Political Reform May Be Dull But Its Vital For a Fair,Successful Society

Political Reform May Be Dull But Its Vital For a Fair,Successful Society 

In this post I’d like to say something about why political reform matters and some ideas to take it forward. By political reform I mean changes to our system of politics in the UK with the aim to improve democracy, accountability, and transparency.

I take as a given that we need to reform the House of Lords, that eventually we should be a republic not a monarchy and that our voting system needs to be transformed to a system such as Single Transferable Voting. These are all big issues and one day perhaps I’ll return to them, but for now I wanted to delve into more detail on some other aspects of the political system we have and why it needs reforming. For now, let me leave this picture as to why the voting system needs to be reformed.

 

Political System Chat Is Boring Geekdom Isn’t It? Why Does It Matter?

Regular readers will know that I consider it essential for any liberal society that is fair, just and successful for citizens to feel that they are all equal, that we are indeed ‘all in it together’, and that they can execute their life plan as an equal member of society with the resources and dignity they need to do so. I set out the reasoning for that in a previous blog here, and here but most especially here.

So, when we look at our political system, we need to make sure that it engenders these feelings- that in theory and practice it looks and feels like it is fair, that it treats all citizens equally, and that the rules for one are the rules for all, and that equality of treatment is real in practice, taking account of the differing resources that citizens have.

Put more bluntly, we want our system of voting, of representative democracy, of access to power and decisions, and of campaign contribution and lobbying, to follow clear rules. We want and need to make sure, crudely, that money can’t buy laws, access to politicians or deliver unwarranted special treatment. We need to make sure that the system isn’t seen as a closed club, an old boys network of patronage and privilege and favours for favours. We need to make sure that it doesn’t feel like this picture:

 

I think for too many, both in actuality and in appearance, we are not meeting these principles. And it matters because for the reasons I have blogged on before, citizens can become cynical, disheartened and susceptible to populists and blame-seekers if the economic and political system taken together don’t look or feel fair.

So, how do we fare against those tests of clear rules, equal access, transparency, removing money from politics and opening up the system of power? In the UK, not so well, is my argument, and so I want to set out ideas to improve things. Normally at this point I’d give unsuspecting readers a blizzard of links to show why money saturates politics, why the system is unfair etc. but I’m going to assume you believe me on that and want to know what possible answers exist.

 

Ok If I Accept We Need Reform, What Do You Propose?

Taking a chance and assuming you agree with me on the need for reform, let me list some areas to zone in on and what i think needs to be done.

 

(1) Political Parties, Voting,Funding and Access to Power 

 

We do, rather later in the day, have detailed rules and regulation about political parties and our system of voting and funding. The Electoral Commission, amazingly only established less than 20 years ago, is the main regulator and enforcer of the rules, and its website also provides useful information to aid transparency.

But the Electoral Commission can only enforce the rules it is given so what else do we need? Firstly, it is unacceptable that rich men and women can still give enormous donations to political parties and be allowed to do so. We clearly need to legislate to limit individual and organisational donations to a maximum limit each year- I would argue that £10,000 per annum is more than adequate. If you think as a rich person your human rights are being impacted by not being able to massively fund political parties, then the answer is no, we are removing a concern that you are buying access, and unfairly impacting on the freedoms and dignity of others.

As it happens the Committee on Standards in Public Life agrees with me- see this for more and for a general update on funding. We need to exempt union donations that are made via affiliation fees where members have consciously agreed to donate. If anything, we need to consider further how to allow smaller citizen focussed donations.

We have a system of declaring donations that works reasonably well, but we need to tighten that up as well to remove the loophole where local donations via ‘members associations’ that are basically of one political party, can donate £7500 to a local campaign without declaring it. All donations above £1500, made by an individual or organisation, to any local or national campaign, need to be declared.

If you worry that that creates too much bureaucracy, my rather blunt answer is so what? This is an area where public trust is low, and better to err on the side of caution.

A rather better objection to limiting donations is that parties will be starved of finance. This matters because we want our political parties to flourish and to have the capacity to develop proper political ideas and policies, without having to rely on rich donors, vested interest think tanks, and secondments from well-off companies hoping to influence an up and coming party or politician. We already have a system where political parties receive some money depending on how many elected representatives they get, but we need to go further and give out public funding as well dependent on the number of votes. I’d argue strongly that it is in all of our interests to both remove big money from politics, but also to ensure our political parties have proper advice, and capacity to develop sensible ideas. Again the Committee on Standards in Public Life proposed this. I’d go further and, copying an idea from Vernon Bogdanor, offer public funding on number of votes received and donations made,but on a matching basis i.e. £1 of public money for every £1 of donations received, plus a matching sum dependent on number of votes received and number of representatives elected. This will of course disadvantage the Conservative Party- but I am pretty sure that the donations made to it unduly influence policies towards those with money and power and vested interest, and away from public good and equal concern for all citizens, so I’m not worried.

 

(2) Access to Power, The Behaviour of Elected Representatives and Lobbying Reform

“Reform parliament? It’s more than my second job’s worth!”

In my day job I sign a clause both requiring me to seek permission for outside work, and to ensure that whatever I do does not put at risk the organisation I work for, or the aims of my job. The expectation is that some (many? most?) requests would be declined, as I have a day job to do and a set of requirements and expectations for me to uphold.

Sadly, this basic common sense does not apply to our elected representatives, who not only can receive all kinds of ‘hospitality’ and ‘support’ from lobbyists, but who also can even be paid by the same people. Again, I am tempted to, but won’t list all the areas of activity where people have clearly failed in their duty to their representatives, but let me just list ‘cash for questions’, ‘cash for honours’ and ‘cash for influence’ and ‘cash for Lords influence’ scandals .

People who donated getting honours. People who donated paying for parliamentary questions. People who donated apparently getting new laws amended or added. It matters not one jot if on fact no one was breaking the rules or even if no one was acting unethically or against the public interest or their solemn elected duty. It looks awful, it sounds awful, it stinks and it has to stop.

We need a new rule that says, if you are are an elected member of parliament or a member of the House of Lords (which of course should be elected) then you simply cannot take a salary from someone else. If that means you don’t take your seat, or go for election then so be it. I am not sympathetic to the argument that says by excluding those who can’t live on £100,000 a year or so then we are thinning the fabric of democracy. Sorry, we have too much influence from rich people already, not too little. If you want to serve and you’re rich, I trust you to find a way.

We have one of the largest lobbying industries in the world, and whilst lobbying can be valuable, it is clearly another area where we need new rules and a greater transparency and sense of fair access. Again, it is vanishingly unlikely that all those lobbyists are there to ensure that the weakest in society, the poorest and those lacking in opportunity get their fair share, so I am not at all concerned if we introduce onerous new requirements.

For a start, the 2014 Lobbying Act clearly needs adjustment. Whilst we do need to regulate political campaigns from NGOs and other charities, we do NOT want one of the few active voices for social and environmental justice silenced, so we need to look at that again. Secondly the Act only sets up a register for full time lobbying companies for hire, and not for corporate lobbyists working of big companies. This is clearly a nonsense and a huge loophole which we need to fill- all lobbyists should be covered and we can work out the exact rules and ask the regulator to figure out a proportionate response.

Speaking of the regulator, the current one for lobbyists is, as I understand it, that the Register is kept by the Registrar of Consultant Lobbyists (the “Registrar”) (currently, Alison White) and the Office of the Registrar of Consultant Lobbyists (the “ORCL”) is sponsored by the UK Cabinet Office. never heard of them? No, me either.

Yet another aspect of disastrous behaviour which corrodes public faith is the so-called revolving door which operates between lobbyists, former ministers, special advisers, senior civil servants and corporations. Many former senior people and ministers go on to advise companies or join lobbyists. Sometimes they don’t even wait to step down before taking up positions. But even if they do wait, how can we be sure that they didn’t create policy to suit the people they might be joining? How can we accept at face value that our senior civil servants and ministers are working in our name when weeks after leaving office some major corporation offers to pay them large sums for their ‘knowledge’, ‘experience’ or ‘access to contacts’. How can we know that these ex-ministers and civil servants won’t use their contacts inappropriately to influence policy in a way you or I can’t?

Now, dont get me wrong. I think most senior people and elected representatives are honourable and do need to earn a living after serving their time. But again, this is all about appearances and whether the system is stacked in favour of, or against ordinary citizens. Have you heard of the body that regulates the appointments that former senior civil servants or ministers are allowed? No, neither had I

It seems clear to me that we need two more things to make our system fair, and obviously fair:

  • a ban on senior civil servants, agents of the crown or ministers and special advisers taking a paid role with a company, lobbyist or other party working in the areas that were previously their area of responsibility, within a defined period after leaving. I’d suggest at least 5 years, but perhaps it should be 10. If that is considered too strict, I think its worth it, and is explicitly an attempt to change the otherwise overly incestuous rules of the game
  • we need a need regulator here- too often it is poorly funded, obscure and timid bodies that we have never heard of dealing with these matters. Too often Sir-Something-Something is the regulator being asked whether Lady Something-Something or SirSomethingSomething has broken and whether we should feel let down or jolly cross. That’s not good enough- the evidence seems clear to me that the regulators in their area are almost always part of the same circle of well off, white and privileged people that they seek to regulate, with the same assumptions about what is reasonable, what is fair, and what is acceptable, but which are far from what ordinary citizens might feel. I’d like to see a real regulator appointed, maybe we might have some fun if an ex-benefits inspector with a harsh eye, or an investigative journalist was appointed!

I would personally bring together into one ‘House of Parliament and Civil Service Ethics Office’ the rules about appointments and revolving doors, about access, about reporting who is meeting what, about a statutory register of lobbyists, about hospitality, about declarations of conflicts of interest, about paid appointments, about a host of ethical rules about second homes and so. By my count that would sweep up the Registrar of Consultant Lobbyists, the Advisory Committee on Business Appointments, IPSA , the Parliamentary Commissioner for Standards, and the equivalent bodies in the House of Lords. No doubt a similar case can be made for the devolved legislatures.

Finally we need better and tighter rules around the relationship between lobbyists and law makers. If I told you that passes which give access to the heart of parliament are given to researchers of parliamentarians, you’d think nothing of it. But if I then said that those same passes are passed on to actual lobbyists, that they can access places and people you and I can’t, that are supposed to be reserved for parliamentary workers, you might change your mind. We need all lobbyists’ meetings and entrance to/from parliament to be logged and recorded. We need to ensure that lobbyists cannot be the paid researchers of parliamentarians. We need to end the practice of parliamentarians accepting paid hotel rooms, paid trips for ‘fact finding’ and paid for expenses, whilst allowing for modest entertaining and hospitality. Again, if politicians need to travel to learn more, we can create a modest ‘travel fund’ paid for from public funds, and administered by the new ethics office.

 

Conclusion 

 

I wouldn’t want readers to get me wrong- I don’t think our political system is rife with corruption and overt bribery, though it is perhaps more common than some might believe. What I think is common is an inappropriate blurring of the lines, a lack of transparency and rigour when it comes to who has access to power, and what the role of money and networks are in decision making and policy. We need stronger rules, we need stronger regulation, we need to cut away the parts of the system that invite cynicism and we need it to be seen to be whiter than white. Fortunately this is one area where action would bring results, and at minimal cost and maximum public gain.

 

 

 

 

Steering Us Towards More Inclusive Growth…

Steering Us Towards More Inclusive Growth…

This week I want to say something about the idea of inclusive growth. I want to particularly draw on the excellent work of the RSA’s Inclusive Growth Commission  in doing so, but then go further.

Like many , I’ve always found the idea of endless economic growth to be problematic. As we know, economic activity takes place within a broader social system, which also is nested within a still broader natural system. I’ll leave the problems created for the environment by economic growth for another day. But clearly, within the system we have, a lack of economic growth can be a source of human misery because of the resulting impacts on incomes, jobs and overall consumption, government revenue and so on. This video from the Bank of England explains this quite nicely.

The problem though is that there has been a tendency to assume that economic growth is all we need for delivery of broader human goods, such as job security, empowerment, human health and wellbeing, and equality and reduction in poverty.

However modern Britain (not just Britain of course) tells us that strong economic growth can exist alongside rising inequality, poor health, low job security, discrimination, rising income disparities, poor skills, and a host of other societal ills.

So, as I wrote in an earlier blog on pay ratios, we need a package of measures for fairer work and more inclusive growth and I’d like to explore some of those ideas here.

Why Have We Arrived Here? 

So why have we arrived at a situation where we can have a strongly growing economy  but without some or all of the anticipated benefits of economic growth? Firstly, it’s worth saying that this isn’t exactly new- Fred Hirsch was writing about some of the problems with economic growth in the 1970s and many more have since.

Very simply put, I believe that as the political consensus began to accept the market and liberal economics as the best means to secure the advancement of social aims, we have ended up taking too shallow a view. We haven’t discriminated as well as we should have. We have tended to accept growth as a good thing, and then sought to redistribute the fruits of growth afterwards without looking at the quality of that growth and the problems it creates in achieving the growth. Often, and in addition, we’ve not made a very good case as to why economic growth matters, and we’ve taken too glib a view of issues of empowerment and identity that are clearly important to people, often suggesting they are holding back liberal trade and are relics of a time gone by. Arguably, this leads us to conditions ripe to be exploited by populists and even potentially underpins things such as Brexit. If people read and hear about how well the economy is doing, but can’t relate that to their own lives, it surely breeds a toxic mixture of cynicism, despair, disillusionment and anger.

I tried to show in my post on societal risks however that it is incumbent on governments to actively think through and manage the risks that its citizens face. Or, going back to first principles, that we need to look at the basic structures of society to ensure they are set up in a way that supports empowerment, dignity, the individual life plans that people make, and that sense that we are truly ‘all in it together’. Again from an earlier post:

‘Equality matters because ultimately, people need dignity and respect, they need the ability to execute their life plan, they need a sense of fairness in all of the rules and institutions and processes of society.’

Before I get down to details, I want to make it clear that I’m not talking about a ‘bolt-on’ to normal patterns of growth. Whilst it is good, for example,  to see a commitment from the Scottish Government to inclusive growth, I think there is a tendency for that commitment to be a series of additional costs added onto normal business as usual, and I think we need to go deeper than that.

 

The RSA and Inclusive Growth

As I mentioned at the start, the RSA’s Inclusive Growth Commission, which reported recently, has been examining these issues. The Commission’s job was to examine how inclusive growth could be achieved.   It sets out the challenges for the UK (with an admittedly English focus for solutions) very well, including the wide range of disparities in life chances, incomes, economic activity and skills across the regions, the worsening problem of in-work poverty, and the low spend on work programmes and skills that the UK makes compared to its competitors.

This diagram from the report illustrates the problem of in-work poverty:

The report itself is short and punchy and well worth a read, but it’s this key diagram that both informed and summarises a great deal of my own thinking:

 

In particular, the right hand side of the diagram is worth showing more clearly:

This sort of thinking ties in very well with a raft of traditional liberal policies and I’d like to comment on the ideas the RSA has put forward, before adding a few of my own.

Social Infrastructure Not exactly new thinking in many parts of Europe, but relatively new in the UK. It should be obvious that ‘pure’ economic growth policies are unbalanced if they ignore the needs of citizens. Chadwick and many more in the 19th century knew that. It should be obvious we need to support the human resources that make up the economy, ensure that working people have proper access to childcare, to mental health services and to the right mix of education, training and skills. But often we have assumed the market will provide, without making sure that everyone is included and without recognising that the more we spend on these preventative and facilitating services, the more our economy is likely to flourish. We have rushed into expanding University provision without always thinking through whether University is always the best option. We have shamefully neglected mental health provision, and acted like we mostly think community groups, activism and local pride are irrelevant to local economic dynamism. We too often act as if the loss of community ‘anchors’ such as post offices, pubs, small businesses and community halls is a necessary price of market or public service efficiency when they are clearly the bedrock of ensuring a truly local economy can function.

Thinking About Places and Decentralising Power It should be obvious but a central plan from London or Edinburgh doesn’t cut it today, if it ever did. We are too monochromatic and too centralised, and we lack resilience in our economic systems, our banking, our food provision and our retail offerings. We need to unleash the power of local people, of regional strengths, of previously disempowered and disillusioned people- the RSA is surely right to call for a fundamental reset in central-regional relationships. As the RSA rightly says we need minimum national standards but we must have local flexibility to decide on the best way to deliver those standards- no more massive, complex central plans for local democracy, for local economic functions or for pubic services reform. or at the very least, only when absolutely needed and not just because a new government or a new minister is in charge.

Just Being Smarter Too often the economic and the social policy communities don’t talk to each other. Too often social policy is seen as a cost, and economic policy as a wealth creator, when the reality is they both can be both. Too often grandiose regeneration plans don’t really involve local people, or aren’t tailored to local and regional distinctiveness or need. Too often infrastructure spend is just about large pieces of ‘kit’ with not enough recognition of the possibilities of procuring differently, of kick-starting self-sustaining changes during construction, or of supporting particular disadvantage groups through cleverer use of public (and private) funds. Too often Universities and colleges are not asked to take a more active local role, as large employers, providers of knowledge and skills and as potential community anchors of innovation and solidity in a changing world.

Measuring the Right Set of Things The RSA rightly calls for a much fuller basket of measures to understand and assess economic growth. Again this is not exactly  new (does anyone remember the 1999 sustainable development indicators?? ) but it is great to see- and I’ve reproduced the RSA’s proposed indicators below.

 

I agree with the RSA that a properly balanced picture of inclusive growth needs to understand much more than just GVA– it needs to try and understand the quality of jobs being created, the skills and training being attained by citizens, the patterns of income and any worrying disparities being created, and measures such as the strength and resilience of local communities, civic groups and local activists.

Finally, its great to see the RSA calling for a much more diverse, local and distinctive approach to banking. The UK is hugely reliant on a small number of large banks- it shouldn’t be, doesn’t have to be, and wasn’t always. Many successful countries, including in Europe, and the US, have much more diversified and locally and regionally focussed financial institutions. I agree with the RSA that diversity and greater decentralisation of the banking system is a key component of a more inclusive agenda. And of course with Blockchain...

 

What Else Might We Need? 

I think the RSA Commission has done a great job of setting out a chunky set of recommendations for people to consider. It is a report full of ideas, and I’ve certainly not mentioned all of them (for example the report also calls for a move away from the push to get more and more people to University, to a more discriminating approach that gives equal value to vocational education).

But I still don’t think the RSA’s work is the final word. So well else would I argue for? As usual dear reader, my words outrun your patience so let me be mercifully brief.

Firstly, I think we need to continue the path we are now on to increase the living wage, to ensure that work really does pay. We’ve made a start but we need to do much more. And as I argued before, I think there is a good case to go further and examine a Basic Income.

Secondly, we need to take action to cap pay and to set up a body to monitor it and report

Thirdly, we need another look at the opportunities for greater fairness in the tax system, to make sure that the tax system is fair, and is transparently so. Here I’d mention the ideas of the late Tony Atkinson, and ideas floated  in 2013 by the IFS

Fourthly I’d mention the new structure for companies that many are exploring- from social finance and community development companies, through to interesting ideas on the very nature of companies themselves- see here and here and here for example.

Fifthly, I’d mention the worker and community empowerment agenda- from including workers on company boards, to establishing greater incentives for people to establish cooperatives or mutual structures. These are not new ideas- Lloyd George’s Liberals were calling for such solutions in the 1920s and many other reformers have led the way, going back a long way , though I’d argue if anything since the 1990s the UK has gone backwards here. Sadly, we’ve never seriously gotten to grips with the ideas of Jo Grimond writing in the 1950s and 1960s. 

 

So, there it is- we need a broader, deeper and more thoughtful approach to economic growth. We do need more spending on public services, but we also need a more discriminating approach. In my view, only then can our economic system deliver what it should- freedom and opportunity for everyone. Thanks for reading.