Tag Archives: policy

Conference and canards

God know’s why I’m still up at 3am. Still a bit wired after conference I guess. I’m not staying up much longer but I wanted to write that I thought it was an excellent weekend both for the party generally, the Social Liberal Forum in particular and me personally. A few random thoughts:

1. I was pleased by the answer Danny Alexander gave me regarding the FPC playing a more pro-active role in formulating a response to government legislation in light of the Digital Economy Bill debacle. I have a few thoughts on this but will write about them later.

2. I was less pleased by Nick Clegg’s non-commital answer to my “friendly” question about if he rules out further tax rises, as he appeared to do in the Spectator this week. He neither confirmed nor denied the position he took. SLF Chair David Hall-Matthews also pressed him on this during the economy debate. The rumour going round was that he privately acknowledges “misspeaking” but it is concerning nonetheless.

3. Despite my constant grumblings, I really do think that Nick Clegg nailed it in his conference speech. “Change that works for you. Building a fairer Britain” is a lousy slogan but then, aren’t they all? As spelt out during the speech however, at its core is a brilliant narrative which encapsulates what distinguishes the Lib Dems from the other parties. The fact that we even have a narrative (or rather, a narrative of our choosing rather than one imposed on us) is a bit of an innovation for the Lib Dems going into an election. The four themes work well and, crucially, join together. The bad old days of the 2005 policy pledges seem long ago.

4. Standing room only at both SLF fringes, including the one about passing a constitution. FTW!

Finally, over on the SLF website, I’ve written a response to the Left Foot Forward/Fabian “research” which purports to prove that the Lib Dem tax policy is regressive – by its own admission it only applies if you cherry pick the tax cut while ignoring the tax rises being introduced to pay for it. Spectacularly bad.

Quality of Life (2) – work and unemployment

This is the continuation of my series of posts in response to the Lib Dems’ Quality of Life consulation paper, the first of which can be found here.

Taking the next three questions in one go next:

6. Should there be compulsory limits to working hours? Can employees make a genuinely free choice to opt-out of the European working time directive? Is it liberal to restrict how much we work?

7. Would a more flexible approach to working make a difference to people’s happiness? How would this be achieved without creating unnecessary bureaucracy?

8. Should we incentivise part-time jobs through NI or other employment tax breaks, especially to encourage employers to create senior part-time roles?

I have to admit that I don’t have much of a problem with the current working time directive (i.e. 48 hours). Most countries have worked perfectly well without the opt-out and the 17-week reference period stops the rule from being silly. There might be a few areas where we might allow for some exemptions but the current blanket opt-out option, in practice, seems as meaningless as the rules of shop workers working Sunday shifts (I worked in a shop full time when these rules were introduced. I was formally told I had the right to opt out but it was made very clear that anyone who did would be looked at unfavourably in the future). If a compromise could be brought forward between the opt-out and compulsory options I’d be open-minded about it, and I would certainly be sceptical about a France-style 35 hour week, but I would have little problem with the current European law.

With all that said, I do think there is a lot we could do to make it easier for both employers and employees. Fundamentally, we tax work far too much in this country while leaving wealth almost untouched. While this is the case there will always be pressure on employers to employ fewer people for more hours (as opposed to more people for less hours) and pressure on staff to work whatever hours they can. The right to flexible working is all very well, but are making it has hard as possible for people to be flexible. A liberal government would consider changing this to be a priority. The poor record of the Lib Dems in this respect has been deeply disappointing.

The party’s move towards lifting the poorest paid out of taxation is a long overdue step in the right direction (it should be noted that this was party policy in 1997) but I would like to see us go much further.

The 1992 Lib Dem manifesto, which more than anything else is the document which made me join the party, contained a commitment to a modest citizen’s income. I believe we should revisit this policy.

How would all this be paid for? The only way I can conceive is by establishing a national Land Value Tax, something which has been Lib Dem policy for a long time but which we have been very lukewarm about in recent years. Instead of cravenly following public opinion on this one, it is time we started to make the case for a fundamental shift in the burden of taxation. I really do believe it is an argument that can be won.

9. Are they ways we can promote greater employee responsibility for their work, and/or involvement in deciding how they work? How could we encourage staff stake-holding?

All the evidence I’ve read – and personal experience – indicates that greater democracy in the workforce leads to a happier workforce and greater efficiency. It would almost certainly also help control out of control executive pay in a way that crude mechanisms such as a “maximum wage” could not.

Again, in the not so distant past the Lib Dems had much stronger policy on this and the time is right to rediscover our passion for “industrial democracy.” This means much more emphasis on obliging companies to consult their workforce, share ownership schemes and mutualism.

10. How could quality of life thinking shape our approach to education, training and career choices?

This is a huge topic and I am not an expert in education. I certainly think we need to broaden apprenticeship training in this country. A shift away from income taxes would encourage this, as would greater workplace democracy.

Vocational qualifications such as MBAs can be fearfully expensive. Some employers are better than others at helping staff cover the cost of these. A great many employers are simply too small. I certainly think there is a case for government subsidising these qualifications through small businesses and non-profit organisations.

11. Should we have more public holidays or increased holiday entitlements? Or even statutory education and training days where employees would be free to pursue skills related either to their current job or future employment prospects?

A few more public holidays would bring us up to the European average. I’m not convinced about the need for statutory training days as the need for these would vary enormously depending on the employee and employer.

12. Technological developments have changed the way we work and at times can contribute to unemployment as companies need fewer people to do the same work. Would it be better for wellbeing if we reversed this trend?

I didn’t realise Ned Ludd was on the working group! Technological developments certainly can lead to structural unemployment in the long term but if anything the experience of the past 250 years points in the opposite direction: we are working longer hours than ever and are able to afford a welfare state. Technology also creates new types of work and will continue to do so in exciting ways. The fact that fewer people are working themselves to death in factories and farms than in the past is a good thing.

With that said, it does bear repeating that while companies are free to make whatever capital investment they wish, labour costs come with a deadweight cost. We should be less concerned about technology putting people out of work and more concerned about ensuring that the two are put on a level playing field. Once again, this means taxing labour less.

13. How can we tackle the stigma of unemployment?

14. Should employment policy be refocused on creating a more flexible employment market with more active government intervention, like Denmark, where it is easier for the unemployed to find new work and consequently less necessary to have high job protection? How would this be achieved?

15. Can we better use unemployment as an opportunity for people to retrain and gain new skills?

Unemployment should carry a stigma and there are too many parts of the country where it doesn’t have enough of one. That isn’t to say we should ever write people off – quite the opposite.

Again, I think a shift away from taxes on labour would help increase the fluidity of the labour market (I know I sound like a stuck record here, but this is the problem with answering each question in turn). This, combined with a citizens’ income would reduce the disincentive within the benefits system to take on low paid work.

We also need to remove the barriers for internships and volunteer work. Currently in my experience the system all but discourages these by forcing people to do less than 16 hours a week and insisting on a paper trail. Yet such activity ought to be encouraged – even incentivised. We could even extend this to political parties: there are much worse things people could be doing with their time than actively working within their communities.

I don’t know enough about the Danish system. Since the working group is clearly looking at this model, it would have been useful to have an explanation, or at least a footnote for us to explore in more detail.

Quality of Life (1) – Introduction

I’ve got out of the habit of blogging my responses to the Lib Dem policy consultation papers of late but the Quality of Life one caught my eye and I thought I’d have a stab at it.

My overall response is that, while I applaud the party for wanting to tackle this issue and personally consider it to be very important, the direction that the consultation paper is taking somewhat concerns me. Unlike some, I don’t think this is an area where government should not intervene, but it needs to be realistic about what it can achieve and it would be better off taking fewer, more strategic decisions than attempting to meddle with every little issue.

I’m also increasingly coming to the conclusion that equality and quality of life are flipsides of the same coin (it is no coincidence that most people who disregard the former also dismiss the latter). To tackle one is to tackle the other, and vice versa. Having entirely seperate consultations on the two areas – the equality consultation begins at the next conference – is to a certain extent redundant.

Anyway, without further ado, here is my response. I will try to contain my comments to the questions in the paper (although such questions always irritate me so I am bound to drift off topic):

1. Should government be more concerned to increase their citizens’ wellbeing than their wealth? What is the proper role of government in promoting quality of life?

The answer to the first question is most definitely yes, but few would subscribe to the notion that wealth and wellbeing are entirely unrelated. Having recently read The Spirit Level: Why More Equal Societies Almost Always Do Better by Richard Wilkinson and Kate Pickett, some of the most compelling charts they print in that book are the ones where they compare the GDP of countries with life expectency (page 7) and happiness (page 9). What these charts show are that GDP, life expectency and happiness are related up to a certain point (around $25,000 per capita) and then level off. From that point onward, equality becomes a more defining factor.

So my tentative answer to the second question is that the role of government is to foster a political economy that is both healthy and where people are relatively equal. But it is absolutely crucial that the way we achieve that equality is itself equitable.

2. Should governments concentrate on minimising misery rather than augmenting happiness? If so, do they need to do more or less?

This is a bit of a silly question. I would answer that our goal should be more about “minimising misery” than “augmenting happiness” since the latter sounds a bit too Brave New World for my taste. But I’m not entirely convinced that the government should be especially concerned with either per se.

I’ve always been wary of the term “happiness” and its utilitarian ties. I understand that a lot of people use happiness and well-being as interchangeable terms but this question somewhat suggests that the author is thinking of happiness in rather more simplistic terms.

There are a variety of things we should be seeking to maximise: liberty, self-confidence, trust in society, questioning of authority, a sense of being in control of one’s life (indeed, I don’t think you can have the former without the latter four – others disagree). These are things we should be concerning ourselves with, not gross “happiness”.

3. Are the ways our public services work detrimental to our quality of life?

In a lot of ways, yes. Far too often they undermine our need for self-control, demand unquestioning obedience and assume that society is a dark and sinister place. They need to be as transparent, accountable and democratic as possible and controlled at the lowest possible level.

4. What additional or alternative indicators should government use in place of GDP?

There are lots of different indicators we could use. The debate about alternative indicators has been going on for at least as long as I’ve been involved in politics. It hasn’t got very far, partially because I think it misses the point.

I have a far stronger indicator for the state of the economy than GDP. It’s called the Maltesers Index. I’ve noticed that over the last six months, an increasing number of shops I walk into are trying to flog me packets of sweets at discount prices. Borders appear to have forgotten that their main trade is in books. The last time I walked into a WH Smiths you could barely reach the counter for all the bargain bins of confectionary they had put in front of it. I have a fairly good understanding of the economics of why that is, but I wouldn’t want the MI to guide national policy for the simple fact that the government could massively improve their figures by banning Maltesers. This wouldn’t actually help the economy – it would make things worse. What’s more I like Maltesers.

We can find all sorts of measurements, but they will always be open to abuse because they are prone to being gamed. What’s more, they have to feel real to people. Two major quality of life indicators have dominated public policy for decades – reported crime and the British Crime Survey – yet they are rarely referred to as such. Politicians tend to emphasise whichever of the two figures that are more helpful to them (in my view the BCS is better but it isn’t without its flaws) and the result is that we tend to distrust both of them. You could say the same about unemployment figures.

The fact is, government measures lots of things. We could measure a few more things but I’m not convinced it will change much. The best indicator in my book is the record of votes cast for whom in each election. We should try having an electoral system that reflects it at some point.

5. People are often bad predictors of what will improve their own quality of life. What role should government play here? What happens if our liberal commitments to equality and freedom of choice appear to conflict with our desire to enable to enjoy a good quality of life?

This is a question that is crying out for a “for instance”. The simple answer is “it depends.”

Yes, people are often bad predictors of what will improve their own quality of life, but governments are too. I’m not convinced that the solution is for the government to step in and meddle with every single solution. We need the government to be looking at more strategic shifts. This is why, for me, equality is such a big deal. The evidence before us suggests that by managing this shift, we could improve a whole range of social and health indicators in a way that hundreds of government programmes have been unable to match.

For the most part, the role of government should be to mitigate bad personal choices, not to prevent them. That of course brings in the question of moral hazard and there should certainly be a cost for making mistakes. But that isn’t the same thing as letting people rot.

Drugs policy is an excellent example. We know that taking drugs such as cocaine and heroin is generally not a very good idea, leading to addiction, the risk of overdose and mental health issues. Yet all attempts to restrict this choice have backfired. Yet all the experiments involving legalisation to one degree or another suggest that such an approach leads to fewer social problems and even less drug useage. Part of the lesson here is that by allowing people to make wrong choices and picking them up off the floor when they do, we enable them to make right choices in future instead of getting stuck in a cycle of desperation and criminality.

The real challenge to freedom of choice is the much cited tragedy of the commons, but I’m not convinced that simply removing choice or even costing in externalities will be the solution. Apart from anything else, such moves are not popular and the parties that propose easy solutions are the ones that tend to win at the ballot box. Mark van Vugt wrote an interesting article in New Scientist a couple of weeks ago challenging this and proposing an alternative approach, suggesting four “i”s: information, identity, institutions and incentives. Ultimately, if individual choices tend to be flawed then it is the role of the state to help inform those choices. In the longer term that will be more effective.