Why should we have to hand over cash to a bank, in order to buy a house?

Policy February 22, 2009 3 Comments »

I see that Mr Brown has this morning waded in to the debate about banks and mortgages, saying he wants to restrain banks from what seem to many people some of their more extraordinary excesses, such as 100% mortgages, mortgages six times your salary, and banks paying you to live in a house in anticipation of you paying them back when you die (OK, I made the last one up but would you really be surprised to hear that such a product was actually available!).

This exercise looks to me as if it’s about trying to reassure us that he is coming from the same place as those of who thinks all this kind of thing sounds just crazy – rather than a serious attempt to tackle the roots of the problems in consumer financial services. Indeed it doesn’t seem to have many specifics at all, other than simply asking the FSA to look into all this.

And specifically it won’t challenge what seems to me to be one of the main ways that banks have insinuated their ways into our lives, which is this.

Quite simply, thirty or forty years ago it was possible to buy a house without having to involve a bank.

Now, however, for almost everyone it is effectively not possible to buy a house without handing over quite a lot of money to a bank, for a mortgage.

I don’t claim to understand exactly how banks have managed to pull this off, but it seems to me a very effective trick by a whole sector – effectively ensuring that you can only get access to one of life’s essentials by paying a lot of money, normally on an ongoing basis over several years, to a private sector. And I really can’t see why anyone would think this is in the public interest. Just compare it to the political debates about other “essentials” of life such as health and education, and the extreme watchfulness and lengths that we as a society go to in order to ensure that no charging regime is able to get between a citizen and these. It seems to me extraordinary that we allow a situation where it is impossible to get access to buying a house without handing over a lot of the money that you ought to be spending actually on the house, or indeed on any of life’s other essentials or desirables, to a financial services institution.

Clearly the point above does not apply to social housing – but unless anyone is actually advocating that private ownership of housing should be abolished, and we should live in social housing, this does not seem to me to answer the point (and unlike health and education where the proportion of the public using the private sector is very small, most of us are in the private housing sector is far higher: I believe the figure is about 70%).

And obviously the comparison between the picture thirty years ago and now is not completely black and white: mortgages did exist then, and certainly some portion of society needed them, and equally there are some still who can afford to buy a house without one now.

But by tying the whole market inextricably into using mortgages, banks have managed to inflate house prices to an extent where the house prices to average earnings ratio is such that for most people, it is now simply not possible to buy a house without a mortgage.

I certainly see that for each individual planning to buy a house, a mortgage can be very helpful in making it more affordable. And certainly banning all mortgages seems somewhat extreme (even leaving aside the not negligible issue that such a move would entail a huge overnight cut in the value of most families’ principal asset!).

But it seems to me that a serious approach to reforming the housing finance sector in the public interest would address this point of why, in stark contrast to health and education, for most people the private sector is able to insist on getting its cut, in order to provide access to housing.

Deciding Council Tax nationally is not “Returning Power to Local Communities”, Dave

Conservatives February 20, 2009 1 Comment »

Earlier this week David Cameron launched a policy green paper entitled “Control Shift – Returning Power to Local Communities”. According to the party website this sets out “a series of policies that will see powers transferred from the central state to local people and local institutions”.

If true, this is surely very welcome: it is indeed quite right that power in Britain is far too centralised, and that many decisions would be very much more effectively and democratically made closer to the people they affect.

But does the Conservative party actually really believe this? They have started to talk of localism more in recent years, but the test is in their deeds, not their words.

The history is not promising: the last Conservative government famously centralised all sorts of elements of power, from abolishing regional government in London to, for example, introducing national control of local taxation (rate-capping).

Cameron Conservatives of course claim that the party has changed radically since those days, and it’s not fair to judge them today on actions of two decades ago.

Fair enough. So are they are now proposing to, say, remove central control of local taxation?

Hardly. In fact on the contrary, they seem to believe that the level of local taxation should not just operate within nationally-set parameters, as Mrs Thatcher thought, but in fact have its actual level set by the national tier. Here is George Osborne making a national pledge about the level of every Council in the country at their party’s autumn conference last year. Mr Cameron himself confirmed the pledge again at Christmas.

They are not crude enough to propose formally removing this power from local authorities, but make it very clear that they expect Councils to fall in line, and when local authorities receive the vast majority of their funding not through local taxation but in a grant from central government – a system Cameron does not appear to be proposing to change – and are regulated and inspected to the nth degree, then central government can have overwhelming influence on what Councils actually do.

Quite simply, you cannot be taken remotely seriously as actually believing in decentralisation of power, while simultaneously making policies to set every Town Hall’s Council Tax from the centre.

Not everything they suggest in their paper is itself a bad idea: some of their proposals might, at the relative margins, improve local Councils’ control of their local area.

But they do not address the real, big questions about greater local control. Will their proposals give local people greater control over, say, their education and health services? They will not. Above all, they make no proposal to give local communities greater control of their finances, and without control of the money, much of their talk of empowering local communities is just playing with shadows.

The truth is that, away from the margins, at heart the Conservatives fundamentally believe that real power belongs uniquely in Whitehall. In their minds, there is simply something special about the national level.

In the twenty first century, this is simply wrong. Certainly many things are best done at the national level. But others are best done locally – and others best done at a global or European level.

So while the Cameron Conservatives might talk some of the talk about local empowerment, the reality is that when it comes down to it, this idea doesn’t even run as far as their own policy proposals while in opposition. Why on earth would we think that when in government – where the temptations are much greater – they would reverse some of the centralisation that they themselves introduced last time?

Insisting on better parenting: the key to a liberal society?

Education January 18, 2009 No Comments »

Yesterday the Liberal Democrats held what seems to have become our almost annual one-day January policy conference, this year on the theme of a progressive future for Britain.

Perhaps the most constant theme across the day, or at least the sessions I was in, was a consensus about the importance for that goal of investing in education, at every phase from early years right through schooling and up to further and higher education (actually further education didn’t get much of a mention, though it should have done). There was a strong consensus that education must be at the heart of achieving the liberal idea of empowering individuals to – as the preamble to the party’s constitution puts it – not be enslaved by poverty, ignorance or conformity. And indeed our spring party conference in six weeks’ time will have a whole raft of proposals in each of these three phases, including significant plans for additional investment in each.

But the point that got me thinking most was one made in the final session, about the importance of parenting skills.

We all agree now, it seems, that investing in the education of children, the younger the better, is the most effective way of helping them to develop, so that in due course they are in the best position to make their own choices about their lives and indeed their world.

But what about the far greater part of their lives that young people don’t spend in school, nursery or any other kind of formal setting – but at home? Surely that must also have a huge impact on how they develop (and indeed there is evidence to support this)?

I always think this is a fascinating dilemma for liberals.

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Lib Dem Hospital Governors Network

Health October 16, 2008 No Comments »

Liberal Democrats have had an interesting relationship with the government’s policy of turning NHS hospitals into ‘Foundation Trusts’. When the government first proposed them in 2002, we opposed the legislation in Parliament – so you might expect us to be straightforwardly against them. But in fact the picture is a little more complicated than that – because at the time what we were in fact saying was that the freedoms which the government proposed to give only to Foundation Trust hospitals, in fact ought to be available to all NHS hospitals. And the government’s policy is indeed now that pretty much all NHS trusts should become Foundation Trusts, so you might say that we have had something of a victory there.

A central part of the Foundation Trust (FT) structure is the idea that these hospitals should be more accountable to local people, and less to the national Secretary of State – all of which is of course a good idea and thoroughly in accordance with Lib Dem policy. In practice I think that they fall considerably short of the ideal here: they are supposed to be accountable to local people who have signed up as ‘members’, but typically you need only about 1% of the relevant local population to sign up as members to convince the regulator that you have enough local support to become an FT. The only real benefit of becoming a ‘member’ is that you then get to vote for the members of a hospital council (the precise term varies from hospital to hospital, but they are often called things like a Governors Council or Members Council). Even in these days of low turnout and political interest it is rare to get a turnout of local people, even for local elections, of less then twenty times this, so this is a pretty ultra-lite form of ‘local accountability’.

Nevertheless, this obviously is an attempt to engage local people in running their local hospital, which – as far as it goes – is a good thing. Some Liberal Democrats have therefore, like myself, stood for election to the Council of Governors for their local hospital, and been elected (and when you stand you are obliged, incidentally, to identify yourself as a member of your political party if you are a member of one). Others have been appointed as members of the hospital’s Council by the local authority that they sit on as councillors. And so as a result, up and down the country there are now a range of Liberal Democrats sitting on bodies with some responsibility for their local hospitals. But so far, we don’t quite know who all these people are, and there is no opportunity for them to exchange experiences, good practice and generally support each other. And so to facilitate this, we have set up an email discussion list for Lib Dem governors of NHS Foundation Trusts.

If you are a Lib Dem sitting on such a body, either directly elected by members of the trust, or appointed as a councillor by your council, and would like to be able to exchange ideas with other Liberal Democrats in the same position, please let us know so that we can add you to the list. (In fact even if you would prefer not to go on the email discussion list it would be helpful if you could get in touch so that we can know you exist). Please send an email with your name, email address and hospital you are a governor of, to hospitals@jeremyhargreaves.org (The list is intended specifically for Lib Dems involved in running Foundation Trusts, not for members of health overview and scrutiny committees)

Also, if you know any Lib Dems who are in this position, please pass this request on to them. We hope this list could be a useful way to provide mutual assistance and support to other Liberal Democrats, and to spread experience and good practice.

Bones is not about reducing democracy in the party

Liberal Democrats September 29, 2008 3 Comments »

I keep reading comments which take it as accepted fact that the Bones commission report, and by extension the party leader, is about centralising power within the party and reducing democracy within it.

Now, while this may be the perception of people who haven’t actually followed the report’s progress carefully (and it seems to me at the moment that the number of people who have actually read the report is in inverse proportion to the number who insisted furiously over the summer on their right to read it!) I think anyone has actually read even the summary of it would accept that much of it isn’t about this at all, but about making other, much more operational matters within the party, work better.

But one proposal: the creation of a Chief Officers Group or COG (or in fact more accurately a slight formalisation of this existing loose grouping) does seem to have given to some the impression of greater centralisation. And I accept that on the face of it, there does seem to be a prima facie case here.

But once you actually look at the situation, in fact this isn’t my analysis of this development at all – and I’ll give two reasons why not.

Firstly, the entire Bones report makes no proposals whatsoever about the party’s process for making policy (with the arguable exception of a specific proposal relating to spring conference, which would not affect the fundamentals at all, and I get the impression is now anyway gradually being withdrawn).

The existing process, in which policy is made by conference, and the process is managed and led by an elected Federal Policy Committee (FPC), will continue, just as it does now.

This is important. While the questions of how we run ourselves as a party are obviously important, the reason we are actually in politics is in order to make proposals and change things – or in other words, policy matters. And the decisions about where we stand as a party and what we are proposing, will not be subject to any greater centralisation whatsoever, but will still come to conference just as before.

So to repeat: not one word in the Bones report implies changing the party’s procedures for deciding our policies.

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More ethnic minorities in the Liberal Democrats – action this time

Liberal Democrats September 22, 2008 1 Comment »

I’m pretty much a hardliner on the action we need to take to improve representation and engagement of ethnic minorities at senior levels within our party. Quite simply, if we want to aim to be a party of government then we have solve this problem, in our own narrow self-interest as a party – let alone because it is fair and will lead to better governance of Britain. The various ‘soft’ strategies we have followed for achieving this – for example to encourage more BME candidates, and support them better, simply haven’t worked. Just take a look at our benches in any Parliament or any party committee. So even if those were the right strategies before, if we want results then we now need to take ‘hard’ action.

I suspect the ‘diversity premium’, through which the Bones commission recommended that any target seat selecting a BME candidate should receive £10K extra, may become something of a test for where people stand on this. I see all the problems with this, but I firmly support it (and I also don’t think that it should be extended also to other under-represented groups too, such as the disabled, for reasons I’d be happy to go into further. I’ve done a lot of work to promote access within the party for people with all kind of disabilities, but basically I think that in this case we have a specific problem with BME candidates which needs to be solved).

One of the many events that I would have liked to get to last week in Bournemouth, but was unable to for simple pressure of having too many of them, was the launch of a new Diversity Engagement Group (DEG). Now, over the last few years, autumn conferences have seen new initiatives launched to get more BME candidates, at a rate of approximately one a year. The teams behind most of them have worked hard, and some have achieved things – I applaud those who have put a lot of effort into them.

But, to be blunt, they haven’t succeeded in cracking the problem. What makes this one different is that it is being led by the party’s Deputy Leader (and indeed current god) Vince Cable. I have high hopes that this will give it a quantum leap higher chance of actually identifying the problems and being able to agree and implement solutions with the relevant people. The fact that Vince is leading sends the right signals that the party leadership has decided that it really does have to take some effective action on this pronto. I look forward to seeing – soon – what it achieves.

How much is Child Benefit?

Miscellaneous September 18, 2008 No Comments »

Don’t you know? OK, well how much is (the maximum) Housing Benefit, then? Council Tax benefit? Income Support? Come on, surely you must know one of these! OK, then, pick any benefit you like that you are not personally in receipt of, and tell me how much it is.

No doubt a visitor or two to this site will be able to take up this challenge, and give an answer to one of these questions (and I’m aware that anyone with a rudimentary grasp of the internet should be able to find them all in seconds). But if more than a handful are able to do so genuinely off the top of their head, then I’ll eat, well, I don’t know, the mouldy chocolate I was presented with from an exhibitor’s stall in Bournemouth earlier this week.

If you’re one of those who couldn’t answer them, then you are completely out of touch with everything that is happening in modern Britain, you have no right to contribute to public life, and should withdraw forthwith to the embattled ivory tower you are surely already living in. So say political opponents and the press (a not entirely co-extensive two categories of people, but shall we say not as distinct as they might be).

Clearly Nick made a boo-boo, not merely not knowing the current level of the state pension but being out by a factor of three. When you get something like that as wrong as that, you do indeed make yourself look pretty silly. If I were a political opponent invited to comment then the press quote clearly pretty much writes itself on an occasion like this.

As always, the 20-20 vision of hindsight is a wonderful thing, but clearly he should have just owned up to not knowing, rather than tried to guess. He should not have got the answer to this question quite so badly wrong.

But going up a level from this error, the way in which the media do now expect, especially at election time, leaders of all parties to know what’s number one at the moment, who plays in goal for England, who’s illicitly seeing whom in EastEnders, and who won Big Brother last year , down to whether Cheryl Cole is back with Ashley at the moment, does seem to me rather silly.

It’s not difficult for the press to portray the inability to answer any of these as “out of touch”, but really, this game has everything to do with sport (in the hunting, rather than Premier League, sense) and not very much to do with quite a lot of things that one might reasonably expect politicians ought to be devoting most of their attention to. Keeping in touch with other people’s lives is one thing, but sometimes it feels as if some parts of the media want politicians to be fulltime watchers of television soap operas.

The level of the state pension is not, I accept, in quite that category. But there still does seem to me an issue about the level of detailed knowledge of every area of national life, that most of us wouldn’t pretend to have, that we can reasonably expect from our leading politicians, of all parties.

However given what I once heard referred to as the “well-developed herd mentality” of our national media, I think Gordon and Dave should watch out over the next couple of weeks. Now they’ve scented blood, humiliating leading politicians for not being able to identify which colour bag cheese and onion crisps currently come in, will surely become briefly a very popular pastime on the airwaves.

Parts of the media will no doubt believe that as well as keeping track of exactly how many of his own MPs are now opposing him, and ensuring a bankrupt bank doesn’t torpedo the entire British financial system, our Prime Minister should spend the weekend before conference week’s media appearances mugging up on the precise cost of a pint of milk in Middlesbrough at the moment.

The untrue story of Liberal Democrat conference

Liberal Democrats September 17, 2008 1 Comment »

Over at Lib Dem Voice, they have launched a campaign against the – well, what to call it? – well, the simply untrue nonsense written about Lib Dem conference by newspapers and broadcasters. I’m very glad that they’ve taken this up and I hope it has an impact.

I still remember vividly my genuine confusion at going home after my first party conference to read the newspapers of it that my parents had kept, and not recognising the event that I’d been at. It felt completely bizarre. Had I really been at a different event? Quite soon, though, and for several years, that turned to frustration and anger that whatever happened at conference – whether we had approved a new overarching policy strategy, or a striking new departure in a particular direction, or anything else, that all that they ever wrote was that the leader’s authority was on the line as they faced a challenge, and that the whole event had been “dominated” by some wildly over-interpreted chance remark made by a senior figure, that almost nobody actually at the conference had even been aware of. These, along with endless obsession with how we related to the other two parties have formed the press’ staple stories ever since about party conference: you can pretty much cut and paste the articles from one year to the next, with just the precise detail of this year’s issue inserted in the blanks.

Finally, I simply came to expect it, and didn’t even really notice it any more. This year was the fifteenth autumn conference that I have attended, and what brought this home to me was reading the very same piece in the Independent that Stephen writes about here, without even really noticing that it talked complete rubbish – it’s simply what I expected now. Only when I saw his piece did I realise what complete nonsense it was, and that he’s absolutely right to be indignant about it. I hope others pick up the general point too and it would be a real achievement if it can get articles written which actually represent what happened at the event.

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