Tag Archives: policy

The Littlewood Effect: Why wishful thinking won’t win the argument for tax cuts for the rich

The new ginger group Liberal Vision – which to all intents and purposes appear to be an entryist brand of the libertarian pressure group Progressive Vision – published a pamphlet this week called ‘The Cameron Effect’ (pdf). As regular readers of Guido Fawkes will know by now, this report makes the startling claim that two in three Lib Dem MPs ‘could’ lose their seats at the next election unless the party introduces a policy of cutting tax cuts, including cuts aimed at high-earners.

Rumour has it that the reaction of at least one MP to this report was to push its co-author Mark Littlewood into a hedge. While I don’t condone violence, I have to admit I can empathise (sp. I can’t believe I wrote emphasise last night!). But for me, the real problem with this pamphlet is not that it is unwelcome (publish and be damned) but that it is a spectacularly poor piece of research.

Let’s take the psephology for starters. Littlewood and his co-author David Preston have this pearl of wisdom about first past the post:

“Under Britain’s byzantine electoral system – it is not just absolute vote share that matters but relative vote share.”

Hmmm… not sure about that. I notice there are no footnotes. Relative vote share certainly does matter in d’Hondt elections, but where is the evidence that is the case for FPTP?

Problematically for Littlewood and Preston, the example they cite doesn’t support their argument. It IS true that if you look at the average ratio of Liberal:Conservative votes in the 1983, 1987 and 1992 elections and compare it to the average ratio of LD:Conservative votes in the 1997, 2001 and 2005 elections, the ratio does indeed change from roughly 1:2 to 2:3. But if you compare 1992 to 1997, during which period the number of Lib Dem MPs leapt from 20 to 46, the ratio goes from a bit under 1:2 to a bit over 1:2. The 2:3 ratio cited only emerges once you factor in the 2005 General Election, when we made significantly fewer gains. If this analysis were correct, surely the ratio would be higher in the year of our great breakthrough?

But of course the difference between 1992 and 1997 was not some quasi-mystical change in relative vote share but a dramatic shift in the way the party targeted resources. This is just the first instance in which ‘The Cameron Effect’ fails to take into account the Rennard Effect.

The pamphlet goes on to examine how each constituency is likely to fare in the next election. Helpfully, it provides us with a neat little bar chart showing us what will happen in each constituency once you apply a uniform national swing based on an average of 30 opinion polls taken in the summer.

Even if we disregard the fact that the Lib Dem vote share will almost certainly be higher (and the Tory share will be lower) than the polls suggest this summer, this is a ridiculously crude mechanism to apply for three reasons:

a) It assumes that public opinion is constant across the UK with no significant variations. Yes, that probably means that in the South and East we are likely to struggle even more, but it also means that in the North and West we are likely to have an easier time gaining Labour seats.
b) Even Baxter allows you to factor in a tactical vote these days. Littlewood and Preston work on the extraordinary assumption that not a single voter will behave in this way, despite the fact that every single Lib Dem leaflet they receive will be urging them to do so.
c) In several of the seats listed as being at ‘measurable’ and ‘high’ risk (i.e. the seats which their press release lists as likely to go Tory) even the statistics they cite appear much rosier than they claim. Harrogate and Knaresborough is cited ad being at ‘measurable’ risk despite the fact that there has been a swing against the Tories locally and the uniform national swing would have us win. There’s a similar story in Kingston and Surbiton while in Solihull the massive swing locally, we are assured, counts for nothing.

While these factors appear to over-egg the claim that we are especially vulnerable to the Tories, they downplay our chances at gaining seats off Labour. They assume that not a single Tory voter in a Lib Dem/Labour constituency is squeezable. They talk about the sort of swings that we typically got in 2005 as being ‘exceptions’ to the point of being accidents – once again, the fact that in each of our target seats we are to have a campaign on the ground is completely downplayed.

In short, strip away the ‘we’re all doomed’ hyperbole and the prospect doesn’t look anything like as bad as Littlewood and Preston would have us believe. Don’t get me wrong: my prediction is that we will remain fairly static in the next election, losing some to the Tories and gaining some from Labour. And stagnation is something that I personally find extremely depressing. But the sort of wipeout predicted in this paper is simply wide of the mark.

So much for the psephology; what about the policy? Well, if the confident predictions of our demise seem unlikely, then the proposed cure-all is even harder to swallow. Let us assume for a minute that we really are in the ditch that Littlewood and Preston claim we are. Is a single change in policy really likely to make any difference? And that’s before you consider that the sort of tax cutting agenda they propose would by neccessity mean cutting several of our existing spending commitments (Littlewood and Preston decline to say which ones) and our opponents will almost certainly seek to present this in as poor a light as possible.

The entire argument for how promising tax cuts would make the party massively popular is based on a single opinion poll commissioned by the Taxpayers’ Alliance 13 months ago (before the credit crunch). Seriously. If that is really the best they can come up with, the only rational conclusion is that they must be wrong.

Their argument about cutting taxes for higher income earners is even more spurious. As a matter of fact (unrecognised in the paper) the Lib Dems don’t have a policy of clobbering the rich. Our policy is to close loopholes and exemptions only available to the rich. To argue, as they do, that what the average person in a low income really wants is special tax breaks for the rich so that, if they ever become rich, they’ll be able to get out of paying tax as well is taking the ‘aspiration’ argument beyond the point of absurdity. No-one is suggesting a return even to the 50p rate of income tax, so where did this nonsense suddenly come from?

In fact, I could probably make a better case for the popularity of tax cuts for the rich than Littlewood and Preston can. Far from being in the grip of ‘craven caution,’ when it comes to offering tax cuts, the Tories’ climb in the opinion polls began when George Osborne announced an intention to exclude all but the very richest from inheritance tax. So it is fair to say that some tax breaks for the rich are popular. But it is wrong to say that there is an opening in the tax debate. Lackadaisically calling for tax breaks for the rich won’t make us sound distinctive – they’ll make us sound indistinguishable from the Tories. And why should voters support Conservative copies when they can have the real thing?

Overall then, pretty much every single aspect of this pamphlet is poorly researched and ill-thought out. Mark Littlewood is a master of publicity and has managed to make a big splash with this pamphlet, but the fact that it is so, well, stupid, is cause for hope that Liberal Vision will prove short-sighted.

Avast! How Clegg and Alexander are doing it wrong.

(Cross-posted from here)

This article pretty much sums up what is wrong with the party’s communication strategy at the moment. Apart from the fact that it has been published roughly four days too late, it repeats many of the mistakes we witnessed last weekend.

Reading it carefully, it is clear what Danny is getting at. But journalists don’t – and often can’t – spend time reading the subtle nuances of every press release and statement. I’m not sure if the talk about ‘the vast majority of the “spare” money’ going on tax cuts is part of a thought out strategy, or a retrofit designed to spare Nick Clegg’s blushes following the Telegraph interview, but its potential to mislead is, well, vast.

Let’s be clear: if the £20bn of savings is to be earmarked for existing spending commitments, then that means that only £2-4bn will be left for tax cuts. Whichever way you spin it, that is not a “vast” amount of money – perhaps a penny in the pound on the basic rate of income tax (which will benefit low income earners not one jot). So why all this talk of “vastness”?

There’s nothing wrong with admitting that any tax cuts we come up with are likely to be modest – given the current economic climate it is prudent to be prudent. All this talk of “vastness” is an open invitation to misinterpretation.

Several people walked away from the “Make it Happen” launch in July under the genuine impression that Clegg had promised £20bn in tax cuts (Iain Dale even described that sum in his Telegraph column as a small amount). We can’t keep leaving so much room for confusion and doubt. And that means choosing words much more carefully.

NB My Parliamentary Monitor article, which is related to this subject, is now readable online to all and sundry.

Clegg and localism: early thoughts

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.

Liberalism and technocracy don’t mix

Oh dear. The cheerleaders for road user charging in the Lib Dems have decided to step up a gear. We will, no doubt, have another row about this at party conference in the autumn and Clegg will no doubt turn it into a vote of confidence issue and win (people who diss Labour MPs for meekly falling into line over their government on 42 days would do well to remember that our own party has a tendency to put the same party interests over principle). That doesn’t make him right though.

Can it really be more than 2 1/2 years since I last blogged about this subject? I don’t have too much to add. To an extent the privacy/civil liberties argument is a red herring, albeit an understandable one, in that it is entirely possible to develop a system and regulatory framework which would respect privacy and penalise infringers severely. The most obvious step would be to not store all the data in one place and not allow people to exchange it without permission from the user. There are pragmatic objections to this – the police and civil service would allow a system which genuinely respects privacy to go ahead over the mound of their collective dead bodies – but not especial principled ones.

My main objections are threefold: it would take bloody ages to introduce, it is an IT disaster waiting to happen and it falls foul of the unintended consequences law.

The first point is that we need to be taking action over climate change now. Looking towards theoretically perfect systems in the future is in this respect a waste of time. It is designed to take pressure of politicians in the short term on the basis there will be jam (or rather in this case a lack of jams) tomorrow. Don’t expect our message to be “punitive fuel taxes now” expect it to be “nice cuddly road charging tomorrow”. That in itself should be dismissed as political cowardice.

As an aside, I can but wonder why it is that we leap on proposals such as this, which will take the best part of a decade to introduce, yet the constant objection to having any specific policy on land value taxation at all is that it will take 1-2 parliamentary terms to introduce.

Secondly, governments don’t do IT systems awfully well. To be fair, old Ken Livingstone seemed to manage both the C-Charge and Oyster competently enough, which is why I gave him my second preference vote (pretty much the only reason why I gave him my second preference vote, for all the good it did either of us), but this system would be of a vastly bigger order of magnitude. We’re talking about a system in which either every single car in the country has to have GPS installed or where every single road in the country has to have CC-TV introduced. No halfway measures will do. How is this going to work? How is it going to be policed? How are we going to stop unregistered cars from driving around unhindered? We don’t seem to have any answers to these questions. On “rat running” the best we can come up with is “the technology chosen must allow for penalties to be enforced on drivers who ‘rat run’ in order to avoid payment,” which is another way of saying “we don’t have a bleedin’ clue how to solve this problem, but don’t pester us with details!”

Thirdly, unintended consequences. It is a fact, uncontestable, that this policy calls for a tax shift away from pollution and onto congestion. The unambiguous winners of this system will be people in rural areas who do a lot of driving on largely deserted roads. These people will be given every incentive to continue their polluting ways. Their tax burden will be taken up by urban motorists. This in itself seems remarkably unfair, but then I’m not a 60-something retiree living the life of Riley out in the sticks and driving a Mercedes, who this policy is surely targeted at.

The solution to congestion is not necessarily fewer cars on the road, but less bunching. This system, combined with increasingly sophisticated satnav systems, will certainly do that, but making it quicker and easier to get about by car is not going to discourage car use, but promote it. People are addicted to cars enough as it is – this will just make it harder to wean them off.

Fundamentally, what would road user charging achieve that a combination of fuel taxes, satnav and simpler (and thus harder to game) congestion charges in strategic areas won’t do more quickly, with less investment in infrastructure and without the civil liberty implications? Thus far I have yet to hear an answer to that.

The other, related policy measure is personal carbon credits which was doing the rounds last week. In this case I at least accept that the economics makes more sense and the civil liberty implications are less because it would actually be simpler to let the private sector manage the scheme. Once again however, it is hard to see why you need a big, complex technical solution when having companies buy the credits directly, passing the cost onto customers and having the government pass the revenue onto the population in the form of a citizens’ income would amount to about the same thing.

There is also the growing realisation that the global carbon trading scheme isn’t working as it should. That isn’t to say the system is doomed to failure, but until the current gaping loopholes have been filled and there has been a significant culture shift, talking about making the system personal is pie in the sky.

Generally speaking, if vastly complex IT systems are the solution, you are asking the wrong questions. Such systems are attractive to politicians because they know they sound green by talking about them in the full knowledge that they won’t be around if and when they are actually implemented. We don’t have enough time to put up with such vanity.

The Orange Book Delusion

The enduring irritation about the Orange Book is not its content, which was broadly uncontentious, but the mythical book which everyone who never read it imagines exists.

So once again my heart sinks when I read Nick Assinder claim:

In his first major speech since winning the job, Mr Clegg has pretty much adopted the agenda set out in the controversial Orange Book, authored by party frontbencher David Laws and others (including Mr Clegg himself) in 2004.

On one level, that is correct; as correct as it is banal. Most of the chapters in the Orange Book do little other than recite existing party policy, with a perhaps a slight difference in emphasis. Very few Lib Dems disagree with the notion that social and economic liberalism both have important roles to play, neither the economic liberals behind the Orange Book nor the social liberals behind Reinventing the State. In that respect, the Orange Book failed to move us forward. You might just as well argue that both Kennedy and Campbell “adopted” the Orange Book agenda.

The real issue is to what extent Clegg has moved in a David Laws direction. The answer to that is, he most certainly has. But adopted the agenda set out in David Laws’ chapter on health? Nope. Adopted Laws’ pugnacious stance in his chapter on liberalism? Quite the opposite. Given that the speech was about public services and philosophy and Laws’ chapters were the main ones on both, these facts matter quite a lot.

This isn’t a debate about a book, it is a debate about a general direction. And if that debate is to be at all meaningful, it should focus more on practicalities than principles: this isn’t an Oxford Union debate. As it stands, I broadly welcome the stance laid out by Nick Clegg on Saturday; I remain deeply sceptical about health insurance. So does that make me an Orange Booker or not?

Perhaps one day someone will publish the definitive book on social liberalism. The Orange Book was not it. I do wish people would stop waving it in my face and actually read it.

The Clegg era starts here

Notwithstanding my gripe on Thursday, Nick Clegg has had a very good week. He started by putting the finishing touches to his front bench, made a series of appointments regarding reforming party structures (about which I must get around to blogging about it detail at some point), made a well-judged debut at PMQs and has now made a major speech on public services reform.

This is the speech I didn’t get during the leadership election but nonetheless voted for, so I’m delighted my gamble seems to have paid off. Linda Jack’s point that he spelled out his approach in an SMF seminar in December misses the point: he spent the election campaign downplaying all this stuff when so many of us were urging him to be bold. Making a token speech to the SMF, towards the end of the campaign and with no fanfare is the oratorical equivalent of putting planning proposals, to quote Douglas Adams, “on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of The Leopard‘.”

So much for the past and back to today’s speech. I’m happy with it because it moves us forward, not in some symbolic “break with the past” way that some of the headbangers in the party might like but through clear-headed liberal analysis about what is wrong with public services in the UK and how they work elsewhere. There is a clear continuity with the approach the party has always had and the direction it has been traveling in.

It is a very politically calculated speech, and I mean this in a good way. He’s correct to say that the Orange Book was correct to call for the marrying of social and economic liberalism. What no doubt would have been more boring to say was that notwithstanding the question of how you get the balance right there is virtually no-one in the party who would disagree with that sentiment (a point about which most political commentators seem unaware): he could equally have said the same about the “social liberals'” answer to the Orange Book, Reinventing the State.

Some sections in it, such as his call to scrap F and G GCSE grades, probably won’t transform society, but they represent a move away from an “everyone shall have prizes” approach to education and towards clearer delineation between pass and fail. This is symbolism, but in a meaningful way.

Possibly the most important passage of the speech can be summed up in a few lines:

I stand for these simple principles:

The state must intervene to allocate money on a fair basis.

The state must intervene to guarantee equality of access in our schools and hospitals.

And the state must oversee core standards and entitlements.

But once those building blocks are in place, the state must back off and allow the genius of grassroots innovation, diversity and experimentation to take off in providing an array of top-class schools and hospitals.

At first it sounds very motherhood and apple pie, but in practice this is a real challenge for political parties of whatever hue to live up to. Clegg singles out Brown’s approach for failing to live up to these core principles, but the same could be said of Cameron, such as his proposal for a “Tsar of all the MRSAs.”

It will be a key test of the Lib Dems in the future to see if they can live up to these principles or are tempted to jump on this interference bandwagon. The biggest challenge is what exactly is meant by “core standards and entitlements”. You could argue that the National Curriculum does that; Labour certainly do. The National Curriculum is a “minimum standard” that has grown and grown over the past two decades, driven by political expediency. One person’s minimum standard is another person’s nanny-state interference. Literacy? Some educationalists argue you shouldn’t even start to formally teach reading until the age of seven. Sex education?

How do you stop minimum safety nets from transforming into straitjackets over time? And who sets those minimum standards: national or local government? My suspicion is that we need to better spell out what checks and balances need to be put in place for such a system to work in practice, but that is for another time.

His model for Free Schools will also need careful crafting. Over the New Year period, Clegg caused some controversy by endorsing the role faith schools have to play as “engines of integration” in The Jewish News. I commented a few months ago about the hypocrisy of Jonathan Sacks making the same point while opposing any measures which would stop faith schools from being able to choose their own pupils. If Clegg wants to ban selection completely, which also means taking on the handful of local authorities which still have grammar schools, he will have to also take on the faith lobby which he has been courting.

Orthodox Judaism isn’t the real issue here anyway. I’m sure the Vardy Foundation will have very little problem with banning selection if what they’re getting in exchange is even greater freedom to teach creationism. I’m sure the Scientologists Applied Scholastics are similarly licking their lips. And these problems are relatively simple in urban areas where there is a great enough population density to mean that parents have a wide choice of schools to choose from; in rural areas the economics works very differently.

It isn’t all one way of course; under this proposal there is nothing in principle to prevent a group of parents setting up their own school and effectively starving the local brainwashing academy of minds (so long as they can find enough support). If it is an open enough system for L. Ron Hubbard’s supporters, it is certainly an open enough system for fans of Richard Dawkins. The challenge for this proposal (which emphatically is not a fatal one) is how we combat liberalism’s greatest enemy: monopolistic power.

The health proposals are less problematic for me. The idea of allowing patients to go private after a waiting time period has expired is a sensible middle way between the Tory’s old policy of voucher system which would simply have undermined the NHS by allowing the wealthiest to take the money and run, and Labour’s target culture.

Overall then, this is an excellent start for the Clegg era. It is the most thoughtful speech given by a party leader since Ashdown departed these shores for Valinor. I think he needs to slightly change his mode of attack on Cameron, with whom he is so frequently compared. He needs to emphasise that while Cameron adopts similar rhetoric, even if he is being sincere he can never deliver while he is at the mercy of a mulish party which only allows him to lead when it feels like it.

The key fight to pick with Cameron, which to Clegg’s credit he seems to have identified as well, is over school selection. The more Clegg challenges Cameron to support a system which emphasises parental choice over school selection, the more the swivel eyed loons in the Tories will go nuts and start banging on about grammar schools. The fact that Cameron has already buckled under the pressure once suggests this will be a fun fight to watch.

The important point is, Clegg’s speech today is one that Cameron could never afford to make. That is what annoyed me so much about the “senior official’s” interview in the Guardian on Thursday. Our strength, ultimately, is our unity. The Tories’ fatal, potentially election losing flaw is their internal division. It makes no sense to talk up disunity within the party when it prevents us from exposing our opponents’.

Finally, this has been a good speech about challenging what he calls “inherited disadvantage”. That’s fine but ultimately if you want to truly tackle social mobility you need to tackle inherited advantage as well. As Clegg has set up a social mobility commission, he can’t afford to leave it too long before starting to address that.

Chris Huhne: time to get serious

I really have veered a lot in my views in this leadership election. I’m not used to this phenomenon of genuinely not having made my mind up about something – it’s giddy stuff!

So it was that while my default position at the beginning of the campaign was that I’d be voting for Clegg, by the middle of last week I was more or less in the Huhne camp. But now I’m starting to move back to the centre again.

The reason is this row about school vouchers. First of all, as I’ve already said, I simply don’t accept the arguments put forward in Chris Huhne’s manifesto that a voucher system would be bad in all cases. If he’d limited his argument to opposing health insurance, he’d have been on safer ground: his arguments about the inherent bureaucracy of such systems are stronger (in my view).

But secondly, that ought to all be irrelevant because if Chris Huhne is truly committed to local control then he ought to accept that different Liberal Democrat council groups might come to wildly varying conclusions based on their local circumstances. I can see, for example, how a school voucher system could work very well indeed in inner London. I’m not wedded to the idea but I can see none of the disadvantages that I would foresee if the same system were introduced in a rural area.

Thirdly, the implication that Nick Clegg has a secret agenda for introducing school vouchers simply doesn’t hold water for me. It appears to be based on a Rachel Sylvester interview in the Telegraph where the simplest, most Occam’s Razor proof explanation is that she simply chose what she wanted to hear. I’ve noticed that one of Clegg’s unique characteristics is that he manages to convince Tories that he is one of them. Last night on 18 Doughty Street Iain Dale and Timothy Barnes were both utterly convinced that Clegg was a conviction Tory, while seconds later being equally convinced that Clegg was about to uncritically support Labour’s “illiberal” proposed homophobic hatred legislation. It doesn’t appear to be rational, more a kind of Derren Brown style mind trick.

(Side point: Barnes and Dale were waxing lyrical about how the Tories were going to oppose this while the Lib Dems would support it. I would merely point you to when it was debated in the Commons last month. Nick Herbert essentially welcomed it notwithstanding concerns about free speech, but it was both Evan Harris and David Heath who dealt with the freedom of speech issue in depth. Lib Dems 1, Tories 0 – sorry chaps)

Back on topic, one of my biggest complaints about Nick Clegg is that he has been playing for safety and that it may cause him and the party trouble in the long run if he then decides to start proposing major changes after he gets elected. To be precise, he won’t be able to and will merely have lots of acrimonious rows that get nowhere if he tries. So I can hardly then worry about a secret plot of his to introduce school vouchers as policy by the back door when he has now stated for the record on several occasions.

And then there’s this article summarising a pamphlet by Direct Democracy about introducing school vouchers. What is significant about this pamphlet is that Direct Democracy are very much on the right of the Conservative Party and they don’t think the argument for school vouchers is winnable in the short term. If they think that, then why on earth would Nick Clegg be so foolhardy as to position himself to their right?

In short, the school vouchers debate is complete puff. I’m annoyed at Chris Huhne for making such an issue of it for what appears to be cheap political capital. And though it saddens me to admit it, I’ve seen him make too much cheap political capital in this campaign so far. The Trident debate went on for two long weeks and also alienated me. The constant references to “not being another Cameron” (which admittedly Clegg can’t entirely absolve himself of blame for) grate; why no attacks on Brown in this campaign?

It is one thing for Huhne to overreach himself occasionally, but it is beginning to look like design rather than accident. His challenge in this campaign as the underdog is to make the political weather. But too much of this comes across as too divisive, too cheap and generating far more heat than light.

Huhne’s manifesto pegged him out to be the strategist, yet he’s the one that has been fighting a tactical campaign. I may be desperately uninspired by Clegg’s campaign, but at least it has an internal logic to it. Being able to maintain a steady course under fire is not in itself a bad thing, even if it is unclear which direction you are going.

I still rate Huhne as the candidate best able to articulate what the Liberal Democrats are for. Clegg continues to fail to inspire me and has been oversold as the “great communicator”. But he is at least now starting to come up with messages of his own. Some I agree with. Some I think are utterly ridiculous. But he’s setting the agenda now. It’s time that Chris Huhne, who has a whole manifesto to keep relaunching bits of over the coming weeks, followed suit.

Clegg’s Council Tax proposals make no sense

I’m afraid my brief excitement that Nick Clegg was about to ditch local income tax proved to be groundless. As Valerie pointed out, he spelt the policy out on the Guardian website earlier this week. At least I think he did:

Mr Clegg added that he is committed to replacing council tax with a local income tax, but that he wants to cut council tax for low- and middle-income families by introducing a progressive tax on those living abroad (sic – is it me or are those two clauses contradictory?).

He plans to raise £1bn from non-domiciles to fund council tax cuts for millions of households. His proposals include taxing non-domiciled taxpayers at 10% on their overseas income, in a system similar to that used in the US.

I think the idea of a tax like this on non-doms is an interesting idea, but it isn’t a progressive tax, it’s a flat rate. Secondly, if he’s committed to scrapping local income tax, why this extra policy which will only add confusion to what many regard as an already complex set of proposals?

The argument seems to be that it will take a while to introduce local income tax and we should to this in the meantime. But it will take a while – pretty much the same while – to introduce a tax on non-doms. The argument against going straight from council tax to a form of land value tax has always been that it will “take a while”; indeed the party remains committed to a land value tax in the long term. So why not just do the switch in one fell swoop and leave local income tax out of it altogether?

Clegg’s proposals also seem to contradict one of the fundamental reasons why the Lib Dems are calling for council tax to be scrapped. If the rate that a family pays in council tax is so good at determining whether they are of low- or middle-income, why scrap it at all? I thought the Lib Dem argument was that it is a regressive system? The fact is that outside of Wales, Council Tax has not been evaluated since 1991. People selling houses often find the property leaps up two or more bands once the sale is completed. What Clegg is suggesting here is a system that will benefit an awful lot of people who are currently under-taxed.

These proposals contradict the Lib Dem commitment to increasing the amount that local authorities collect locally. What he’s suggesting is a national tax to subsidise a local tax – in short, that we should go the other way.

In short, this is a mess. The truth is, there’s actually very little you can do to offset a tax that will only raise £1bn that sounds impressive; raise personal allowance by a few quid? The temptation is always to focus on those small taxes that actually raise very little but which cause the public a disproportionate amount of upset – see Gideon Osborne seeking to slash inheritance tax for example. You could do a lot with it on the spending side, but we’re not supposed to do that these days.

Ultimately, this policy is a mess and the way Clegg has presented it is a mess and it is axiomatic of the sort of thing that is all too frequent in Lib Dem policy making: a policy bite which doesn’t accord with our broader strategic vision. I’m sorry if it is “purist” to suggest we need less rather than more of this sort of approach, but that’s my view.

Is Nick Clegg about to ditch local income tax?

Discussing Clegg’s interview with David Mills of GMTV Sunday earlier, it occurred to us that the following quote has potentially enormous implications:

Nick Clegg: Er, yes, but I mean there are other ideas. For instance there are other ideas, I mean for instance I’ve also this week been floating ideas for how I think we should introduce a 10% tax on the non-domestic earnings of so-called ‘non-doms’. In that particular case that raises about £1 billion. I would like that to go to alleviate the burden of Council Tax on those in Band A and band B properties, those on the lower rung of the property ladder, if you like. But it’s just an example of where we can be creative in trying to find that extra money in order to fulfil that pledge, and I’m absolutely confident that we will under my leadership make that fixed pledge by the next general election.

Is this just idle blue skies thinking (which you surely must never do on a TV interview) or a hint that under Clegg the Local Income Tax policy is to be scrapped or at least adapted so that council tax will remain in the picture for the foreseeable future? Because you can’t alleviate the tax for low bands if you are going to scrap the tax altogether.

Is this an unintentional slip, revealing an agenda to move the party away from its existing LIT commitment? He was apparently quoted as saying nice things about site value rating earlier this week although I don’t have chapter and verse. Is a pattern emerging?

Speaking personally, such a shift would be fantastic: despite all the wobbles it could even win my vote (notwithstanding details, etc). Amongst many other party members though it would probably be about as popular as drinking a bucket of cold sick.

This isn’t an issue to be trifled with. If Clegg is thinking along these lines, mere hints will not be good enough. He would have to press it home. It would be a high risk strategy of exactly the kind that so many of us have been calling for him to adopt over the past few weeks.

Dare to do it Nick; you know you want to! 🙂

On Equality

Last week I got some flak for stating that I support “equality” as a guiding principle. Indeed, in Andy Mayer’s case it turned into a full scale onslaught. Church of Leftology? Where did all that come from? Never has so much been read into the use of one little word. I’ve been meaning to return to the subject all week and have struggled to fit it in with, among other things, blogging about the Huhne interview, but it looks as if I finally have a chance.

What I aim to spell out in this article is that support for the narrow ideals of “meritocracy” and “equality of outcome” at the exclusion of equality in the round is inconsistent with the Liberal Democrats’ stated goals, with liberalism more widely and is ultimately riddled with contradiction.

The first point is easy. I need only quote the Liberal Democrat Preamble:

The Liberal Democrats exist to build and safeguard a fair, free and open society, in which we seek to balance the fundamental values of liberty, equality and community, and in which no-one shall be enslaved by poverty, ignorance or conformity.

That’s a pretty bald statement and it’s written on every single membership card. In the almost 20 years of the party no-one, as far as I’m aware, has ever lobbied to have this statement changed. In short, if you don’t support equality, you don’t support the principles of the Liberal Democrats. The End.

But while that may well be true, it is insufficient. It could be that all this proves is that the Liberal Democrats are not a true liberal party, but rather a rough halfway house between a liberal party and a social democratic one (which in one sense of course happens to be true). Is “true” liberalism therefore incompatible with Liberal Democrat values?

In a sense I suspect it depends on whether you consider yourself to be a social liberal or a classical liberal. In Reinventing the State, David Howarth however makes the point that even David Laws is a social liberal, albeit a “minor” one. Let’s look at a number of policy areas and explore whether the Liberal Democrat line leans more towards equality or equality of opportunity/meritocracy.

First of all, a simple one: democracy itself. Not only does the party believe in universal suffrage, it believes in a fair voting system. These ideals are rooted in equality, not equality of opportunity. We don’t argue that everyone should have an opportunity to have a vote. We have a real concern (don’t we?) about the fact that under first-past-the-post the value of your vote varies enormously depending on where you happen to live. We don’t limit ourselves to being concerned about everyone having the opportunity to live in a marginal constituency. We want all constituencies, ideally, to be marginal.

What about another absolute: human rights. Do we argue for a meritocratic rights system, where only the “deserving” have rights? This isn’t totally absurd question: a number of people in the Labour Party, including Home Office Minister Tony McNulty, do. The Conservatives want to tear up the Human Rights Act but they are happy to remain signed up to the European Convention of Human Rights – under such a system everyone would have the opportunity to exercise their rights. Do we agree with them? I don’t think so.

Do we think the police should only answer calls of distress from people with a clean criminal record? Do we think the health service should only be available to people who don’t smoke and stick to their ideal body weight (again not a completely hypothetical question as this issue does crop up time and again)?

Education is a thornier issue. Some Conservatives support Grammar Schools; David Cameron blathers on about “Grammar streaming”. Obviously the whole point of doing exams is that you have achieved some standard of merit. But is the Pupil Premium about equality of opportunity or a system of positive discrimination? If we were a party purely concerned with opportunity and meritocracy, how would such an idea not merely be policy but manage to get through our party conference with barely a squeak of opposition?

It strikes me that not only could you not maintain a liberal position while holding to a strict philosophy of equality of opportunity, you would get stuck into a mire of contradictions. As a philosophy it doesn’t tell you where to draw the line. At what point do you give up on people? At what point do you insist on leveling the playing field? At the genetic and embryological stage? At the toddler? The teenager? It’s rooted in the idea that there is a point in everyone’s life that you can point to, make sure the inequalities are addressed there, and then leave people to go off on their merry way without having to worry about what happens next.

The problem with such an approach is that there is no internal critique. As such it is all too easy to slip into complacency. Andy Mayer for example is extremely quick to write people off:

But there are entrenched privileges that are ‘unequal’ but not ‘unfair’. Looks, brains, talent, aptitude etc.

Sure there are fundamental differences in our genetic code, but there is a huge danger in exaggerating them. We know for example that identical twins, with different upbringings can end up having extremely different “looks, brains, talent, aptitude, etc.” (notice how imprecise all these differentials are). We understand – don’t we? – the danger of drawing wild conclusions about genetic difference, following the publication of spurious books such as the Bell Curve. From my reading of the nature versus nurture debate, at best the jury it out on which is the main steer; if anything nurture and the external environment appears to be winning through. You can’t ultimately answer a scientific issue through political philosophy; if the latter is to be meaningful it must be informed by the former.

Most meritocrats within the Lib Dems have leapt onto the issue of education as his point at which everything will fall into place. They are certainly correct that this is one of the most important areas that maximise equality of opportunity, but if you think that a good secondary education alone will set people up for life, you are sadly mistaken.

For example, I work in the public policy sector. I’m very conscious of the fact that small organisations like my own use internships to help bolster what we can do. The only reason why people do internships is because it gives them valuable experience and helps get them paid work. Yet people without access to free accommodation and board within London can’t afford to do internships. Result? The public policy sector is disproportionately filled with people from stable middle class backgrounds based in London and the South East. The best state supplied education in the world won’t change that fact, and the same rule applies to a whole range of white collar professions.

Andy Mayer and others have been very keen to attack my apparent support for “equality of outcome”. In fact this is the first time I’ve written that dread phrase on this blog. Equality of outcome is just as narrow and problematic a philosophy as equality of opportunity; if you solely concern yourself with outcomes you will only ever level down. But that does not mean you shouldn’t be concerned about equality of outcome. And it is here that Andy Mayer goes a bit bonkers. In attacking Duncan Brack’s writings on equality, he says the following:

Duncan Brack’s many magnus opi on this have attempting to obfuscate that clarity by claiming inequality in itself is such a barrier, particularly in respect of non-material matters such as happiness or life-expectancy…. or ‘I can’t ever be happy because you’re better looking than me’.

But it’s a circular argument. Inequality matters because it matters, therefore we must redistribute for the sake of redistribution.

This is a complete travesty of what Duncan has written. Duncan’s argument in Reinventing the State and elsewhere has been to look at the international evidence, observe that for example more equal societies tend to have lower incidences of crime and higher life expectancy and ask why. At no point does Mayer suggest that this leads to wrong conclusions, merely that it shouldn’t be looked at at all. Then, by way of misdirection, he starts raising the spectre of the Soviet Union, pointing out that the crime level there was low.

But the Soviet Union, as any casual viewer would attest, was not an equal society. While it espoused equality, the reality was quite different. While large sections of society were equally poor, they didn’t have equal rights or equal status. Duncan Brack doesn’t refer to the Soviet Union at all; so how is it relevant?

Mayer’s leap is to assume that a concern about equality of outcome is the same thing as pursuing equality of outcome at the expense of everything else. Yet no-one in the party as far as I’m aware has ever argued either for a narrow interpretation of equality or even that equality should be allowed to trump liberty.

And it isn’t just me who espouses a concern about outcomes. Nick Clegg this week made it extremely clear that he takes outcomes seriously. On the issue of diversity within our parliamentary party, he declared:

I believe this is our last chance to do it the purely liberal way, without any positive discrimination written into the rules. So I will take out an “insurance policy”, so we make sure we get it right. If, in 2 elections’ time, we have not sorted this out once and for all, then we will have no choice but to consider positive discrimination.

While I welcome this statement, it goes further than I’ve ever gone. According to Mayer’s logic, this makes Nick Clegg a fully paid up member of the “Church of Leftology

Finally, I’ve been castigated for supporting the redistribution of wealth as an end in itself. Once again, I would quote you the Lib Dem preamble:

We recognise that the independence of individuals is safeguarded by their personal ownership of property, but that the market alone does not distribute wealth or income fairly. We support the widest possible distribution of wealth and promote the rights of all citizens to social provision and cultural activity.

Why has the party taken such an unequivocal line on this? For the simple fact that if wealth is left to accumulate is will always block opportunities for others. Wealth, all things being equal, creates more wealth. A millionaire can outbid a typical graduate on a house without breaking a sweat and use the rental income from it to help buy more houses. The market is not self-correcting in this respect. Redistribution then is a fundamental corrective. Support for it only as a “last resort” is to call on us to waste time trying to avoid a fundamental principle of economics that has been well understood since Adam Smith.

Redistribution of wealth is not the same thing as redistribution of income. Speaking personally, long before the Lib Dems supported cutting income taxes I was calling for us to shift the burden of income and onto wealth. Policies such as the 50p rate on incomes above £100,000 fail to differentiate between hard work, good investment and sitting on inherited wealth. We should always encourage innovation and initiative; we should always discourage people from resting on their laurels.

Ultimately, a commitment to true equality means moving outside the narrow confines of concepts like “meritocracy”, “equality of opportunity” and “equality of outcome” and instead appreciating the bigger picture. Ideally, equality of opportunity ought to produce equality of outcome. In the real world we are never going to achieve that ideal but the creative tension between the two can lead to progress. By contrast, an opportunity-centric approach in the way that Andy Mayer espouses is like a factory owner having a machine in which he believes he can get the best products by putting the finest raw materials in one end, but who refuses point blank to look at what comes out at the other end.

Similarly, confining equality to economic terms is to deny the wide range of areas in which it can and should inform policy; ways which the headbangers for meritocracy appear to be blind to. Human rights, fair votes and universal suffrage – all classical liberal ideas – are rooted in the Enlightenment and thus a fundamental belief in equality.

Liberals take it for granted that liberty is a complex and rich concept; so why this mad rush for reductionism when it comes to equality? Ultimately the two must inform each other. I’m not convinced you can have true equality without liberty: look at how inequality in Venezuala is becoming more stark since Chavez took the reins of power. Conversely, as L.T. Hobhouse put it: “liberty without equality is a name of noble sound and squalid result.”