Liberal Vision

Which of Clegg’s Cabinet colleagues voted against Section 28 repeal?

Much has been written about Theresa May’s somewhat less-than-enlightened voting record on a variety of sex issues, particularly gay rights.

And today I was perusing Lib Dem Voice when I came across this statement from a comment-leaver:

“At least five of Nick Clegg’s cabinet colleagues voted against Labour’s repeal of Section 28”

So, getting an assistant on the case, I thought I’d look into who exactly voted against the repeal. Some results are as follows.

“No”, rather confusingly, means they voted for the repeal.

“Aye” means they voted against the repeal.

Here goes:

Ian Duncan Smith AYE
Cheryl Gillan AYE
Dominic Grieve AYE
William Hague AYE
Eric Pickles AYE
Caroline Spelman AYE
George Osborne NO
David Cameron ABSENT
Ken Clarke ABSENT
Liam Fox ABSENT
Chris Grayling ABSENT
Andrew Lansley ABSENT
Theresa May ABSENT

Interesting, eh?

Furthermore, Baroness Warsi infamously used election leaflets in 2005 that included the following lines:

“Labour has scrapped Section 28, which was introduced by the Conservatives to stop schools promoting alternative sexual lifestyles such as homosexuality to children as young as seven years old.

“Labour reduced the age of consent for homosexuality from 18 to 16, allowing schoolchildren to be propositioned for homosexual relationships.”

Oh dear.

Fund Managers are first victims of cuts

I popped a birthday cheque for my daughter in the mail today. Destination her Child Trust Fund.

We set the fund up a year ago to take advantage of the discount voucher and in order to save money we hope one day she might use for university fees or bail a future boyfriend of whom we sternly disapprove.

It’s a scheme we use and circumstances permitting will continue to use until it expires on her 18th birthday.

With the scrapping of the Child Trust Fund scheme, she will not have that option for her own children, and some Fund Managers involved in the administration of the funds are outraged on her behalf.

“It’s not over yet. There are a lot of people very angry about this.” says David White of the company we use.

But should they be? The Child Trust Fund is a very odd idea, poorly targeted, and however convenient fails any kind of test of public necessity.  

The original thinking behind it came from “Labour’s favourite think tank”, the IPPR. The political motive is to provide a mechanism for encouraging savings amongst groups who do not traditionally save, and a little cash injection to get things started. This based on the principle that you cannot tackle inequality only by looking at income, asset ownership matters as well, and building a tradition of saving should encourage a life-long habit.

We cannot yet know whether the CTF scheme has been successful against the IPPR’s goals. Started in 2002 the first beneficiaries will not turn 18 for another decade. We can though make some observations.

Asset inequality is a direct consequence of income inequality and inheritence. To save, to build assets you have to earn more than you spend.  This is rarely possible for those on low incomes or benefits as by their nature these provide enough for necessities not a surplus. To inherit assets you have to choose your parents carefully.

The CTF has no impact on inheritance and only those on high incomes can fully exploit the tax benefits of the CTF’s £1,200 a year maximum savings rate. In some respects it acts as a form of tax free inheritance for children before their parents have passed on.

There are also cultural barriers to saving. People who do not have a tradition of saving by necessity can continue to spend what they earn even when their personal circumstance improve substantially. People whose incomes don’t change will still not be able to save and handing out expensive vouchers to everyone in the hope of changing the habits of a nouveau riche niche is a strange project.

If the cultural change target is the children, the CTF does nothing to encourage a savings habit. Instead it hands them a benefit cheque on their 18th birthday. A counter-productive message.

The more obvious place to start with a savings message for adults is pensions. Individual pension accounts that allow people to supplement their basic state pension might be a better opportunity to reward and stimulate savings behaviours. In the long run they should also take a large number of people out of the benefits system.

In a nutshell the CTF Scheme was either a poorly targeted benefit, or largely about shuffling money from middle income taxpayers back to middle income taxpayers.

 The political motives behind it were well intended but lacking in credibility. Widening asset ownership in society can happen, but it requires as all to be richer, not just better distributed.

In the meantime I doubt calls from the Fund Management industry to save the scheme to protect their jobs will elicit much sympathy.

Clegg Prepares the Ground for Cuts

The last general election was between three parties in different states of denial about the state of the public finances. All agreed there would be cuts, none wished to say on what, and all agreed front-line services would be protected.

Were they all telling the truth the deficit could not be cut and the United Kingdom will eventually be having difficult conversations with the IMF. I think it unlikely the coalition will let that happen. But beyond the substance of what is to be done, they now have the communications challenge of adjusting expectations.

Nick Clegg has started this process with the language of “painful but necessary” cuts, whilst the Conservatives are strongly implying that many departments have been left with difficult legacies by their wasteful Labour predecessors. A process helped by Liam Byrne’s odd sense of humour.

It appears Vince Cable will need to make some of the toughest early decisionsby cutting the budget of BERR, the department of business. This should not prove politically difficult, BERR’s core business constituency are not vulnerable or compelling victims, and many will agree with the decisions.

It should also not prove as painful for Vince as has been reported. Abolishing BERR’s predecessor, the DTI, has been party policy for nearly a decade.

“Our proposal to abolish the DTI is not just about saving money but because we understand the frustration business has with a meddling, centralising, over regulating government. Its abolition is the largest act of deregulation.”

Labour’s narrative during this process will be about threats to “front-line services” and “jobs”. These are fair points. Cutting fake jobs for which there is “no more money”, is still cutting a job. Delivering services nobody needs badly is still front-line delivery. The coalition are going to have to be prepared to be a lot tougher in their analysis of where the public sector does and doesn’t create value, to counter this.

They need to point out that many jobs will transfer from public to third sector or private provision where they are valuable and necessary, and many new jobs will be created in the private sector from the money not been wasted by Whitehall. Do Labour think only public spending creates jobs?

They need to draw distinctions between essential services, those that are nice to have if we could afford them, and those that are political projects of dubious worth that don’t deliver. The latter should go, the second should be cut, the former protected. Do Labour disagree with this?

They need to challenge the crude Keynesianism of Labour’s suggestion that cuts will ‘jeopardise the recovery’ or that they ‘withdraw money from the economy’. They could challenge Labour to reinvent their own golden rule and come up with a less arbitrary definition of the difference between investment for the future and current spending.

As things stand both parties have allowed Labour to get away with painting almost all public spending as a good thing, because it is public spending.

The coalition have referred vaguely to ‘waste’ and talking about reducing the centre, but they have not yet developed a clear ‘public service test’ that might help indicate what the limits of government activity might be and by implication what needs to be cut.

Iain Duncan-Smith, after his leadership, started talking about the difference between public service and the public sector, but this analysis has been narrowly applied, not extended to politically difficult sectors like health. It also doesn’t differentiate between public services that are valuable today, those that are valuable for the future, and those that reflect political priorities from the past which are no longer justified such as the BBC licence fee.

When the coalition come to deliver change then they will then need to deal with unravelling Labour’s justifications for the debt, and their own half-agreements with it, made prior to the election. It will take longer and the cultural barriers will be higher. But the process has started.

A review of the coalition agreement pt 2.

Today the Prime Minister has been busy executing section 13 of the coalition agreement, leading on not leading in Europe. Sending a somewhat confused message that could be interpreted as a willingness to block eurozone countries from legislating to support the single currency, regardless of whether or not it involves the UK.

But analysis of the evolving new European policy will have to wait, there is still half a coalition agreement to review.

IMMIGRATION:

A liberal-conservative immigration policy was always going to be a curious pushmepullyou. On the liberal side an end to detaining children and greater focus on tackling human trafficking. On the conservative an annual cap on non-EU arrivals with a dedicated Border Police Force. Both want asylum procedures speeded up.

So everyone is welcome, until an arbitrary limit is reached, then not. But we’ll  let you know quickly, and the person saying no will have their own uniform.

INTERNATIONAL DEVELOPMENT:

More aid, more trade for aid, more transparency on trade.

JOBS AND WELFARE:

Quite a radical promise to reform welfare and introduce a single welfare to work programme. Work clubs will be introduced, which if successful might mean the coaltion become responsible for reinventing working men’s clubs. A surprise for all of the parties if it happens.

JUSTICE:

Justice in future will be more fair. This we assume is an improvement on  being more just.

Sentences are likely to rise, but so will rehabilitation options, and there’s a sneaky tax rise on prisoner incomes to generate a victim fund.

The need to speed up the criminal justice system by properly resourcing the various stages from arrest to trial to prison to rehabilitation was something neglected by a Labour government more interested in headlines around new offences and numbers of Police Officers. It will not be easy to fix.

NATIONAL SECURITY:

Dubbed the coalition’s primary responsibility this is the shortest section in the document, presumably pending the Strategic Defense and Security Review.

One interesting measure will deny public funds to any group that has recently espoused or incited violence or hatred. It is unclear whether there will be exemptions for political parties, particularly those in favour of invading other countries or demonising each other. That would certainly solve the conundrum of state funding for politics.

HEALTH:

Labour’s myth was that more public money without reform would make the NHS the envy of the world. The coalition intend to test the other myth that all the NHS requires to thrive is less central control and more democratic accountability.

This is fine as far as it goes, but whilst we all remain wedded to the notion that all healthcare should be free at the point of use, incentives for health investment and cost restraint will remain difficult. None of the world’s best healthcare systems work like the NHS nor seek to.

There are a lot of measures in this section, mostly around decentralisation, some around cutting administration costs and quangos, some around new rights for patients to choose where they are treated. A a prescription for improving the NHS it’s all fine stuff, the problem though is the NHS.

PENSIONS & OLDER PEOPLE:

A suicidally generous proposal to restore the earnings link to the state pension, with a guaranteed minimum of 2.5%, means, on top of an aging population, that tackling the deficit will be much harder. The default retirement age will rise, but only slowly. Public pension reform will also be reviewed, but locking in current benefits, which translates into large tax rises for our children whilst they pay more for themselves.

Rome was bought down by the spiraling cost of the army and persistent need to buy them off to protect the ruling classes. We have pensioners and the NHS.

POLITICAL REFORM:

Most of the items in this extremely long and radical list have been pre-released. Electoral reform, parliamentary reform, anti-fraud measures, all postal primary trials targeted at safe seats, making it easier to sack civil servants etc. Looking at this list it’s clear why Nick Clegg has taken reform on as a deputy Prime Ministerial role, there’s a big job to do and success is not assured in the teeth of opposition from Conservative back-benchers.

SCHOOLS:

The Conservative plan to ensure more providers enter the education system will be mixed up with Liberal Democrat plans to better fund pupils from more deprived backgrounds. The fusion will be interesting, whether or not it delivers the ambition to ‘tackle educational inequality’ will be tested.

SOCIAL ACTION:

This section sounds like a really bad top shelf magazine for friendly perverts. It is instead about getting the third sector involved in public service delivery. The action in question is the Big Society Bank funding a little mutualism and neighbourhood groups involving 16 year olds. Civil servants will be appraised on their performance. The difference is clear.

SOCIAL CARE & DISABILITY:

There will be a commission, it will report. “We understand the urgency”.

TAXATION:

The new principles of the tax system will be to make it more competitive, simpler, greener and more fair. Allowances will rise, as will capital gains tax on non-business assets, tax avoidance will be pursued rigorously.

Most of us will ignore the detail and see whether after a year of this Government we are paying more or less tax. We will have to wait for the Budget.

TRANSPORT:

This is another area where there is strong danger of worthy ambitions meeting the reality of the huge costs they will entail, and politics leading there markets should be left to make decisions.

High speed rail for example is not a green panacea and makes little sense compared to flight in respect of cost per passenger mile. A recharging network for electric cars could mostly be delivered by the markets, but only when electric cars are affordable and battery life more effective. Rushing it will be expensive

UNIVERSITIES AND FURTHER EDUCATION:

A row postponed on tuition fees and probably a great relief for the market-wing of the Liberal Democrats who know the party policy makes little sense either in respect of properly funding universities or redistribution. More could be done to remove universities from state control, and there are hints this process will start.

SUMMARY:

The ambition of the the coalition programme is soaring, the detail a little more sketchy, and in some places could do better. It is not the small state, low tax, personal freedom agenda that would constitute a perfect result for this blog, but it potentially the best possible from all the potential governing agendas likely from this election. Left-wing Liberal Democrats and socially conservative Tories have been marginalised.

Politically there will be tensions in all the areas where we might expect there to be tensions between two different parties. But the attempts made to mitigate against this for stability have been extraordinary, particularly when we consider the expectation prior to the result of a Conservative majority. This may be a new British model of how to do Coalition government.

If the alliance can hold, and achieves even half this manifesto, what we can say is that Britain will be more free, less regulated, and more ambitious for the future. The economic battles to come over what to cut, when and how will be difficult, but the opposition is not yet in any sort of shape to offer a credible alternative. All in all a win for Britain and a win for liberalism.

A review of the coalition agreement pt 1.

On first reading there is much to be cheerful about in the new coalition agreement. The agreement is visionary, it’s not just a New Labour set of tractor statistics with the language going one way and the policies in the other. There is purpose. It is possibly the first time in 13 years that a Government manifesto has shown any interest in freedom.

In the overview there is a commitment to safeguard national security, tackle the deficit, and do so in a way that is both sensitive to and aspirational for those at the bottom of the pyramid.  

To do this there will support for green growth, banking reform, welfare reform, tax reform, reform of the political system, education liberalisation, decentralisation,  and nudge politics.

That is the overview.

BANKING:

The detail starts with proposals for banking reform. This section leaves me a little cautious. There are some nice dog whistles, taking white collar crime seriously, which may also be a Parliamentary reform. An intent to improve regulation and mechanisms to insure against another collapse.

I am not yet though convinced our politicians are wise stewards of financial probity, expert in international financial markets who will do more good than harm in their tinkering. The banking levy reminds me a little of the various North Sea levies, the key difference is that the North Sea can’t up sticks and move to Switzerland. There is a similar problem with hints at micromanaging bonuses and bank structure.

The fundamental issue in the credit crunch was the mispricing of risk, deliberate or not. I’m not how any of these proposals ensure that market failure won’t happen again, but they may help pay for it.

BUSINESS:

The headline to the business section is a  lot of waffle about a fairer and more balanced economy, the Coalition it seems still feels the need to assert that the Government can direct the economy. It can’t.

The content though is mostly a radical string of anti-regulation  / anti-tax measures that should generally help more businesses thrive, with a sensible goal of reducing the time it takes to set up a new business and opening up government contracts and even the Royal Mail to more and different types of business input.

Many of Vince Cable’s less ingenious proposals have been reigned in. There is  for example a nod toward reviewing merger rules but not affirmation for political creteria to so.  

CIVIL LIBERTIES:

Ah freedom, welcome home. Tony Blair used to make entire speeches without a reference to individuals or liberty. Now we’re getting a Freedom Bill, and the proposal to scrap the Human Rights Act has been… scrapped. The section will not go far enough for some libertarians, particularly on the right to self harm in the pursuit of leisure. But for liberal libertarians it covers most of the most important bases on the database state.

COMMUNITIES AND LOCAL GOVERNMENT:

The theme is decentralisation and engagement. Within that there is an enormous shopping list of specific proposals many of which involve removing contraints put on local democracy by the previous Labour and Conservative administrations. 

Abolishing the Standards Board, and allowing Councillors to vote down senior executive salaries should prove popular, planning reform, particularly of strategic infrastructure planning will prove more tricky to implement without sabotaging other goals like energy security.

CONSUMER PROTECTION:

More competition, better protection for consumers and curiously “harnessing the insights from behavioural economics and social psychology”. Which sounds a little like something David Cameron might have denied doing at university. What it means in substance in unclear, but there is a welcome nod towards thinking about customer service in the public sector.

CRIME & POLICING:

Broadly we don’t like criminals but think the Police should be more accountable, and the usual confused authoritarianism over drink and drugs, an area where social conservatives dominate in both parties. Not a very inspiring section.

CULTURE, OLYMPICS, MEDIA & SPORT:

Continuity with Labour’s state socialism in culture, and no real evidence of significant reform in any of the other areas. It’s a brave government that stops media-friendly luvvies and national sporting heroes from claiming welfare. This government would rather fight the Taliban.

DEFENCE:

The government begins the long process of repairing relations with the military… whether such ambition survives the MOD’s translation of policy into projects however remains to be seen. Trident replacement disagreements are kicked into the long grass.

DEFICIT REDUCTION:

The burden of deficit reduction will fall mainly on spending cuts not tax rises. The aim is to do it without hurting the vulnerable more than anyone else. Methods to do this include focusing public sector pay restraint on the upper end of the scale and removing a small amount of middle class welfare.

It is  an unfortunate signal that this section is about the same length as that on the Olympics… particularly given it is the second priority of the whole document. What will matter here is the full spending review in the autumn. Until then the deficit debate remains smoke and mirrors.

ENERGY & CLIMATE CHANGE

Almost complete continuity with Labour, bar Liberal Democrat objections to nuclear. Much room for innovation from Huhne in the long-run, but it does not look like much will change this year.

ENVIRONMENT, FOOD & RURAL AFFAIRS

The first priority in the shopping list is criminalising the import of illegal timber. In the 1980s it was saving the elephants, today it’s stopping the unlicensed mahogany hunters. Not something that sits easily with another policy of rolling back new criminal offences.

Otherwise the coalition is in favour of carefully slaughtering some badgers, but not whales, and wants a free vote on the method of terminating foxes.

EQUALITIES:

Equality is good, inequality and discrimination are bad. Particularly if due to the circumstances of your birth

If you are from an under-represented ethnic minority you have a shot at an internship in Whitehall or an enterprise mentor. If you are white, poor and gay you do not. Although if you’re gay and Iranian you are now less likely to be deported, with or without your enterprise mentor. Nick Herbert will continue to lobby his Conservatives European partners to be more nice.

EUROPE:

The Government would like Britain to play a leading role in an enlarged European Union, but defers leadership decisions on any major change to the British people through a referendum.

Given how far apart the parties are on many European issues this is not a bad basis for a workable compromise. It  also seems fairly clear from the economic situation that the major task ahead is for several nation states to get their own houses in order, not look to Europe for bailout without reform.

FAMILIES AND CHILDREN:

A section that promises to protect children from “excessive commercialisation and premature sexualisation”. Curtains for the Young Apprentice and much of the Channel 4 schedule I think.

The weakest element of this section is a refusal to recognise that the previous government’s child poverty targets need to be reviewed and a less relative measure adopted. The target distorts priorities and contains no recognition of the difference between inequality and poverty.

FOREIGN AFFAIRS:

A pragmatic section that rules out the use of torture, seeks a special relationship with India, and wants Germany to have a permanent seat on the Security Council.

This is positive sign the Conservative party intends to move on from the Second World War, Empire, and a belief that Spooks is real. Will the Daily Mail approve?

GOVERNMENT TRANSPARENCY:

A good section that sets an ambition to ‘throw open the doors of public bodies’, through a large range of measures to require the publication of public information. Sir Humphrey’s likely retaliation will be to highlight the cost of all this and demand more staff and spending to deal with it. Whether the cost savings encouraged by exposure offset this only time will tell.

Tomorrow… IMMIGRATION: