Radical Ideas for the Future

At the moment, virtually all of our policies – save for our stance on the EU – amount to tinkering at the edges of a flawed, if not broken, political system. This is a result of the fact that there is generally a fair amount of consensus within mainstream politics on a number of key issues.

All parties agree that we need to build more housing, that we need more funding of schools, the NHS and the police, and that we need to protect the environment. The major policy debates at the moment concern immigration, nationalisation of public infrastructure, the EU, education and public sector borrowing – most of which are couched in simple binary yes/no terms, depending on whether you support Labour or the Tories.

Rather than trying to join in the political consensus or meet Labour and the Tories halfway (e.g. see our current policy on housing), I genuinely believe that we have an opportunity to pursue an alternative set of policies that will mark us out as distinct.

Along with electoral reform and being pro-European, six policy ideas from various places within the liberal political tradition, come to mind:

1. A national housebuilding company

A national construction company set up to build houses, with the government taking a majority stake and offering financial guarantees. Instead of just pledging a high-sounding number of homes to be built each year and leaving it to the private sector, a government-backed company would have the opportunity to take responsibility for recruiting and training construction workers (with a focus on British workers), building homes and maintaining homes – with profits going back to the Treasury.

Combined with relaxing the rules preventing local authorities from borrowing to fund social housing, a national housebuilding company would be an exciting yet pragmatic way of building homes while balancing the risk and reward of construction projects.

2. PFI on hold

While bringing much-needed improvement to utilities, transport networks, and other infrastructure, question marks surround PFI projects, ranging from accountability, their quality of service and their value for money. The failure of Carillion also highlights the fact that many infrastructure projects are just not that financially profitable.

Going forward, an immediate review on ongoing and prospective PFIs, to be repeated every 2 years, would be a good start in assessing their financial viability. A 1-year moratorium on new PFI projects could assist with this. A suggested threshold might be that PFI must offer a significantly better business case compared to the public sector alternative, in order for approval to be granted.

3. Expanding Citizens Advice Bureaux (CABs)

CABs are perhaps one of the more underappreciated public sector institutions in this country. In being a one-stop shop for free advice on jobs, debt, housing, welfare and consumer rights, they help, advise and ultimately empower hundreds of thousands of people each year with a range of issues requiring specialist expertise. In additional to the educational and social benefits, CABs also make financial sense – at the end of the day, helping people avoid falling into debt, finding jobs, keeping them in their homes and preventing legal disputes from reaching court creates a net economic benefit for the state.

4. A new corporate charter (5% from the 5%)

One way of combating social inequality is by asking the business world to contribute to their communities. While many already do, a new corporate charter for the top 5% of companies by revenue – which commits them to donate at least 5% of their annual profits to charity – would set a new moral precedent. Britain has one of the most business-friendly environments in the world, and it is only right that businesses who take the advantage of operating in the UK give back a share of their profits back to their community in some way. SMEs and sole traders, who often operate on proportionally smaller margins, would be exempt.

5. Abolish council tax

Council tax is regressive and disproportionately hits lower-income households. As part of a reconsideration of taxation as a whole (for instance, revisiting the thorny issue of inheritance tax), the abolition of council tax should be targeted as a priority, to be replaced either by a local income tax or – as suggested by the Resolution Foundation earlier this week – a tax based on the value of high-value properties in an area.

6. A new environmental charter

The Lib Dems have generally been strong on the environment, and we should continue to build on this legacy. Alongside local issues, an “environmental charter” with various red lines should be set out, with commitments to carry out the following before 2030:
– phase out ALL plastic
– phase out ALL diesel cars
– continue to ban fracking
– invest in and support renewable energy sources

We face a crossroads. One path leads us to the safety of middle-class, middle-of-the-road mediocrity. Another is a riskier, but potentially more rewarding path of pursuing genuinely liberal reforms in the hope of making a difference. The choice is up to us, as members, to decide.

* Chris Lee is a Lib Dem member currently based in Tower Hamlets.

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39 Comments

  • A national housebuilding company

    Isn’t the reason so few houses get built down to the difficulty of getting planning permission? How does a national housebuilding company help with that? Having a national housebuilding company doesn’t help at all if there’s no land with permission for it to build houses on.

    which commits them to donate at least 5% of their annual profits to charity

    If it’s compulsory, it’s not charity, is it? It’s a tax. You’re just talking about an extra 5% corporation tax on the ‘top 5% of companies by revenue’ (which seems very unfair, doing it by revenue, given that revenue and profit margins are rarely correlated: a company could have a huge revenue but tiny profits if it is in a competitive sector with large costs, and so be caught by this, while another company which has much bigger profits on a smaller revenue slips through the net).

    it is only right that businesses who take the advantage of operating in the UK give back a share of their profits back to their community in some way

    Isn’t that called ‘tax’?

  • In response to Dav:
    – The core issue is profitability when it comes to housebuilding. Housebuilders often engage in land banking albeit this is not something they readily mention! Planning is actually a lot easier than it used to be pre Coalition, although I agree it could be more streamlined.
    – Re the corporate charter point, I never said it was pure charity. Plenty of policies exist already which compel companies to pay a contribution/levy for the benefit of their local community – certainly this is how a lot of building development works. The money would however not be a tax in that it doesn’t go to the government – it would go straight to the charitable causes. The obligation would be to demonstrate that £X had been donated/spent on/allocated to charitable causes – perhaps in annual reports.

  • Some really good ideas here Chris. Of course people will come on and pick at the details, but you general point is right that we need to start thinking outside the box and taking a lead on bold new policy ideas. At least you are doing that.

  • William Fowler 10th May '18 - 11:31am

    Unfortunately, the UK has a long history of inefficient State and council spending, if you want to build a 100k house for 150k get the State to fund it, etc. Blair/Brown solved the problem by “doubling up” on the private cost and time then declaring themselves brilliant when it came in under cost and time (but still way more than it would cost in the private sector). Despite spending vast sums on the infrastructure the quality was so dodgy that it is back in need of another update.

    Agree planning is part of the solution, plus using up spare land held by the govn, councils, Network Rail etc and maybe selling the resulting houses at half price on a leasehold with the option to buy the freehold when able to (and at an inflation adjusted price rather than house inflation price). Funding should come from housing bonds so savers get a chance to overcome inflation.

    Corporation and top rate of income tax falls have resulted in an increase in tax take so whilst the really poor may not be benefiting from trickle down the govn has more money to spend on them so it would be insane to increase taxes and then have a lower take, less to spend. A tax and welfare system than encourages creative capitalism at an individual level would energize the country, in the same way as stepping off the plane in Singapore you can feel the buzz of the city.

    Getting rid of council tax is a total vote winner unless it is replaced by something even more complex and arbitrary, thinly disguised as a wealth tax. Let people enjoy the family home but maybe heavier taxes on empty or second properties and BTL’s.

    Total energy pricing reform that encourages low energy use is something else worth adding to the list, start by getting rid of those standing charges – another vote winner.

  • “All parties agree that we need to build more housing, that we need more funding of schools, the NHS and the police, and that we need to protect the environment.”

    Then why are the tories cutting all these things?

    I’m with on on CABx, though. Another thing that the tories have consitently slashed funding for.

  • Nonconformistradical 10th May '18 - 11:41am

    A national housebuilding company implies to me centralised control – when we really need more localised involvement e.g. for involving local businesses (and hence local employment) in building at least some smaller clusters of housing in appropriate places – seems to me that a national housebuilding company would be handing it all to the huge housebuilders who don’t really seem to be doing a great job – quantity or quality..

  • Jennie – good point re Tory cuts. It is sadly about perception vs reality. Tories have seized on any increase in spending in numerical terms while ignoring the fact that i) inflation adjusted totals (which in many areas indicate an actual decrease) are what count, and that ii) double allocation of resources within departments are illusory. Hence if the NHS budget goes up by £1, or if £x million is taken out of one NHS budget and reallocated to mental health this will be celebrated as “increased investment” by the Tories.

  • Nonconformistradical 10th May '18 - 12:28pm

    “– phase out ALL diesel cars”

    Chris – in case you hadn’t noticed – since the issues of oxides of nitrogen pollution and particulates has become more prominent and people have been shying away from buying diesels there has been a spike in atmospheric CO2 levels – not a good idea – we’re deep in trouble over that already. Point being that although diesels emit oxides of nitrogen and particulates they emit less CO2 per mile than equivalent petrol vehicles.

    One factor in amount of oxides of nitrogen emissions appears to be stop-start driving – with spikes in emissions when one accelerates e.g. away from traffic lights. Hence we have a problem which may be much more serious in urban environments than non-urban ones where, provided one drives sensibly (smoothly), such emissions might be significantly lower. There needs to be more research into this but factors such as improving traffic flow through urban areas need to be addressed as well as what powers the vehicle. Because if you think we are all going to be driving electric vehicles in the foreseeable future – forget it. Much more progress needs to be made on mass-producing electric vehicles than has been achieved to date – look at the problems Elon Musk has been having.

    There are still loads of diesel cars out there which are not required to have diesel particulate filters – and even if they are so required there are unscrupulous people removing them although I believe doing so in future will result in an MOT failure – quite right too. The filters also need ‘cleaning’ at intervals by the vehicle being driven at a reasonable speed for 15-20 minutes – difficult to achieve in an urban area so that for someone doing most of their motoring in an urban area a diesel may not be suitable. Getting most taxis on to electric power might be number one priority because of this issue.

    However, for someone doing their motoring largely outside urban areas then it is a different matter – using diesel rather than petrol they may well be able to achieve better CO2 emissions along with better controlled particulates and oxides of nitrogen emissions.

  • Let’s be really radical and scrap tuition fees.
    Guess that’s so radical that nobody would believe us.

  • John Littler 10th May '18 - 2:12pm

    “William Fowler 10th May ’18 – 11:31am
    Unfortunately, the UK has a long history of inefficient State and council spending”

    Really? I was in a civil service division that was “Market tested” against the private sector tendering. All private bids were way higher despite removing staff rights and protections and a worse pension offer. Market testing was abandoned.

    The government funded NHS is way cheaper to run than private alternatives such as in USA, by almost 50%, despite the USA system not covering 10% of it’s people.

    USA’s contracted by party version of the civil service is also way more expensive than the UK public model, despite the USA system being seen as ineffective compared to the UK’s and others internationally.

    I am afraid that the contracting out of road repairs is also something of a joke. With workmen visibly swinging the lead and spinning the length of the job out presumably for a higher fee, instead of just finishing it. The state could build council houses on a large scale more cheaply than the private sector if wanted to.

    By the way, I own and manage a niche electronics exporters.

  • “We face a crossroads.”
    Too right, just that the crossroads is to do with the long-term sustainability of our lifestyle and society ie. beyond 2050. Brexit, with it’s widely expected economic downturn and upheaval in the established economic order provides another opportunity to adjust our direction of travel.

    Let us take one point: “phase out ALL diesel cars”
    Why just phase out diesel cars? why not all cars – regardless of fuel?
    Whilst some get upset about what comes out of the engine, all cars, including electric cars generate particulates from the wear of tyres on the road! Which at the levels we are now taking measurements are becoming more significant than the particulate byproducts of combustion.

    By considering something so radical, we have to think about ways of travel, working, industry, and just what exactly is it that we are trying to achieve. Whilst I doubt we will provide any transformational solutions, I expect that some radical ideas that could be implemented now will be identified. Such ideas, contributing to the rebuilding of the economy along new lines and not simply shoring up what has gone before.

  • We need to abolish tuition fees

    – frankly we won’t get a higher opinion poll rating until we do that. Our “core” voters – younger, graduates,parents of those will vote for us on our other issues – Remain etc. but will be attracted by Labour until we do pledge to abolish tuition fees – and – um.. mean it this time.

    It will signal a break with the coalition – and frankly all parties – Labour and the Conservatives – have to do such things to signal a break with the past. Clause 4, hug a hoodie etc. etc.

    A £30,000 lifetime fund for adult education and training for every citizen – you can use it for your first degree and/or for other things if you prefer.

    Double the pupil premium and a real terms increase for school funding outside of the premium.

    Paid for by borrowing – if necessary £10-£20 billion – we are borrowing anyway for tuition fees. A “human infrastructure” fund for a better future – our future prosperity relies on our human capital.

    We will not succeed until we are a much, much bolder party with real bold, striking, “cut through” issues we can campaign on.

  • “William Fowler 10th May ’18 – 11:31am……Unfortunately, the UK has a long history of inefficient State and council spending”….

    I think you should replace ‘inefficient’ with ‘insufficient’….Since 2010 councils have seen a 40% reduction in funding from central government (a figure which is expected to rise to 77% by 2010.
    Regarding your ‘public bad, private good’ assertion….Tory run Northamptonshire bragged about its pioneering “easy-council” approach when it was introduced in 2015. The council outsourced every service it could, shedding all but 150 of its 4,000 staff. They were transferred to four new service providers, part-owned by the council but run like private companies, down to the payment of dividends. Within two years the council found that private sector management can no more deliver adequate services on too little cash than the council can itself. By last autumn, it was running into trouble. A peer review by the Local Government Association concluded that “major shortfalls in achievement” were so serious that the council was relying on reserves to keep going. The review speculated that the Conservative-controlled council was hoping for a Whitehall bailout a la Surrey…

  • A national house building company would as you say help against land banking and should help against private construction companies trying to get out of the requirement to build a certain number of social houses. I am not against their being a government owned house building company, however the really important thing is to build more houses and especially more social houses. Radical might be banning any company from building more than 6 homes without there being some social housing for rent and when 24 or more homes are built at least half have to be social housing for rent.

    Why not just scrap PFI?

    Citizens Advice is not part of the public sector they are a charity, however around 60% of its income already comes from government sources.

    A simpler solution for Council Tax would be to increase the bands and then give it a clear relationship to the value of the property. However, the first thing which has to be done is to restore the national Council Tax benefit scheme so those people living on just Universal Credit pay no Council Tax as happened before 2012.

    What is missing from your environmental charter is the nationalisation of the Green Bank, the restoration of the Feed-in-Tariff to its March 2011 levels and government paid insulation of all homes in the UK and the provision of free double glazing for the poorest people on benefits.

    And as John Littler sort of points out, it could include free working life-long training.

  • David Allen 10th May '18 - 4:48pm

    “All parties agree that we need to build more housing”. Well – If they are right, then why is it not happening, in a free market economy?

    “It’s because of the planning bottleneck.” Rubbish! Builders have a large backlog of sites which have been granted permission, and they are building on them only slowly. So why are they doing that?

    The answer is, basically because they won’t build more houses than they can profitably sell. The market demand, for profitably saleable development, is simply not that great. So the builders won’t rush to build.

    Then why have we got a housing problem at all? Because the problem is the demand from people who cannot participate in the market – Those who are too poor to buy, and often even too poor to rent. Those are people whose “demand” does not count, in a free market economy.

    It follows that –

    We don’t need a massive programme of building non-“affordable” housing. We don’t need to use artificial methods to influence the free market for building non-affordable houses for sale. We should leave that market alone, and accept that it works perfectly well in meeting the low-ish market demand for “executive” housing and the like.

    We do need a programme of building affordable housing for rent, and meeting the non-market demand from poor people. That has to be social housing, financed if not built by the state, because the market will not provide the finance.

    We don’t need stupid targets like 300,000 houses a year, which we won’t meet because they just aren’t needed.

    We do need targets for new subsidised rented accommodation to tackle homelessness, sofa surfing, living in slum sheds, and living with parents, by people who cannot afford a free market solution.

  • In the aftermath of WW2 a bankrupt Britain, bereft of anything but the will to house it’s population, embarked on a radical programme of creating affordable housing.

    In contrast, today’s Britain lacks nothing but the will….

  • @expats – Northamptonshire’s problems were compounded by an unwillingness to increase council tax – it doesn’t take many years before a failure to increase council tax by 3% per annum results in a 10% funding shortfall…

    Interestingly, currently the council can sell assets to help balance the budget – my understanding is that property/asset sales under £500,000 only require the signature of a single individual. We fully expect many community assets eg. buildings primarily used as libraries to be sold off for development…

  • Ref the national housebuilding company, yes but. I think we can do something more distinctly liberal here than either replicating private sector national housebuilders, or indeed trying to create a national social housing provider. If we properly fund and empower councils we will see many of them doing this without the need for central direction. Instead, let’s use the power of the state to empower individuals to meet their own needs. Something like a cross between the New Towns (which very successfully housed many but were somewhat soulless) with the much smaller scale self and custom build enablers growing up around the country. We can imagine a form of “affordable self build” which uses national planning/compulsory purchase/investment powers and individual, family and community sweat equity to create great places and ready made communities. Details to be worked out, sure, but maybe more radical and more liberal.

  • Roland 10th May ’18 – 8:38pm………………[email protected]pats – Northamptonshire’s problems were compounded by an unwillingness to increase council tax – it doesn’t take many years before a failure to increase council tax by 3% per annum results in a 10% funding shortfall…………………….Interestingly, currently the council can sell assets to help balance the budget – my understanding is that property/asset sales under £500,000 only require the signature of a single individual. We fully expect many community assets eg. buildings primarily used as libraries to be sold off for development……………………

    From William Fowler’s post I thought the ONLY change needed was to utilise the expertise of the ‘Private Sector’; are you suggesting the heresy that THEY, too, needed extra money?
    Selling public infrastructure/facilities; now where have I heard that before? Bearing in mind that they can only be sold once; what do you sell when there are no libraries and other public facilities left?

  • Regarding your points on housing and council tax, I will share with you my working hypothesis that the two are inextricably linked. When municipal services are funded through locally set taxes on residents, the incentives are such that prospective and incumbent councillors are under enormous pressure to promise reductions, or at the very least to limit increases. Now, let us couple that with locally administered planning permission. For too many local authorities in the UK and for too many consecutive years, an extra housing development or block of flats granted planning permission on a hitherto undeveloped or brownfield piece of land raised costs by more than it did council tax receipts. Collecting refuse, recycling, and looking after roads is a costly business! The current solution? Under Section 106 of the Town and Country Planning Act, property developers can offer to make up for the net costs a council will incur down the line by paying them off through in-kind contributions such as roads, parks, town centre improvements, or affordable housing units. This has several consequences. First, smaller developers without sufficient scale are pushed out of the market because they cannot afford to BOTH put forward these big concessions AND undertake development works. This creates barriers to entry and improves profit margins for the larger developers who remain in the market, whilst raising costs for end users. Second, these more dominant builders will still only get permission to build and actually do so if the profits from doing so are enough to pay off the council and local residents under Section 106 and generate a profit. This will generally require an elevated equilibrium price of housing. Add to that land banking and the fact that planning permission is often given without mandatory development milestones and it becomes apparent how our nation, which brought the world penicillin and light switches, has created a near-perfect mechanism for sabotaging the efficient and market-driven provision of housing. Local taxation should be done away with entirely and, as is (mostly) the case with schools and the NHS, funds should be disbursed locally by central government based on an adjustable formula that takes into account population size, growth, and distribution. Service provision and the accountability of councils for its quality could of course still remain local, thus maintaining current incentives to keep costs down and respond to voters.

  • @David Allen

    Housing in its current state really isn’t a free-market, or rather it is but it’s filled with perverse incentives. Laws and regulations actively encourage businesses and local councils to stop building. Land banking and land speculation is so disgustingly rife because we don’t directly tax landowners, and to further increase the bleed on this, the 1961 Land Compensation Act (something that absolutely needs to be abolished) allows landowners to get planning permission for their land and then sell the land for ludicrous profits – buyers have to purchase the land not for what it’s worth, but for what it could be worth if properties were built there. This just flat out stops local councils from buying land to build social housing.

    Shelter have been banging on about this for ages and we really should be listening to them.

    http://blog.shelter.org.uk/2017/08/a-consensus-is-emerging-on-land-value-capture-what-we-need-now-is-political-action/

    “We’ve been through this in detail on our policy blog before. In its simplest sense though, under the current system, land needed for major transport and housing projects is paid for not on the basis of what it is actually worth right now, but instead on the basis of what it one day might be worth if it ever got residential planning permission: The ‘hope value’.

    In practical terms this means if a local council wants to buy an agricultural field to put in a new rail station and some affordable homes it can’t just pay the current value plus an amount of compensation. It also has to pay ‘hope value’ straight to the landowner, making the land so expensive that taxpayers’ money is needed to complete the project.

    This is clearly not sensible. All the value that the land might have goes to the landowner – even when that value is actually created by public investment. Landowners win big while communities lose.

    This also drives up land prices more widely by contributing to a broken system.

    If this were changed though, by amending the 1961 Land Compensation Act, it would be possible to capture the uplift in value and use that to – among other things – build some affordable homes.[1] And landowners would still get a fair price for their land that includes compensation.”

  • “All parties agree that we need to build more housing, that we need more funding of schools, the NHS and the police, and that we need to protect the environment.” I totally disagree with that, especially the last one.

  • Many thanks for your forward looking and innovative ideas.

  • @nonconformistradical – Thank you for defending diesel. It isn’t the devil that it is reported to be. In fact, if we could stop taxi drivers sitting in ranks with their engines running, air quality in towns and cities would substantially improve.
    The council tax system doesn’t work properly because of national bands. In London nearly every house is in the top band whereas there are only 3 in my whole district council area (which is bigger than some counties). If band D was set at the median price for each area the tax would be fairer and truly progressive.
    As for house building. Let the councils use the funds from ‘right to buy’ to build houses.
    We need to be truly radical about the NHS. In my area our local general hospital is part of a trust which is headquartered outside of the county. The clinical commissioning group and the mental health trust is in the process of closing the mental health wards which will mean shipping mental health inpatients into two different counties and elderly dementia patients into a third.
    We lost doctor led maternity care and now A&E is under threat with plans to again move it to another county.
    In some parts of the country moving facilities to another county may not be too bad but this is North Yorkshire.
    We should move the NHS services to local control and decisions being made by the people that it affects not faceless bureaucrats miles away who don’t even use the services they are cutting.

  • Nonconformistradical 11th May '18 - 12:04pm

    @Jenny Barnes
    I have no problem with getting more people out of their cars on to feet and cycles – but – comparing the UK with Holland is ridiculous.

    Holland is largely flat. Cycling and walking are a lot easier and safer there than on very many UK roads – which are narrow (often too narrow for separate cycle lanes), hilly, winding and often downright dangerous even if you are in a car.

    Holland has a long-time culture of cycling for everyday purposes – we don’t in the UK – it’s more of a leisure pastime. Too many motorists in the UK treat cyclists with utter contempt. Too many cyclists sharing road space with motorists can’t be bothered to make themselves properly visible – I believe they have a responsibility to at least do that. Too many cyclists in urban areas treat pedestrians with utter contempt as well, with little or no consideration for disabled people (it’s actually legal to walk around the streets when deaf, blind or partially sighted).

  • “invest in and support renewable energy sources” should also involves investment in the development of domestic manufacturing of related equipment and machinery to supply the energy industry, instead of importing from abroad.

  • I also want to curb short-termism in British business. However, unlike Japanese and Continental European systems where banks play a more important role in financing, our market-based financial system naturally encourages short-termism. We should have a National Bank and also private industrial banks (like in Germany) to fund manufacturing and STEM firms and to hence discipline them in a way that promote long-term development rather than focusing on quarterly profit like the way financial markets is currently operating.

    You should use both Solow-Swan Model (Keynesian version of Suply Side economics, no longer mainstream economics (which is neoliberal economics) today) and Post-Keynesian Economics as the theoretical base for our policy making.

  • Peter Hirst 12th May '18 - 1:58pm

    We must choose our policies carefully as it is as much what we focus on as the actual policy that matters. My preferences would be, apart from Brexit, land value taxation as it tackles land banking and encourages brown field development, becoming carbon neutral by 2040 and solving the housing crisis for its generational effect though I am sure there are others.

  • encourages brown field development

    Fun how there seems to be an endless supply of brownfield sites…
    But then once you understand the rules, it is a fairly easy process to take a greenfield site and turn it into brownfield and then get planning permission – then rinse and repeat…

  • Simon Banks 13th Jul '18 - 9:33pm

    These are interesting ideas, though not all radical ideas: expanding CABx, for example, isn’t particularly innovative or fundamental. Perhaps we need to remind ourselves that “radical” means going to the root of an issue (Latin: radix, a root). For example, “Your Liberal Britain” ran the Ashdown Prize for Radical Thought and the winner was the idea that supermarkets should donate unwanted food to food banks – almost a textbook example of an idea that may or may not be a good one (I suspect not as a big increase in food at food banks would require a big increase in volunteers and often bigger premises), but is not radical as it certainly doesn’t go the the root of poverty.

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