Close to the edge
I remember many, many years ago an announcer on a Radio 4 comedy programme starting an item like this: ‘Once, in a small village just outside France’. The subtle joke being, of course, we need to know what country a village is in before it can be narrowed down by which other country is close by.
I was reminded of this by the announcement this morning that the Treasury will require all Whitehall departments to identify 5% of their spending which will be the first call for cuts should an unexpected need for funds emerge after the budget has been set. Presumably this means there will be a swathe of public service workers who will live in a place just outside extinction.
In Danny Alexander’s speech, which was a powerful restatement of the Coalition’s commitment to deficit reduction, there was no indication of whether the new system is being adopted based on successful practice elsewhere. This is a pity because on the surface of it the proposal could have many fascinating consequences.
It could – and perhaps should – be possible to put a whole departmental budget in priority order, starting presumably with spending which is the direct result of legal requirements and then moving onto spending which is of critical strategic importance and so on. From the low priority end up, if there is an expendable five per cent of activity, presumably there is another five per cent which narrowly escapes the same fate.
Clearer prioritisation may be valuable but don’t underestimate the complexity. For example, because many expenditure items are related to each other, the candidates for the expendable five per cent are likely to be biased towards two areas: on the one hand, self-contained items which can more easily be subject to an immediate cut and, on the other hand, items like staff costs where proportionate, salami-style, cuts can be made across the piece by, for example, not filling vacancies. This could mean it is less the content and more the form of spending items which makes them vulnerable.
Perhaps I am simply being obtuse, but is the vulnerable five per cent a rolling budget item? Whilst normal contingency funds sit in the budget all year waiting to be allocated should the need arise; what happens if the unexpected demand to use the earmarked five per cent occurs in budgetary month eleven, when presumably only about 10% of the total departmental budget remains unspent, will it mean a fifty per cent cut in what’s left?
Like any other large organisation Whitehall budgets are subject to various forms of gaming. Indeed it was partly in response to gaming around contingencies that today’s announcement was made. But a new form may now emerge. If I were a minister or permanent secretary and keen to protect my budget in the face of an unexpected call on funds, I would be very tempted not to put a questionable item in the five per cent but things which are politically sensitive, for example something the Prime Minister is on record pledging to protect.
And what will be the impact on those who rely on wages or grants which fall into the near extinction zone? Given their vulnerability is a consequence not of their own actions but of unexpected events beyond their control, will they plough on regardless, albeit suffering more than their share of sleepless nights? Or will they work tirelessly to try to convince officials and ministers to push them up the queue and relegate another area. Could we see a monthly Whitehall equivalent of the sing-off on X Factor as jeopardised activities suddenly move up the ratings while former star performers are punished for having an off day?
On reflection, having, albeit briefly, considered the case for telling various RSA staff that what they do is the least valuable of our activities, and that they should remain vigilant for the possibility that failure, fraud or flooding will lead to their immediate redundancy, I think I am tempted to stick to the boring old system of having a contingency line in the budget. There is a risk come year-end that managers will try to raid an unspent fund, but I guess I trust my budget holders more that Treasury ministers appear to trust theirs.
A richer debate?
A few years ago, when running ippr, I had an idea. It was to create a new top rate of tax for the wealthy but to give these taxpayers the option of choosing where their tax revenues were directed. The reaction I received from my left of centre policy wonk friends is relevant to the heated debate about the imposition of a cap on tax relief; but, first, some context.
Back in 2003 the personal tax base was narrowing. The Government was able to rely on business taxes – particularly those generated by financial services – to fill the coffers. This strategy blew up disastrously with the credit crunch. Indeed, as the current ippr director Nick Pearce has argued, it was the over-reliance on taxes related to financial services and property transactions – much more than over spending – which was the biggest cause of the deterioration in public finances in the wake of the crunch. However, given political nervousness and hostility from the well-off it was difficult to see a way of making an increase in wealth taxes a realistic policy, thus my idea.
The strong opposition to the proposal from ippr colleagues (as a consequence of which it never surfaced) explains why the Guardian is defending the tax cap and why Ed Miliband is performing verbal contortions to condemn the Government without actually opposing the policy.
The first objection was that rich people’s choices would tilt spending in unfair and irrational ways. This is exactly the same charge levelled at tax relief in a recent Guardian leader:
the chancellor is right to limit the tax relief that wealthy people receive for supporting good causes. This is effectively money that pensioners and the low-paid, along with other taxpayers, are handing to the rich to indulge their philanthropic activities
The second objection is more subtle and profound. Although in proportionate terms low and medium earners actually donate more of their income than the well off, most people can’t afford to make large donations to good causes. They have to accept their contribution to society is made through the taxes they pay, and they have no individual control over how those taxes are spent. From a left of centre perspective, the problem with my idea was accepting the principle that by paying more aggregate tax rich people should have greater rights as taxpayers and citizens. This could even be seen as the first step in a slippery slope back to property qualifications on the franchise. The critique applies more directly to my idea than to the case against the tax cap, but it is still applicable.
Behind the critique of Government cock–up and the understandable but instrumental complaints of the charity sector lie deeper issues. Do we think high tax payers should, in essence, have more control than the rest of us over where their tax is spent? If the rich do have more control, isn’t that a good thing in that it means bold, controversial or decorative causes which the state might not support get independent funding? Conversely, given that the majority of big domestic donations go to either, or both, elite institutions or London-based good causes, doesn’t tax relief just add an extra dimension to the imbalance of culture and social capacity between London and the rest of England?
Given the best defence of the Coalition policy is from the left, and charities will probably fight shy from explicitly defending the principle that rich people should be uniquely free to hypothecate their taxes, I suspect the public debate about the tax relief cap may not get to the heart of the matter.
Black swan on the Thames ?
Twenty-twenty hindsight, the human need to find meaning and the huge industries tied up in claiming to predict the future tend us towards rational explanations for social events. Even when something extra-ordinary and world changing occurs – 9/11 or the credit crunch, for example – we will find reasons for saying that it was inevitable. It is not easy to walk a consistent course between on the one hand, the truism that every event has causes and is therefore as some level explicable in terms of its causes and, on the other, the existence of black swans (huge, unpredictable events), emergent phenomena (things which are qualitatively more than simply the sum of their parts) and tipping points (tiny causes which lead to huge effects).
But once in a while, in something which feels like a child’s excitement as the milometer on the family car clicks over ten thousand, there is a moment when it feels like something radically discontinuous has become a credible possibility.
I came perilously close to nailing my colours to the mast of a particular London Mayoral candidate the other day, so let me underline that my voting intentions are between me and the ballot box, and anyway the RSA website is not the place for me to parade my political preferences.
However, one doesn’t need to support Siobhan Benita to be fascinated by her unheralded rise. Given that just about the only people who predicted George Galloway’s success in Bradford West were the bookies, it is surely interesting that Ms Benita’s odds have fallen from 500-1 to 50-1 in the last 48 hours. No one should get carried away – the bookmakers stopped taking bets when Galloway was odds-on and if a horse wins the National at 50-1 it will be accurately described as a rank outsider – but still, as the cliché has it, in politics momentum is everything. Ms Benita also has the advantage of the most popular slogan in the current election. Not the rather prosaic ‘Siobhan for Mayor’ which features on her website but the phrase you can hear wherever Londoners meet; ‘they’re both as bad as each other’.
Reflecting the RSA’s interest in promoting citizen engagement in decision making and more informed public discourse, I have written in the past about the way political parties are squeezing the life out of our politics. Ultimately, I am a friendly critic. I want politics to be about issues and programmes not personalities so my intention is to save parties from themselves. But the concerns of people like me have had little purchase as long as the voters had nowhere else to go. A classic analysis of failing corporations argues that a symptom of decline is when they are more interested in their competitors than the customer. Sadly, as the current shenanigans around Labour’s process for selecting Mayoral candidates underlines, many people in political parties seem more concerned about competition within their party than the customers.
One swallow doesn’t make a summer and one Galloway doesn’t mean the end of the party system. But if Galloway was followed by Benita and then perhaps by a swathe of Mayors and police commissioners, then who knows?
I have not met Ms Benita but I suspect she may be about to face the biggest challenge of her life. If the odds continue to shorten then the major parties and media will try to do to her what Labour failed to do until too late in Bradford, put the outsider under the kind of scrutiny that mainstream politicians live with every day. It will be tough. If she performs well under pressure she might lose some of her outsider appeal, if she cracks….well, she cracks.
Mind you, given that just a few days ago virtually no one had heard of her – indeed she is still literally invisible in some opinion polls – I bet it’s a challenge she’d be delighted to face.
Time for change?
As the visionary American writer William Gibson famously said, ‘the future is already here it’s just not evenly distributed’. When trying to convince people of the need for change it is more powerful to identify things which are already happening, albeit patchily or at the margins, than simply to hypothesise a better way.
Although I often forget it, I find this tip helps address my tendency to adopt a tone of indignation and piousness. This is particularly the case when it comes to politics. I have recently drafted a piece for the journal Political Quarterly in which I explore how politics might need to change if it is to be better at engaging and mobilising people (so that, to use a stock RSA phrase, we might start to close ‘the social aspiration gap’ separating people’s hopes for the future from the trajectory on which current attitudes and behaviours have set us).
One aspect of such a politics is that politicians would find a way to be both more respectful and more challenging towards the public. We tend to think successful political persuasion is when a politician convinces us they can solve our problems. Instead we need politicians who can help us ‘own’ social problems and accept we have the responsibility and the capability to contribute to solving them ourselves. When making this point I sometimes refer to how Presidential candidate Barack Obama dealt with being attacked for attending services given by Jeremiah Wright a preacher who often used anti-white rhetoric.
Instead of trying to bury the issue or simply condemn Wright, Obama recognised his embarrassment but chose to turn the issue back to the people with a brilliant speech exploring the wider unresolved issues of race in modern America.
Having used this example on many occasions it was good to read another tribute to Obama’s speech making, in Matthew Paris’s column in today’s Times. Here is what Paris writes:
‘Mr Obama’s text was pitched quite cooly to a notional person. That person was a humane intelligent and fair-minded individual; not part of the President’s claque but disposed to give him a hearing. The speech was an appeal to this individual’s reason and sense of justice. It did not assume his hearer agreed, but believed that he or she could be persuaded. The President liked his hearer, but was not trying to ingratiate himself or get too familiar. Mr Obama respected this person and wanted their support – but their considered support’
Paris goes on to urge David Cameron to offer the same kind of leadership by also speaking to the best in us;
‘…if he could lay aside PR, news management, the hurly-burly of Westminster, his pollster’s lists of groups whose tummies need tickling and his aides lists of achievements that need name- checking; if he too could fix his attention unwaveringly on this civilised incarnation of the country he leads’.
We can expect and even demand a better form of politics and a better type of leadership. And it isn’t just up to the politicians, we have to reward those who show the right stuff and be willing to step outside our own comfort zone to encourage change. And that’s why in the London Mayoral election, for the first time in my life, I don’t think I’ll be voting for the Party I’ve always previously supported.
I tend to be suspicious of independent candidates in elections. But The Times also featured an interview with Siobhan Benita, independent candidate for London. Not only did I agree with just about everything she said but I also liked the calm, thoughtful, open way she seems to be saying it. She probably hasn’t got a hope but I like the idea that challenges to our current mediocre political mainstream can come from the thoughtful centre not just the wilder extremes.
Filling the vacuum
At the risk of self-importance (something of which, let me make crystal clear, I most assuredly cannot be accused), the news from Bradford reminds me of some things I have written in the past.
The first goes back years to an article about attempts to reform the Labour Party. This involved me reading a whole slew of pieces on this topic ranging over several years. I noticed that reformers always looked at the problem through the lens of what was best for the Party not what was best for the country. Instead, I argued, the starting point should be the increasingly deleterious impact that the nature and behaviour of parties was having on the overall health of our political system. My conclusion was something like this: ‘the major political parties have a stranglehold over representative politics, but in decline, their withering handhold tightens threatening to throttle the life out of our politics’.
The second extract is more recent, part of an argument about how quickly the political consensus can change. Around fifteen years ago there was an aphorism often quoted by modernisers in the major parties; ‘the right has won the economic argument, the left has won the social argument and the centre has won the electoral argument’.
Now it feels like this argument is neatly reversed. In the face of credit crunch, growing market- generated inequality and the continued irresponsibility of the financial sector the left has the most powerful economic argument, in the face of worries about social cohesion and individual responsibility the right has the most cogent social argument and – increasingly – the extremes are threatening to win the electoral argument.
As the economic slump continues and people start to realise that lower living standards and declining social provision are not a temporary aberration but more likely the new reality, public anger is likely to increase. While the major parties continue transfixed by each other in a bubble of self-interested complacency, outsiders with a strong populist message – whether it’s Galloway in Bradford, Geert Wilders in Holland or Marine Le Pen in France, tap into deep reservoirs of resentment and alienation.
The public at large needs to accept an argument which is intially unpalatable - tougher times are here to stay and we need to adjust our expectations and behaviours – so that they can move to a more positive one – it is better to live now than at any time before and we can find a new path to progress.
But such a message can only be projected from a position of intellectual courage and personal authenticity. How far we seem from this.
As I wrote earlier this week, the failure to reform political funding is entirely explicable in terms of a combination of party self-interest and weak leadership. The fact that Labour had apparently no idea that George Galloway posed a threat until it was far too late underlines how shallow are the roots of the ‘people’s party’ in most working class communities
Just as prosaic trade union general secretaries and Machiavellian fixers among the PLP constrain Ed Miliband, so the Conservative leadership seems too often to be in thrall to a cabal of opinion formers centred around their back benches, the Daily Telegraph and Spectator.
As Nick Robinson says, Bradford West is an untypical constituency with an untypical voting record but Galloway’s success is also part of a bigger pattern. Many historians predicted that severe economic downturn would likely sooner or later to be the midwife to a more volatile and extreme politics.
The main parties combine a continued hold over the Westminster system with a combined popularity lower than at any time in living memory. I can’t say exactly what kind of leadership is needed now, although I believe I would recognise it if I saw it, but politics abhors a vacuum. As Galloway showed last night, if the mainstream doesn’t fill it there are plenty with more radical answers waiting to do so.
RSA Animate
RSA Mobile
RSA Comment- RSA Projects Blogs
- Twitter @RSAMatthew
RSA Bookshop
The RSA Bookshop, in partnership with Blackwell's the UK's leading academic bookseller, offers Fellows and friends an opportunity to purchase books and to explore our speakers’ ideas in greater detail. Visit the RSA Bookshop.