Free votes: or how I stopped worrying and learned to love the Whip

Free votes are funny things, and much overrated. We always have them for changing parliamentary procedure. We normally have them on things like abortion, equal marriage and euthanasia: essentially, ‘God issues’. Sometimes, we have them for no very obvious reason: fox-hunting was a case in point. And occasionally, we have them to make a point: Ted Heath held one on the ‘in principle’ vote for entering the EEC in 1972, largely to encourage Labour to split as badly as possible on the same issue.

It’s easy to see why they appeal. We complain about spineless lobby fodder, MPs with no independence of thought, rigid party dogma and so on. Allowing a freewheeling debate, with MPs able to vote their conscience, sounds great (though actually, plenty of MPs rebel). You even hear people saying we shouldn’t have whips at all.

But there’s a reason why in practice, MPs usually get free votes when either the party doesn’t care too much, the outcome isn’t in doubt, religion comes into play or party management means leaders think they have no choice. Equal marriage is important to me personally, for instance, but the whole of government policy on tax, benefits and inheritance wouldn’t have fallen apart if it hadn’t gone through. Not everything can be separated out so neatly.

Take the free vote principle too far, and eventually governments can’t govern coherently at all. If the Budget is completely rewritten by a series of splits, you’re not going to get a massively improved document with better policy for all: you’ll probably get a complete mishmash with everyone running round to try and square all the contradictions after Parliament has voted.

If you run a foreign policy on a ‘voting at will’ basis, you’ll also get an incoherent mess. The Government’s decision to allow Cabinet ministers to campaign against each other in the EU referendum and Labour’s free vote on Syria both illustrate the point. EU membership and decisions on military action are fundamental to UK policy. You can’t just say ‘Well, we’re neutral on leaving the EU, but basically our foreign, security and economic policies are the same either way’ or ‘Well, we don’t have a line on military action in Syria, but basically our policy on the Middle East is the same either way’. These decisions are game-changers: if you don’t have a position on them, you don’t have much of a position full stop.

Too many free votes don’t just make governing harder: they blur government accountability. Most people don’t think they vote for their individual MP: they think they vote for their preferred government, or their preferred party, or to send a message of some kind. The link between how we vote in an election and what policies we get depends, ultimately, on ensuring that MPs from a given party usually vote the same way. I don’t want a completely unwhipped Parliament for the same reason I don’t want a House of Commons filled with independents: parties may be unpopular, but they’re also necessary.

This isn’t to say MPs should be partisan lobby-fodder: dissent is important. But you can’t dissent when there’s nothing to dissent from. Most of the time, governments have to set out their stall and make sure their MPs are happy enough with the collective line that they can get it through Parliament. Rebellions serve a purpose, but so do concerns expressed on the floor of the House or in Committee: they allow for an interplay between a government and its MPs.

And if enough of your MPs won’t toe your preferred line, then you usually need to change it. When Labour MPs made it clear to Jeremy Corbyn that they wouldn’t be led down anything other than a pro-European path, that was the principle of parliamentary democracy at work. To his credit, he gave way, and Labour will now campaign to stay in the EU. No leader can survive without the acquiescence of the MPs they’re meant to lead. Tony Blair shouldn’t have had a free vote on Iraq: he should have had a policy with which MPs were more comfortable.

So yes, we need MPs who don’t always toe the party line. Sometimes MPs have to rebel. But let’s not confuse valuing dissent with not taking a position at all.

The single market: you can’t write the rules of the game on your own

It’s one of the interesting things about the Conservative Party’s EU crises: the militant Europhobes force the more moderate Eurosceptics to sound both more and less anti-EU. So we have David Cameron referring to the European Union’s achievements as a “precious thing” at the same time as he talks about using the eurozone crisis to repatriate powers from Brussels. Boris Johnson accepts that the City wouldn’t want the UK to find itself without a vote on single market rules, while he argues that we should opt out of pretty well everything else. And David Lidington talks about repatriation of powers, in order to “feel comfortable with membership of the EU”.

Lidington is no swivel-eyed Brussels-hater: he can see why some form of European co-operation matters. And clearly, you can have major opt-outs within an EU framework (the euro, the abolition of passport controls, large areas of justice and home affairs …) – and this will increase for the UK and for at least some other EU member states, as the eurozone integrates further.

However, the fact that other EU member states are going to need to integrate further in order to make the eurozone viable does not mean that they will suddenly agree to grant the UK a whole series of opt-outs on existing agreements. The UK already has pretty much zero goodwill left right now with most of its European partners. It isn’t hard to see exactly what they would think of London for deciding to halt the very measures it has called for the eurozone to take – which it has called vital for the sake of the global economy – in order to settle a purely domestic debate about ‘Brussels’. Furthermore, they would be very likely to do exactly what they have already done with the Fiscal Compact: that is, move ahead outside the EU Treaties and hope to incorporate the new measures later on. Depending on the exact reforms involved, this could be more difficult to achieve, but the amount which can be done without Britain’s say-so is likely to be a great deal more than Tory hardliners like to think.

Part of the problem is that the British are underestimating the commitment, when push comes to shove, of most of Europe’s political elites to the euro. They always do. They assumed that EMU would never actually happen; then they assumed it would never launch in 1999; many of them assumed in 2011 that eurozone governments would let the eurozone fall apart. They won’t – partly because they’re terrified of the consequences (and rightly), but also because they are committed to European integration in a way which London is not. British elites (mostly) see the putative collapse of the euro as an economic disaster: so do most continental ones, but they also see it as a disaster for the European idea. In the end, therefore, the rest of Europe simply will not be willing to let British self-obsession wreck the whole show: and the experience of the Fiscal Compact shows that they will probably find a way to stop it from doing so.

The other point which the British fail to see is the way in which other governments view their particular demands. Many Britons talk about focusing on the single market and nothing else. For most other Europeans, social and employment law aren’t separate from the single market, but part of the package. In order to remove barriers among ourselves to commerce and trade, we have some common rules to ensure that national rules aren’t putting new barriers in place. Most of these are meant to ensure that our laws are similar enough that we can recognise each others’ and thus operate freely in each other’s countries. From the point of view of other Europeans, if we’re going to remove those barriers, then part of the common framework should be a certain set of minimum standards of how European workers are treated, to prevent a race to the bottom.

So other European governments are going to see this as an attempt to access the single market without playing by its rules – and to undercut their own businesses in the process, by being allowed to treat employees in a way which none of them would tolerate. This is one thing from developing countries, who frequently compete on labour costs, for obvious reasons: it’s quite another thing from a fully developed country which joined the Social Chapter over 15 years ago. Furthermore, it’s dangerous to the whole concept: if one country can unpick bits and pieces of the single market, why can’t another? And where does it all stop?

Some commentators in Britain talk about Germany as a potential ally in helping London here. If anything, Germany is likely to be particularly stern in its opposition: it takes rules seriously. Angela Merkel may well want Britain to be involved in moving the EU in a free-market direction: that’s different from letting Britain drop the regulations and leave the others to it.

It’s perfectly true that other EU members want to ensure that eurozone integration doesn’t exclude non-euro countries from decision-making about the single market, either in theory or in practice. That is a separate, crucial debate. However, no other EU government wants to unravel large parts of what the EU has already created … or to allow one country to duck out of anything it sees as inconvenient. And they won’t allow Britain to impose it on them.

Slipping behind: with benefit reform, keep an eye on the index

Historians generally agree that cutting back public spending is difficult in a modern democracy.  Losers shout louder than winners; the most expensive programmes are generally the ones with the most interests behind them; radical cuts are more likely to provoke strong reactions.  (Similar objections apply to tax rises, of course.)  The current cuts are striking, not just in their sheer unprecedented scale, but in the extent to which they cut back on services on which a lot of people rely in a very visible way.

So governments have always tended to fiddle with the small print of tax and spending rules – it’s hard to twig exactly what’s going on, the consequences aren’t immediately clear and by the time the full impact is clear the deed will already be done.  Freezing the basic-rate limit (or, in days gone by, the personal allowance) for income tax is a classic example.  So, too, with changing the rules for calculating benefit increases.

Of course, the Government’s already played this game.  Nearly £6bn of its £18bn of planned welfare savings come from changing the measure of inflation used in uprating benefits from RPI/the Rossi Index, depending on the benefit, to CPI (see p40 of the Emergency Budget).  This is simply because small changes, repeated each year, add up.  If you look at the chart here, the impact over a long period becomes very clear.  Whether Gordon Brown specialised in stealth taxes or not, George Osborne certainly has a fondness for stealth cuts.

The exception to the rule is the Coalition’s ‘triple guarantee’ on state pensions, guaranteeing annual increases of the highest of an increase in earnings, prices or 2%.  Of course, this will start undoing the work of the last Conservative Government, when it broke the link between pensions and earnings.  The (clearly documented) consequence was that the basic state pension fell further and further as a share of earnings – from 20% in 1978 to under 15% by 1998; it has carried on falling ever since.  That trend will now reverse over time; but note how differently a large, vocal, Conservative-inclined group is being treated from people on low incomes, with disabilities or in need of housing.

We need to spell it out: the decision to uprate benefits by CPI rather than RPI is a straightforward decision to make the very poorest people in Britain poorer.  It hits people on Income Support, on Jobseeker’s Allowance, on Incapacity Benefit or ESA.  As the Government are even cutting the link between Local Housing Allowance and rent levels, it will drive more and more people out of their homes: eventually, given long enough, it will make people out and out homeless.  (This holds even if we ignore the effect of all the other LHA cuts.)  The single biggest policy change, fiscally speaking, in the Emergency Budget and the Spending Review combined is a plain and simple cut to the incomes of Britain’s most disadvantaged inhabitants – one which will be repeated every year, until it changes.

That’s quite bad enough as it is, and it makes the Government’s claim that it’s determined “not [to] balance the books on the backs of the poor” look pretty hollow already.  This September, the difference between CPI (5.2%) and RPI (5.6%) was fairly small, but the long-term effect will be dramatic.  So for the Government to even consider ways of reducing the annual rise again, even for one year only, is a particularly nasty attack on the living standards of a lot of very vulnerable people.  The reason inflation is high is that the cost of living is going up: a lot of that is to do with global food prices, which (as a relatively fixed cost) will bear especially hard on the poorest.  When the IFS says that £1.4bn (out of £1.8bn) could be saved by averaging out six months’ worth of inflation figures, they mean that most of a badly needed boost to incomes for the very poorest people in the country could be removed.

If the Government want to argue that that’s justified, then I’d disagree, but it’s a point for debate.  But they cannot then claim that they’re not “balancing the books on the backs of the poor”.  As a matter of cold, hard, statistical fact – whether they go ahead with this one-off change or not – they already are.

Lords in limbo: apply the Salisbury Convention in spirit as well as letter, please

Lords reform has been fairly heavily trailed for some time now, and we’ve had a bit more confirmation that the White Paper is on the way in the past couple of days.  I’ll be glad to see the Government make headway on this: despite the outcome of the AV referendum, Lords reform has been a longstanding commitment from politicians of all parties and the evidence has always been pretty clear that a majority of the public believe our second chamber should be (at least predominantly) elected.

Personally, I think this really should be a fairly cut-and-dried issue.  Members of the House of Lords are not primarily independent experts, sources of warnings or nods to tradition.  These are all understandable things to want, and we ought to think much harder about how we integrate expertise into our legislative process, but they are not the primary role of the people who vote in the second chamber.  They are, first and foremost, legislators – and legislators whose record of changing Bills and therefore policy is significant and growing.  If we want expertise, we should make sure we have it in the right committees and the right debates for the right issues.  (Could some experts even sit on Select Committees, in the Commons and in a new second chamber, as non-voting, co-opted members?)

The people who actually do make our laws should be democratically accountable.  In an ideal world, therefore, we should finish up with nothing less than a 100% elected second chamber.  I’m relatively relaxed about the finer points of STV versus open lists (lists where you can choose a candidate within a party list rather than just opting for a party): so long as it’s a proportional system where voters don’t just have to tick a party box, I’ll settle for it.

With regard to the likely plans to come from the Government: I’m not ecstatic about the idea of 15-year terms and I have fairly serious reservations about single terms – I think it’s an important principle that legislators should have to at least consider the possibility that they might want to face the electorate again, and if we’re serious about democracy then we have to accept that that requires accountability.  Electing by thirds (or halves, or quarters) is sensible, though: our new Senate should be a more continuous body than the House of Commons, and a combination of PR and staggered elections would help to make sure it fits the bill.  In terms of dealing with the current members of the Lords, I think an arrangement along the lines of the Cranborne deal might make sense – which would mean that we’d have 200 left in 2015, 100 left in 2020 and none by 2025 (when the full complement of Senators would have been elected).

But I’m enough of a pragmatist to understand that, if you want Lords reform at all, you can’t let the best be the enemy of the good.  The fact that people haven’t recognised that is exactly why Lords reform hasn’t happened, even with a Labour government who said they wanted it in charge for 13 years.  So if Nick Clegg can even secure an 80% elected second chamber, even with twelve voting bishops (though the latter will cause me real pain …) and even with all the other peers staying until 2025, then I’ll see that as a major step forwards and a real achievement.  Of course, that depends on his Coalition partners voting it through.  Whether the Conservatives will choose to live up to the spirit, as well as the letter, of the Coalition Agreement remains to be seen: if they choose not to, no doubt Liberal Democrats will feel even more betrayed than many of them do already.

The other question is how fiercely the House of Lords will resist being reformed.  Everyone seems to agree that they will fight tooth and nail against reform.  I do appreciate that, when people find themselves on the red benches, they have an uncanny knack of seeing the wisdom of allowing the nation to carry on benefiting from their wisdom.  The Cross Benches’ reluctance is understandable, given that there would undoubtedly be pretty few (if any) of them in a 100% elected second chamber and that their role would inevitably be questioned in an 80% elected one.  In any case, the difficulties the Lords could cause for reform, and for large areas of Government business, are very substantial indeed.

It’ll eventually be a question of whether the Coalition has the political will to push change through, whether peers like it or not.  But one thing I really don’t understand is: on what basis do the Lords think they have any right to derail this legislation at all?  All three main party manifestos called for a wholly or mainly elected second chamber.  All parties have been reasonably clear, with some wobbling from the Conservatives in the past, that the second chamber would need to be elected by some sort of proportional system.  In 2005, both Conservatives and Liberal Democrats also called for a wholly or majority elected second chamber too.

It seems to me that, if a pledge won the support of both parties in the Coalition when they went to the country (as well as the Opposition and a number of the smaller parties), we have a pretty clear case of the Salisbury Convention in action.  I can see why the Lords might query some Coalition compromises in that regard: no one got to vote for the Coalition Agreement.  But on this one, I just can’t see where the ambiguity lies.  It was proposed: it was in the manifestos: it’s now in the process of being turned into a White Paper, and hopefully a Bill.  If there’s any defence, it’s surely of the most technical kind.  Where exactly did the Salisbury Convention include a bit saying the Lords didn’t have to apply it to their own seats?

Dear ministers: poverty generally means not having enough money

Yesterday’s furore over Nick Clegg’s former interns rather missed the bigger picture.  Yes, it’s not on for MPs (Clegg is, in this respect, pretty typical) to hire de facto labour and not pay for it: equally, Jonny Medland’s tactics aren’t exactly edifying (it’s not as if he suffered from the experience).  The Social Mobility Strategy seems to contain a number of reasonable-in-principle-but-less-than-earth-shattering initiatives, most of which have already been announced and some of which are new.  Fair enough, to a point: all governments try to reframe a whole series of policy announcements from time to time, and goodness knows oppositions like to repackage old policies too.  It’s worth pointing out that much of it rings hollow in the current climate (commitments to Sure Start would be a bit more plausible if Children’s Centres weren’t closing all over the country …), but few of us are going to argue against the general principle.

The Government’s Child Poverty Strategy was also published yesterday.  Of course, it received much less attention: poor children are always of much less interest to the British press than who ends up interning for the Deputy PM.  But a key strand running through it was a commitment to ‘broader’ definitions of poverty.  This ‘broader’ definition seems to stretch through from access to health services to – you guessed it – social mobility and life chances.  Frankly, the Government seems to be in serious danger of confusing the words ‘broader’ and ‘different’: throughout the document, we get references to opportunities, to generational cycles of poverty, to unfair educational outcomes – to anything, in fact, which avoids the question of whether poor families have enough money.

Perhaps I’m narrow-minded, but it seems to me that poverty has rather a lot to do with not having enough money.  It’s all very well to say that poverty isn’t all about money or that poverty plus a pound doesn’t equal fairness (not a statement, I suspect, that anyone who finds themselves one pound above the poverty line would ever make) – but ultimately, if a family struggles to put decent meals on the table, it’s about money.  If an unemployed parent can’t afford the transport to a job interview, it’s about money.  Finding the money for school uniforms is a question of, well, money.  Children whose parents can’t afford enough space for them to study in peace and quiet are struggling with their schoolwork because their parents don’t have enough money.

There’s a cynical conclusion to draw here, which has a large degree of truth to it.  This Government needs to have targets which go broader – and longer-term – than the current set: it knows perfectly well that its chances of the current targets going in anything other than the wrong direction, fast, are vanishingly small.  £18bn of welfare cuts will cut savagely into poor families’ incomes; Housing Benefit cuts will mean that many poor people will find themselves forced to give up jobs as they move out of their reach, one bus ride too many to sustain or one extra half hour too much to juggle with another job; closed Children’s Centres translate into parents who find it that much harder to stay in work.  All in all, income-based targets which can be measured in 2015 are unlikely to hold much comfort for Cameron and Clegg.

But it isn’t just that.  The Government doesn’t really believe that income poverty is the measure of fairness.  It pays lip service to it – it’s obliged to by law, after all – but in its view, as per its Social Mobility Strategy, ‘The true test of fairness is the distribution of opportunities.’  The Child Poverty Strategy trumpets the Fairness Premium for education – and the Child Poverty Commission will now be set up as a Social Mobility and Child Poverty Commission (note the order, by the way) – because the Coalition thinks that poverty and mobility can be elided.  It believes that the question of whether people are poor is basically the same as the question of which people are poor in a generation’s time.

Well, it isn’t.  Poverty is poverty: it is a grinding, day-to-day inability to share in the common life.  As Polly Toynbee said of social exclusion, “It is a No Entry sign on every ordinary pleasure”.  And if we subordinate tackling poverty to promoting mobility, not only will we fail to do either: we will condemn another generation of poor children to growing up in poor housing, without birthday presents, with the fear of falling into debt, with parents trying to make ends meet (often with several jobs at once) and often divided from each other under the strain.  It’s very easy to treat the lack of money as a sideshow when you’ve always had plenty of it.  Our Government ought to remember that.

Afterthought: A partial exception to this, in fairness, is a focus on getting people into work.  This is something the last government worked hard on, and found dauntingly difficult, at a time of economic plenty.  At a time when the best part of a million people are about to be put out of work by government policy, I find it hard to believe that the Universal Credit is going to get us very far towards raising employment in the next few years – especially when no one’s even going to start receiving it until 2013.  Smoothing out some of the kinks of the current system is a good thing: but it’s a smoothing out, not a revolution, and it’s accompanied by plenty of benefit horrors – many of which, like the lowering of the maximum award for childcare from 80% to 70% of costs, will actually make it harder for people to enter or to stay in work.

Housing policy poses similar problems: the arguments around the Coalition’s plans to allow higher social rents in order to create revenue streams for building more homes are complex, but higher rents combined with Housing Benefit tapers mean that the barriers to work rise even higher.  (And the need for this particular expedient might have been reduced had the Government not decided to cut the social housing budget in half.)

Taxes, taxes, taxes …

I realise very few people see it as an interesting exercise to sit down and work out how the plans for £29 billion of net tax rises break down.  But if you’re going to think about better ways to close the gap between what we spend and what we raise, then it’s not a bad idea to look at what we’re doing at the moment.  And in rough and ready fashion, based on the Emergency Budget* figures, the planned breakdown of net tax rises in 2014-15 is about as follows:

Tax Net revenue raised (£ billion) Tax Net revenue raised (£ billion)
VAT and IPT 13.9 Green taxes 0.7
Pension contribution relief 4.6 Stamp Duty 0.3
National Insurance 3.3 Inheritance Tax 0.3
Income tax 2.5 Other tax rises 0.2
Bank levy 2.4 Other tax cuts -0.2
Other pension tax breaks 2.1 Council Tax -0.6
Capital Gains Tax 0.9 Various business taxes -0.8
Sin taxes 0.8 Corporation Tax -1.3

Those figures conceal significant tax cuts in terms of income tax (£3.9 billion goes to raising the personal allowance by £1,000) and National Insurance (£3.7 billion spent on raising the threshold for employers’ NI to offset some of the increased costs), as well as a number of tax hikes in Corporation Tax to help pay for a headline rate cut. But in terms of where the main burden is falling, you’ll get a fair idea here.

It shouldn’t take too much to work out that any attempt to raise another £26 billion, say, is going to be very politically difficult.  Labour have argued for keeping the bankers’ bonus tax (£3.5 billion or so – assuming revenues don’t fall if the tax stops being a one-off), and they’ve pointed to their National Insurance plans too (£3.7 billion more).  If you were to argue for, say, 5p on the higher rate of income tax (taking a very brave example …), the Treasury’s Ready Reckoner suggests you’d raise about £4.6 billion.  Lowering the starting point for the 50p rate to, say, £100,000 might raise £1.3 billion (or about half that, if you raise the 40p rate to 45p – otherwise you’re double-counting).  The Liberal Democrats’ famous ‘mansion tax’ was intended to raise about £1.7 billion.  If, in another act of extreme bravery, you were to raise Inheritance Tax to 60%, you might net about £1.4 billion.  The exact amount of money you could get from tackling avoidance may very well be substantial – but it’s difficult to bank on, and I wouldn’t envy the Chancellor who tried to rely on it as a main tool for tackling the deficit.

This clearly doesn’t, even in terms of orders of magnitude, add up to a £26 billion alternative to the Coalition’s plans. So in the end, substantially higher taxes will mean that people on moderate incomes will also end up paying more – not just the wealthy and the banks.  In saying that, I’m not arguing against the idea: in almost all cases, tax rises are more progressive than cuts to services – and of course, it’s quite possible to use some revenue to compensate the poor too.  It’s no accident that Scandinavian social democracies pay substantially more VAT than the UK – if you’re serious about social justice, the volume of money for benefits and services will make much more of a difference than the exact degree of redistribution managed through taxes on their own, and the tax burden has to be fairly widely spread in order to be politically accepted.

So not only would a centre-left government almost certainly end up raising VAT at some point, for instance; it would probably be right to do so, though probably not right now.  It makes sense that, in an economy which needs to move towards more saving over time, we might increase taxes on consumption.  The debate over how progressive/regressive VAT is has run and run, but it’s certainly more progressive than even more service cuts – and if it’s difficult enough to find £26 billion extra, try finding £40 billion instead.  In the same way, further income tax/NI rises would be pretty hard to avoid.  Property taxes would be politically very difficult, but probably sensible as policy.  And if the centre-left want to reduce the damage done to public services, welfare benefits and public investment more generally, then we’d better start learning how to argue it’s worthwhile for all of us to pay more taxes in a good cause.

How much of this does Labour need to spell out?  Some of it, at least – at least as an indication.  The Conservatives didn’t give much away on their plans in 2010, but they did highlight plans to raise the retirement age faster and taper tax credits more aggressively.  Not an obvious route to electoral success, in a way, but a manifesto which made no mention at all of any difficult tax/spending changes wouldn’t have been more popular: it would just have made people think they either weren’t being given the full story (even more than they already did!) or that the party in question shouldn’t be trusted with the public finances.  And in reverse, the same applies to any party of the left.

* Figures weren’t provided for revenue raised by the 50p rate, the restriction of the personal allowance from £100,000 or revenue raised from Labour’s changes to ‘sin taxes’ (alcohol, tobacco etc.) – I did find a Treasury figure for 2014-15 for the first, but the other two had to be extrapolated a bit from previous Budgets. But the broad outline stands.