Do I agree with Nick?

5099

do-i-agree-with-nick

It’s odd that the more the right-of-centre press attack Nick Clegg, the more I like him. Two stories in particular caught my eye this week. The first, in the Daily Telegraph, claimed that Nick Clegg supported the legalization of drugs. The second, in the Daily Mail, said he wanted to break up the NHS and replace it with a European-style social insurance system. If either of those things were true, I’d certainly be more inclined to support him. But what is the real story?

First, the drugs: back when Clegg was a Member of the European Parliament, he was one of only eight British MEPs to support a motion calling for the sale of cannabis and its derivatives to be legalized, for the use of other recreational drugs to be decriminalized, and for heroin to be made available to registered addicts under medical supervision. It also condemned the international drug war as a failure, and described national drug laws as ‘restricting civil liberties and individual freedom’.

In other words, the motion was plain common sense, and said what anyone looking rationally at the evidence would conclude: that drug prohibition is a flat-out disaster, which fails utterly in its stated aims, which gives rise to the most horrendous unintended consequences, and which ought to be ended as soon as possible. I can honestly say that if Nick Clegg and the Liberal Democrats were committed to ending the drug war, they might have my vote, in spite of their soak-the-rich, bash-the-bankers economic platform. But in reality all the Lib Dems are proposing is to put the Advisory Council on the Misuse of Drugs in charge of drug policy. And Clegg being a politician like any other, the fact that he once believed in something doesn’t mean he still does. After all, David Cameron used to favour legalizing drugs too.

Second, the NHS: in 2005, Clegg told the Independent, ‘I think breaking up the NHS is exactly what you do need to do to make it a more responsive service.’ When they asked him whether he favoured a European-style social insurance system, he said, 'I don't think anything should be ruled out.’ Again, both of those statements are perfectly sensible: the NHS is too big to be manageable, and its decision makers are too remote to be responsive to patient needs; similarly, if you are going to reform the NHS, then all the options should be considered. After all, in many European countries social insurance schemes (like the one we proposed here in 2002) do deliver better outcomes and greater patient satisfaction than the NHS. Likewise, international comparisons tend to rank Bismarckian social insurance systems above Beveridge-inspired single-payer ones.

But in reality, again, that isn’t actually Liberal Democrat policy. Their plan is to make the NHS more manageable by localising it, to make it more responsive by introducing elected local health boards, and to make it fairer and less bureaucratic by abolishing Labour’s performance targets and replacing them with a simple guarantee that if the NHS can’t treat you within the specified time, the state will fund you to go private. In other words, a definite improvement on the status quo, but not the radical upheaval the Daily Mail would have you believe.

So funnily enough, I do sort of agree with Nick. I just agree with the radical caricature designed to frighten middle class voters rather more than I agree with the man himself.

The 2010 General Election – Westminster’s X Factor

5096

the-2010-general-election-westminsters-x-factor

Like international cricket in recent years, UK General Elections have changed massively. Given the controversial decision to hold three debates between the major party leaders, the focus of this General Election is no longer on the ‘stump’ - famously illustrated by Gladstone’s West Lothian campaign or, in 1992, by John Major’s soapbox. This campaign is very different, dominated by the three debates – the last of which will be held on Thursday.

Every word and body language movement in these debates is scrutinised ad nauseam. For many, it is soap opera politics and akin to a Westminster version of The X Factor. Aside from the three party leaders, few other politicians have had any real look-in. Where is William Hague for example?

The morning press conferences have now lost much of their bite and the importance of the one-to-one TV interviews have faded - short of a major gaffe. Whilst many welcome the three leaders’ debates, this Election has clearly suffered on two counts.

First, there is relatively little emphasis on policy. Given a Public Sector Net Borrowing figure of £163 billion, it is unacceptable that no political party is prepared to set out in detail how it would deal with the dreadful state of the UK’s public finances, although the Liberal Democrats have made some effort to do so.

Secondly, given the ever-increasing move to personality and, above all, to appearance, does it mean that eventually in UK General Elections only individuals with film star looks can lead their party? Admittedly, he – or she – may need to be briefed to the eyeballs, to avoid any gaffe.

Perhaps, the election of President Reagan heralded the future for UK political leaders – film star looks, excellent delivery and no obvious visual negatives will be paramount. Our leaders, too, are now far younger. A sad conclusion?

Hung parliament – The dangers to UK plc

5078

hung-parliament--the-dangers-to-uk-plc

Recent opinion polls, driven forward by the Clegg phenomenon, indicate that a hung Parliament is a real possibility. As such, two critical priorities for the incoming Government – cutting the UK’s horrendous public sector net borrowing (PSNB) figure and tackling the UK’s lack of base-load electricity generating capacity – will be downgraded.

The incoming Government must cut public expenditure – both urgently and vigorously – if control of public finances is to be regained. The projected PSNB figure of £163 billion for this year – equivalent to a quarter of every £ of public expenditure (pre debt interest) being borrowed – is clearly unsustainable.

Unless concerted action is undertaken, the gilts market may react very badly and drive up borrowing costs. Whilst there are many differences with Greece’s plight, notably the UK’s floating currency, there are also too many similarities for comfort. An inconclusive result on 6th May, which produced either a formal Coalition Government or Liberal Democrat Parliamentary support for a Labour-led Government, would make cutting public expenditure very challenging.

The outcome of the General Election is very important to the energy sector. New base-load generation is a real priority. Whilst both the Labour and Conservative Parties back new nuclear-build, the Liberal Democrats most certainly do not. Indeed, they envisage a long-term energy policy based entirely on renewable generation – dream on!

Even without political disagreements, UK new nuclear-build has enough problems already, given that the two most obvious investors - France’s EdF and Germany’s E.On – have racked up net debt of c£40 billion apiece. And if the Liberal Democrats add a ban on new nuclear-build – in addition to a move to PR - as part of their price of coalition participation, new nuclear-build is probably a non-starter.

How much would UK plc suffer from a lack of resolution in tackling both these key challenges?

68 percent support English Parliament

5077

68-percent-support-english-parliament

According to a new ICM poll for POWER2010, 68 percent of English voters believe that England should have its own Parliament, with similar powers to the Scottish one. An even larger number (70 percent) supported the idea of ‘English votes for English laws’, whereby laws that only affected England could only be voted on by MPs representing English constituencies. Plainly the West Lothian Question, first posed by Labour MP Tim Dalyell in 1977, is long overdue an answer:

For how long will English constituencies and English Honourable members tolerate... at least 119 Honourable Members from Scotland, Wales and Northern Ireland exercising an important, and probably often decisive, effect on English politics while they themselves have no say in the same matters in Scotland, Wales and Northern Ireland?

My own preference is for an English Parliament, creating a federal United Kingdom, combined with a decisive shift towards fiscal autonomy in each of the Home Nations – i.e. each national assembly or parliament should itself raise the money it spends. This system would not just be vastly fairer than the asymmetric devolution we have now, but would also place a check on the unsustainable growth of government in Scotland, Wales and Northern Ireland.

Moving to this sort of arrangement would actually be fairly simple. First, constitute the English MPs in the House of Commons as an English Parliament with its own first minister and executive, sitting in the House of Commons for two weeks of every month. Then give them the same powers as the Scottish Parliament. This would be far less costly than creating an entirely separate Parliament, and besides, do we really want more politicians?

The UK Parliament would remain responsible UK-wide matters and would control the various departments in charge of them: security and immigration, foreign affairs, international development, defence, employment and social security, energy, constitutional affairs, and aspects of tax economic policy. All the other departments currently serving the UK government would be transferred to the new English one.

Step two: fiscal autonomy. The UK Parliament would retain VAT and National Insurance Contributions, while all other taxes (income tax, corporation tax, excise duties, etc) would be devolved to the national parliaments/assemblies. As well as encouraging greater fiscal responsibility, this arrangement might also encourage intra-UK tax competition – a welcome development for those of us who like lower taxes.

But I suppose the details are less important at this stage than the simple fact that English people are overwhelmingly fed up with a constitutional set-up that disadvantages them at every turn. POWER2010’s poll is another indication that the time is ripe for change. Happy St. George’s Day everyone!

Proportional Representation: what if?

5073

proportional-representation-what-if

Strong polling from the Liberal Democrats in the wake of last week’s election debate has put discussion of electoral reform on the agenda: a referendum on proportional representation (PR) would surely be a key condition of entering any coalition. The conventional wisdom is that PR would lead to more or less permanent centre-left government, with Labour and the Liberal Democrats always getting enough votes between them to keep the Conservatives out of office. But is this really the case?

Well, I’m not so sure, not least because I suspect people would vote very differently in a PR general election than they do in first-past-the-post ones – you can’t just take current general election vote shares and translate them into parliamentary seats to work out what a PR parliament would look like. So why not look at a recent British election that was actually conducted based on PR – the 2009 European Parliament elections – and see what kind of House of Commons that would have produced?

Based on my very rough regional calculations, which exclude Northern Ireland for the sake of simplicity, those results, replicated in a Westminster general election would have given the Conservatives 28% of the seats, Labour 18%, UKIP and the Lib Dems 16% each, the Greens 7%, and the SNP and Plaid Cymru 3% and 1% respectively. So a Conservative-UKIP coalition would have 44% of the House of Commons, while a Labour-Liberal-Green coalition would also have 44%. If you assume that no other party would agree to work with the BNP and that the Scots and Welsh nationalists would side with the left, while the Ulster Unionists (again, not included in my calculations) sided with the right, you would still be left with two coalitions of roughly equal size.

Now, OK, there’s a flaw in my logic: European election results probably flatter UKIP while causing problems for the Europhile Lib Dems. So presumably the Lib Dems would get a higher proportion of the vote, and UKIP a lower one.

But this raises another issue: would the Liberal Democrat Party stick together if became truly competitive with the other two parties, or would it split under the weight of its internal contradictions? In a PR system I can easily imagine the Lib Dems dividing into its ‘liberal’ and ‘social democrat’ factions. Many of the more libertarian Lib Dems I have spoken admit this is a serious possibility.

That would mean ‘broad churches’ in British politics – a centre-right coalition of Conservatives, Liberals, Unionists and UKIP, and a centre-left coalition of Social Democrats, Greens, Nationalists and Labour – either of whom would stand a good chance of getting 50% of the seats in the House of Commons.

But that’s enough crystal-ball-gazing. I should also point out that I do not favour PR myself. I agree with what Madsen wrote in Freedom 101:

A democracy should enable people to change their government. It is more about throwing out who they don't want than about electing the most popular. Proportional representation makes change difficult. Elections tend to bring small adjustments in the balance between the parties, and to result in coalitions of slightly different composition.

In other words, big changes from the status quo are much more difficult in PR systems. And at a time when the UK needs to depart radically its current path, that would be a very worrying development.

PR: The risk of a hung parliament

5065

pr-the-risk-of-a-hung-parliament

According to the bookies, a hung parliament is now the most likely outcome of the election, with the Liberal Democrats playing the kingmakers in deciding whether the Conservatives or Labour would make up the next government. A hung parliament would indeed be tremendously damaging: the next government would be too weak to implement reform and may be thrall to fringe parties. But the biggest danger would be the Liberal Democrats’ price for coalition – the introduction of proportional representation (PR).

PR has the virtue of being fairer than first-past-the-post, by allowing a number of representatives to be elected from each constituency, and it gives smaller parties a much bigger chance of succeeding. This is a good thing, but the drawbacks of PR aren’t worth this added fairness.

As an Irish citizen, I am no stranger to the PR system. Proportional representation means that poll shifts have to be massive in order to bring about political change. As a result, in Ireland, governments change according to backroom deals between political parties. In the 1990s, the Labour party managed to change coalitions from the two main centre-right parties, changing not only prime ministers without an election, but the main ruling party. Currently, the government coalition includes the Green Party, and it seems highly likely that the Greens would be a part of any future government formed by the opposition parties. This has meant that fringe green policies like carbon taxes have been implemented without popular support.

Radical reform is also very difficult under PR, as governments cannot take risks that would offend their minor coalition partners. For instance, the Irish government has been limited in the extent of public spending cuts it can make, for fear of upsetting the Green Party, despite a deficit to rival Greece or Britain. Much has been made recently of the instability and weakness of a hung parliament – bringing in PR would mean that every parliament is a hung parliament.

A partial defence of the Lib Dems

5063

a-partial-defence-of-the-lib-dems

I have to say one good thing about the Lib Dems: of the three main parties, they are the only with a single policy that will directly benefit me. As well as taking three and a half million people out of income tax altogether, their plan to raise the personal allowance to £10,000 would leave me about £700 a year better off. I certainly wouldn’t say no.

There are other good things in their manifesto too. Of the three main parties, I’d say they have the best plans for reforming the NHS, which include, inter alia, slashing bureaucracy and funding people to go private if the NHS can’t treat them within a set time. The Lib Dems are also strongly committed to civil liberties, and are undoubtedly the most localist of the major parties – they are more likely to disperse power from Whitehall than the Tories or Labour. All good stuff.

But for me there’s a problem: the Lib Dems’ desire to bash the bankers and soak the rich. According to the Spectator’s Martin Vander Weyer, Vince Cable’s response to business leaders opposed to the forthcoming national insurance rise was as follows: “I find it utterly nauseating, all these chairmen of FTSE 100 companies being paid 100 times more than their employees, lecturing us on how we should run the country.” And that seems indicative of a broader anti-business, anti-market sentiment.

As Allister Heath put it in City AM:

[T]he top rate of capital gains tax will be hiked to 50 per cent (from 18 per cent), crippling investors, private equity firms and landlords; £5bn a year will be raised by restricting pension tax relief to the basic rate, which would devastate the pensions industry; £1.7bn would come from the “mansion tax”, a class-war inspired form of double taxation which would slap a 1 per cent annual tax on homes worth over £2m a year, forcing thousands to sell their homes; £3bn from increased air passenger duty, further hitting tourists and business travelers.

The Lib Dem plans on capital gains tax probably deserve a blog post of their own, but suffice it to say for now that I regard the idea of more than doubling a tax on entrepreneurs and investors, just as we are emerging from a recession, as lunacy.

One last point: like many libertarians, I often hope for a resurgence of classical liberalism in the Liberal Democrat Party. And indeed, I know for a fact that there are lots of genuinely free-market, limited government Lib Dems, so maybe it will happen one day. But on the basis of their 2010 manifesto, we are certainly not there yet.

The not-so-liberal antidemocrats?

5061

the-not-so-liberal-antidemocrats

The Liberal Democrats claim to be a liberal party. This is half-true, at best. Their manifesto has some good points on social issues: opposing ID cards is the very minimum that I’d expect of a politician, but it’s nice that the Lib Dems agree. On some social issues, though, they fail to live up to their ideals. Rather than ending the shameful drug prohibition laws, the Lib Dems settle for platitudes like ‘treatment’ of addicts – as if that makes up for laws that criminalise a whole section of people living their lives in peace. What’s more, Nick Clegg’s comment that he wants to “change people’s behaviour” before they commit crimes at the debate is a nod towards social engineering that no liberal should make. Nevertheless, the Liberal Democrats are fairly liberal on social issues.

Unfortunately, the same cannot be said for the party’s economic policies, which evoke the worst kind of left-wing populism. They claim that government should soak the rich to give everyone else a free ride – a highly illiberal idea, even if it was realistic. They claim that they can give nearly everyone tax cuts and spend more on government, simply by ‘closing tax loopholes’ and raising capital gains tax to a whopping 50%. This is laughable: these tax hikes would smother new enterprises and totally undermine an economy recovery. For a man who claims to have predicted the financial crisis, Vince Cable seems shockingly ignorant of what his own policies would do to the economy.

The Liberal Democrats are also the most strongly pro-EU party in Westminster, and Nick Clegg is an ardent federalist. The Liberal Democrats broke their own 2005 manifesto pledge for a referendum on the Lisbon Treaty by abstaining from the vote on holding a referendum. There is a valid debate about the virtues of the EU, but it is a strange sort of ‘democrat’ that would vote to deny people a referendum on something as important as the Lisbon Treaty.

The Liberal Democrats’s platform is a mish-mash of fairly decent social policies, Europhilia, and populist economics. Nick Clegg’s rise has been compared to Susan Boyle’s: but to be fair, we have no reason to think Susan Boyle is that unsound.

Presidential politics: the horse that’s bolted

5053

presidential-politics-the-horse-thats-bolted

British politics has become presidential. Thursday’s leaders debate just underlined that. The problem, of course, is that we don’t have a constitution that can contain presidential power. In fact, we have one that takes presidential power and, provided the ruling party’s majority is large enough, turns it into an elected dictatorship. Put simply, our legislature no longer holds the executive to account in any meaningful way. Party whips enforce discipline, and anyone who wants to climb the greasy poll knows they have to toe the party line – if they don’t they’ll lose out on the luxuries that come with being a minister.

There are plenty of proposals to strengthen parliamentary democracy – beefing up select committees, for example – but while most of the usual suggestions would be an improvement on the status quo, I’m not sure they’d make all that much difference in the long run. Might it be time to admit that the horse has bolted, that Britain now has a presidential system, and that in the era of 24hr news media we’re not going to be able to row back from it? There is also some truth in the maxim that people get the politics they deserve. Has the British electorate become irredeemably attached to personality politics? Maybe so.

The question then becomes how to adapt our constitutional arrangements to deal with presidential politics. Sometimes I think the most sensible thing would be to separate the executive from the legislature, directly elect prime ministers, and ban members of the government from sitting in parliament. Apart from restoring the independence of parliament (which was always intended to stand up to the executive, not be its lackey), this could help improve the calibre of government ministers (they couldn’t exactly get worse, could they?). It would also mean letting the PM advise the Monarch on whether to grant the royal assent to legislation, creating an effective veto power.

Would a separation of powers do a better job of protecting liberty than our current arrangements? That’s the standard by which all constitutional amendments should be judged, in my opinion, and honestly, I’m not sure what the answer is in this case. But it’s an interesting thought for a Sunday morning.

Dull, limp, lifeless*

5050

dull-limp-lifeless

First up, if I hadn’t been reviewing the debate on CNBC, there is no way I would have sat through last night’s debate. Political commentators are spinning it as a victory for democracy, and a lot of people seem enthusiastic about it, but to me, it was just three men standing on a stage pontificating and rolling out their favourite soundbites. A real debate would have drawn the party leaders on their plans for Britain, and subjected them to cross-examination and scrutiny – we would have switched off our TVs knowing a lot more about what electing each of them would mean. The ITV debate, by contrast, was nothing more than an exercise in presentation skills.

So how did the candidates fare? Well, Nick Clegg was judged the winner by the commentariat, and opinion polls back them up. I don’t disagree – his anti-politics, ‘let’s-be honest here’ shtick worked well – but Clegg still left me cold. For Clegg is not what he claims – a new kind of politician – but rather just a fresher face in a different tie. And despite his party’s liberal heritage, Clegg is every bit as statist as his opponents. His policy platform is grounded not in principle, but in crude, bash-the bankers, soak-the-rich populism.

What of Brown? It wasn’t a disaster, certainly, but I can’t imagine he won over any swing voters. He only really had two lines of attack, which quickly wore thin. First was his ‘I agree with Nick’ stuff, trying to co-opt Lib Dem support on almost everything. Trouble was, Nick didn’t agree with him and told the audience as much – ‘there’s nothing to agree with’. More annoyingly, Brown just wouldn’t shut up about the £6bn the Tories were going to ‘take out of the economy’. Cutting this 1% of public spending (little more than a rounding error, in fiscal terms) is apparently enough to trigger a double-dip recession, cost thousands of jobs, and decimate public services. Right…

What Brown is seemingly incapable of understanding is that cutting public spending is not ‘taking money out of the economy’: it is leaving money in the private sector where it belongs. The British state, which now accounts for half our GDP, isn’t stimulating anything; it’s just a parasite sucking the life out of productive enterprise. Government does many things it shouldn’t do at all, and the rest it does wastefully and bureaucratically. It desperately needs to be cut down to size, and fast.

So is Cameron the man to do it? His performance was smooth and polished, and he said some nice things that few could disapprove of. But for all his Obama-lite, ‘hopey-changey’ rhetoric, there wasn’t much passion or urgency on display, and few signs of ideological conviction. But then maybe those aren’t things that win elections these days: perhaps it really is all about seeming a lovely fellow and not frightening any horses.

But if that is the case then these debates are emphatically not victory for democracy. In fact, they are little more than a perpetuation of the staggeringly shallow status quo.

* Unlike Cheryl Cole's hair extensions.