Sunday, 24 October 2010

Castaway Clegg's revealing choices

The idea of leaving Nick Clegg on a desert island will doubtless polarise political and public opinion. Warning: this post contains spoilers for those hoping to listen to Radio 4's Desert Island Discs at 11.15am this morning - since the BBC has rather unsportingly provided a media preview.

Most media coverage highlights the deputy PM's wish to stash away some cigarattes, but his choices might also tell us more than he realises about the deputy PM's political project.

Clegg's book choice The Leopard is a fine choice. One hopes that Clegg intends this to show that he understands the underlying motivations of David Cameron's progressive Conservative project, since the novel is a subtle study of the importance to conservatism of having to adapt to progress if it is to secure its foundational goal: that things should change as little as possible.


"If we want things to stay as they are, things will have to change", as Tancredi, the Prince's ambitious young nephew, says in the novel's most famous line.


The Prince, who is instinctively extremely worried about his nephew's embrace of and involvement in Garibaldi's Italian nationalist movement as a threat to aristocratic status, comes to understand that he is in fact far more minded to preserve the privilege and power of the traditional elite than he had realised, and has indeed developed a more effective strategy to do so.

Clegg may have had to u-turn on tuition fees, but perhaps choosing Shakira's Waka Waka keeps him down with the kids. The official World Cup 2010 soundtrack was first released the day after the General Election, and was in the charts through the World Cup after Shakira performed it (along with 'She Wolf' and 'Hips Don't Lie') at the opening ceremony. So it would seem to have provided Clegg's personal soundtrack - his Coalition Anthem, so to speak- for that heady first month of Coalition power last summer.

The lyric is pretty profound stuff too.


The pressure is on
You feel it
But you've got it all
Believe it


An even more personal choice is Prince's The Cross.

Its not quite John Lennon's The Ballad of John and Yoko - "The Way Things are Going/They're Gonna Crucify Me" - but there is clearly a theme there. However, the Prince lyric is more optimistic.

So a closer reading suggests a (slightly messianic) message to worried Liberal Democrats that their leader can turn around their opinion poll ratings.


Black day, stormy night
No love, no hope in sight
Don't cry, he is coming
Don't die without knowing the cross

Ghettos 2 the left of us
Flowers 2 the right
There'll be bread 4 all of us
If we can just bear the cross


The reason he didn't choose Purple Rain instead is that Clegg's credentials as a Prince fan are truly impressive, as he told the Telegraph's Mick Brown in a campaign interview.


“I wasn’t what you’d call a groupie, but I did actually spend a whole year – 1990 I think – in Minneapolis, following him around while on a fellowship at the University of Minnesota. He comes from there. He used to try out new songs in bars and clubs, and I would go wherever I’d heard he he was going to be.

“Once I spent all night drinking in a bar waiting for him before eventually giving up and going home. And of course then I heard he’d turned up at 1 or 2 am and played the best gig anyone had seen.

“I think he’s gone slightly off the boil now. But at his height – and when I was that age – he was very clever, very funky and different. I don’t listen to him much any more. It was my Prince phase.”


Interesting stuff from the political artist formerly known as on the centre-left!

Saturday, 23 October 2010

Will a control orders u-turn complete a triple whammy for the LibDem left?

James Forsyth of the Spectator rightly spots the non-barking dog significance of the loyalty of the LibDem left in not criticising the comprehensive spending review on fairness grounds, quoting a Simon Hughes press release endorsing necessary cuts as being "as fair as possible", which is striking given that on the social housing issue where Hughes sensibly chose to make a stand, he would appear to have been most comprehensively routed.

Forsyth notes that the LibDem leadership is confident it can secure sufficient Parliamentary support to reverse the party's totemic position on university tuition fees (for a moderately modified Browne review package), and has now navigated past the big moment of the spending review - and the perhaps somewhat unavoidable but surely undeniable fact that it is sharply regressive. (For constructive dissent, you need to look beyond Parliament to the Social Liberal Forum's politely assertive statement arguing the case for change from within, honestly acknowledging that the CSR is regressive and that the benefit changes can not easily be said to meet the tests set by the party conference).

And the LibDem liberal-left wing may now face a triple whammy in the next week or so, as another highly symbolic red line may well be crossed.

This is perhaps not ideal timing for the party leadership to be considering a u-turn on another totemic LibDem policy - the scrapping of control orders - which are an important symbol for many in the party of their commitment to civil liberties and human rights.


The LibDem manifesto pledged to "scrap control orders, which can use secret evidence to place people under house arrest" on the grounds that "We believe that the best way to combat terrorism is to prosecute terrorists, not give away hard-won British freedoms."


No date has been publicly given. But the government will shortly receive and publish the Office for Security and Counter Terrorism review on security and anti-terrorism policies. It is difficult to imagine that Nick Clegg does not already know what it will contain. There has already been informed press speculation that the review is set to recommend retaining control orders - in which case the key question will be whether Liberal Democrat ministers will support this. (The Conservatives also pledged to scrap control orders, but have never seemed particularly averse to retaining them).

The most obvious smoke signal that the Coalition are preparing to make the case for control orders is that the Coalition is believed to have already made two new applications for Control Orders since taking office in May.

***

It is very fair to say that Labour's record in power on these issues was often poor, too often giving too little weight and priority to civil liberties when dealing with some genuinely difficult dilemmas in forming counter-terrorism policies. (The LibDems argued this cogently, though if their ministers are now planning a u-turn may give them more sympathy for some of the trade-offs involved). That is acknowledged by Ed Miliband and new shadow Justice Secretary Sadiq Khan, though again this leaves open the issue of how to formulate the content of an effective and liberal new policy.

That case was made by an unusual suspect in an interesting, somewhat surprising piece by Tony McNulty, the ex-Home Office Minister who has a reputation as something of a New Labour 'hard hat' on these issues in Friday's Times (in a piece which would have generated rather more attention were it not for a combination of the CSR and the Times paywall).

The headline Labour got a lot wrong on terror, I admit gives the gist. (full piece (£))


I was Counter-Terrorism Minister in the previous Government. We got a lot right, but we made mistakes. Some policies simply did not protect the public; others failed to strike the right balance between public safety and liberty. An important part of Labour’s renewal in Opposition will be to get its counter-terrorism policy right.

First, Labour should reaffirm its commitment to the Human Rights Act; we will not defeat terrorism by reneging on this law. Upholding human rights may sometimes be terribly inconvenient in the fight against terrorists, but it is the price of democracy ...

Control orders have never been a satisfactory solution for detaining foreign nationals who cannot be deported. They were always a clumsy tool and successive legal judgments have further limited their scope. Although the coalition parties opposed them in Opposition, two control orders have almost certainly been imposed by them already since they gained power.

The current approach of using control orders for the most serious causes is no longer a sensible option. It means constant court challenges and the validity of orders being struck down by judges. The Government could use its derogation powers from Prevention of Terrorism Act 2005 and carry on using control orders in all cases; but that would represent an admission that this country could not protect its citizens without moving away from the European Convention on Human Rights. This would be a propaganda prize for our enemies.

The brave and responsible option — and a big departure from Labour’s position in power — would be to scrap them. This would require, however, real guarantees that the security services and the police have the resources and manpower to keep terror suspects under surveillance.


McNulty also says that, five years on from 2005, that 28 days detention without trial is too long. The government has renewed this for 6 months while conducting its review.


But the past two years in which no one has been detained for more than 14 days give us a new opportunity to rebalance civil liberties and public protection. It’s not soft on terrorism to revert to the 14-day limit for pre-charge detention.


So there would seem to be a pretty good chance of a reversion to 14 day detention powers proceeding by all-party consensus (though the government might propose a limited series of exemptions for 28 days). Shadow Justice Secretary Sadiq Khan personally made a careful and cogent case for Labour supporting the government on this, if they were to present evidence for 14 days being sufficient, at the Fabian fringe meeting on the Sunday of Labour conference, before taking up his current role after this month's shadow cabinet elections.

On control orders, it now seems possible that a Labour party seeking to reconnect with liberalism and liberties may now collide with the Liberal Democrats u-turning on the same road in the opposite direction, a manouvere made more difficult to execute given how vocal the Liberal Democrats have always been on this issue.

Here are two fairly characteristic Chris Huhne press releases, both still helpfully available from www.nickclegg.com


Labour’s discredited control orders must be scrapped says Huhne
(Mon, 18 Jan 2010)

“It is an affront to British justice," said the Liberal Democrat Shadow Home Secretary.

Commenting on today’s High Court ruling that quashed control orders on two terror suspects and opened the way for them to claim compensation, Chris Huhne said:

“Today’s ruling must sound the death knell for Labour’s discredited control orders regime.

“It is an affront to British justice and the freedom people have fought and died for to place people under de facto house arrest without even telling them why.


“It now seems this fiasco is going to cost thousands of pounds of taxpayers’ money.

“Control orders should be scrapped before any more time and money is wasted.”



And a challenge to Tory hypocrisy in claiming to be against control orders but not voting to scrap them.


Tories challenged to end control orders hypocrisy says Huhne
Fri, 26 Feb 2010

Ahead of the debate in the House of Commons on the renewal of the use of control orders for another year, Liberal Democrat Shadow Home Secretary, Chris Huhne has written to the Conservatives to ask them if they will be voting against this renewal in the debate.

Chris Huhne said:

“We should not be the sort of country where ministers put people under house arrest without them even knowing the accusations against them. Control orders are pure Kafka and must end.

“Control orders are a constant reproach to Labour’s liberal credentials. The Conservatives have promised to vote with us against them but have repeatedly bottled out of doing so.

“Their line seems to be ‘Lord, make me liberal but not yet’.”



On control orders, a strong case remains that the Chris Huhne position (if perhaps too stridently absolutist in tone) was quite right in substance, and that this should be viewed as a core test of liberal principles, integrity and the values of British justice and democracy, and in October as well as in April. Moreover, the practical utility of control orders is also in doubt, a point on which Huhne and McNulty appeared to converge.

We can expect that case to be made very strongly by Liberty and other campaigning groups, should both the Tories and LibDems now both change their minds on this issue.

There is an arguable defence of a 'with regrets' position in favour of control orders as a last resort, on the grounds that holding responsibility for issues of security, terrorism and protecting citizens involves genuinely difficult issues in a small number of cases. That used to be Labour's position and the Conservatives are moving towards it.

However, that defence is not easily be open to anybody who has vocally challenged the integrity of anybody who took a different approach to the issue. It is more difficult to see how LibDems can credibly begin to make the case for nuance and complex trade-offs in an imperfect world without at least offering an acknowledgement of their own history of arguing the case solely as one of moral absolutes, to the extent of challenging any opposing view as authoritarian, self-serving and dishonest. (This point was made in a pro-LibDem piece by The Guardian's Julian Glover, in which he argued that criticism of the LibDems joining the government is far too vitriolic, rejecting the very idea that politics must involve compromise, yet noting that this mirroed "how the LibDems never presented themselves as deal-makers. Instead, they presented themselves as tellers of fantastical truths").

Perhaps - for Chris Huhne himself and other LibDems who have argued similarly - control orders will really prove a "red line" which can not be traded off or crossed.

Anybody who sincerely thought what he said was true would have to genuinely call 'No Pasaran' on this one. And perhaps he and his colleagues will. Let's wait and see.

If not, that may well be a further - and perhaps final - proof of the Forsyth thesis that the coalition looks set to remain remarkably robust, whatever cherished policies the LibDems have to ditch to remain within it.

Tuition fees are going, the parties are together on the Osborne economic strategy, nuclear power is (reluctantly) accepted in the coalition agreement, and the party pre-prepared on the ground that losing the AV referendum would not be cause to sulk off and take their ball home.

If control orders in the field of civil liberties are not a red line for the LibDem leadership or their backbench MPs either, the it would seem extremely likely that the Coalition can reach the end of a five-year term without ever finding one.

Would David Cameron have won this week's General Election?

Andrew Grice's column in today's Independent offers the chance (following Stuart White on the CSR) for another thought experiment from a parallel universe.

Grice writes:


Last Thursday was ringed in my diary with the words "general election?" I pencilled it in when the May election resulted in a hung parliament and there seemed every chance that a minority Conservative government would soldier on until David Cameron asked for a proper mandate and a second election.


There is a very interesting discussion of this in the excellent and indispensable 'The British General Election of 2010', the new 'Nuffield' election study, now authored by Dennis Kavanagh and Philip Cowley (of Liverpool and Nottingham!).

As Kavanagh and Cowley write in their 'Five Days in May' chapter:


Post-formation, there was also a claim that the outcome was somehow inevitable, that there was - to use a phrase beloved of Mrs Thatcher - no alternative. Yet there were several alternatives.

Several figures around Cameron - though excluded from the negotiating team and his thinking - certainly favoured another approach. One option was to negotiate only on the basis of a confidence and supply arrangement and to refuse any requests for coalition. Others favoured an even riskier strategy - which was to imitate Harold Wilson's behaviour in 1974 and let the other parties take the lead ...

When negotiations between Labour and the LibDems failed, as they were sure they would, Cameron's authority would have been enhanced. He could then govern as a minority PM, calling and winning another election within a year or two or negotiate an agreement with the LibDems from a position of strength, knowing that Nick Clegg no longer had any alternative home. Ceding the initiative to Labour in this way would have been a high risk strategy, especially for Cameron personally (if Brown and Clegg did manage to patch together a deal, even one that only lasted for six months or so, that could have been the end of the Cameron leadership) and anyway there was no guarantee of winning another quickly held election. In both 1910 and 1974, the last two elections to see two elections in one year, the results barely shifted at the second contest. Moreover, as John Curtice shows [Nuffield appendix], the political geography of the UK has changed in recent years, producing fewer marginal seats so making a victorious second election even less likely.

The LibDems also had choices, though they were not easy ones. ...


They are right. Nobody knows what would have happened.

But that is quite a significant challenge to the conventional wisdom about this scenario.

And the assumption of an easy Tory victory in a second election is often the foundational reason why most Liberal Democrats who are not instinctive enthusiasts for this Coalition (such as Simon Hughes) believe that their party did make the best of a series of difficult options in May 2010. These Liberal Democrats have a very arguable case - but it can not be nearly as open and shut as they think.

The conundrum is this. If the outcome would have been as the LibDems think, why wasn't there much stronger pressure on David Cameron from within his own party to hold out against a Coalition (instead of immediately making that easily his preferred outcome) and so take the prize of single party rule? The primary answer is that this outcome would have been very far from certain. (One alternative hypothesis is that Cameron and his party's interests diverge: that if most Conservatives would prefer a majority government to a Coalition, Cameron would not if the majority is small, because he would substantively prefer to make concessions to Nick Clegg to not have to make them to some on his own backbenches. According to taste, this can be taken as proof of Cameron's centrism, or alternatively as an indicator that Clegg's instincts mean he converges with Cameron on the centre-right, and so is not likely to make red lines of concessions which Cameron can not comfortably make).

In truth, there are many more uncertainties in several directions in any "second General Election of 2010" election scenario. Here are a few of them:

1. The route by which the Conservatives would have established a minority government is not straightforward. Securing a minority government would have required a substantive negotiation with the Liberal Democrats, who would need to be ready to vote 'no confidence' were Gordon Brown to test the confidence of the Commons, before at least abstaining to let the Tories in. It is a plausible hypothesis that the negotiating position of the LibDems vis-a-vis the Conservatives is as strong (or stronger) in policy terms - for example, over the budget and spending review, in particular - with the significant exception of having any enforceable guarantee on futue election timing. (That suggests it might be plausible to note a possible trade-off here between policy influence and party interests).

2. David Miliband would probably be the Labour party leader, since the party would have had to hold a leadership election on the shortest possible timetable. It is probable (though not certain) that Ed Miliband would have contested the leadership, but his chances would have been weakened without a longer campaign. The advantages for David Cameron of seeking a mandate in power have to be weighed against the loss of the brooding Scot Gordon Brown as an opponent, though Labour would have ceded an "experience" argument at the same time. (If David Miliband were leader, there could well be a good party unity case for him having as Shadow Chancellor Ed Balls or Yvette Cooper!).

3. The prevailing assumption is that Cameron would win a "crisis mandate". But there would also have been limits to ramping up this argument. This would have proved at odds with Cameron's "reassurance" strategy which he felt was absolutely crucial to dealing with his party's (unresolved) brand decontamination issues. The electoral challenge, second time around, was not to deepen the conviction of the need for a Tory government among the 36% he had won - and so who were convinced by the Tory and press argument on this in May 2010 - but to persuade a significant number of voters who went LibDem or stuck with Labour in the election we had. So the Prime Minister would have been arguing about an urgent crisis and yet continuing (for electoral reasons) to say he saw no need for frontline service cuts (as he did on the final weekend in May 2010).

Yet David Cameron would face vulnerabilities within his own party and from his right, where the post-May debate has focused on the weaknesses of Cameron's strategy and the uselessness of the Big Society as a public argument. So there would have been a very clear probationary sense of "last chance saloon" over a second election, though he would have used the imminence of a future election to try to manage this, while key the Murdoch and Dacre papers would be caught between instincts to double up cheerleading to win the second time and challenging the leader to shift his advocacy their way.

The Coalition has both reinforced Cameron's centrist public position and largely insulated David Cameron from some very significant party management issues. One political challenge might have particularly been how to maintain a lid on manouvering about what would happen in the event of a second hung Parliament, since any flashpoint which saw these spill out into significant public divisions - potentially reinforcing the "same old Tories" message which Cameron's team think potentially "toxic" - is not clear.

4. The Liberal Democrats would risk being squeezed, as a second election would have been tougher for Nick Clegg after the deflation of Cleggmania, and the dangers of instability of a hung Parliament might well be perceived as being borne out.

It is not easy to see how the LibDems would have fought the second election, perhaps focusing mainly on defending the seats they held. This explains why the Liberal Democrats - as the Nuffield account goes on to set out - appear to have first decided that a coalition with one of the parties was preferable to supply and confidence, before confirming their choice of which party that would be in the circumstances.

The LibDems might also have seen their policy platform raided. David Cameron could have attacked them for irresponsibility and over immigration, while nicking their pupil premium and tax threshold policies so as to appeal to their voters (though he would have become more resolute against electoral reform). A Labour Miliband would have had a similar electoral interest in pursuing some symbolic and practical shifts - especially on political reform, and on civil liberties - to appeal to LibDem votes. The LibDems would have complained bitterly about this, though it is also a route to influence (as, for example, Labour's constitutional reforms from 1997-2001 and the gradual rise of environmental issues show).

Amn attractive option which the LibDems would almost certainly seize would be to appeal more strongly to specific strong voter segments - perhaps especially ramping up the pro-student rhetoric on their clear pledge to reject all tuition fees, being able to exploit here their wilingness to campaign vociferously on a promise which neither of the other parties felt they could ever responsibly match.

5. A broadly similar result to that of May 2010 would have made alternative Coalition options much more viable.

Despite the possibility of a LibDem squeeze, the electorate could easily decide not to have a hung Parliament, if there remained significant doubts about the dangers of giving the Conservatives a clear mandate among voters who did not vote Tory in May 2010. The probability of this outcome tends to be underestimated: the current electoral geography (and incumbency advantages) make any big shift within months very difficult.

I suspect David Cameron could well have had the most seats and votes, but perhaps with a narrower lead over Labour than the 7% he won in May 2010, and no majority in the House of Commons. Politically, it would not have been Gordon Brown who had been rejected, but David Cameron whose call for a mandate had been rebuffed (rather as with Edward Heath in the first 1974 contest). If the Labour and LibDem seats total were higher, there would certainly be most likely to be a Lab-Lib coalition. The stability of any government - minority or Coalition - without a formal majority would be stronger given that a third election would not have been a plausible option.

But let us take one more imaginative leap. If there was an alternative government, the politics would become very difficult as soon as we get out of the exciting topsy-turvy week of coalition discussions this weekend and over the week ahead. Were they successful in negotiating an agreement this time, then the key political challenge for Prime Minister Mr Miliband, his deputy Nick Clegg, Chancellor Ed Balls and Chief Secretary Vince Cable would quickly become how to work out how to make a persuasive public case for different and smaller yet significant cuts in public spending to reduce the budget deficit.

Right fears Coalition is losing the "fairness" argument; public agrees!

59% of people believe the CSR cuts are unfair because they hit the poor hardest, while 36% disagree. This includes 34% of people who voted Tory in May and 59% of those who voted LibDem in May. Only 30% believe the Chancellor's claim that the better off will bear the heaviest burden, while 64% disagree with that.

ComRes polling for Saturday's Independent 36% of voters think the LibDems should pull out of the Coalition because of the scale of the cuts (while 51% think they should stay in). This falls to 26% of LibDem voters at the election, and 27% of Conservative supporters, but is a stronger sentiment among younger voters.

The poll is causing some alarm at ConservativeHome, urgently promoting a backlash against the Institute for Fiscal Studies since Mr Clegg appears badly in need of reinforcements on that front.

So ConHome founder Tim Montgomerie is offering a fightback briefing - with his 20 progressive policy reasons to "forget" the IFS

We do so appreciate ConHome's appreciation of the left-wing blogs - with Next Left, Left Foot Forward and the Staggers singled out for apparently being at our "ruthless best" (most kind) in our "borg-like" propagandist dissemination of (err) thorough, authoritative and politically neutral IFS public policy analysis whose tediously reality-based factualness disrupts such a lovely Cameron-Clegg "narrative" about what they would like to be the case.

Montgomerie (no stranger to ruthless online advocacy) was especially impressed by Clegg's unfortunate claim that it would all look much better if the analysis was about public services, as well as tax and benefits. The Deputy PM couldn't be more wrong about that.

The very purpose of Tim Montgomerie's little list of pro-Coalition talking points is to reinforce and exemplify the Cameron-Clegg call for narrative selectivity. As Clegg said "I would ask people to have a little bit of perspective: if you look at some of the announcements we made yesterday, and add that to some of the announcements we made in the budget, I think the picture is a little bit more balanced than people are saying".

Whereas, if you look at all of the fiscal changes in the budget, and add them to all of the spending changes, you find out that Clegg and Osborne simply overclaimed. Montgomerie's own claim that "a large number of that list of twenty aren't even part of IFS calculations" is over-egging it too. Most of them are.

Still, if Tim Montgomerie wants to provide a list of 20 things that are fairer than fair, and Mr Isaby wants to recommend their borg-like repetition across the right, then it must surely fall to us to find out whether they stand up any better.

So here goes.

***
Do ConservativeHome's 20 claims for Coalition fairness stand up?

1. Benefits Reform and 2. Help into work

As the IFS analysis shows, Many of the changes in the CSR and budget have increased marginal tax rates and incentives to work, contradicting the government's policy area.

In principle, the government's universal credit is a good idea, though everything depends on the details, on which nothing substantial has been released. Several contradictory policy decisions have been announced: this week's IFS analysis show that the government's new council tax benefit changes entirely contradict the universal credit principles, and will make it more difficult for people to understand whether they would be better off working. There is also some policy dissonance with the (botched) child benefit changes: the Prime Minister and DWP Secretary have publicly contradicted each other over whether child benefit will be rolled into universal credit, or not.

3. Less tax for low income workers
- This is in the IFS tax and benefit changes. Indeed, the headline policy of raising the tax threshold to £10,000 contributes significantly to Coalition regressivity.
- As the IFS June budget analysis shows, most of the gains from raising the tax threshold goes to double-income households in the top half of the income distribution. The Spectator suggests the Tories should sell these tax cuts on that basis, by ditching the LibDem pretence that they are focused on the poor. (Investing in the universal credit instead of this headline tax cuts policy would be more progressive).

4. Protection for lower-paid public sector workers
Montgomerie is correct that the 1.7 million lowest paid public sector workers will not face the two year pay freeze which75% of public sector workers face, meaning a real terms pay cut. (However, everybody "protected" is still likely to face a real terms pay cut, albeit mitigated, since the flat rate increase of £250 amounts to 1.25% for somebody on £20,000, or 1.67% for a worker on £15,000, while inflation expectations are over 3%). In addition, public sector workers will also be asked to make higher pension contributions, further reducing their take-home pay.

The government projects that 1 in 10 public sector jobs will be lost during this Parliament, while the CIPD suggesting this 495,000 lost jobs figure is a "best case scenario", so many of those "protected" will also be vulnerable to losing their job.

5. More generous state pension.
- The initial changes are in the IFS tax and benefit changes. George Osborne attacked Labour for being miserly on pensions. That's daft when, because of Labour's sustained redistribution, pensioners are at a lower risk of poverty than other adults for the first time in British history. Osborne complained about the rising welfare bill, conjuring up images of unpopular benefits (unemployment benefit) which fell, and ignoring the fact that these were largely increases for pensioners and families with children.

6. Continuation of winter fuel allowance
- This is reflected in the IFS tax and benefit analysis.

- It also forms part of the rising welfare bill which Osborne attacked. The decision to protect pensioner benefits is unpopular on the right, but reflects David Cameron's election pledges under pressure. Both the IFS and TUC analyses shows that these choices explain why childless pensioner couples do much better in the spending review cuts than families with children or the disabled, who lose out heavily.

7. Protection of NHS spending
- This is reflected in the TUC Fabian/Landman spending analysis. The IFS points out that the marginal real terms increase will not keep pace with demographic pressures, even before the costs of the major NHS reorganisation come out of the same budget.


The IFS said the NHS was getting a real terms increase of 0.1% but referred to a piece of work they had done with the King's Fund which called for the NHS to get a 1% rise if it is to keep pace with an ageing population and the rising cost of drugs – the coalition's stated aim.


8. Taxes on the wealthier
- These are included in the IFS tax and benefit analysis.
- The Conservative Party has pledged to reverse these by the end of the Parliament, though doing so would lose the one 'progressive' claim which stands up: that, by keeping Alastair Darling's tax proposals at the top, the top 2% are contributing more (while the distribution across over 90% of the income spectrum is regressive). ConservativeHome wants the higher rate on earnings over £150k reversed, to help the "striving classes" in the 'squeezed middle'!

9. Schools budget protected against inflation
- The better than average schools settlement is reflected the TUC Fabian/Landman spending analysis.
- However, the IFS analysis shows that the real terms spending per pupil will fall, contradicting the government's claim to the contrary, because the 0.1% real terms increase is smaller than the increase in the number of students, and because funding for new academies comes out of the same resources.

10. Better schools for all.
- The Coalition's new academies are considerably less focused on disadvantage than current/Labour academies, which means that any comparative shift in resources to these schools will work against the pupil premium, rather than reinforcing it.
- The evidence from Sweden suggests free schools failed to improve standards, and that the policy there increased social segregation.
- The Department of Education is privately projecting the loss of 40,000 teaching jobs.

11. More pre-school education
- This is a good policy. However, the TUC has been almost alone in highlighting the very sharp CSR reductions in support for childcare through tax credits, with cuts of up to £30 a week for some working families on modest incomes: this is one of the less noticed and tougher benefit cuts, and among the changes to have negative work incentives.

12. Pupil premium
"As part of a £7bn package schools will receive additional funds to offer targeted help to every pupil eligible for Free School Meals"
- The IFS analysis suggests this is not true. As Martin Kettle noted, the promise of "additional funds" (from outside the DFES budget) appears to have disappeared since Friday.


A week ago, Nick Clegg made a speech previewing the progressive content of the spending review and highlighting the pupil premium's importance in an enhanced schools budget. The briefing about the speech was quite explicit: I have it in my notebook. This was new money, over and above the budget for existing programmes. It had been placed in the review because ministers knew they needed to show real progressive grit and put a genuine Lib Dem stamp on what would inevitably be a grim general contraction. Now, as a result of the IFS analysis, that claim appears to have been false.



13. 75,000 more apprenticeships
- A good policy, continuing and building on policy of previous government, though this will cost only one quarter of the £1 billion cut from adult training. The CSR committment to creating 75,000 apprenticeships in four years includes the 50,000 announced earlier in the year, while the Conservatives promised 100,000 at the election. Business groups are among those concerned this welcome move is not enough to counter the impact of public sector job losses.

14. Higher earning graduates to pay more
- The detail to be announced; it will also involve most graduates paying more than at present, and the proposal to have no fee cap at all is likely to be challenged both within and outside the Coalition on "fairness" grounds.

15. Controlled immigration
- Contentious. The means of implementing a temporary cap (ahead of a longer-term arrangement) have been criticised by the Business Secretary and the CBI for being clumsy and potentially economically damaging.

16.Freezing council tax and licence fee
- The Council Tax freeze is voluntary but incentivised. This may seem a slightly strange policy for a government committed to localism. Council budgets are being cut very heavily. These moves may help household budgets, though there are several other areas (increased bus and rail costs; increased childcare costs) which will increase household costs.

17. Big society bank: new funding for innovative community groups.
- The proposal to use dormant bank accounts builds on the policy if the last government. Whether and how far this involves real new money remains to be seen. Funding for community groups is be cut very sharply overall. ACEVO predicts the £470m of new funding will be dwarfed by up to £4.7 billion in lost income.

19. World leader in global poverty
- Yes, the government should be congratulated here. The commitment to excepting the 0.7% aid target from austerity cuts shows just how much the Labour governments from 1997-2010 transformed the cross-party political debate on development aid. It would be too soon to say that the political or public argument has been won. Tim Montgomerie's readers hate this policy.

20. Better aid targetting
- The detail remains to be seen. Development charities are concerned that too great a shift towards post-conflict nations may see DFID lose its core global poverty focus.

***

Of course, what the right too easily forgets is that the distributional fairness test is not (only) a preoccupation of leftist pointy-heads.

The main reason it has such headline prominence is that this is the central "progressive austerity" promise made by Cameron, Clegg and Osborne themselves.

The regressive graphs had less impact the day after the Thatcher-Lawson 1988 budget - because that government had been quite open about its "let our people grow tall" promotion of inequality, publicly rejecting the idea that any real poverty still existed in Britain.

Friday, 22 October 2010

Revealed: How CSR cuts will hit the poorest 15 times harder than the rich

Deputy Prime Minister Nick Clegg has laid down the challenge in the Guardian this morning. The deputy Prime Minister insists that any fair assessment of the CSR should not just look at tax and benefit changes, but look too at the changes on spending to the services people 'live by'. He said:


"It goes back to a culture of how you measure fairness that took root under Gordon Brown's time, where fairness was seen through one prism and one prism only which was the tax and benefits system. It is a complete nonsense to apply that measure, which is a slightly desiccated Treasury measure. People do not live only on the basis of the benefits they receive. They also depend on public services, such as childcare and social care. All of those things have been airbrushed out of the picture by the IFS."


Mr Clegg is not always wise in picking fights with the Institute for Fiscal Studies.

But let any such airbrushing end at once.

Let us immediately take up the deputy Prime Minister's challenge.

What happens if you undertake the fullest possible survey of the distributional impact of public spending changes - on the services that "people live by", as Clegg rightly says?

Is what the deputy PM thinks true? Are the spending changes much more progressive than the government's tax and benefit changes? Unfortunately for those hoping the government would be able to act on its "progressive austerity" commitments, he could not be more wrong about that.

A full analysis of the spending changes shows these are very sharply regressive. (Indeed, the specific changes which the government has announced have proved more regressive than was anticipated by allocating the overall scale of cuts equally to non-ringfenced departments).

The new post-CSR data is published by the TUC today. (The data can be downloaded here).

It shows that the poorest ten per cent of households will be hit 15 times harder than the richest ten per cent as a result of service cuts announced in the comprehensive spending review. The research been undertaken by Howard Reed of Landman Economics, experts in economic modelling, and Tim Horton, research director of the Fabian Society, to offer a post-CSR supplementary analysis of their 'Where the money goes' (PDF) report published by the TUC last month.

Using official figures to calculate how different groups benefit from different public services, the Reed and Horton analysis shows that the poorest ten per cent of households, with incomes below £10,200, will suffer reductions in spending on services equivalent to 29.5 per cent of their annual income on average, or £1,913 a year.

The second poorest group of households, with incomes between £10,200 and £12,900, will be hit hardest in cash terms – losing services worth £2,164 a year – and the TUC analysis confirms that the higher up the income scale people are, the less they lose from the cuts. The richest ten per cent will lose services worth just two per cent of their net income, the equivalent of £1,506 a year.

The analysis examines the impact of the CSR on different types of family and finds that lone parents will be hit the hardest, losing services worth 18.4 per cent of their income on average (£3,121 a year). Single pensioners are next, losing services worth 11.1 per cent of their income on average (£1,305 a year).

The analysis uses the same spending model behind the TUC report Where The Money Goes published last month on the eve of TUC Congress. This found that on average households benefit from £21,000 worth of services a year, and that those on low or modest incomes gain more than the better-off.

Where The Money Goes predicted that cuts of 25 per cent by 2012-13 (while ringfencing health expenditure and partially protecting education) would mean that the poorest ten per cent of households would lose around 20 per cent of their income.

But today’s analysis, using data from the CSR, shows that overall cuts to public spending (excluding benefits and tax credits) of £48 billion (in today’s prices) by 2014-15 will be even more regressive, partly because of deep cuts to services which are disproportionately used by the poorest households – such as social housing and social care.

The analysis examines the impact of the cuts on four typical families:

* A family with two school age children on modest earnings will suffer service cuts equivalent to 13.2 per cent of their income, or £2,631 a year.

* An affluent family with children at university will suffer service cuts equivalent to 19.4 per cent of their income, or £3,889 a year.

* A working lone parent with two children will suffer service cuts equivalent to 15.7 per cent of their income, or £3,132 a year.

* A pensioner couple will suffer service cuts equivalent to 16.2 per cent of their income, or £2,226 a year.

The Treasury's own distributional analysis of the CSR also shows that the spending changes are regressive. However, the Treasury analysis has chosen to model only about half of public spending - omitting home affairs, policing and most areas which are public goods like defence or environmental protection - while the TUC analysis seeks to model all the impact of all of the spending cuts in the CSR. The TUC reports finds that the smaller Treasury sample considerably underestimates the regressivity of the CSR by comparison with the model which seeks to count all of the spending.

To coincide with these findings, the TUC is launching a new ‘cuts calculator’, which allows people to work out how much they are likely to lose from the spending review. (The online cuts calculator).

"Distorted nonsense"? How we are taking up Clegg's CSR challenge

The Nick Clegg versus the IFS rematch begins with the Deputy Prime Minister showing his characteristic enormous confidence and chutzpah in this now traditional fixture, now telling The Guardian the economic think-tank's analysis of the CSR is "distorted nonsense".


"I think you have to call a spade a spade. We just fundamentally disagree with the IFS. It goes back to a culture of how you measure fairness that took root under Gordon Brown's time, where fairness was seen through one prism and one prism only which was the tax and benefits system. It is a complete nonsense to apply that measure, which is a slightly desiccated Treasury measure. People do not live only on the basis of the benefits they receive. They also depend on public services, such as childcare and social care. All of those things have been airbrushed out of the picture by the IFS."


What a spade! Clearly, Nick Clegg thinks the distributional analysis of the government's spending cuts is much more progressive than that of its regressive tax and benefit changes.

Well, it's a hypothesis, I guess. And the Deputy PM ought to know what he is talking about, having said that this issue of fairness was "literally the question I have been asking myself every single day of this very difficult process". Clegg shows a lot of fighting spirit for a man four-nil down to the IFS before half-time. Will this interview mark an audaciously brilliant comeback - or prove his most spectacular own-goal yet?

Since Clegg has thrown down the gauntlet so publicly, the quality of public policy debate depends on somebody being willing to pick it up.

Now that the relevant information is public, we shall be able to provide him with a comprehensive answer to that today. Howard Reed and Tim Horton will be providing a post-CSR update to their TUC report. This new analysis of the CSR will assess precisely what Clegg tells The Guardian he is most interested in - the distribution of spending and spending cuts, and what they tell us about the progressive/regressive balance of his CSR as a whole.

So fingers' crossed, Nick.

It is true that the IFS analysis of the "regressive" budget in June was about tax and benefits - and so did not assess the spending cuts which make up three-quarters of the government's deficit reduction plan.

But the IFS did include public services and spending cuts analysis in their post-CSR presentation yesterday, finding the cuts to be regressive too.

It is important that the Treasury responded to calls from us and others to make its first (acknowledged to be tentative) attempt to do this in its CSR document. As the IFS said yesterday, the Treasury's own modelling and numbers do suggest that the impact of spending cuts is regressive, as we set out on Left Foot Forward on Wednesday night (despite one very silly Treasury graph trying to stand the data on its head, finding a way to claim that similar cuts in services with a cash value of £520 hit households on £48,000 harder than those on £19,000). While there are a range of methodological challenges and debates in this relatively new area, it is important to try to account for the full range of public spending and to include all of the changes wherever possible.

The Treasury distributional analysis omits 50% of public spending - including policing and home affairs, for example. It also, bizarrely, still leaves out one-third of the government's benefit cuts, on the pretext that these are hard to model even though the IFS has shown how to do it, and modelled them for the Treasury. (The IFS point out that it is rather harder to model the pupil premium, which the government did include).

More later ...

Thursday, 21 October 2010

Nick Clegg v the IFS: the rematch

Conventional wisdom has it that George Osborne's emergency budget in June was regressive, what with that being what the graphs and IFS analysis showed and everything.

But not so fast. This blog was one of the few outlets to give time and space to Nick Clegg's creative dissent - in which he pointed out that the IFS in June had completely failed to include any future decisions which the government had not made yet.

Fast forward a few months and Clegg should be pleased to see that the economic pointy-heads have finally raised their game.

Today's IFS report does at last contains a detailed analysis of Wednesday's Comprehensive Spending Review decisions, after these were so strangely omitted from its June study.

Clegg somehow seems far from gruntled, as The Guardian's Andrew Sparrow blogged on the Cameron-Clegg post-CSR conference this afternoon.


Clegg also said that the question of fairness was "literally the question I have been asking myself every single day of this very difficult process we have been going through".

"I honestly would not have advocated this if I didn't feel that, notwithstanding all the difficulties, we tried to do this as fairly as possible. Of course I understand people are very, very fearful, and fear is a very powerful emotion and it kind of sweeps everything else aside. But I would ask people to have a little bit of perspective: if you look at some of the announcements we made yesterday, and add that to some of the announcements we made in the budget, I think the picture is a little bit more balanced than people are saying".


Hell, we can do better than that. If you look at all of the announcements the government made yesterday, and add them to all of the announcements in the budget, then you've kind of got the IFS methodology for getting a whole lot of perspective on the balance of the governments overall policy programme.

Still, Clegg's plea for selectivity tells us something too.

As Stephanie Flanders blogs, what the IFS want to know is why the Treasury keeps leaving out from its budget and CSR analysis a third of the benefit cuts which hit the poor hardest, when the IFS has already done the modelling work for the Treasury.

Doh!

Haven't you seen what that does to the graphs, silly?

They think its all over. But somebody should tell Nick Clegg that Spurs were four-nil down at half-time yesterday in Italy - and they kept trying.

Since its got a bit one-sided in Whitehall too, Next Left has one helpful suggestion to help level the playing field. Mightn't Downing Street - on the Know Your Enemy principle - see if Mr Robert Chote, now of the independent Office of Budget Responsibility but having been IFS head honcho during the budget - might now be persuaded to spend a lunch-hour or two giving the odd tutorial and especially helping the Deputy Prime Minister road-test any some more wheezes he has for creative rebuttal.

If Mr Chote were to get wind of this plan then you might spot him wondering the Treasury corridors muttering "it's not fair".

Yet, were Nick to put that dream-team together, perhaps it could be after all.

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