For the background to this post please see Testament of Yoof (1)
“Third, a Liberal is an Internationalist. He realises that the inequalities that exist in this country are nothing compared with the inequalities between this country and the developing world. He believes that our rich country should, as one of its highest priorities, play its full part in assisting the Third World in its fight for economic development. In practical terms this means that he will not only press for the raising of Britain's Aid Bill to 1% of our G.N.P., at once, but he will also fight for trade agreements which will help the poor countries , and against those (like the Labour Government's new Cotton Tariffs last year) which hamper them. "
Well, I certainly stand by all that. It is shameful, after forty years, how relevant it remains. As far as I can remember Britain signed up to the UN call for rich countries to devote 1% f their GDPs to development aid in 1967. Three years later Liberals were calling for this target to be achieved "at once." We still haven't got there though, to his credit David Cameron has agreed to honour the Labour government’s promise to reach the government's share of the target (0.7%) by 2013.
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Progress on the reform of the international trading system has been equally modest Still today international trade agreements, supervised by the World Trade Organisation, remain heavily skewed in favour of the rich.
However, a great deal has been achieved in bringing the subject of world poverty on to the political agenda, not least through the Jubilee 2000 campaign to cancel much Third World Debt. Unfortunately the promises made at summits are rarely honoured in full.. For example, Egypt, where more than 18 million people live below the poverty line, still has an international debt of $30 billion, much of it borrowed by Hosni Mubarak, not for development but to prop up his regime. Mubarak has been overthrown but the people of Egypt are still required to pay his debts. Details of a "Dictator Debt Day of Action” in London on the 31st October can be obtained from the Jubilee Debt Campaign.
Saturday, 10 September 2011
Thursday, 8 September 2011
That 50% tax rate
As every student of elementary economics will have been taught, there are two ways of analysing the effect of income tax on effort and enterprise.
One assumes that work is disagreeable and leisure is agreeable. All workers have to do some work but at the margin have the choice of whether to do a little bit more or a little bit less. The higher the net wage (ie after tax) the more attractive work becomes compared to leisure. This is the rationale for paying time and a quarter or time and a half for overtime. A high marginal tax rate reduces the net wage and makes work less attractive. Therefore the worker reacts by doing less work and enjoying more leisure.
The other analysis comes to the opposite conclusion. It assumes that the worker has in mind the income necessary to maintain his/her household's standard of living. Most households live up to their incomes. An increase in the marginal tax rate means that net household income falls. Hence the worker will work more in order to maintain the household standard of living (whereas under the first argument he would say something on the lines of "Sod this for a lark," work less and lower the household standard of living even further.)
There are flaws in both analyses. Both are couched in terms of hours worked and most workers don't have much choice: we are given a job with a stated number of hours and that's it (apart from the possibility of overtime, mentioned above.) Only part-time workers tend to have much flexibility on the number of hours worked, although, of course, some "full timers" can get a second, part-time (evening) job.
A more serious flaw, in my view, is that both analyses assume that the monetary reward is the only or most important factor in determining how hard one works. Beyond earning enough for the basic necessities, this is unlikely to be true for most people. Pride, the respect of one's colleagues, desire for promotion, doing a fair day's work for a fair day's wage, all motivate the employees. Entrepreneurs are similarly motivated, along with aims such as to maintain the reputation of a respected business, to increase the size of the business or market share, fame (for actors, singers, artists etc), to wield more power, gain in prestige, or even have enough to contribute to a political party and get a knighthood.
Empirical evidence suggests that marginal tax rates may affect the amount of work offered by part time "second income" earners (in earlier times usually housewives earning "pin money) but not many others. That high marginal tax rates discourage effort and enterprise is a convenient myth promulgated by the rich.
Personally I would keep the 50% tax rate, introduce it at a lower level and consider even higher rates for for higher incomes. Remember at present it is only paid once taxable income has reached £150 000 a year, Depending on allowances, that's around £3,000 a week. Over half the working population would be in the seventh heaven if they received that amount a month. If we really are "all in this together" then the rich have to play their part, not opt out of the society that enables them to be rich.
One assumes that work is disagreeable and leisure is agreeable. All workers have to do some work but at the margin have the choice of whether to do a little bit more or a little bit less. The higher the net wage (ie after tax) the more attractive work becomes compared to leisure. This is the rationale for paying time and a quarter or time and a half for overtime. A high marginal tax rate reduces the net wage and makes work less attractive. Therefore the worker reacts by doing less work and enjoying more leisure.
The other analysis comes to the opposite conclusion. It assumes that the worker has in mind the income necessary to maintain his/her household's standard of living. Most households live up to their incomes. An increase in the marginal tax rate means that net household income falls. Hence the worker will work more in order to maintain the household standard of living (whereas under the first argument he would say something on the lines of "Sod this for a lark," work less and lower the household standard of living even further.)
There are flaws in both analyses. Both are couched in terms of hours worked and most workers don't have much choice: we are given a job with a stated number of hours and that's it (apart from the possibility of overtime, mentioned above.) Only part-time workers tend to have much flexibility on the number of hours worked, although, of course, some "full timers" can get a second, part-time (evening) job.
A more serious flaw, in my view, is that both analyses assume that the monetary reward is the only or most important factor in determining how hard one works. Beyond earning enough for the basic necessities, this is unlikely to be true for most people. Pride, the respect of one's colleagues, desire for promotion, doing a fair day's work for a fair day's wage, all motivate the employees. Entrepreneurs are similarly motivated, along with aims such as to maintain the reputation of a respected business, to increase the size of the business or market share, fame (for actors, singers, artists etc), to wield more power, gain in prestige, or even have enough to contribute to a political party and get a knighthood.
Empirical evidence suggests that marginal tax rates may affect the amount of work offered by part time "second income" earners (in earlier times usually housewives earning "pin money) but not many others. That high marginal tax rates discourage effort and enterprise is a convenient myth promulgated by the rich.
Personally I would keep the 50% tax rate, introduce it at a lower level and consider even higher rates for for higher incomes. Remember at present it is only paid once taxable income has reached £150 000 a year, Depending on allowances, that's around £3,000 a week. Over half the working population would be in the seventh heaven if they received that amount a month. If we really are "all in this together" then the rich have to play their part, not opt out of the society that enables them to be rich.
Wednesday, 7 September 2011
More peaked caps
Not long ago my fellow passengers on a bus journey were school children, boys and girls from 11 to 16 or so. They sat still, talked to each other quietly and most thanked the driver when they got off. I was so impressed that I toyed with the idea of writing to their head to congratulate him on their impeccable behaviour, with a request that he should not identify them publicly or it would destroy their "street credibility." Unfortunately, as with many generous impulses, I never got round to this.
Some weeks later I travelled on the same bus and the school children yelled loudly, insulted each other, used offensive language, horsed around and were generally an intimidating nuisance.
It was then that I realised that on the first bus was, in addition to the driver, a second bus company "official." He didn't inspect the tickets so I think he was carrying out some sort of survey. Whatever, it was clearly his obvious presence which accounted for the different behaviour of the young people.
Of course, in the high and far off times when most people behaved well on buses, and few, adults or children, put their feet on the seat opposite and if they did were promptly asked to take them off again, all buses had that second official, the conductor.
This incident came to my my mind yesterday when I read of proposals to close the ticket officers in a further 675 railways stations, and therefore leave them unstaffed. This will surely lead to more vandalism and hooliganism.
I do not feel it is illiberal or an advance of the police state to want more bus conductors, station masters, park keepers, concierges and other semi-official figures, with or without peaked caps, to keep a friendly eye on our public property and improve the quality of life in our public spheres. CCTV cameras are no substitute for the personal touch. At a time of high unemployment it is an obvious step to begin to re-introduce real live guardians of our public spaces.
Some weeks later I travelled on the same bus and the school children yelled loudly, insulted each other, used offensive language, horsed around and were generally an intimidating nuisance.
It was then that I realised that on the first bus was, in addition to the driver, a second bus company "official." He didn't inspect the tickets so I think he was carrying out some sort of survey. Whatever, it was clearly his obvious presence which accounted for the different behaviour of the young people.
Of course, in the high and far off times when most people behaved well on buses, and few, adults or children, put their feet on the seat opposite and if they did were promptly asked to take them off again, all buses had that second official, the conductor.
This incident came to my my mind yesterday when I read of proposals to close the ticket officers in a further 675 railways stations, and therefore leave them unstaffed. This will surely lead to more vandalism and hooliganism.
I do not feel it is illiberal or an advance of the police state to want more bus conductors, station masters, park keepers, concierges and other semi-official figures, with or without peaked caps, to keep a friendly eye on our public property and improve the quality of life in our public spheres. CCTV cameras are no substitute for the personal touch. At a time of high unemployment it is an obvious step to begin to re-introduce real live guardians of our public spaces.
Tuesday, 6 September 2011
Another cheer for Nick
Nick Clegg spoke out strongly yesterday against the lazy idea that the recent riots are all the fault of the schools and all that is needed is for the teachers to be tougher (hence fast-track in some former soldiers), teach traditional subjects in the traditional manner and and make the kids behave.
"Teachers are not surrogate mothers and fathers," said Nick. "They cannot do it all."
Blaming the schools for perceived social ills, from bad spelling through teenage pregnancies to hooliganism and rioting, is nothing new: in fact it has been around throughout my career, and possibly longer. I well remember, in the 1960s, when I was a keen union representative for the NAS (now the more politicly correct NASUWT) our general secretary, the formidable Terry Casey, forcefully pointing out that schools are often oases of virtue amidst deserts of immorality. (Mr Casey put it rather better than that: he had a way with words.)
However it is put, the truth remains. With or without the statutory act of "broadly Christian" worship at the beginning of each day (and what other organisations other than parliament attempt that?) schools try to develop the concepts of integrity, modesty, honour, loyalty, endeavour, reliability, tolerance, respect for others, sportsmanship, teamwork, the pursuit of truth, justice and the appreciation of beauty in a world motivated principally by greed,sex and self-promotion.
A respected deputy head for whom I worked used to ague, in relation to length of hair, dangly earrings and other items with which deputies are required to concern themselves, that "the school cannot be too far in advance of society." The same applies to the more important aspects of life. If society expects the young to behave honourable and decently then it must adopt those values itself.
Nick deserves another cheer for trying to block the idea that free schools could become "for profit" businesses. A pity he didn't stick the Liberal Democrat neck out even further and try to block the largely self-serving free schools altogether.
"Teachers are not surrogate mothers and fathers," said Nick. "They cannot do it all."
Blaming the schools for perceived social ills, from bad spelling through teenage pregnancies to hooliganism and rioting, is nothing new: in fact it has been around throughout my career, and possibly longer. I well remember, in the 1960s, when I was a keen union representative for the NAS (now the more politicly correct NASUWT) our general secretary, the formidable Terry Casey, forcefully pointing out that schools are often oases of virtue amidst deserts of immorality. (Mr Casey put it rather better than that: he had a way with words.)
However it is put, the truth remains. With or without the statutory act of "broadly Christian" worship at the beginning of each day (and what other organisations other than parliament attempt that?) schools try to develop the concepts of integrity, modesty, honour, loyalty, endeavour, reliability, tolerance, respect for others, sportsmanship, teamwork, the pursuit of truth, justice and the appreciation of beauty in a world motivated principally by greed,sex and self-promotion.
A respected deputy head for whom I worked used to ague, in relation to length of hair, dangly earrings and other items with which deputies are required to concern themselves, that "the school cannot be too far in advance of society." The same applies to the more important aspects of life. If society expects the young to behave honourable and decently then it must adopt those values itself.
Nick deserves another cheer for trying to block the idea that free schools could become "for profit" businesses. A pity he didn't stick the Liberal Democrat neck out even further and try to block the largely self-serving free schools altogether.
Monday, 5 September 2011
With firends like these...
The "revelations" in Alistair Darling's memoirs do nothing to enhance the British public's respect for politicians and the political process. Darling was allegedly a principal supporter of Gordon Brown over a long period, and a senior partner in government, but shows no hesitation in "slagging him off." What has happened to decency and loyalty? Clearly they take second place to self justification and the desire to make a fast buck.
On a slightly different plain, but equally demeaning and off-putting, the editorial in this week's Liberal Democrat News repeats yet again the tired and misleading mantra of "the economic mess this country had been left in by the previous Labour government." Yes, there is an economic mess, and it was created principally by the collapse of the unregulated capitalist banking system. Trying to pretend that the blame lies with Labour and its profligacy is an an unworthy distortion of the truth from a party that offered a more honest form of politics.
Cleaning up politics is a much larger task than cutting down on MPs' unjustified expenses. Loyalty, decency and honesty are all required.
I shall not be buying the Darling memoires. However, I have just received the third volume of those of Chris Mullin. I look forward to a good read which, if like the earlier volumes, will be "funny, fascinating - and free of malice."
On a slightly different plain, but equally demeaning and off-putting, the editorial in this week's Liberal Democrat News repeats yet again the tired and misleading mantra of "the economic mess this country had been left in by the previous Labour government." Yes, there is an economic mess, and it was created principally by the collapse of the unregulated capitalist banking system. Trying to pretend that the blame lies with Labour and its profligacy is an an unworthy distortion of the truth from a party that offered a more honest form of politics.
Cleaning up politics is a much larger task than cutting down on MPs' unjustified expenses. Loyalty, decency and honesty are all required.
I shall not be buying the Darling memoires. However, I have just received the third volume of those of Chris Mullin. I look forward to a good read which, if like the earlier volumes, will be "funny, fascinating - and free of malice."
Saturday, 3 September 2011
Testament of Yoof (1)
A member of the Literal History Group is researching the Liberal Revival in the Batley and Morley constituency (as it then was) in the 1960s and 70s. He has unearthed an article I wrote as PPC for our Members' Newsletter in April 1970, and has asked me to what extent I'd stand by it today. Well, pretty much all of it, actually.
The article is rather long (members were assumed to have a longer attention span than in in today's "sound bite" era,) so I'll reproduce in in smaller snippets.
"In past issues of Contact I have tried to explain aspects of Liberal policy in detail. In this issue I should like to ignore, for the moment, the trees and examine the wood - the philosophical basis of Liberalism in the 1970s.
What then is a Liberal?
First a Liberal is a Radical. He believes that the world is a god place, but is wrongly organised at the moment, so wrongly that it cannot honestly be maintained as it is, as the Conservatives believe, nor can it be put right by a few minor adjustments here and there, as the Socialists now believe. A full and fundamental reorganisation is required.
Second, a Liberal is an Egalitarian. He believes that one of the major things wrong with this country is the concentration of power, privilege and property in the hands of the few, whilst the many have little share in the making of the decisions that shape their lives, and very little share in the products of their labour. Some have so little share that, despite our national prosperity, they are very poor indeed. This is the basis of the Liberal's belief in co-ownership in industry , which will improve the distribution of wealth, and comprehensive education, which will improve the distribution of opportunities."
Well, apart from the assumption that all Liberals are male, I stand by all of that. Indeed, in the forty years since it was written "Socialist" tinkering has become even more minor and conservative (vide Tony Blair), the "have nots" have become an even larger group with an even smaller share and, despite the advance of comprehensive education (hampered in my view because the schools are too big through of an over-emphasis on subject choice) opportunities are still very unevenly distributed, and there is much less industry for us to co-own
So a Liberal (Democrat) party with a clear vision of where it wants to go is even more necessary now than in the 1970.
The article is rather long (members were assumed to have a longer attention span than in in today's "sound bite" era,) so I'll reproduce in in smaller snippets.
"In past issues of Contact I have tried to explain aspects of Liberal policy in detail. In this issue I should like to ignore, for the moment, the trees and examine the wood - the philosophical basis of Liberalism in the 1970s.
What then is a Liberal?
First a Liberal is a Radical. He believes that the world is a god place, but is wrongly organised at the moment, so wrongly that it cannot honestly be maintained as it is, as the Conservatives believe, nor can it be put right by a few minor adjustments here and there, as the Socialists now believe. A full and fundamental reorganisation is required.
Second, a Liberal is an Egalitarian. He believes that one of the major things wrong with this country is the concentration of power, privilege and property in the hands of the few, whilst the many have little share in the making of the decisions that shape their lives, and very little share in the products of their labour. Some have so little share that, despite our national prosperity, they are very poor indeed. This is the basis of the Liberal's belief in co-ownership in industry , which will improve the distribution of wealth, and comprehensive education, which will improve the distribution of opportunities."
Well, apart from the assumption that all Liberals are male, I stand by all of that. Indeed, in the forty years since it was written "Socialist" tinkering has become even more minor and conservative (vide Tony Blair), the "have nots" have become an even larger group with an even smaller share and, despite the advance of comprehensive education (hampered in my view because the schools are too big through of an over-emphasis on subject choice) opportunities are still very unevenly distributed, and there is much less industry for us to co-own
So a Liberal (Democrat) party with a clear vision of where it wants to go is even more necessary now than in the 1970.
Thursday, 1 September 2011
Liberal Democrat Pride .
Statements in the past few days have caused me to feel a surge of pride in our Liberal Democrats in government.
First Vince Cable is proclaiming loudly and clearly that the the gambling and retail activities of the banks should be separated and that this should happen now and not "after the next election." Most people wonder why the banks were allowed to gamble with our money in the first place (and then come to us as taxpayers for a bail-out when they got things wrong), why it has taken three or four years to bring forward proposals to put a stop to it, and why in the meantime bankers have been able to pay themselves outrageous bonuses. Well done, Dr Cable, please stick to your guns and do all you can to prevent this essential and overdue reform form being kicked into touch by the bankers' friends, the Tories.
Secondly Liberal Democrats in government are making it chttp://www.blogger.com/img/blank.giflear that in our view the 50% tax rate is right and just and should be here to stay. Critics claim, without much evidence as far as I can see, that it doesn't raise much money and discourages the enterprising, who may go somewhere else. The answer to the first criticism is to clamp down more vigorously on tax evasion and avoidance. The answer to the second is to call their bluff and let them go.
Thirdly and perhaps most importantly Nick Clegg has spoken out boldly in favour of the Human Rights Act. Part of his article in the Guardian last week (26/08/11) is worth quoting in full:
The Labour government that passed the Human Rights Act then spent years trashing it, allowing a myth to take root that human rights are a foreign invention , unwanted here, a charter for greedy lawyers and meddlesome bureaucrats....
The reality is that those who need to make use of human rights laws to challenge the decisions of the authorities are nearly always people who are in the care of the state: children's homes , mental hospitals, immigration detention. They are often vulnerable, powerless or outsiders,and are sometimes people for whom the public feels little sympathy. But they are human beings, and our common humanity dictates that we treat them as such.
As Shami Chakrabati put it at the Liberty AGM earlier this year (04/06/11), "Unpopular people have human rights too." Great to see the Liberal Democrat leader standing out from the populism which has became such a feature of our politics and sticking his neck out on an unpopular issue, because it is right.
First Vince Cable is proclaiming loudly and clearly that the the gambling and retail activities of the banks should be separated and that this should happen now and not "after the next election." Most people wonder why the banks were allowed to gamble with our money in the first place (and then come to us as taxpayers for a bail-out when they got things wrong), why it has taken three or four years to bring forward proposals to put a stop to it, and why in the meantime bankers have been able to pay themselves outrageous bonuses. Well done, Dr Cable, please stick to your guns and do all you can to prevent this essential and overdue reform form being kicked into touch by the bankers' friends, the Tories.
Secondly Liberal Democrats in government are making it chttp://www.blogger.com/img/blank.giflear that in our view the 50% tax rate is right and just and should be here to stay. Critics claim, without much evidence as far as I can see, that it doesn't raise much money and discourages the enterprising, who may go somewhere else. The answer to the first criticism is to clamp down more vigorously on tax evasion and avoidance. The answer to the second is to call their bluff and let them go.
Thirdly and perhaps most importantly Nick Clegg has spoken out boldly in favour of the Human Rights Act. Part of his article in the Guardian last week (26/08/11) is worth quoting in full:
The Labour government that passed the Human Rights Act then spent years trashing it, allowing a myth to take root that human rights are a foreign invention , unwanted here, a charter for greedy lawyers and meddlesome bureaucrats....
The reality is that those who need to make use of human rights laws to challenge the decisions of the authorities are nearly always people who are in the care of the state: children's homes , mental hospitals, immigration detention. They are often vulnerable, powerless or outsiders,and are sometimes people for whom the public feels little sympathy. But they are human beings, and our common humanity dictates that we treat them as such.
As Shami Chakrabati put it at the Liberty AGM earlier this year (04/06/11), "Unpopular people have human rights too." Great to see the Liberal Democrat leader standing out from the populism which has became such a feature of our politics and sticking his neck out on an unpopular issue, because it is right.
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