Constitutional Codswallop

The Conservative party PR machine tried, for once with only modest success, to divert attention from the nuts and bolts of the consequences of the proposed reduction in tax credits. Instead  they tried  to focus attention on the constitutional issue of whether or not the Lords had the right to block or defer the changes. There was even talk of a constitutional crisis and, would you believe, the danger of involving the Queen in a political issue.

Happily the Lords ignored them and went right ahead.

However, the PR machine keeps on trying.   Jacob Rees-Mogg, MP, son of the late Honourable William, spouts of the possibility of creating 100 extra Troy peers to bring the Lords into line, and David Cameron hints darkly  of a "rapid review" of their powers and functions. Well ,of course, he had his chance when his then partners in government, the Liberal Democrats, proposed democratic reform which his party  had promised to support, and he bottled it.  Cameron is quick to use what he sees as the pejorative term "unelected," but if the second chamber remains  "unelected" whose fault is that?

The Conservatives make much  of the argument that the Tax Credit proposals have financial implications, and the Lords do not normally interfere with these.  However, as explained in the previous post, George Osborne himself failed to include the proposals in his Finance Bill,and instead submitted them in something called as Statutory Instrument, presumably to avoid full scrutiny and debate in the Commons.  So serves him right.

Lords defeats and delays are not all that unusual but it is curious that they happen a lot more when there is a Labour government  than when the Tories are in power.  From 1975 to 1979 (Labour ) there were 240 defeats, an average of 60 a year.  From 1979 to 97 (Tory years) there were just two more, 242, but over 18 years that averaged out at only 13 per year.  Then  in the 13 years of Labour rule  from 1997 to 2010 the figure jumped up to 528, an average of 40 a year.*

So the Tories are getting a dose of their own medicine, and, like most bullies, when the tables are turned, they cry "foul."

*  Figures derived from  http://www.parliament.uk/about/faqs/house-of-lords-faqs/lords-govtdefeats/

The Lords and the Low Pay Subsidy.

Way back in the 1960s we Liberals campaigned for what we then called Negative Income Tax. - if your income was high you paid tax to the state, if it was low then the state paid you.  It seemed a good idea.

Calling it Working Tax Credit Gordon Brown introduced it in the early 2000s.  The chaos of the initial introduction is amply described in Chapter 10 of King and Crewe's " The Blunders of our Governments,"  but most of the initial teething troubles have now been sorted out.  However, what we now realise is that, rather than being a clever way of administering a vital part of the social security safety-net, working tax credits are in practice a massive subsidy to employers to enable them to pay wages below the market rate.

So George Osborne is quite right to try to move  employers away from a state subsidy to paying decent wages.  The obvious and humane way to do this is to raise the wages first and then gradually lower the subsidy.  Typically Osborne has chosen to effect the process in reverse: the subsidy is to be reduced now and the (very slightly) improved wages are to come later, if at all..  All independent sources say that some three million of the lowest paid people, already on the breadline, will lose out, some of them to the tune
of over £1 000 a year (maybe peanuts to the well heeled, but a crucial £20 a week to those on a tight budget.)

With its Conservative majority, the Commons has already approved the proposals, but this afternoon the House of Lords has a chance to stop it.

The Tory Perception management machine is already in spate expressing outrage.  Former Tory leader Michael Howard (he of something of the night) says that Lords' interference in financial matters  upsets 350 years of tradition. (His own party blocked regularly Liberal financial proposals right up to Lloyd George's People's Budget in 1910.)  Nicky Morgan had a better perception of history (fortunately, as she's Education Secretary) when she brought down the period of non-interference to 100 years.

However, the truth is rather different.

First , the Tories were quite explicit in the general election campaign that thy would not reduce tax credits.  Michael Gove, then and now a senior minister, is on record as saying in the election campaign that they would be frozen for two years.  David Cameron said there were no plans to reduce them.  So there is no question of Lords frustrating the elected government  on a policy for which they have a mandate.  Rather the reverse - to prevent their breaking an election  pledge

Secondly, Osborne is hoist with his own petard.  The constitutional principle is that the Lords will not interfere with a Finance Bill.  But Osborne did not include his Tax Credits proposals in the Finance Bill, but , in order to avoid too much scrutiny and opposition in the Commons (even some Conservatives have their doubts about the wisdom of the policy) introduced the measure by a Statutory Instrument.

The Lords have every right to kick this out.  Lets hope they do

PS (added Tuesday 27th October)   Hurray, they did!

Next blunder of our government.

A couple of years ago the political pundits Anthony King and Ivor Crewe published a book, "The Blunders of our Governments" depicting  major errors of British governments in recent years.  These ranged from Mrs Thatcher's Poll Tax,  Pension Mis-Selling, entry to the ERM at the wrong price so subsequent humiliating exit from it, the Millennium Dome, Working Tax Credits, and the attempt to finance an extension of the London underground through a Public Private Partnership.

If and when an updated edition is produced thee can be little doubt that the  Hinkley Point C Nuclear power station will be added to the list.

It :-

•  uses, according to George Monbiot, who knows about these things and whom many of us trust,  outdated technology
• is to be built by the 85% state owned French company EDF, who are already years behind-hand with similar projects in other countries
• is expected to cost £24.5 billion, but will probably over-run
•  is to be largely financed by the Chinese Government, not at present the most compatible with our government's much vaunted emphasis on British norms and values.  . .
• . . .but, if the project falters, much of the Chinese expenditure is to be guaranteed by the British government
• will produce electricity at double the current price, and this is guaranteed, with adjustment for inflation, for 30 years.

More details can be found at  https://en.wikipedia.org/wiki/Hinkley_Point_C_nuclear_power_station

An alternative use of the Hinkley Point area was to build some wind-farms, but locals objected on the grounds that a blade from one to the wind turbines  might be blown off and do damage.

Our  government hails this dubious  nuclear project, for which the foreign owned state sectors will take the  profit if it is successful, but for which the British taxpayer will pay if it fails, a great success.

At the same time our government  is cutting back on support for renewable energy projects on the grounds that  they are so successful we are in danger of exceeding our targets for the reduction of carbon emissions.

I shudder to think what our right wing press would be saying if a Corbyn government were making such daft decisions.

Labour's enemies within.

Too many of Labour's leaders, some of them even in the shadow cabinet, are vying to dissociate themselves from Jeremy Corbyn's policies. Could it be that they don't want him to succeed?  Could it be that Corbyn's success would demonstrate that New Labour under Blair was, not necessarily all but mostly, a terrible mistake?

Norman Warner, a Labour member of the House of Lords, this week went further than most and actually left the party, claiming  that under Corbyn Labour  "hasn't a hope in hell."

Lord Warner is a former civil servant in the Department of Health and (presumably after having left the civil service) was a Health Minister in the Labour Government from 2005  to 2007.

One of the great mysteries to me is why the Liberal Democrats  in the Coalition Government (2010 to 2015) went along with the Conservative policy of re-organisation of the NHS when this policy was not included in the Coalition Agreement and, indeed the Conservatives had expressly  promised  "no top-down reorganisation of the NHS" in their election campaign.

One of my (very few) contacts in the House of Lords explained to me that Lord Warner  had assured the Liberal Democrat group that the Tory reforms were "all right" and, since he had been a civil servant in the department, and even a minister, they presumed that he know what he was talking about, so they agreed to be re-assured.

Later they discovered that Lord Warner had financial interests in private health providers.  As Wikipedia now puts it:

Lord Warner is a director of Sage Advice Ltd, and an adviser to Xansa (a technology firm) and Byotrol (an antimicrobial company) - all of which sell or are hoping to sell services or products to the NHS, according to website Social Investigations.^[18] He also took up a position with Apax Partners – one of the leading private equity investors in healthcare, according to the Alliance for Lobbying Transparency.^[19]

Presumable that information wasn't on the web at the time, or maybe the Liberal Democrat peers were too trusting and didn't bother to look.

I suspect that Lord Warner will be no great loss to the progressive side of politics.

That progressive side can be heartened by the fantastic victory of the Canadian Liberals, who have overwhelmingly won their general election on a promise to run a government  budget deficit for three years in order to  invest in infrastructure and help stimulate Canada's economic growth.

So Keynesian economics is alive and well, and electable, at the other side of the Atlantic. Maybe Corbyn (with Liberal Democrat, Green and SNP support) can pull of a similar coup here. Certainly he has a far better chance than any of the Labour spoilers.

They, and we, should get behind him.

Bully for the bisops

The 84 bishops of the Church of England who wrote to the prime minister offering to lead a national campaign for the welcoming and settlement of refugees from war-torn Syria were not grandstanding, as I believe the Daily Mail suggests, but making a constructive appeal for a humane response to a humanitarian crisis.

Their purpose was not to embarrass the prime Minister, as they initially wrote privately, more than a month ago. They published their letter only when, other than a formal acknowledgement, they had received no reasoned reply, though one had been promised.

The essence of their offer was and is as follows:

We stand ready to play our part as well. We will:
1.         Encourage our church members to work alongside the wider community in offering welcome, orientation, integration, sign-posting and support to all refugees who come
2.         Encourage, where possible and feasible, churches, congregations and individuals to make rental properties and spare housing available for use by resettled refugees.
3.         Promote and support foster caring among churches, congregations and individuals where appropriate to help find the homes needed to care for the increasing number of unaccompanied minors
4.         Pray for, act with and stand alongside your government, to rise to the challenge that this crisis poses to our shared humanity.

Surely this sort of response is what David Cameron means by  the "big society."

So far Britain's official response, or rather lack of it, must be one of the  humiliating in our history.  A minister suggested that those needing help while attempting the dangerous crossings of the Mediterranean by boat should not be rescued, because that would only encourage more to try.  The government has opted out of any attempt by the EU to share in the task of resettling genuine refugees equitably between member states.  Our current offer of 20 000 Syrian refugees  (over five years?) is paltry when compared to the hundreds of thousands already taken by Germany. We hang our heads in shame.

Humanitarian issues apart, I suspect that Angela Merkel has, despite the initial difficulties, been very shrewd in welcoming so many.  As Robert Winder notes:

There aren't many universal truths, but people do not lightly burn  their small hoard of money or burden themselves with loans merely to put their feet up at someone else's expense.  They do not leave their homes and families because they are risk-averse.*

 

In not too may years' time, and when their ageing population makes it most necessary, the German economy will experience the boost  resulting from the input of these enterprising incomers. 

Our government is right to point out that Britain is making a very significant contribution in international aid to sustain the refugee camps on the borders of Syria. 

But this is not a question of "either- or."  The migrants are both on their way and here inside Europe.  Conservatives are traditionally noted for being realistic, and it is folly to ignore this reality.   The sensible solution is for us to work constructively with our international partners to deal with the reality in a humane and compassionate manner.  The alternative of fortress Europe, or fortress Britain, is simply not viable.  As Winder further points out:

The opponents of migration are always up against powerful human forces - love, lust, curiosity,  hunger, fear and hope - and they are usually outmatched.  A nation historically wedded to freedom  would always have a hard time striving to curtail it. **

Let's hope that, with or without the government's backing, the churches, other religious bodies, and other pillars of civic society, redeem our reputation by going ahead with the bishops' plans

 
*  Bloody Foreigners, p 359

**          ''                   p 399

 

An Englishman's home. . . . .

Something called the Investigatory Powers Tribunal has decided  that even the private telephone calls, Emails, and letters of our members of parliament are not exempt from arbitrary interception by "the authorities."  So along with the rest of us, their private communications, however "confidential " they may be presumed to be,  can  be made available to umpteen different bodies on the whim of any bureaucrat who fancies a bit of finding out.

All this in the name of protecting us from  terrorist plots and sundry dangers.

What a contrast with the standards of privacy maintained in the mid 19th century.

In his splendid book "Bloody Foreigners" Robert Winder refers to the case of the Italian revolutionary Giuseppe Mazzini, who, during his exile in England, discovered that the post office was tampering with his mail and passing on information to rival groups in Naples.  This caused an outcry, and debates in parliament, not because we were harbouring a revolutionary, but because his privacy had been invaded.  In a letter to The Times, the Scottish philosopher Thomas Carlyle wrote:

It is a question vital to us all  that sealed letters in an English post office be, as we all fancied they were, respected as things sacred; that opening of men's letters, a practice near akin to picking men's pockets, and to other still viler and far fataler  forms of scoundrelism, be not resorted to except in cases  of the very last extremity.*

That was in 1843 when I'm quite sure there would be as much anxiety of terrorist and violent activity of one form or another as there is today. But then there was a greater determination to defend the freedoms that others might be out to destroy.

There is much huffing and puffing from the Bufton Tuftons of this world about the maintenance of "British Values."  One of these is surely the concept  that "an Englishman's home is his castle," meaning that "the authorities" are not allowed to invade it, or, by extension the privacy of the occupants, without good cause.

The present mass surveillance techniques (including, as I understand it, the requirement of communications companies to keep all data for at least a year in case "the authorities"  would like to check it out) is clearly incompatible with this ancient right.

The organisation "Liberty" (formally the National Council for Civil Liberties)  recognises, like Carlyle above, that privacy may be violated  in "cases of the very last extremity"  but argues, among other things, that there should be "prior judicial authorisation  for all surveillance requests" and that such surveillance be conducted "for only narrow and tightly defined purposes."  For more details visit: https://www.liberty-human-rights.org.uk/

The issue is to be debated in parliament shortly.  Now that MPs know that, for once, they, like the rest of us, are "all in this together" they will take steps to safeguard our and their right to privacy.

* Quoted on page 148 of Winder's  book, which is a riveting read about immigration, and puts that into perspective too.

Nonsense about fiscal responsibility

Our Chancellor of the Exchequer, George Osborne, is to introduce his (revised?) Charter of Fiscal Responsibility into parliament tomorrow. As I understand it the charter is to require that, from three years on,  every government, in normal times, must run a budget surplus.

Even if it made economic sense, such a charter would be nonsense. Under the British Constitution no parliament can bind a future parliament, or even future decisions of the same parliament, so any government with a parliamentary majority which wanted to repeal the charter could do so.  And of course, the definition of "normal times" can be varied to suite whoever wishes to describe the times as abnormal.

So this is just a piece of political grandstanding by Osborne, designed to embarrass the Labour opposition, which the Tory PR machine and compliant media have managed to tarnish as being  of questionable economic probity.  John McDonnell, Labour's Shadow Chancellor, is not helping to regain their credibility by flip-flopping on the issue, having first announced that he would support the charter and now deciding, sensibly, that Labour will vote against (and I fervently hope, the Liberal Democrats too, or Keynes will be turning in his grave.*)

Keynes demonstrated that balancing the budget, come hell or high water, is an inadequate policy.  He showed that in times of recession caused by inadequate demand the government should run a budget deficit in order to make up the short-fall and maintain or achieve full employment, and in times of over-heating the government should run a budget surplus both in order to recoup the money spent in the recession, and to dampen down inflationary pressures.  Fine tuning of the economy in this way is what the modern chancellor should be attempting.  Osborne's policies are a throwback to the 1930s and before.

Strictly speaking it is not even necessary to balance the budget in the long run.  Even humble "A" level text-books have long  suggested that a prudent chancellor should aim for a  long-run budget deficit of around 3% of GDP.  The value, and cost of repayment, of the subsequently accumulated national debt, will be reduced through growth and inflation.  If however, we are to aim for "prosperity without growth," which I believe we should,  that percentage will have to be revised.

Even so, as Larry Elliot pointed out in an article some time ago, if the economy grows at 5% in money terms, as the UK's has done, on average, since the war, than long term borrowing at only 3% in money terms will gradually reduce the Debt:GDP ratio.

The really serious deficit in the British Economy is the current account of the balance of payments, which is running at or very near a dangerously high level of 6%.  Unlike  the internal deficit (ie that discussed above), which is largely "money we owe ourselves," this external deficit really is a burden on future generations.  It really will have to be paid back some day.

Rather than tackle the problem by measure to increase efficiency and productivity, Osborne's only policy seems to be to buy time and postpone the evil day by flogging off national assets with foreigners as eager and willing customers (yet more of the Post Office to go to "US institutional investors" any time now, with Northern Rock, the Ordnance Survey and Channel 4  in the pipeline).

* Happily they did, so Keynes can rest.  (added 18th October)

Poem

Today is national Poetry Day.  Here is one of my favourites:

Ode on Solitude

Happy the man, whose wish and care

   A few paternal acres bound,

Content to breathe his native air,

                            In his own ground.

Whose herds with milk, whose fields with bread,

   Whose flocks supply him with attire,

Whose trees in summer yield him shade,

                            In winter fire.

Blest, who can unconcernedly find

   Hours, days, and years slide soft away,

In health of body, peace of mind,

                            Quiet by day,

Sound sleep by night; study and ease,

   Together mixed; sweet recreation;

And innocence, which most does please,

                            With meditation.

Thus let me live, unseen, unknown;

   Thus unlamented let me die.

Steal from the world, and not a stone

                            Tell where I lie.

Alexander Pope 1688–1744

Although I originally learned this poem, or parts of it, to be able to show, in essays, examinations, that Pope did  not always write in iambic pentameters, I'm very fond of some, though not all (I should not want to die unlamented) of its sentiment 

One of my most effective teachers was the Bradford historian Jack Reynolds.  He spent his entire career in this area and was highly respected by all who came into contact with him, and particularly those he taught.  This is in great contrast to those professionals who whiz around from job to job, often moving on to the next before the mess they've made in the last one becomes apparent.  More to be pitied are those unfortunates who flit around the world trying to leave themselves behind.

I suspect that today we do not esteem sufficiently those who confine themselves to " a few paternal acres. "  We should.

The Tories gave, and the Tories have taken away: blessed be he name of the Tories

Actually the quotation should be the other way round.  It was a Tory government under Mrs Thatcher which took away the right of local government to set, keep and spend the business rate.  Now George Osborne has the cheek to claim a revolution rather than a "U" turn by giving it back again.

Although, of course, not all the powers are returned.  Most local authorises will be permitted to vary the business rate in one direction  only - downwards.  Only those authorities which succumb to central government bullying and agree to combine and have a separately elected executive mayor will be able to vary it upwards, and then only by a maximum of 2% (and, curiously, provided they have the support of the business community - how will this be assessed?)

This may be devolution, but only in the sense of the conclusion of Stanley Holloway's monologue on Magna Carta, the result of which is claimed to be :

                      "That in England today we can do as we like.
                        So long as we do what we're told."

Osborne is also rather coy on how, and how much, money will be redistributed  from richer local authorities to poorer ones, which is one of the most important functions of central government..

Westminster council in London with a population of 227 0000, can raise almost £2bn from business rates   This, according to Larry Elliott (page 6, Guardian, 06/10/15) is more than the combined business rates of  Birmingham, Manchester, Sheffield, Liverpool and Bristol, with a total population of 3 million, can raise. 

Of course, equalisation can be achieved by the redistribution of general taxation and not just business rates, but without details, the Tory recipe seems to be one by which the already prosperous shall prosper even more.  Another odd biblical quotation  springs to mind:  "Unto him that hath shall be given...." even if nothing is actually taken away from him that hath not.

In all it is hard to avoid the conclusion that  what is actually devolved in this ploy is responsibility, and blame, for the public expenditure cuts made by the central government in their policy of reducing the size of the state

How catastrohhic was Labour's defeat?

The media, and even the Labour party itself, seem to have accepted that labour suffered a catastrophic defeat in May this year, and a consensus has developed that this was because their manifesto was "too left wing" and that Ed Miliband was "not prime-ministerial materiel."

Labour's defeat was certainly devastating, but only in the sense that, until the results of the exit poll were released at 10pm, we all thought that Labour and the Conservatives  were running "neck and neck" and those of us on the the progressive side of politics believed  there was more than an even chance that the next government could be a "rainbow coalition" of Labour, Liberal Democrats, Greens , and possibly, the SNP.

Those hopes were shattered as the exit poll, which few believed at first, proved to be right.  In the case of the Liberal Democrats, more than right: I  believe it predicted we should just attain double figure, but we ended up with only eight MPs.

It is indisputable that both Labour and the Liberal Democrats experienced a catastrophe in Scotland, losing between us a spectacular 50 seats to the Scottish Nationalist Party and retaining only one seat each.

However, the results in England reveal a very different story.

In England both Labour and Conservatives gained votes ( Labour  +3.6%, Conservatives  +1.4%) and seats  (Labour  +15 and Conservatives  +21), all, I think,  from we Liberal Democrats.

In Wales the Labour vote increased by only 0.6%, though they still lost as seat, and the Conservatives gained three seats with an increase in total vote of only 1.1%.  Neither party campaigns as such in Northern Ireland.

So, concentrating on the results in England, Labour's "too-left wing" campaign under the "not-priminsterial" Ed Miliband was by no means a failure.  They increased their vote, in percentage terms, by more than double the Conservatives, and it was only the distortions of the electoral system that this  produced fewer additional seats.

The obituary of Denis Healey in today's Guardian  quotes him as reconsigning the need to "close the gap between our active workers and the average voter in the country."  Labour's present establishment  could tackle this not by deserting or ditching what whey perceive as their even more unelectable leader and retreating on his even more left-wing policies (most of which seem to me to be perfectly reasonable) but by support him and using  their energies to explain, refine and publicise the  policies which have so energised Mr Corbyn's supporters.

Liberal Democrats should contribute, not by taunts of "hard left" and "Trostkyite," but by emphasising the policies on which we agree, such as housing, fairer taxation,and the protection of human rights,  and bringing to the mix our enthusiasm for Europe, and, of course, proportional representation by single transferable vote in multi-member constituencies.