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A new tax to fund the NHS and Care

September 29, 2016

The NHS currently costs about £130Billion. Every sensible politician agrees that the amount needed will keep on going up, year after year. New drugs and treatment and diagnosis techniques increase the cost pressures of an ageing society. But there is no consensus on how to find the extra money and safeguard it when government finances remain tight. My former parliamentary colleague Norman Lamb, the excellent health spokesperson for the Liberal Democrats, has revived the idea of a tax dedicated to the NHS. At the party’s conference he announced he was setting up a “New Beveridge Group” to consider how a new tax could work. He also confirmed that the Lib Dems want to see an integrated NHS & Care Service.

Details are sketchy at the moment and the names announced so far as members of the group are health practitioners rather than tax experts or economists. It’s also not entirely clear whether they will be looking at options for increasing existing taxes with the proceeds of the increases hypothecated for the NHS or whether they will go further, creating a new tax, with the entirety of its yield dedicated to the NHS. Gordon Brown did the former in his 2002 Budget, raising national insurance contributions by 1% across all incomes. A repeat of such a move would be an easy recommendation but it could only fund a one off uplift in the NHS budget. It would not be sufficient to cover future health cost rises. It would also fail to deliver Norman’s desire to make it plain on everyone’s payslip how much they are paying for the NHS. So I think a new tax would be a better option.

New taxes don’t come around that often and in recent times they have been tiddlers in terms of the revenue raised, just a few billion here and there from the likes of air passenger duty or landfill tax. To raise in excess of £130billion a year requires a behemoth of a new tax, not seen since the introduction of VAT when Britain joined the EEC in 1973. VAT currently raises £115.4Billion making it the second largest source of revenue after income tax on £168.5Billion. The third largest is national insurance (NIC) at £113.7Billion. Setting up a new NHS tax would necessitate a major disturbance to one of these three big existing taxes. The obvious candidate is NIC.

My Liberal hero Lloyd George created national insurance in 1911. It paid for two of the foundation stones of the welfare state, sick pay and unemployment benefit. Later it also became linked to the financing of an earlier Liberal creation, the old age pension. Despite popular myth that it funds the NHS, this has never been the case. When another great Welshman created the NHS in 1948 it was decided that it should be funded from the general range of all taxes. Aneurin Bevan rejected William Beveridge’s attachment to insurance. Now might be the time to convert NIC into the NHS tax that many people already believe exists.

Several obstacles would need to be overcome. First, NIC would have to be shorn of the remaining links to entitlement to the state pension and non means tested Job Seekers Allowance. NHS and social care are both devolved issues and the budgets of the Cardiff, Edinburgh and Belfast governments are adjusted by the now antiquated Barnett Formula. If a dedicated NHS and Care tax is to be introduced, why not devolve the setting of the rate to the devolved governments with the Chancellor being responsible for the rate solely for England? Social care is currently funded via local government (the Coalition started a limited pooling of council and NHS local budgets in 2015 with the Better Care Fund) so a fiscal change would be needed in the local government settlement too.

Making NIC the funder of the NHS & Care Service would enable us to kill two birds with one stone. NIC has for many years effectively been a second form of income tax. But its rules make its operation more complicated and less progressive than income tax. Thanks to the Liberal Democrats the Coalition raised the starting point for income tax to £11,000. The starting point for employee NICs is just over £8,000 – an unfair tax on the lowest paid. Worse, the charging rate of 13.8% drops to just 2% on incomes over £43,000, the same point where income tax doubles to its 40% rate. While income tax is levied on all forms of remuneration, several perks such as company cars escape an NIC charge. Employers also pay NIC and the rules are different here, with different rules again for the self-employed.

Setting up a new NHS tax would enable the charging thresholds and rules to be aligned with income tax, with quieter squeals of anguish from higher earners than if the reform was done as part of a normal Budget. The rates of tax would depend on the amount needed to be raised. The National Audit Office’s latest report on adult social care in England says that current spending is £19Billion. So with an increased NHS budget the target revenue for a combined service would be in the region of £155Billion. HMRC officials would need to work out the tax rate needed to raise this amount. I would want to see a small reduction in the current main 13.8% rate and a rise in the 2% rate on higher incomes. The new tax could be called National Health and Care Contributions, NHCs.

I wish Norman Lamb well with his New Beveridge Group. If they take on board some of my ideas they could at a stroke bring clarity and stability to NHS finances and make our tax system more progressive. Whatever path they choose, I hope they are bold in their recommendations, like the great Liberal himself William Beveridge.

Sugar tax on its own will not tackle obesity

August 18, 2016

Theresa May said she would be a more interventionist Prime Minister than her predecessor. She promised to help British industry and do more to tackle inequality. I rather hoped that she meant it. But if today’s childhood obesity strategy is anything to go by, they were hollow words.

Health inequality scars Britain, with life expectancy varying widely even within the same towns. Theresa May could have done something about a public health issue that is making the gap wider, obesity. Instead she watered down draft ideas, bowing to pressure from food manufacturers. So she has indeed helped industry, ignoring those pesky experts, much derided in the Brexit debate.

Apart from warm words and exhortations to cut sugar content the only tangible measure is the soft drinks industry levy announced by George Osborne in what turned out to be his last Budget. The “sugar tax” will bite on drinks that have more than 5% sugar content (specifically 5 grammes per 100 millilitres) with a higher levy on drinks with 8% added sugar content. The higher levy will increase the price of both Pepsi and Coke and will even catch Lucozade, which according to the BBC has 8.7g sugar per 100ml.

The government has rejected other measures recommended by public health experts, such as mandatory clear labelling, advertising restrictions or product placement in supermarkets. Without such complementary measures the sugar levy will be just a new regressive tax on the poor.

Compare this inertia on sugar with the measures taken on tobacco. High levels of duty make cigarette packs an expensive product but in recent years those packs have been covered up in shops, can’t be sold from vending machines and will soon be sold in plain packaging with stark health warnings. As Chair of the cross party parliamentary committee on smoking I was at the forefront of these changes. I wouldn’t put sugar in the same category of danger as tobacco and as anyone who knows me will attest, I am a chocoholic! But if we are to reduce sugar content in drinks (the government is not proposing anything for cakes or confectionery) a tax will not be enough.

Reducing the consumption of harmful substances requires a holistic approach including marketing, advertising, public information, provision of alternatives as well as pricing and tax measures. Tackling obesity also requires sustained investment in sports and physical recreation activities in which everyone can participate, as well as elite Olympic athletes. After my general election defeat last year I took up swimming and try to go to Bristol’s Horfield pool three times a week. I’m fitter and slimmer as a result.

Excessive levels of sugar in food and drink is a public health problem, leading to weight gain and obesity. Children and adults who are obsese are at greater risk of developing type 2 diabetes, heart and liver disease and of course tooth decay. It is legitimate for a responsible government to act to reduce the risk of such outcomes.

Libertarians, including too many Liberal Democrats, often lambast public health measures as the actions of a nanny state. I would wear a nanny state liberal badge with pride. Effective tobacco control measures have given Britain one of the lowest smoking rates in the developed world. In the years ahead fewer people will have lives impaired and cut short by lung disease. But we’re still a nation of binge drinkers and have high rates of teenage pregnancy. Given Theresa May’s timidity on childhood obesity I doubt if we’ll see any action in these areas.

Without an effective all embracing public health strategy for tobacco, other drugs, alcohol, fat and sugar too many people, mostly from communities already held back by low wages and poor educational standards will live unhealthy and shorter lives. Poor health is a drain on the NHS and saps economic productivity. But it leads to misery for too many families. A government that truly wanted to help people succeed in life would be bold rather than timid on public health.

How a federal republic could keep Britain united

August 8, 2016

There’s been a lot of speculation that the UK’s impending exit from the European Union might lead to the break up of the longer lasting union of nations on these islands. Scotland voted most strongly to remain, while England voted most emphatically to leave. Northern Ireland voted to remain while Wales voted the same way as England, albeit by a smaller margin. Nationalists in Scotland are planning a second independence referendum. Nationalists in Northern Ireland have called for a border poll on union with the south, rather than facing a hard border on the UK’s only land border with a European Union country.

Brexit has already caused turmoil in both the Conservative and Labour parties. It may lead to the realignment of British politics, at least on the centre-left. There are renewed calls for electoral reform. But might Brexit also provide an opportunity for a more fundamental recasting of the British state? Is there a way to hold together the British union while allowing for more self determination by the Celtic nations and more decentralisation in England?

Since the 1970s when devolution to Scotland and Wales was first seriously mooted there has been no answer to Labour MP Tam Dalyell’s “West Lothian Question” about how to resolve the democratic deficit of MPs from English constituencies having no say on NHS reforms in Scotland but MPs from Scottish constituencies being able to vote on all matters before the House of Commons. The current Conservative government has tried to solve this with English Votes for English Laws. I heard a lot about their obsession with “EVEL” when I was a member of the cabinet committee on devolution during the coalition. In the aftermath of another referendum, on Scottish independence, EVEL was more important to them than delivering more powers to Edinburgh or reforming local government in England.

The intractable problem with the current House of Commons is that it is effectively both an English Parliament and the body that decides UK wide macro-economic policy and Britain’s relationships with the rest of the world. Removing Scottish MPs altogether or solving a West Glamorgan Question by stopping the MP for my home town of Pontypridd from voting on the vast majority of issues would be untenable. The Prime Minister of the UK would not be able to speak for the whole kingdom. And it’s the kingdom that is the blockage to solving this democratic conundrum. We have a head of state with no real political power. The monarch is also at the pinnacle of a network of an unelected establishment that includes the absurdity of the House of Lords, a body of people that still includes a smattering of hereditary Earls and Barons. Former Prime Minister Cameron has just made the institution look even more absurd with his resignation honours list. The gilded chamber also has places reserved for bishops from one denomination of one religion from one part of the United Kingdom on its red benches.

I believe that the best way to hold our country together and renew our democracy would be to abolish the United Kingdom and replace it with the Federal Republic of Great Britain and Northern Ireland. The short name would be Great Britain, which seems to be acceptable to everyone watching the Olympics in Rio at the moment. We would elect our head of state who would rule in conjunction with four national parliaments and a British Senate. Everyone who makes laws in Great Britain would be elected. Here’s how I think it could work:

The FEDERAL GOVERNMENT of the Federal Republic of Great Britain and Northern Ireland shall consist of a President and Senate.

The PRESIDENT of Great Britain shall be elected by all British citizens aged 16 and over, using the alternative vote system. British passport holders in the various offshore dependencies such as the Isle of Man and Gibraltar shall also be able to vote for the person who would be their head of state. The President’s term of office shall be five years, with one option to stand for re-election. The President will be head of state and head of the federal government of Great Britain. The President will be primarily responsible for macro-economic policy, foreign and defence policy and international trade. There will also be some residual social welfare powers and a duty to arbitrate on cross border issues. The President will be the authorising signatory of all federal and state laws and will be the civil commander in chief of the British armed forces.

The President shall appoint a cabinet of ministers from the members of the British Senate in order to administer the federal government. There shall be a Chancellor of the Exchequer, Foreign Secretary, Home Secretary, Defence Secretary, International Development Secretary, Trade Secretary, Pensions & Welfare Secretary and a Federal Relations Secretary and Federal law officers. The British federal government will set and receive the revenues of a federal income tax (including employee national insurance) and will be the sole controller of corporation tax, capital gains tax, inheritance tax and all international customs and tariffs. The British government will also control the rules but not the rates and thresholds of all taxes levied in any of the four constituent states. The President and the president’s staff shall occupy Buckingham Palace and Number Ten Downing Street but will also have a physical presence in Edinburgh, Cardiff and Belfast.

The British SENATE shall consist of 200 members, elected by the single transferable vote in multi-member constituencies of 5 Senators for a period of 5 years, with no term limits. England shall elect 110 senators, Scotland 40, Wales 30 and Northern Ireland 20. The Senate will occupy the chamber of the Palace of Westminster currently used by the House of Lords, an abolished institution. Senators will set federal law, pass a federal budget and scrutinise the actions of the President and ministers. The President shall choose federal ministers from among serving members of the Senate. A Senate committee shall scrutinise each federal department. Senators shall elect a Speaker at the outset of each five year term. The Speaker shall assume the office of President pro-tem on the death or resignation of a President, pending a by-election to elect a new President for the remainder of the former President’s term, unless there is 6 months or less until the next scheduled election.

The Federal Treasury, Foreign Office, Defence Department and Home Office shall be based in London. The Office for Federal Relations shall also be in London. The Pensions & Welfare Department shall be located in Edinburgh, the Trade Department shall be in Cardiff and the International Development Department shall be in Belfast. The Home Secretary will be responsible for British immigration law and the domestic intelligence and security services. The Pensions and Welfare Secretary shall be responsible for pensions law, the state pension and other benefits including those for disability and parental responsibilities. The Trade Secretary will be responsible for competition law, international trade agreements and will work with the four national governments on inward investment and strategic economic development funds to facilitate economic convergence across the federal republic. The Secretary of State for Federal Relations will assist the national governments on cross border issues on areas such as transport and will hold responsibility for federal institutions of a cultural and scientific nature.

There shall be 4 national parliaments for all aspects of domestic law and administration that are not expressly reserved for the federal government. The PARLIAMENT OF ENGLAND shall have 450 members, located in London, based in the chamber of the former House of Commons, an abolished institution. The PARLIAMENT OF SCOTLAND shall have 129 members and be based in Edinburgh. The PARLIAMENT OF WALES (SENEDD CYMRU) shall have 80 members and be located in Cardiff. The PARLIAMENT OF NORTHERN IRELAND shall have 108 members and be located in Belfast.

The four Parliaments will all sit for five years. The Members of Parliament in England, Scotland and Wales will be elected by the Alternative vote in single member constituencies plus a regional top up to give greater proportionality. The accumulated first preference votes in a group of constituencies will be used to allocate top up seats, with the number of constituency seats won being taken into account. The English Parliament will have 300 constituencies and 150 top up seats drawn from 25 regions each with 6 top up MPs. The Scottish Parliament will have 73 constituencies plus 56 top up MPs drawn from 8 regions each with 7 MPs. The Welsh Parliament will have 45 constituencies plus 35 top up MPs drawn from 5 regions each with 7 MPs. The Northern Irish Parliament will have 108 MPs elected by the single transferable vote in 18 constituencies each with 6 MPs.

The four Parliaments will have primary responsibility for all domestic law and administration within their national boundaries. The existing laws of the UK will be the basic law of each territory until amended by the national parliament. The national parliaments will each control the rates and receive the revenues of national income tax (including employee NIC), employers’ NIC, VAT, excise duties and stamp duty. Income tax and NIC will be allocated on the basis of the primary residence for tax purposes of the individual.

At its first sitting after an election each Parliament shall elect a Speaker and then a First Minister. The First Minister shall appoint a Finance Minister, Justice Minister and ministers for education, health, welfare, transport and culture plus law officers. The Finance Minister will be responsible for the national budget and economic development. The Justice Minister will be responsible for policing and all aspects of the criminal justice system and will have a duty to cooperate with the federal Home Secretary on security issues.

The national parliaments shall pass laws for their territories in the areas for which they are competent and are not reserved for the federal Senate. Bills passed by the parliaments shall become law on the signature of the President. The President may, in exceptional circumstances where it is believed the proposed law would be prejudicial to good relations between the four nations, veto the law. The veto would give the national parliament up to one year (or the expiry of the 5 year term if less) to submit a new proposal. If the new proposal is vetoed for a second time it is referred to the Senate. The Senate may uphold the veto, nullify the veto or amend the law, which is then sent back to the national parliament before referral to the President for signature.

The relationship between the national parliaments and LOCAL GOVERNMENT shall be a matter for each national government. But the structure of local government shall be unitary principal authorities. Combined Authorities may be set up for city regions, with powers and revenues devolved from the national governments to be exercised by a Regional Mayor, elected by AV. Unitary Councils will set a local income tax and will control all aspects of council tax. They will retain all business rates and may introduce supplementary local taxes and levies from a menu set by each national parliament. Unitary Councils (or a referendum of a defined group of not less than a thousand electors) may set up neighbourhood councils for towns and villages. Neighbourhood councils may charge a precept on the council tax. All councillors will be elected by STV in multi-member wards. In rural councils or sparsely populated areas the AV+ method may be used.

Election of the President and Senate will take place on the third Sunday in September. The President and Senators will assume office on the Monday four weeks after the election.

Election of MPs for the four parliaments will take place on the second Sunday in June. MPs will take office on the Monday four weeks after the election. They will then elect a Speaker and a First Minister.

The creation of the democratic institutions of the Federal Republic of Great Britain and Northern Ireland will require the abolition and phasing out of existing United Kingdom institutions. On the inauguration of the first President the monarchy will cease to have any constitutional role in law making and all prerogatives will vest in the President. The Civil List will be adjusted and accommodation rearranged for an interim period. On the death of Queen Elizabeth all royal titles will be abolished. A generous resettlement package will be provided for the remaining principal members of the former royal family together with the conferment of hereditary peerages. The Church of England will be disestablished on the same lines as the Church in Wales. The bar on same sex marriage in both institutions will be abolished, though it will be up to them whether they offer same sex marriage. The President of Britain would not be the head of state of any other Commonwealth country, other than the dependencies that are included in the presidential franchise.

The House of Lords will be abolished. The titles associated with the peerage will remain with existing holders but there will be no new creations of life peers. The House of Commons, Scottish Parliament, National Assembly of Wales and Northern Ireland Assembly will be abolished and replaced by the four national parliaments. The combined current total of Peers, MPs, MSPs and Welsh and Northern Ireland AMs is almost 1,800. The combined total of new elected law makers at federal and state level will be 968 including the President.

I believe that the institutional shock of Brexit gives us an opportunity to refresh our British democracy. Those who advocated a break with Brussels alleged a lack of democratic control over law making in Europe. The same people were largely blind to the deficiencies of the creaking machinery of British government. A national Parliament with one House unelected and the other elected by a system that fails to reflect the proportionality of the votes that were cast. The elected House with MPs having different voting rights over domestic policy. An uneven devolution settlement between the Celtic nations and emasculated local government everywhere. My proposed model allows for even handed devolution within a federal structure and a system where everyone with a hand on the levers of power is elected, by a fair votes method. Ironically, whether we actually leave or end up remaining in the EU, it is a structure that will be all too familiar to our fellow Europeans.

The Tory energy policy mess – stalled, obstructed and scrapped nuclear, renewables and home efficiency

July 29, 2016

I wonder if Theresa May’s pause for thought on Hinkley Point C will also mean a rethink about the Tories’ sceptical and obstructionist attitude to renewables and energy efficiency. I am open minded about the role of nuclear energy, as long as the costs can be brought down. I hope the new government, as it increasingly seems to be distancing itself from the Cameron era, becomes more open minded about the other essential components of our energy mix.

My experience in government was that the Tories were at best sceptical and often openly hostile to investment in renewable energy and measures to reduce home energy consumption. Their hostility to wind energy in particular stemmed mainly from party political considerations. Cameron allowed ministers to fulminate against wind farms and to actively use the planning system to obstruct their construction. This was not based on sound engineering or cost grounds, rather it was a political need to see off UKIP and placate the Tory backbench headbangers and climate change deniers. This tendency of Cameron to throw red meat to those that snarled the loudest at him was as bad for energy policy as it was disastrous for our place in the European Union.

When I became Communities Minister in 2013 one of my responsibilities was regulation of the building industry. The suite of building regulations covered everything from fire safety to the design of staircases. They also covered energy efficiency. I’d been saying for years that as well as switching our energy sources of supply away from carbon towards renewables we should also look to reduce demand if we are going to make any meaningful contribution to reducing greenhouse gases. The first Liberal Democrat minister at DCLG, Andrew Stunell, had tightened building regs in 2011 so that house builders had to do more to improve insulation and install energy efficient heating systems. My officials explained to me that there would be a chance to go further and bring to life a concept that had been around since the Brown government, of “zero carbon homes.”

Like a lot of buzzwords from the Labour era, zero carbon homes was a misnomer. No house could be built without consuming resources and no family living in the house would live a cold life in the dark. But it was certainly possible to further reduce energy consumption and also require housebuilders to make a contribution to low carbon energy projects. Officials and housebuilders had invested several years in working up proposals. After several briefings with my talented and knowledgeable officials I met with a group of housebuilders who told me that what they wanted from government was policy clarity. Neither the previous Labour government nor the coalition had actually committed to introducing the legislation necessary for a zero carbon homes standard to operate by the original target date of 2016. So I undertook to make the case inside government.

I could (and will!) write another blog entirely about the policy making process and wheeler dealing that went on inside the coalition government. But suffice for now to say that to get anything signed off that was a policy priority of one party needed the agreement of the two Cabinet Office ministers from each side, Oliver Letwin for the Conservatives and David Laws for the Liberal Democrats. So I found myself in many meetings with Oliver in number 9 Downing Street, with a view down the street of the comings and goings through the most famous front door in the world. Eventually it was agreed that we would proceed and zero carbon homes would be part of an Infrastructure Bill in the final session of Parliament of the coalition. I’m sure the Queen has read out lots of eye brow raising proposals from her twelve Prime Ministers but on 4th June 2014 I watched with pleasure as she said “Legislation will allow for the creation of an allowable solutions scheme to enable all new homes to be built to a zero carbon standard”

The proposals I took through Parliament would require housebuilders from 2016 to further improve the energy efficiency of new homes. My visits to lots of building sites plus the amazing Building Research Establishment (founded by Lloyd George as part of his promise to build “homes fit for heroes”) at Watford had shown me what could be done on site. Brick design, wall insulation, glazing enhancements and making triple glazing the norm could all make a contribution. Boilers were getting more efficient. Homes could also be built with photo-voltaic panels to generate the house’s own energy. But only so much could be done on site and to new houses. The location of some sites would not be suitable for solar energy. The vast majority of our existing housing stock was built without energy efficiency as a consideration.

Greater returns for investment by housebuilders would be found in retrofitting older homes or by funding other low carbon projects. I wanted to have a wide range of options for housebuilders to invest in the “allowable solutions” for off-site carbon off-setting. Retrofitting Victorian housing was an obvious example but I was also keen on funds for electric car charging points, cycle routes and possibly a direct financial contribution to the Green Investment Bank that had been set up by Vince Cable.

The allowable solutions menu was to be worked up once the Infrastructure Act became law. This is what should have happened during the second half of 2015. Oliver Letwin had told me that imposing more regulations on house builders would not have been done if the Conservatives had been in government on their own. So it was no surprise but still a deep disappointment that in July 2015 George Osborne announced that the new Tory government would suspend the scheme. With no sense of irony the Chancellor included his scrapping of my scheme in his proposals for a productivity plan to increase national prosperity. The allowable solutions scheme would have been a huge boost to the low carbon economy, stimulating investment right across the country. To make matters worse, Osborne also cancelled the uplift in on site home energy efficiency.

Theresa May has a reputation for immersing herself in the details of policy. On home energy efficiency the work has already been done and the legislation is in place. Whether or not to proceed with more nuclear plants is horrendously complicated. But it should be a no brainer to realise that reducing demand for energy in our homes will reduce the need for a new supply of nuclear energy. Our new PM has shown that she has no qualms about overturning the decisions of the Cameron-Osborne era. Let’s hope that she acts now to get us back on track for zero carbon homes. By doing so she will demonstrate that she understands that as well as diversifying our energy supply we also need to manage down demand if we are to have a sustainable future. Housebuilders are well prepared to make the transition and householders would thank her for the lower bills. And our small part of the planet would breathe a little easier.

The Common Ground – how a progressive alliance could transform our politics

July 16, 2016

These are extraordinary times in British politics. The second decade of the twenty first century is the most turbulent since a hundred years ago. After 1916 the Liberal Party was split and weakened, opening the way for the rise of the Labour Party as the main alternative to the Conservatives. Both the Liberals and Labour faced further splits and crises in 1931 but by 1945 politics had settled to a Conservative-Labour duopoly of parties of government, with the Liberal Party squeezed to a tiny rump by the merciless force of the first past the post electoral system. The main beneficiary of this turbulence on the left has been the Conservative Party, the most successful political party in Europe.

Liberal leaders in from the 1950s to the 1970s, Jo Grimond and Jeremy Thorpe, talked about a realignment of the left, their hopes buoyed by shock by election wins. David Steel almost pulled it off when the Liberal Party fought the 1983 and 1987 elections in alliance with the new Social Democratic Party. I joined the SDP as a 16 year old just after the 1983 election and have been an activist ever since. My hopes of a breakthrough were dashed in 1987 when over 7 million votes translated into just 22 MPs for the Alliance. The messy merger of the Liberals and SDP and the theft of much of our social democrat language by Tony Blair in 1994 made me feel at the time that a realignment had indeed taken place but mainly inside the Labour Party. I very nearly joined Labour at that time but personal loyalties kept me in the Liberal Democrats.

Might 2016 have the right mixture of factors to bring about a union of progressives, liberals and social democrats currently spread among several parties? I think so but it all depends on whether the foundations of the Labour Party broad church have been shaken enough for the walls to come tumbling down. Much has changed since the Labour landslides of 1945 and 1997. Tribal support for both the Conservatives and Labour has been declining since the 1960s as the class based society has been eroded by social mobility and huge changes in our economic base. The political landscape has become more crowded as the Scottish National Party has surged, more successfully than Plaid Cymru in Wales. UKIP was initially a threat to the Conservatives but now is arguably more of a problem for Labour as white working class people respond to its simple messages about job insecurity and suppressed wages being the fault of the EU.

The 2015 general election was a disaster for the Liberal Democrats, reduced to 8 MPs but still obtaining 2.4 million votes. In Scotland it was a shared humiliation with Labour as both parties were pummelled by the SNP and reduced to just 1 MP. UKIP polled 3.9 million votes, doing well in towns in the north of England. Labour had only 231 MPs from England and Wales, its worst result since 1987. Labour members chose Jeremy Corbyn as their new leader. The party suffered a further set back in the 2016 Scottish Parliament elections, reduced to third party status in a country where it had been the dominant force for fifty years. The result of the EU referendum, with many of Labour MP “safe seats” voting for Leave has plunged the party into crisis. MPs have no confidence in the Leader, who at the time of writing is still popular with Labour party rank and file members.

If Corbyn survives the forthcoming leadership election then it is very likely that the party in Parliament will fragment into several factions. So a realignment in 2016 depends on the fate of one man. The swift coronation of Theresa May as Conservative Leader and Prime Minister will keep pro EU, socially liberal Conservative MPs inside their party, at least until the Brexit crunch time arrives. But the break up of the Labour Party is a distinct possibility. The broad church could well be falling down.

Labour MPs who reject Corbyn’s brand of extra Parliamentary protest march socialism face three choices. First, I think most of them will sit tight, waiting for the wind to blow over. The Labour Party is their political home and in many cases they can’t contemplate life outside. Then there are those who feel that all is lost and Labour, robbed of its Scottish heartland and threatened by UKIP in many of its safe seats, is heading for electoral oblivion. They have nothing to lose by trying another path.

So a second group may break away from the official Labour party in Parliament and form a new group in the Commons and quite possibly in the Lords too. This new grouping, let’s call it the “Independent Labour Party”, will be a party without a base in the country or any party apparatus. Given the gulf between MPs and their Corbyn supporting members it is likely to be a party with lots of chiefs and no Indians. As the SDP showed in 1981, this is a massive risk. In 2016 there are lots of other options for progressives with a range of political parties and campaign groups, with less room for a new party than there was in 1981.

A third group of Labour MPs could simply defect to the Liberal Democrats. I know of many Labour MPs who have always had more in common with the Lib Dems than they care to acknowledge in public. They could easily have joined the Lib Dems at an earlier stage in their life but chose Labour due to family history and political ambition to win power. It would be a wrench for them to depart now and both defecting MPs and the existing Liberal Democrat MPs and constituency parties would have to show good grace, putting behind them past rivalries, arguments and personal slights.

The relative sizes of these three groups will have implications for the operation of parties in both Houses of Parliament. The Liberal Democrats have 107 Peers so it would only take 52 of Labour’s 209 members to defect to make the Lib Dems the official opposition in the Lords. In the Commons there could be four party groups (including the SNP) on the opposition benches with more than 50 MPs, which would break the underlying assumption of business that there are only two main parties, one in government and one in opposition. This was a major problem for the Liberal Democrats between 2010 and 2015.

If Labour does break up then the next general election is a great opportunity to put before the electorate a range of candidates from credible centre left parties. But if those parties compete in every seat then Theresa May will win the greatest Conservative landslide since 1931 when it won 460 seats. Such an outcome would be a catastrophe, propelling Britain out of the EU for good and emboldening the Tory right to shake up state services and welfare. Given that she is well aware of this opportunity it is imperative that progressive politicians in all parties act to mitigate the risk before it becomes a reality.

I propose that the Liberal Democrats and any new Independent Labour Party should cooperate on the ground to avoid clashes in Conservative facing seats. There could also be arrangements involving the Green Party and Plaid Cymru though neither of these parties is a serious contender in any constituency currently held or under threat from the Conservative Party. I see little scope for an arrangement in Scotland, such is the dominance of the SNP and weakness of the Tories.

The Lib Dems and the new ILP could fight the next election as separate parties with their own manifestos but would have a Common Ground set of objectives and principles. The first Common Ground objective is obviously the defeat of the Conservative Party, leading to a House of Commons with a progressive majority. All candidates fighting under the Common Ground banner would have to agree to a 36 month Parliament to allow time in both Houses for a programme of constitutional reform the most important of which would be a more proportional election system. It should be easier than in the past to agree campaign finance reform, on the assumption that the unions have stuck with the Corbyn led Labour Party.

The Common Ground would also set out some other basic principles such as maintaining the closest possible relationship with the European Union, retaining the integrity of the UK with full devolution to Scotland, Wales and Northern Ireland and greater power for local government in England. While the parties would have their own detailed manifestos it would be necessary to agree some broad tax and spend parameters for a Common Ground coalition government to operate within.

Common Ground candidates from the ILP, Lib Dems and possibly other parties would be chosen primarily on the basis of who was best placed to defeat the Conservatives. The criteria would include the electoral history of the constituency over the last four general elections and of course the attributes of an individual candidate who could be the sitting or former MP or a well known individual standing in a new seat. I would add a further factor, obtaining a measure of political pluralism even under the last election to be held under first past the post. So while it is likely to be the case that the Liberal Democrat candidate is best placed to defeat the Conservative in most of southern England there should be an ILP MP in Surrey or Cornwall. Similarly, it would not be right for there to be no Liberal Democrat MPs in Lancashire or the East Midlands.

This arrangement of giving the Common Ground coupon to Liberal Democrat or ILP candidates should be straightforward in most Tory facing seats. There would be other problems to iron out the biggest of which is what to do with constituencies with a Corbyn Labour sitting MP. It would be crazy for those seats to be handed to the Tories as a result of all of the Lib Dems, ILP and the Green parties fielding a candidate. The same would apply to the Green Party’s sole seat in Brighton Pavilion. There may be other seats where historically the Lib Dems and Labour have been in hot competition, such as Cambridge and Hornsey & Wood Green. These would have to be settled on a seat by seat basis and in some cases it would have to be accepted that the Lib Dems and the ILP would fight each other, with neither candidate having the official Common Ground coupon. I believe there are also some sitting Conservative MPs who might be tempted away from their party if they were guaranteed a safe berth with a Common Ground coupon.

This is a momentous period with a mix of factors that give Britain the best opportunity to transform its politics from the stale tribalism of two big parties that is now so unappealing to millions of voters and indeed non voters who think nobody listens to them. A pluralist political system of several parties, underpinned by a proportional voting system is potentially in reach. Achieving that goal will require MPs, Peers, councillors and activists currently in several parties to think differently about how they conduct politics. My excitement and optimism is only tempered by a knowledge that we have been here before and it didn’t happen. But given the extraordinary political events of the last 6 years, the Coalition, the Scottish referendum aftermath and now the Brexit aftermath, anything must be possible. If not now, then it is hard to see a better opportunity ahead to reinvent British politics.

Britain’s worst foreign policy disaster – Iraq or Brexit?

July 6, 2016

It’s hard to think of a more momentous political period in my lifetime than what we are experiencing now. The country is divided after the vote to leave the European Union. The party of government is rudderless and is concentrating on finding a new leader rather than guiding the country through dangerous times. The main opposition party has a leader trapped in his parliamentary bunker, deserted by his MPs but clinging on as the wider party still (he hopes) supports him. Today has seen the publication of the Chilcot Report, reminding us all of Mr Blair’s folly and re-opening political wounds. Corbyn got that call right back in 2003 while Cameron and almost every other Conservative MP backed Blair’s invasion of Iraq. The consequences of Brexit and legacy of Iraq now vie with each other for the worst foreign policy decision in modern British history.

I listened carefully to Sir John Chilcot’s calm delivery of the findings of his seven year long enquiry, with several quotes from Bush and Blair correspondence. Three words stand out as a condemnation of Tony Blair, when he wrote that he would be “with you, whatever”. Written in July 2002 it demonstrates that Blair committed Britain to war whatever the UN resolution, whatever the evidence on the ground from weapons inspectors and whatever might be the opinion of the British people.

Chilcot has concluded that the invasion and occupation of a sovereign state was not justified. In March 2003 all peaceful options had not been exhausted so war at that time was not the last resort. The evidence about weapons of mass destruction given by Blair to Parliament was presented with a certainty that was not justified. The war cost the lives of 179 British soldiers, a similar number of British civilian personnel and countless thousands of lives of innocent Iraqi civilians. The aftermath has been even worse. Chilcot has shown that the preparations for Iraq after the overthrow of Saddam were “wholly inadequate”. This failure to prepare for the aftermath has led to Iraq descending into chaos.

I believe that the Iraq war, based on what Charles Kennedy at the time called a “flawed prospectus”, has destroyed the confidence of many people of the case for a liberal interventionist foreign policy. This is shown most clearly by Syria. The collapse of order in Iraq enabled extremists to take root and then spread their poison across the desert into Syria. The Syrian civil war is a direct consequence of the destruction of order in Iraq. Our failure to intervene in even the most limited way in Syria is a consequence of over timidity after Iraq. President Assad really has weapons of mass destruction and he really has used them against civilian targets. The compelling case for intervention in Syria has been undermined by over-caution after the flimsy evidence for the war in Iraq.

The chaos on the ground in Iraq and Syria has bred terror groups that not only murder Iraqis, Syrians and Kurds but also pose a direct threat on the streets of London, Paris and Brussels. The awful truth is that while Saddam did not have weapons of mass destruction that could be deployed against Britain in 45 minutes, the likes of ISIS do have weapons and have indeed used them against us, without even a 1 minute warning. The invasion of Iraq in 2003 has made Britain less safe in 2016.

While Tony Blair will forever be associated with Iraq, David Cameron will forever be remembered as the Prime Minister who triggered the EU referendum that led to Britain dislocating itself from its closest neighbours. I believe that the potential damage to British interests from us leaving the EU will be far more serious than the security risks post Iraq.

Breaking apart from the EU will leave Britain with a smaller, weaker voice on the world stage. Our diplomatic clout was enhanced by EU membership, it will be diminished outside. Our trading position with other large world economies will be weakened outside the world’s largest single market. Our economic growth will be held back by a reduction in foreign investment and reduced opportunities for research collaboration by business and universities. A falling pound is no longer a spur to manufacturing exports as we don’t have the mass manufacturing capability to respond. Besides, we also have put up a “go away, not welcome” sign to the skilled migrants from Europe who could most easily move here to expand the workforce. Within a few years British businesses will face higher tariffs imposed on our exports, cancelling out any short term exchange rate advantage. British consumers will fare even worse, with higher prices on imported goods. Employment opportunities for them will be fewer as investment dries up.

All of these risks from a Brexit were spelled out by David Cameron during the referendum campaign. They were warnings, not scaremongering. Some are already hard facts. Given the stark risks it is all the more unpardonable that Cameron bet the country’s future in order to placate the Eurosceptic head-bangers on his backbenches and to stave off UKIP. Party advantage trumped the British national interest. Blair may have been wrong in his judgement but his motivations were perhaps more noble.

In my view the decision to hold a referendum on a highly complex mix of issues bound up in our membership of the EU was worse than the decision to go to war in Iraq, at least for the people of Britain. But they share a common characteristic in the failure of the protagonists to prepare for the aftermath. In Iraq we sent in troops to boot the door down, smash up the house, hang around for a while and then pull out leaving a country collapsing in violent chaos. Those British politicians that actually wanted (or so they said) us to leave the European Union failed to spell out what life the other side would look like. But their deceptions and simplicities fooled just enough people to force a Brexit. Now faced with the consequences, Boris Johnson and most of the rest of them are running away from responsibility for the messy task of uncoupling Britain from the EU.

Finally, a point from my own party political perspective. In 2003 Liberal Democrat MPs were united in voting against the Iraq war. We campaigned against military intervention from the outset, at a time when public opinion was still giving Blair the benefit of the doubt. For over 50 years we have been the consistent champion of Britain being a fully engaged member of the British Union. We have made some mistakes, indeed all parties when in government make decisions that annoy people. But in the two biggest decisions about the British national interest in my lifetime so far, our judgement was right. I’m thinking today of my late colleague and friend Charles Kennedy. He was the brave party leader who spoke against the Iraq war in 2003. He was a passionate advocate of Britain in Europe. How we miss his distinctive Liberal voice today.

Brexit – how on earth did we get to here?

June 24, 2016

Like all liberals and progressives in Britain today I am devastated by the country’s decision to vote to leave the European Union. I feared this outcome, having had many encounters with people over the years who believed even the most risible claims about the EU. Couple decades of negative stories about Europe with our political age of social media spreading of myths and a lowering of the reputations of political leaders and you have the ground prepared for a combustion of anger against the establishment.

Much will be written in the coming days and in future history books about this momentous decision. Here are my thoughts, written in sadness and after no sleep. These are the factors that occur to me now and no doubt I’ll think of more when my mind is rested and with more time to be reflective.

1 The referendum is a self inflicted wound by David Cameron. There was no pressing national need to vote on Britain’s membership of the EU. He held the referendum to honour a manifesto pledge he never thought he would have to carry out. I’ve painful scars of such pledges myself and the fact that coalition government ended a year ago meant that Cameron became a prisoner of his own eurosceptic backbenchers. The referendum was held because of the long running Euro psychodrama in the Conservative Party and too much of the coverage of the campaign was about the jousting between the two old Etonians who want the Tory crown.
2 The near annihilation of the Liberal Democrats as a Parliamentary force has robbed Britain of its most distinctive and authentic pro European voice just when it was needed the most. The pro Remain arguments from Conservative ministers relied heavily on fear and hyperbole. The Lib Dems wanted to make a positive case for Britain in the EU but were largely ignored by the broadcasters.
3 The biggest political failure was by the Labour Party leadership. Corbyn’s political history is strongly eurosceptic and his campaigning in the referendum was half hearted and mealie mouthed. Some of the biggest votes for Leave came from strong Labour areas. Places like Sunderland, Nottingham and Blackburn are one party states where only Labour MPs and councillors are in positions to give their communities leadership based on facts. Yet Labour MPs seem to have been scared of their own grassroots and for too long failed to answer their real concerns about immigration. The warnings about economic contraction from the government should have been amplified by Labour in their heartlands. In an economic downturn it’s the poor who suffer first and longest. Voting against the EU may be a kick in the shins for the London elite but it’s really an act of self harm. The positive impact of the EU on poorer communities with lower prices on everything from food to Easyjet flights barely featured in the campaign.
4 We are living in an age where it is easy for myth to triumph over reason. Humnanity may have largely discarded belief in omens and the words of soothsayers. But the thundering cascade of information in our internet and social media age has robbed people of the time to sift through the waters and separate the nuggets of fact from the pile of mythical sludge. Financial literacy is too boring for many people to see that Vote Leave’s claim that £350m a week could be spent on the NHS was both wrong and only a small proportion of government spending. Apparently most of our laws come from Brussels (I somehow failed to notice this when making laws for ten years as an MP) and are made by unelected bureaucrats in the EU Commission. Vote Leave got away with dismissing from minds the elected MEPs (like Farrage and Hannan) or the elected Council of Ministers, which include Gove and Grayling. Oh, in this country we usually call unelected bureaucrats who write laws “civil servants”. MPs and ministers who like me had voted on the accession agreements for Bulgaria, Romanian and Croatia told us that they had no say on Turkey joining.
5 Politicians blaming the media is like sailors moaning about the sea. But newspapers have deluged the public with lies about the EU for decades. Their owners (mainly foreign) have their own agendas. But the BBC failed us all by not acting as an arbiter of facts or showing clearly where the balance of opinion lay. Far too often the lies from Vote Leave were reported with a counterpoint from Remain, showing balance but leaving voters none the wiser and wondering who to believe. Remain was backed by huge numbers of business leaders, economists and other financial experts. But balanced reporting giving equal time to Leave’s tiny number of business backers (a vacuum cleaner designer, tractor maker and pub landlord) made it look evens.

So Britain has voted to dislocate itself from the world’s largest single market. We will now bob about between the U.S., China and the EU. We will have a smaller, quieter voice on the world stage. Decades of successful diplomacy building a Europe of 28 free democracies, most of which were fascist or communist dictatorships at our joining the EEC in 1973, has now been cast aside. The Leavers said that our isolation would be splendid. They now have to show us just how we can prosper in safety in a globalising world.
The most prominent Conservative arguing for a “no” vote in the 1975 referendum was Enoch Powell. I quoted him in my concession speech when I lost Bristol West, saying that all political carreers end in failure. David Cameron gambled the future of the country in order to placate his party. He’s lost his bet and will now lose his job. In coalition his government did much good and I think history will judge that period kindly. David is two days older than me. His premiership of a Conservative government will be remembered for making the biggest foreign policy mistake of our lifetimes.