I Agree with Tim: Why we need a New Consensus

Tim Farron’s speech to the Social Liberal Forum

On Saturday 19th July, Tim Farron gave the third annual William Beveridge Memorial Lecture at the Social Liberal Forum conference in London. The title of his lecture was “building a new consensus” and it was a direct challenge to the Thatcherite consensus of the last 35 years. I agree with Tim that the contemporary political consensus has failed and that we need a new one.

 

The Failure of the Thatcherite Consensus

The Thatcherite consensus and its mixture of free markets, deregulation, and small state economics is something that both the Conservatives and Labour have supported for two decades. The light touch regulation of the banking industry by both Tory and New Labour politicians was one of the main reasons that led to the financial crisis in 2008. The burst of the unsustainable housing bubble and the bank bailouts showed that the Thatcherite consensus was a failure.

Since 2008, Thatcherism has gone from strength to strength; harsh cuts have been enacted on the welfare state, the market continues to encroach on public services, a new housing bubble is inflating, and the wealthy are still not taxed enough. What should have died off six years ago or perhaps 30 years ago is back. The centre-right believes that they have won the big economic argument and for too long the centre-left have let them think they have won the argument. This old broken consensus needs to be challenged by a new progressive consensus inspired by William Beveridge.

 

The Plight of the Poor and the Young

Nowhere is the failure of the Thatcherite consensus more evident, then in the looming social crisis that faces this country in regard to the situation of the poor and the young. One of Beveridge’s giant evils was want. There can be no greater want than the ability to be able to feed yourself and yet, there are now almost one million people using food banks run by the Trussell Trust alone. It is terrible that in the seventh richest country on Earth some people can still not afford to feed themselves. Many of the reasons why people use food banks are related to welfare reforms and benefit delays. The social security rug that was laid down by Beveridge in the 1940s is gradually being pulled from beneath the feet of those who most need it.

Youth unemployment is still a big issue facing Britain. There are still almost 1,000,000 young people out of work. Workers in their 20s and 30s are also having to struggle by with little job security, student debts, and no wage increases. Central to Beveridge’s philosophy was the belief in tackling unemployment through state intervention and economic stimulus. Today the state seems unwilling to provide a social framework through which secure, well paid jobs could be created.

For many years very few politicians have sought to reach out to the young and the poor, this has led to many of them being effectively disenfranchised from the political system as they are unwilling to vote and feel unenthusiastic for the results of democracy. Politicians need to reach out to these groups and have policies that will engage and encourage people to participate in our democracy once again.

 

The Role of Global Corporations

During the SLF Conference, Mark Blackburn asked a question to Tim Farron regarding “corporatism.” It is important to recognise the role that globalisation has played in the Thatcherite consensus. Many aspects of globalisation are very positive, Britain has benefited immensely from global technological innovation and multiculturalism. However, some aspects of economic globalisation can be more negative. Some corporations are wealthier than nation states, and where wealth leads, power will surely follow. In 2009, according to the World Bank, corporations like Royal Dutch Shell and Wal-Mart had a bigger GDP than EU countries like Belgium, Sweden and Austria. Global corporations exert immense pressure on nation states to have favourable tax policies and labour laws. There needs to be global cooperation to ensure that companies pay their taxes, and that those companies that do not pay their workers a fair wage, or that ruin the environment are held to account.

 

A new consensus for Beveridge Liberals

Social liberals such as Beveridge and Keynes helped to create the post-war consensus. Once again, social liberals need to be the architects of a new progressive consensus to replace the Thatcherite consensus. This new Beveridge consensus must give everyone, young or old, rich or poor, man or woman, north or south, an equal stake in society.

It can no longer be acceptable to allow masses of younger and poorer voters to be effectively excluded from having a political voice. It also cannot be acceptable to base an economy on many people being paid low wages and many more struggling with low standards of living. Furthermore government needs to be actively preparing for the future; whether this is ensuring that enough houses are built or whether ensuring that the NHS is fully equipped for the health conditions of the 21st century.

The greatest achievement of social liberalism was the welfare state. A new Beveridge liberal consensus must protect and enhance Beveridge’s achievement. People must have enough social security to live free of poverty and unemployment. Finally the state must remain vigilant of global threats whether they come in the form of climate change or unaccountable corporations.

 

The Democratic Fight for the Future

As Tim Farron alluded to in his speech, a new consensus will have to be fought for. This democratic fight, must engage people with a social liberal vision for the future to replace the Thatcherite consensus and the broken ideas of the right. The Liberal Democrats must lead this democratic fight and they can only do it by sticking to their historic roots as a centre-left, social liberal, active party. The vested interests of Thatcherism in both the Tories and Labour are well dug in, but a radical social liberal agenda can help to displace them at the ballot box. Britain needs vision, Britain needs hope, and Britain needs a new Beveridge Liberal consensus.

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Our behaviour has to reflect our values – reflections on Nick Clegg’s speech

This post first appeared on Lib Dem Voice 

 

One thing about Nick Clegg, rather like those inflatable Humpty Dumpties some of us had as kids – thump him and he bounces right back. Monday seems to be one such occasion. An upbeat, earnest speech, designed, it seemed to most commentators, to speak to the party as much, if not more, than to the country.

For the Social Liberal Forum, the immediate reaction to his commitment on increased infrastructure spending was, while welcoming it, to wonder why on earth he and Danny had railed against it to the extent of picking a fight with the party about it until now? But, Damascene conversions, however belated, are to be welcomed. Let’s hope this is the first of many.

I was interested in Stephen Tall’s analysis that despite not saying it Nick was still firmly trying to “anchor us in the centre ground.” I am sure he is right, although of course I do not accept that this is a position we have always and must always, hold. It’s not often I find myself agreeing with Tony Blair, but his comment on the Today programme recently that one of our problems was having produced 3 manifestos to the left of Labour we now found ourselves to the right of them. So, while Nick and co have been relentlessly trying to position us in this mythical ‘colourless mush’ centrist position, it is certainly not one many of us would accept.

On the plus side, as well as the commitments on infrastructure spending and being prepared to look at tax rises rather than welfare cuts to balance the books, I welcomed Nick’s acknowledgement when questioned that we have left young people wondering if we are there for them or not. It is heartbreaking for those of us who until 2010 proudly asserted the truth that we were the most young people friendly party, to see so many young people turning away from us. With the caveat that of course we do still allegedly have a democratic process to approve our manifesto, I welcome his commitment to putting education at the heart of it.

On the minus side I find myself (again unusually) agreeing with some of Isabel Hardman’s analysis in the Spectator. She observes:

I’ve yet to hear a politician who says ‘actually, I don’t really believe in people’ or ‘wouldn’t it be great if we were honest that being unfair is fun?’ Yet Clegg is setting up a divide with the other parties that is essentially ‘as Lib Dems we care about people, and the rest of you don’t.

This highlights for me one of our key issues in restoring the party – our values, messaging and behaviour have to add up. Just as it is too simplistic to claim no other party cares about people, it is also a bit of a hostage to fortune when we have been seen to approve of apparently vindictive legislation like the bedroom tax and unfair welfare and legal aid cuts.

Isabel Hardman’s conclusion that his speech may not do much to reassure those in his party who fear he doesn’t have a strong definition of Liberalism, is fair. I for one would have liked to see more reference to those values expressed in our constitution and more about what we would actually do differently to demonstrate that we genuinely care about everyone. That kind of reminds me of the ubiquitous Anglican prayer for world peace – so broad as to be in danger of becoming meaningless.

Whether he has done enough to re-endear himself to his critics in the party, or more importantly, the public – remains to be seen.

Linda Jack is a member of the SLF Council.

* Linda Jack is Chair of Liberal Left

 

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Long term gains from short term arguments

This post first appeared on Liberal Democrat Voice

Most participants in the post-election debate have concentrated on specific changes they want now: the Leader, his advisers, the communications team, the detail of policy issues etc.  I firmly believe that the underlying issues are systemic rather than one-off and that we should use the opportunity to establish structures for the future which minimise the likelihood of problems arising and improve our capacity as a democratic Party for dealing with them.

Some key targets:

  1. Agreement by the Party in advance on the elements which underpin construction of a coalition agreement: what are the elements to build into any future agreement about separate identity, resolving policy differences (or not), when and how to go beyond an agreement, responding to immediate challenges (e.g. in foreign policy)?  The fixed term Parliament was an example.  The time of negotiation, when a potential partner is eager for government, is the time to write on these conditions.
  2. The President: her/his role as “principal spokesperson of the Party” has been sidelined.  The next Presidential election creates an opportunity to spell out that responsibility and to get any and all candidates to sign up to an explicit job description, including the President’s role on behalf of the Party in negotiations, during coalition, and in relations with the Leader.  The job is not a stepping-stone to the Leadership; nor is it a role for representing the Leadership to the Party rather than the other way round; nor is it about being any sort of figurehead or symbol.  The President has the position and the power and should have the authority to speak the Party’s truth to the Party’s leadership.
  3. The supine nature of the current FE is scandalous.  It has a central position in the Party (NOT just one particular role in relation to organisation matters, but across the Board).  Its key role is governance (in the context of the Constitution, which is both federal and has some separation of powers).  Its responsibility, often through the President, who should be its creature, is to ensure that the whole structure comes together, problems and tensions are resolved and the Party’s staff carry out the Party’s will.
  4. Something that happens to all parties in elected assemblies (parliaments; councils, etc) is that the short-term agenda and timetable of those bodies takes over the party’s policy priorities.  All parties in government become even more obsessed with short-term policy choices as formulated by departments of state.  It’s inevitable and necessary; but it means that a strong party needs strong, independent machinery, outside assembly members and government, to build its own ideas, directions and policies.
  5. There is the belief, nurtured by the broadcast and print media, that a political party has “bosses” and that theLeader is the boss of bosses, the “capo de tutti capi”.  It’s the Leader’s responsibility to respond immediately to any challenge to the party by “ordering” an enquiry or a set of actions, regardless of whether the Leader has the power, the responsibility or even the knowledge.  Disagreement is reported as treason; argument is a “rift” or a “challenge”.  Any attempt at open debate is judged by which side a Leader is on.  What egregious nonsense!  In fact, Liberal and Liberal Democrat Leaders have managed to hold out better than most against this corrupting influence, but it’s hard when the principles and dynamics have not been thought through and accepted in advance.  The answer is not simply to have a different Leader – it is to ensure that any Leader is constrained, checked and balanced in an open, democratic, vibrant party.
  6. Over the next five years, the party will have to re-establish its long-term activist base – where will we find those people, what is needed to give them the long-term motivation that underpins long-term commitment, what are we asking them to do – certainly not just doing what they are told by a cadre of campaign technicians?
  7. The community politics idea is not just about using technical skills to get elected and then faithfully representing their views, prejudices and fears, while dealing with casework.  It is about helping people in their communities to take and use power.  That means engaging with them from the base of our own beliefs and philosophy and therefore a commitment to a revived political discourse at every level, but crucially based on starting from where people are and moving on from that.
  8. A Party which is strong and sure in its core beliefs and the policies which give them effect can rightly be confident that its leaders will articulate those beliefs.  Increasingly, we have substituted specific policies for basic beliefs in our debates.  Where are the fora in which those ideas are formulated, rehearsed, articulated and developed so that all members understand and are comfortable with their creed?
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Statement following SLF AGM

Yesterday the SLF AGM was held in Reading. Despite reports to the contrary no emergency motions were submitted and no resolutions passed. The claim in Andrew Rawnsley’s piece in the Observer today stating that the SLF are planning to call for a special conference is wrong. This is not and has never been the case.

 

 

 

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Letter published in The Times, 29/05/2014

There’s no escaping just how strongly the electorate has rejected our party’s offer in the European and local elections, with a few welcome exceptions. Such heavy losses can’t be attributed just to no longer being a party of opposition, even if governing as a junior member of a coalition means supporting policies many of us disagree with. Nor is it just down to the Lib Dems being an isolated voice in taking on UKIP’s dangerous populism. So it’s right that the party seriously re-examines its strategy, how we deliver it, and what we will be offering to the electorate at the General Election in 2015 – and it is right that this debate should include who leads the party. As a democratic party, the membership will hold the key to this re-examination, and we acknowledge that views differ on how to approach these issues within the party – as they do within the SLF.

But resolving this debate and reviving the party matters because the electorate risks losing the only voice capable of representing values of freedom, community and social justice as a national political force. British politics deserves an effective liberal presence, especially in the face of rising populism at home and in Europe. Social liberals cannot stand by and see this voice fade.   So the SLF will lead the discussions that rightly follow, to ensure the Lib Dems present a mix of policies in our manifesto that chime with the values voters expect from a liberal party – and that we have a leadership in place that people listen to.

Social Liberal Forum

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Action on welfare and food poverty

Work to write the crucial Liberal Democrat pre-manifesto will be stepping up as we move into summer.  Social Liberal Forum campaigns on welfare and food poverty illustrate the need for that document to look forwards as well as back; to solve problems left by Conservatives’ espousal of regressive policies.

As we move into the final week of the local and European election campaign, we will continue to work to ensure the strongest possible policy platform to stand Liberal Democrats in the best stead in 2015.

To do that we welcome the views of our supporters on policies for the 2015 manifesto and especially your feedback at our AGM and Conference.

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Independent, 14/05/14: Nick Clegg under pressure from Lib Dem activists to water down Coalition’s welfare reforms

The Social Liberal Forum (SLF), the biggest left of centre pressure group inside the party, is pressing Mr Clegg and other Lib Dem ministers to make changes after a wholesale review of the Coalition’s approach to welfare.

“The so-called ‘bedroom tax’ should certainly be reviewed, and the evidence I have seen supports radical reform if not outright abolition” said Gareth Epps, [SLF co-chair]

Kelly-Marie Blundell, the Lib Dems’ prospective parliamentary candidate in Guildford, said: “There is absolutely no excuse, no reason for people to go hungry, especially not in a First World country.”

Read the full story here

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Faith Leaders Speak Out on Food Poverty Campaign Led By SLF

The Social Liberal Forum, which backed the motion on Food Poverty passed unanimously at Liberal Democrat Spring Conference earlier this year, applauds and welcomes further pressure by End Hunger Fast and faith leaders on this issue which so gravely concerns all of us.

Faith groups are well-represented among those working on the front line in offering support to those in need.  It is clear that support traditionally offered by the welfare safety net is failing far too many and it is incumbent upon government to investigate and take action now.   Others have already gathered evidence.

Once again, we add our voices to those who are rightly calling for an immediate review of policies that may be causing hardship, for a system of emergency aid for foodbanks and  a package of measures to offer support those for whom the welfare safety net is failing as well as the implementation of a Living Wage. Liberal Democrats unanimously at their Conference  last month supported these measures and today sees a significant step in the call for the Coalition Government to take action.

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Towards a sensible welfare system

This post was originally published at Liberal Democrat Voice.

Where is the development of Lib Dem welfare policy? It’s hard to see any. Even the recent living standards policy paper (pdf) said “we do not believe that this paper is the appropriate place to determine a Liberal Democrat approach to welfare reform. [...] this is an area that needs further debate within the Party.”

We all want a society in which technology, employment, education, high pay, low inequality, progressive taxation and cheap homes reduce the need for means-tested benefits, but this long-term goal must not prevent the party battling for a sensible and supportive welfare system. That Universal Credit is expected to cover 30% of households should show how important it is to get right.

Aside from the question of how generous or stingy benefits should be, there are many design problems that need to be tackled.

Bring Council Tax Support (CTS) within Universal Credit

The government localised Council Tax Benefit (CTB) and cut its budget by 10%, deciding not to merge it with the 6 other means-tested benefits in Universal Credit (UC). This year, 2.34 million low-income families will pay an average of £149 more in council tax than they would have under CTB.

UC is designed to limit marginal rates and clarify how much better off you’d be from additional earnings: the government will (above an allowance) claw back 65p for every £1 you earn. CTS undermines these goals by adding complexity and local differences and by further reducing work incentives. In some areas, CTS withdraws 30% of extra income, after the 65% UC withdrawal and after taxes. A select committee report (pdf) warnedrecently that with CTS and current benefits, some “stand to lose 97p for every extra £1 earned”.

This affects Lib Dem income tax cuts too. Under the new system a £100 tax cut would, for poorer families, lead to a £65 UC cut and up to a £10.50 CTS cut – leaving less than a quarter of what was intended.

CTS’s exclusion from UC was in large part about making savings faster than could have been done with UC. The poor decision was apparently a victory for DCLG over DWP, and the IFS concluded (pdf) that “It is difficult to think of reasons why the government’s original plan to integrate CTB into Universal Credit was inferior to what is now being proposed.”

Relink Local Housing Allowance to current local housing costs

Many changes have been made to the Local Housing Allowance (LHA), which determines housing benefit (and UC) in the private rented sector. This previously increased in line with local rents. The government has changed this so that each area’s LHA will now rise with CPI inflation. This is a cost saving measure, given that rents will generally rise faster than CPI.

Whether or not such cuts are welcome, there is an absurdity here. It would make sense to have a uniform, national housing allowance (or indeed to do away with earmarked housing benefits). It would also make sense (as used to be the case) to link local allowances to current local rents. But what the new rule means is that in 2032, LHA will vary across the country based on the distribution of rents in 2012. This needs changing as soon as possible, as it will get ever harder to fix as the distribution of rates drifts ever further from reality. Average LHA spending could still be limited to match CPI, but changes in each area’s LHA would once again be proportional to changes in rents.

Other changes

The Lib Dems should also look at increasing (rather than continuing to cut) the UC disregards or ‘work allowances’, which are analogous to the income tax Personal Allowance. This could counteract the 65% withdrawal of Lib Dem tax cuts from poorer households. And as party policy suggests, we should look at introducing a separate disregard for second earners. Ensuring UC rolls out successfully should of course be a fundamental goal.

Finally, we should scrap the well-intentioned but ineffectual bedroom tax, as well as the new budgetary ‘welfare cap’ and the £26,000 benefits cap – both of which are political gimmicks that break the link between needs and support. The latter cap limits the total amount any family can claim in benefits. But if the argument is that there should be a limit to how many children one can claim for, that should be fixed through the child benefit or child tax credit system. If the argument is that benefits shouldn’t pay for people to live in inner London, then the housing benefit system needs changing. The benefits cap is therefore at best a blunt and confused solution to the symptoms of other design flaws. And if the argument is that families should be better off in work than out, we should exclude from the cap those benefits that are available both in and out of work, which is in fact most of them.

The Lib Dems can be proud of Universal Credit as a structure – if it works: building a far simpler benefit system with reductions in poverty (when considered in isolation) and improved work incentives (complementing higher tax allowances and childcare help). And there are legitimate debates about the balance between cash transfers and public services. But in the party’s desire to paint Labour as economically incompetent, it must not favour tough-sounding gimmicks and welfare austerity when what we need are intelligent improvements and fair support.

* Adam Corlett is an economics researcher at CentreForum, the liberal think tank, and vice-chair of the Liberal Democrats for Drug Policy Reform.

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Budget 2014: where are the Liberal Democrat priorities?

Much of this year’s Budget comes as little surprise. With a tight fiscal background and given George Osborne’s penchant for playing to the gallery, so much is predictable. Ditto the widely-trailed coalition announcements on the income tax threshold (where Nick Clegg has been desperate to stop the Tories claiming credit for the policy they opposed in 2010) and childcare.

But where – again – are the unequivocally Liberal policies? Extending childcare for those in receipt of Universal Credit is absolutely the right thing to do: but when money is so tight, why the perk for the very wealthy who can afford it – and why not reforms to address the shortage of supply that would create jobs as well as helping those who need it most?

In coalition we have learned, however uncomfortably, to accommodate Tory posturing that is not progressive, damaging, or simply wrong. Again we have evidence: a dogmatic and damaging freeze on welfare, and an extension of the ISA savings limit that is mercifully the extent of the sops to the wealthy.  Posturing, too, on a beer duty freeze that will give nothing to the consumer nor to the publican, but will simply be swallowed up by the big breweries and Osborne’s mates in the pubcos.

The clearest sense of Lib Dem priorities, though, came with the obvious influence of Steve Webb, who’s work at DWP has reformed pensions; it was striking that this was where many of the surprises were.  The party will need to get behind this and claim it as the Lib Dem success it is. Much the same goes for Vince Cable successfully securing a much higher tax-free investment allowance of £500,000 for businesses – we have to show voters this is our win.

As for the rest,it is same old, same old.  Resting on laurels on employment; little to tackle low pay in a meaningful way; and nothing of the promised incentives for housebuilding.  The opportunities for Liberal Democrats to set out our priorities couldn’t be clearer

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