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The SLF are not Social Democrats

By Andy Mayer
June 21st, 2011 at 8:08 am | 10 Comments | Posted in Liberal Democrats, Social Liberal Forum

The Social Liberal Forum, a left leaning lobby within the Liberal Democrats, held their first conference on Saturday. The event and lobby have been characterised as a gathering of social democrats.

“‘We are trying to make sure that mainstream liberal values continue to be shown in mainstream party policy.’ By mainstream he means social democratic.” – Independent on Sunday

“a group that represents social democrats within the Lib Dems” – Guardian

It’s an easy assumption, but anachronistic. The Social Democrats were the pragmatic right of the 1980s Labour Party, generally comfortable with markets and capitalism. Former members such as Andrew Lansley, Andrew Adonis, and Chris Huhne sit in all three major parties today.

That opposing the direction of travel in public service reform of the first two, and coming closing to tearing up the public services position of the Liberal Democrat Commission bearing the name of the latter, is principally what the SLF is known for, is a pretty big hint.

The SLF, like LV, and unlike the SDP, tend to be sceptical of central government and imperial adventures. There is nothing inherently objectionable in their desire to see more local democratic accountability over local public services. We just wish they would see that there is nothing inherently objectionable in using market mechanisms to make institutions accountable to individuals.  

The SLF and LV both sit on a liberal spectrum. We’re all social liberals. We differ in our concept of social justice. 

LV leans towards redistribution as a means to an end, for example tackling ignorance and poverty. SLF leans towards redistribution as an end in itself, in the belief that a flatter society is a better one.

We differ in our economic preferences. We support a more Hayekian model of sound money and a night watchman state, they tend to Keynesianism and activist government.

As SLF member James Graham notes in an excellent piece of analysis, most of the labels are unsatisfactory. I’m not entirely convinced by his conclusion though that social liberal is least dissatsifactory. His ealier pick of socialist liberal is the most accurate description of the SLF’s bias towards redistribution, sympathy for public ownership, scepticism of markets, and bottom-up change.

It’s a better counter-point to the use of economic liberal to describe the right, and largely defines what we oppose in the SLF agenda, their socialism.

The SDP was a victim of it’s own analysis. It highlighted that the early 1980s Labour party was too extreme, too left-wing, and too unwilling to compromise with the real world to be electable. Having made that point, most forcibly in the 1983 election where only geography and first past the post saved the reds from meltdown, Labour’s modernisers set about expelling Militant, ditching Old Labour poses, and creating the election powerhouse that was New Labour.

They became the SDP.

The SDP itself was dead over 20 years ago.  

The SLF is very much alive, exploiting the circumstances of coalition with Conservatives, and a long-standing weakness amongst our ‘Orange-Book’ leadership to take party management seriously. SLF have every reason to believe that should we continue on that trend, that the next Leader of the party could be from the left.

That is the long-game. That is the risk to which those of us who regard liberalism’s anti-socialist tradition as important should be most alert.

That though is the battle with the SLF, not a re-run of the merger debates of the 1980s.

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Danny Alexander is right on pension reform

By Andy Mayer
June 19th, 2011 at 12:36 pm | 11 Comments | Posted in coalition, Public Sector Reform

Trade Unions are organisations committed to getting the best possible deal for their members. Public sector pensions have been a sensational deal for some time, funded as they are by committing future taxpayers to the bill.

The politics then pit a constituency with no votes against one that can mobilise thousands in mass protests and impact millions through economically damaging strikes.

For politicians to resist that movement, instead standing up for the rights and living standards of our children, is extremely brave and should be supported.

The coalition proposal  to  raise contributions and the retirement age is right. Chief Secretary to the Treasury, Danny Alexander, summarises the challenge well:

“(it is) unjustifiable to ask the taxpayer to work longer and pay more so that public sector workers can retire earlier and receive more themselves. This is not an assault on public sector pensions but an attempt to protect them for the long term.”

Labour VAT move is half right

By Andy Mayer
June 16th, 2011 at 9:50 pm | 1 Comment | Posted in Economics, Labour, Liberal Philosophy

Shadow Labour Chancellor Ed Ball’s call for a permanent or temporary VAT cut puts him half into the same camp as liberal think tanks who opposed the VAT rise in January. Philip Booth, Programme Director at the Institute of the IEA wrote 

“Today’s VAT rise is simply bad economics… If the government insists on increasing taxes, there are better candidates than a general VAT rise.”

 Where Balls and Booth part company however is on the flipside of the balance sheet. Booth writing:

“Today’s news should be a wake-up call that the spending cuts are insufficient. If the government wishes to prevent growth from stalling, it will cut spending further, not burden the population with an unnecessary tax rise.”

Balls, a Keynesian of sorts, remains convinced stimulating demand alone can restore growth.

Economic growth fundamentally is based on doing new things and more commonly doing old things more efficiently. It is a supply-side issue.  If you increase the money supply without improving productivity you just increase inflation. Interest rates rise, we are all worse off.

Two important element of Keynesianism are also missing from the Shadow Chancellor’s analysis . Firat that the last government, of which he was a leading player, should have been running a surplus during the long boom in the last decade. Not a deficit in every year since 2001. The surplus would have taken some heat out of the boom, and provided a fighting fund for the crash.  

Second Keynes did not confuse government spending with government investment. Investing in infrastructure such as roads, or development such as scientific research is clearly a very different growth proposition to spending on welfare and public sector pensions.

In that regard Balls is not a very good student of his own economic philosophy, Keynes did not advocate profligacy. A VAT cut without corresponding reductions in unproductive spending would be just that.

Our influence on NHS reform

By Andy Mayer
June 14th, 2011 at 10:44 pm | 1 Comment | Posted in health, Spin

In May we made a prediction for the great health reform debate:

“If as expected it concludes with some ‘minor concessions well spun’, no one will be pleased. A thousand authors will claim the credit. The Conservative backbenchers have already starting highlighting their own influence.”

This was unfair. The spinning has been magisterial, a master-class in repackaging that has silenced or baffled most critics, whilst leaving what were quite modest reforms largely unchanged… only masked in complexity and rhetoric where previously there was a dangerous level of clarity.

For example, Monitor, the health service regulator, previously, was to encourage competition.

Now it will only do that if patients benefit… which is no change at all… competition tends to keep providers in check to the benefit of patients… monopoly does the opposite.

It will encourage integration, collaboration, and choice… all of these things exist in competitive markets.

If any of these objectives collide, it is really very simple… they will be integrated, competitively… or the regulator will encourage parties to choose to collaborate…  unless that involves competition… in which case an integrated patient benefit test will apply… or Monitor will choose from several competing tests… some requiring collaboration from other regulators… unless those are rationalised in order to encourage integration… in which case it will be passed back to the Secretary of State to choose… or collaborate with his colleagues… or pause for a genuine listening exercise… or flip a coin…

The regulatory governance of the NHS is now at least as comprehensible as that of the Liberal Democrat Federal Party.

Never let it be said we are not reshaping Britain in our own image.

Lords reformers need to draw FIFA analogies

By Andy Mayer
May 31st, 2011 at 10:53 pm | 1 Comment | Posted in Lords Reform, Sleaze

What’s wrong with Football’s world governing body Fifa is fairly self-evident from the outside of the organisation. A aging elite, far too satisfied with the prestige and power of their positions, entirely out of touch and unaccountable to the people the organisation serves. As a result it appears corruption has been allowed to thrive. World football is diminished and tainted.

The House of Lords and Parliament by association has been in entirely the same boat, albeit far closer to reform than Fifa.

Although only one peer, Lord Taylor of Warwick has been jailed for expenses fraud, it should be noted that the sole difference between his crime and what was normal ‘approved’ behaviour for many of his colleagues, was a matter of ten days residency.

What this means is that like Warwick many peers acquired second homes or weekend retreats outside London for the sole purpose of claiming a generous overnight subsistence allowance potentially worth near £25,000 a year. These addresses were labelled “main residences” for the purposes of the claims.

Some working in full-time jobs in London did little more than ‘clock-in’ to the Lords each morning, claiming between £40-60k a year from the taxpayer for turning up.

Following the exposure of these practices during the expenses scandal, the Peers committee for closing stable doors, decided that all this was ‘within the rules’ of the Lords if the claimants stayed at the ‘main residence’ for just one day a month, in only ten months of the year.

So what was an honour system designed to support peers in need of additional support rapidly degenerated into a cash cow for the craven and greedy.

The large number of genuinely honourable members, who claimed only sums to which they were entitled, did very little about this. Some like reform campaigner Lord Oakeshott spoke up but were limited by political implications of rocking the boat.

The obvious conclusion of the expenses scandal should be democratic and fiscal reform of the Lords with mechanisms for expelling those convicted of crimes. To make that happen however will either require the Lords to vote for it (fat chance according to the latest polls), or a war of attrition from the Commons and media.

Playing nice and hoping for a consensus is a repeat of the mistake made by the Yes to AV electoral reformers who pulled their punches on the other side.

Making it quietly clear to the ‘almost-Warwicks’ that, following obstruction, they will be treated with all the courtesy and respect due to FIFA Executives, may have a wonderful vice-like effect on hearts and minds. Even some pro-reformers may be unusually motivated to persuade colleagues to seek an early compromise.

Like the absolute last thing the Lords want is proper scrutiny of what it is they do and have done. Unlike the Commons, most of those implicated are still in position.