Thursday, 14 October 2010

The Browne Report - where to go from here

Dear Nick,
I believe that tertiary education should be available to everyone in the UK, rich or poor, especially poor, who can benefit from it.
But I have never supported scrapping tuition fees. That would involve using State taxation powers to compel the lower-paid, who are less likely to have benefited from tertiary education, to subsidise the higher-paid who are more likely. I don’t think John Stuart Mill would have approved.
People with degrees get paid more. It is only fair that a person who gets the benefit and is able without hardship to contribute to the cost, should do so.
In view of the huge expansion in tertiary education, I believe scrapping tuition fees is unaffordable. It was unaffordable before the banking crisis. It is even less affordable now that the country is burdened with a huge deficit caused by bailing out the banks.
That is my personal view but current Lib Dem policy, made democratically by vote at Conference, is otherwise. Scrapping tuition fees is party policy.
It is, however, not a fundamental value. Policies can change, values don’t.
So what’s to be done?
I have looked at the Browne Report, which is readily available for download by anyone with internet access. It states that allowing students to defer payment of fees is critical to takeup.
The Browne recommendations allow for this by making nothing payable by students for fees. Nothing is repayable unless they graduate and begin to earn a good income. If anything is repayable, it is related to their ability to pay.
That seems fair to me.
The Browne Report states that making funds available for maintenance by deferred loans is also critical to takeup.
That seems fair to me too. It is better than a grant system based on family income because it frees students from family circumstances.
The Browne recommendations propose the same provision for part-time students for the first time.
That seems fair to me as well. Currently they have to pay up front, which is a hardship.
The Browne Report states that the percentage of young people in tertiary education in the UK has risen from 6% in 1960 to 45% today. This is a huge number of people. The cost has rocketed. I don’t see how free tertiary education can be paid for.
People who want to learn, who want that qualification, will welcome the opportunity offered by the Browne proposals.
In May’s General Election the party campaigned on a policy of scrapping tuition fees but the party did not win a majority. It got only 57 seats. The policy is still party policy, but we cannot implement it.
So where do we go from here?
The fact that some MPs have promised on the record – whether in writing or not does not matter - to support scrapping tuition fees puts them in a dilemma. The promise cannot be unmade. But to vote that way would be futile in the sense that whether they do or not, scrapping tuition fees is not going to happen. The arithmetic of democracy has made sure of that.
I am not convinced that the obligation to keep their personal promises entitles them to give right-wing Tories a precedent for rebelling in future over other issues which may be even more important.
The arithmetic of democracy has given the MPs power but it rules them too.

Wednesday, 14 July 2010

First CGT, now VAT, what next?

The Lib Dems are holding an awayday tomorrow on the coalition, which I can't go to because of my day job. As possibly the Federal Policy Committee's longest-serving member, I call on them to come up with a solution on how to handle our coalition partners (at Westminster level but certainly not at mine!) when they try to depart from the coalition agreement. A solution means stopping them from doing it. For me, it is hard enough to accept that we helped the Tories into Downing Street and are helping keep them there. I can accept it on the basis that each side did a deal whereby a mix of policies derived from each side would become the new programme, and that the coalition agreement sets out that deal. And an Englishman's word is his bond, or at any rate the best of them's is. But almost as soon as the ink was dry on the coalition agreement, the coalition started departing from it. I can understand this if a new unforeseen circumstance ("Events, dear boy, events") forces a new policy response. But what was new in the scenario affecting capital gains tax? We are told that the 28% CGT rate for non-business gains is the optimum rate because if any higher, the government would lose revenue. What is the new evidence for this and where is it from? I am sceptical whether there is any. I question whether that claim is more than, in reality, an excuse, no a pretext, for the Tories getting their way on keeping the tax light on the well-off in society who are their main support base. That is I suppose to be expected of them, but given that it is contrary to the express terms of the coalition agreement, why are our people supporting it? Equally puzzling is last night's vote on Value Added Tax or VAT, but for a slightly different reason - it is not mentioned in the coalition agreement at all. I have searched the entire coalition agreement and nowhere is VAT mentioned. Not once. So why are our Westminster MPs obediently voting for it? They have no obligation to do so if it is not agreed. What is going to be the next thing that is not Lib Dem policy, but that the Tories get our MPs to vote for? And can they justify that to the Federal Policy Committee, the party members (e.g. me) who worked and worked so hard to get them into Parliament and the electorate? If so, how?

Wednesday, 23 June 2010

Tory breach of contract on capital gains tax

The Lib Dem-Con coalition agreement states: "We will seek ways of taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities." The Treasury's budget report states: "Effective from 23 June 2010, capital gains tax will rise from 18 to 28 per cent for those with total income and taxable gains above the higher rate threshold... Basic rate taxpayers will continue to pay an 18 per cent rate on their gains. The 10 per cent capital gains tax rate for entrepreneurial business activities will be extended from the first £2 million to the first £5 million of qualifying gains made over a lifetime... The 50p rate of income tax took effect from April 2010 and will remain in place for the time being."
Spot the difference? Of course you do. This means that the Tories have already reneged on the coalition agreement for the sake of their friends the haves, and will do so again if allowed to get away with it. Meanwhile social services are slashed, so that elderly and vulnerable people who yesterday were acknowledged to need such services are today told they can't have them any more, which makes me choke. This feeble move on CGT is contrary not only to the coalition agreement but also to the advice of former Tory Chancellor Nigel Lawson who on the CGT rates question advocates reversing the economically unsound meddling of Gordon Brown. In this Lawson agrees with Saint Vince of Twickenham, a voice of sanity on this question regrettably unheard as he is silenced by loyalty and by parliamentary convention in his role as business secretary (though he ought to be chancellor).
What's to be done? My suggestion is that the Lib Dem leadership should find their backbones, which seem to have deserted them recently, and start playing the cards the electorate has dealt them, by which I mean the 57 Lib Dem MPs' votes, to see off the Tory right. Where are the Tory right going to go if they don't get their way?

Thursday, 13 May 2010

What people are talking about

The coalition has been the only topic of conversation on Westminster's streets for the last two days, or so it's seemed to me on walks between Victoria and Fleet Street. The novelty of the new setup attracts curiosity, unsurprisingly, but I also detect an unusual level of goodwill. It is as though a higher percentage of people than usual feel that they own a piece of this new government. And they can, because about two thirds of those who voted supported a faction that is now part of the government. Another factor behind the general air of optimism could be a response to enthusiastic fresh faces in ministerial posts. Or is it just because it's spring, and the grass is full of daisy flowers in St. James's Park? By the way, for those who rate omens, there was a rainbow over the Palace of Westminster on Tuesday evening.

Tuesday, 11 May 2010

The prize

Remember that line about being wary of them even when they bring gifts? That is how I feel about the Conservatives with their very late offer of a referendum on the Alternative Vote system. Behind the courtesy at the negotiating table they thought the Lib Dems had no alternative to a Tory-LD deal. The Right were salivating at the thought of getting power back. It seems they thought they could get away with not offering a referendum. The offer was only dragged out of them when the LD team began to walk away. Clearly the Conservatives still love First Past the Post and that is not surprising - it has served them very well. But the national interest requires that the era of phoney majorities based on a minority of the popular vote must end. The electorate has this time withheld a majority whether in the Commons or in votes cast from any party. Many more people voted against the Conservatives than for. Even the inscrutable millions who could have voted and didn't were expressing something that could be interpreted as disillusionment and a feeling of powerlessness. This cannot go on. The arithmetic of an LD-Lab alliance could, just, work, as I don't see the minor parties rocking that boat if launched. So in my view, the LD team is right to talk now to Labour. The prize is an electoral system in which the people's votes really count, that could reinvigorate our democracy. The electorate has given the LD team a unique opportunity to bring both main parties to heel, and they are right to take it. But I'm wary of Labour bearing gifts, too.

Saturday, 8 May 2010

It is so strange!

Something enormous happened early on Friday morning, in an understated and very British way. The Lib Dems suffered casualties, but emerged from the latest contests with 57 MPs, who now block the entrance to 10 Downing Street for a humbled David Cameron (only weeks ago so confident of victory). It is so strange! How best to exploit the advantage handed to us by millions of individual choices made by the British people? Some object to a deal with Labour, others to a deal with the Tories, but this is not on: our MPs are not in a situation of their own choice and they have to deal with a reality that is not of anyone's making, or rather is of everyone's making. I cannot fault Nick Clegg's announcement so far that fundamental political reform is a sine qua non of any deal, and if David Cameron doesn't like it, tough: he will probably find minority government is worse. As for other conditions, like millions of people I would be relieved and glad to see Vince Cable as Chancellor because he deserves our trust at this difficult time. Do your best and go for it, Nick!