Wednesday 12 June 2013

What about democracy?

I cannot disagree with those who argue that senior pay in local government has become excessive in recent years.  And I’m not convinced by the argument that those doing the job are so exceptionally talented and able that we need to offer to pay them at the highest levels to have the honour and privilege of them agreeing to work for us in our local authorities.  I am, on the contrary, entirely convinced that we can find people who can do the job, and do it well, for much lower salaries than those currently on offer.
Attacking that culture of high pay is undoubtedly popular amongst the public at large. I’m still uneasy, though, about the unholy alliance of the Tories, Lib Dems, and Plaid getting together to demand that the Welsh Government acts to bring senior pay in our local authorities under control.  I'm not even certain that what they're proposing will work - who's to say that the proposed 'independent panel' won't simply recommend even higher salaries?  History and experience suggest that it will be stuffed with people who are, or have been, part of the system themselves.
I suspect that one argument put forward by defenders of the current system – that this will lead to legal disputes – is just hot air, and can fairly safely be ignored.  After all, the law, in this case, is whatever the National Assembly says it is.  Their question about why local government is being singled out for special attention is a rather better one – why indeed are the same arguments not being applied in the Health Service, where those employed are in any case more directly the responsibility of the Welsh Government?
Indeed, why restrict the assault on senior pay to the public sector?  I would personally be much more willing to accept a blanket piece of legislation restricting the pay of those at the top to a fixed multiple of the pay of those at the bottom – and I’d consider that it would be much more properly the preserve of government to make such provision.  (The Welsh Government doesn’t currently have the power to do that of course – but I don’t even hear them arguing for it.)
That isn’t the cause of my unease either, however.  It’s more the ideological question about what power and sovereignty are, and where they come from, which leaves me uneasy.
It’s clear that, for all four of the centralist parties in the Assembly, power resides with them, and local government is there to do as they say, and within any directives which they lay down.  Pay is just the tip of the iceberg in this context.  I may agree with them about the unacceptability of the outcome of current arrangements – i.e. excessive pay – but I start from a different place. 
Local government has its own democratic mandate, and if we were serious about devolution and decentralisation within Wales, we’d be giving local government more powers, not taking them away or constraining them.  Whilst there’s scope for a lot more discussion about what we want local government to do and how we want to structure it, that’s not the discussion that’s being had.  And instead of opening out that debate, the Government is simply acting in a piecemeal fashion to constrain and limit powers as and when it sees fit.
I have argued in the past that, if we’re dissatisfied with any aspect of the performance of the Welsh Government and the National Assembly, the right approach is not to abolish them, but to change the people and the policies.  I’d argue the same way about our local authorities.  I wonder how many AMs would argue that the solution to any problem at Assembly level is for the UK Government to legislate to constrain the powers of the Assembly.  But isn’t that exactly what they themselves are saying in relation to local government?

Friday 7 June 2013

Not his finest hour

It’s undeniable, to use the terminology currently in vogue, that there are ‘shirkers’ who don’t work and don’t want to.  The number of them, and the cost of keeping them, is a great deal lower than is generally believed, but the numbers are non-zero.  It’s also undeniable that pandering to that pretence that the number is much higher than it is, and that the cost is much greater than it is, is popular with a certain section of the electorate.
Whether it is true that the votes of that section of the electorate are essential to the chances of any party seeking to win an election, or that the votes of that section of the electorate can only ever be won by pretending that they’re right and playing to their prejudices, is another matter entirely.
Clearly the policies of the UK coalition partners are based on the assumption that both of those assumptions are ‘true’; ‘welfare’ then becomes a cost we ‘cannot afford’ and must therefore cut.  They know, of course they know, that the losers will not be restricted to that small group of ‘shirkers’ whom they love to demonise – such a restriction could never generate the savings that they’re looking for.  That matters little to them – the real target has little to do with welfare at all, it’s about appealing to prejudice and ignorance to win votes.
From his speech yesterday, it looks as if Miliband and Labour have also concluded that those assumptions are true, and have decided to join in the attack on ‘welfare’ and agree that it is ‘unaffordable’.  Sure, they’ve tried to say that they’ll cut it in different ways; that their priority is in getting people into work rather than merely cutting benefits.  But subsidising employers to take on staff that they don’t need to do jobs that aren’t really there looks like a bit of a smokescreen to me; an attempt to pretend that they’re not really reducing welfare payments at all.
The Tories have been quick to criticise, claiming that Labour’s skeleton of a policy ‘lacks credibility’ because it doesn’t spell out in detail what they’re going to cut and how.  In a sense, I agree with the Tories on that – but only in a sense.
By joining the attack on welfare, by trying to appeal to that same section of opinion for electoral reasons, Labour are legitimising theTory/Lib Dem attitude to welfare as unaffordable.  Instead of refuting the argument with reason, and pointing out the flaws in it, they are effectively adding their voice to it.  And once they’ve done that, any less than full-blooded proposals they put forward will always look weak compared to the harsher proposals of their opponents.
It’s potentially the worst of all worlds for Labour – accepting the premise of their opponents but not the conclusions means that they probably won’t even succeed in appealing to those whom they are targeting.  It also leaves the vulnerable without an advocate, and allows the Tories and Lib Dems to shift the centre ground in UK politics in their direction.
It wasn’t Miliband’s finest hour.

Thursday 6 June 2013

Pickles has a point, even if he's missed it

The little spat between Cardiff and London last week over changes to building regulations in Wales highlighted yet again the loose way in which politicians use the words ‘red tape’.  Eric Pickles claimed that the new law on installing sprinkler systems, and the rules requiring higher carbon emissions standards for housing, are examples of ‘red tape’ which should be abolished; as ever, one man’s ‘red tape’ is another’s environmental protection or improved safety.  And it’s not as if the UK Government can really claim that they’re against regulation anyway – the recent Queen’s speech proposed extra regulation around employment and housing for immigrants as I recall.  It’s only some ‘red tape’ that they’re against.

Pickles’ rationale was based on the potential damage to the house-building industry in Wales, highlighted by some builders suggesting that they’d now prefer to build new homes in England where they don’t have to comply with such standards than in Wales where they do.  It’s the normal capitalist response to changes in the market conditions – existing capitalists must be protected from such changes, preferably by not making them.  (Although the economic purists would argue that change promotes innovation, and that the companies which manage to find the best and cheapest ways of complying will grow whilst the dinosaurs die.  It’s just that capitalist dinosaurs never die quietly.)

He does have a point, though, at a purely economic level.  There is surely no doubt that the changes made in Wales will increase the capital cost of building new homes, in the short term at least; and even in the long term, the capital cost of building a new house in Wales is likely to remain higher than the capital cost of building a new house in England.  With no increase in earnings on the Welsh side of the border, that will put a squeeze on housebuilders’ profits, which is why they are protesting so much (although it is precisely that squeeze which is supposed to drive innovation, isn’t it?).

Forgetting the housebuilders for a moment, the people likely to lose out here are those families in Wales who want to buy a new house.  Prices are already high compared to wages; a further increase in prices with no change to wages simply prices even more people out of the market.  There is a danger that the main beneficiaries will be another group of capitalists – those who operate the burgeoning market for private rented housing.  The Welsh government’s response is hopelessly inadequate – it’s as though they believe, or pretend, that there isn’t a problem at all.  Or at least, if there is, it isn’t their problem.  But there is a problem, and it’s a very real one.

However, the fact that there is a problem doesn’t mean that Pickles is right to call for the abandonment of changes which will, undoubtedly, improve safety and reduce environmental impact.  That’s simply throwing the baby out with the bath water.

The essence of the problem is this: improving the environmental performance, and the safety, of new housing will reduce the lifetime cost of home ownership, but at the cost of increasing the initial purchase price.  Long term revenue costs are reduced in exchange for an immediate increase in the capital cost.  But the financing structures for home purchase – the mortgage market – aren’t changing to reflect that.  Purchasers and mortgagors see only the increased capital cost; the reduced revenue costs aren’t taken into account in assessing affordability of mortgages.  So what we need isn’t to scrap the changes, but to look at how we can reflect that front-loading of cost in financial arrangements.  And that’s something which neither government seems to be willing to tackle.

Monday 3 June 2013

“I’ve done nothing wrong”

There was a time when MPs were paid nothing for representing their constituencies, and only the very rich could afford to take on the job.  From an establishment point of view, that system had a lot of advantages; it kept power in the hands of the few and excluded the majority from participation in elected politics.  When the Chartists proposed that MPs should be paid a salary, there was some opposition to the idea, but eventually the idea took hold. 
I doubt that the Chartists ever expected that MPs would come to regard that salary as being just a part – and for some, quite a small part – of their overall income; the idea was to open up parliament to people from all backgrounds by making the job a full time one.  Today’s salary of some £65,000 is no small sum; it’s well above what most of the population could ever expect to earn.  Yet still we have some MPs who see nothing at all wrong with ‘supplementing’ that income with all sorts of outside interests, some of them dubious to say the least.

Every time some scandal or other is uncovered there are calls for ‘tighter regulation’, or for more scrutiny of what MPs are up to.  And every time the rules are tightened or amended, the unscrupulous find ways around them, and invariably fall back on the excuse that “I’ve done nothing wrong”, because they’ve followed the letter of the rules.

Time, perhaps, to get back to the original thinking behind paying a salary at all.  A full-time job deserves a full time salary, and that’s what they get.  A generous full time salary at that.  Why should they be allowed to earn any extra money at all whilst carrying out that full time job?  A simple, easy to understand, and easier to enforce rule – no outside earnings at all.  Just a salary for doing the job to which they sought and won election.

Some will no doubt argue that this will keep able people out of parliament, since they can earn more elsewhere.  There are a couple of major assumptions in that, however.  

One is that people are motivated primarily or even solely by the amount they can earn.  Maximising personal financial benefit is one of those assumptions that economists like to make about motivation, but it’s not true for everyone and never has been.  Besides, is that what we really want from our elected representatives?  Pursuit, first and foremost, of their own financial interests?

The second assumption is that the most able people earn the most money.  I’m not sure where the evidence is for that assertion; observation suggests to me that it’s the most pushy and ambitious who end up earning the most, not necessarily the most able.  

It’s not the most able who would be deterred from standing for parliament by a ban on outside earnings; it’s the most greedy.  Would that be such a bad thing?