Author Archives: James Graham

The coalition of ideas is needed more than ever

Back in September I co-authored an article in the Guardian with Neal Lawson, Chair of Compass, about the need for a “coalition of progressive ideas” between Liberal Democat and Labour members.  In truth, Neal did most of the heavy lifting on this, but I had no trouble signing up to it.  In particular, I was keen on how we defined this so-called coalition:

Progressives in all these parties are committed to greater equality and dealing with the challenge of climate change, but the binding value is pluralism. We recognise the value of difference, distinct histories and tradition but are using them to develop a shared project that is stronger because it is based on consensus-building. What we seek is not a big tent – that has been tried and failed – but a camp site where we keep our independence but grow stronger within common boundaries. This is not a coalition of parties and votes but of ideas and hope.

For many, the events of the past fortnight render talk of a progressive alliance as naïve at best and even contemptable.  For a lot of people on the “left,” the Lib Dem-Conservative coalition represents little more than a betrayal, and of the Lib Dems “selling out.”  The Lib Dems will spend the next five years as little more than the puppets of an ideologically-driven Thatcherite Conservative Party, dazzled by the prospect of a handful of cabinet posts and a referendum on the Alternative Vote.

Not only do I think that narrative is factually wrong, but I worry that it is dangerous. In terms of the facts, everyone in the Lib Dems I have spoken to is all-too aware that junior partners of coalitions rarely do well out of the deal: we really aren’t getting into all this because we think the party itself is going to do especially well out of it, if at all.  The majority of people would have preferred a Lib-Lab coalition; we just had a bottom line that Labour were not willing to match.  Few seem to genuinely question the fact that such a coalition was both arithmetically difficult and lacked a significant degree of political will on the part of the Labour Party; nor does anyone seem to genuinely believe that a Tory minority administration would be either more progressive or provide the country with the stability it needs at a fragile time.  And while cynicism about the deal abounds (much of which, it has to be said, may turn out to be well founded – nothing about this deal is risk-free), very few people seriously disagree that the concessions Nick Clegg and his team wrung from David Cameron were very considerable indeed.

The worst thing about this “Con-Dem” narrative is that it plays into the hands of another coalition: the regressive alliance.  While you won’t see the likes of Nadine Dorries and John Reid penning joint articles in the Telegraph any time soon, the fact remains that there is a very real force in British politics which deplores political pluralism and enlightenment values and has a very considerable amount of influence within both the Conservatives and the Labour Party.

The Con-Dem narrative suits the purposes of headbanger mentality in the Conservative Party because the more it is encouraged the stronger it will be.  If people on the centre left leave the Liberal Democrats in droves (something which, a small trickle notwithstanding, does not appear to be happening), then the junior coalition partner will be weakened and will struggle to hold its own in the inevitable battles for the heart and soul of the coalition government over the next few years.

But this Con-Dem narrative also helps the headbangers in the Labour Party.  The last thing these people wanted was a coalition with the Lib Dems (which is why so many took to the airwaves to derail the Lib-Lab talks), the price of which would have been a reversal of Labour’s very many authoritarian policies and electoral reform.  As far as they are concerned, if the Lib Dems can be crippled over the next few years, the return of two-party pendulum politics will be all-but inevitable.

A lot of progressive Labour members and supporters currently buy into this idea as well.  They are making a huge mistake and one which, if they let their anger and frustration continue for much longer, they will live to regret.  The key lesson to be learned from the electoral politics of the last 100 years is that pendulum politics always favours the right, even when there is a clear left consensus.  Jo Grimond understood this.  Roy Jenkins understood this.  Even Tony Blair, before he got seduced by his headbanger wing and the prospect of a huge majority, understood this.  Not only does the electoral system work against us, making the whole election contingent on a handful of swing voters in marginal constituencies, but the rightwing media get to call all the shots.

The dangers are there to see.  The tone of the current Labour leadership debate has, thus far, been extremely depressing.  Candidates seem to be lining up to out-compete each other in terms of who can be more right wing on immigration and workfare.  Jon Cruddas, a man who has plenty of sensible and progressive things to say about both, has ruled himself out.  And of course Labour has just spent the past couple of months attempting to portray the Conservatives as soft on crime.  With Labour politicians saying very little about the economy and tax beyond some somewhat exaggerated hand wringing about the Tories’ promised £6 billion cuts in non-frontline services, there is currently very little to distinguish them as a progressive party at all.

It will be a tantalising and disturbing irony to have the Lib Dems spend the next five years preventing the Tories from lurching to right only to have Labour pushing in the opposite direction.  Yet as things stand that is a very real prospect.

Fundamentally, what does Labour achieve by ensuring that the Lib Dem “sell out” becomes a self-fulfilling prophecy?  It won’t help a single person on a low income.  It will only undermine the public services Labour claims to want tp defend.  And it won’t make the Conservatives any less electable in five years time, who will be seen as the dominant force in the coalition.  The lack of a Lib Dem force in the 2015 election may make the public’s choice that much simpler, but it won’t make Labour’s job of winning any easier.

What can be done to prevent this?  Fundamentally, we need to keep talking.  This needs to be done at both a parliamentary level and at a grassroots one.  From Labour, the rhetoric needs to change.  Instead of dismissing the coalition as a victory for the right, Labour ought to be challenging its claim to be progressive.  A smart Labour leader will not wallow in the comfort zone of oppositionism but instead focus on finding new ways to tempt Liberal Democrat backbenchers into supporting positions that the Tory Taliban will find beyond the pale.  The word on every Labour politician’s lips should not be “condemnation” but “lovebomb”.  That’s if they are interested in long term strategic gains rather than the sort of short term tactical populism that became so discredited under the Gordon Brown era.

One important factor appears to have been missed by the political commentariat: while the new government is certainly centre-right, the House of Commons itself will be centre-left.  With the Lib Dems’ rightwing disproportionately now sitting on the government benches (with a few notable exceptions such as Steve Webb), the select committees – set to be stronger than ever under the Wright reforms – are likely to disproportionately include Lib Dem MPs from the left.  This is likely to be the most scrutinised government and most powerful parliament in living memory.

The progressive majority has not been shut out of power in this Parliament.  It is dominant in the Commons and exerts a restraining influence on government.  If these two factors can be combined, we will see nothing less than the realignment of the left that so many have fought for for decades.  But to achieve that, people within both the Lib Dems and Labour need to look beyond mere party interest and move beyond the simplistic dividing lines that tend to dominate British politics between “government” and “opposition”.  In a hung parliament, this is a false dichotomy.

If the opportunities are great, the risks are greater still.  If the experiences of the eighties, nineties and noughties have taught us anything, it is that Labour cannot win alone.  Not without going further along the road to becoming a conservative, reactionary party more concerned with power than fighting for its concept of the Good Society.  Triangulation always ends up backfiring on you in the end.

There are some siren voices within Labour itself for whom that would be an unequivocally good thing.  For the progressive majority within Labour, the time has come to stand up to such pernicious small-mindedness.

In short, to all my Labour friends: you really need to get over it. And fast.

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Speech to Liberal Democrat conference on inequality

James Graham moved Amendment 3 at the Liberal Democrat Special Conference which reads:

Insert after line 23:

“Conference calls for Liberal Democrats to work constructively in government to ensure that the the net income and wealth inequality gap is reduced significantly over the course of this parliament.”

Conference,

There is no question at all that Nick Clegg and his negotiating team wrung a string of key concessions out of the Conservatives in this agreement.

Cuts in services is a deep concern, but let us be frank. The difference between all three major parties’ spending plans was not all that great. When the former Labour Chancellor promised “deeper cuts than Thatcher,” the fact of the matter is that we would be committing to a pretty similar plan whichever party we ended up in government with.

Our key task in this parliament is to ensure that the glint that appears in George Osborne’s eye whenever there is talk of cuts in public services never becomes more than that.

In my view there are two fundamental tests we should apply to this government and whether this agreement ultimately advances liberalism or conservativism.

The first is whether this government protects human rights or weakens them, especially those of the most vulnerable and least popular in society such as asylum seekers and prisoners. The agreement text gives us some grounds for hope on this score, but we have not yet seen how our new Conservative colleagues will respond to a renewed tabloid attack on the Human Rights Act. We must not go along with this under any circumstances.

The second, which is the focus of my amendment, is whether this government manages to narrow the rich-poor divide. The case that equality does not just benefit the poor but decreases a whole host of social problems and is even of benefit to the wealthy has been comprehensively made by Richard Wilkinson and Kate Pickett in their book The Spirit Level. Its thesis has not been seriously questioned by anyone on the Conservative benches.

But there are signs that many of them simply don’t get it. Delivering the Hugo Young lecture last November, David Cameron astounded many in the audience by asserting that the real problem is not the rich-poor divide but the gap between the poor and those on middle incomes. So much for the big society. So much for “we’re all in this together.”

And while we have stopped them from forcing through their plans to cut inheritance tax for multi-millionaires, they in turn have blocked our plans for increasing wealth taxes. This leaves our plan to raise personal tax allowance partially unfunded. The burden of this tax cut must not end up being paid for by the poorest. That is not what we signed up for. There must be no VAT bombshell.

One way to make this plan more affordable would be a pound-for-pound reduction in the higher income tax threshold. At this time of economic uncertainty, handing out tax cuts to the wealthiest cannot be justified.

And while we may not have won the argument for wealth taxes in drawing up this agreement, I hope that Liberal Democrat ministers will use the resources they have in office to build the case for such a tax shift. They must seize this opportunity.

Narrowing the inequality gap is about much more than tax. I would urge every Lib Dem minister to set themselves a personal mission to do what they can to drive the equality agenda over the next five years.

I am willing to concede that the best we might be able to achieve is that the rich-poor gulf holds steady. But if we fail to prevent the Conservatives from indulging their instincts and widen the rich-poor gulf in the name of 80s style trickle down economics, we will have comprehensively failed. I hope Chris Huhne will make it clear in his speech that that is a line we will not cross.

I want to end my speech on a note of hope. I believe this coalition agreement could lead to one of the great reforming governments in history. Throughout my entire life I have never been more excited by the eventual outcome of a general election. Like many in this hall today, I worry about what it means for my party. But if it leads to a fairer, freer, more humane Britain, we should not hesitate for a second. We serve a more noble purpose than mere partisan advantage.

Over the next few years we must dare to dream. If we can do that, and hold firm to our principles, then anything is possible.

The amendment was passed with no objections.

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Statement on the Liberal Democrat-Conservative agreement

The Social Liberal Forum made clear earlier this week that we favoured a progressive alliance between the Labour and Liberal Democrat parties as the basis for a government. We very much regret that due to the intransigence of some individuals within the Labour Party that opportunity was not taken.

The alternative deal that our MPs had placed in front of them contained a series of important progressive policy commitments secured in the negotiations with the Tories. It was a hard-won deal for the Liberal Democrats and will lead to far more progressive outcomes for Britain than a Conservative minority administration. We therefore fully support the Liberal Democrats’ role in the coming government. This must include constantly holding the Tories to account and constantly seeking to introduce the progressive measures that Liberal Democrat supporters will rightly expect from Liberal Democrats in government.

In particular, the Social Liberal Forum will pay attention to the key issues we set out on Saturday 8 May:

First, that Liberal Democrats in government should not support measues that widen the gap between rich and poor – indeed we must work to narrow it. The deal includes important elements of our progressive tax policies and we welcome that as a good first step. Above all, it will be essential that Liberal Democrats fight to ensure that the forthcoming deficit reduction package is delivered fairly, with the greatest burden falling on those who can most afford it (if necessary by higher taxation of wealth).

Second, there should be no move to cut social spending or frontline public services this year. We are satisfied that the deal has ruled this out.

Third, treatment of asylum seekers must improve. The abolition of detention for the children of asyslum seekers is a good start.

Finally, there must be no attempt to water down the Human Rights Act. This was not mentioned in the deal.

These and other issues will be critical yardsticks by which the Liberal Democrats can show the public how a coalition government is far better than an unfettered Conservative administration would have been. We are confident that Liberal Democrats in government and in parliament will continue to fight to temper the Tories’ baser instincts and to introduce progressive change.

The Social Liberal Forum will keep a keen eye on all policy developments.

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SLF statement on the opening of formal talks with Labour

Events are moving quickly. Gordon Brown’s resignation and the opening of formal talks with the Labour Party have reignited the possibility of a progressive alliance.

The fact that talks with the Conservatives have failed to come up with agreement at this stage suggests that this possibility has run its course. The Social Liberal Forum Executive respect Nick Clegg’s commitment to talk to the party with the greatest mandate first and have suspended our judgement on what such negotiations might result in. But the party has always been clear that this by no means was to offer them a blank cheque or even that a deal would necesarily result from these talks.

It is now apparent that David Cameron is not prepared to deliver a genuinely proportional voting system, nor offer a progressive agenda that Liberal Democrat members and voters rallied behind the party to secure. With Gordon Brown gone, so has the key barrier to a better alternative.

With this in mind, we strongly endorse the opening of talks with Labour. A progressive coalition, possibly involving the Green Party, Alliance Party, SDLP, Plaid Cymru and the SNP would command a majority mandate from the public. 52% of the public voted for either the Liberal Democrats or Labour, almost 56% if the votes of all progressive parties in Parliament are combined.

There is a progressive majority of opinion in this country and despite the deficiencies of our broken political system, our government should ideally reflect that.

Nonetheless we are realistic that such an alliance would be precarious. For it to work, legislation for fixed term parliaments, increased caps on election spending and caps on party donations must be prioritised. Extending fiscal autonomy to Northern Ireland, Scotland and Wales would be crucial.

All progressive parties, including Labour, are committed to some form of electoral reform, but a commitment to a referendum on a proportional voting system must remain a deal breaker. To ensure a real change to our broken political system, Nick Clegg must be prepared to walk away and allow a Conservative minority government to go ahead if Labour refuse to allow the British people a say in how they elect their parliament. Needless to say, we also feel that the ‘red lines‘ spelt out by the Social Liberal Forum Executive this weekend still apply.

As with our statement over the weekend, which garnered the support of more than 30 parliamentary candidates, local party chairs and party members, please email us on admin@socialliberal.net to let us know if you agree with the sentiment of this statement, including what position, if any, you hold within the party. We really do value your input.

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Social Liberal Forum calls for a Government of National Unity

Statement from the Social Liberal Forum Executive:

These are exceptional times. The nation faces two great crises: a financial crisis and a political crisis. The next government needs to be strong enough and honest enough to deal with the economic mess and our discredited democratic system.

The most credible way to tackle this would be the formation of a Government of National Unity.

The cornerstones of such a Government must be as follows

  • First, we must demand an immediate referendum on a genuinely proportional voting system, for which there is clearly very widespread support among voters.
  • Second, we need robust but fair action to deal with the financial crisis. The deficit needs to be tackled. However, rushing to make cuts would be counter-productive and in many cases, socially unjust. Where cuts are made, they should be to unnecessary programmes such as ID cards. If such cuts do not close the deficit on their own, then burden should then fall on those with the broadest shoulders.

Within such a Government the Liberal Democrats should also pursue the excellent four key pledges that were the focus of our manifesto. We should also make clear some lines that we do not wish to cross, given the proud liberal and social democratic traditions of our party.

  • We will not collaborate in any measures that would increase the gap between rich and poor, such as tax cuts for the wealthy. As outlined in our manifesto, we should not rule out further tax rises on those who can most afford it. Any tax cuts must be targeted at those on the lowest incomes.
  • We will not collaborate in any real terms cuts to front-line public services or social spending in the current financial year.
  • We will not collaborate in worsening the treatment of asylum seekers, which is already unconscionably inhumane.
  • We will not collaborate in any watering down of the Human Rights Act, which is essential to protect law-abiding British citizens.

Things are moving very quickly.  Please email us on admin@socialliberal.net to let us know if you agree with the sentiment of this statement, including what position, if any, you hold within the party.

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Another successful conference

The Social Liberal Forum had another successful conference, with two fringe meetings that were standing room only. This was perhaps not surprising for our joint fringe with the One Society campaign on equality, but our evening session was an ostensibly much drier affair, to adopt a constitution so that the SLF can become a membership organisation. It was surprising – and very encouraging – that so many people turned up to give us such a flying start.

We’ll have more up about conference and where the organisation goes from here soon but in the meantime I just wanted to write a short note to thank everyone for their enthusiasm and inspiration. It really means a lot.

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Fabians fail the fairness test

Not having decent internet access over the weekend at Lib Dem conference, I’ve been itching to get my paws on the latest Left Foot Forward report on the Lib Dem proposal to raise the income tax threshold to £10,000. “Think Again, Nick!” (pdf) purports to show that, far from being the most redistributive policy on offer in this general election, it is in fact deeply regressive and a hallmark of the Lib Dems’ rightward shift.

I’ve been reading the headlines on both Left Foot Forward and Next Left over the weekend, thinking, “They’re not going to take the personal allowance proposal in isolation are they? Surely, this analysis must purport to show how, contrary to all the evidence I’ve seen, equalising capital gains, equalising tax relief on pensions, closing various other loopholes and introducing a mansions tax will actually have a minimal impact on the incomes of the wealthiest on society? That’s got to be some pretty bloody impressive research. I’ll believe it when I see it but surely someone as fair-minded as Sunder Katwala wouldn’t get involved in a partisan hatchet job? He’s got a reputation to consider.”

How wrong I was because taking the personal allowance policy in isolation, it transpires, is exactly what Tim Horton and Howard Reed have done. They even preface their report by emphasising how much they approve of the Lib Dems’ tax raising proposals. And if you were in any doubt that this is anything other than a bit of Labour propaganda rather than serious research, they rather give the game away by putting an embarrassing photo of Nick Clegg on the front cover. When you reduce political criticism to the level of Nick Brown even before you begin, you really do have a credibility gap to contend with.

The actual research doesn’t actually say that much. It consists of little more than a bunch of quotes which show that (gasp!) some rightwing people support the policy and a graph showing the impact on each income decile which, frankly, I could have approximated on the back on an envelope and five minutes. How they manage to expand this out over 32 pages is a marvel to behold, but then they do say that muck spreads.

The fact that raising the tax threshold helps people on higher incomes more than people on low incomes is not, believe it or not, a startling revelation. We know. The party has never tried selling this policy in isolation; we’d be mad to attempt to because people would rightly ask where we propose trying to find £17bn. The two are meant to balance each other; that’s why we are calling for a tax shift and not either a rise or reduction in taxes overall1.

But there are three other reasons why the policy is not only defensible but progressive:

1. An increase in the tax threshold will reduce inflationary pressure on wages at the bottom end of the scale and reduce the deadweight cost of employment. Anything that discourages the outsourcing of employment to other countries is a good thing, particularly at a time when the economy is so fragile, is crucial. Horton and Reed can up with all the graphs they like, but the difference in income between someone working and not working at all is significant.

2. The fact that people on middle incomes do well out of this tax shift is an entirely good thing because we need middle-class buy in – again, especially during this fragile period. Campaigning for a massive shift in income between rich and poor which leaves those on median income out in the cold might be a nice example of hairshirt politics but it is unlikely to inspire the public.

Horton and Reed like to talk about deciles as keeping the argument abstract is helpful to them. Let’s try to move this a step or two into the real world though, shall we? According to the government’s latest equalities report (pdf), the weekly income at the 30th percentile (P30) is £292 while the income of the 70th percentile (P70) is £523, less than twice as much. There is actually a bigger gap between P70 and P90 than between P30 and P70. Individuals can shift between these abstract staging posts significantly during their working lives, and even within a few months. I’m a case in point, having gone from an income which put me in the top 70 percent to something approximating median income simply by shifting to a four day week to protect my job last summer.

So, am I concerned that our tax policies help people above average incomes? Not a bit of it, especially at a time when the average UK house price is, still, £160,000 (it wasn’t that long ago when a mortgage worth more than four times your income was considered the height of irresponsibility).

The third reason for this policy being progressive is that it represents a significant shift away from taxing income and onto taxing wealth. Shocked by the fact that there is a 4x income difference between P10 and P90? You should be, but you should be even more shocked that when it comes to wealth the difference is 100x. Any system which allows people at the bottom end of the scale a greater share of their own money whilst taxing the wealth at the top end of the scale will help to tackle that. It is, frankly, a greater priority.

None of this is to deny that the Lib Dems could go further. Personally, I would like to see a much bigger shift away from income taxes and onto wealth taxes. I’d be prepared to contemplate a flat tax and even the abolition of income tax altogether (although I have grave doubts about this being practical), which would almost certainly – in isolation – lead to a shift from low incomes to high. But crucially, I’d never want to see that happening without a corresponding increase in taxes on things like land. You could try to smear me as some kind of rabid, rightwing, Ayn Rand-inspired libertarian but frankly I don’t fancy your chances.

The Fabians’ own proposals in The Solidarity Society are very interesting and deserve a closer look. I have a lot of affection for the key commitment in the 1992 Lib Dem manifesto for a citizens’ income and would love the party to revisit it. But does anyone, least of all Sunder Katwala, Tim Horton or Howard Reed, believe that Gordon Brown is the man to implement a programme that even vaguely resembles universal welfarism? If the Fabians and Left Foot Forward are serious about promoting progressive aims they should be aiming their fire at a Labour government that has squandered thirteen years of power. It would have been nice, at least, for them to have the courtesy to at least try to justfy Gordon Brown’s decision to cut income tax by 2p and abolish the 10p rate as he did in 2007. To not tackle this is not merely partisan but moral and intellectual cowardice.

Perhaps the most damning aspect of this report is that the simplest way to abide by the authors’ wishes would be to do nothing and not raise personal allowance. Indeed, when it comes to alternative proposals, the best they can come up with is three half-hearted bullet points. For a 32 page report that really just repeats the same basic message again and again, that is a particularly bad show.

In conclusion then, the Lib Dems’ proposed tax package would significantly reduce income inequality, go some way to addressing wealth inequality, would cut the deadweight cost of Labour and would benefit the middle classes as well during an extremely challenging economic period when solidarity between the poor and people on middle-incomes will be crucial. The other major parties, and in particular Labour, have nothing on offer that comes close. I don’t think the smears will get the Fabians and other tribal Labour activists very far but if they want to make this election about the need for fairer tax policies, bring it on.

  1. In fact, just to be clear, with the banking levy, the Lib Dems are going into the election calling for an overall increase in taxes. The general line being put out at conference was that Nick Clegg ‘misspoke’ in his Spectator interview by ruling out Lib Dem support for any further tax rises in future to tackle the deficit, although sadly Clegg himself neither confirmed nor denied this when I pressed him on this in the Q&A. []
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After the Crash: Re-inventing the Left in Britain

Jointly published by Soundings, Social Liberal Forum and Compass, After the Crash is a call to arms for a coalition of ideas and action on the centre left, working together to find common ground for change. It was jointly edited by Richard S. Grayson and Jonathan Rutherford

After the Crash (Final)

The challenges faced by the country in the next few years require those who share a commitment to equality, democracy and sustainability to form a coalition not of parties but of ideas. It has become clear however that a pre-condition for progressive change in Britain is the removal of Gordon Brown from Downing Street.

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Spring Conference News

Inaugural General Meeting
Saturday 13th Early Evening 18.15 – 19.30
The ICC, Hall 6b

The Social Liberal Forum has been up and running for just over a year now.  We always intended to make it a membership-based organisation and that time has come!

At this year’s Lib Dem Spring Conference in Birmingham, we will be holding our first general meeting to agree the organisation’s constitution.  Anyone who is a member of the Liberal Democrats and agrees with our aims and objectives is welcome to attend and have their say.  The proposal from the current executive committee (to be confirmed at the meeting) is to make membership free, at least for people who are happy to receive all their communications online.

We will be publishing the draft constitution on the SLF website in the next day or two and the final document will be amendable at the meeting.  But we don’t just want the general meeting to be about constitutions and standing orders – we also would like a general discussion about where people would like to take the organisation in the future.  Hopefully we will also have some exciting news about our first post-general election project.

Joint fringe with One Society Campaign
Saturday 13th Lunchtime 13.00 – 14.00
Crowne Plaza, Room 8

The One Society Campaign has been launched by the Equality Trust, the think tank established by the authors of the best selling The Spirit Level: Why Equal Societies Almost Always Do Better Richard Wilkinson and Kate Pickett.  We’ve delighted to be co-hosting this event which will also be used to promote A Wealth of Opportunity a new pamphlet published by Demos, also in association with the One Society Campaign, exploring equality through a Liberal Democrat perspective.

As well as speakers from Demos and the Equality Trust, Jo Swinson MP will be speaking and the meeting will be chaired by SLF Director Matthew Sowemimo.

I look forward to seeing you at both events!

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Robin Hood Tax? Beware the men in tights

Robin Hood Tax logoI want to support the new campaign for a “Robin Hood Tax” – really I do. I understand the logic behind the Tobin Tax and have a lot of sympathy for the idea. But there’s something about this campaign… Actually, there are four problems I have with it:

Firstly, the name “Robin Hood Tax”. On LabourList, Sarah Hayward has already suggested that inviting comparisons with your tax and thievery may not exactly be a great idea. But more to the point, it just isn’t accurate. This isn’t a case of robbing from the rich to give to the poor; it is a case of robbing from the banking system – which we, the companies we work for and the pensions we hope will look after us in old age all participate in – and giving to the government. I don’t wish to sound like a swivel-eyed libertarian, but I need to hear a stronger argument for how that would be genuinely redistributive before I sign up. There is certainly an issue surrounding bankers awarding themselves unjustified bonuses, and you might call that a reverse Robin Hood effect, but it is by no means clear how this tax will tackle that.

Secondly, my old sparring partner Andy Mayer makes an interesting point on his Facebook page:

The figure for global banking profits comes from the campaign website itself $788bn and refers to the year 2006, at the height of the boom. Using the same source as the campaign more recently, the 2008/09 profit figure is just near $120… hence this Tobin tax, if implemented, would be akin to a special corporation tax of between 50-350%.

In the last 8 years I there would only be 3 years where the industry could have afforded to pay it from profits. In the last year it would have had to have been taken direct from bail-out funds, a somewhat circular exercise for government.

Now the Robin Hood Tax is not a tax on profits so there is a danger of comparing apples with oranges here, but the simple fact is that a charge has to go somewhere. It either cuts into profits or it gets passed on to the customer. I’m not, I have to confess, entirely clear what would happen precisely – there are lots of variables – but the Robin Hood Tax website doesn’t seem to want to enlighten me. Perhaps the 0.05% level is too high? Perhaps there should be other restrictions? I have an open mind and would like to hear a debate; instead I’m just being asked to add a mask onto my twitter profile pic.

Thirdly, and this is where I really start to get nervous, the Robin Hood Tax is not the same thing as a Tobin Tax. James Tobin’s proposal was intended specifically to attack currency speculation – not to raise revenue. The Robin Hood Tax, according to their own blog is intended to do the exact opposite.

Why does that make me nervous? Well because when it comes to taxes, I’m highly dubious about taxes on economic activity. Economic activity is a good thing: it gives people jobs (and meaning). Markets aren’t perfect and can create all sorts of anti-social problems but it isn’t the economic activity itself which is the problem but, generally, monopolisation and speculation. Taxing all financial transactions equally won’t tackle bad economic activity any more than the good – it’s just another way of screwing money out of the rest of us. What’s worse is that unlike the Tobin Tax, this idea isn’t about discouraging what is arguably a bad economic activity but profiting from it. Speculation just ruined your economy? Dont worry, here’s a sticking plaster courtesy of the Robin Hood Tax.

Let’s introduce taxes that don’t create perverse economic incentives (such as land value taxation) before creating new ones that do.

Fourthly, there is the Richard Curtis factor. Okay, maybe it is a bit harsh to pick on Curtis, who does seem to mean well, but there’s something about his “love, actually” world view that makes my skin crawl. To promote the campaign, he’s made this video starring Bill Nighy:

Like most of Curtis’ films, on a basic level it is harmless enough but as soon as you start thinking about it the more pernicious you realise it is. Ooh, what a nasty greedy banker! Boo to him! This from the man who gave us the all white Notting Hill (which has now become a self-fulfilling prophecy courtesy of David Cameron and his pals).

Okay, maybe that last point isn’t a particularly strong one, but it is this sort of superficial, anti-intellectual marketing that has got the world in the mess it is today. Is the Robin Hood Tax a brilliant idea? Feel free to try convincing me, but spare me your celebrities, your claims that you can get money for nothing and your *gag* guerilla marketing exercises (a protest at 4am? Edgy!).

Further reading:

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