The Proposal

Richard Church: Public services are now more accountable to inspectors than they are to the public they serve. Millions are spent on auditing and inspecting schools, hospitals, police and every aspect of local authority services, and millions more are spent by public services in preparing for and responding to inspections. We live by the star ratings and the sound bites that these inspections produce, and public services live or die by a few distorted words in an inspectors report.

The Lib Dem pledge for health services, police etc to be more accountable to local government or new elected bodies will mean nothing unless we take a hatchet to nationally imposed inspection regimes. There will always be a role for checking that public money is soundly spent and that public entitlements are delevered, but from those basics a centralised and self perpetuating inspection industry has grown. Inspections have become routine, when they should be exceptional, to be used when a problem is perceived.

We need to make the inspection industry responsive to local concerns,it should itself be a service that can be harnessed by a local community to tackle a service that has become unresponsive and is offering poor value.

We should create a single locally based inspection agency, able to respond to public concerns about a service (maybe through a petition, scrutiny or councillor concerns) and able to call on natiional specialist expertise to inspect and report on a service giving cause for concern. It clearly needs to be independent of local government, but with the authority to inspect within and beyond local government. The key though is that it is only empowered to act where a sound and verifiable concern has been raised.

Localism means taking some risks, many services will be far more responsive to local needs, but there will always be some that will fail. Inspections can help a service to improve through comparison and challenge, but it does not need the highly centralised and formulaic regime of inspection we have at present. Think of the money we will save!

Responses

Susan Gaszczak: This is exactly the way I see localism working. Inspections bring services to a stand still and often the results do not capture the reality of a service, as we know locally in Hertfordshire. 3* Adult Care Service but contractors being sacked for not providing care!

Inspections should be handled locally, by people who see the day to day service but are not connected with the service. They should be driven by residents or the results of the specified service. Councillors should be given more powers to be able to scrutinize in much more depth.

By doing this we would save millions in lost man hours, spun reports and loss of service for residents because officers are too tied up reporting to the inspectors. The further area that stems from this is exactly where we need KPI’s and how they should be set.

Chris White: The Audit Commission is, of course, not primarily an inspecting body – that function is very new. Its prime role is that of audit.

I presume that we are not suggesting abolishing the national audit function nor indeed proposing that local authorities can choose their own auditors. Indeed, it could be argued that audit objectivity in the private sector could be improved if companies had their auditors appointed by an external agency.

(Yes: I am an Audit Commissioner so you may wish to dismiss this as special pleading).

The Proposal

Tony Vickers: For many Liberal Democrats, income tax is the most progressive of taxes. Those who earn most, so the argument goes, can afford to pay most (Forgetting that top earners are the top avoiders and evaders!).

‘Land taxers’, including ALTER members, usually dispute this. To us, the definition of ‘fairness’ in taxation can be summed up: “pay for what you take, not what you make” or even “tax wealth, not work”. More technically: “internalise the externalities” (which covers “polluter pays”, “no free lunch” and “reward investment”). What ethical or economic justification is there for giving any of one’s productive earnings to Government, so long as those who pollute or monopolise natural resources, do not pay their dues? As Vince Cable has said: “Ability to pay applies to wealth accumulated as well as to earnings.”

Following the Tax Commission and two lively debates in Conference (2006 and 2007), Party policy on land value taxation (LVT) is as follows:-

• Business rates to be reformed onto a site-value-only basis (Site Value Rating) and largely re-localised, within one Parliament;
• Site Value Rating to be levied on second homes and development permitted housing land, until residential occupation.
• LVT more generally – including on domestic property – “longer term”.

We also have an aspiration to raise the income tax threshold to the level of national minimum wage (NMW) – but no plan for how to do this. Among our wider policy aspirations are increased supply of affordable housing, sustainable land use and massive investment in transport and other public infrastructure – all currently unfunded.

As ALTER’s representative on the Tax Commission, I presented proposals to achieve all this which were never discussed. I was told we could not dilute our “Axe The Tax” message with any suggestion of a domestic property tax. With the Credit Crunch, however, all neo-liberal economic textbooks have become obsolete, so perhaps it is time to refine and re-present these proposals, which now have the full endorsement of Liberal Youth. I suggest 5 simple steps:

1. When scrapping Council Tax and replacing it with a Local Income Tax, retain a national domestic property tax. The easiest way to do this would be to re-introduce ‘Schedule A’ income tax (imputed rent ‘earnings’ on owner-occupied property), hence exempting all who pay rent for their home. An additional personal tax allowance would be given to partially offset the burden on those owning modest homes by local standards – as used to calculate housing rent now. Pensioners would be allowed to defer net payments until death/sale/re-mortgage.
2. Remove the risk of a house price hike following the removal of Council Tax by ensuring yields from a revived Schedule A balance that from Council Tax now (£21bn). The basic rate threshold can then be raised correspondingly, taking millions of low earners out of income tax.
3. While the registers of land ownership and value are being completed, require occupiers (a) to pay property taxes (recoverable by deduction from rent) and (b) to self-assess site values, with local authorities given the power to acquire sites at the owner’s valuation if thought too low.
4. When the first national land valuation is completed, continue a ‘rolling revaluation’ to ensure the tax base remains a fair reflection of the land market and captures the impacts of all infrastructure investments. Convert ‘1’ above to conform with non-domestic site-value rating.
5. Phase out Stamp Duty, Section 106 (Developers Contributions), Inheritance Tax and Capital Gains Tax (on ‘real property’) over time, replacing them with a higher LVT, captured through income tax and corporation tax systems.

Social liberalism is about ensuring a fairer, more equal society. Ever since Liberals were thwarted from taxing land values to achieve such a society 100 years ago, taxing work and productive profits has served only to keep people poor. Such superficially “fair” taxation does not pay for welfare: it creates so much as create what James Robertson calls a ‘dependency culture’. A century on from the “People’s Budget”, a properly progressive Land Value Tax still remains “the change we need”.

Responses

Richard Huzzey: I should probably declare my interest as a member of ALTER and Green Lib Dems. I’m obviously very sympathetic to Tony: a switch to land value tax is exactly the sort of radical overhaul that the Liberal Democrats should be aiming for. Rather than tinkering with the edges of the current tax system, we should be asking what purpose such an unfair, regressive tax system exists for. I think ‘income tax’ has become fetishized by some liberals over the year as a ‘progressive’ tax, and one that is good for its own sake. Yet, as Tony says, it is easily evaded by the very wealthiest, and is based on some bizarre philosophical reasoning.

So, I’d welcome a broader change to taxing wealth accumulation where it disadvantages others, not wealth creation where it does not harm others. The big challenge, of course is finding a practical way to switch Britain to LVT, as the short-term crossover could be painful and disruptive if done badly. It also needs – as Neil Stockley would remind us – a ‘narrative’ to sell to people on the doorstep. So, while I’m sold on the philosophical advantages of LVT, I predict the struggle to convert the Liberal Democrats will pivot on questions of transition and its viability as a doorstep message. I expect ALTER will need to focus on on the problems of transition (as Tony addresses here) and the question of how you’d sell LVT in a Focus leaflet, and offer a simple message for its virtues against the inevitable smears and spin it would suffer.

James Graham: like Richard, I’m also an ALTER member, and I have similar concerns. I suspect that LVT is something that would be a lot simpler to sell in government than in opposition. Somehow we have to find a way to elevate it up the political agenda, and I suspect that will require someone outside of traditional party politics to make it hit the mainstream.

But within the party, the dynamic has to change from a “nice idea but it will never sell” approach to a “how can we make it sell?” one.

The Proposal

Simon Radford:If you have not read Steve Waldman’s ‘The Bill’, I would recommend it.  It follows the life cycle of a campaign promise- Bill Clinton’s pledge for a new domestic Peace corps- through the legislative process to its final implementation and legacy.  The result was ‘Americorps’.

Americorps is something that should intrigue all British liberals.  Even as we have grown more successful as a community-powered party, the viability of our communities has dwindled.  The evidence is everywhere, from the decline of local papers both in quality and quantity to the hollowing-out of the high street by out-of-town shopping behemoths.

Added to this is the ghettoisation of different communities based on income, race and other factors.  The best state schools are overwhelmingly dominated by the middle classes , just as the Grammar schools used to be.  The highest-paid jobs are dominated by those who went to the best universities.  Opportunity, if you are born in many parts of this country, is effectively denied.

Another American book, Robert Puttnam’s seminal ‘Bowling Alone’, chronicled and tabulated the decline of America’s voluntary associations and groups: from bowling teams to political meetings.  We have seen a similar decline in mass membership political parties, trades union and other groups in this country.  At the same time, the main working class employers in manufacturing have given way to smaller, less long-term employment in smaller service companies.  Making cars has turned into flipping burgers.

What these two twin phenomena – the decline of the arena for and willingness to volunteer or associate – have lead to an atomisation of individuals and a shift from a cultural  or class to an economic stratification of British society.

Liberal Democrats have many ideas to combat this drift: from local credit unions, industrial democracy, and decentralisation of taxation, services and political power.  However, what about applying also the Americacorps model to redevelop our city centres while helping people mix and meet people they otherwise would not?

Gap years tend to be confined to those from wealthier backgrounds.  They tend to be with people from the same social background and be based abroad rather than shining light on the hidden poverty in their own country.  So, why not create a Gap Year that is based at least partly in Britain, helps the very poorest in society who participants might otherwise be isolated from and sweetens the deal with some employer sponsorship for work experience to bolster their CVs as well as a small wage?

Teach First has been a real success in getting some of the best graduates into the more challenging schools and, in many cases, persuading them to stay there.  It is not hard to imagine that the skills that a wider volunteering scheme would endow its participants with, would be a very attractive proposition for employers when their course is over, as well as going a small way to introduce Britain to a part of itself that it is all to easy to either mock when Little Britain comes on the TV or worse: forget.

Responses

Richard Huzzey: New ways of encouraging volunteering – probably in partnership with existing community groups and charities – is an excellent idea. A healthy national community requires an expansive civil society. It is of course important for liberals that such work is voluntary, and not compulsory, as an alternative to national service, for example. There is a great new initiative (Student Hubs – http://studenthubs.org/) that is promoting the wide variety of volunteering opportunities for students on campuses. It sounds like this would provide similar opportunities for people to find the right opportunity for their skills and interests.

Would it provide some sort of allowance to people, to pay for them to spend a year volunteering?

The Proposal

Ed Randall: The author of Supercapitalism, Robert Reich, who was Labor Secretary in the Clinton administration, brilliantly explains how the ways in which we behave as consumers and investors have given rise to a monster. The monster is eroding community and civic virtue, undermining citizen involvement in democracy and destroying democratic accountability. Although his analysis is stronger than his prescription for invigorating democracy his book contains the seed of a policy idea that should appeal to Liberal Democrats. It certainly appeals to me.

On page 224 of Supercapitalism, in what reads like a throw-away line, Professor Reich suggests, and this is my paraphrase: a way to redress the imbalance between commercial lobbies – which have run out of control and invaded the space for public policy making and democratic debate – and citizens, who struggle to see the point in taking part in a ‘democratic’ system where parliamentarians and legislators are easy meat for the lobbyists and the PR skills of lobbyists who are overwhelmingly funded by commercial organisations with seemingly bottomless pockets.

The proposal is for what Reich calls a tax credit, I’m calling it a citizen endowment for an active and balanced democracy. The citizen endowment is a small part of the tax that any consumer, worker and/or investor pays each year. In Reich’s proposal it is $1,000 credit. In mine it is £100 – but that represents an opening bid. The endowment would amount – in the first instance – to about double the fee that a British
political party might charge for membership.

The money for citizen endowments would be placed by the tax authorities in a public fund replenished from tax receipts annually. Every citizen, who is registered as a voter, would be able to nominate an organisation to receive up to £100 from the fund each year. Money that was not committed at the end of twelve months would become part of Exchequer receipts available for meeting the costs of public spending programmes. There are likely to be a number of restrictions on the organisations that can be recognised and approved for receipt of the citizen endowment but, in the UK, we have considerable experience of regulating charities and the problems of identifying appropriate recipients of citizens’ endowments are not insuperable. Organisations that qualify would need to show that they were capable of representing citizens and representing their values.

Recipients of citizens’ endowments might, for example, seek to increase the incomes/earnings of the poorest, campaign for the abolition of higher rate tax relief on pension contributions, introduce legislation to reduce tax avoidance, alter the classification of cannabis. The list is almost endless. The citizen endowment could even go to political parties. If use of citizens’ endowments, as a source of funds for political parties, were to be permitted then funding for political parties from corporate donors, trades unions and private individuals would either be prohibited or tightly controlled. After all we believe in one person one vote and we should also be campaigning for one citizen one citizenship endowment/political contribution.

The recipients of citizens’ endowments would have to be not for profit organisations, but the choice of organisation would be for individual citizens. The objective of the citizens endowment is to provide each
citizen with an opportunity to influence the terms of public debate and to increase political engagement when, as Anthony Downs once observed, ignorance, from the perspective of the ordinary voter, is quite rational.

I am convinced that this proposal would introduce a new and powerful democratic dynamic into British politics. It could also help pave the way for controls on money in politics, which did not come from individual citizens, greatly diminishing the undemocratic influence of purely commercial interests.

Responses

Richard Huzzey: I can certainly see the attractions of this for solving the problems of party funding and lobbying. Yet I don’t like the idea of state funding of political parties and I don’t follow whether this would be an addition or replacement to commercial lobbying?

It seems to me that the problem of commercial influence is tied more to their donations to political parties or the shady ‘consultancy’ activities parliamentarians are permitted – as highlighted in the recent Lords-for-hire scandal. I’d have thought that shutting down those avenues was more effective than creating a compulsory charitable endowment, which would throw up questions of its own. Would scientific research charities be excluded if they did not take part in lobbying for government, for example? Is this a £100 poll tax on every individual, or would you cut some other portion of current taxation (in which case, wouldn’t this money be better used reducing class sizes)? I don’t mean to disagree with the corrupting effect of lobbies on the entire political system… I’m just not sure this will address the key issues, as superficially attractive as it is.

As an aside, I’ll have to look at this book as I’d have thought an active consumer identity is similar or identical to active citizenship.

Chris White: Essentially this is state funding for the voluntary and political sector; the fact that it is in the form of a tax credit does not really disguise this.

There is already state funding for both sectors. All this does is give a little influence to the ordinary citizen over where the money might go. It is not clear that most of us would actually bother to nominate (but then it falls to the exchequer so the money is not lost). The rest may care to nominate to the usual bunch of charities and political parties.

There’s the rub: the Charities Commission does indeed have a track record of regulating charities and weeding out the unsuitable. But there is no track record of successfully discriminating between ’sound’ political parties and those that step outside the mainstream consensus. We tend to rely on a fudge: big parties with seats get money (Short money, freepost etc). Small parties without seats get considerably less and in that way the state funding for undesirable parties like the BNP is reduced.

There is a Liberal dilemma here which may become acutely uncomfortable if our collective resources are made so freely available. The public revulsion at the public funding of the far right or the far right could bring the scheme into considerable disrepute (and there are worse parties than the BNP).

There is also a huge practical problem. Revenue and Customs has shown itself particularly inept in dealing with family tax credits. Do we really expect that this amazingly complex scheme would fail to collapse under its own bureaucracy?

James Graham: As someone who, in a work capacity, has been making the case for a similar model of state provision for political parties, I am more sympathetic to this idea than my colleagues above.  I don’t think this necessarily be an overly complex scheme – GiftAid has proven itself to be easy to administer.  You simply cannot compare the relative complexity of this system with the monster that is the tax credit system.

As for worries about funding the far right (and other distasteful organisations), I would have thought that could be covered by insisting that any organisation eligible upheld the the anti-discriminatory principles of a Single Equalities Act (something which we may yet get in 2009).  That won’t stop the Daily Mail from fulminating about lesbian charities getting funding from it, but I can live with that.

Ultimately there remain two problems: the first is that while this may help us develop a more active citizenship, it would not be a panacea.  Parties, charities and other non-profits would still try to get to get as much money out of people for as little effort as possible.  Participation costs (even if the internet is bringing the price down) and there will be plenty of people out there who would rather continue as passive consumers than active citizens.

The second is where I agree with Richard and Chris: how would we sell it to the public?  I don’t think the argument would be unwinnable, but I would want to see more work on it before it became a manifesto commitment.

The Proposal

David Heigham: Our power to decide locally has been centralised, is still drifting to Whitehall, and should go back where it belongs.

Local government exists to enable us, locally, to decide amongst ourselves everything not decided nationally. Everything that can be decided locally should be local.

We, locally, should pay for what we decide locally.

We need to enable broad consent and not alienate groups amongst us. How authorities are elected will condition the way they do their job; no system of election is perfect.

The smaller the ward, the greater the turnout of voters. Small wards and single transferable votes help elect members who the voter can feel is accountable.

Small wards mean small authorities or large Councils. Both are workable. A local authority should be whatever size the people of the area want.

Many large authorities now effectively localise themselves admirably. We need to take this further. We need citizen juries to sit and help elected councillors decide a wide range of very local decisions.

The most local level of decision is that of individuals and households. Transfers of some collective decisions into choices by families and individuals can and should flourish by local choice.

In few public services is there any clear relationship between amount spent and level of service provided. National government should forget about setting these amounts. How the money is spent is much more important, and that is a local matter. The Audit Commission and similar bodies help. National “inspectorates” are much less effective.

National government has no need to control absolutely the total of local spending in any given period, but should be able to influence it more effectively. Clear local government responsibility for collecting in taxes what it proposes to spend could strengthen national economic management.. Formula and general grants from national to local government can and should disappear.

The available and workable local taxes are property tax; and the main rates of income tax on wages, salaries, self-employment and pensions. Together, they are capable of financing local government spending without general grant. Total amounts we pay in tax can remain unchanged.

The same level of local service should mean the same rate of local tax. Taking the lowest generally achievable cost for a good standard of each particular service and relating the totals to population and other indictors of need gives the right way of equalising. Redistributions of tax monies on that basis can and should be left to local authorities. National government’s interest ends when they agree.

A continuous pressure for greater efficiency will develop as lower cost ways of achieving better services are found and proved in the future.

Whitehall control over local indebtedness is fully adequate but ridiculously over-detailed. Authorities could distribute the limit of new indebtedness between themselves. They know what needs spending where. Whitehall does not.

We can expect to take two Parliaments delivering a reform designed to last for generations. The first will work through the reforms and the second apply them locally.

Responses

Richard Huzzey: I am sure that Liberal Democrats will remain committed to devolution in particular and federalism matters. Reviving individuals’ feelings of influence and involvement in their community are vital to participatory democracy. Exactly how this agenda would be pursued in legislation and local government reorganisation is a bigger question!

Of course, there are some obvious challenges thrown forth by devolution. If we practice what we preach, Lib Dems will have to respect the right of Tory or Labour councils to pursue schemes under their devolved powers that we disapprove of. We would also have to have a good explanation of why we support a “postcode lottery”, as local autonomy would come to be seen.

I’d also like to see the old liberal principle of decisions being taken on the lowest possible level extended to the powers of the European Union. It should look for continental approaches to immigration and climate change, and encroach less on national issues.

David Hall-Matthews: I agree absolutely with the principles here. Devolution of responsibility without devolution of finances is worse than nothing. However, there is a danger that local service provision matched solely to consensual local taxation will result in much worse services in poorer and less socially cohesive areas, e.g. inner cities, than elsewhere. To some extent, we may have to accept that the “postcode lottery” is a fair price to pay for reviving most (if not all) local authorities. However, I would therefore go further and say that central government should allocate substantial central resources to local authorities (or at least to those that need it) – without interfering in how they are then spent locally. A large part of the reason for voter apathy in (some) local elections is the perception (however unfair) that councils don’t make much difference to people’s lives. The more responsibility and financial muscle they have – in addition to greater local accountability as David proposes – the more people are likely to engage with them.

James Graham: There is very little I would take issue with here and I strongly endorse David’s call for smaller wards (which means more councillors), although we must recognise that will not be electorally popular. What might be somewhat more popular would be more frequent elections – at the lowest level of government I can see no reason not to have all out elections every two years.

If there is a risk with radical localism it is that some local authorities would be able to completely tear up service provision in a way that would hurt some of the most vulnerable in society, and that some area will be less wealthier than others. The former problem makes me a fan of justiciable social and economic rights entrenched in a constitution. The latter demands some kind of redistributive method and I have yet to come across a better system than some kind of national progressive tax on land values, the revenue of which would be doled out to local authorities on a per capita basis.

The Proposal

James Graham: work with the industry to develop incentives to dramatically switch from supermarket use to home delivery.

A couple of disclaimers to start with: this isn’t an attack on supermarkets. Nor is it a fully fleshed out policy agenda. Ideally it could be achieved with minimal state intervention, but government may be able to play a role in terms of creating incentives to make it easier for industry to adapt.

Home delivery is generally seen as a middle class indulgence. And in its present form, frankly, it is. But a significant shift towards home delivery would have a whole host of positive outcomes:

a) It would reduce the carbon footprint of grocery shopping.

b) It could be combined with waste collection and thus lead to waste reduction: if the industry had to collect food packaging and waste, it would have an incentive to keep it to a minimum; if food went directly from warehouse to home, there would be less need for packaging. Savings could be passed onto consumers in the form of reduced municipal taxation.

c) If business had a profit motive to do so, it could help tackle the digital divide. Just as my mobile phone is subsidised by my phone company who want my monthly payments, so potentially could supermarkets have an incentive to discount home computers to make it easier for people to shop online.

d) Improved quality of life; less slogging around around a supermarket on a Saturday afternoon.

Nonetheless, there are significant barriers to this shift happening by itself. Supermarket chains with existing stores have a short term profit motive in keeping their stores profitable, and thus filling them with customers (in the longer term, a significant shift from shop to home delivery would inevitably lead to shop closures, although these would be replaced by warehouses). Most people will want their goods to arrive at around the same time – weekends and evenings and so there is a problem with scaling up. And then there is the simple habit of people used to a certain way of shopping.

In other areas however, big shifts are happening. The music and video industry has transformed over the past decade from one largely based on the high street to one based online. Amazon now dominates the book industry (the Amazon model is an interesting one: imagine a system where local farmers could use tesco.com to sell their own produce, making a daily delivery to the local Tesco warehouse to fulfill the orders, just as Amazon allows third parties to sell books via its Marketplace). Why shouldn’t we look to make a similar shift in grocery sales? After all, it wasn’t that long ago that people took it for granted that milk and other dairy products were delivered door to door; the local milkman wasn’t abandoned because it was a bad system of distribution but because they couldn’t compete on price.

There will always be a place for buying food in person, but that side of things will always be done better by specialist retailers such as greengrocers and butchers (Who knows? Maybe freeing people from the weekly trudge to an out of town supermarket will encourage them to rediscover their local high street?) What supermarkets do best is distribute food in large quantities. This policy would preserve that while attempting to minimise the more negative aspects of supermarket retail.

Note: this idea came out of a brainstorming session at the Liberal Democrats’ policy conference in January 2009. My thanks to the other members of that group who helped develop the idea.

Responses

Susan Gaszczak: The interesting point here is linking home delivery to waste reduction. Over the last 25 years we have moved from a culture of going to the local shop to shopping in large warehouses, and that in itself has caused the increase in waste. 25 years ago, when shopping, you would go to the greengrocer, butcher and fishmonger and buy the quantity of food you required and it would be wrapped in either a plastic or paper bag.

The situation now is that supermarkets dictate the quantity of food you buy by wrapping it together. If we could persuade supermarkets to move away from standardised sizes and back to the counter model, where you could take your own reusable containers in and buy the quantity you require would in itself reduce waste.

This solution would not reduce the food miles, which are astronomical, but would reduce the amount of packaging. Shopping online is great when you know exactly what you are going to eat and cook, but it does not allow you to try new foods. Many people who do an online shop still find themselves visiting the branch they have ordered from because of the things they have forgotten and this actually increases the number of food miles. If a solution can be found for this then your idea could work.

Richard Huzzey: This is a good aspiration, but I find it hard to see how you would coerce such activities. You could offer a VAT rebate for online shopping – but this would further the problems for small local bricks-and-mortar shops which already struggle against internet competition. I think this may be one of the cases where well-meaning tweaks to the tax system could have unpredictable effects down the line — a frequent problem, as Lib Dems know, with New Labour’s legislative diarrhoea.

One of the biggest problems is supermarket monopoly as a result of lack of market competition in the grocery sector. In this respect, supermarkets’ property portfolios are a huge asset – and one that a shift to land value tax would do much to address. Capitalism acts in the consumer interest when monopolies are restrained and competition is promoted — that’s wealth creation Lib Dems can believe in.

I’m afraid I want to know more about what ‘incentives’ would be. It’s interesting that market advantages in selling some items (books, DVDs) have helped make business like Amazon and Play.com thrive, but buying food is still something we generally prefer to do in person. I don’t plan meals and hence purchase ingredients very far ahead.

Just as I deny that free market lessons from selling bread and milk can be applied to health and education, so I’d beware thinking that the state can always pull levers and change consumer practices with ‘tweaks’ like this! Show me more detail, and maybe I’ll take your idea on a buy-one-get-one-free offer with LVT.

The Proposal

Dr Tim Leunig: Those in social housing should be allowed to require their landlord to sell their home and buy a place of their choice.

Council and housing association tenants get little choice over where they live and are rarely able to move: many are in properties that do not suit their individual needs and preferences.

This can and should change. In a paper published by the Policy Exchange, The Right to Move, I argue that social tenants should have the right to move, the right to require their landlord to sell their current home and use the money to buy a place chosen by the tenant.

The new property would be owned by the landlord, and rented out as before. Tenants would be better off: they would get to live in a house of their choice.

The value of the landlord’s portfolio does not change – only its location. Of course, if a Lambeth tenant moves to Croydon, Lambeth will need to subcontract the maintenance to Croydon, but this is hardly difficult. Landlords could veto properties with disproportionately expensive maintenance – thatched cottages and the like. When the tenant leaves social housing, Lambeth could sell the Croydon property and buy one in Lambeth as necessary.

There are important advantages for society.

First, all tenants would gain a real stake in their house and area. Since they might one day want to move, they have an incentive to look after both, to report little problems before they become big ones, and an incentive to stand up against antisocial behaviour that plagues too many social housing estates.

Second, when social tenants move out of estates they would integrate with those living in other tenures. In addition, as some estate properties are sold on the open market, those estates would become more mixed, leading to better-integrated communities.

Third, social tenants could, for the first time, move easily for job related reasons, both within their own town and further away. This is good for them, but it is also good for society more generally, since it raises tax revenues and cuts benefit spending.

Fourth, poorer families could do what many middle class families do when they have children: move to areas with more space and better schools. Flats in city centres are generally as valuable as houses in the suburbs, allowing many families to move.

The only question is who should pay the costs of moving: selling fees, valuations and legal costs. Given bulk buying, these amount to around £1,000. The gains to society from greater social integration, as well as higher levels of employment, make a case for these to be subsidised to encourage social tenants to move, and we suggest that the state should allow tenants a “free move” once every five years. Those who wish to move more often would have to pay the fees themselves.

The right to move is about freedom, dignity and opportunity. It is about giving the same choices to those who are poor as to those who are middle class. It has the potential to transform the lives of millions of people living in social housing, by allowing them to decide where they live.

Note: This article was originally published on Comment is Free.

Responses

Dr Matthew Sowemimo: Social housing has traditionally been one of the areas where the state has been the least responsive to poorer communities. This proposal has the merit both of providing a practical means to securing more socially mixed communities and extending genuine choice to people who have often simply been ‘allocated housing.’ This proposal is absolutely consistent with Social Liberal Forum’s philosophical approach about how state action has to be refashioned in order to bring about equal life chances.

Susan Gaszczak: Whilst I agree that council and social housing tenants should have the right to move, I think there is a whole section of the community living in privately rented property that require more urgent attention and policy. People living in private rented property are subject to the standard of the landlord. Often you will find families who are classed as living in poverty in properties with inadequate heating, little insulation and a multitude of problems that cost large quantities of money. Sub standard private housing really needs to be tackled as well as giving social housing tenants the right to move.

The Proposal

Thomas Hemsley: As part of a wider effort in strenghtening select committees (through allowing members to be elected by the Commons/Lords themselves) and democratising the second chamber, I feel we should look into having US-style ratifications for government appointees.

These ratifications would not be for ministers, but for members and heads of QUANGOs/NDPBs. So, for example, ratifications would be held for the Director General of the BBC, as well as the Chairman of the Trust and its members, and would be done so by the second chamber’s DCMS committee.

Similarly, the Chairman of the Environment Agency would be ratified by the second chamber’s DEFRA committee. I feel this would increase accountability over the executive and allow the second chamber a key role in scrutinising the Govt.

Responses

Paul Holmes MP: The ratification suggestion is a good idea and on the Children Schools and Families Committee we have established that in future the Head of OFSTED (which is supposedly answerable to Parliament through the Select Committee), will be ratified in this way. This could be extended considerably.

Allowing members to elect Select Committee members and Chairs is not quite so straightforward in a Parliament which is highly distorted due the effects of the first past the post electoral system. A straightforward majority vote under the present structure would certainly see all but Labour and Conservatives largely squeezed out entirely. Until proportional representation changes the dynamics a short term solution would be allowing the relevant Party MPs to cast a secret ballot for ‘their’ share of the Select Committee membership and for their agreed ‘share’ of the Select Committee Chairs. This would not only remove power of patronage from Government Whips but from ‘minority Party’ whips/leadership too!

Dr David Hall Matthews: This is a very good idea. Due process can sound dull, but it is at the heart of the creation of progressive societies. In order to have enabling states, it must be guaranteed that key state functions cannot be captured by interest groups or self-interested parties. Careful, robustly-structured democratic scrutiny is the only way to do this – and a revived, democratised upper house would have a key role in making the UK state structure more progressive.

James Graham: I would actually go further and increase Parliamentary scrutiny of ministerial posts as well, particularly in light of the current government’s recent obsession with so-called “GOATS” (Government Of All the Talents). The US cabinet is subject to scrutiny by Congress, why not here?

The other aspect that should be put under greater scrutiny is the Prime Minister’s power to create, merge and abolish departments. Prime Ministers have become obsessed with this in recent years and it is hard to see how such fundamental changes can be justified without Parliamentary oversight.