The peculiar obsessions of Liam Byrne

Once again, the opinions of Labour’s DWP spokesman Liam Byrne are causing controversy – this time a short piece in the Observer that starts off surprisingly well with quite a cogent critique of the failings of Coalition welfare policy, before shooting himself spectacularly in the foot by proposing a raft of solutions demonstrating his acceptance of the Coalition’s assumptions.  Readers of course can make up their own minds as to which they believe.

The problem with Byrne is that he is completely hung up on the idea of sanctions – a belief that people need to be threatened to give up the lifestyle to which they have become accustomed.  The Welfare State after Beveridge represented a fundamental shift – from the idea that poverty, unemployment and idleness were caused by individual failings to the idea that they represented a systemic failing (going hand-in-hand with the adoption of the Keynsian economic rationality in which an interventionist state could prevent, to coin a phrase, boom and bust).  The Coalition’s assault on welfare is based on a rhetoric that returns to the idea of individual responsibility; it is the message that underpins the vile rhetoric of Osborne, Cameron and their media cheerleaders in their claim that the appalling acts of Mick Philpott are the product of welfare “dependency” (notwithstanding the fact that the case judge’s withering and powerful assessment did not mention benefits once, but focussed on issues of domestic abuse that the political establishment finds far less congenial to its prejudices).

Byrne’s Observer piece starts by discussing systemic failure, but by the time he reaches his proposed solution he is back on individual failings – and where he talks about institutional changes, like a new 10p tax rate and “supporting good employers” (whatever that means) he’s as vague and woolly as his talk of personal sanctions is precise.  And in doing so he is happy to accept, rather than challenge, the myths of welfare as against the realities (nicely summed up by Ricky Tomlinson here).

And his talk of the “old principle of contribution” is just nonsense. He forgets – or ignores – that it was the principle of contribution that Beveridge sought to replace with universality; yes, you still contributed through National Insurance, but for the general good rather than as a private individual.  It was the principle of contribution that meant that, before the NHS, men in work received more support for health-care than did their wives or children; Beveridge sought to build a more generous, more collective approach to the welfare state because it was both the right and efficient thing to do. Byrne does not even begin to address the cost and complexity of this idea – something that Beveridge’s universal principle sought to avoid.

Byrne – and Labour more generally – need to understand that the welfare debate is part of a much wider one about the collective versus the individual, and about systemic failure.  Of course it’s much easier to spread myths about three generations of worklessness; it means you don’t have to confront the much more difficult systemic questions.  But doesn’t – or shouldn’t – Labour have ambitions to be better than that?  After all, as I’ve argued before, the rhetoric of individual culpability that Byrne seems happy to adopt leads straight to the door of the workhouse.

And the simple fact remains – talk of sanction almost completely misses the point.  There is mass unemployment in this country because there are no jobs; because our economy has been smashed, not by the indolence of a tiny minority of those on benefit, but by the the greed and delusion of Byrne’s fellow bankers which fuelled the bubble that burst in 2008, and by an economic policy of austerity that is, by any definition, failing desperately (except in its success in shifting wealth to the wealthy).  The gobsmacking thing about the tone in which the Westminster establishment conducts the debate about welfare is not its unpleasantness, or its lack of evidence; it the sheer frivolity of it all.  A grown-up democracy deserves something far better than Liam Byrne’s easy generalities.

Austerity and the redefinition of citizenship

The imposition of austerity economics – often in conflict with democratic mandates – has obviously had profound economic effects; but it has also at heart a democratic issue.  Austerity has in many cases been imposed in the face of democratic mandates or by the installation of “technocratic” governments; but I believe that at heart it is redefining the way we think about citizenship and the status of the individual in a market society.

Thanks to a recent tweet from David Graeber, I’ve just become aware of this article by G M Tamas, published in 2000 in the Boston Review.  Tamas writes with reference to nationality and citizenship, responding specifically to the rise of Jorg Haider in Austria; but it seems to me that his arguments are profoundly relevant to the way in which, quietly but surely, austerity economics – and in particular the way in which benefits have been cut – have redefined concepts of what it is to be a citizen; and in turn that has profound implications for democracy.

Tamas and post-Fascism

In summary, Tamas writes about how a resurgence of nationalism and a deep hostility to immigration has been reflected in policies that lead to the exclusion of citizen rights and the creation of classes of citizenship.  Tamas – writing at a time when the End of History was being widely touted – writes about how the triumph of capitalism has led to a breakdown of narratives about class and economic power, with the left focussing instead on issues of civil rights; and Tamas, quoting Lipset, describes a “fascism of the centre” in which hostility to the state combines with a belief that rights are not universal, but are the preserve of a particular group, usually based around national or ethnic identity. For the first time in history, popular ire about unfairness in society is being directed not at those wielding wealth and power, but at the dispossessed.

For me, what makes this article so fertile and important is the way in which it points to how Western market societies increasingly treat those who are unable to work – whether through unemployment or disability.  It seems to me that part of the process of austerity is to deny the citizen rights of those who cannot support themselves through paid work, through processes similar or identical to those pointed out by Tamas.  And I believe that this process has a fundamental effect on our conceptions of citizenship and democracy.

Universal benefits: the Beveridge legacy

I’ve written elsewhere about the case for universal benefits – as well as the costs advantages, pioneers like Beveridge saw universality as a means of social cohesion – a recognition that all had a stake in society, whether rich or poor.  Writing in the aftermath of European Fascism and the struggle of total war (a war in which victory was intimately bound-up with the mobilisation of state power) Beveridge was keen to see benefits as a route to stability and an expression of citizenship; all were to have rights, including the right to a basic minimum standard of living.

Citizenship and austerity

It is obvious to anyone who follows politics that in the UK, as in the rest of Europe, Beveridge’s vision is being abandoned – we are being told, in an age of austerity, that we simply cannot afford it (there’s an obvious point to be made about the difference between level and scope of benefits, but both are under attack).  Drawing on some of the issues Tamas raises, it’s possible to define some important themes in the way that the austerity consensus – in Britain at least – is seeking to redefine the concept of citizenship in, I’d argue, destructive and dangerous ways.

It is obvious that the debate around benefits in the UK has moved to a place where austerity is being used to justify a change in the conception of citizenship.  At a time when living standards continue to fall across the piece for all apart from the wealthy, those who rely on the support of the state have been recast into the role of the oppressor – an unproductive burden, a charge on the productive.  Citizenship increasingly appears to be contingent on conformity to a capitalist model of monetized income (so for example a carer, whose daily unpaid work not only brings real and tangible benefit to the person who they care for, but is also – potentially – saving the state money, falls on the wrong side of the citizen divide, because their contribution is not monetized and does not generate profit).  We are in a society in which your citizenship is increasingly defined by your ability to obtain and hold down paid work, and to consume accordingly.  The Big Society, to the extent to which it means anything at all, replaces entitlement with largesse doled out on a whim; it means that the privileged retain the right to decide whether those in need receive the essentials of life or not.  It’s the antithesis of citizenship.

This is made all the clearer by aspects of the debate around how benefits are received.  Market economics places choice at the heart of its rhetoric; increasingly, approaches to benefits assume that choice should be taken away – through workfare or through the growing advocacy of (expensive and insecure) payment cards for those receiving benefits. This has nothing to do with efficiency, or the operation of the market.  If you are receiving benefits, your participation in one of the defining rituals of market capitalism is to be denied; you do not deserve the benefits of citizenship.

To me, one of the nastiest and most insidious pieces of contemporary political rhetoric is the cult of the “hard working family” – used across the mainstream political spectrum in the UK but particularly associated with New Labour.  It’s not just that for this reader it conjures up images of a sort of Betjeman-esque domestic nightmare of white-shirted middle-manager paterfamilias, company car in drive, with wife and children in consuming subservience; it’s the way the phrase, consciously or not, is designed to exclude.  In defining whose side we are on, we also – inevitably – identify those who fall outside the scope of our politics. Like so much ideological rhetoric, it defines as much as it describes – and I for one find it both profoundly obnoxious but deeply revealing of the assumptions of our increasingly homogenised political class.

One can only conclude that underlying all this is a new definition of citizenship – one that is dependent on a property qualification.  If you have a job, or private wealth, and have the power to consume, you are a full citizen.  If you are unemployed, or disabled, or ill, you are not.  You have forfeited your citizen rights in favour of the largesse of the comfortable, and the whim of those who bear far more responsibility for the current economic crisis than you do, but for which you are being called on to pay a disproportionate price.  Your citizen status is not defined by your humanity, but by the casual Poujadist thuggery of the tabloid press and a political class – increasingly drawn from those enjoying extreme privilege – that is happy to ride that thuggery.

And we need to place this in a wider European context: there is a big movement – encompassing the imposition of “technocratic” governments in Greece and Italy, to the creation of a new treaty in the EU to entrench austerity in European law, to the increasingly frequent pronouncements by senior bankers and officials that economic policy should be taken out of political hands – to take economic policy out of politics and away from democratic scrutiny.  As David Harvey has argued eloquently in his book Neoliberalism,  this remains the ultimate neoliberal dream; to claim the kudos of being a democratic state while ensuring that the distribution of wealth is a matter over which electors have no real control.  It depends, of course, on economics being seen as an objective science and its practitioners being seen as expert manipulators, rather than – more realistically – being seen as a set of more-or-less empirically-derived  generalisations based on largely subjective psychological assumptions.

Extremism of the centre

Following Lipset, Tamas uses the phrase “extremism of the centre”, and it’s a formulation I find extremely compelling. In the absence of the big narratives about class conflict and economic power, it offers an understanding of how political and economic elites can rationalise and legitimise prejudice against the poor, vulnerable and especially the disabled into something that they appear to have little difficulty in reconciling with liberal democracy.  The way in which the collective view of disability in particular appears to have swung away from a belief in support (even if only to bring disabled people into the workforce) to outright hostility is, in my view, one of the defining phenomena of modern Britain.  We are a society that apparently provides a willing audience for Government press officers who see their work as the spreading of unattributable lies about the benefits enjoyed by disabled people; that apparently cannot understand that a 20% cut in benefits “justified” by a less than one percent rate of fraud is an act of collective punishment that moves our political class firmly into moral equivalence with those who, seventy years ago, were decrying disabled people as “useless eaters”.

In conclusion, Tamas’ piece seems to me to offer a way into understanding the mindset that underpins the kind of society we are becoming.  We neglect issues of citizenship and democracy at our peril – and we need to understand that the implications of austerity go well beyond economics, leading to fundamental questions of what society is and how we relate to one another.

Nothing strange about the death of English liberalism

Reading Nick Clegg’s New Year message was a sad and sobering affair (leaving aside any impatience at the growing habit of politicians great and small issuing such messages).  It read as really little more than excuse-mongering and post-hoc rationalisation in defence of policies that appear to rub against the natural grain of the Liberal tradition; its ludicrous defence of an economic policy that is, by every objective standard, failing does not sit easily in a political tradition that has sought to define itself as moulding society in the service of the rational.  Surely Liberalism should aspire to something better than this.  And one then began to question whether, perhaps, this is not about one rather discredited politician’s traducing the political tradition for which he is apparently the spokesman, but perhaps something more deeply ingrained in the nature of English liberalism itself

I am someone who had Liberalism in their political blood from an early age.  An active Liberal Party member in my late teens and early twenties, sometime President of the Oxford University Liberals, and, after university, Liberal Party employee for a couple of years; contributor to Liberal debates about philosophy, confident that Liberalism was a coherent philosophy offered something radical, important, unique.  It gave the appearance at least of being a big, coherent narrative that could explain the world and guide its improvement.   Revisiting that philosophy with a critical eye, at a time when Liberal Democrats are in Government, and after a quarter of a century of reading and reflection, suggests that it is none of those things.  I have moved on, but I think now is a good time to consider why Liberalism appears increasingly irrelevant as a political philosophy capable of addressing contemporary political and economic issues.

Political parties are not always loyal to the ideas that their names and supporters profess (there are still apparently socialists in the Labour Party) and the Liberal Party, and then the Liberal Democrats, often trod a rather tentative path around the core beliefs of Liberalism – a party formed of an alliance with the old discredited Labour right was always going to involve compromises, although a confident and assured liberalism need not have worried about that.  And one could argue that the new party represented a coming together of a tradition that had been blown apart by the ferments that led to the creation of the Labour Party at the start of the twentieth century, when social liberals developing a more interventionist account of the state were divided between the new Labour party and sticking with an old Liberal Party that showed limited inclination to abandon the shibboleths of nineteenth-century laissez-faire – a debate taking place at a time when the cleavage lines of British politics were more about empire than economics.

One approach to understanding the issues around Liberalism is to take an inevitably brief tour around some of its historical themes.

Peace, retrenchment, reform

So where does one start to develop an account of what Liberalism was?  Gladstone, inevitably: peace, retrenchment and reform.  Even in the 1980s – arguably the high-point of social liberal influence in Party thinking – Gladstone was still a name that featured in Liberal discourse (the Liberal Party Headquarters in which I worked occupied a set of surprisingly grotty offices on the top floor of the National Liberal Club in Whitehall Place – an ostentatious pile that expressed Edwardian Liberalism in all its confidence, the building where Liberal grandees gathered to celebrate the 1906 landslide, and whose entry hall was stuffed with Gladstonian memorabilia, including an axe that the Grand Old Man had used in his favoured pursuit of tree-felling).  Peace and reform have remained Liberal themes – a sense of moral obligation in foreign policy, which still manifested itself in Liberal Democrats’ opposition to war in Iraq before the fighting started (although probably not in its capitulation to tabloid opinion once the fighting was under way); and a commitment to political reform which extended up to the point at which Clegg’s Liberal Party entered coalition (though, once again, not obviously afterwards). And it is worth re-reading the speeches of John Bright on the Crimean War – often held up as a beacon of Liberal idealism – to appreciate the extent to which  moral considerations could be contingent on protecting the public purse.

Retrenchment – there we reach the first and obvious problem with Liberalism; its equivocal attitude towards the state.  It originates in opposition to the corrupt oligarchy of Eighteenth- and early-Nineteeth Century England; the sense that while Britain advanced into an age of economic growth and prosperity, a corrupt and sclerotic state, run by placemen and which acted as a parasite on economic progress, was holding it back.

The New Liberalism of the late-nineteenth and early-twentieth century began to see the state as something that could intervene positively in the economy, but much of the basic energy of that new thinking went into the Labour Party. It’s striking that the New Liberalism emerged in the 1880s and 1890s during a long depression that shares many characteristics with the post-2008 economic catastrophe, and a discontent with the narratives of economic liberalism that framed that depression while engaging with emerging Socialist thinking and activism.  In particular, there was a growing “condition of England” question – in which the hard evidence provided by writers like Stead and Mayhew, and the activist testimony of William Booth, tested the conscience of Liberal progressives.

But this was a movement that had little real purchase – even though the Liberal landslide of 1906 brought important social reform (modelled on the insurance of the private sector rather than a belief in state provision). A hostility to the state, and a refusal to see it as a mechanism that could ensure better outcomes for individuals in a more efficient way than, say, private philanthropy, with even modest levels of coercion through taxation, has long been lurking in Liberal thinking – even among the more socially progressive Liberal Democrats. In the 1980s, during my time in the Party, it expressed itself in a longing for decentralisation, without ever recognising that to achieve may liberal goals – especially in terms of personal and gender politics – a strong democratically accountable state was necessary.  Liberal Democrats – through the Orange Book and in Government – have shown that under pressure, they have no coherent theory of the state.

It’s an omission that sits uneasily with the emphasis on reform; a belief that improving the mechanisms through which politics is conducted can bring real benefits to society.  Once again the nineteenth-century roots are obvious – a belief that an educated, open polity could overturn the sclerotic oligarchy that governed early 19th Century England.  Gladstone’s civil service reforms – ensuring that Government selects its administrative corps on merit – represent a classic Liberal reform, grounded in theories of rationality (while at the same time defining “merit” in a fairly exclusive and conventional way, falling short of challenging norms of contemporary discourse).  It’s a discourse in which reform becomes a way, not of overturning the status quo, but of preserving the best of it and making it more efficient; it implies that the purpose of political action is not to challenge political systems as a whole, but to root out abuses that inhibit the smooth operation of an essentially benign political system.  The big questions remain unasked (and certainly unanswered).

But at the heart of Liberalism’s intellectual problem is that, beyond a vague commitment to open structures and scrutiny, it offers no theory or understanding of the collective.  Its concept of the public world is wholly atomistic. I would argue that one of the fundamental issues of political discourse is where the rights of the individual end and where the collective interests of society begin; classical Liberalism is barely capable of formulating the question, let alone providing a coherent answer to it.

Twentieth century giants – Keynes and Beveridge

It’s a pattern that underpins the two dominant Liberal figures of the twentieth century – Keynes and Beveridge.  British Liberalism has claimed both as their own (Beveridge was briefly a Liberal MP, Keynes held no office within the Party).  In both cases, Liberalism claimed them when it was expedient to do so, even though their reformism went beyond the bounds of traditional Liberalism.  Now that the old Liberalism has reasserted itself, they have been cast aside.

Keynes’ explicit mission was to save capitalism from the idiocies of its most fervent exponents.  Beveridge was horrified not just by the suffering of the British poor, but by the political instability that arose from that; both were acting, consciously or not, under the shadow of totalitarianism, of Hitler and Stalin.  There is a respectable case for saying that the urgency with which their ideas were taken up derives from the reality of competing ideologies, and hence a sense of the underlying fragility of liberal democracy; it contrasts with a mindset in which a claimed “end of history” appears to have removed the threat of alternative economic theories from the scene; in which the “other” has become a religious and cultural one rather than an attempt to redefine ideas of ownership and wealth.  It is an environment in which Liberalism’s traditional role – that of moulding society in the defence of rational ideas – becomes a defence of what are portrayed as democratic cultural norms against an Orientalist conception of barbarism and primitivism.  “Liberal imperialism” – another Party-splitting discourse from the early twentieth-century – has become something of a Western foreign policy norm, with all that implies.

The work of Keynes and Beveridge remains vitally important. Both, ironically enough, offer the basis of powerful critiques of the neoliberal society for which Britain’s Liberal Democrats have become such enthusiastic enablers and cheerleaders.  Beveridge, in particualr, offers a powerful corrective to the notion of citizenship that is implicit in Orange Bookers’ and Liberal Democrat Ministers’ enthusiastic advocacy of the belief that the right to state support is conditional on the attitude rather than the condition of the vulnerable, and should be administered on the basis of who those in power deem to be deserving.  The defining arguments against Clegg’s much-trumpeted assaults on universal benefits remain in the Beveridge Report, and Clegg’s speechwriters have yet to find a coherent narrative to support Clegg’s ludicrous claims that his party’s happy cheerleading for cuts in benefits for the vulnerable marks him as the true heir to Beveridge.

And Keynes demonstrates as powerfully as Marx why the policy of austerity is self-defeating: the most trenchant public critics of austerity tend to be Keynsians rather than Marxists (although the resemblance of late-capitalist austerity to Marx’s crisis of capital accumulation is striking and sobering).

The Personal and the Political

And that leads inevitably to another strand of contemporary Liberalism; its concept of personal freedom.  Liberalism traditionally talked in terms of rational, educated and informed individuals acting in a way that ensured maximum benefit from their interactions; it is a philosophy very much at one with the fundamental doctrines of the free market.  In more recent years it has become more closely identified with extending individual liberties, especially those related to identity; its progressivism has been rooted in its opposition to capital punishment, its belief that gender and sexuality should not be barriers to equality, its recognition of the right to “alternative” lifestyles.  All these are important things; they have hugely enriched our lives as a society.

But problems remain. The personal is undoubtedly the political; the problem arises when the political becomes the personal, without a concept of the collective.  It is a commonplace that the people who argued for and largely won greater personal liberties – both by overturning restrictive legislation and by living lifestyles that were more liberated – voted for Thatcher and Reagan in their droves.  The obvious reason, once again, is the idea of the state as something hostile; a belief that the liberal society was one in which you were left alone.  It’s a very negative, reactive concept of liberty.  Liberals have yet to demonstrate how such gains can be made without a strong, interventionist state and a discourse that is prepared to challenge popular opinion.

Community politics

The problems become clearer when one considers what was regarded by many Liberals in the 1970s and 1980s as their key political position, the thing that differentiated them from other political parties: community politics.  At its best and most pure it was an ideology that sought to empower and energise the citizen, by giving them power over the environment in which they lived; at its worst it often degenerated into the politics of mindless activism, based around endless oppositionist campaigning to achieve electoral success with no clear vision of how to handle office once it was achieved.  It is the basis for the sneer that Liberals were the party of pavement politics.

As I’ve argued before, re-reading its principal text – Gordon Lishman and Bernard Greaves’ The Theory and Practice of Community Politics – the thing that strikes one most forcibly is just how reactionary it is.  It reeks of hostility to the collective, to the state and – in particular – to Trade Unions (at which point it is worth noting that the Liberal ideal for the most part ignores collective action by workers, and demonises it on those few occasions when it emerges into Liberal discourse). Its distrust of the state and its belief that social objectives can be achieved through voluntarism make it read like a first draft for Cameron’s Big Society. Its combination of populism and activism brings to mind, as much as anything, the policy positions of UKIP.  (To be fair to my younger self, the Liberal obsession with decentralisation and localism always seemed to me to be intellectually weak. It’s only really since that I have come to realise just how anti-democratic such sentiments are, how tropes of localism can be used to argue against wider democratic will and how vital it is to have a strong theory of the state to manage such conflicts).

The Orange Book

Here Liberalism appears to have returned to its roots; here the hostility to the state and the reliance on market individualism, latent in community politics,  is made manifest in a document that has become a manifesto for Liberal Democrats in Government.  Why did Liberal Democrats do so little to oppose the marketisation of the NHS? Because it’s core Liberal Democrat policy, as set out in David Laws’ chapter in the Orange Book. There is a belief expressed by many people on the soft Left that Liberal Democrats have been weak in Government – that they went into Government on a coalition agreement that has long been left behind, and have been systematically worsted by a cynical Conservative Party whose unscrupulousness and instinct for power makes the Central Committee of the Chinese Communist Party look like a Sunday School advisory group.  Some of this is true – look for example at how the Liberal Democrats lost electoral reform and Lords reform.  In some ways the Tories have shown themselves to be weaker than that – look at how Cameron has to paper over the cracks on Europe and equal marriage.  But on the economic essentials that define the coalition, there is nothing between Tories and Liberal Democrats.  Economically, this is a Liberal Government, with the Orange Book as its instruction manual.

And the most important point to note about the status of modern Liberalism is that this position does not in any way reflect the politics of the Liberal grass roots.  I don’t suppose the grass roots have changed much since my days in the Party – decent, progressive people who are horrified by much of what the Party leadership is doing, rooted in identity politics and (a Liberal characteristic I have not really touched on here) their tradition of internationalism, but – by and large – clueless about economics and its role in shaping the political agenda, and without the big narrative to oppose the Orange Bookers.

Conclusion

So, where does this necessarily brief excursus in to the politics of Liberalism lead us? In general, then, the problem with the Liberal discourse is not that it fails to ask the big questions; it is that it looks increasingly like an ideological construct that is designed to prevent those questions from being asked.  It is a philosophy that is generally fearful of the state, and fearful of democracy; the constant fear that admission of the hoi polloi to real political influence will result in a decline into irrationalism.  J S Mill’s fear of universal franchise has never really gone away.  The lingering belief that if you temper the laws of the market with democracy, chaos will follow, seems to inform almost every pronouncement of the Liberal Democrat High Command. You may vote for ending tuition fees, but such a policy is, in retrospect, unaffordable.

The historical fate of Liberalism is inevitably bound up with the concept of market economics.  In the nineteenth century, when the unfettered operation of the market stood in opposition to the bloated jobbery of the state – in England in particular – Liberalism looked like – indeed was – a radical and progressive ideal.  Political reform and economic progress went hand in hand.  In the late nineteenth century our concept of the state changed – and the Liberal Party split and those who saw the state as an agent of change went into the Labour Party.  Ironically enough, Liberalism in fact provided many of the reforms that made the activist state possible; and the nonconformist conscience, formed in an age when religious exclusion was the norm for those who spurned Anglicanism, provided a radical edge (but also a sense of moral disapproval for the poor).  Prominent Liberals like Keynes and Beveridge provided the intellectual foundation of the welfare state, in which the state became an agency of progress and change.  The Liberal revival of the 1970s and 1980s coalesced around the idea of community politics, which offered the illusion of progress and empowerment while espousing an anti-state, anti-Union and pro-voluntarism stance which in many ways provides an ideological background for Orange Book Liberalism.

The decline and fall of Liberalism is at one level a tragedy.  At its best Liberalism offered an optimism, a belief in progress, a commitment to fairness and a belief in the power of human intellect in the face of ideology that represents the best of British political history. It sought to speak truth to power in a way that is wholly admirable and actually represents a necessary condition for progress. Many individual Liberal Democrat members doubtless continue to express those virtues. But, hobbled by a belief in market agency and its hostility to collective action in general and the state in particular, and faced with the crisis of late capitalism that Marx so strikingly foresaw, contemporary Liberalism has nothing to offer other than the perpetuation of that crisis.

Perhaps the most powerful lesson is that Liberalism has, since its Victorian and Edwardian days, been a strange and incongruous vessel for the aspirations and ideals of its progressive followers.  Midway through this coalition, the time has surely come for these decent people to invest their ideals elsewhere.

In praise of universal benefits

Among Nick Clegg’s various pronouncements yesterday was his repeated claim that benefits for the elderly should not be universal, and should not be available to the better-off.  It’s not  a new theme, of course – Clegg was making the same arguments at this year’s Liberal Democrat conference, with Vince Cable weighing in to claim, in effect, that rich old buffers like him should not be a burden on the state.

It’s an argument that has its attractions at a time when austerity politics is biting hard and when real living standards are falling faster and further than at any time in the last century.  Why should those who are well off continue to receive what Clegg and other coalition Ministers would no doubt describe as the largesse of the state?

There are some very good arguments, actually.  One of them is that universal benefits are cheap to administer and eliminate the risk of fraud; as soon as you means-test benefits you have to set up complex bureaucracies to administer the tests, to monitor and manage changes in circumstances, and to deal with fraud.  You end up adding to the nightmare complexity that already haunts the UK’s benefits system, for very little savings.

And what do you measure – wealth or income?  And how do you do it?  There are many older people who have very low incomes, but who own their own homes and therefore, in the crazy world of house price inflation, are sitting on a pile of unrealisable wealth.  It’s all very well for Vince Cable – he’s an MP and Cabinet Minister, drawing a substantial salary on which he pays significant amounts of tax.  It’s disingenuous to use himself as an example. And of course old age brings with it the risk of additional expense.  However you means-test these benefits you will create a back-wash of hard cases, in which a minority – normally those who can affford a good accountant – play the system and a larger minority lose out: amplifying, in other words, the failings of the tax and benefit system elsewhere.  And you will create a bureaucratic monster that cannot adapt to changing circumstances, and you will turn entitlement as of right into something that looks like largesse, when the people concerned have paid their taxes and National Insurance over decades in the expectation of a decent sufficiency in old age.

Moreover, the current generation of older people have already been let down by politicians – people who in the 1980s were sold the idea that private provision would secure them a prosperous old age, but are now facing the reality of a pension pot diminished by the swingeing fees of pension managers, the destruction wrought on their capital in 2007-8 by bankers speculating against their pension funds, and by quantitative easing decimating the returns on their investments.

Beveridge’s arguments in favour of universal benefits – ease of access, fairness, and the sense that a decent sufficiency is a matter of right, with state support as an expression of people’s membership of an inclusive civil society – have not changed.  We just appear to live in a society that no longer values those things; and appear no longer to be repelled by the use of cuts in living standards for the most vulnerable as an economic strategy.

I recently happened across this blog piece which, in the US context of medicare, argues that means testing plays to the prejudices of well-meaning liberals:

 Means testing as a cut strategy exploits liberals’ good intentions.  This works at two levels.  First is the belief (correct in my view) that the rich already are getting way too many of the rewards in our society, that inequality is a serious problem, and therefore it would be better to place a slightly greater burden on the rich, rather than people at the bottom if pain is going to be dished out. (It’s also standard for liberal thinking to not ask if pain needs to be dished out at all, but that is a separate matter.)

The second level is more personal.  The good liberal says ‘I’m privileged, I can pay more, better that then cutting benefits for others’.  It’s an understandable sentiment.  But disastrous.

Aside from what I’ve already said, it is based on the notion that the problem is actually about the deficit and that the politicians who are pushing schemes like means testing or raising the retirement age or whatever are seriously concerned about it.  But they aren’t. If they were, we’d be talking about raising the cap on the Social Security payroll tax, or adding a Tobin tax that would contribute to the trust funds.  There are plenty of ways to save money in Medicare that don’t involve benefit cuts.  And of course, if we had full employment and less inequality, it would mean more money going into these programs.

It’s an important argument – means testing not as a way of saving money, or making the benefits system more equable, but as a way of assuaging the conscience of a certain type of affluent liberal.  It’s a mindset that owes everything to privilege, and very little to real concern for the vulnerable.

50p tax rate and Tory triumphalism

Widely-circulated predictions that George Osborne is about to announce the end of the 50p top income tax rate for those earning more than £150,000 have attracted much comment.  The obvious one is fury at the naked unfairness – here is a handout to the wealthiest in society that comes at the same time that those on the lowest incomes are seeing their living standards cut (for example the estimated 900,000 people on low incomes who will lose nearly £4000 per year due to changes in tax credits in April).

Then there are also concerns about the economic justification. There’s no real evidence that this will do anything to stimulate the economy; this looks like a case for the confidence fairy if ever there was one.  Moreover, macroeconomic theory suggests that increasing the incomes of the poorest is much more likely to stimulate the economy, as they spend all (or nearly all) their income; cutting tax for the lowest-paid, or increasing public expenditure is a far more effective stimulus.  And there’s  the Treasury spinning of the figures  - in the absense of any hard numbers for tax take, claiming that the 50p tax rate is raising “hundreds of millions rather than billions” despite predicting that it would raise £3 billion per year (with tax expert Richard Murphy arguing convincingly that the take could be as high as £6 billion - the TUC paper to which that article links is essential reading).  At a time when benefits and services for the poorest and most vulnerable are being slashed in the name of deficit reduction, it’s an astonishing policy – a naked, obvious wealth grab on behalf of the wealthiest paid for by the poor and those on middle income, at a time when Coalition rhetoric still claims that we are “all in it together”.

And it’s a sign of Tory self-confidence and triumphalism.  I wonder whether the the events of last weekend’s Liberal Democrat conference were on Osborne’s mind as he contemplated the policy – a conference voting in two different ways on the NHS as their MPs and Peers prepared to trip happily through the Parliamentary division lobbies in support of a bill that effectively breaks up our National Health Service.  Perhaps he was reading the opinion polls, which showed that even when presiding over economic policies that have eviscerated the living standards of the vulnerable, hit Middle-England hard and enriched the 1%, or when presiding over the effective privatisation of Britain’s once-beloved NHS, the Tories are only a few percentage points behind Labour (with the added advantage that boundary changes and the deserved collapse of Liberal Democrat support will, in terms of seats in the House of Commons, greatly benefit the Tories).  Or perhaps the decisive moment was when Ed Balls signalled the raising of the white flag on economic policy, implicitly accepting the neoliberal economic agenda by effectively backing tax cuts.

Every one of these represents a Westminster political culture in which the Tories are utterly dominant.  Of course there is opposition outside the political class – all the evidence suggests that Coalition policies on health, on tax, on public expenditure are widely unpopular, although one of the most sordid aspects of the Coalition’s tenure has been its casual demonisation of the disabled, the sick and the vulnerable who depend on benefits.  But that is outside the Westminster bubble – and one can hardly avoid the conclusion that nearly all the most obnoxious aspects of Coalition policy – NHS privatisation, benefit cuts, workfare, tuition fees, the privatisation of public space – are simply the policies that Labour followed in office taken to their logical conclusion.  Ed Miliband wrote the 2010 Labour manifesto in which many of these policies – in a softer, cuddlier form – were advocated;  New Labour luminaries like Liam Byrne continue to trash the legacy of Beveridge and the welfare state.  No wonder Labour has been so utterly useless in opposition.  The Liberal Democrats, allegedly a moderating influence on the Tories (which they were never going to be – read the Orange Book), are in disarray.  The best they have to offer in response to the abolition 50p tax rate is Clegg arguing for raising tax thresholds at the bottom – which of course will ensure that the rich benefit twice – or a possible commitment to a Mansion Tax. In principle.  In the long term.  If it’s workable.  ”All in this together” is a slogan that accurately describes the position of the British political class.

It’s been sad to read some of the comments on Twitter to the effect that the Tories really have blown it this time.  They are not stupid – they are resurgent.  All they have learned from the events of the last two years in Government – helped along of course by their yellow-tied useful idiots, and assisted by Labour’s refusal to argue for a real alternative  - is how easily they can get away with it.

Abusing Beveridge’s legacy

According to the Daily Mail (NB clicking on that link will contribute to the Mail’s advertising revenues), Ed Miliband and Liam Byrne are about to launch an attack on the “evil” of benefit scroungers.  The Left blogosphere and Twitterati have been driven into overdrive by this; some condemning the way in which an alleged party of the Left bows to cheap populism and lets Tories and their papers drive their agenda; and Labour loyalists trying to dissemble.  My own view is that a political system in which politicians jockey for votes by demonising the poorest and most vulnerable in society is badly broken, and those politicians who do so are beyond condemnation; it’s cheap, cowardly and even New Labour should know better.

However, one of the stranger aspects of the whole business is that Liam Byrne makes these comments in the context of a forthcoming lecture on William Beveridge, and tries to portray himself as Beveridge’s legitimate heir.  It’s an interesting parallel to Nick Clegg trying to do the same in front of the Liberal Democrat conference last March.

It’s strange because Beveridge was a powerful advocate of universal benefits. And, following Beveridge, there are two types of  arguments; the practical and the political.

First, the practical – obviously if a benefit is universal it cannot be claimed fraudulently.  The moment you means test a benefit you have to set up an apparatus to evaluate claims, process paperwork, manage changes in circumstances, enforce against abuse (the last of which turns the state into enforcer where it should be enabler).  Universal benefits are cheap to administer, fair and in principle free of abuse.  Indeed the very act of means-testing introduces abuse into the system – abuse happens because people try to beat the rules and the suggestion that you can exclude abuse by tinkering with those rules is asinine.  More seriously – since there is little hard evidence of deliberate abuse – you introduce the risk of mistakes in the system, and you raise barriers that make it more difficult for people to claim their entitlement.  That is the position in Britain, where the amounts of benefit that go unclaimed are vastly greater than the amount of fraud.

Second, there is a serious political point about how universal benefits emphasise what one is entitled to as a citizen – the citizen is not a supplicant, and although some of those benefits may go to the middle classes who do not, in the strictest sense, need them they help make society more cohesive and ensure that those who depend on those benefits are not stigmatised.  It emphasises that we are, to coin a phrase, all in it together.  It is about society establishing that everyone is entitled to a decent minimum as a matter of right.

Where would Beveridge stand today? It’s worth remembering that for Beveridge, enforced idleness was a terrible social evil.  The level of mass unemployment among young people in particular under the Con Dems would have horrified him; the idea that mass unemployment was a price worth paying for clearing a deficit caused by the fecklessness of the bankers would have repelled Beveridge’s old-fashioned sense of morality and probity. And he saw a National Health Service as an absolute condition of a decent society.

The narrative of benefit scroungers is an ideological myth. Yes, there is undoubtedly abuse, but compared with the £16 billion of unclaimed benefit each year and the squalor and despair of mass unemployment, it is minor.  If Labour was a decent party, true to its roots in Trade Unionism, in Christian socialism and Fabian improvement, and retained a shred of the decency and compassion that drove its founders, it would have the moral courage to stand up to the myth and debunk it.  As R H Tawney wrote in his great essay on the choices before the Labour Party following the split of 1931, “to kick over an idol you must first get up off your knees.”

But Labour’s leaders no longer have that decency – the latest pronouncement reflect their policy in Government and in opposition.  They’re quite happy it seems to dance along to the Tories’ ideological tunes and abandon the people on whose behalf they once spoke.  The poorest in society – single mothers on benefits – have seen their real income fall by nearly 20% in the past year. There are many people for whom Miliband and Byrne’s latest pronouncement are enough, and have packed up their Labour membership.  Others who choose to stay should examine their consciences – and understand why a growing number of people on the Left see Labour as part of the problem, and nothing to do with the solution.

And, please, could they, and Clegg, have the decency to leave Beveridge out of this.

Combining income tax and National Insurance – simplification or ideology?

There is much speculation that in his Budget tomorrow, George Osborne will announce plans to merge income tax and National Insurance Contributions (NIC).  I have some real concerns about this.  On the one hand, to the individual in employment, it would appear that income tax and NIC could easily be merged into a single tax, making the process more transparent and possibly reducing the bureaucracy needed for collection.  But there seem to me to be problems both of principle and in practice, and I wonder whether this is about ideology, not efficiency.

As a matter of principle, income tax and NIC are raised, in theory at least, for two different purposes.  One is a general tax; the other is a contribution towards the cost of benefits, including unemployment and sickness benefit and the old age pension.  Of course, both of them go into the consolidated fund – as do excise duties like VAT and duties on petrol and alcohol.

But the point about NI is largely sympbolic.  It’s about entitlement and the right to benefits.  It allows people drawing benefits to do so in the knowledge that benefits are a right that they have earned, not a charity.  This is important when the principle of universal benefits and social provision is under unprecedented attack  – the Big Society seems to me to be an attempt to return collective social action to the voluntary sector, replacing rights with charity doled out by local committees of moral guardians.  The loss of the link to a national insurance payment seems to me to be a step away from the idea of universal provision .

Moreover, this seems to me to be a move towards the right’s dream of a single flat tax.  In many ways NIC is a highly progressive tax – there is a real risk that a combined tax could shift the burden from high to low earners, if not managed properly.

There are technical issues too.  The self-employed currently pay a low level of NI reflecting the fact that their benefits are lower – how would that be reflected in a single tax?  Many pensioners pay tax but no NI – merging the two could be a huge tax whammy for them, without special exceptions that would rather destroy the advantages of a single tax.  Currently NI contributions are paid by employers as well as employees – will those contributions be turned into a payroll tax – after all Osborne’s rhetoric in opposition about “taxes on jobs”? Or will the burden of the employer contributions be passed on to employees?  The problem with a single tax is that to make it fair – indeed to avoid it becoming a way of shifting the tax burden on to indivuduals and away from the corporate sector – it needs a set of exemptions and conditions which will mean no significant simplification.

I have a real fear that Osborne could use such a change for ideological ends – to shift the burden of taxes still further from the rich to middle-income and poor, and from business to individuals.  Many people now are unclear about the structure of the taxes they pay – this could just be the ultimate stealth tax.

A party dying on its feet

Nearly thirty years ago, a politically-engaged student and president-elect of the Oxford University Liberals, I sat in a dingy hall in Llandudno with several hundred of my fellow party members and heard my then leader, David Steel, tell us to go back to our constituencies and prepare for government.  It was heady, inspiring – and unrealistic.  Nevertheless there was pride and passion in that party – admittedly some of the pride related to passing a pro-CND motion, moved by one Cllr Paddy Ashdown, on the conference floor earlier in the week – and radicalism.  Our mission on the radical wing of the party was to change the world, not to preserve its inequalities and power structures.

Over the ensuing thirty years, the Liberal Party and I went our separate ways – the Party moving to the Right  into merger with the SDP and eventually into government in alliance with the Tories, while I spent much of the next thirty years in Whitehall as a politically neutral Enemy of Enterprise, watching, thinking, reading and moving to the Left as my knowledge and experience deepened, and now in retirement engaging with the debate.

Following the Liberal Democrat conference this week, then, has produced mixed emotions.  Overwhelmingly, there is a sense of despatches from the front line of the shock doctrine.  They don’t quite know what’s hit them – from the intemperate reaction to the protests outside the conference to the growing realisation of their deep unpopularity.  Like Macbeth faced with Banquo’s Ghost demanding to know “which of you have done this”, there is a deep denial of the reality of what their party has done.

For anyone with a knowledge of history it was astonishing to hear Clegg referring in his closing speech to Beveridge and Keynes. Seventy years ago, William Beveridge was starting work on the most important document in British social history.  His report paved the way for the creation of the welfare state and identified five Giant Evils in society – squalor, ignorance, want, idelness and disease.  Keynes had warned of the futility of tackling economic crisis by cutting public expenditure.  Clegg claims that “ours is not a government of cuts”. And yet, in the face of all the evidence, from Ireland and elsewhere, Clegg is part of a government that is slashing and burning the public sector, while promoting the cruel lie that you can take £80bn out of the economy in expenditure and create hundreds of thousands of jobs.  He sounds like – is – one of the boneheaded fiscal conservatives that Keynes so excoriated in the 1930s.  It is not difficult to see him as one of the wing-collared Tories that had done well out of the First World War, arguing for cuts in the face of the depression and rationalising it by claiming that unemployment is down to the fecklessness of the poor.  Keynes and Beveridge knew those people, and their Liberal tradition opposed everything they stood for.

And what sort of failure of awareness does it take for a man who styles himself as a radical not to realise that, thanks to his Government, Beveridge’s five Giant Evils are more prevalent than they have been for a generation?  Squalor, Ignorance, Want, Idleness and Disease.  The assault on welfare, the effective privatisation of the NHS, and perhaps above all – because this lies at the heart of Beveridge – a belief that benefits for the most vulnerable are not a matter of right but are charity, the hand-me-downs of a Big Society of the wealthy and privileged.  It takes a special kind of self-deception for the Deputy Prime Minister of this coalition government to portray himself as the heir of Beveridge.

So what of Liberal Democrat activists?

No doubt activists like to laugh at their predecessors.  I’m sure that there is no lack of smooth young folk in PR and marketing – people to whom the free market has been good – sitting in the bars at Liberal Democrat gatherings, patronising their bearded and sandaled predecessors.  But we stuck to the task and fought for what we believed in.  Do you?  Is it really more honourable or more adult to be the Tories’ useful idots? You may not have liked the protesters outside your conference, or for that matter the students who marched in London last autumn, but at least they had got off their knees. Have you?

I have no doubt that many of those in the hall in Sheffield were decent, progressive people.  But the record makes it clear: a government in which Nick Clegg is comfortable is one that no decent progressive could support.  And I’d say to those delegates – stop whining. You may not like what this Government is doing, but you have made it possible.  By going into formal coalition with the Tories, you’ve made it possible for them to pursue their shock doctrine.  Privatising the NHS and the Universities? Cleansing the poor from the inner cities? Do you really believe any of this would have happened had your party been deciding its position in the Commons on a vote-by-vote basis, rather than going into full coalition with the Tories?

And do you really think that Clegg, let alone the Tories, will take any notice of your vote on the NHS?  Yes, Lansley’s been talking the language of compromise, but you know that the die has already been caset.  The private sector providers are already looking for the opportunity to profit from the GP commissioners, just as the private sector has leached public provision through privatisation and PFI for the last two decades.  The fact is, Clegg’s loyalty – and Laws’ and Alexander’s loyalty – is not to you.  It’s to the Tories who control the coalition, and the ideology that drives them.  The electorate knows that, and it’s why you’re coming sixth in by-elections.

And if you believe in tackling Beveridge’s Five Giants, every Liberal Democrat leaflet you deliver, every sub you collect, is an expression of moral delinquency.  It’s over.  Your party is no more than the fading figleaf on a decaying Victorian statue – if you really believe in anything better, tear up your membership card and get out now with your integrity reasonably intact and before the denial poisions your soul.