with a system that Blair and the wider Labour Party would be willing to accept at a time when they were riding high with a 170 majority. Needless to say, they failed. He was too clever by half and didn’t satisfy anyone. Yet to this day I still hear people going on about it as if it were the Holy Grail. I’m convinced that in the centuries to come, whole organisations will be established to campaign for this system which no genuinely independent review body would recommend in a million years.

Toynbee’s objection to local democracy appears to be rooted in the perceived worst excesses of Conservative councils. In this respect it is entirely tribal and rooted in the typically Fabian notion that the people should not be trusted with too much democracy. Of course, with a fair voting system, the chances of the Tories or indeed any party wielding an unassailable majority in a local authority would be remote. The idea that we should have more representative local authorities but be content to leave them as glorified talking shops is faintly obscene. At least bread and circuses sounds a little more fun.

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I’ve added the main fringe meetings I plan to be going to onto flock together and added my personal feed from that website onto my sidebar. If you’re a Lib Dem blogger, why not do the same?

Personally, aside from the day job I’ll be busy promoting my chapter on intergenerational equity in Graham Watson/Liberator’s new pamphlet “Liberalism - something to shout about” (fringe meetings on the Sunday evening and Monday lunchtime) and I will also hopefully have an article printed in ALDC’s update of the Theory and Practice of Community Politics.

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The Observer has been given a sneaky-peak of the Lib Dem’s Taxation Commission’s current thinking and it sounds good. 2p off the basic rate of income tax, paid for by increases in environmental taxation and “tougher tax rules for the wealthy”.

By the latter, I’m taking it to mean, at least in part, to some kind of “progressive property tax,” although Vince Cable’s quotation about share income being taxed at a lower rater than general income suggests reform of capital gains. Nonetheless, I welcome it: the Lib Dems absolutely should be the party of low income tax. These reforms suggest a “direction of travel” that I’m very comfortable with.

But there is a cloud on the horizon however. Read carefully, and it is clear that we are just talking about national income tax here. Existing Lib Dem policy is to replace Council Tax with a local income tax of, on average, 3.5p in the pound. If this policy isn’t significantly changed by the Tax Commission, we would have to go into the general election with the highly confusing policy of saying that, nationally, we want to cut income tax while locally we want to pile it on. In net terms, every taxpayer would end up paying 1.5p more in income tax.

Kiss goodbye to any electoral benefit we might expect from the tax shift, in other words: our message to the electorate would be horribly confused. We wait and see what the Tax Commission come up with, but there seem to be two solutions. The first one is to replace Council Tax with something else, maybe a genuine tax on property that is continually revalued (every 1-2 years for instance, like everywhere else: Council Tax is mostly based on 1991 values and thus has little to do with actual values) and taxes high value property at the same rate as low value property. The Band system of council tax leads to effectively a subsidy on the rich that the middle classes have to pay. Better yet, base it solely on site values and leave the capital entirely out of the equation. The second solution would simply be for our policy to not have a policy: local authorities should be free to raise their taxation however they pleased. Of course, that would be pretty meaningless as a policy if 75% of local government expenditure continued to come from national government: a shift to 50% or even 25% would, at a stroke, give local authorities far more clout, and enable us to drop the basic rate of income tax even more.

The problem is, a lot of senior Lib Dem spokespeople have gone on record to say that our local income tax policy is here to say. It seems to me though that we’ve reached a crunch point: either we think income tax is a good tax that we want to shift the burden onto, or a bad tax that we want to shift the burden away from. There is no middle way or third position. That is the decision the Lib Dems, collectively, have to make over the next 3 months. Fudge this, and all our critics will be vindicated.

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Michael Lyons has just published his latest report on local government. It makes heartening reading for those of us who are not just in favour of the rhetoric of localism but the substance as well. Read it and champion it before Tony Blair and Gordon Brown catches sight of it and attempt to bury down a very deep hole.

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Final call for Liberal Drinks - 7pm, Silver Cross, Whitehall.

Looks like there’ll be a decent crowd (12 confirmed on the website alone), and I know of at least 1 MP coming. So hope to see you there!

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Evidence has been dribbling in that Sure Start is not merely failing to help but is actually hindering the most vulnerable families in deprived areas.

This is a difficult one, and Lisa Harker is correct to say that it is too early to make any pronouncements on the scheme’s relative success or failure. However, Tim Worstall is also correct to point this out:

Wondrous. It’s all so difficult to measure that we’ll never know so we’d better keep spending money on it.

Thanks for that Lisa.

The problem with this scheme is that it is a classic case of national government trying to do local government’s job. Lisa Harker is keen to emphasise how each local Sure Start is profoundly different from the next, but why are national funds being spent on a scheme that is essentially uncoordinated?

Wouldn’t it be better to give local government the clout to be able to set up its own schemes (or not) and leave them to evaluate each scheme on its merits? A bit of Darwinian evolution can’t do us any harm here, and local circumstances demand local solutions.

The alternative is that the government will eventually come up with a one-size-fits-all “best practice” which is all but guaranteed to fail as it will inevitably be too inflexible, bound up by targets and red tape and crucially exist to serve the Man in the Ministry not the families on the ground.

This is an area that national government simply cannot succeed, and it shouldn’t even try.

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LOCALISM: to what extent can policing, health and regeneration be devolved to neighbourhoods and families?

Full paper.

This is a bit of a silly section. Admirer as I am of David Boyle, it is clear that he wrote this chapter and appears to be having a conversation with himself. Happily however, this is one area where I appear to be relatively in tune with my partisan superiors.

The Centre for Um’s Free Think website is currently looking at this area, although traffic to it would appear to be stony dead. Go over there and have a look - I have been valiantly defending Sarah Teather’s good name and fearlessly mocking Prof Corrigan’s deluded fantasies.

The real question for me here though is not policy but strategy. The party has always been in favour of radical decentralisation to one extent or another, and yet it never appears to be a campaign issue for us. Read our “top ten reasons to vote Lib Dem” and not one - not one - is a commitment to devolve power (indeed, as the Tax Commission admits, the local income tax pledge commits us to make local government even more reliant on central funds!).

So instead of answers, I have questions that I’d like the working group itself to answer:

• How do we sell localism in a general election, rather than hide it in our manifesto?
• How can we resolve the paradox of fighting an election at a national platform whilst effectively prescribing localised solutions?
• Does our commitment to localism extend to making it a core part of our campaign strategy, even if the polls say it is not an issue that the public are particularly interested in?

If the working group cannot answer these three simple questions, then I would humbly suggest not spending any more time on the subject.

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