Clegg’s curate’s egg of a speech

We all know about the cuts. And the claims that getting the public finances in order will act as a spur to a revival of private sector economic activity. We’re all – quite possibly including the Government – less clear on exactly how that revival is supposed to occur. We are promised a budget for growth in a few weeks time. But the speech on the economy that Nick Clegg delivered last week was eagerly awaited. Perhaps it would give some early signs of how precisely the Coalition is expecting current policy to deliver this bright new private sector-led dawn.

The speech has not been universally welcomed. David Blanchflower over at the New Statesman dismissed it as “empty waffle”. That’s harsh. But is it fair? One of the challenges is knowing quite how to read what was said. Cynics might say the challenge is knowing quite what, in what was said, to believe.

Magical markets and medical muppets

You don’t come across that slightly touching, naive market fundamentalism quite as often now as you did a few years ago. The financial crisis and its aftermath has increased the circumspection of some market advocates, at least for the moment. One place you do sometimes come across the dogmatic view of markets is among those who live in former state socialist and communist countries. The other would appear to be the Coalition government.

I quite regularly have the opportunity to discuss the relative merits of the state, the market and points in between with citizens from transition and developing economies coping with the legacy of state socialism. While some have a sophisticated understanding of the issues, others could perhaps engage with the complexities a bit more deeply. There is a strand of very simplistic thinking which sees the public sector as fundamentally corrupt and markets as a solution to most of society’s ills. The former view may be born of bitter personal experience, but it is treated as an inherent characteristic. Markets, on the other hand, have almost magical properties.  They are the repository of dynamism, entrepreurialism, efficiency. Markets are reified and deified. The idea of private sector inefficiency, monopoly or villainy doesn’t compute. Even when the post-transition society they live in might reasonably be characterised as a kleptocracy.

So what about the Coalition?

Right all along? (Unfortunately)

Today’s Independent carries an op-ed piece by Steve Richards which ostensibly focuses on the concerns of the Tory right about the prospect of an electoral pact with the Lib Dems. Richards argues that such concerns are unfounded. The basis for the argument appears to be that an electoral pact would undermine the Lib Dem commitment to pluralism.

In the process he summarizes why the Tory right should be happy with how things are shaping up. In doing so he encapsulates all that social liberals find so appalling about the Coalition:

An informed view on health reform (a comment on a comment)

Guardian Cif posted a fascinating comment piece the other day under the title To avoid NHS privatisation, Lansley must change course. The author is clearly well-informed and provides a thoughtfully balanced assessment of the need for change. She demonstrates a sound grasp of the risks associated with a rushed or botched approach to reform. The piece argues that unless the Government is very careful there is a risk that people’s genuine concerns about Andrew Lansley’s fundamental reorganisation of the NHS – that it is in fact an attempt to privatise the system – will turn out to be well-founded.

Exit, voice, loyalty: What’s a LibDem to do?

For the second day running a confluence of events got me thinking. At lunchtime yesterday I had an interesting discussion triggered by a recent paper (here for those who can access it) that uses Hirschman’s famous Exit, Voice, Loyalty framework to examine recent developments in education policy in the UK. Hirschman’s framework has been applied in a number of policy fields including, probably most prominently, the reform of public services.

Later on, in the aftermath of the tuition fee vote, I was mooching around the LibDem blogosphere and encountered a thought-provoking post by Richard Huzzey on LibDemVoice, explaining why he felt that resigning from the party was the only way he could register his unhappiness at the direction policy/the party appeared to be heading.

It seems to me that Hirschman’s framework could have something to say to any member of the party thinking about how to respond to the way the Coalition is evolving, and in particular those who are deeply unhappy with the leadership’s approach to the tuition fees issue (among others).

A fairer future or no future for social housing?

We’ve now had a few days to come to terms with the content of Local Decisions: a fairer future for social housing, the Coalition government’s consultation paper (CP) on social housing reform. The response has varied from the broadly positive to the outright condemnatory. In prefacing his comments on the CP last week Dave over at Nearly Legal was moved to invoke the term “cataclysmic”. He’s a chap with a good grasp of these matters. So I have been reflecting on whether I’d assess the proposals in similarly vivid terms.

Underpinning the need for reform, from the Coalition’s perspective, is a perception that there is unprecedented demand for social housing and those who currently benefit from access to it are not necessarily those who most “need” it. Waiting lists for social housing have increased dramatically over the last decade to close to 2 million and there are many thousands of tenants living in overcrowded accommodation. Yet at the same time there are hundreds of thousands of tenants “under-occupying” social housing properties – living in properties with more bedrooms than they are deemed to “need”. So the Coalition argues that something has to change to realise more fully the potential of this national asset.

Who’s wrong? The Government or the Economists?

Where should we draw the boundaries of the state? When should Government take responsibility for providing or funding services? And when should it be left to the market to sort out? One characteristic of the current government is that it has destabilised well-established understandings of where the boundaries lie. Most prominently we have the debate over higher education funding. But there are a range of other fields – including social care, rail pricing, school sports, arts funding and library provision – where central or local government is stepping back from funding and/or provision. While the financial crisis is typically invoked as the trigger for this, there is more than a suspicion that this can act as a handy pretext for furthering an agenda of state retrenchment, leaving more to the market, the voluntary sector or informal provision.

From the point of view of economists interested in social policy and social problems this is intriguing. Many economists who concern themselves with such matters tend to operate from a social liberal or social democratic position – they tend to favour a mixed economy and acknowledge a significant role for the state, if only in funding rather than provision. This is in part because they are a self-selecting group. The dyed-in-the-wool market fundamentalists don’t tend to spend too much time thinking about the role of the state. Rather, they tend to assume that Milton and the Public Choice boys have put that particular question to bed – the state should keep well away from just about everything.

Equalities out, “fairness” in?

So Theresa May has announced, outside of Parliament, that the Government will not be implementing the socio-economic duty for public bodies which was originally part of Labour’s Equalities Act 2010. The tone of the announcement was rather different from the signals the Government were giving back in July when it looked like they were going to continue with the equalities agenda set by the previous government. Back then the only part of the Equalities Act that was apparently under scrutiny was the proposed requirement upon employers to publish pay data, which had the potential to expose the existence of a gender pay gap. While that part of the legislation is still looking vulnerable, the focus of Ms May’s current displeasure is the socio-economic duty which she has dismissed as ‘politically motivated’.

It appears that Lib Dem Lynne Featherstone followed up her Minister’s statement by describing the socio-economic duty as “new and unnecessary” and continued: “I said at the time that this was a weak measures, that it was gesture politics and that it would not have achieved anything concrete”. On the one hand, it is disturbing that a Lib Dem is being taken as supporting the Tory line on an equalities issue. But, on the other hand, Featherstone’s point appears rather different. It is not that the socio-economic duty was unnecessarily interventionist – “socialism in one clause” – in the way the Tories are claiming but that it was an inadequate mechanism for addressing entrenched inequality: too weak rather than too strong,

Making the coalition work, seeking electoral reform

In  Self-denying … and self-defeating I offered some alternative readings of why the LibDems seemed to be willing to concede so much ground to the Tories, and what the consequences might be for the chances of success in the AV vote.

In response to the version posted over at Liberal Democrat Voice a further possible reading of the situation was offered. Nick Clegg’s overriding priority is to demonstrate that coalition government can work. The aim is to show that coalition can deliver strong, pluralist government with a clear sense of direction, rather than being dysfunctional and expending much energy on bickering and in-fighting. This will demonstrate to the electorate that they can safely vote yes in an AV referendum without fear of a paralysis of leadership. I’ve been thinking about this.

Dealing with the deficit, broadening the mind

In 1927 the American Jurist Oliver Wendell Holmes stated that “Taxes are what we pay for civilized society”. That is sometimes rendered slightly more catchily as “Taxes are the price we pay for civilization”.

This observation seems entirely apposite in the context of current debates over how to deal with the UK’s structural deficit. The coalition is clear that the only plausible means of dealing with the deficit is to place the emphasis upon cutting spending rather than raising taxes.