Opinion: what Ed Miliband should put on his blank sheet of paper – part 1

Ed Miliband has invited Lib Dems to make suggestions for his 2015 manifesto. In doing so, he is treading a well-worn path: from Tony Blair, who borrowed Alan Beith’s proposal for an independent Bank of England and a chunk of our policy on constitutional reform, to David Cameron, who borrowed a lot of our policy on civil liberties.

Imitation is a form of flattery, but it isn’t always sincere. I believe Ed Miliband spoke from the heart in his campaign for the Labour leadership, when he said that he would like to make us extinct. I’ve no doubt he would like cooperation on policy to become a halfway house to defection, but that doesn’t mean we should refuse to offer him public advice.

Labour may be intending to steal our votes and create schisms within the party, but it’s no different from David Cameron’s invitation to Lib Dems to “lend their vote to the Conservatives” a couple of years ago.

If they do borrow Lib Dem policies in the way Tony Blair did, a future Labour may still end up just as illiberal as they did before, but their borrowing our policies would still be a good thing. It would increase our influence on the political consensus, it would strengthen our negotiating position within the coalition, and it would make a Lib Dem/Labour coalition more feasible after the 2015 election.

So, despite being a supporter of Nick Clegg and of the coalition, I’m going to suggest a few ideas:

Economy and deficit

By leaving a huge deficit to their successors, Labour have seriously damaged their reputation for economic competence. Their first priority should be to try to restore it.

Labour should change from its strategy of saying nothing and scapegoating the coalition for the pain caused by Labour overspending. They should offer to form a cross-party committee to explore areas of consensus for deficit reduction. For this to work, there must be a strong ethos of confidentiality in the discussions, so he should choose representatives who have a track record of avoiding tribalism. It should be low-key, so that it isn’t wrecked by political opportunism. The objective would be to find policies that, without consensus, would be politically impossible.

Making the Bank of England independent has been a success, but it didn’t prevent a huge structural deficit. The reason for this overspending is nothing knew. To a lesser extent, something similar happened in the recession of the nineties, when the temporary windfall of tax revenue caused by a housing bubble disappeared.

Any government, faced with large temporary tax revenues, finds it extremely hard to resist the temptation to spend it, even though that will bequeath the country with a large structural deficit. They will do so because the overspending isn’t immediately obvious, and so, politically, they can get away with it.

So the next government should instruct the Office for Budget Responsibility (OBR) to produce regular estimates of the underlying structural deficit, by estimating what part of government revenue is caused by a bubble, and so is temporary. The OBR should also highlight other liabilities which do not normally fall under public debt, such as PFI and public sector pension liabilities.

Council Tax

One of the most regressive taxes in the UK is the council tax. This has risen dramatically over the last decade.

In one sense, reducing government grants and increasing local taxes is a good idea, because it frees local councils from central government control. But a progressive council will be very reluctant to increase such a regressive tax.

So the government should undertake a major reworking of council tax, introducing more bands at the higher level, and changing the burden of tax, so that the poor pay a smaller proportion.

I’ll be suggesting a few other ideas in a second article tomorrow morning. But, until then, over to you guys for your policy suggestions.

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11 Comments

  • As you say, the economic plan is very important. Clearly they need to show that they won’t – as the Tories will claim pre-election – reverse all the ‘good work’ that has been done closing the deficit (regardless of whether or not this is good economics!). A bit of “tax the rich!” might help too! Your structural deficit idea is very good, I’m amazed that’s not already done.

    If Labour want to become more like the LibDems that’s certainly not a bad thing. A good base, I think, would be a commitment to evidence-based policy, whether that be sentencing, foreign aid, education, everything! Their attitude to drugs policy was “We refuse to look at the evidence because our policy is fixed and that tells us the evidence cannot be true”. Decriminalisation with an emphasis on treatment would paint them as the ‘nice guys’, while strict government regulation of cannabis fits their image nicely. But if they don’t want to go that far, or even as far as a few reclassifications, a simple look at the cost-effectiveness of counternarcotics operations would be nice.

    Finally – yet related to evidence-based policy and to not overspending – they need to turn from hawks to doves. Commit to nuclear disarmament, perhaps – to retain broader support – with a plan to first negotiate some multilateral reductions. And try to show that they rather than the Tories are less likely to expand military spending and go invade a few countries. It’s hard trying to work out which of the two are the “nasty party” but it’s well within Labour’s power to clarify which is which.

  • I think the biggest step, and the one the Leadership do not seem willing to take is to engage. Even if Labour are none too serious, the Lib dems are the party that proposes greater plurality.

    I also think that the use of phrases made during an election campaign will not help this. The comment regarding making the Lib Dems extinct was in relation to a single campaign. If this type of coment matters then why be in coalition with a party whose leader, when asked his favorite joke, stated Nick Clegg ?

    As to specific policies, on a previous post I suggested sending the two senior Lib Dems out of government to a joint policy group. This shoudld be aimed at finding the areas of agreement, the areas of similarity and identifying where disagreement exists.

    The next step would be to negotiate around the similarities to see where, in the event of a hung parliament, compromises could be reached.

    This then leaves parties to campaign on the differences. It would also allow voters to see the likely shape and policies of any future coalition between the parties.

    I also feel the same process should be followed with the Tories. This would provide real clarity around outcomes for voters and politicians and be a step forwards for plural politics.

  • Lib-Dems are doing a good enough job of making ourselves extinct.

  • @George Kendall
    “While we are in coalition, I don’t think that is realistic or appropriate. We’ve gone into coalition with the Conservatives. For now, I think we have a responsibility to try to make this work. If we went into private meetings to help Labour produce policies to attack the coalition, I don’t think the country would approve of that. And I think they’d be right.”

    Then there is no future for truly plural politics. I don’t propose anything that would be an attack on the coalition, although the current Lib Dem policies are exactly that. What I propose is looking for areas of agreement and possible compromise. It’s how businesses work every day, and achieve the best results because of that. If dialogue is only takin gplace with the Tories and not Labour then the Lib Dems not only restrict their options in he event of another hung parliament, but they also reduce their bargaining position with the Tories.

    I also do not believe the meetings need to be private. A very public statement at the end of any session stating, for example, that both parties believe in a permament 50p tax rate and that both would agree tomove to an entirely elected second chamber within 1 parliament…. (note the two issues are yet to become real objectives for Labour!!!).

    There could also be a statement on the differences, i.e. the Lib Dems want to phase out tuition fees but Labout want to institue a graduate tax.

    Where these cross over with coalition policies this would take the heat out of opposition allowing better laws to be made with a consultative approach.

    In short we should expect our politicians to be adult… In fact we should demand it.

  • Labour are going to blame the coalition for what’s happening because the coalition are at the wheel, Labour aren’t going to hold their hands up, say they made a mess of it, but please vote for us next time and not try and hold the coalition to account, the same as the coalition aren’t going to stop blaming Labour for the mess, even though the mess is far from all being down to Labour.

    This is an area where politics needs to grow up, but I’d imagine it will be a long time before politicians are prepared to grow up.

  • daft ha'p'orth 22nd Dec '10 - 1:29pm

    @Dane Clouston

    Disclaimer: I am not an economist and therefore am probably talking through my hat. But… the more liquidity made available, the faster it will be sponged up. Without a government that is far more well-meaning and genuine than the bunch currently occupying Westminster, or any other govt in the last few decades come to that, something like this Universal Inheritance sounds like an invitation to think of some reason to prey on those in their late twenties to the tune of an additional £10k.

    For me, one significant place where Labour went wrong was in encouraging the idea that the young and skint should be encouraged to engage with very large sums of money, be they tuition fees and loans or ridiculously massive mortgages. Throwing more money around sounds to me as though it would just promote more upfront fees: for example, why not mandatory 2k fees on setting up a first mortgage, or raised insurance fees for the late twenties, or raised taxation for the temporarily affluent. Why not, when you know that everyone in that age range has the money for it? Think universities or American healthcare: If you know that everybody in that age range can borrow that much money, you’re not going to put in a lot of effort to keep prices as low as possible at the expense of your other pet projects, shareholders, or bottom line. You’re just going to take as much as you can get.

    Don’t get me wrong, I appreciate the idea in principle, or at least the sentiment behind it. I just think that it would need a lot of work to be useful as anything other than a plum target for any scoundrel, including the government itself, appropriately placed to target the significant and trivially identifiable ‘universal inheritor’ demographic. As it is, it’s such a tempting artificially created market for collusion and price fixing that it’s virtually entrapment 😉

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