An Incomplete Manifesto
Assorted ideas for new policy (offered to Ed Miliband and other Labour figures, now available to anyone on application to richardkheller@hotmail.com)
An Incomplete Manifesto 2010
This is an incomplete jumble of ideas I have advanced since 2003. Some are Utopian, but most are cheap and cheerful, and all or any of them would signal that Ed Miliband’s Labour party is interested in new ideas.
The economy: general This is still a good speaking passage or “think piece”
Get real on the economy When he was Chancellor of the Exchequer during the 1970s my former employer, Denis Healey, was widely mocked for using the phrase “the real economy.” I think he was ahead of his time. I believe that there are now two economic systems at work throughout the world. One is “the real economy”, in which people buy and sell and otherwise exchange current and actual and ascertainable labour and capital and goods and services. Another is a “fantasy economy” in which people trade instruments for their own sake. The value of these instruments is determined by speculation in their market place. To illustrate the difference simply, in the “real economy” people buy and sell currencies to obtain the means to purchase goods and services in the countries which issue them. (Hence the purchasing power parity theory of currency prices). In the “fantasy economy” people buy and sell currencies because of their expectations about other people who buy and sell them.
In my view the central problem of the world economy is that in every sector and every market the “fantasy economy” is far greater than “the real economy.” This has several pernicious effects:
– the fantasy economy reinforces irrational behaviour and magnifies its effects. When markets are deranged with optimism or pessimism it pays most players to behave the same way – only a few can afford to take a long view and buck a hysterical market. Fantasy markets also require more drastic corrections when players finally come to their senses
– those who profit from the fantasy economy have disproportionate influence in the world’s political systems
– for that reason, the fantasy economy is largely unregulated and offers immense scope for market abuse and outright crime, which destroy trust in “real” markets and institutions
– the fantasy economy drives the performance of the real economy in ways which are unaccountable and uncontrollable. It destroys the moral and practical foundation of all good economic systems – the power of people to improve their economic circumstances by making better personal and collective decisions.
The central task of any modern government should be to restore the influence of the “real economy” at the expense of the “fantasy economy”.
The “fantasy economy” relies on a number of special privileges. Chief among them are:
– the ability to trade in assets and instruments without paying real money for them
– leverage – being allowed to have potential losses many times greater than realizable assets
– the ability to invent new assets and instruments and ascribe value to them
– no limit on the funds which may be managed or controlled by any one institution or individual
– the ability of individuals and institutions to influence the price of the assets they trade in by their own behaviour
– the ability to shuffle potential gains and losses between different parts of their business, between different customers and “counter-parties” and between different tax and regulatory jurisdictions
– no fear of failure by their principal actors, thanks to government bail-outs and personal remuneration contracts
It seems to me that none of these privileges is of any value to “the real economy” and that most of them are positively harmful. Ideally, they should all be struck down or at least drastically curtailed.
The economy: specifics
Implement Green New Deal
A one-off capital levy on all holdings of personal wealth above £1 million
In my view the PFI/PPP is the biggest moneylaundering scam in the Western World. Its sole value is presentational: it makes public finances, temporarily, look a little healthier. There is no real transfer of risk to the private sector (cf London Underground bailout). In the long term it is a huge drag on public expenditure. Our children and grandchildren will be paying over the odds for schools, hospitals, infrastructure which is crumbling or even vanished. It is probably too much to hope that any government could “renationalize” PFI/PPP deals. But as a first step the government should have first refusal of any deal which a private company wants to sell or abandon. It is incredible that companies are free to sell contracts involving public assets – and it shows what lousy deals the government negotiated.
All public sector contracts with the private sector to be published (many are now hidden by “commercial confidentiality”.)
This one is presentational but would outflank government as guardian of fiscal prudence A balanced budget law: the government to be required to pay for all annual current expenditure out of annual current tax receipts (with a small margin on either side). Government borrowing only to finance capital expenditure – but definition of this to be revised to include all Green New Deal and other environmental/climate change expenditure and expenditure on human capital (education, training, child health and care esp in early years). All administrative expenditure to be treated as current.
Slash and burn all special reliefs and incentives in taxation, especially of companies. They simply encourage people to do things for tax reasons and/or reward businesses for decisions they would have made anyway. Plough savings into raising allowances in income tax and cutting basic rates.
A Big Idea. Change Income Tax to PET (Progressive Expenditure Tax). Instead of taxing income, tax income minus net savings. That means totting up each year total income plus net changes in borrowing minus net changes in saving. Why?
- Encourages all forms of saving – prepares to meet future pensions crisis
- Fairer and more environmental to tax people on consumption (what they take out of economy and planet) than on income (what they put into economy and planet by labour or investment)
- Can still be progressive – tax higher spending at higher rates
- Does not discriminate between forms of saving or expenditure (but allows for excise taxes and other measures on revenue/environmental grounds)
Another Big Idea. Tax businesses on basis of their UK turnover not their profit. Cut rate(s) of tax dramatically (and abolish business rates). Why?
- Avoids tax avoidance by multinationals, for whomUKtax has become voluntary
- Loss-making businesses make claims onUKpublic spending, and onUKstate itself, just as much as profitable ones and probably more. Why should they not pay tax? (They already pay unified business rate)
- Change would benefit profitable, small and medium UK-only businesses (especially if combined with small biz rate)
- UKturnover is already established through VAT and present corporation tax – no new information required
- If paid a year in arrear, would benefit companies which grow (and penalize those which shrink)
Despite recommendation above to cut all special reliefs, could encourage innovation by giving temporary exemption from business tax for all income derived from introduction of new product or process (needs careful definitions and policing)
The majority of mergers and acquisitions destroy value rather than creating it. Unfortunately the actual promotion of a merger or acquisition makes money for people whereas keeping the status quo does not (unless there is resistance). It would be nice if all promoters of a failed merger or acquisition could be made personally liable for at least a portion of the value destroyed.
Safeguard/encourage R&D by imposing legal requirement in takeovers to maintain level of R&D (but not actual programme, if no good) in any acquisition for set period of years. Might encourage companies to boost R&D as defence against hostile takeover – but would that be such a bad thing? Would meet a major current concern over growth of private equity takeovers.
Voluntary taxation – allow people to contribute more to department of their choice, each department to state how extra contributions would be spent. In present circumstances, invite voluntary taxation to reduce the deficit, but offer some kind of reward when deficit reaches a target (rather like postwar credits in WWII).
Specific tax on fat/sugar content of foods
A 100% tax on the value of all alcohol advertising/sponsorship and promotion – the proceeds to alcohol rehabilitation and education programmes.
Make trade union membership tax-deductible, as essential work-related expense, on same basis as professional membership fees. Rejected year after year by trade-union supported Labour government!
Banking
All banks to have at least one non-executive director nominated by the Bank of England, and reporting directly to it. Could give early warning on unsound practices, excessive bonuses, tax evasion.
All bankers’ bonuses above a certain value to be paid in National Savings – so that they work for the economy as a whole. Recipients not allow to sell or transfer them for set period.
Revive the tradition of municipal banks. Encourage or if necessary, direct, banks and building societies to set up local “Good Neighbour” accounts, in which all proceeds would be invested only in local people and local enterprise. Local government could use these accounts, and local people would have the opportunity to invest for the benefit of their own community (and guarantee that their savings would not fund the Russian Mafia, or get turned into chips for casino banking).
All top bankers to be compelled to reveal how much they personally save through the products they offer customers.
Set maximum rate of interest for moneylenders – make anything greater unenforceable, like gambling debts.
Economy/Energy
Increase taxes on energy consumption, but partly offset by giving an annual energy voucher to all households, to be used for payment of energy bills. Value based on number of members (and possibly age of members). This will represent a basic entitlement to consume a set amount of energy free of tax. It will be worth far more to poor households than rich. Make voucher transferable to reward energy-thrifty households. Bring down value of voucher slowly over time, to encourage continual energy saving.
Cleaning up politics
Party funding is an area where Cameron is massively vulnerable. Worth keeping a track on all Tory donors who receive any kind of honour, appointment or benefit from this government.
Abolish political donations or cap at £1000.
If state funding introduced, abolish party political broadcasts and all other political advertising (a popular move among voters, and taxpayer should not fund party propaganda.)
A trial ban of six months on all meetings between ministers and officials and lobbyists. Would reduce influence-peddling, save money for companies and help to redress inequality in access to power between special interests and others. EM might do this for Shadow ministers – expose Cameron’s lack of action on lobbyists despite public statements against them. EM might also ban shadow ministers from accepting any financial or other support from organizations not affiliated to the Labour party – good contrast with both Cons and Lib Dems in opposition, whose front benchers were funded and supported by special interests.
Ministers should take personal responsibility, including liability in law, for all actions and statements by their personal appointees – ie end their classification as civil servants and make them agents or “emanations” of ministers. A real deterrent to wrongdoing by spin doctors and special advisers.
It should become a breach of the Ministerial Code of Conduct for any minister, or special adviser, to attempt to influence the recruitment, promotion, demotion or dismissal of an individual journalist. Popular with the media and draws a line on some bad episodes in our time in government.
Conversely, introduce in law a rebuttable presumption that editors and media proprietors are aware of and responsible for all wrongdoing by their employees or agents. No more Andy Coulson defences! EM might care to tease Cameron – how can he employ an ex-editor who was so ignorant and incompetent?
No honours or public appointments of any kind for tax dodgers.
Children/Education
Allow children to evaluate their school, including a simple rating on a scale from 0 to 10. Publish the results in a “league table” alongside all the others. This exercise could be very illuminating – children’s ideas of what makes a good school are often very different from those of adults, especially officials.
Copy Finland! (The world’s most successful education system. Noteworthy features: no League tables, no specialist schools, one test at end of education, no streaming, children at same school from 5 to 18, teachers encouraged to experiment, supported when under pressure). EM might make early visit to Scandanavia, esp Finland (to look at school system) and Norway, the most successful economy in Europe.
Kids Clubs at each school – run by parents as part of qualification for NVQ in child care/business.
Every school to offer breakfast – the most important meal in a child’s life – to guarantee children a healthy source of energy to get through the morning.
Dental nurse at each primary school and regular health checks by mobile school nurses.
Let children leave school at 14 for approved employment+education, return at 16.
All children who are carers (at least 175,000 according to 2001 Census) to be entitled by law to an assessment of support required to enable them to take a full part in education and social life – without breaking up family.
Ban all commercial advertising directed at children under 18 (age of contract).
End any concept of parental rights for parents convicted of violence/neglect of children, no presumption that children will be reunited with them. Introduce the “leave well alone” principle for children in temporary care: any successful placement of child with carer should continue as long as child/carer want it. Conversely, respect any wish of children to remain with a parent, unless it is clearly contrary to their interests.
Change the law on assault so that any assault on a child’s carer a) in the child’s presence or b) in the child’s residence should also be deemed to be an assault on the child. Would recognize trauma which such assaults cause to children even when they are not the immediate victim.
Public sector
Independent review of all government IT projects and use of management consultants over £10 million in value to establish and publish:
– what was purpose
– when was intended to be implemented
– when it actually got implemented – or scrapped
– intended cost
– actual cost
– consultants used
– any changes in purpose/design
– public expenditure saved (if any)
– public service improvements (if any)
– reaction of users/public
All future contracts to be based on contingency fees – consultants to receive percentage of ascertainable cost savings and productivity gains
Science
Restore independence of science by ending link with Business ministry
Not a realistic policy but a talking point – Allocate set percentage of scientific research budget completely by lottery – guarantees independence, prevents dominance of scientific establishment and orthodoxy, acts as control on effectiveness of officially selected scientific research – if it fails to outperform lottery chosen research there is something wrong.
Health
Make public health top priority of Department of Health – not NHS. DH to become lead department on drugs policy and take over
– food standards
– animal and plant and environmental health
– health and safety at work
– housing standards
Appoint a minister for mental health, with no other responsibility.
Department of Health should also take over sport – fund sport for contribution to physical and mental health.
Then make elected local authorities (not appointed quangoes) responsible for local public health and medical provision (with shared local/national budgets for “national” institutions, eg teaching hospitals)
Give no-claim bonus for people who stay out of NHS – entitlement to health-related benefits for each year they make no claim on NHS resources, but linked to compulsory health checks.
Make Department of Health lead department for drugs policy, legal and illegal
Restore right to heroin on prescription, a policy which worked in relation to both health and crime. (Consider creation of controlled legal source of supply of all recreational drugs – not open sale but eg special centres which register all users and point them at treatment).
Guarantee five-year funding for all current drug rehabilitation programmes – no questions asked. (There is appalling waste in multiple sources of funding.) Make Department of Health sole public funder for anti drug programmes.
Justice/Law
Maximum legal limit on prison population.
Copy French juges d’enfants – single agency with wide powers over welfare/education/reform of all problem children, not only offenders.
A small but extremely worthwhile reform – give Explanatory Notes to all Bills legal force as guides to interpretation of legislation. Could save millions in litigation.
Social security
Double carers allowances and entitlements.
A Big and Daring Idea. Set limit of years for pension, pay it any time after 16. (Create a universal state income and give people a choice – either take a set number of years before “retirement” with chance to buy them back later, or defer pension claims until retirement and collect it for rest of life. Increases personal choice, ultimately saves state money if people claim pension at today’s rate not tomorrow’s. Could help people retrain, return to education, take career breaks, look after children etc).
Make all universal benefits, eg child benefit and state pension, transferable to another person or a charity. Would allow people to redistribute income voluntarily.
Pay child benefit for six months after child’s death – a recognition of the extra costs, both financial and emotional.
Create anti-poverty loans – unsecured personal loans for people who plan their personal pathway out of poverty. (Could be linked to Good Neighbour bank accounts, see below).
Give carers entitlement to part of estate of deceased person they were caring for, regardless of relationship.
Trade and Industry
Let small businesses transfer bad debts to Customs and Excise at a discount as payment of VAT. C&E would then collect them from big firms. In effect, a state factoring service, which should pay for itself.
Disqualify company directors for serious breaches of health, safety, environment, and for corruption and offences overseas. To include non-executives (who are supposed to prevent unethical policies by their companies)
Patents – in public domain after 5 years if not used, royalties to originator.
New deal for inventors as employees: full royalties on invention unless invented as part of contractual obligations to employer. I think it would be good for EM to make regular visits to inventors of all kinds.
International development
Promote debt for environment swaps. Cancel countries’ public debts in exchange for reliable guarantee of conservation of rainforest and other vulnerable natural resources and species.
Exemption from all trade liberalization rules for countries with annual per capita GDP below $3000.
Why not abolish DfID and devote entire budget to provision of clean drinking water? An absolutely certain way to help the poorest people in the poorest countries.
Environment
Establish squatters rights over derelict land. Compile national register of derelict land. Owner has six months to bring it into use. If not in use, becomes available to first claimant with any scheme for temporary or permanent development which has been approved by local authority/Secretary of State, with rental payments to owner.
Arts/Sport
Put artistic and sporting and charity prizes on National Lottery scratchcards. Instead of winning cash, people would win the right to take part in the arts or sport, including the chance to commission a work of art from a British artist, or make a donation to the charity of their choice. A method of promoting interest and participation in the arts, sport and charities, and giving them extra income, at no extra cost to the Exchequer.
Establish an artist/designer and writer in residence at British embassies overseas
An immediate one-year moratorium on all sales of school playing fields and public recreational land.
CAP
The next two are Utopian but would be very popular as long-range objectives, outflank the government and cause serious turmoil in the Conservative party.
Abolish CAP. Replace by Common Agriculture Fund – all EU countries to pay in according to GDP, to pay out set income to each registered farmer in EU, regardless of size, fund to be reduced each year. Completely free market in agriculture produce, free trade with outside world, no export subsidies.
Repatriate the Common Fisheries Policy. Restore to each member state control of its fisheries. We will never conserve fish stocks if they are EU property (and up for grabs) rather than national property.Norway has kept its fish stocks in theNorth Sea, we have lost ours.
EU and constitution
A nationwide “subsidiarity” consultation. Ask where people want policy in each subject to be decided: local government, devolved government,UK government or EU.
Lords reform: create separate categories of voting and non voting peers, all voting peers and ministers to be elected. Allow members of public to volunteer to contribute to debates committees on particular subjects – to be chosen by lottery.
Make Lord Chancellor independent of government and give back its ancient function – keeper of the sovereign’s conscience. Lord Chancellor becomes completely independent of government. Would give independent legal advice to sovereign and (on request of majority of MPs) to Parliament. Would act as universal listener to all whistle-blowers, in government, public and private sector, and investigate their reports.
General
Certificated national service (see detailed note at end)
Linked to certificated national service, introduce the equivalent of a short service commission for service in the public sector generally as well as the armed forces. People would commit themselves to a minimum of say, three years as a teacher, social worker, police or probation officer etc. University students who take such a commission would have their loans repaid in part or in full. Their commissions would begin at university when they would spend a set amount of time in voluntary service, particularly as mentors for secondary school students considering university (see separate paper on certificated national service).
Establish A Think Tank As Big As Britain: a small team at Number 10, reporting direct to Prime Minister, with sole purpose of receiving, assessing suggestions from the public to improve any area of national life – and acting as champion for the best. In spite of recent much-hyped public consultations, Cameron’s government has just rejected this cheap and popular idea – like the previous three PMs!
Certificated National Service A popular idea which has more focus than Cameron’s nebulous Big Society
Introduce certificated National Service. People of all ages would get the chance to volunteer to serve the nation by performing a national service “unit” of six weeks at a time. These could be served
– in the armed forces
– in the police service
– in the NHS
– in voluntary service overseas (longer units probably required)
– in rescue services
– in government departments
– in social services and local government generally
– in the education system
– in charities and voluntary bodies
– in sport and the arts
Each of these sectors would be invited to create a programme of six weeks’ public service, to constitute a unit, which would be approved and funded by central government. Some of these programmes could build on existing schemes (like the Duke of Edinburgh’s award): others would give new outlets for service, reaching groups which existing schemes may miss. The six-week timespan would allow young people generally to take part more easily without losing education or work opportunities. The minimum age should be set as low as 13.
By serving a six-week unit a volunteer could acquire a certificate of national service, worth so many points, which could be used to:
– acquire a modular educational qualification (NVQ/GSCE in Civics)
– acquire a credit towards paying off a student loan (or an addition to an individual lifelong learning account)
– provide evidence of character and achievement in job applications (and in sentencing for offences)
– accelerate the rehabilitation period for past offences – to wipe the slate clean quicker (this would be a powerful incentive for ex-offenders and help to open the gateway into employment).
Certificated national service, along these lines, has enormous potential to
– educate and engage young people
– improve the fabric of local communities
– enhance social inclusion
– promote contact between communities and generations
– prevent re-offending
– allow asylum seekers and applicants for naturalization to express their commitment to this country.
Richard Heller 204 The School House Pages WalkLondonSE1 4HG
020 7394 9336 07796 1747 52
