Opinion: Suggestions for the 2015 manifesto – how we can do more for low paid working people than Labour

This article was orgininally, mistakenly attributed to Obhi Chatterjee.

libdemmanifesto 2010 wordleI have just registered for conference, and that got me thinking about our 2015 Manifesto.

When he first became leader of the Liberal Democrats Nick Clegg defined our target audience as being ‘alarm clock Britain’, a demographic that was derided at the time as being undefined and totally incomprehensible.

Had he defined our target demographic as being ‘people aspiring to improve their situation who are in work on low to middle incomes’ would he have meant the same target group, and what have the Liberal Democrats in Government achieved that is of benefit to that demographic?

The first thing that the Liberal Democrats in Government have achieved for that target group is the ring-fencing of the education budget, the introduction of the pupil premium, and the extension of pre-school education to 3 year olds.

It is the aspirational in work who want to ensure that their children get the best start in life, and they also recognise that giving all children a good start in life helps their own children as competition to learn increases the hunger to learn.

This group also have the opportunity for the first time to benefit from the extension of Tuition Fee Loans to people returning to education, and their children benefit from not only the state bursaries for higher education that Labour opposed but also the local bursaries that Universities are required to provide if they want to charge fees over £6,000.

These are also the people who have benefited from the Lib Dem kept promise of increasing the tax threshold to £10,000 and also from the decision to stop the fuel escalator, cutting the cost of travelling to and from work and of doing work that involves travel as a part of the job.

So, how do we continue to work to ensure that we benefit this group of people?

Firstly they need the security of a decent home to live in, and that means a massive house building initiative is needed.  We need to stop speculative property developers from blocking development buy buying land, securing planning permission to build houses and then sitting on it.  A development charge based on double the rentable value of the land they are sitting on should go some way towards that.

Secondly they need the security of a living wage, and that means increasing the national minimum wage to make it a living wage.

Thirdly they need a taxation system that is fair, and yes that means integrating NI and Income Tax and making all income subject to the same rates of tax.  It also means setting a progressive series of tax bands based on the aggregated national average earnings of men and women in part and full time employment.

If the Liberal Democrats move in this direction then we will be showing that demographic that we, not the Labour Party, are where their best interests lie.

Wordle (above) of the 2010 Liberal Democrat manifesto from wordle.net

* Chair of Manchester Gorton Liberal Democrats, a member of the NW Regional Executive and the English Council and Vice President of LGBT+ Liberal Democrats

Read more by or more about .
This entry was posted in Op-eds.
Advert

98 Comments

  • Alisdair McGregor 31st May '14 - 10:51am

    As I have previously pointed out on LDV (https://www.libdemvoice.org/opinion-63-37067.html), the “Living Wage” proposed by Labour has the same take-home pay as would be achieved by eliminating both the employees & employers national insurance contributions on pay at the minimum wage, and upgrading the NMW by the same amount as the employers NI contribution would have been.

    The upshot of doing as I propose is that take-home pay rises as for the Living Wage, but without a cost to businesses. The only loser is the exchequer – but quite honestly the exchequer needs to learn to exist on less taxation, ad shouldn’t be taxing those on minimum wage at all!

  • Toby Fenwick 31st May '14 - 10:59am

    The Living Wage is a great soundbite but it is a moving target- it depends on your location and family size. It therefore isnt a single figure amenable to becoming the NMW.

    So, is Obhi proposing a series of regional NWMs or a set of top ups foe children? The only alternative would be to set the NWM at the level required for a family of four in London which could be twice the current rate, and would assuredly cist jobs nationwide.

  • Eddie Sammon 31st May '14 - 11:01am

    Criticisms of the author’s three ideas:

    1. Massive house-building on the scale that you wish is probably not feasible or green.
    2. I’m against the minimum wage and I don’t care if this is controversial. Lots of people work for free or even a loss and it is just not feasible. The way to increase wages is through progressive taxation.
    3. Not sure what you mean about making sure everyone pays the same rate of tax. You clearly aren’t talking about a flat tax, but you might be talking about ramping up taxes on the middle class.

    Can’t think of many positives I am afraid, besides merging NI with income tax.

  • Eddie Sammon 31st May '14 - 11:03am

    Oh I get it! That old chestnut about making all “income” subjects to the same rate of tax. This means forgetting about corporation tax and making self-employed people by 40% corporation tax AND then 40% income tax on the residual. You should widen your reading materials.

    Best wishes

  • Alisdair McGregor – ‘the exchequer needs to learn to exist on less taxation’.

    At a time when we have a £100bn+ a year deficit? If we don’t raise taxes at all in the next few years and intend to close the deficit – and this party has basically backed itself into a fiscally conservative corner – then the spending cuts required will do huge damage to our public realm. The NHS are already creaking. You have the increased costs of social care, pensions and the like.

    I don’t really like the idea of a single target demographic. What about pensioners? The currently unemployed? Students? The socially conscious affluent? Surely all these should be relevant to the Lib Dems. The bigger problem for the Party as I see it is everyone keeps focusing on eye catching policies but what does it all mean? What dot he Lib Dems stand for? What are they fundamentally for and against?

  • Jenny Barnes 31st May '14 - 11:31am

    “‘people aspiring to improve their situation who are in work on low to middle incomes’”

    Hmm. How about people who can’t find jobs because there aren’t enough? ZHC’s? I think this sort of exclusionary language is part of the problem, not the solution. In fact, why don’t you go with the usual soundbite ” Hard working families”? What comes to mind? A traditional breadwinner type 1950s family with 2.2 children and a semi, probably. Obviously “hard working families” should be included in those LDs appeal to, but not to the exclusion of everyone who wouldn’t see themselves as included in that label.

    I agree that a massive house building programme, probably including large amounts of social housing, would be sensible, and could be green if the building standards were high enough (passivhaus standards), rather than Code 3 or whatever we can get away with. It would, ofc, reduce house prices/rents (bad for house owners, rentiers) put some overstretched borrowers (well done Help to Buy) into negative equity, but would reduce the welfare bill as housing benefit would be considerably reduced. Maybe social housing could be developed using “sweat equity” : unemployed people could be trained to do some of the lower skilled (or perhaps even higher skilled) building work on the house or a group of houses that they would eventually get one of?

    Security of a living wage – until their job disappears , then what? I think a Citizen’s income would give basic security, eliminate all the fiddle around the failed Universal Credit system, and give people the ability to take on ZHCs if they want, or not if they don’t – power to the people. And it would eliminate the need for a lot of Job Centre staff, who could then do something useful.

    Tax. Once you have Citizens income, all income (including inherited wealth) should be taxed. And that should be at progressive rates. We live in a very unequal society – if that inequality continues to increase, democracy will no longer be a plausible method of governance. I’m not sure it is now, it’s possible that the UKIP phenomenon is partially rage from the electorate at their democratic voice being ignored, whoever they vote for.

  • >making all income subject to the same rates of tax

    If this happened (it infers making tax for shares, corporation and income the same), I’d be out of here (the UK). Successive governments have dipped their toes into tinkering with these issues, but when thinking the logic through they all decide to do something else. The casual way you’ve mentioned such a seismic shift suggest you haven’t considered what you’re saying to any great depth.

  • Eddie: “The way to increase wages is through progressive taxation.” Eh? I don’t understand the mechanism here. Call me old-fashioned, but surely the way to increase wages is to increase the productivity of the economy and thus the number of well-paid jobs it can support. Taxation simply creates a ‘wedge’ between what employers are prepared to pay and what employees receive.

    Therefore, a good means of increasing not wages, but net (ie after-tax) incomes is to reduce taxation of that income by lifting the thresholds for income tax (which the coalition has done significantly) and National Insurance (which it hasn’t, and which is now more pressing in my view). To help the low-paid in particular it is also important to do this in conjuction with reform of the tax credit/benefit system and Universal Credit work allowances. If these sorts of solutions are what you prefer to introducing a ‘living wage’ then I agree with you, not least for the reasons explained by Toby above.

    On house-building, I don’t see any plausible way of sorting out our dysfunctional housing market and reducing house price inflation that doesn’t involve a big increase in supply. No amount of tinkering with other features of the system will alter this basic fact, simply because of the mismatch between demand and supply. For a party that wants an open immigration policy (which obviously contributes to the increase in number of household formations) it would be eccentric to deny this need.

  • Simon McGrath 31st May '14 - 11:51am

    “Secondly they need the security of a living wage, and that means increasing the national minimum wage to make it a living wage”
    Ok so what number of jobs lost are you willing to trade against a higher minumum wage ?

  • Eddie Sammon 31st May '14 - 12:01pm

    Lol, Alex, my thoughts at the moment are that the super rich are so rich and powerful that they are depressing wages and increasing prices on final goods and services, so I think everyone would benefit if we increased taxes on them and reduced them for others, especially the middle class who I think get hammered. I wouldn’t be reckless with it, I just think there is room for reform and that direction.

    When it comes to house price inflation I think increasing interest rates would have nearly as big of an effect as building lots more houses. This is not for spite, I think we need justice for savers as well as borrowers, which includes everyone with a pension plan.

  • Eddie Sammon – you don’t think increasing interest rates would kill the economy?

  • Eddie Sammon 31st May '14 - 12:15pm

    I don’t think a 0.25% increase would kill the economy. However, I would combine it with labour market liberalisation to prevent a big increase in unemployment. Even if GDP went down, I don’t think these things are so bad in the short-term as long as it looks like you have a grasp of the situation.

  • At some point soon interest rates will no doubt have to be raised, hopefully in the gradual way suggested by Mark Carney. Fortunately for borrowers the low level of consumer price inflation is postponing the inevitable day, but once the process of raising rates begins a lot of homeowners will get a nasty shock at the increase in their monthly repayments. This will dampen the consumer recovery somewhat, so we must hope that the recovery has broadened out by then with business investment and exports taking over the lead (though the increasing strength of the pound could derail the latter).

    In general I’m not keen on redistributive taxation of the type that you propose – I don’t think we should be taxing personal or corporate income higher and doing so would be counter-productive to the recovery in the medium term. What we should be doing is radically reforming the tax system to make it simpler, with far fewer loopholes and thus less open to avoidance and evasion by those with deep pockets and clever accountants. In short, I think taxes should be low, simple and compulsory rather than high, complex and voluntary for the well-advised.

    We should also be shifting the tax base away from productive activity to economic rent by wholesale reform of property taxes – including ultimately scrapping stamp duty – not tinkering with a populist mansion tax.

  • On this ‘attack on the MNW’ point, almost all studies show that the position ‘MNW’ equals fewer jobs is wrong. However, I do agree that fixing our tax system is the first priority, but that does not simply mean ‘lower’ how much tax people pay or setting one single rate, it actually means making a progressive tax system. Most of the most successful economies have very high, but very progressive tax systems because whilst it is good in some ways for people to take home more, that in of itself is not the only answer as most people will never take home enough to pay for things such as healthcare.

  • Little Jackie Paper 31st May '14 - 12:50pm

    Here’s a thought. Look to drive down rents. Obviously BTL and house price hyperinflation is something that the propertied boomer class will defend to the death, but we could look to the example set by other EU countries and place real restrictions on foreign property ownership. Denmark for example:

    http://www.expatify.com/guide/buying-real-estate-in-denmark

    Eddie Sammon – ‘When it comes to house price inflation I think increasing interest rates would have nearly as big of an effect as building lots more houses. This is not for spite, I think we need justice for savers as well as borrowers, which includes everyone with a pension plan.’

    So your suggestion is right to buy discounts and mortgages eroded by hyperinflation for the boomers and buy to let serfdom for the young?

  • Eddie Sammon 31st May '14 - 1:25pm

    Jackie, increasing interest rates would reduce house prices. There won’t be any great criminal side effects.

  • Bill le Breton 31st May '14 - 2:02pm

    Integrating income tax and NI sounds ok, but what happens to income from saving? Am I right to think that for the average person the tax on the income from their hard compiled nest egg goes from 20% to 30%.

    We want to make saving a more attractive thing to do. Do you have a suggestion? Am I missing something?

  • Bill le Breton 31st May '14 - 2:07pm

    Eddie, we are in a jam because the evidence is that reducing housing prices reduces spending; increasing unemployment and fear of unemployment (or underemployment) which further decreases spending. It is Catch 22 in the book of demand management.

  • Philip Rolle 31st May '14 - 2:14pm

    How about abolishing tax on savings income up to £5,000? Or introducing an intermediate tax rate of 30% for those presently at the lower margins of the 40% band.

  • “The upshot of doing as I propose is that take-home pay rises as for the Living Wage, but without a cost to businesses. The only loser is the exchequer – but quite honestly the exchequer needs to learn to exist on less taxation, ad shouldn’t be taxing those on minimum wage at all!”

    Firstly, why should the exchequer learn to exist on less taxation? What’s good about that? Our higher taxing European neighbours have happier people, less crime, fewer people in jail, and lower inequality. Why would we not want to get closer to that model?

    Secondly, increasing the minimum wage actually delivers money targeted to the poorer in society, whereas tax threshold rises is mostly a give away to middle earners and has no impact at all part time, low-paid, workers.

    Thirdly, why should the state be subsidizing businesses to underpay their workers? Wouldn’t it be better to expect businesses to pay staff properly?

  • Bill le Breton 31st May '14 - 2:31pm

    Philip, it has to be something like that, doesn’t it – I wonder what the Treasury View would be on that.

  • Eddie Sammon 31st May '14 - 2:35pm

    Jack comes in with an ignorant comment about rich bosses not paying their staff properly. What about the bosses earning less than their staff? I know this situation doesn’t exist in left-land, but it is a real one and needs to be considered.

  • Wholly agree with Obhi’s conclusion “If the Liberal Democrats move in this direction then we will be showing that demographic that we, not the Labour Party, are where their best interests lie.” and offer the following as a balanced means of addressing the competing concerns of a broad range of voters :

    The vision:
    A Liberal and Social Democracy of equal opportunity and just reward for effort, equitable balance between rights, liberties and responsibilities, tolerant and cooperative local communities exercising power at the local level, protective of the environment and internationalist in outlook.

    Top ten policy areas to deliver the vision:
    1. Economy – Monetary & Fiscal policy, structural reforms and deficit reduction developed on the basis of a stable full employment economy (<5%) with a more flexible range of inflation targets based around Nominal GDP measures. Long-term funding of national infrastructure and flood defence programs.
    2. Jobs – expansion of apprenticeships, skills development and short-term job guarantees for long-term unemployed; government training programs in areas of skill shortages typically filled by EU migrants in construction trades, social and child care services.
    3. Welfare reform –replacement of means tested universal credit with universal basic income for all (including University students), replacement of work capability assessment with disability eligibility assessment by district nurses/social workers. Housing benefit eligibility conditional on being in employment, disabled or a pensioner. Extension of time before which EU migrants can claim benefits in the UK to 6 months. Phased increase in minimum wage towards national living wage (outside London).
    4. Taxation – merger of income tax and earnings tax into single rate applicable to all sources of income including capital gains, rents and investment income, replacement of higher rate tax income tax with Land Value Tax.
    5. Housing – provision of 1 million + homes (private and public) over five years and reform of council tax bands. Bringing Public Sector Net Debt (PSND) accounting rules into line with other EU countries so that local authority borrowing is not constrained by central government debt targets. Finance guarantees to local authorities and housing associations to provide for replacement of social housing stock to pre-eighties level.
    Development of infrastructure/housing bonds to attract investment from pension funds. Reinstatement of employment as condition for able-bodied to be eligible for social housing in conjunction with job guarantee program.
    6. Immigration – reduction in employer demand for EU migrants with local authority hiring of construction trade trainees from government programs and placement of single mothers requiring housing and trained as carers with elderly requiring live-in care. Development of English language training program for migrant job seekers delivered by ESL teachers recruited and trained from ranks of native English speaking long-term unemployed. Take students out of net migration targets and rebuild trust in the migration control system with exit checks and deportation of illegal immigrants, retaining existing legislation to provide irregular adults a route to regularisation. Implement ‘Training up Britain’.
    7. Crime and Justice – decriminalising of soft drugs and licensing of prostitution, review of secret court legislation and effectiveness of anti-terror legislation, implementation of enhanced security measures to contain threat from extremists returning from Syria.
    8. Transport, Energy & Environment – return of natural monopolies (rail network, domestic power generation and fracking) to the public sector, introduction of tax relief for commuting by public transport, insulation of all public buildings and public housing stock, significantly increased investment in renewable energy and commitment to International cooperation on mitigating global effects of climate change, review of effectiveness of badger cull in containing bovine TB.
    9. Banking reform – nationalisation of Natwest network as public bank and regulatory reform of ‘too big to fail’ commercial banks, concentration on maintenance of adequate capital ratios and financial system stability, support for further development of peer to peer lending platforms.
    10. European Union – overhaul or replacement of Common agricultural policy, review of transition rules on free movement of labour for new entrants. EU wide banking regulation, common policy on multi-national transfer pricing and corporate tax avoidance.

  • On delivering something of real and direct worth to people who are looking at rising prices and stagnant incomes, tackling rents is of course the best priority. The rent is indeed too damn high, but beyond the immigration scapegoating, nobody’s saying anything about it, much less doing anything.

    Taking a look beyond that sort of worthy tinkering that is the mindset we’ve been driven to by coalition, we really do need a major overhaul of how we collect and especially how we distribute wealth. Jenny Barnes I think is onto a potential winner with Citizen’s Income, something that can both improve delivery to needy citizens and restrict the opportunity for fraud. It even has the potential to be drawn as a retrenchment step to rein in the ballooning costs of means assessment and its attendant mess of unfairness, recrimination and the ATOS Miracle situation.

    Definitely needs considering.

  • Eddie Sammon 31st May '14 - 2:50pm

    I know very low income self-employed people who are struggling to pay the jobs tax, that is due even if you are making losses. The jobs tax needs to go.

  • Nigel Cheeseman 31st May '14 - 2:53pm

    On savings, Philip, perhaps we should look at relaxing the rules on ISAs. Saving can do so much good even for those on the lowest incomes, who are hit hard by pay day loans and other expensive sources of finance. Simple interest bearing current accounts which are tax free for all (subject, say, to a maximum turnover) could be run by non-risk taking institutions, similar to the old-style building societies and TSB. Managed properly, the difference between rates of interest paid to account holders and lent to people (e.g. for mortgages or business loans) could run the institution. By non-risk taking, I’m suggesting that the loans should only be made on a secured basis and only to those with very good credit rating. The opposite of the type of lending which caused the recent recession.

  • jedibeeftrix 31st May '14 - 3:12pm

    “Thirdly they need a taxation system that is fair, and yes that means integrating NI and Income Tax and making all income subject to the same rates of tax.”

    Sounds good. Including employers contributions!

    Some detail for introduction in 2020:

    0% up to the national minimum wage (currently ~£13k)
    25% from 1.0x NMW to 3.3x NMW (currently – £13k – £43k)
    37.5% from 3.3x NMW to 9.9x NMW (currently £43k – £129)

    Tax personal savings with Capital Gains at 19%
    Tax Corporation Tax at 19%

    Use indirect taxation to smooth over the worst of the cliff edges, with the intention of:
    a) seeing all deciles pay roughly one 30% of income to the exchequer (as is the case the right now)
    b) maintain the discrepancy in deciles +/- 10% of that 30%
    c) ensure no decile pays more than 33%

    As I see it it has the following benefits (some actual / some psychological):
    1. It greatly simplifies the tax system, maximising revenue against cost to collect
    2. It minimises the complex nooks and crannies that become loopholes
    3. It implicitly accepts that no-one should be taxed at more than 50%
    4. It links middle-class taxation to body temperature, giving the Daily Mail awesome choice of headlines if it rises
    5. It closely associates the totality of business taxation with middle-class taxation (37.5% vs 38%)
    6. It puts a hard edge at the limit to which we penalise rich people for being richer (9.9x NMW)

    What’s not to like? 😀

  • Alisdair McGregor is right to focus on net pay as the issue although I would adopt Jenny Barnes recommendation of a citizens income to replace personal tax allowances and national insurance thresholds as a more efficient and equitable means of achieving this. The UK’s NMW is middling by the standards of many other developed countries. I would suggest around 50% of median average wage would be the right level. i.e. roughly where it is now. To get NMW to the living wage there needs to be a strategic focus on public and private investment and increasing economic productivity to push up the median average wage, as Alex Sabine infers above.

    Bill – national insurance is now called earnings tax, There is no logical reason why interest or other income earned on capital should suffer a lower rate of tax overall than earned income. There needs to be a dividend tax credit system to avoid double taxation of profits but beyond that using the tax system to incentivise behaviour creates too many loopholes and distortions in my view. I would agree with Alex Sabine on this point “we should be… radically reforming the tax system to make it simpler, with far fewer loopholes and thus less open to avoidance and evasion by those with deep pockets and clever accountants. In short, I think taxes should be low, simple and compulsory rather than high, complex and voluntary for the well-advised.”

  • jedibeeftrix 31st May '14 - 3:14pm

    oops, missed the top-rate:

    0% up to the national minimum wage (currently ~£13k)
    25% from 1.0x NMW to 3.3x NMW (currently – £13k – £43k)
    37.5% from 3.3x NMW to 9.9x NMW (currently £43k – £129)
    50.0% from 10.0x NMW onward (currently >£129k )

  • Eddie Sammon 31st May '14 - 3:15pm

    I can’t get over the ignorance of this attitude of “why don’t bosses pay their workers properly?”. What about customers paying their bosses properly? What makes socialists even more economically incompetent is they also want tight price controls so they can squeeze margins both ways, as if we live in a world where many businesses aren’t struggling. Truth be told, the left doesn’t like business and wants to squeeze them until their pips squeak and let the state take over, which would also fail because it’s against human nature.

  • Just go back to the preamble to the constitution instead if this Dutch auction to demographic groups.
    If we’re set to go down, let’s do it on high principles and full liberalism .

  • Eddie Sammon 31st May '14 - 3:37pm

    Here’s another one: why won’t MPs pay their interns properly? The consensus is wrong when it comes to bashing all bosses.

  • David Evershed 31st May '14 - 3:51pm

    Whatever proposals the Lib Dems settle on, we should avoid following the Labour Party as the anti business party. Labour want to give away election bribes to voters but know they can’t afford to do so with a £100bn annuakl deficit. So instead Labour are looking for promises which can be paid for by businesses. This would be a drag on the economy and employment.

    Lib Dems should NOT:

    – introduce price controls on private businesses

    – cause a steep rise in the minimum wage (resulting in less employment of the low paid, low skilled)

    – pass laws to increase holidays, paternity leave etc which businesses have to pay for

  • Eddie Sammon 31st May '14 - 3:51pm

    I know the consensus isn’t to bash all bosses, but the minimum wage consensus is wrong, in my opinion, when there is so much unpaid labour. Anyway, I’m going to go before I give myself a head-ache.

  • I think Jedibeeftrix is more on less on the right track. We need approximately 40% of national GDP to fund public services and transfers (pensions & welfare). That tax needs to collected through a combination of direct and indirect taxes. To maintain equity and push back against rising inequality there needs to be a proportionally higher contribution than 40% from those with above average incomes and wealth and a proportionally lower contribution than 40% from those with below average incomes and wealth (if any).

    Designing a tax system that meets this criteria efficiently and equitably requires the kind of reform and simplification that Alex Sabine has called for. In my view this is best achieved with the merger of income tax and earnings tax into a single rate applicable to all sources of income including capital gains, rents and investment income, replacement of higher rate tax income tax with Land Value Tax and replacement of personal tax allowances and national insurance thresholds with a citizens income.

  • Alex Sabine 31st May '14 - 3:57pm

    I presume those marginal rates would be for income tax, employers’ and employees’ NI combined, jedi? Because of course we should include all those when assessing the tax ‘wedge’ on earnings. Eg the top rate is currently not the widely assumed 45% but 53% of gross employer cost.

    What’s more, as IFS director Paul Johnson recently highlighted, there is still a 60% marginal income tax band for around half a million people earning between £100,000 and £121,000 because of the withdrawal of the personal allowance. As he said there can be “no plausible rationale” for this tax structure.

  • Stephen Hesketh 31st May '14 - 4:04pm

    Thanks for the post Obhi. Some excellent ideas throughout. Makes us sound like a radical egalitarian centre-left (not to mention common sense) alternative to Labour and the Tories.

    I do hope the neo-Cons and special advisors at Clegg Tower are taking notes … and note!

    This is not a centre party at thought (Nick Clegg and Co.) nor a broken introspective party tearing itself apart (Murdoch and Co.).

    The future could yet be bright, the future could yet be … YELLOW!!!

  • Kevin Colwill 31st May '14 - 4:06pm

    I don’t want to live in a society where poverty is a price well worth paying so the already well off can become genuinely rich.
    I applaud enterprise but don’t lets pretend there’s no exploitation out there. Many a “self made man (or woman)” has made themselves rich by keeping loyal and hardworking staff poor. Wanting to combat that isn’t fighting “human nature” any more than laws against theft, assault and doing 100 mph on the motorway.

  • jedibeeftrix 31st May '14 - 4:09pm

    Hi Alex,

    Absolutely.

    All in one, no claw-backs or withdrawals.

    I can accept a little lumpiness in the tax-slice between deciles in the name of tax simplification, which is why I am happy to but wide bounds of + or – 3% on an objective of 30%.

    Will I cry foul if the guardian exposes the fact that the poorest third poorest decile pays 32.5% whilst the eight poorest pays on 29%? No. I would not in a million years try to create the labyrinthine horror constructed by Brown in the name of ‘fairness’.

    That said, there is a role to play for indirect taxes to help smooth out the major cliff-edges.

  • Who cares, the party is irrelevant!

  • Eddie Sammon 31st May '14 - 4:59pm

    Kevin, I want to tackle the super rich, but what I don’t want to do is to tackle small businesses based on prejudice that they don’t pay their workers properly.

    All the best.

  • This question (or the headline) is framed in terms of “helping working people”.

    Obhi Chatterjee,
    You say that —
    ” .,,,,When he first became leader of the Liberal Democrats Nick Clegg defined our target audience as being ‘alarm clock Britain’, a demographic that was derided at the time as being undefined and totally incomprehensible…”

    I think it may have been a while after he became leader but someone will no doubt correct me if I am wrong.

    But you go on to say that various initiatives in education will benefit this group. This seems simply illogical. Parents with children, ie those who might benefit from education changes, are not necessarily working people (people in jobs or self employed) neither are working people necessarily parents. I am sure you get this point. Whilst there will be many working people who are also parents the two groups are very different. Especially nowadays when workplace pensions have been disgracefully slashed, scrapped or stolen by the likes of Maxwell, many working people are in their seventies. Others who are in their seveties and still working do so not for financial need but for other reasons. To pick an extreme example Mr Dimbleby who covers elections for the BBC is clearly a working person, but hardly someone who needs help from the state and certainly not someone with a direct interest in state education (I assume he sent his children to private schools and they are all now grown up and rich in their own right).

    I agree with Toby Fenwick who makes the point of the moving target of both minimum wage and living wage. Does tinkering with it necessarily help those in need on a sustained level of income or does it just play catch up occasionally as the luckier in society forge ahead with mega bonuses?

    Your third point about combining NI and income Tax is entirely reasonable and has been party policy as long as I remember. Not sure why after four years we are no nearer to it as many Conservatives would agree. I guess that is just a symptom of the weakness of both Cameron and his deputy when it comes to making really radical changes against the wishes of Treasury Mandarins.

    As to this group favouring Liberal Democrats rather than Labour. Have you really thought this through? There is a large chunk of the electorate whose attachment to Labour is based on emotional and traditional family and community allegiance. I don’t think any of your suggestions would make very much impact on that.

    Another chunk of the electorate responds to how they have been treated by Conservatives when they are in power (which includes us because the electorate do not differentiate if they feel they have been treated badly). You do not have to be paying the bedroom tax yourself, or be on benefits and be sanctioned yourself. Many working people will know someone who has had their home lives mucked up by the benefit changes and/or the bedroom tax. Or even if they are not low paid workers in the public sector their friends and families may be. Working people may well have friends or family who are public sector workers eg poorly paid civil servants, who have not had a proper pay rise to keep up with the rise in the cost of living since 2008. Do you think all these people will be rushing out to vote Liberal Democrat if we follow your suggestions?

    I have not even mentioned tuition fees until now — but there will be a cohort of working people who have been lucky enough to get to university who (whatever the facts) will remember how they felt about the betrayal by the Liberal Democrat MPs who broke thir promise. They will remember ow they for the rest of heir working lives and their voting lives — no amount of tinkering with tax or doing stuff for schools will wipe that memory.

    Your suggestions in themselves have some merit but I just do not think you are going to undercut the vote of the Labour Party with them. Or the Green vote, which in the long run may be more of a threat to Liberal Democrat success. The evidence of the Labour vote in London Boroughs and big cities last week compared to the pathetic result for Liberal Democrats may be denied by those who wish to cling on to the failures of recent years but it is a fact. Nobody can deny that fact. It is written in the election results and the fce of former MEPs and former councillors. It is clear to see.

  • Stephen Hesketh 31st May '14 - 5:10pm

    In tandem with simplifying the tax regime and making it fairer, the other area we must tackle is that of tax loopholes. Unnecessarily complex tax arrangements lead to avoidance and evasion. There must be no more soft ‘arrangements’ for those avoiding or evading tax. These people are stealing from vital public services and from the pockets of the rest of us. Complex tax arrangements and their results are another area where the low and middle income families see one rule for them and another for the most wealthy. Now that would distinguish us from the Tories!

    And if we are looking for popular and long overdue policies we could do far far worse than Joe Bourke’s point 9:
    “Banking reform – nationalisation of Natwest network as public bank and regulatory reform of ‘too big to fail’ commercial banks, concentration on maintenance of adequate capital ratios and financial system stability, support for further development of peer to peer lending platforms.” 10/10!

  • Stephen Hesketh 31st May '14 - 5:22pm

    @John Tilley “I have not even mentioned tuition fees until now — but there will be a cohort of working people who have been lucky enough to get to university who (whatever the facts) will remember how they felt about the betrayal by the Liberal Democrat MPs who broke thir promise. They will remember ow they for the rest of heir working lives and their voting lives — no amount of tinkering with tax or doing stuff for schools will wipe that memory.”

    I completely agree with you John. Whatever Vince Cable salvaged financially, we need to do much more to make up our broken promise to these people … and their parents. A start would be for Clegg to admit (complete with tear) just how wrong were where to break this pledge. Following that we are going to need something very special. Perhaps we could start by asking the graduates and students themselves?

  • Simon McGrath 31st May '14 - 5:40pm

    @Stephen Hesketh ” There must be no more soft ‘arrangements’ for those avoiding or evading tax. These people are stealing from vital public services and from the pockets of the rest of us.”

    You don’t have an ISA or a Pension then ?

  • Little Jackie Paper 31st May '14 - 6:11pm

    Stephen Hesketh – How about writing off the student loan book? Is that any crazier than giving away social housing at massive discounts?

    It’s not just students really. To my mind the only reason that young are not far more angry than they already are is that very few of them have realised quite how much of a kicking they have had compared to the boomer classes.

  • On the wider issue of suggestions for the manifesto and broadening the parties appeal, let’s not forget building on the key areas of Health & Education as well as the specific concerns of voters in Scotland (hopefully) and Wales:

    Another ten policy area to consider:
    1.NHS – executive oversight of Clinical Commissioning Groups, budgetary and needs planning by local authority Health and Well-being boards, full integration of mental health, ambulance service and social care programs, expansion of smaller local hospitals.
    2, Education – decentralisation of executive authority and needs planning to local authorities including authorisation, funding allocations, financial and minimum standards oversight of academies and free schools
    3. Defence, foreign policy and overseas aid – commitment to 2% of GDP defence spending in accordance with NATO obligation, support for Israeli/Palestinian two-state solution and halt to settlements in occupied territories, pursuit of nuclear-weapons free zone in Middle-east, ethical foreign policy based on respect for human rights and International norms,
    4. Overseas aid – non-lethal aid to Syrian National Coalition, Libyan and Ukrainian governments, maintenance of overseas aid at 0.7% of GDP
    5. Small business – establishment of new enterprise hubs, focus on local authority procurement from local businesses, pubco reform.
    6. Electoral reform – change of voting system for local elections to STV.
    7. Culture and Sport – implementation of Leveson recommendations for press standards regulation and statutory regulation of football governance and financial rules
    8. Scotland – Home rule, devolution max
    9. Northern Ireland – embedding of peace process and continued development of cross-border co-operation through Council of Ireland
    10. Wales – bringing health and education standards up to UK wide levels.

  • Obhi Chatterjee says we need a massive house building initiative and his answer is a development charge. No mention of ensuring 300,000 new homes are built every year, of government providing finance for the building of houses to rent and allowing councils to borrow more to build new council houses. (And as Joe Bourke writes – “Bringing Public Sector Net Debt (PSND) accounting rules into line with other EU countries so that local authority borrowing is not constrained by central government debt targets.”)

    He says people need a living wage and so he calls for the minimum wage to be increased to the living wage level, but nothing about setting a different minimum wage for London, or having different rates for different regions, or having different rates for different business sectors.

    He says that NI and Income Tax should be integrated but fails to mention that the threshold for NI should be increased to the increasing level of personal tax allowance, which is not going to be included in the manifesto because it has already been rejected by the tax working group. He talks of progressive series of tax bands but doesn’t give any meaningful details for what he means. (However jedibeeftrix does.)

    I agree with much of what that Jenny Barnes wrote.

    @ Jack – the state is already subsidizing wages for some businesses and that is why raising the minimum wage has to be done to reduce these subsidies.

    @ Joe Bourke – you know that I don’t view 5% unemployed as low enough. I reject the idea that hosing benefit should only be paid to those in employment, because then those who are unable to work will lose their home and we shouldn’t be doing anything to increase homelessness. The idea that we can have the “placement of single mothers requiring housing and trained as carers with elderly requiring live-in care” is illiberal to both the single mothers and the elderly. (It is also sexist.) My mother had a live-in carer for over a year before she died and she would have hated to have to put up with having someone else’s children living in her house. However offering to single parents jobs (and training them) as carers for the elderly that fit round the school day would be useful. Lots of elderly people have carers visit them a few times a day and it is this type of carer role that would be better than the one suggested by Joe.

  • I believe that housing benefit should only be paid to those not in work. Those in work should be paid enough so they can afford their hosing costs. The large amounts being paid out in housing benefit go to landlords and therefore it a kind of subsidy for the richer members of society. I don’t believe we can stop paying housing benefit to those in work tomorrow, but hope that by increasing the minimum wage and increasing the Income Tax personal allowance and the National Insurance threshold we can reduce the amount that has to be paid to those in work.

  • Michael,

    “I reject the idea that hosing benefit should only be paid to those in employment, because then those who are unable to work will lose their home and we shouldn’t be doing anything to increase homelessness.” It would have to operate in conjunction with a job guarantee scheme as referenced further down the list with respect to “Reinstatement of employment as condition for able-bodied to be eligible for social housing in conjunction with job guarantee program.”

    As you perhaps will know , in the 1950’s and 1960’s people took a lot of pride in being able to qualify, from their own efforts, for their own council home and the estates were well maintained. When the estates became long-term dumping grounds for large numbers of long-term unemployed during the eighties, in place of short-term hostel or B&B accommodation they began to decline precipitously.

    “Offering to single parents jobs (and training them) as carers for the elderly that fit round the school day would be useful. Lots of elderly people have carers visit them a few times a day and it is this type of carer role that would be better than the one suggested by Joe.” This may be a better idea Michael and I would not suggest compulsory placement of single mothers, but rather a voluntary scheme. There are, however, significant numbers of seniors requiring live-in care that have family homes suitable for a mother and child and this may be one way of killing two birds with one stone i.e. providing senior care at an acceptable cost and finding scarce accommodation for single mothers.

  • Little Jackie Paper 31st May '14 - 6:59pm

    Joe Bourke – I note that in your lengthy posts you do not mention perhaps the biggest fiscal decision undertaken by this Coalition: ringfenced areas of spend in a fiscal consolidation. Most notably pensioners and NHS which are two of the biggest budgets.

    The net effect of this is that we have just borrowed £2bn+ to send a fuel payment cheque to some of the wealthiest people in the country. Take a look at the Pensioner Income Survey. Similarly we have an NHS that is basically a sacred cow. The effect of ringfencing has been deeper cuts elsewhere.

    I am yet to hear any compelling reason why there should be these sacred cows. Well – no economic reason I suppose.

    It is also worth noting that as far as I can see Labour has not made any promises about ringfences, whist the Conservatives have promised a pension triple lock to 2020.

    Ringfences have been a real unspoken in this Parliament and the fact that the other parties are ducking the tough questions doesn’t mean that the LDP should do so too.

  • Little Jackie Paper,

    two good points. The answer I would advocate with respect to pensioners is broadly revenue neutral. I would suggest concurrent with the introduction of the basic state pension of circa £140 per week in the next parliament – withdrawal of all winter allowances, free bus passes, personal tax allowances etc and replacement with a universal Citizens income in addition to the basic state pension. The effect is to leave those pensioners in the bottom half of pensioners average income with a marginal net gain in income and those pensioners in the top half with a marginal net reduction in income. The exchequer benefits from a reduction in administration costs of pensioner benefits.

    As regards the NHS, ringfencing has not prevented the health service coming under severe strain as the population ages and costs of drugs and medical supplies outstrip inflation. I think going forward, demographic trends mean we will need much closer integration of health services and senior social care services at the local level, expansion of care at home facilities, a greater focus on preventative health education and direct payment for procedures such as gastric bands or cosmetic procedures like mole removals etc.

  • Stephen Hesketh 31st May '14 - 8:05pm

    @Simon McGrath 31st May ’14 – 5:40pm
    “You don’t have an ISA or a Pension then ?”
    I have both as it happens however I’m sure you realise the sort of thing I am thinking of a) tax avoidance schemes identified by specialist tax accountants who find unintended(?) loopholes created as a result of sloppy drafting etc. Priority should be given to closing such known loopholes and b) tax evasion by individuals and companies and even when they get caught a pathetic arrangement is reached by HMRC allowing such crooks to pay only a percentage of the tax due.

    While on the topic, we should do something at EU level (a plus for membership) about multi-nationals not paying tax, and even if they do, not paying it in the country where the profits were made.

    It is interesting that you place ordinary occupational pensions in a similar category!

  • Stephen Hesketh 31st May '14 - 8:17pm

    @ Little Jackie Paper 31st May ’14 – 6:11pm
    “Stephen Hesketh – How about writing off the student loan book? Is that any crazier than giving away social housing at massive discounts?”

    Or fighting massively expensive wars or replacing Trident or allowing multi-nationals to avoid tax – No it isn’t. But I still think we need to ask the people concerned.

    “It’s not just students really. To my mind the only reason that young are not far more angry than they already are is that very few of them have realised quite how much of a kicking they have had compared to the boomer classes.”

    WHAT! You are joking aren’t you??? In no way have the young got off lightly compared to the baby boomers.

  • Stephen Hesketh 31st May '14 - 8:21pm

    @ Little Jackie Paper 31st May ’14 – 6:11pm
    Apologies!!! I realise I completely misread your ‘kicking’ post. At least you know where my sympathies lie!

  • Stephen Hesketh 31st May '14 - 8:26pm

    @JoeBourke.
    Joe, thank you for some excellent ideas and considered responses. I don’t know if you are on any policy committees? If not you should be!

  • Stephen Hesketh 31st May '14 - 8:57pm

    @ Michael “He [Obhi?] says people need a living wage and so he calls for the minimum wage to be increased to the living wage level, but nothing about setting a different minimum wage for London, or having different rates for different regions, or having different rates for different business sectors.

    I fully appreciate that the cost of living is higher in London and genuinely feel sorry for people being unable to afford the ridiculous property prices, however, paying London residents more is not the answer to this problem. I don’t pretend to know what the answer is but for the sake of the rest of the UK economy we have to take the heat out of London as it is distorting the economics of the rest of the country.

    Perhaps land value tax and incentives for relocating head offices outside of London might begin to address the problem?

    Paying people less for doing the same job outside the south east is just not on and, as above, only perpetuates the problem.

    Regarding “different rates for different business sectors”. An interesting concept that a minimum living wage should vary by sector. Perhaps we should also pay different taxes by employment sector!

  • Liberal Neil 31st May '14 - 9:54pm

    @Bill le Breton – what you are missing is that if you combine income tax and NI the potential take goes up. That provides flexibility with which you can either have a much higher basic allowance or a lower rate at the lower end or some combination. This means that the vast majority of ordinary savers will not lose out.

  • Little Jackie Paper makes a good point about the effect of ringfencing: protecting two of the largest budgets inescapably means deeper cuts elsewhere. In many ways I don’t think it makes sense, and it has distorted the fiscal consolidation.

    However I also agree with Joe that the pressures on health spending are so great that even freezing the budget in real terms (which is essentially what has happened) has proved a big challenge and will continue to do so. This is why reform, including the integration of health and social care budgets, is essential to maximise service levels.

    Whether the NHS budget can continue to be ringfenced throughout the next Parliament is a big question. I don’t think the same latitude can be extended to ever-rising pension spending; that’s to say I think either the triple lock itself needs to be re-examined, or countervailing measures need to be taken to claw back some of the cost, ie reform of the universal pensioner benefits (TV licence, winter fuel payment etc) and/or a sharper increase in the state pension age.

    (A lot has already been done to reduce the generous tax treatment of private pensions, and most proposals for going further here actually amount to double taxation rather than removing tax privileges – such as taxing pension savings both ‘on the way in’ and when they are drawn down as income, which would be the effect of removing relief at marginal rates – when in fact we want to be encouraging personal saving as much as possible.)

  • When it comes to homes remember A Bevan’s comment ” If we do not build enough homes in the next 2 years we will be criticised but if we do not build them of sufficient quality , we will be criticised in 10 years time”.
    We need good quality homes built on brownfield sites, in urban areas. We do not need shoddy homes on greenfield sites where people do not want to live. The last time authorities built homes people liked was London County Council, Guinness and Peabody Trust pre 1914. Any rapid house building will produce shoddy homes as the last years of the 80s/90s and 2006-2007 booms showed. There is no point in building homes if we have the same rate of immigration we have had since 1997. The reality is that the UK is one of the most densely populated countries in the World. Every house we build on the Belt is less farmland to grow food and the more we have to import.

  • @ Joe Bourke

    In the early 1990’s there was a thing called Employment Training which I think was voluntary and the unemployed were paid an extra £10 a week and their travelling costs. It could have include an educational course and it should have included a work placement. Your work guarantee scheme has too much stick and I prefer one with a large carrot. I think a carrot is liberal and a stick is dictatorial. I think the extra payment would need to be above £20 to keep a real value close to £10 in 1990. Also if you are only trying to achieve 5% unemployment then maybe those who wish to be unemployed (there might be some who might choice this, even if I think it would not be in their best interests) should be paid to be so and thus give more opportunities to those who wish to work.

    Maybe you are conceding that there were no large numbers of unemployed in the 1950’s and 1960’s when you say that council tenants look pride in their home and now there are areas where there are long term unemployed who don’t take a pride in their homes. Maybe the reasons this is so are twofold; being unemployed means they have less money for maintenance and the addition of personal touches and because they are long term unemployed they have given up hope knowing the government will not pursue policies to get full employment and see them into work.

    Maybe all theelderly people you know like having children round them, but I know a lot who would hate it. I don’t think we should force the elderly to live with children if they don’t wish it, which your scheme implies when you talk of their family homes.

  • Wow, Eddie, how’s your blood pressure?

    Look, the fact is that *every* time in any country there’s been a discussion about introducing or raising the minimum wage, there have been howls about how it will increase unemployment or destroy small businesses. In fact, these predictions have turned out to be wrong in every single case. At worst, in times of recession, raising the minimum wage has a very mild effect on youth unemployment but, in general, the result is neutral to mildly positive. What it does do is redistribute wealth towards the poorer in society, and that’s a good thing not just because it leads to a fairer society but because the work rate of money is higher among the poor and that’s good for the economy.

  • Eddie Sammon 1st Jun '14 - 8:02am

    Lol, Jack, my blood pressure is fine thanks. The key to knock me down a peg or two is to talk about so many suffering from poverty and violence whilst others are so rich and comfortable. It sometimes makes my heart bleed as much as nearly any human.

    Regards

  • Eddie Sammon 1st Jun '14 - 8:46am

    Here’s one for low paid working people: Collective Pensions in the news today that Steve Webb is introducing. The man doesn’t know what he’s doing. A social and economic net loser and one way to hit activist morale is to wipe away small businesses and replace them with the state in a belief that collective state action is more efficient. In Holland they are thinking of getting rid of them, but good socialists like Steve Webb want them here. Terrible idea.

  • Eddie Sammon 1st Jun '14 - 8:48am

    Somebody get rid of Steve Webb! I can’t stand his socialist policies.

  • Eddie Sammon 1st Jun '14 - 8:54am

    It’s not even liberal community action, it’s STATE CONTROL! It will fail.

  • Eddie Sammon 1st Jun '14 - 8:59am

    Or maybe all the contracts will go to big business. I’m sorry for ranting.

  • Eddie Sammon 1st Jun ’14 – 8:46am
    “…….. one way to hit activist morale is to wipe away small businesses and replace them with the state in a belief that collective state action is more efficient. ….. …… Terrible idea.”

    Eddie,
    I look forward to your plan for street lighting to be provided to each individual customer by small businesses because that would be more efficient than the state doing it.
    I assume you also believe that we should all buy our “defence” from a small business (a man with gun no doubt) because you see that as a more sensible and efficient method than the army or the police?
    A man with a boat would I guess be available for you to charter because that would be more efficient than the Navy.
    The small business approach to vaccination against killer diseases will be interesting; — no doubt that is why polio was not a problem before the state took responsibility for it ?

  • On this issue of ‘small businesses’, I do agree with Eddie that we should not be looking to do anything which harms small businesses and should keep looking to help them, but actually, the UK does not have a problem with small businesses – our small business industry is very strong. The problem the UK has is that we have too few Medium sized businesses and this is where we need to concentrate our efforts over the coming years, especially if we wish to fix out import and export imbalances.

    We need to develop policies that foster a culture where more of our small businesses actually aspire to grow into medium sized businesses (and give them the means to do this). We also need to provide Medium sized businesses with the means and will to be more daring and export more outside of the UK (and Europe). The strength of the German economy lays behind its Medium sized business see its internal market as a small part of their business, with their external market being their key drivers. Businesses in the UK, however, are more conservative and see external markets as a small and very risky part of their business.

  • Tony Rowan-Wicks 1st Jun '14 - 12:57pm

    As the Tories did a re-balancing to make life harder for the poor, LibDems should counter with a re-balancing which includes public and private enterprise in a compass which citizens can comprehend, starting with:
    a) gives support to the poorer sections of citizens
    b) is not afraid to level down those who have gained most from the economy
    c) looks again at what services must be owned again by the nation and in what way e.g. transport, including aviation
    d) takes preventative measures to stop the drift of housing and business to overseas owners
    e) is far more upfront about the causes of inequality
    the list goes on ……..

  • @ Stephen Hesketh
    The reason for suggesting different regional rates for the minimum wage is because the market sets wages rates at different levels in different regions. However the government could investigate what regional policies are successful in balancing these markets so wage levels become more balanced nationally as economic growth is balanced nationally.

    Differing minimum wage rates for different sectors have been suggested because it is felt that some sectors could afford to pay more but they just pay the legal minimum.

  • Eddie Sammon 1st Jun '14 - 8:41pm

    I once again apologise for my rant this morning and believe me I personally paid for it (through sinking into a mini depression), but I shall be scrutinising these collective pensions because they seem to be based on the ideology that the state should run the private sector because state monopolies are more efficient than private companies. Even if it is not the state who runs them, with the Conservatives involved it will probably be big business and liberals should not be taking away from SMEs to give to big business or big government.

    “Risk pooling” sounds nice, but in reality lower risk individuals only help higher risk ones if they are forced to or the taxpayer is forced to contribute too.

  • Michael,

    unemployment in the 1950’s and 1960’s was measured as the number of unemployment insurance claimants i.e. the equivalent of today’s jobseekers allowance claimants. JSA claimants had fallen to around 3% prior to the start of the current recession.

    Relatively high employment in the 1950’s and 1960’s was maintained for a time as a consequence of widespread nationalisation of industry and unionised restrictive practices that created over-manning. The lack of competitiveness with overseas producers in Germany, France, Italy, Japan and the USA ultimately saw the hollowing out of British Industry.

    Reflationary economic policies temporarily papered over the structural problems with the UK labour market, but could not stem the ultimate reckoning that was to come in the 1970’s, prompting James Callaghan in 1976 to declare
    “We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step…When we reject unemployment as an economic instrument — as we do — and when we reject also superficial remedies, as socialists must, then we must ask ourselves unflinchingly what is the cause of high unemployment. Quite simply and unequivocally, it is caused by paying ourselves more than the value of what we produce. There are no scapegoats.”

    The introduction of a Universal citizens income to replace JSA and universal credit, together with apprenticeships, skills training and a job guarantee program undertaken via the not-for-profit sector for the long-term unemployed provides the safety net that people may need. Restoring employment (including job guarantee employment or self-employment) as a qualifying condition (as it was prior to the mid-sixties) for the able-bodied to secure social housing tenancies and/or housing benefit is a perfectly reasonable balance of rights, liberties and responsibilities,

    As per my earlier response to you on this thread and at the risk or repeating myself- I would not suggest compulsory placement of single mothers, but rather a voluntary scheme for seniors requiring live-in care that have family homes suitable for a mother and child and would wish to avail themselves of senior care at an acceptable cost.

  • @Joe Bourke

    Thank you for replying.

    Since the time of Thatcher I have heard it said that it was restrictive practices that created over-manning in British industry. It wasn’t said earlier and it was is part of a political debate and not independent research. However the issue with British industry as shown on a BBC programme I saw this year, was the lack of investment which was mainly due to the consequences of the Second World War. The war was a reason why there was major investment in Germany and Italy.

    The figures I quoted for unemployment in another thread come from a report produced in about 1995 and went back to 1881 so it is unlikely they were just based on the claimant count. Also I remember the Thatcher government changing the way unemployment was measured at least twice. Therefore I reject your assertion that the less than 2.5 % figure for unemployment is not based on those unemployed. I am not sure how disabled people were counted then. Now they are excluded but I am not sure they were then.

    When a political says something it is not necessary true and he doesn’t necessary believe it. Quoting politicians will never convince me only independent researchers. Callaghan had to say what you quote because of going to the IMF. However if Healey had been given accurate predictions he wouldn’t have gone to the IMF and Callaghan wouldn’t have said what you quoted.

    Also when politicians of the 1970’s spoke about paying ourselves more than the value of what we produce they were often thinking more of the balance of payments that the level of wages. Also if I remember correctly at this time the Labour government was trying to control inflation with wage restraint. This is why any discussion of the 1970’s needs to discuss the money supply because while politician blamed high wages for inflation, inflation may have been caused by the lack of control of the money supply and it was inflation causing high wages and not the other way round. (There was a huge increase in the money supply caused by banking reform under Heath, which caused many of his later economic problems.)

    “The introduction of a Universal citizens income to replace JSA and universal credit, together with apprenticeships, skills training and a job guarantee program undertaken via the not-for-profit sector for the long-term unemployed “ we can agree on. However to try to turn the clock back to before 1965 with regard to social housing where if someone was unemployed there were evicted I think is barbaric. Housing benefit is also paid to those in the private sector, would you make them homeless as well. To give someone a choice take this position on a government course or we will make your family homeless I think is wrong. Much better to give that person say an extra £20 a week and their travelling costs and convince them that doing the course or scheme will help them get into normal employment. Also having an unemployment level that doesn’t fall below 5% means that these people on the government programme are likely to move from one programme to another never getting into a proper job because not enough proper jobs will ever be there for them. There will still be sectors of the population who will be excluded and I think they will still feel hopeless as time goes by. And this is not Liberal. It may appeal to the majority of the population as reasonable but we need to go further than that because we are Liberals.

    To clarify, I accepted that your scheme for single mothers would be voluntary for the single mothers, but you haven’t said if it the elderly can reject having a single mother and her children living with them as the price of having the care they need. Elderly people often find having children round them for any length of time very difficult. Also I think that the elderly person needs to be the centre of attention for the carer and if the carers children are there the elderly person will come after the children.

  • Michael,

    there is a good short article on the post-war economic decline here http://www.users.globalnet.co.uk/~semp/bdecline.htm. I would not suggest that over-manning was the only or even principle cause of decline. A comparative lack of investment was certainly as important together with other factors including economic policy in relative economic policy. Over-manning in nationalised industries was government policy and this policy together with under-investment in new efficient technology requiring less manpower maintained unsustainable artificial employment for a time.

    James Callaghan was not just any politician. He gained the Senior Oxford Certificate in 1929, but could not afford entrance to university and instead sat the civil service entrance exam. He joined the Inland Revenue, trained as a tax inspector and became a member of the civil service union national executive. During the war Callaghan joined up as an Ordinary Seaman and was promoted to the rank of Lieutenant. After the war he became an MP in Attlee’s Labour party that brought in the NHS and introduced Beveridge’s welfare state. Callaghan served as Chancellor of the Exchequer at the time of the 1967 devaluation , Home Secretary at the outbreak of the troubles in Northern Ireland, Foreign Secretary during the 1975 referendum on the EU and Prime Minister during the Lib-Lab pact of the seventies when he introduced the training opportunities scheme for over 19’s. Callaghan’s administration also introduced the Housing (Homeless Persons) Act 1977 further extending local council responsibility “to provide accommodation for homeless people in their area,” and instituted the right of homeless families to a permanent local council tenancy. Denis Healey described Callaghan as our best prime minister since Attlee, one who believed there was such a thing as society.

    Callaghan’s 1976 speech to the Labour Party conference is available onlinehttp://www.britishpoliticalspeech.org/speech-archive.htm?speech=174 “… overcoming unemployment now unambiguously depends on our labour costs being at least com­parable with those of our major competitors. Second, we can only become competitive by having the right kind of investment at the right kind of level, and by significantly improving the productivity of both labour and capital. Third, we will fail – and I say this to those who have been pressing about public expenditure, to which I will come back – if we think we can buy our way out by printing what Denis Healey calls ‘confetti money’ to pay ourselves more than we produce. I do not care what economic system we live in – at least, I do care very much – but the moral I want to draw is this that whatever system we live under these fundamentals are at the heart of the standard of life of the people of the country concerned, and we ignore them at our peril. They are also at the heart of the Social Contract and of our industrial strategy.”

    As liberal democrats we recognise that freedom is meaningless without the economic means to pursue. As long as people are able, then they should take responsibility for their own responsibility of that of their family. Beveridge’s five ‘Giant Evils’ were ‘Want, Disease, Ignorance, Squalor and Idleness’. We need to tackle them all including idleness. Seemingly well meaning policies, such as the Housing (Homeless persons) Act 1977 have led us to a position where
    being in work automatically disqualifies one for priority housing under the current “needs” based allocation system (not enough “need” on behalf of the applicant) and creates concentrated ghetto’s of unemployed on our local authority housing estates.

    Pensioners with their own homes have to pay for care at home and live-in care is very expensive – several hundred pounds per week. Many cannot afford the agency costs unless they can get an expensive home equity loan or their families can fund the costs. For a great many the only alternative is to either sell the family home and move into a private care home or. if available, have a family member move-in as a full-time carer. Having a voluntary scheme where single mothers will do the job gives another option for many facing this dilemma.

  • daft ha'p'orth 3rd Jun '14 - 12:26am

    @Joe Bourke
    ” Having a voluntary scheme where single mothers will do the job…”

    What a weird idea. If a live-in carer post is advertised as an ordinary job then single mothers can apply just as anybody else can, but why fixate on single mothers?

  • Alex Sabine 3rd Jun '14 - 12:27am

    Joe – I think Callaghan gets a worse press than he deserves for his performance as prime minister – he did at least pull Britain back from the precipice that his government and the preceding Heath administration had taken the country to, and that speech (written by Peter Jay) belatedly told the Labour Party some important truths.

    But he was an abject Chancellor in 1964-67 and pretty hopeless in his other ministerial roles. (A particular blot was his decision as Home Secretary to introduce emergency legislation to strip the Kenyan Asians of their British passports in the 1968 Commonwealth Immigrants Bill.) And I reckon Denis Healey was characteristically over-egging the pudding to describe him as the best PM since Attlee – even if admittedly there wasn’t much competition during the intervening period.

    Michael – You’re right to say that it was the rampant expansion of the money supply that was the root cause of inflation in the 1970s rather than trade unions – even if the unions were not exactly ‘pure as the driven snow’, as Enoch Powell claimed with monetarist certainty. But the unions’ restrictive practices undoubtedly played a big part in the poor productivity of British industry and its international reputation for strikes and shoddy workmanship in the 1970s. Poor management must also take a share of the blame, but equally it’s hardly surprising that companies were reluctant to invest in that climate and when they faced periodic threats of nationalisation and ‘planning agreements’ from hostile Labour governments, and fared little better under pusillanimous Tory ones.

  • daft ha’p’orth,

    what typically happens is there are care visitors during the day – generally at meal times to assist with getting bathed, washed, preparing meals and taking medication. Where attendance is required overnight a carer will sleep at the home overnight on the clock. Costs run from around £100 per night + day care costs for these services and can easily eat up the equity in the family hone over a three or four years.

    Single mothers with young children stuck on the housing waiting list that can live-in may be a significantly lower cost alternative than the typically outsourced agency costs in these circumstances.

  • @ Joe Bourke

    The article by Nicholas Woodward sets out the reasons for Britain’s poor economic growth since 1945, but I don’t think it supports your contention that it was restrictive practices that were the major problem. I also must have missed the section on why full employment was the cause.

    Your most recent quote from Jim Callaghan seems much more balanced. British labour costs are of course linked to the value of the pound which was overvalued at the time. Low productivity due to the lack of investment (which he mentions) meant that more labour was needed in Britain than in other countries. He also mentions increasing the money supply and I think I have made it clear that for any discussion of what was going on in the 1970’s the money supply should be considered. If the money supply is increased more than it should be then you get inflation and this inflation is not caused by public investment. He also mentions the Social Contract which was his government’s policy of wage restraint. Callaghan does not say the problem is full employment and restrictive practices.

    My position is clear if there was full employment then people would freely by their own choice work rather than be unemployed. There is no need to bully or dictate to them or force them to do something they don’t think is right for them or lose their home. As a liberal how do you argue that it is better for society that a person goes on a job guarantee scheme that will not lead to a job, but only another government scheme than for society to strive to bring about economic conditions of full employment where that person will be employed?

    You seem to be concerned about ghettos of unemployed people but don’t recognise that without full employment there will always be people who are not in work. Your answer is to put them on a government scheme. My answer is to improve the economic situation of the UK so an employer will employ them.

    I didn’t recognise that your whole scheme for single mothers and the elderly was voluntary and that the single mothers didn’t get paid. As far as I remember when my mother had a live-in carer she paid nothing (accept £20 a week towards the carer’s food), but when she had a carer come four times a day she did, but she also got more benefit.

    Thank you Alex Sabine for comments about the 1970’s.

  • Michael,

    we seem to be constantly talking at cross-purposes on here. The question is not what were the reasons for economic decline but how was apparent full employment maintained in the post-war period. It was maintained by unsustainable reflationary economic policy, acceptance of restrictive industrial practices by complacent governments and management and by lack of investment in modern equipment. Failed policies that cannot and should not be repeated now.

    Your earlier comment suggests “…when politicians of the 1970’s spoke about paying ourselves more than the value of what we produce they were often thinking more of the balance of payments that the level of wages .”The expanded quote from Callaghan (and the link to the speech) is there to show that high relative labour costs are what he refers to. There mat be many reasons for high relative labour costs, but that is what is referred to as the cause of unemployment nonetheless.

    Full employment cannot be created by government fiat now anymore then it could in the 1970’s. Now as then, there were structural economic problems that had to be mitigated with apprenticeship schemes, government training schemes and job guarantees until the economy was able to return to full employment. That took another decade until the mid-eighties and unemployment climbed well over 3m in the intervening years leaving a lost generation of young unemployed (shifted onto incapacity benefit) in its wake..

  • Roger Heape 3rd Jun '14 - 8:13am

    The personal tax allowance policy.The reason the £10,000 allowance policy has been so successful is that it was a clear, simple, easy to understand and easy to remember policy- a rare event among Lib Dem policies!
    Quite rightly for 2015 , we are planning to make this the centre of our Fairness agenda, ,tackling as it does the big issue of the increasing income gap between the poor and the rich.It’s also a coalition promise kept and implemented.
    However I read that the policy is being complicated by linking it to the minimum/living wage.I doubt many people know the annual minimum wage.We are in danger of losing clarity.Please, please leave the policy as just increasing the personal allowance to a specific figure( £15,000 comes to mind) over the next parliament.
    The increase to the minimum wage is best handled as a separate policy aim.

  • “Quite rightly for 2015 , we are planning to make this the centre of our Fairness agenda, ,tackling as it does the big issue of the increasing income gap between the poor and the rich.”

    It doesn’t tackle that issue. It does absolutely nothing for those already below the threshold. It gives a flat-rate tax cut to all other income tax payers except the top 15%. About 40% of the money goes to people on above-average incomes.

    And how on earth would it be paid for? If the actions of this government are anything to go by, it would be paid for by penalising the poorest as well as the richest.

    The party already faces huge difficulties over trust. What is the electorate going to think if the party’s main messages are, alternately, “We had no choice but to cut spending because of the huge deficit” and “Look how much we have cut – and are going to carry on cutting – taxes”. People must have a very low opinion of the intelligence of the electorate if they think that will work.

  • @ Joe Bourke

    I now understand. You reject the idea that Keynesian economics can produce full employment. You must also assume that monetary economic policies can’t do it either or a combination of the two. Therefore there is nothing I can say that will persuade you that producing full employment should be pursued and that it is the liberal solution.

    I do not reject the idea that there is structural unemployment, but I reject the idea that government training schemes and job guarantees can solve it without managing the demand in the economy by Keynesian and Monetary means. Also I stated that even when you think there was full employment you found examples where this wasn’t true. I have also pointed out that running the economy for London and the south-east will not produce full employment in all the regions. Therefore part of the government policy to obtain full employment would be to have regional policies that not only encourage business to be in the regions but also uses targeted public investment to create jobs and demand in those regions (Keynesian economic policies to suit each region).

  • daft ha'p'orth 3rd Jun '14 - 3:56pm

    @Joe Bourke
    Oh, workfare is it? Single mothers naturally will do this (difficult, skilled, often physically demanding!) job ad infinitum in exchange for a place to stay and a minimal handout.

    Well, that’s not exploitative at all. Carry on!

  • Keynesian economics was never designed to create full employment as Jim Callaghan explained to the labour party in 1976. . “The General Theory on Employment, Money and Interest” holds that that in the short run, especially during recessions, economic output is strongly influenced by aggregate demand. The short-run in this recent slump was the period from 2008-2010 when all the developed economies utilised both monetary and fiscal stimulus to arrest the slump in demand. From 2010, what was required was stability to embed the recovery i.e. maintaining government taxation and spending (especially capital spending) at constant levels and gradually increasing the bank base rate as the economy recovered. Allowing automatic stabilisers (reduced tax take and increased social security payments) to do the work of shoring up demand should not have been countered by increasing VAT and cutting capital expenditure programs. Automatic stabilisers should have been enhanced with the introduction of minimum wage job guarantees to put a floor under consumer spending.

    As a consequence of the over-reliance on monetary policy in recent years, we now have increasing inequality and another credit-fuelled expansion led by the housing market in danger of imminent collapse.

    As noted earlier, I regard a full employment target of <5% as an appropriate level for budgeting of government receipts and expenditures. When unemployment falls below this level the government should be running a surplus and starting to pay down debt.

    Regional policy initiatives have been tried by every government since the days of the Jarrow march with limited success. In my view, decentralisation of local taxation (business rates and council tax) and spending powers to local authorities/cities is the only really effective policy.

  • daft ha’p’orth,

    this telegraph article will give you a flavour of the issue http://www.telegraph.co.uk/finance/personalfinance/insurance/longtermcare/2811289/Live-in-helpers-to-the-rescue.html.

    Most homeowners will not qualify for state funding and I expect there will be plenty of single mothers stuck at home with their parents or in hostels that would welcome the opportunity of securing a minimum wage job with free accommodation. Sounds like a win/win situation for both parties to me.

  • daft ha'p'orth 3rd Jun '14 - 6:36pm

    @JoeBourke
    I know people who work for those excessively expensive agencies of which you speak. I know what’s involved, thanks.

    Your fixation on offering ‘minimum-wage jobs with free accommodation’ solely to single mothers is bizarre, and I’m not sure you’ve really thought through the training requirements for caring roles.

  • This kind of program targeted at single mothers is just one category of a series of such job guarantee programs that can be run through local authorities or social enterprise organisations as advocated by this economist http://www.levyinstitute.org/pubs/pn_14_1.pdf

    I am aware of the training programs for different levels of carers and the kind of training currently provided by care agencies providing staff to local authorities and care homes.

  • daft ha'p'orth 3rd Jun '14 - 10:21pm

    @Joe Bourke
    If this caught on you’d presumably be putting a lot of agency workers out of work in favour of minimum wage workers. I see why it’s attractive.

    Once and for all, why is this ‘targeted at single mothers’?

  • @ Joe Bourke

    I disagree with your analysis of “The General Theory on Employment, Money and Interest” maybe you analysis is correct for “new Keynesian economics”. Isn’t the reason Keynes called it “general theory” because it was always true unlike classical economic theory which wasn’t right? Keynes stated that under-employment and under-investment are likely to be the natural state unless active measures are taken.

    You state that the fiscal stimulus (Keynesian policies) should have continued post 2010. I am not sure that if you just use automatic stabilisers you would ever stop stimulating the economy because you would still be using investment to stimulate it.

    I have read on this site that monetary policy could be used differently to how it has been used and the problems you identify wouldn’t necessary appear.

    I note I haven’t convinced you that regional policies are important because the economy is run for London and the south-east. The reason regional policies are needed (and accepted within the EU) is that having a common currency means that the regional economies can’t adjust via different exchange rates. Just because regional policies are difficult to get right shouldn’t mean we don’t use them because without them the situation will be worse. I also support local taxation – land value taxation and the allowing of local authorities to spend what they wish (maybe some Keynesian stimulus locally). And allowing Council to borrow as you posted recently – to bring the Public Sector Net Debt (PSND) into line with the definitions of other EU countries.

    The Telegraph article you gave the link to is dated 2007 and must be incorrect because as I have said my mother who owned her house receive free live-in care until she died in 2013.

  • daft ha’p’orth,

    the paper linked to above explains why this is a job creation and not a job substitution scheme.

    It need not be limited to single mothers but they are a group with housing priority needs that local authorities are struggling to meet.

  • Robert Skidelsky in his 2009 biography of Keynes “The Return of the Master” writes:
    “The chief argument of this book has been that underlying the escalating succession of financial crises we have recently experienced is the failure of economics to take uncertainty seriously. It has covered up this neglect by means of sophisticated mathematics.
    Keynes did not believe that all economic life was uncertain. Classical theory was appropriate for many markets and problems – for most markets in consumer goods, for pricing policies in particular firms and industries. In these cases it was reasonable to assume that self-interested agents had enough knowledge of market conditions to achieve their goals. The trouble was that classical theory had colonised the whole domain of economic activity, including all those activities whose outcomes were inescapably uncertain. As a result it greatly overestimated the stability of the market economy, and drew misleading conclusions for policy. Keynes’s attack was not on classical theory as such, but on its scope and applicability.” There is an LSE book review here http://blogs.lse.ac.uk/lsereviewofbooks/2012/04/01/book-review-keynes-the-return-of-the-master-robert-skidelsky/.

    I think regional policies are important, just not terribly successful without real decentralisation of power. The Cities deal scheme is a step in the right direction http://www.bbc.co.uk/news/uk-politics-21495688

  • The smilarity between the editorial approach of LDV and scenes from Orwell’s 1984 take on a new blatant form. Obhi Chatterjee has been consigned to the memory hole. What has happened to Obhi? Is he languishing in Room 101 at LDV’s Ministry of Truth blended by bright Orange walls and gnawed at by a plague of sharp tothed rats?

    Anyone coming late to this and reading through the thread may think that I and others were quite mad when we seemed to be responding to Obhi Chatterjee.

    I began my comment —
    JohnTilley 31st May ’14 – 5:01pm
    This question (or the headline) is framed in terms of “helping working people”.
    Obhi Chatterjee,
    You say that –
    ” .,,,,When he first became leader of the Liberal Democrats Nick Clegg defined our target audience as being ‘alarm clock Britain’, a demographic that was derided at the time as being undefined and totally incomprehensible…”

    Since then the author and the headline for this thread has been changed. A small print line in italics beneath the new headline is the only clue to this change. — “This article was orgininally, mistakenly attributed to Obhi Chatterjee”

    Orwell would not have been surprised.

  • @ John Tilley

    The title change does not seem to be very large. When I first commented I wrote that it was something to do with the manifesto followed by “how we can do more for low paid people then Labour” So was the change just the addition of “working”? Also the article was printed again on Monday with a completely different title, which I found less interesting and so I didn’t see it until yesterday.

    @ Joe Bourke

    We can agree that Keynes believed that classical theory didn’t work for the macro economy. However I hope Skidelsky is wrong. Classical theory doesn’t work in the real world. Hopefully this is still taught when people learn about it as it was when I was taught about it. The Classical theory talks about a model market were certain conditions apply. However these conditions do not apply in the real world, sometimes conditions become close; an example would be the stock exchange. In another thread I set out how a classical type market could be established in education, but concluded that to ensure this market existed would involve the government in being more involved ensuring that people carried out certain actions to make it work.

    I am glad we can agree that regional policies should include devolving power to local authorities to “increase jobs and drive industry”.

  • Michael,

    I think Skidelsky is just pointing out that classical theory, as it has been developed since the days of Adam Smith, is perfectly sound in the field of micro-economics. The laws of supply and demand underpin commercial interaction between firms and individuals, prices and wages. Marginal utility theory remains an established feature of commercial decision making.

    Keynes transformed the way we think of macro-economics and the economic cycle in ways that classical economics had no model for, challenging ‘Says Law.’. In particular noting the importance of maintaining aggregate demand and introducing the concepts of the ‘paradox of thrift’ and ‘animal spirits.’

    As the book reviewer notes “…Keynesian activism (became) self-defeatingly prone to complacency and profligacy by the governments which practiced it… Merely because neo-classical economics has taken an overdue intellectual battering does not mean Keynesianism can take its place by default. However valuable Keynes’s insights, the world has moved on.

    Keynes has joined that long line of economists from Smith, Ricardo, Mill, Marx, Marshall, Hayek, Friedman and Minsky that have changed the way we think about economics.

    Politics requires pragmatic solutions that can be seen to produce effective results. I think Skidelsky is right to remind us of Keynes criticism of the failure of economics to take uncertainty seriously and the hubris of believing that sophisticated mathematics and free market discipline can bring about ‘no more boom and bust.’

    The economy and the financial system that underpins it is inherently unstable. Political economy can mitigate instability and excessive risk taking in the financial system and can provide safety mechanisms to counter the effects of declines in demand, but risk and uncertainty cannot be eliminated from the collective economic sphere.

  • This article was orgininally, mistakenly attributed to Obhi Chatterjee

    A result of too much “gin”?

    Orwell would not have been surprised.

    Victory Gin?

  • @ Joe Bourke

    The laws of supply and demand only work in the model they work less well in the real world, but can be a useful way of understanding markets. I had forgotten about marginal utility, I haven’t seen a critic of it.

    While I don’t accept that the world has moved on from Keynes, I can accept for reasons I don’t understand there is an economic cycle. This acceptance that there is an economic cycle means I reject your 5% target for unemployment. A 3.5% target would mean that when reached the government would stop stimulating the economy and sometime in the future unemployment would begin to rise and the government would decide to stimulate the economy again, but this would take time to work on the economy and unemployment may well rise temporary above 5% during this time. Therefore the economic cycle would still exist but its worse effects would be moderated.

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

If you are a member of the party, you can have the Lib Dem Logo appear next to your comments to show this. You must be registered for our forum and can then login on this public site with the same username and password.

To have your photo next to your comment please signup your email address with Gravatar.

Your email is never published. Required fields are marked *

*
*
Please complete the name of this site, Liberal Democrat ...?

Advert



Recent Comments

  • User AvatarHywel 21st Nov - 11:16am
    I'm struggling to understand how someone who was a UKIP candidate in 2010 passed the candidate approval. Let alone how that was allowed to happen...
  • User AvatarPeter Watson 21st Nov - 11:13am
    Back in May 2017 I asked this (https://www.libdemvoice.org/tim-publishes-lib-dem-manifesto-in-email-to-members-54362.html#comment-440519): The last two Lib Dem conferences voted for policy that: “Ensures that selection in admissions on the...
  • User AvatarMartin 21st Nov - 11:01am
    If there is no overall control in Westminster, is it not the case that whoever is the current PM (Johnson) gets to carry on? I...
  • User AvatarDavid Raw 21st Nov - 10:37am
    Bill le Breton is correct. There is no clear message or consistency in the campaign just a constant shifting of position. Sadly, there is a...
  • User AvatarSesenco 21st Nov - 10:34am
    Ed Davey last night made the party's position perfectly clear. Liberal Democrats will not, absolutely not, put either Johnson or Corbyn into No 10 and...
  • User AvatarJohn Marriott 21st Nov - 10:26am
    I see from her most recent interviews that Jo Swinson is backtracking a little on revoking Article 50 and emphasising another referendum. That makes sense...