Tag Archives: social contract

Scarcity and the Social Contract

Scarcity on the surface

When I sat down for lunch with a local council leader one afternoon, in a café adjacent to a YMCA, one of the first things we discussed was capacity. The ability of the state to serve its people, to foster a society where they can access social mobility, and to give them support when they need it. As I sat down and talked with them, drinking my “woke” chai latte, I understood some of the problems we faced in Somerset and it was upsetting. Children unable to access SEND schooling, or falling out of education. People waiting many months for affordable housing, forced to rent privately. Elderly people living in precarity to afford social care.

Often we think about this country and the state that it is in, and all we can feel is despair; which is completely understandable. The canyon between earnings and living costs is ever-growing. Services keep being cut year-on-year, and there’s no money to restore them in real terms. Councils being forced to tackle potholes, graffiti, and overgrown vegetation like a game of whack-a-mole – I blame Eric Pickles in particular.

In 2010, when we came into government, the economic outlook was not good. We had just faced a global crisis of horrifying proportions, and as such policy programmes were devised. The Conservatives wanted to reduce a “structural deficit” through austerity, so that we could “live within our means”. They believed if they could cut debt as a proportion of GDP, through cutting expenditure, they could close a gap – but look at how much wider it has become.

One evening I was speaking to my Local Party chair, and she informed me it would cost four billion pounds to restore SEND provision funding in real terms. To put that into perspective, that is 18% of Rachel Reeves’ fiscal headroom (£22bn) from the Autumn Budget. Now extrapolate that to the rest of the state. Capacity wasn’t just “cut” in the immediacy of austerity, but it was left to wither. And the British people have paid the price; through fiscal drag, anaemic wage growth, a quicksand poverty line, and the persistent anxiety of precarity.

So what does that have to do with my latte in a YMCA-adjacent café? Well, this wasn’t any café; it supports our community, residents in the YMCA, and even helps people out of precarity. The Purple Spoon provides freezer meals, free to anyone who needs them; no questions asked. It is doing something that is emblematic of social liberal philosophy.

Many decades ago, in a different world, liberals envisioned a state that would support people to live. Not through paternalism, but through liberty through security. Despite what some say, welfare isn’t about paying people to “do nothing”, but two things: investing in people and supporting them. Yet Britain has stopped doing the former, and does the latter quite poorly.

Things can get better

But as I sat there, talking to this council leader and drinking that coffee, despair suddenly turned into hope. Not a naive, euphoric lightbulb moment, but a way forward. We can’t go back to where we were before 2008, but we can choose a better trajectory than managed decline. I understand our problems aren’t simple, but pragmatism and pessimism aren’t the same.

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Can we follow up the by-election by ‘showing steel’?

Leading Tory commentator and former MP Matthew Parris commented in his last Saturday’s Times column on our party’s appeal in the by-election to people he sees as decent, middle-of-the road Conservatives who have a ‘distaste’ for Boris Johnson. However, he complained that our party avoids hard choices, “wobbles off the highway into the ditch of localism, neighbourhood grumbles, government intervention and ‘whatever your gripe is (its) ours too”.

He even rudely accuses us of having “a big yellow streak” beyond our orange bird, and says that to have a fighting chance at the next election we will need to “learn to show steel, to say no to someone, something, anything …”

The choices of Mr Parris, who voted Lib Dem at the last election but only, he says, out of ‘repulsion’ at the alternatives, are not those of Centre-Left Liberal Democrats, but I suggest he makes good points. We do tend to assume that with our excellent principles and good policies, Middle England only needs to know about them to support them. Yet even to the educated middle-classes we can easily appear ‘Labour-lite’ or else too Conservative-friendly offending adherents of either big party, or else so indefinite that supporting the Greens who appear definitely right for these times is an easier choice for the politically homeless. The old slogan of being anti-Brexit and pro-Europe isn’t sufficient now.

Where do we stand on free trade, people could ask us? We can’t give the clear-cut answer which our nineteenth-century forbears could. So what can we be definite about?

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The time is now for planning Beveridge-2

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Post-Covid and after the delivery of Brexit, our country needs radical reforms of the kind Sir William Beveridge proposed for the end of the Second World War. He wanted a comprehensive programme of reforms, to cover the social injustice and unfairness he saw around him. The reforms should result in alleviating poverty, limiting disease, stopping homelessness, improving education and providing jobs for everyone who needed them.

These are the areas in which radical reform is needed again today. The social contract that existed between government and people in the post-war world has broken down and requires renewing. The Liberal Democrats as the heirs of the Liberal Beveridge are uniquely well placed to demand a new Beveridge-type reform plan.

A business motion has now been sent to the Conference Committee for possible debate at our March Conference. Entitled Beveridge-2 Plan within a Social Contract, it calls for the party to pursue a campaign for a Beveridge-type Plan of radical reforms. The Plan should seek solutions for all the social ills which afflict our country and which have worsened so much recently. It must focus on relieving the growing poverty and restoring full employment, on providing integrated and sufficient health and social care, on ensuring that there are enough homes including social housing available at affordable cost, and on remedying the growing deficiencies of education for all children.

The motion proposes a radical way forward to create the Plan. It requires the party to immediately establish a Commission, to consider urgently how our policies may be grouped and developed to constitute the new Plan, asking progressive politicians and academics to contribute to it. The Commission would then report to Conference next autumn on how the work is developing, with a recommendation that the Policy Committee develop a Consultation paper on the Plan for the Spring Conference next year.

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Building a progressive alliance on the basis of the past, and now looking to the future

Clive Lewis, the Labour MP giving the Beveridge lecture to Liberal Democrats last week, admitted that some of his party believe that ‘labourism’ is the only progressive future. Certainly Lib Dems have to accept that Socialists who believe that Liberals will always defend capitalism against the workers will never accept us as a progressive party, and will consider any alliance as a mere tactical ploy. In a mirror image, there are plenty of Liberals who believe that Labour cannot shake off its Far-Left inheritance and will always aim for state control and management, with the soaking of the rich to enforce greater equality.

Yet if a majority of both our parties can focus on policies of social justice, full employment and moderate redistribution within the new challenge of climate change, we can surely begin to work together in more ways than is already happening in the All-Party Parliamentary Groups.

There is, as Clive Lewis said, a “shared tradition of the social liberal and the socialist”, based on “our common values embedded in our collective institutions… (and) our principled commitment to defend the human rights of all.”

For Liberal Democrats, the Thornhill General Election review instructed us that “we must reconnect with the electorate as a whole. We must give a fresh distinctive vision of a liberal Britain in the 21st century with policies that resonate with – and are relevant to – ordinary people.” Indeed, it must be the first requirement for both parties, to discover and strive to meet the needs of the electorate, among which measures of social justice and provision of jobs with fair pay will surely rank high.

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How the Social Contract idea can serve both our party and the country

It is easy to be high-minded about the Social Contract idea, which may be why it is not yet universally known or accepted. Yes, it is a vision of addressing the main social ills of this country, campaigning to have them put right. And yes, it gains legitimacy by assuming the mantle of William Beveridge, the Liberal who produced a great Reform plan during the Second World War, including a demand that ‘five giant evils’ of the time should be destroyed by following his plans.

What could be more appropriate for the Liberal Democrats to campaign on, than a plan developed during the current world crisis, to tackle the huge social ills which are modern equivalents of those which Beveridge saw? It can also meet the present mood in the country for major beneficial change, which is comparable to that felt by the British people suffering in that devastating War

To demand a new post-COVID Social Contract, the equivalent of the post-War Social Contract is not just poetic; it is practical and far-reaching. Just as in Beveridge’s time, the social ills here today existed before the present crisis, and are likely to worsen as the immediate remedial measures come to an end.

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Liberal Democrats can lead the way in planning for the future

On a lunchtime edition for Radio 4 Professor Peter Hennessy, the well-known historian of contemporary British history, recommended taking up the ideas of the Liberal Sir William Beveridge. In 1942 Beveridge wrote of ‘five giant evils’ that must be combatted through the reforms he sought which resulted after the Second World War in the Modern Welfare State and the National Health Service.

There are five evils in our society today that need fighting, said Professor Hennessy, listing what he believes they are, to make the changes necessary after the current health crisis. His ideas were then discussed in the programme, the World at One, by Kenneth Clarke and Alastair Darling. The two well-known retired politicians, from the Conservative and Labour parties respectively, agreed on the principle and several of the five suggested ills, adding modifications of their own.

Perhaps Peter Hennessy had been reading Liberal Democrat Voice. Five great ills of today, matching the Beveridge evils, have been extensively discussed in articles this year. They have placed them in the context of the need for a new Social Contract since the Beveridge-inspired reforms after the Second World War were seen as a social contract between government and people.

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William Wallace writes: Capitalism and tax

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In case you missed it, the Times  on April 20th carried an article in its Business section entitled Business must adopt a new social contract as we reinvent capitalism (£).  It was by Jimmy McLoughlin, who was a Downing Street SPAD from 2016-19.  That’s right: a self-declared ‘free market Conservative’ who advised both Theresa May and Boris Johnson has now said, on his return from a visiting fellowship at Stanford University, that

It is time for a new social contract between business, government and society.

The business pages of both the Times and the Financial Times in recent weeks have become increasingly radical: sharp criticisms of executives taking bonuses while laying off workers, of opaque offshore accounting methods concealing the ownership of properties and companies, of the absence of coherent business leadership during this crisis.  A government which dismissed the CBI as a ‘remoaner’ organization is now hoping that the appointment of a new director-general will revitalise the organization.  Three years after Economists for Britain suggested that we could do without a significant manufacturing sector, ‘Made in Britain’ has become a vocal part of the current debate.

McLoughlin’s list of changes in approach that are needed includes the proposal, anathema until now for the small-state think tanks of the right, that “business needs to suggest where taxes will rise.”  He calls for businesses to play a stronger and more visible role in their local communities, to build closer links between business and academia, and to support greater ‘cross-pollination’ between universities and government through a British version of American White House Fellowships. He accepts that opinion polls now show declining trust in private business, and that the capitalist model needs ‘to go through its most drastic reinvention.’

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