The government could take advantage of Brexit to do things differently. It probably won’t.

Over the course of the last 20 years, the EU has made a series of bad calls about the management of national economies, dominated by neo-liberal thinking on issues such as public spending, state based economic activity and social support.  Once the UK is no longer governed by common regulations, these restrictions no longer need to apply.  I have to accept that it is unlikely that the British government will do much about this, because if we look at where many of the EU’s most ill-judged restrictions have come from, it’s often reflected the free-market ideology  of British governments.  Here, nevertheless, are some of the things that a UK government can do after leaving, which members of the EU cannot.

  1. State enterprise.  Mariana Mazzucato has made out an overwhelming case for state enterprise: many of the  major economic developments of the post-war period have been made, not through the operation of an unrestricted private market, but through state action to identify, build and support new development.
  2. Sales tax.  The structure of tax in this area has been subject to EU rules on VAT.  VAT is not a sales tax, because it is not uniformly levied on sales – the way it works tends to focus on stages in the manufacturing process.  This hasn’t worked for financial or digital sectors, and the current controversy about a digital sales tax is taking place because there’s nothing there.  The US-based digital giants, and their defenders in the US administration, can hardly  reasonably object to ‘local’ sales taxes taken at the point of distribution, because that is just what happens in the states of the USA.
  3. Regionally managed immigration.  The Scottish Government’s proposal to do this has been met with incomprehension.  The approach of successive UK governments has been to focus on border control, whereas the bulk of management relies on different mechanisms entirely – housing, employment, education and public services.  There is no intrinsic reason why immigration cannot be differentiated regionally.
  4. The taxation of UK nationals abroad.  The USA taxes its citizens abroad, and the UK could do the same.  There is a good argument against dual taxation, but that is not an argument for advantaging people who move resources or profits from the UK to more favourable tax regimes.  Moving money off shore or to more favourable tax regimes should have no effect on a tax liability to pay any balance of liabilities within the UK.
  5. Procurement  contracts that meet social objectives.  Public procurement contracts that guarantee employment to locally unemployed people.  The general advice to local government has been than this is incompatible with European law; that should no longer apply.  The same should be true of locally negotiated minimum wages, such as the living wage – that runs directly counter to ECJ judgments.
  6. Moving work to the workers.   The process of regional development in the EU was based on different premises – encouraging market specialisation while cushioning the impact of that specialisation on the regions.   That hasn’t worked.  The UK government needs to return to the policies of the 1960s, moving the jobs rather than moving the people.  There is no hope for many British towns unless it is done.
  7. Freeing public expenditure.  The control of public expenditure is based on a myth, that it is government spending that drives the money supply.  It isn’t – private finance does that.  Local government needs to be able to raise funds through  its own bonds, as it did in the 19th century – along with the capacity to default (as local government can do in the USA).  There is no obvious economic case for setting global limits that apply only to the public sector.

None of this qualifies my disappointment with the deeply unsatisfactory settlement –  I am no less troubled by the disregard for citizen’s rights shown by both the British government and the European Union than I was three years ago.  Tonight, as Britain leaves the EU, I will be in Brussels.

Universalising French pensions

It’s not the first time that a French government has tried to inject a greater element of universality into its arcane system of welfare provision.  The Juppé plan, in 1995, tried to curb rising costs partly by imposing spending limits, and by trying to bring the pension rights of miners and railway workers into line with other groups.  It also proposed universal rights to health care and guaranteed access. One prominent trade unionist called that idea “the biggest rip-off in the history of the French Republic. … the end of the Sécurité Sociale.”

The current system of pensions is costly – it’s long been the case that pensioners in France are on average better off than workers.  Clearly, part of the government’s agenda over time has been to cut the cost, and that is the source of many of the protests.   If cost was all it was about, there are other things that the government could have done – raise the pension age, increase contributions, increase the number of contribution periods required, and so on.  But there are lots of other problems in the system.  The shift to precarious labour and the problems of switching between different pensions rules can shut people out. With 42 distinct pensions regimes, the system is horrendously complicated.  It takes years (literally) to work  out what someone’s pension is going to be; often the calculations begin long before a person reaches 60 and are not finished until after the person retires.   As the government plan says,

personne ne sait exactement ce à quoi il a droit. Le système est illisible, complexe, et crée de la défiance.

[Nobody knows exactly what they’re entitled to.  The system is incomprehensible, complex and it creates distrust. ]

The proposed alternative is outlined in the government plan (the link is in French). The main elements are:

  • a universal scheme for everyone – one of the principal aims is to remove inequities between people currently under different regimes
  • a points system, in place of contribution periods, to determine entitlement
  • an increased minimum pension
  • retention of retirement at 62 (that is early by European standards, but  worse than some French regimes currently offer)
  • credit for every hour for which contributions are paid  (seriously!)
  • improved protection for people whose contributions have been interrupted through care, unemployment or sickness
  • full transparency, through a personalised record of contributions and linked entitlements
  • a commitment to balance the books – the current system runs perennially in deficit
  • transitional arrangements for current workers
  • a new system of governance.  There is a commitment to consult about the value of points, but overall the new system will reduce the role of the ‘social partners’ including trades unions.

Something that isn’t explicit in the plan is the distributive element.  It’s been reported that the proposals are regressive:  the contributions required of very high paid people will be 2.8% above 120,000 Euros a year, whereas under that level the contribution will be 28%.  However, the 2.8% is purely redistributive; it will yield no benefits for the contributions.

Both sides of the argument are right.  On one hand, the government is proposing a scheme that should be less complex, fairer and  more inclusive.  On the other, the objectors will be trying to defend a scheme which, for all its irrationality and complexity, has delivered far better benefits than  a more orderly set of schemes could ever have offered.  There will, of course, be vehement protests  – it’s the French national sport, and they do it so well. But the protestors, mainly from the left and the trades unions, are  protesting against the idea of universality and state welfare, and from a British perspective, that’s a difficult position to hold.

The realignment of UK politics

What happened last night is more than the eclipse of Labour.  The Conservatives won on a populist platform: representing the will of the people in opposition to a venal political class.  The core problem with that formulation is that the Conservatives are simultaneously seeking to appeal to both of those factions at once.

This could lead  in the long term to a new  political alignment, as a class of people with no obvious political home look for different ways to have a voice.  Our political system militates against that.  It is more likely that the vote will change the Conservatives.  In the course of the next two or three years, they will be trying to appeal to their new electorate, and recruiting new members, very different from the rural and suburban heartlands they have made their own.

In the course of the next five years, then, I think we can expect to see the redefinition of coalitions of interest into two rather different main  parties, looking rather more like the parties in the US.   On the right, there will be something more like the US Republican party: mixed, angry, uncertain whether it’s  more in favour of free markets or the pork barrel.  On the left, there will be something like the US Democrats: an uneasy combination of liberals and conservatives, with a marginalised left wing.  Neither of these combinations leaves much room for social democrats, trades unions, traditional Tories or the old political centre.

Boris Johnson: in his own words

Most of the criticisms of Boris Johnson focus on the things he says that he obviously doesn’t believe.  Here are some of the things it seems he does believe.

Greed is a valid motivator of economic progress.(Source)

The real divide is between the entire class of people now reposing their fat behinds on the green and red benches in the Palace of Westminster, and the bottom 20 per cent of society – the group that supplies us with the chavs, the losers, the burglars, the drug addicts and the 70,000 people who are lost in our prisons and learning nothing except how to become more effective criminals. (Source)

A combination of economic misfortune …  and an excessive predilection for welfarism have created a peculiar, and deeply unattractive, psyche among many Liverpudlians.(Source)

Single parents are responsible for “a generation of ill-raised, ignorant, aggressive and illegitimate children”. (Source)

It must be generally plausible that if having a baby out of wedlock meant sure-fire destitution on a Victorian scale, young girls might indeed think twice about having a baby. And yet no government – and certainly no Labour government – will have the courage to make the cuts in the safety net of the viciousness required to provide anything like such a deterrent. (Source)

Whatever you may think of the value of IQ tests, it is surely relevant to a conversation about equality that as many as 16% of our species have an IQ below 85 … while 2% have an IQ above 130 … And the harder you shake the pack, the easier it will be for some cornflakes to get to the top.(Source)

I don’t believe that economic equality is possible; indeed some measure of inequality is essential …  (Source)

Ipse dixit.

British democracy faces an existential crisis.

The government of the  United Kingdom has always had an unwritten constitution, and that position has been defended on the basis that it allows governments a degree of flexibility in dealing with complex situations.  That position has been tested to breaking point in recent months.  Here are a few concerns.

1.  The Conservative Party is standing on a manifesto which commits them to change the basis on which laws are made and reviewed.  The Manifesto states:

After Brexit we also need to look at the broader aspects of our constitution: the relationship between the Government, Parliament and the courts; the functioning of the Royal Prerogative; the role of the House of Lords  …

2.  At the same time as Britain withdraws from the governance safeguards imposed by the European Union, it is proposing to weaken  other safeguards (such as human rights and judicial review) which derive from other sources.   The Manifesto again:

We will update the Human Rights Act and administrative law to ensure that there is a proper balance between the rights of individuals, our vital national security and effective government. We will ensure that judicial review … is not abused to conduct politics by another means or to create needless delays.

3.  The present government is firmly committed to legislation on Europe that will give Ministers extensive ‘Henry VIII powers’ – the power to change laws without scrutiny or the prior approval of parliament.  The election was called, not because Parliament had failed to agree the EU Withdrawal agreement, but because it had demanded the rights to scrutinise the bill that enacted those powers.

4. The government has responded to criticisms in the media, the courts and in Parliament by threatening to close them down – most recently threatening Channel 4’s licence to operate.

5.  Members of the government have no scruples about lying about its aims, objectives, situation, process or outcomes.  There is a depressing catalogue of falsehoods listed by Peter Oborne.  It is probably no less dangerous, however, that so many government ministers don’t do detail, and say things that are false simply because they don’t know any better.  Recent examples are the confusion between the EU and the European Court of Human Rights, the mistaken statements about state aid and the EU, or the ill-informed statements made by Johnson and Patel, in the wake of the recent terrorist attack, about the release of prisoners on licence.

These things threaten three key elements of any democracy.  They are the rule of law, public accountability, and open discourse and deliberation.  The threat to democracy is chilling.

The election campaign has been marked by a flurry of lies

Lies are a rarity in British public service.  Most public servants know to avoid them, for a simple reason: they will be found out.  The nature of modern government means that everything is somewhere recorded (usually in writing), subject to exposure or liable to be the subject of legal action.   Public servants, in the best tradition of Sir Humphrey, can prevaricate, obfuscate, divert or distract, but if they’ve got any sense, they don’t say things they know to be untrue.

The Brexit campaign was bizarre, and alien to our political culture.  There were not only deliberate lies (for example, about Turkey’s entry to the EU), but deliberate and flagrant breaches of electoral law.  It’s not going too far to describe those breaches as ‘corrupt’ – the first legislation on electoral spending was, if I have it right, contained in the Corrupt and Illegal Practices Act of 1883.  Now, two elections on, we’ve seen a repetition of many of the same practices. 40 new hospitals and 50,000 nurses belong with the lie on the Brexit bus.

The cavalcade of lies is spearheaded by Boris Johnson.  The Conservative journalist Peter Oborne, horrified by what’s going on, is maintaining a tally at https://boris-johnson-lies.com/ .  I suspect he’s finding it hard to keep up.  Only this morning, the Guardian reports preposterous things being circulated about prostitution, immigration and spending,  and less preposterous (but false) statements about state aid, trade unions, tax and defence.

The main offenders are the Conservative party, but the Labour opposition is not exempt.  Accused of a ‘mendacious fiction’ in saying that the Labour Party had deal with all cases of antisemitism, Jeremy Corbyn did not try to say (in his interview with Andrew Neil) that the statement he’d made was true; he said only that the accuser would have to prove that it was ‘mendacious’, or deliberately untrue.  So the statement was false, but not intended to deceive?  Politicians really ought to be aware that people will on occasion listen to the words they use and judge them accordingly.

 

The last of the main manifestos, from the SNP

The Scottish National Party’s manifesto is the last of the main manifestos to appear.  It’s a reflective document, explaining the SNP’s work in opposition, their role in Westminster and some of the things they hope to lobby for.  In the field of social security, that includes ‘halting’ Universal Credit – presumably that means halting the roll-out, scrapping the two-child limit, ending the freeze on uprating and protecting the WASPI women.   That platform brings them quite close to Labour, who are similarly trying to reverse some of the negative policies of recent years.

I have to accept, reviewing the clutch of election manifestos, that I’d been looking for something that none of the parties is really ready to consider: some thinking about what government should be trying to do for its citizens, what might be done with benefits, what principles we would want to uphold.  I had imagined, after the great splash on social care in 2017, or the continuing problems in health care marked by the troubles of A and E, that some party would have run with something more innovative – for example, what should be done by contributions (the German approach to social care), what by different social arrangements (such as the Kerr reforms of urgent health care) or what by redistribution.  However, these are not the sort of things that our political system is engaging with.  It’s easy to blame Brexit for monopolising everyone’s attention, but I think it goes deeper than that.  After decades years of neoliberalism, marketisation and ‘austerity’, there’s little appetite for solidarity, redistribution  or the expansion of public service.

 

A minority government is a government that is not supported by a majority. The clue is in the title.

I’ve been irritated by the apparent failure of BBC journalists, in questions put to both the Liberal Democrats and the SNP,  to understand what a minority government is or how it works.  It’s not difficult: we’ve got a minority government at the moment, we’ve had minority governments before (e.g. under Wilson in 1974) and the SNP is technically a minority government in Scotland.  The 2010 Coalition was not a minority government; it had a majority.

Every question which asks minority parties, “who would you support for Prime Minister?”, is irrelevant.  The whole point about minority governments is that they don’t have majority support.  All that has to happen is that there is not actually a vote of no confidence – that minority parties abstain.

In principle, a minority government should work by selecting policies or legislation which can command support – policies that will get through Parliament.  This approach has been undermined to some degree by the present Conservative administration’s refusal to compromise or act as if is in a minority, but there’s nothing wrong with the principle; the current government has simply demonstrated, through repeated losses, how ridiculous it is to ignore the parliamentary numbers.  This election has been called because of the government’s refusal to compromise – not on the Withdrawal Agreement, which had reached a second reading, but on the sweeping authoritarian  powers (“Henry VIII” powers, in the jargon) that they were determined to enact.    Any majority government which took that position would represent an existential threat to our democracy.

A minority government is not a bad thing; it can be a good one.  Lacking a majority forces governments to common ground or compromise, and in our present predicament those are positions devoutly to be wished.  Unfortunately, no-one can actually vote for a minority government; it’s not on the ballot.  All you can do is to vote for a minority party, in the assurance that if there are enough minority parties, there won’t be a majority government.   And that promises a better outcome than any prospective majority government is likely to offer.

 

The Conservative manifesto is out

I have very little to say about the Conservative manifesto, because it has very little to say about the issues I am generally concerned with.  The manifesto does say (on page 17) that the Conservatives want to reduce poverty, but not how.  The misplaced emphasis on stopping fraud is hard to reconcile with the benefit system’s real failures.  And somehow, carrying on with the roll-out of Universal Credit and extending the life of PIP assessments doesn’t quite seem to address the core problems with benefits, low income,  destitution or debt.

That might, of course, raise the question of why I have not been more enthusiastic about the policies promoted by other parties.  I’ve previously explained that I was looking for a different approach.  Here, with apologies for repetition, is a list of some of the measures that I believe would have a beneficial effect.

  • To make commitments to the principles of income security, meeting need and social justice.
  • Reconsider what people need benefits for, providing services rather than cash where appropriate.
  • Offer a wider range of benefits to improve the security of people’s income and to meet social objectives.
  • Move away from means-testing, with greater reliance on contributory benefits and universal allowances.
  • Rethink how things are done: aim to have benefits with simpler rules, fewer conditions, fewer personal adjustments and longer time scales.
  • Secure benefits for disability to secure their financial status and their dignity.
  • Protect the position of children in disrupted families by directing benefits to the child
  • Improve provision for the oldest pensioners.
  • Reform occupational pensions, to secure the future of pension entitlements and to ensure that pensions funds are invested in the British economy.
  • Protect people better during the interruption of earnings caused by sickness and unemployment.
  • Separate benefits and employability provision; they are doing different things.
  • Provide more public sector jobs, to do the things that we want to have done.

And here is a rough indication of what the parties have promised on those issues.  It’s rough, because it’s easy to miss things; the manifestos tend to pass over minor topics such as ‘poverty’ in a sentence or less, and costings documents are now routinely hidden  somewhere else.  If I’ve missed something important, please let me know.  I’ll try to refine this table as the election campaign goes on.

Labour Conservative Liberal Democrat Green
Principles Dignity
Respect
End poverty
Get people back to work Financial security
Provide services, not cash, where appropriate Free broadband, extend child care, free personal care, free primary school meals Free child care for 2-4s Free child care, free personal care for older people
Wider range of benefits
Less means testing
Less intrusion
Secure disability incomes “The support they need”
Benefits direct to children School meals
Older pensioners
Reform occupational pensions For miners and postal workers
Income smoothing
Separate benefits and employability
Create jobs Infrastructure development Infrastructure development Green jobs

 

Liberty, equality , fraternity: now on open access

I’m delighted to report that my 2006 book, Liberty, equality fraternity, is now available free on open access at the Policy Press website.  From the website:

“Paul Spicker’s book takes the three founding principles of the French Revolution – Liberty, Equality, Fraternity – and examines how they relate to social policy today. The book considers the political and moral dimensions of a wide range of social policies, and offers a different way of thinking about each subject from the way it is usually analysed.

The book is in three main parts, one part devoted to Liberty, Equality and Fraternity in turn. Each part explores the elements and dimensions of the key concept, its application to policy, its interrelationship with the other two principles, and how policies have developed to promote the principle in society. The conclusion outlines three models of radical politics, based on the main concepts.”

The book presents several arguments that are quite original, it refers only to examples from life, and it hasn’t dated.

This is the sixth of my books to be available freely to all.  Find it and others on my open access page.