The Independent Group wants us to click on “I Agree”. Unfortunately, I don’t.

The ‘Independent Group’, the seven MPs who have quit the Labour Party has posted a statement of principles on its website.  (Not only do they have a website, they’ve even got a Wikipedia page; not bad for a movement that is less than one day old. )  The site opens on a positive statement of values, which they invite people to agree with.  Presumably they think the principle have a general appeal and that the statement places them somewhere near the political centre.  That may be true, but if so, the centre is a lot further to the right than it used to be.

Ours is a great country of which people are rightly proud, where the first duty of government must be to defend its people and do whatever it takes to safeguard Britain’s national security.

The idea that the first duty of government is defence comes straight out of the neo-conservative playbook, and it’s highly contentious.  The first duty of government should be this: the welfare of the people is the highest law (or salus populi suprema est lex:  when it’s in Latin, you know the sentiment has been around a long time).   In the course of the last  thirty years we’ve seen a proliferation of new states, and while defence matters. it comes well down the list of priorities.  What people want from their governments is practical benefit, and that’s a long way from what any government in the UK has been trying to do in recent years.

A strong economy means we can invest in our public services.

This one has it the wrong way round.  Investing in public services, and investing in people, is the way to have a strong economy.

The barriers of poverty, prejudice and discrimination facing individuals should be removed and advancement occur on the basis of merit, with inequalities reduced through the extension of opportunity, giving individuals the skills and means to open new doors and fulfil their ambitions.

Meritocracy and an emphasis of opportunity – the platform of the Conservative Party in the 1960s – are arguments for an unequal society.  Even the United Nations has been able to sign up to something more promising than this, pledging that no-one should be left behind. Anthony Crosland, who many people think of as being on the right of the Labour Party, wrote:

“in Britain equality of opportunity and social mobility … are not enough.  They need … to be combined with measures, above all in the educational field, to equalise the distribution of rewards and privileges so as to diminish the degree of class stratification, the injustice of large inequalities, and the collective discontents which come from too great a dispersion of rewards.”

Back to the Independent Group.

Individuals are capable of taking responsibility if opportunities are offered to them, everybody can and should make a contribution to society and that contribution should be recognised.

It seems that everyone should make a contribution to society.  But some people can’t.  Some are left out, some are shut out, some are pushed out; some will never be able to fill the gap.  When people are vulnerable and disadvantaged, it’s not a good time to look for a contribution.  Some of us believe that people should be protected.  Some of us even think that people might have rights.

I share many of the Independent Group’s concerns about the direction that the Labour Party has taken.  The direction they propose instead is not, however, the direction I’d want to take.

 

Making people work for their health care

The Economist this week carries an article and an editorial piece about what they are calling “The Arkansas experiment“.  In January 2018 President Trump announced that there would be federal waivers to allow states to introduce a test of ‘community engagement’ for entitlement to Medicaid.  Medicaid is the means-tested system offering support in the US for health care for people of working age; ‘community engagement’ means, more or less, a work test, requiring people to be working, ‘volunteering’, studying or responsible.  Arkansas is so far the only state to implement this, but the Economist notes that 14 other states have applied for similar waivers.

The Economist expresses some doubt about the policy: it is complicated, engagement is difficult to prove in a world of precarious work, and incentivisation is perverse.  The main thing that sick people need before they can work is to be healthy.  But they start with a rather questionable statement of principle:  “The theory behind tying cash benefits to work requirements is sound. Asking people to do something in exchange offer a payment can build political support for welfare programmes”.    Conditionality may well be the price that politicians have to offer to get a programme accepted; that’s not the same as saying that conditionality leads to greater support.  If anything, the polities where people are most determined to impose conditions on the poor are also usually the ones where support is most tenuous.

The “theory” behind work requirements, if it deserves to be called a theory,  is highly questionable.  ‘Activation’ policies, which are supposed to prod unemployed people into work, are based on a series of false premises – that benefits used to  promote unemployment ‘passively’, that the answer to unemployment is more vigorous job-seeking, and that people will not move into work without a spur.  Empirically, activation doesn’t improve job matching; there is some evidence that it can make lead to mismatches, or even slow down the rate at which people move in to employment.  ‘Activation’ for people who are sick – a policy we’re now seeing in the UK, reflected in the treatment of sick people on ESA and Universal Credit – is worse still.  People on these benefits have to ready themselves for work nevertheless – sickness is no excuse.  It’s only a small step from there to the extension of the same principle to health care.  Depression?  Ulcerative colitis?  Congestive heart failure?  Pull yourself together!

 

 

Universal Credit leaves more people destitute

How to bring the Brexit negotiations to a conclusion

There are several possible conclusions of the Brexit negotiations.  This could all could finish with no deal, or with acceptance of the deal that Parliament has already objected to.  A second referendum might even finish with the UK deciding to stay in the EU, but that is unlikely.

The fundamental problem with the existing offer is a simple one:  it is incomplete.  Article 50 made provision for both a withdrawal agreement and an agreement about the future relationship.  The second part is missing.  There is a “political declaration”, but there isn’t a legally binding agreement about the future.  And that’s why the withdrawal agreement had to come with a ‘backstop’.  The backstop is only necessary because nothing has been firmly decided about the future.

We arrived at this situation through a combination of ill-considered procedural decisions.   The EU should not have insisted on postponing discussion of the future relationship until after the withdrawal agreement had been negotiated; that was inconsistent with its treaty obligations.  The UK government should not have consented to the timetable.  Nevertheless, that is what happened.  The way out of the dilemma now is to conclude the unfinished decisions about the future – in other words, negotiating the trade agreement that should have been on the table two years ago.

It might not be possible to make this agreement in the remaining time; that argues for an extension of the notice period.   But a final agreement would not require anyone to revisit the withdrawal agreement, it would have the advantage of saving face for both the EU and the UK government, and it would avoid a situation which none of the parties wants.

A levy on workplace car parking is a bad idea

As part of the price for the cooperation of the Green Party in the Scottish parliament, the Scottish Government has agreed to give local authorities the power to introduce a levy on workplace car parks.  “Plans to give powers to councils to introduce a workplace parking levy, as already allowed in England, will come forward via an agreed Green Party amendment to the Transport (Scotland) Bill. ”  This is intended to reduce the numbers of people who travel to work by car.  It’s been tested in Nottingham, where it’s been claimed to reduce congestion and raise revenue.

Both of those claims may be true, but it’s still a rotten idea.  It falls into the same category as a raft of proposals, and sometimes actual policies, which try to regulate behaviour by using price as the main lever.  Policies of this type have often been favored by market economists, because the most basic economics courses tell us that the way to reduce demand is to raise the price until the market is cleared.  There have been loads of suggestions about policies where the same principle could be applied:  they include congestion charges, road pricing, charges for GPs, water metering, and charges for rubbish collection by weight.  (Often they go hand in hand with some kind of gee-whiz technology that just happens to be sold by the companies that are pressing for the policy, but that’s not the main issue here.)

The key objections to rationing by price are threefold.  First, the demand for any activity depends on the resources that people have, and the people whose behaviour are most likely to be affected are those on the lowest incomes.   Almost by definition, people on lower income have to be more sensitive to marginal cost than people on higher incomes can be –  and the introduction of a flat-rate levy takes far more from the incomes of lower paid workers than it does for higher paid workers.  It’s important to consider for any policy what the distributive implications are. Second, it’s essential to understand what the effect on behaviour might be, and changing the price of an activity is a blunt instrument.  Some substitutions may be desirable – such as cycling to work instead – but it can lead to people substituting different, less desirable  behaviours instead – for example, parking on residential streets instead, driving more and longer while looking for parking places, absenteeism or resignation.  Third, it may conflict with other policies – recruiting specialist staff such as nurses and teachers, encouraging people to take up work at a distance, getting people to take longer hours by flexible employment practices.

I’ve argued before on this blog that there is a wide range of rationing measures, and rationing by price is markedly inferior to some of the alternatives.  None of that means that rationing by price is never appropriate – there may be exceptions (reducing the demand for cigarettes by price could be one) – but it does mean that it’s hard to justify, and there are usually better ways to achieve the ends.   Before penalising people for turning up to work, try some of the alternatives: encouraging collective transport such as employer-funded buses; provide rail season tickets and bus passes; tilt the balance towards remote working; tie site development planning to transport provision.  It’s odd to see the Green Party advocating a set of market-driven measures that would sit more comfortably with the Institute for Economic Affairs than they do with the people-centred economic policies that the Greens claim to support.

 

Brexit is set to deprive UK citizens of basic rights

I’ve repeatedly argued in this blog that trade with the EU is not the main issue: social rights are.  I wrote before the referendum that

If the UK leaves, UK citizens will lose their rights as European citizens. Those rights include rights to representation within the EU, the right to move and live freely throughout the EU, reciprocal rights to public services, and consular and diplomatic protection from other EU countries when outside Europe. There is something deeply flawed about a process that claims to be democratic but implies that a majority decision would deprive a minority of their rights.

Last March, the House of Commons passed this motion:

this House supports the maintenance of European Union citizenship rights for Welsh, Scottish, Northern Irish and English citizens, notes that the range of rights and protections afforded to individuals as European Union citizens are integral to a person’s European identity; further notes that many of those rights are closely linked to the UK’s membership of the Single Market; and calls on the UK Government to ensure that the UK’s membership of the Single Market and UK citizens’ right to European Union citizenship are retained in the event that the UK leaves the EU.

Yesterday, despite that, it emerged that if Britain leaves the EU without an agreement, reciprocal arrangements for  health insurance will be withdrawn from UK citizens living in other European countries.  None of the main protagonists in the Brexit debate is focusing on the things that really matter.

 

The Social Security Charter promises a different kind of service

There are a couple of days left to comment on the draft Scottish Social Security Charter, but I’m not going to do that, for a simple reason: it’s excellent, and I have no criticism to make.  I’m going to pick out just five points:

  • the Charter promises that the agency will listen to people and to trust them.  There is long-standing evidence that threatening people with prosecution during the process of claiming is simply destructive.
  • the Charter promises that the agency will learn from its mistakes.  I commented during the passage of the Bill that while the UK system treats complaints, rectification and review as a quasi-judicial, adversarial process, “other public services attempt to learn from complaints and use them as feedback to improve their processes.”  They’re on it.
  • Payments will continue while people are appealing a decision.  In the UK system, penalties are routinely imposed without a hearing.
  • People will be told about their entitlements, including services delivered by other agencies. 
  • People will not have their time wasted.  They promise to “recognise that your time is precious and handle your application and enquiries as quickly as we can.”

This may be a challenge, but can anyone spot the difference between this and the DWP?

PIP is costing more than DLA did. Why is the OBR surprised?

Personal Independence Payment has proved to be more costly than the system it replaced.  If only we had realised, the Office for Budget Responsibility complains, we shouldn’t have accepted that PIP would deliver the savings that the DWP was predicting.

“At the time of its use in our December 2012 forecast, the results from [the DWP survey] appeared the best available guide to the assessment process. But hindsight has revealed several issues with the nature and use of the results …  including: the voluntary nature of participation; the hypothetical nature of the assessment; subsequent changes to assessment criteria; and a sample that was unlikely to be representative of new PIP claims. It is now clear that the results were biased rather than merely uncertain.”

Among the excuses, the OBR notes that the forecasts are subject to changes in the composition of the peopopulation which is making claims, legal challenges about the scope of the benefit, and changes in the way that benefits are delivered.

Oh, my: who’d have thought it?  Well, as it happens, I did.  I wrote in this blog on 15th December 2012:

I think the predictions are likely to be wrong. The common experience of selective benefits has been that when governments try to impose firmer boundaries, they are liable to discover that needs are deeper, more complex and more difficult to reject than they imagine. The distinction between the lower and middle care rates on DLA has always been confusing, and many people can argue persuasively for higher banding. There are new opportunities to include people with psychiatric disorders. And the PIP rules do not exclude the growing numbers of older people claiming DLA. Short term reductions have to be offset against the general trend, and as time goes on, inexorably, there will be pressure to extend protection. That happened with Single Payments, it happened with Incapacity Benefit, it has happened with DLA, and it will probably happen here, too.

 

A second referendum is not the way out of this mess

If there is a second referendum, there is no good reason to suppose that it will deliver the result that remainers hope for.  I’m basing that view not on opinion polls, but on some old-fashioned political science.  There is no such thing as ‘the will of the people’.  What there is, instead, is a mish-mash of different opinions.  Some people voted ‘leave’ because they were unhappy with the EU; some because they were opposed to immigration; some because they were against capitalism; some because they wanted to return to the 1950s; some because they wanted to give the government a kicking.  Some people voted remain because they like the EU; some because of self-interest; some to avoid disruption; some because of their judgment about the economy; and so on.  Lies or fear may have played a part, on either side, but that’s not decisive; nor is the fact that some people will feel empowered to vote leave, or that other people will strain themselves to get a different result this time.  The more complex an issue is, the more likely it becomes that people with different motivations and preferences will cancel each other out, and the closer the result moves to what you’d expect from a random distribution – a 50-50 split.

Once we start from that position, the result is statistically likely to be decided by a relatively small group of people with a strong, settled opinion, if there is no equivalent group on the other side to oppose them.  The source of this argument is L Penrose, The elementary statistics of majority voting, Journal of the Royal Statistical Society 1946.    Bartholomew and Bassett wrote, in Let’s look at the figures, that  “2,000 resolute voters in a population of just over one million can almost always get their way.”   (p 125)  And that’s what happened in 2016.   (There might well have been an equivalent group on the other side – Britons in Europe – but they were largely barred from taking part.)     It’s not the polls that count; it’s the mechanism by which the issue is to be decided.  And without very strong reasons to the contrary, we should expect the same mechanisms and the same process to produce the same result.

Monthly assessments for Universal Credit aren’t working

The High Court judgment on Universal Credit payments has implications beyond the immediate issues.  It condemns the DWP for simply following through an automated process for income testing rather than considering the actual circumstances of the claimants – in this case, the early payment of monthly salary.

When the idea of making assessments in ‘real time’ was first mooted, in 2010, I was critical of the idea.  In the course of the last eight years – yes, it’s that long – I’ve posted a range of comments about the effect of assessing income on the basis of the current month.   I’ve just been reading through my old posts to make a list:

  • it deals with uncertain information
  • it requires the system to process information that it doesn’t have  access to
  • it deals with information from diffuse sources
  • it’s not applicable to the circumstances of self-employed people
  • it puts claimants into default when things go wrong
  • the system can’t cope with irregularities in the calendar, like bank holidays or Februaries
  • it provides an income that is fluctuating, unstable and unpredictable.

To this, we can now add another point: mechanical calculation yields arbitrary and unreasonable results.

Surely, people in favour of means-testing might reasonably ask, there’s no real difference in principle between monthly assessment and the assessments we used to have?  That may be true.  Many of the problems we’re seeing are problems that we’ve known about for years.  They include:

  •  the problem of offering fluctuating incomes to people on very low incomes – a system, the Ombudsman commented about Tax Credits, fundamentally unsuited to the needs of low income families
  • the problems caused by tapers, which mean that people can’t tell when they’re entitled to benefits and when they aren’t
  • the problems posed by changes of circumstances, and
  • the devasting effect when changing entitlement to one benefit (such as Income Support) spills over into suspension or recalculaltion of another (such as Housing Benefit) .

Universal Credit, I’ve previously written, “brings together every major feature that has caused administrative meltdown in the course of the last forty years … It is as if the designers had painstakingly identified all of the elements of the benefit system that are known not to work and built the new benefit around them.”