Liberal Vision

Diane Abbott shows that she knows very little about … well … anything really.

This Labour leadership race is a stark reminder of just how important it is to make this Coalition work.  Sure, some elements may not be ideal, but the prospect of any one of Labour’s unsavoury bunch getting back into power should be enough to quieten the staunchest of anti-coalitionites. The run-in looks certain to be a family affair, but what jobs have the aspiring leaders got their sights on within the shadow cabinet? The losing Milliband will presumably be in the running for a top post, Balls has his beady eye on the shadow treasury and Burnham will be happy just to be on a bench. Any bench. But what of Diane Abbott–the self proclaimed “alternative”? Which post does she have the talent to command?

Judging by Monday’s interview with The Guardian, the outlook’s not terribly auspicious. For those of you who found 12 whole minutes of Abbott and Poly Toynbee slobbering over each other too much to bear, here are the highlights:

On the economy: Simple. Rebalancing spending with tax increases. Apparently drawing her inspiration from Obama and Norman Lamont (et tu Norman?!), she proposes that spending cuts and tax increases are split 50:50. Thus followed  a breathless three minute rant: make the 50%  tax rate permanent, bring the threshold down to £100,000, increase capital gains tax, impose a financial transaction tax, double the banking tax, impose a new wealth tax, impose the mansion tax, tax assets more… etc, etc. Miss the part about public spending cuts? Me too.

Foreign Policy: “Withdraw the troops”–the priority is to get out before the US, regardless of the nuances, we must beat the yanks to the departure date. What to do about the Afghanistan? Not a problem, send in the UN, they’ll sort it out. “I have a lot of faith in the UN”, she reassures us.

Next up: torture and rendition. Not an issue. The problem isn’t Labour’s record on abusing human rights–it’s the audacity of the Tories to launch an inquiry into the subject. Clearly a shallow attempt at defaming Labour MPs.

Social Justice: this one’s easy, obviously it’s the fault of the bankers–increase taxes.

Education: Not really interested in talking about this, or the issue of her son attending a private school. This isn’t really about education, she laments, it’s about “being a women in public life–all anyone is interested in is shoes and family”!  Even Poly baulks slightly at this, but no Abbott is certain, she has no case to answer because she’s a woman. Harriet Harman eat your heart out.

Finally, on her fellow leadership contenders. Nothing. Not a thing. She can’t even declare who she has more in common with Dave or Ed. All we get is a “nice suits, nice red ties, nice hair-cuts” quip.

So back to my original question- where next for Ms Abbott? Presuming that there has been no-one since Tony Benn crazy enough to let this tax-devouring-fiend anywhere need anything of economic importance, the main jobs at the treasury, home office, BIS, and pensions are out. Trusting the UN to resolve anything shows a fairly basic misunderstanding of international affairs, so out are the FCO, Defence and DfID. Education or Health? Nope. Justice? Probably best not.

In truth, it’s hard to see just what exactly Ms Abbott could do. Her ascendency bears testament to just how far playing the “persecuted-black-single-mum-from a poor background” card can get you in politics. The Millibands will be laughing all the way to the ballot box.

Chinese labourers to earn £100,000+ per annum?

Bob Crow, speaking to Ian Hislop:

“I have more in common with a Chinese labourer than [I do with] someone like yourself…”

Annual salary of Bob Crow:

£105, 679

Finkelstein: LDs should be happy just to be in power

The headline (above) is, admittedly, slightly paraphrased–but this is essentially Danny Finkelstein’s message in The Times today:

The LDs may be dropping in the polls, but they’re IN POWER and should be happy with that.

For those who don’t have access beyond the pay-wall, the Fink argues that the whole point of being high in the polls is to get into government. Thus it’s better to be in government and on 14% in the polls, than out of government and on 20% in the polls. Popularity is simply a means to an end, so if you have achieved the end, this is what matters.

He also claims that a drop in popularity is inevitable when in government, especially for the “junior partner” of a Coalition.

With the rise in LD fortunes in recent times, the Party, he argues, had to make a choice–to remain a Left-ist protest vote (with the option of siding with Labour) or to position itself in the Centre, allowing the option of holding power with either “main” party.

I slightly disagree on the Left-Right model: it’s up to the LDs, surely, to promote the liberal elements of the “Left”–greater civil liberties, a fairer voting system, constitutional reform, tax reform, penal reform, liberal policies on migration (well said, Vince!), less reactionary views on the EU and so on. This is our raison d’etre.

Finkelstein does, in fairness, understand this. He proposes that liberalism can be seen as Centre ground, and that this can appeal to the electorate:

“There is an audience — and an agenda — for a centre party that offers voters a chance to liberalise the others” he says.

The issue of what happens in subsequent elections is extremely pertinent. The LDs should not simply be grateful for 4/5 years in power, and then crawl back to irrelevance. The Cons can’t have their gluten-free soya cake and eat it. Our presence in the Coalition changes everything, and the question of what we do at future elections won’t go away.

On this question, and the dilemma of the polls, I am (for once) on the fence. Affecting government policy is great–but the question is how to make this a more permanent affair. Thoughts below, if you will.

GUEST POST: Jon Gower Davies on “hate crimes”

After and over the best part of 400 years we in Britain managed to construct a relatively free civil and civilised society in which religious and secular life could flourish in public and mutual agreement and disagreement, vigorously and occasionally scatologically critical the one of the other.

Now, however, this public debate has been circumscribed by classifying such argument and such difference as expressing little more than ‘hatred’, a new criminal offence: And, alerted to a looming illiberality by a series of ‘hate’ laws relating to race, religion, gender, age, and physical disability and by the ludicrous ambitions of the Equality and Human Rights Commission, all freedom-loving people would be well-advised to check on the legality of their public utterances before they make them – hypocrisy being the best policy.

In our new publication, we show how, in pursuit of ‘hatred’, the Police and the Crown Prosecution Service destroyed the free speech and independent existence of two ordinary citizens of Liverpool, a story pregnant with implications for all of us. When messrs Cameron and Clegg get round to their promised ‘Bonfire of the Banalities’, then the laws relating to religious hatred in particular should be the first into the flames.

As these two bold politicians told the House of Commons in June 2005, these laws ‘disproportionately curtail freedom of expression, worsen community relations as different religious and belief groups call for the prosecution of their opponents, create uncertainty as to what words or behaviour are lawful and lead to the selective application of the law in a manner likely to bring it into disrepute’. Our book looks to demonstrate how true this is.

• For more information on the study, click here.
• A NEW INQUISITION: religious persecution in Britain today, can be purchased here.

Jon Gower Davies is a former lecturer at the University of Newcastle and former Labour Councillor on Newcastle City Council.

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Ed Miliband’s mickey mouse degree plan

Labour leadership candidate Ed Miliband has joined his more improbable rival Ed Balls in backing a National Union of Students campaign that seeks to replace Labour’s tuition fees policy with a 20 year graduated graduate supplement on income tax.

If adopted and supported by a future Labour government this would be a highly retrograd step, moving Labour back towards the economics of punitive socialism and away from the economically liberal centre-ground.

Graduate taxes per se are not automatically an entirely awful proposal. If proportional and used as a mechanism of loan repayment, i.e. the actual cost of your tuition, there is little difference between them and the current loans for fees. In that context the argument is about which system is more efficient to administer, and how you maintain university funding in the transition between them. The difference is so slight that most people consider it not worth bothering.

That though is not the NUS/Miliband proposal. They instead would seek to impose a unknowable future cost of education on students based on future earnings. Their proposal is an attack on aspiration and success.

These graduate taxes create perverse incentives. If for example you are bright, ambitious and want to work in medicine you have a fair expectation you will be in the top quintile for wage earners very soon after university.

For you the grad tax is very likely to be much more expensive than fees and loans today. You would be wise then to consider study outside England. And that doesn’t just mean going to the US or mainland Europe. An England-only grad-tax would create incentives for a massive boom in elite education in Scotland, Wales, and Northern Ireland.

Labour’s scheme would incentivise a flight of self-assured, self-financed talent from English universities. That talent would then pay less for their education than late developers, or those with few resources up front. Hardly a progressive outcome, nor one good for the English economy and universities.

Worse, after university the scheme incentivises working abroad for twenty years out of the reach of the Revenue.

The NUS have entirely failed to model the impact of tax avoidance on their scheme.

It also begs the question why a bright American should be able to go to Oxford at cost via loans, then work in the UK without a tax bill whilst a native is denied that option. Surely this is discrimination?

But if you address that by making the scheme an option versus real cost loans, rates at the bottom would need to be raised or the scheme would fail to finance universities. Either way, unless the NUS are proposing to put a wall around England the price and market for university education will still exist, it will just be denied to the English.

At the other end of the scale, those with limited income expectations either through lack of ability or an ambition to work in low paid employment, are incentivised. Their demand for university education would go up.

Ed Miliband’splanwould then unwittingly create comparative advantage for the English university sector in providing mickey mouse degrees to marginal candidates.

And this the man that until recently was leading plans to encourage UK green-tech through building the science base. Good luck with that when the engineers are studying in Germany, and Cambridge is leading the world in homeopathy.

In the middle throughout the 20 year life of the ‘loan’ the bands in the tax would create small disincentives through high marginal tax rates. In recessions people might find themselves paying a higher graduate tax if their wages fall less than the average. It’s a crazily complex system, and this is before arguments about credit-based allocations of cost, employer contributions, and what counts as qualifying education as opposed to vocational training.

The advantage of fees, other than transparency and simplicity is that they encourage people to seriously consider the value of higher education.

It is precisely that cold market-discipline that enrages the left. They believe those capable of going to university are incapable of making a financial judgement no more complex than taking out a mortgage. Or rather the NUS think students shouldn’t have to think. Patronising, authoritarian and quaint, but somewhat self-defeating in an education system.

Their main worry, worth considering, is that some people who might be capable of benefiting from university choose not to due to their fear of debt. This is not an empty worry. Financial risk-aversion is more prevalent amonst thosefrom lower income backgrounds and at the margins can mean able children choose not to go to university.

But this is an education not system issue, and one that can be narrowly targeted at the small group in question for very little cost. We need to ensure people have the tools to make sensible investment decisions by the time they leave school, not continue to treat them like children throughout their lifetimes. Particularly not potential graduates.

Making an entire system, overwhelming used by those that can afford to pay free at the point of use to combat a marginal disincentive at the margins is ridiculous and wasteful. A criticism that applies equally to the Liberal Democrat’s current opposition to any fees or repayment at all.

The NUS has always been a clique of trainee Labour politicians unrepresentative of either student or public opinion. If this is the kind of interest group Ed Miliband feels will help win him the Leadership of the Labour Party you must wonder just how far left they have gone and will continue to drift during this Parliament. It can only bode well for the longevity of the Coalition.

Are we doomed to a future of characterless, robotic politicians?

News just in from north of the border: Labour MSP Frank McAveety has resigned after being caught making a few casual remarks about the attractiveness of a (presumably) young woman.

The BBC has the story.

A friend linked me this earlier in the day and my initial reaction was “pffft, what a load of nonsense about nothing.” At that point the “load of nonsense” consisted of a few blog posts, and the SNP sanctimoniously demanding a resignation.

But now the storm has spiralled out of the teacup. It is actual news, and he has actually quit.

What exactly has he done to warrant this? An apology, sure, was rightfully called for - more for being caught than anything else. “Sorry I was mumbling inane nonsense when I should have been working.”  That kind of thing. But a resignation? Really?

People often complain that it’s increasingly impossible to go into politics if one has done anything in one’s past that might be considered remotely socially unacceptable–or if one shows the slightest sign of human weakness. I have some sympathy for this line of thought.  Do we really want to drive away every candidate who’s prone to a moment of mumbling about someone they fancy? Do we really want a Parliament of Nu-Lab-Blair-esque robotic yes (wo)men?

I dunno, this seems ridiculous.

The Independent City State of *ankers

Yesterday, I attended a talk on the theme of our natural resource legacy by economist Paul Collier. He questioned the ethics of depleting resources in order to produce other goods- “our children’s children are unlikely to be impressed when we offer them computer games instead of fish stocks” he mused. He even managed to work in a good natured dig at Goldman, which made me think about another of our legacies: the UK’s economic environment. Now, we all know everyone hates bankers at the moment. Allister Heath reminds us that Osborne will use tonight’s Mansion House address to indulge in a little more “banker-bashing”.Traffic wardens, divorce lawyers and tabloid journalists have never slept so well.    Everything that can’t be blamed upon the financial services must be the fault of the credit rating agencies and anything else is BP’s fault. In fact it’s becoming increasingly difficult to find someone who makes money who isn’t despised by the general public. But is all this hatred really such a good idea? Will our children’s children really thank us, and our politicians, for making life so difficult for big business in the UK? Is hammering people with new regulatory hurdles, higher capital gains tax (CGT) and the constant threat of new rules and scrutiny really such a good idea? I rather suspect not and here’s why.

Another esteemed economist, Paul Romer, is promoting a new approach to development: Charter Cities. The idea is for underdeveloped countries to set up new cities with business friendly regulatory environments and low taxation to attract investment and labour. Modeled on the development success stories of Hong Kong and Singapore, the concept is radical, inspirational and might just work. So, considering our resentment for all things financial why don’t we set up a Charter City- City of Bankers - in Canary Wharf? All the fat cats who spend their time smoking Cuban cigars (hand rolled by 5 year olds), buying porches, and generally ruining “our” economy could move there in voluntary exile to enjoy the business friendly environment and the absence of bureaucrats. We, on the other hand, would get to inhabit a London free of corrupt and greedy businessmen and get on with enjoying the finer things in life: eating organic produce and drinking carbon-neutral water.

Of course, the answer is fairly obvious. Really we want, in fact we need, the financial sector and big business to stay. Not only do we appreciate the services, jobs and tax revenues, but we also enjoy the talent, capital and ideas they attract from across the globe that afford us the cosmopolitan quality of life most of us relish. London and the UK became prosperous and successful by embracing business and industry, not by obstructing it.

The typical response to these concerns is that big businesses wont just up and leave- London is London, its where everyone wants to be! Maybe. But maybe not forever. London is the financial capital of the world by design, not default, and we’re not talking about today’s businesses, but tomorrow’s. Established companies may linger, but the new ones will locate wherever they believe they will make the most money. While London remains the place to be, all is well and good, but for those politicians (unfortunately there are many within the Lib Dem ranks) who remain intent upon scoring cheap points at businesses’ expense- be careful what you wish for! One day our children may talk of setting up a Charter City, not in jest, but in an attempt to entice those we currently love to bash to come back.

Sack this person – now!

In case you hadn’t noticed, today a certain football tournament kicks off in South Africa. Thankfully this fact hasn’t escaped the attention of our Food Standards Agency (FSA). No, indeed not. Such was the concern about our wellbeing at the FSA that someone has generously spent tax payers’ money preparing a guide on how and what we should drink during the festivities. How kind. Never mind that Homo sapiens have managed feed and water themselves for around 200,000 years now, what we’ve always needed is a ten-year-old government body to help us through the trauma of mealtimes. A full copy of this egregiously patronising document is here, but the highlights include:

“If you’re throwing a party for friends and family to watch a game, there are lots of tasty and healthy options you can tuck into as you cheer your team on. Why not serve a vegetable curry with boiled rice or a tasty chilli with plenty of kidney beans?”

“When you’re engrossed in the game it’s easy to sip your way though more [drinks] than you realise. Remember that bottled beers come in different sizes, so you might be drinking more that you think.”

And my personal favourite:

“You might feel as if you are kicking every ball and covering every blade of grass along with the players, but that doesn’t count as being active! So why not use football fever as an excuse to get active yourself?”

What on earth is this all about?! Easy to lose count of how many drinks you’ve had… forgetting that bottles come in  different sizes…! I would feel embarrassed using this tone with my four year old cousin, let alone preaching about the type of party food you should or shouldn’t serve in your own home. As for using football fever to get yourself active, nothing makes me want to remain ensconced in my arm-chair more than a jumped up public servant reminding me of my “duty” to keep myself fit and healthy. Whoever spent a morning writing this paternalistic nonsense, at our expense, needs sacking. Immediately.

Cuddly Cuts?

‘These are not just cuts, these are delicate, compassionate Coalition cuts…”

So might run the Central Office of Information campaign following Nick Clegg’s announcement of “sensitive” cuts. Or at least it might, only the COI budget is one of the first in the firing line…

Nick Clegg’s general point is that although spending reductions are essential, he doesn’t want them to be done in the same way as in the 1980s, which in the “folk memory” of the north of England in particular, were particularly “brutal”.

A good ambition, but is the narrative wise?

The main problem is that there is no nice way to lose your job.

The government can create better support structures for retraining, can incentivise moving people to where the jobs are, and can ease transition in other ways. A lot of this already exists. It doesn’t though make losing your job a pleasant experience.

It also doesn’t sit well with the Coalition’s other major welfare focus, workfare, that although ‘progressive’, a ‘centre-left’ innovation, and tied to the Clinton administration, is still a very big stick, not a carrot or candyfloss.

Rather than focusing on compassion alone then, Nick might be better off talking about his ambition to get everyone affected back into work as soon as possible, and how the coalition intends to improve the chances of that happening. That’s what matters when you have job insecurity not hearts and flowers.

The other big credibility issue in the ’sensitivity’ narrative is where cuts are most likely to take place. It is evidentially the case that the most bloated public sector institutions, and welfare abuses such as using disability benefit to mask unemployment, are in the areas where Clegg wishes to be most sensitive.

Does regional sensitivity then mean the more balanced south must face the music first, or pay most of the bills? Neither is likely to go down well with most of the people who have elected this coalition.

Other aspects of the brutalism narrative of the 1980s should not return. We are unlikely to see the Police face down members of BA cabin crew. The concentration of failing nationalised industry in small towns that made the impact of some 1980s closures more devastating is less likely to happen with the closure of targeted Council services.

But Nick would do well to remember that in no small part the shock of the 80s was due to the decades of political dishonesty that preceded it… ‘cradle to grave welfare’… ‘the state will provide’… ‘jobs for life’… ‘homes for heroes’… and so on… that put necessary changes in the most difficult context possible.

Nick will need to walk a very careful tightrope to avoid perpetuating a similar mistake. Policy needs to ensure more private sector growth, a smaller better focused state, and pathway between the two for those impacted by transition.

Promoting the pathway is surely the right kind of compassion to consider, not tea and sympathy without any sense there is something fundamentally wrong with vast swaithes of the country having no better career opporunities than working for the Job Centre.