Cameron’s Red Card

Leeds City HallCameron acts on localism!

Cameron has successfully introduced a new principle for British politics.  If a majority of the member states of the European Union disagree with a new law passed by the European legislature then that law may be disregarded.  This is despite both the upper and lower houses of the European legislature having voted in favour of the law.

On this basis, if a majority of councils in Britain disagree with a new law passed by the British Parliament that that law may be disregarded.  This is despite both the upper and lower houses of the British parliament voting in favour of the law.

What is good for the goose is good for the gander.

Let all our councils band together to ignore the faceless bureaucrats in Whitehall and bring our democracy home!

Whenever you hear an MP say “we” in reference to the European debate just remember that they speak about themselves – not us – and, of course, they do not want power to move up or down from their clutches.  That power they usurped by force in 1689 and have succeeded in keeping it in their iron grip ever since.  Do turkeys ever vote for Christmas?

Let’s really Join the EU

Looking back over the history of the European Union I wish we had joined at the beginning in 1951 when the European Coal and Steel Community was inaugurated.  I think that Europe would have been a better place today had we done so – but there is no point crying over spilt milk.

Back then Britain still had an empire of sorts and many in Britain could or would not conceive that the British Empire was about to fall apart; so one could readily understand the reluctance of the British people to join in the European journey.

When Britain finally joined in 1971 the original member states had already designed a Europe to suit themselves.  Many of their policies were not suitable for Britain.  For example, the protectionist and grossly inefficient Common Agricultural Policy was awash with grain, butter and beef mountains and wine lakes; with its high level of food prices it did not suit the average food buyer or third world food producers.  The poorly designed Common Fisheries Policy seemed to be determined to wipe out fish stocks.  There was no single market in goods and services.  Member states used all manner of means to protect their industries against their more efficient neighbours.  All meetings were held in multilingual settings making ordinary discussions difficult if not almost impossible.  The project was basically run for the benefit of the French – and who could blame them.

But what excellent changes have occurred through British membership.  Okay the Common Agriculture Policy is still around but it is much reduced.  Britain has substantially reformed the fisheries policy.  Britain pushed though the single market and encouraged the expansion of the union to include all Europe.  Britain made Europe look outwards – to be more competitive and created Europe to be the arbiter of global standards in trade and technology.  English is now the working language of the European Union with half the 500 million people having a functional competence in spoken and written English (apparently the average Dutch-person has a higher ability in English than the average Brit).

If Britain could make such changes over the last forty years just think what could be done over the next forty.  Of course there is be more work to be done. By improving Europe we can help improve the whole world and, most importantly, make the lives of the British people better.  Britain cannot do this without getting engaged.

Britain cannot be engaged unless it adopts all European Union law – no opt outs.  In my view, the first items on the agenda are to establish the euro on a firm footing and to manage migration properly but there are medium-term to longer-term structural changes that need to be made too – like increasing democratic accountability.

Europe needs to manage its own borders. It should no longer rely on member states to do so.  Britain does not rely on Sussex to monitor our borders and nor should Europe rely on Greece or Hungary.  The processing, management and funding of non-European migrant should be entirely the responsibility of the European government.  I understand that 25% percent of recent migrants have come from Albania – nowhere near Syria.  It was pretty poor when I was there but it is not war ravaged.  Rather than let each state pass migrants onto Germany, Europe must set up border police and processing staff (where necessary a coast guard too) and these people must be directly employed by the European government – responsible to the European government using property owned, leased or rented by the European government.  I completely understand that such an approach is only a sticking plaster but Europe must get a grip.

Just like any modern country, Europe needs a currency and that currency must be backed by its government.  To properly function, among other things, there must also be an equalisation mechanism between the various member states.  Just like in Britain where funds flow from richer places like Surrey to poorer places like Northern Ireland (the average family in Surrey gives the average family in Northern Ireland £1,200 a year) so in Europe we should transfer funds from the richer part of Europe to the poorer parts.  It means that the European government provides directly to each European citizen a small monthly sum.  Very little is needed to completely stabilise the European economy.  True, European taxation would increase from the current 1% to 3% but that is nothing compared to the 40% that Westminster takes already.  The level of taxation would be limited by treaty so could not be increased without a referendum.

A further policy change that Britain would have to deal with itself would be to convert most welfare into a contributional framework.  There are two reasons for this: one because it is a good idea anyway (returning to the original basis for welfare when the Liberals invented it and Labour installed it after the war); second, because that is how virtually all the member states of the union work.  This policy would not end “welfare migration” but it would reduce it.  Welfare tourism is much lower than most people imagine it to be in any case.  A much more successful approach for Britain would be to resource the revenue staff to enable them to make sure employers are employing legal workers and paying them properly.

Britain could say to the other member states – we will join the euro and the passport area as long as the above measures are put in place and that every other member state also joins when we do.

No varied geometry, no opt-outs.  If you want to be in you are welcome to be in but the only other option is out.

Currently, Britain isn’t really in the European Union.  It is sort of semi-detached.  For example, one can drive from the Algarve, on the Atlantic, right across Europe to the Ukrainian border and you will not have to stop for passport control anywhere, or customs and euros are the currency in every country travelled though.  For nearly all Europeans, for all intents and purposes, Europe is already one country – it is just that the British, who normally fly, tunnel or take the ferry rather than drive (with all security that goes with them), rarely experience the freedom of moving around the world without borders.

We are in a time warp.

We need to vote in – really in.

Growing membership

Liberal_Democrats_Logo.svgSince the election our membership here in Elmbridge has almost doubled and is still rising.

Some are people are returning to the party but most are people who have not been a member of any party in the past.  As one person said “I have long taken a liberal society for granted but after this recent election I believe it is up to all of us who revere the type of society that Liberal Democrats espouses to come together to ensure that this country shall have a new birth of liberalism and that the hope for a future government of decency, fairness, openness, generosity and tolerance shall not perish from this land”.

And another said “I for one are very appreciative of what the Liberal Democrats achieved in government and apprehensive about the new Conservative majority.  Therefore I hope by joining the party I can do more than simply vote and instead do my bit to ensure we have a strong liberal voice in British politics to promote equality and opportunity for all.”

I look forward to meeting you all shortly.

Results

The election results for an Esher and Walton representative in the national parliament on Thursday, 7 May 2015 was as follows

Dominic Raab – Conservative Party 35,845
Francis Eldergill – Labour Party 7,229
Nicholas Wood – UKIP 5,551
Andrew Davis – Liberal Democrat Party 5,372
Oliver Palmer – Green Party 2,355
Matt Heenan – Cannabis is Safer than Alcohol 396
Della Reynolds – Independent 228

The total number of votes caste was 57,165 and the turnout 71.55%

A pie chart of the voters.

Voters

A pie chart of the electorate on the basis that those that do not vote give their consent to the winner..

Electorate

Climate Change

Beyond our current policies – As minimum to mitigate climate change I would campaign for the extension of the climate change levy into a carbon tax and use it to meet a minimum aim of being a country in the better half of impactors on climate change rather than be one of the the 35rd worst countries (out of around 200) by 2030.

I would set up an organisation whose task is threefold:

  • One group of independent experts would estimate the likely production of climate change gas each country would be producing in 2030 and provide the data for a target for Britain.  This target to be set so that Britain is on the less polluting side of the median of countries in the world – in the better half.
  • A second group of independent experts would analyse the polluting factors involved in climate change and work out whether they are significant to bother counting, can be suitably measured and what the carbon tax figure would be appropriate for them.
  • A third group of independent experts would establish the carbon tax rate that would be needed to hit the target set by the first group using the figures produced by the second group.  This tax rate would always be set five years in advance.

The target will be dynamic as each country develops in its own way.  If other countries become more active in mitigating climate change then our task will be become harder. The carbon tax rate will rise faster.  If other countries are lax then our task will be easier and our carbon tax will rise more slowly.  However, as we are currently 35rd worst we have our work cut out in any case.

All this work would be public to allow for independent scrutiny.

In independent taxation system will provide a neutral way of nudging consumers into making decisions that favour the environment (often without consciously thinking about it because the cost is subsumed in the purchase price of what they are buying) and nudging industry to invest in more sustainable projects.  Because the taxation is set in an independent framework business would be able to rely on the direction of travel.  Although having the carbon tax set for five years hence can be quite short term for many industries such a move is far better than what we have now.

This tax would replace road fuel duty either partially or fully depending on whether or not road user charging was introduced.  It would also replace all the special charges, grants and funding that government currently undertake to clumsily attempt to influence the economy – picking winners as it is often called.  Government investment in research is fine as is investing in demonstration projects but subsidizing industries is counter productive.

The tax could either become part of general taxation to reduce other taxes – to raise the threshold for income tax higher for example and/or fund the insulation of homes and the general decarbonizing of commercial activities.

Minimum Wage

Often confused with the living wage, in government Vince Cable delivered the largest increase in the minimum wage since 2007, benefiting over 1.4million lower-paid workers. Someone working full-time on the NMW has seen their salary increase by over £416.

According to the current trajectory the minimum wage is due to rise to £8.23 by October 2019.

Under Liberal Democrat plans people on the minimum wage working 35hrs a week will be £263 better off under Liberal Democrats as a consequence of our plans to increase the personal allowance to £12,500.

Inequality

This post deals with income and not wealth.

In Britain, the median (average in ranked order)  full time salary in 2010-11 was £26,200 per year, but someone working full time for the minimum wage would only earn around £11,000, while the top 10% earned over £52,600.  This is before taxes and benefits and these reduce inequality.

Gini - standard

Since the world financial crisis the Gini coefficient, a commonly used method to measure inequality, has fallen.  This coefficient summarises the degree of inequality in the income distribution in one number. The Gini coefficient takes a value of between 0 and 1, where the higher the value, the higher is inequality. Gini

However, summarising inequality in just one number can mask different patterns in changing inequality. To illustrate this, the chart above shows the change in the ratio of income at different points in the income distribution over time. For example, the 90/50 ratio is the level of income at the 90th percentile (the level of income that 90% of the population fall below and 10% fall above) divided by the level of income at the 50th percentile (the median). Again a higher number indicates greater inequality.

As the blue line compares the poorest 10% to the average we see that relatively the poorest 10% have approached the median in recent years suggesting that equality is improving.  Likewise, the red line, which compares the people on the 90% percentile to the median 50%, shows that in recent years equality is improving.

Reason that people consider inequity is increasing is because of what is happening above the 90% level. The gap between the people on 90% and the people on 99% has increased dramatically in recent decades – the green line.  The gap between the people on 99% and 99.999% has increased even faster.

This phenomenon has occurred throughout the world and it has not been caused by the coalition government.

Taxing the people in the 99.9999% bracket is notoriously difficult because of the nature of their business and because they can employ more tax accounts and lawyers than the government.

There interesting articles on this subject in both The Economist and Prospect magazines.

Rent Controls

I have had many types of tenancies in my time, rent control flat, council house, tied house, bedsit, shared house, licensed squat, mortgagee, and house owner, so I can see what the Labour party is try to achieve for people who want to rent their home.

Labour plans are to:

  • Cap rents so they cannot rise by more than the rate of inflation (CPI) during secure three-year tenancies
  • Require landlords and letting agents to disclose the rent levels charged to previous tenants so that householders can negotiate the best possible deal at the start of their contract.
  • Labour’s also planning to introduce new ways for landlords to evict tenants within that three year period, for example if they want to sell your home or get it back for other reasons. These loopholes are pretty scary when you think they’re attached to a big financial incentive to use them – because that’s the only way they will be able to put the rent up in the first three years.

The problems with this are:

  • As the charity Generation Rentsays – it won’t bring down rents and will incentivise landlords to evict tenants.
  • Housing expert Henry Pryor said: “Don’t be taken in by Labour rent controls, it won’t make it cheaper, increase supply” but “it will distort the market”.
  • Rather than reduce rents, Labour’s plans will lead to huge rent hikes every three years, higher rents overall and fewer available rental properties.
  • There is a rare consensus amongst economists that rent controls impact negatively on housing market, with a recent survey finding that 95 per cent of economists disagreed with the proposition that rent controls had a positive impact on the amount and quality of broadly affordable rental housing.

Rents are high in England for a number of reasons but the main one is that the demand for homes for rent is higher than supply.  Artificially keeping rents down will mean that landlords will withdraw from the market and the supply will decrease.

The only way to keep rents under control and stop house prices from spiralling is to follow the Liberal Democrat plan to build 300,000 homes.  As well as ambition house build targets, the Liberal Democrats will help young people with their tenancy deposit and support people to gradually buy their home through our Rent to Own policy.

Labour in the past

  • Failed to build anywhere near enough homes in Government – with house building falling to levels not seen since the 1920s.
  • Even Ed Balls admitted that Labour failed to recognise the “importance of building more homes and more affordable homes”.

Liberal Democrat plans

Set an ambitious goal to build 300,000 homes a year, including in 10 new garden cities in areas where homes are needed most, in areas where there is local support, providing tens of thousands of high-quality new homes, with gardens and shared green space, jobs, schools and public transport.
Introduce a new “Help to Rent” and “Rent to Own” schemes which will provide government-backed tenancy deposit loans for all first time renters under 30. And we will help working people buy their first home for the same cost as renting, with a new model of Rent to Own homes, where each month’s rental payment steadily buys you a share in the home, which you’ll own outright after 30 years.
Directly commission house building from government. As is being trialled in Northstowe in Cambridgeshire, we will support government-backed schemes to build houses for sale, where necessary, to compensate for the shortfall in the private market.

Labour have used the example of Germany as evidence that a rent control system could work in Britain. In Germany, rents are set by the market initially but then can only be raised within tenancies according to inflation or increases in the landlord’s costs. However, this ignores huge structural differences in the housing market more broadly compared with Britain, the biggest one being that Germany has been able to deliver the number of houses required to meet demand, as demonstrated by the fact that both rents and house prices are much lower-relative to income-than in Britain.

The German example only proves one thing, which is that the priority has to be building the 300,000 homes a year that Britain needs-only the Liberal Democrats have committed to achieving this.

Christian Aid

Christian Aid says the Liberal Democrat manifesto offers a vision of a fair and sustainable future for all, including the world’s poorest people. Christian Aid welcomes the Liberal Democrats’ ambitious proposals which would see this country continuing to lead the world on the most vital matters over the next five years. The party’s policies for promoting Britain’s low-carbon economy and dealing with global environmental problems amount to a coherent package which would be a strong opening gambit in any negotiations with other parties. We are also really pleased to see the party’s recognition that helping people living in poverty requires commitment across many national government departments – it cannot be left to just one.