The health and social care Act of 2012 is, according to certain Tory cabinet insiders, the biggest mistake the Tories made in government. It was a direct contradiction of their manifesto pledge not to impose any top-down reorganisations of the NHS, and it wasn’t mentioned in the Coalition agreement. LibDem endorsement of it was a far greater betrayal of principle than Nick Clegg’s about-turn on tuition fees.
HASCA2012 continued Nu-Labour’s reform agenda, which bought into the unsubstantiated neo-liberal claim that cost savings could be made by outsourcing healthcare provision to private-sector suppliers. Another facet of the reform agenda was the use of PFI agreements to build new hospitals. These off-balance-sheet instruments made the public sector finance numbers look prettier in the beginning but were badly written, badly negotiated and have left today’s and tomorrow’s NHS facing payments they can’t avoid for services and hospitals they no longer need. Nu-Labour is as guilty as the Tories on this; I will allow that they were more gullible schmucks than conniving predators, but the result is the same.
Anyway, back to the current (and future) problem. Billions of pounds of NHS expenditure is going through outsourcing, PFI and other contracts to private-sector suppliers, when in many cases the services can be provided more flexibly and often more cheaply by directly-employed NHS professionals working to a patients-before-profits, care-before-costs agenda. The government, and in particular a future government of honour and integrity (we can dream) will be stuck with honouring deals done by the present bunch of thieves. There are international laws and standards about not breaking deals your predecessors in government have done. Surprisingly some of these are human rights laws (Governments can’t deprive citizens of their property without compensation).
So what is to be done? What can a future good-Labour, Green or NHAParty government do to unpick these deals and rebuild a fair NHS? While the deals themselves can’t be undone, the context in which they continue can be changed. It could make the legal, economic and tax environment too uncomfortable for the private sector contractors to continue, and it could provide a mechanism by which they could choose to give up or change the terms of their agreements. However, such a change would have to be done without discrimination. A law directed specifically at NHS contractors would be open to challenge.
Naturally, I would make the case for a law about transparency as part of the mix. Make it so that every government and public sector contract must be published in full. Plus information about the beneficial ownership, tax status and political affiliation of the contractor. Let’s add to that a requirement that NHS trusts also publish their accounts in detail, leaving out only any personally-identifiable data – transparency is a good thing all round: the only thing that should be confidential in the NHS is patient information.
By pursuing the transparency agenda, the new government will make it more and more uncomfortable for the worst private contractors. If the ownership paper trail ends up at a brass plate in Grand Cayman (as well it may), the Government can and should require the UK end to disclose the details or forfeit the contract.
This forced opening of contracts will allow teams of NHS supporters to conduct forensic analysis of the terms. It may be that some private-sector contracts actually turn out to be more efficient than keeping the services in house; if so, there are other things to worry about.
The Tories are concerned that working age benefits cost about £100bn per year. About a quarter of that is housing benefit, and about 40% of housing benefit goes to private sector landlords – £9bn pa. This public money pushes up house prices and is a factor in the distorted property market. The real gainers are the said private sector landlords.
Tax private rental income more. I can’t immediately find statistics for the size of the private rental market – what I’d like is the aggregate private rent paid – so I’m going to estimate. There are about 4m privately-rented homes in the country. According to the Valuation Office Agency, the average monthly rent for England is £720, which amounts to an annual rent of £8620. Assume for the UK as a whole it will be rather less because of the distorting London factor, so I’ll assume a mean annual rent of £6k. Multiply by 4m and you get an annual private rental market of £24bn. Tax is already paid on some of that, but the net income is going to be substantially less after allowing for mortgage interest and other expenses including repairs and maintenance. I guess – though there may be treasury and HMRC figures to correct this – that the total income tax take from the sector is less than £2bn. It’s certainly well below the £9bn paid to the sector in housing benefit.
My suggestion is that all Schedule A income from residential property should be taxed at the higher rate regardless of the taxpayer’s other income. It could cover the cost of housing benefit.
This will hurt a lot of private landlords. Do we feel sorry for them? Just a little. But in most cases, the reduction in their net income after tax will be easily absorbed. Some private landlords will be highly-geared and will have borrowed substantially; it is possible that they will be forced to sell up and there will be cases of individual hardship (although hardship is probably too strong a word). Others will find that property is no longer such a satisfactory place for their money and will sell up by choice rather than imperative. This will release some private-sector rented property onto the market for owner-occupation and will tend gently to push down already-inflated house prices.
Impact on rents
Opponents will argue that it will push up rents as landlords try to recoup the cost of the extra tax through rent rises. This is unlikely; rents are determined by supply and demand, not by cost pressures. If anything, the result will be to lower rents because of the overall impact on capital values.
Administration and anti-avoidance measures
To make this work, HMRC should undertake to register all private tenancies. Changes would be made to housing legislation, so that the landlords’ protection of an assured shorthold tenancy would be conditional on registration with HMRC. An unregistered tenancy would be automatically protected in favour of the tenant who would gain indefinite security of tenure, the right to a fair rent assessed by a tribunal and the right to buy. The register would be publicly-accessible and would generate the necessary pages for the landlord’s tax return. The cost of developing such a register would be relatively small and substantially less than the annual revenue a new tax would generate; it is essentially a database.
Restrict Housing benefit through caps and stricter eligibility criteria. Clearly this is what the Tories would prefer as it would hurt their kind rather less. It is, however, likely to be much less effective. Fair tax on private rental income would have a much clearer and measurable impact on government finances.
Hasn’t he just blown his last opportunity before the election? Never mind, let’s get with it.“In a few months, the people of the UK will be voting for a new Parliament and a new Government. We’ll be able to get rid of the ConDems, certainly the worst government to have run this country in my lifetime. They have been almost entirely without principle, apart from the principle that creates systems to award contracts to people and businesses who are natural supporters of and donors to the party. The damage they have done to the NHS by allowing cost criteria to crowd out care criteria will take years to put right. The Labour Party is the obvious choice to replace them. But let’s not imagine that it will be the same as last time. This time will be different, because Labour is different. We are no longer New Labour, but neither are we Old Labour; we are just The Labour Party. I served in the last Labour Government, as did my colleague Ed Balls. We didn’t get everything right, and we got some things badly wrong. We won’t be doing those things again. The thing we got most wrong our relationship with the financial services industry. We believed it was mostly doing good for the country; we needed the tax income it generated. But it distorted the economy in many ways. I won’t discuss detail here, but just look at the results. During our term in office, inequality rose and social mobility fell. The rich got much richer, and while – for most of our time in power – most people got a little richer, the lions share of the benefits went to the rich. You expect that under a Conservative government, and that’s what we’ve had for the last five years – only this time, not only have the rich been getting much richer, the poor have been getting much poorer. But on our watch, inequality still rose, and most of those rich people who got much richer were working in or associated with financial services. Now this matters to Labour because we are a party that has egalitarianism in our soul. We are the party of aspiration, of the rising tide that floats all the ships. Inequality should go down when we’re in charge, but from 1997 to 2010 it didn’t. The Tories are the party of the wealthy establishment; they don’t mind if the poor stay poor so long as their mates get richer. But for Labour, it hurts. It hurts me to acknowledge that we didn’t do as well in reducing inequality as we should have done, and dealing with inequality will be top of our economic priorities when we are in power. This is because it matters for the economy. Not just for social fairness, the things that brought me and my colleagues into Labour politics. They matter, of course – we forget those basics at our peril. But because too much inequality is bad for the economy. There’s a growing body of serious economic research that shows for a developed economy, sustainable growth comes best when the economy is more equal. You may remember a speech Boris Johnson gave last year when he celebrated inequality. Obviously it suits him and his rich Etonian friends. And don’t think that we want a system where everyone gets the same, regardless of how much work they do. That’s absolute income equality, and it’s just as undesirable. We must each be able to get a little richer by working a little harder, and much richer by working much harder. Boris’s argument that because a little inequality is a good thing, a lot of inequality is a better thing is an example of the drunk’s fallacy. This isn’t just about redistributive taxation: increasing taxes on the rich, to pay bigger benefits, wage subsidies and tax credits to the poor. That is the worst way of all to deal with inequality – It’s better than nothing and it will always be part of the mix, but no one should go into government with it as the only plan. It’s really a sign of failure – that we have an economy that has become so unequal, that we can only correct it by redistributive taxes. We want an economy that rewards hard work from the bottom up. For much of our time in power, inequality was made less bad by the property market. Many people who owned or bought property in that time have done OK. So much so that for millions, the “property ladder” was seen as the best way out of the rut of poverty. People made – and some still make – incredible sacrifices to get their foot on the property ladder, and those that have stuck with it have done OK. But it’s not sustainable, as we are now finding out. The children of those who got on the ladder in the nineties are now finding that the bottom rung is completely out of reach. That’s because it was always an illusion. The property ladder can’t help a whole economy out of its own mess. The only ladder that’s any use is the enterprise ladder, and it turns out that no one has really been looking after it properly. We’ve patched it up, here and there, tried to fix bits of it, but it should be the centrepiece of our economy. It’s much more important than the property ladder. It should be accessible to everyone, and everyone needs to be keen to get on to it. So in government, we’ll need to make some changes. One, we’ll need to fix the ladder. We won’t repeat George Osborne’s mistake of trying to fix the property ladder. His Help To Buy scheme has made it worse anyway. We’ll concentrate on the enterprise ladder. We’ll look at all aspects of starting and growing businesses, we’ll deal with bank lending, we’ll encourage new peer-to-peer funding mechanisms such as equity crowdfunding, things that – as it happens – disintermediate much of the banking sector. We’ll look again at regulations, reforming regulations so that they help enterprises do better rather than hindering them with red tape. We’ll encourage more and more apprentices, making it easy for new businesses to take on apprentices, with schemes that encourage businesses to keep them on with a share of the business once their training is over. We’ll make business rates cheaper for small businesses, and we’ll look at market for commercial premises. We’ll make enterprise, not property, the focus of a new generation’s aspiration. For too long, we’ve had a situation where you needed to be on the property ladder to get on the enterprise ladder. As a home owner, you could give the guarantees lenders and landlords needed. That’s the wrong way round! We’ll make it so that the enterprise ladder is the way to the bottom rung of the property ladder. Many of the most enterprising people in the country are newer citizens. We welcome the enterprising drive that new immigrants often bring to the country, and we’ll encourage them to share it with those who’ve been here longer. Integration is key to making a diverse society work, and the workplace is where we should be making it happen. Let’s all learn from each other.”
OK, Ed – got it? Pity you didn’t manage something like this last week. Never mind, you’ll have other opportunities. But for god’s sake, do it.
- man up and admit to the failure on inequality when you were in power;
- Be clear that inequality is BAD FOR THE ECONOMY
- Promise to FIX THE ENTERPRISE LADDER.
On today’s You and Yours, on BBC Radio 4, Paul Burstow the former care minister called – amongst other things – for much greater transparency in the finances of care homes.
In particular, he called for open-book accounting so that residents and local authorities can know how their money is being spent and to understand the costs of providing housing with care.
Care provision is going to be a growing cost for an ageing society and there have already been many abuses of the system. Underpaid and exploited workers have sometimes resorted to inflicting appalling cruelty on vulnerable residents. They have rightly been punished when found, but the problem is the lack of resources and a more serious problem of financial engineering which ultimately led to the collapse of the Southern Cross chain of homes a year or two ago.
Of course, I’m delighted that any politician should be calling for open-book accounting in any sector, but it shouldn’t just be care homes.
Politicians’ expenses, perhaps? Election expenses? Everything the government does on our behalf or with our money should be subject to full open-book accounting.
I am reading Thomas Piketty’s excellent book, Capital in the 21st Century. It deserves to be as influential as Keynes’ General Theory.
I have also been following up some other research into the question of inequality, and have found some interesting work going back to the 1950s by influential economists such as Kaldor and Kuznets. The empirical data seems to be that a relatively low level of inequality is fairly well correlated with growth: see, for example, this IMF Staff Discussion Note by Ostry, Berg and Tsangarides, which was recently cited in a speech by Mark Carney.
Citation-surfing led me to: The Tradeoff Between Inequality and Growth by Jess Benhabib, Professor of Economics at New York University. Benhabib was trying to show that the relationship is non-linear, a result I would expect. But when I read the paper….
That tenured academics are paid good money to produce such rubbish is incredibly depressing. In a social science, there is simply no point in such pages of algebra. So far as I can tell, not one of the variables in the reams of equations can ever be empirically determined. How can these theories ever be tested?
I’m not great at maths, but I know enough to know that it has incredible beauty in its pure abstract depths, the more remarkable because the same abstract language describes reality so accurately. But this “economic modelling” does nothing of the sort. The “agents” to which it refers have no basis in reality. It’s not wrong, mathematically. It’s just pointless. It’s mathematical self-abuse, an abuse of mathematics – and if it’s the sort of theory that’s been used to inform real, public economic policy it’s hardly surprising we’ve made such a mess of things.
The continuing tragedy of Gaza is that the people most affected by it seem to have the wrong ideas about a solution. Periodic ceasefires are imposed from outside, accepted at best grudgingly by both sides. Both democratic bodies (Hamas is democratically-elected in Gaza) enjoy popular support for their policies from their electorate.
But, from here in London, both sides’ tactics seem bizarre, calculated to achieve nothing but perpetuation of the current misery.
I have more sympathy for Hamas than for Israel, not only because of the one-sided tally of deaths; and I do begin to detect an acknowledgement by Israel that it has badly miscalculated global public opinion. Israel now wants a ceasefire not for its own domestic reasons, but to regain some support from the international public. The Guardian has today run an obnoxious advertisement, paid for by Israel, to try and blame Hamas for the many child deaths. While Hamas rockets have not killed a single Israeli or Gazan child, it is telling that Israel feels the need to place the ad. It is losing the propaganda war.
But the Guardian has also run some excellent balanced pieces by Paul Mason, including this one from a few days ago, in which he concludes that, despite everything, Gaza works. Israeli politicians should read this and try to formulate a different strategy, continuing the logic of the withdrawal that was Ariel Sharon’s last significant act (That he was a war criminal, remembering Sabra and Chatila, does not change the fact that he was also a realist who came at the end of his conscious life to move away from the intransigence of Likud). It will be difficult and hugely expensive, but with the right will, there will be huge international support for it. Besieged Gaza, isolated and impoverished, will always be a source of trouble for Israel. The inevitable logic of continuing to besiege Gaza is that Israeli public opinion will move closer and closer to calling for a final solution, the tragic irony of which cannot be lost on anyone with any sense of history. On the other hand, a prosperous and independent Gaza, relying first on massive aid and subsequently on tourism and financial services, will fire far fewer rockets and foment far less anti-Zionism. An independent Gaza is achievable, even with Israel’s twisted internal politics, because there are none of the intractables of settlements and Jerusalem. This implies a three, not two-state solution as the end-game, reflecting in any case the divisions between Fatah and Hamas and removes one complication from the equation. It wouldn’t be my choice (I think that a single, secular state with citizenship decided by birth not blood or faith is the only long-term solution and is the only way to solve the Jerusalem question), but it ought to be Israel’s short- and medium- term strategy.
There is, of course, one huge problem: Hamas is ideologically committed to the destruction of the Jewish state, and Israel cannot therefore deal with it (and vice-versa). Well, Sinn Fein is ideologically committed to a united Ireland but manages to sit in government in a separate Ulster. It’s not directly comparable, but it shows that with the right turn of phrase and mutual incentives, such intransigent ideological blocks can be overcome. Parties can agree to differ, can acknowledge the other side’s view and disagree with it. Money makes a huge difference, but even so it will cost Israel less in aid than besieging Gaza costs in munitions, and the deal can be done this year. This month, even. Face as well as lives can be saved on all sides if:
- Israel accepts Hamas’ demands to lift the siege of Gaza (so Hamas can claim victory at home);
- Hamas undertakes to disarm (so Netanyahu can claim victory at home);
- Israel offers unlimited reconstruction aid, for which international assistance will be forthcoming;
- Gaza becomes an independent Palestinian city-state, with a secular constitution guaranteed by the international community including Israel and Egypt.
September to sign the agreement in principle and start allowing some movement of goods and people. December to complete the lifting of the siege and disarmament. This time next year to celebrate Gazan independence and to mourn the martyrs on both sides.
Most likely story. which we may never find out.
A bunch of rebel casuals gets their hands on the SAM kit their Russian friends had supplied them, for the purposes of shooting down Ukrainian government helicopters and troop planes.
Training was a little rushed, especially that bit about really checking the identity of the plane you were firing at.
But it wasn’t on an official flight path. Usually only troop planes here.
Airliner diverted to avoid turbulence/heavy weather.
Rebel commanders seriously pissed off with muppet who was only trying to score another troop plane.
We can blame the Ukrainian Government.
I would be excited by independence, lived I in Scotland. But I hope that I would not vote for it.
Keep the power to influence your own future -
If you vote for independence, it will be the last time you have the power to influence your future at all. As a small nation, you will be bound by the same international trade rules as the large ones, but you won’t be able to afford the lawyers to bend them.
Or cede it to multinational corporations
Instead of Westminster as your colonial master, you’ll have powerful global corporations deciding your laws in backroom deals with your local politicians.
You’ll still have to borrow money from the vampire squid of international finance, but they’ll have even fewer qualms about screwing you than they do about screwing us.
If you keep the pound, Threadneedle Street will still run your monetary system. If you’re not allowed Sterling, you’ll have to keep the Scots Pound at parity with it and the vampire squid will have a ball.
Scotland’s a great country with a great future if it realises that it doesn’t need to be a nation state or to assume the tiresome responsibilities that go with nationhood. If you vote for independence, you’re just giving a bigger trough to your local politicos.
Mr Gove’s declaration that schools will, henceforth, be required to teach British Values shows just how far he has lost the plot. He has always been a libertarian ideologue, and he has removed lots of the citizenship things that Labour put in to the curriculum.
Pundits have been having a lot of fun trying to work out what British Values are; of course, they are whatever you want them to be. If the conservative Muslims of Birmingham succeed, British Values will become Muslim values; and there is nothing wrong with that – if that is how society develops. I hope it doesn’t, because I don’t hold with conservative Muslim values although there are parts of Islamic morality that I like (as well as lot I really dislike).
As it happens, it’s much easier to make a case for French values or American values – because they’re encoded in their history. Freedom, equality and brotherhood – French values in a national motto. But British values? Not so very long ago, the answer would have been simple – British Values are Protestant values. Christian, but certainly not Catholic. Mr Gove is probably thinking a bit along those lines, but he can’t say it. The Protestant enlightenment allowed the free-thinking in which our society and economy developed.
Neither can Mr Gove say secular values, although he almost certainly does mean that. France is proud of laïcité; but secularism this side of the Channel is still seen as a little cranky. It shouldn’t; religious people in particular should embrace secularism as the best guarantee of religious freedom. The opposite of secularism is state-sponsored religion, which isn’t that far from theocracy. I don’t think we can directly compare today’s Church of England to Massachusetts Puritans or the Taleban; but the Church of England under Queen Elizabeth the First wasn’t a nice organisation if you were a Catholic. The difference is one of degree, not of nature, and it was the bad experiences of the sixteenth and seventeenth centuries that led America’s founding fathers to write the First Amendment. A secular state gives no faith any special privileges, and thus it guarantees all faiths the same treatment.
In a secular society, a woman may wear the hijab, should she choose to do so; but she may not be forced to do so – either by the State or by any other player. That’s a pretty good example of a modern British Value, which most of us would endorse (I’m very uneasy with secular France’s outlawing of the hijab – it strikes me as populist, Islamophobic and illiberal).
But from the punditry and the vox pops of the last few days, another British value has emerged: the idea of good manners. It’s been renamed “respect”, but that’s a horrid weasel word. Good manners matter; as William of Wykeham said, “manners makyth man”.