This week's heavy snow has resulted in two incidents that made me think about the nature of community and feel upbeat about the prospects for Britain after the Election.
This morning, unable to get my car out of our untreated side road and having to get to a client in Redhill, I walked to a nearby bus stop, from which a service is allegedly still running. While waiting, I saw the driver of an expensive BMW convertible struggling to pull away from rest, as the driven rear wheels spun impotently on a surface of impacted snow with ice beneath. He got out and attacked the highway with a spade; if anything, this made the situation worse, exposing the frozen substratum. He revved the engine fruitlessly, and the car slewed sideways.
Next, first one by-passer, then another, came to his aid, working together to push the back of his car sideways onto a narrow track of Tarmac, partially protected by gritting and exposed by the tyre-tracks of previous traffic. Once the back tyres gained purchase on it, he was able to reverse, pulling the car's nose onto this strip of still-passable highway.
The two helpers must have been tied up for 15 minutes, at considerable personal discomfort and some risk of injury. Both looked to be of limited means, yet they appeared unconcerned with the obvious disparity in wealth between themselves and the driver they were assisting.
The second incident is much closer to home. About three days before Christmas, my partner Sarah and I noticed that one of the local cats was carrying one of his rear paws in the air, having presumably sustained an injury to either the paw itself or the hind leg or hip. We assumed his owner would take him to a vet. A week or so later, between Christmas and New Year, we were concerned to see him still hopping along on three legs, the injured limb not bandaged or strapped. But, knowing that broken limbs in small animals are often now dealt with by internal pins, thought nothing of it. Our concerns intensified a couple of days ago when the snow blew in: we know our cat, Popcorn, barely ventures out when the ground is this cold, yet the injured black and white Tom was still hopping along, only this time, issuing a plaintive maiow every few steps.
We called the Cats Protection League, who asked us to call on neighbours to establish whether anyone owned the animal or if it was lost or feral. So we trekked round the neighbourhood at nearly nine at night on the coldest night of the year to date. Everyone was happy to open the door to us, give us all the information they had and help with the attempt to save what we believe is a lost domestic cat that has lived locally for the past 18 months or so. Turns out that everyone else, as we did, had assumed someone owned the animal until the past few days, when it became obvious that the length of time its injury had gone untended, combined with the fact it was still outside all day in Siberian conditions, led them to conclude it needed help. What touched me is how many people, including those living in Housing Association properties who are therefore likely to be on low incomes, often with several children and animals of their own to care for, had tried to feed it, or catch it.
With the help of Cats Protection and food donated via a collection point at our local supermarket, a kennel and feeding point have been set up in a neighbour's garden that the injured cat is known to frequent. In time, the feeding point will be converted into a (humane) trap, which we hope will capture the animal before its leg can set wrongly (if broken) or become irreversibly infected (if wounded), whereupon the charity will pay for it to receive veterinary attention then take it in to recover, before re-homing it.
As I've written before on this blog, I see the two overriding challenges for the new Government as fixing the economy, which will entail slashing the public debt by getting more done with less, and healing our community, by fostering co-operative and caring attitudes in place of a sense of entitlement or self-interest, which have been the prevailing values of the New Labour bubble.
People old enough to remember World War II and the kipper years that followed talk of privation in positive terms, in that it created conditions under which people had to pull together for the common good. I'm not sure whether 'New Conservatism' really exists - the Left likes ideological labels more than the Right - but if it does, it strikes me that it probably has to do with a desire to empower people, on a grass-roots basis, to create change, rather than having it driven from the centre, as has happened, expensively, oppressively and ineffectively, under New Labour. This ethos pre-dated the recession, but has gained traction since the banking crisis because this bottom-up approach offers the opportunity not only to re-establish social cohesion but also to get things done more cost-effectively at a local level, often on a voluntary basis, without the use of expensive phalanxes of civil servants and Quangocrats.
The two little incidents that happened near me over the past couple of days have shown me how the community can still come together to help those in need, whatever their circumstances. Fundamentally, co-operation remains an important part of the British psyche and has not been entirely destroyed by the regulation-obsessed, State-will-provide Blair-Brown era. This strikes me as a promising start to 2010, after a difficult 2009.
Thursday, 7 January 2010
Thursday, 17 December 2009
"We have to do better than this"
There are two things I'd really, really like for Christmas this year. The first is for David Cameron to invite Sir Gerry Robinson to work with his administration on the Herculean task of fixing public services; the second is that Sir Gerry should accept the offer.
If you've watched this programme, you'll know why. The second part of the former Granada Chief Executive's investigation into the state of dementia care in the UK, which I count as a public service because although most homes are privately owned, 70 percent of places are funded by local authorities, its findings both shocked and moved me.
The episode focused on a home that had recently been inspected, and upgraded from poor to adequate, largely because the owners had recently given it a cosmetic makeover and all the required documentation was in order. But this box-ticking approach overlooked glaring flaws in the standard of care: elderly people with Alzheimers and other conditions that demand frequent human interaction if sufferers are not to withdraw fully into themselves were being deprived of contact and left to vegetate. They were locked indoors, because it was deemed 'unsafe' to allow them to sit outside on summer days; on occasion, it was implied that they'd even been locked in their rooms at night to stop them roaming, allowing care staff to sleep, their emergency call cords tied beyond their reach, lest they interrupt staff's sleep.
The overriding culture, driven from the regulator downward, was driven by the need to demonstrate that residents' physical wellbeing was met, while ignoring their emotional and mental needs: better to wrap them in cotton wool than allow them to live, if living meant risking injury (the 'care plans' included diagrams showing evidence of any bruises, all of which had to be accounted for). In contrast, Robinson found a model home in which the staff wore casual clothes, rather than variants on nurses' uniforms and sat with the residents, engaging them in the process of helping to run the home - for instance, in preparing food, and cleaning the place. Needless to say, occupants in the latter environment were happier, and healthier - and the home's running costs were no higher.
The presenter brought in the owner of the role-model home, and the dementia care consultant who'd helped make it such a good place to live, to work their magic on the failing establishment. They found that many of the staff wanted to engage with the residents, some even volunteering to come in, unpaid, on their days off, to talk to them. The blockers were an owner who lacked leadership skills or the motivation to improve, coupled with a regulatory system that seemingly neither measures nor cares about the emotional wellbeing of residents.
But the temporary improvement in morale had a consequence none of those involved could possibly have anticipated: emboldened by the fact that people were now interested in what they had to say, a number of the residents began making claims about abuse. The police became involved, then the council, and in due course the home was closed down. And this an establishment that had just been rated 'satisfactory' by its regulator. Robinson made the point that this was a Pyrrhic victory, as a third of elderly people moved from one care home to another die within a year of transferring - a proportion which I suspect may be higher for dementia sufferers, given that their episodes of confusion would be likely to make such an upheaval even more traumatic. The presenter didn't make this point, but I couldn't help thinking that, even at the end, bureaucracy dealt the residents an appalling hand: why should the failings of the two individuals who owned that home result in them having to be displaced? Why couldn't the managers be removed, and the residents be allowed to remain in the environment that was familiar to them?
Sir Gerry concluded the report with a voiceover, which became a piece to camera, which was so well put that I felt the urge to transcribe it, and include it, verbatim, in this blog:
"It had been a fight - against complacency, low expectations, apathy, and poor regulation. At some point in the future, we will look back on this, and when we do, I really hope we’re staggered by the fact that we were prepared to treat our relatives in this way, our loved ones, to leave them sitting in rooms, bored, staring at walls, non-people. It beggars belief that we’ve allowed this system to continue for so long. We have to do better than this."
I'm not ashamed to say this was one of several points in the programme when I felt tears welling up, of sympathy for the vulnerable people who were treated so callously by the system, of anger at those responsible, and of empathy for Robinson, who I think is one of the best TV presenters of the current age and by far the best exponent of business on television. Where 'Sir Alan' is portrayed as a pile-'em-high bully and the Dragons primarily as opportunists, Gerry Robinson presents himself as a good business leader is in real life: an intelligent analyst, who agonises about decisions, cares about those involved and is angered by injustice.
He displayed the same traits in his two series deconstructing inefficiency in the NHS (I'll Show Them Who's Boss and Can Gerry Robinson Fix The NHS?). Both showed him frustrated at a system obsessed with targets, run by weak, disempowered managers who were unable to reward the productive and committed and unable to deal effectively with the lazy, incapable and self-serving.
I vividly remember the second series, in 2007, in particular his righteous indignation that millions of Pounds worth of operating theatre equipment was used only during office hours, four days a week, because consultants were reluctant to work shifts and those who scheduled their work assumed they'd want to play golf on Fridays. Prompted by Robinson, a handful of pioneering surgeons challenged hapless managers and were allowed to extend operating hours, but one of the most productive and committed among their number was head-hunted by a private hospital and the restrictive pay scales imposed from the top prevented his manager from making a satisfactory counter-offer: instead, the NHS Trust in question was forced to contract in his services at a premium from his new employer in a bid to slash waiting lists.
As the prospect of a change of government hardens, any number of management consultancy firms are lining up to demonstrate their commitment to re-engineering public services, cutting out cost and inefficiency while improving delivery, eager to distance themselves from being positioned as part of the problem, rather than the solution. But their costs are prohibitive, and few of their consultants have run anything more challenging than a half marathon. They're also adept at hiring former civil servants, local authority, NHS and quango executives, on the revolving-door principle that their successors will give them contracts now in anticipation of being looked after in due course.
Maybe I'm responding to a public image rather than reality, but I genuinely feel that Gerry Robinson would be above all this. He's a former Catholic priest, for a start, which suggests that some level of belief and altruism underpins what he does. He's also personally wealthy, which means he's unlikely to be driven by scrapping around to feather his own nest. But above all, in the programmes that he has made about public services, and indeed about private businesses, he has come across as someone who really cares.
I'm sure there remains a suspicion among the electorate that the Conservative Party doesn't much care for public services, on the false premises that many prominent figures are rich enough not to need to use them. The truth is that modern Conservatism is committed to rebuilding social cohesion, and that can only be done if those who make decisions that are critical to the NHS and other services have first-hand experience of them. As, indeed, Robinson has of dementia care (his father having suffered from the condition in his latter years).
The public wants to know that we do care about public services, and that our criticisms of them are borne of frustration and anger at their shortcomings, not contempt for those working in them, or using them. They want to know that our drive to eliminate waste is underpinned by a sense of responsibility toward those whose income is taxed to pay for the services, and who rightly demand accountability in how their money is spent, rather than an uncaring drive to cut taxes for the wealthy, at the expense of decent services for the many.
If you scroll back up to Gerry Robinson's closing comments about dementia care, you'll see precisely the kind of motivations that I think are needed to truly get a grip on public services: not to slash and burn, but to rebuild them, if necessary from the ground up, around the needs and aspirations of users.
Robinson publicly supported Tony Blair in 1997, and has given money to New Labour. But he has been a Conservative in the past, and in June 2008 made it clear he would no longer donate to the current administration while Gordon Brown was its leader. In some ways, I prefer this to the notion of him being a life-long, uncritical Tory: if he agreed to help reform public services, it would be because he wanted to help, not in expectation of preferment or to support long-standing friends.
Whether it's hospitals that deny patients scans and operations while expensive equipment stands idle, homes that lock up dementia sufferers to protect them from injury while simultaneously depriving them of care and human conversation, quangos that create self-perpetuating elites of non-executives and senior managers while doing little to help those they were established to assist, what's needed is reform based around making end users' lives better, harnessing the most committed and able of those in the systems - often not those at the top, or the self-appointed spokespeople - to cut through existing chains of command and challenge assumptions about how things can and can't be done.
I'd like to think that the programmes Gerry Robinson made about the NHS made him re-examine his support for New Labour. A party that represents a coalition between senior managers in the public sector and the trades unions, which in the current era exist overwhelmingly in public services, is too close to those vested interests to challenge the way things are done - which, all too often, is engineered to suit the producers, rather than the consumers. And while I accept that my own party has historically been stereotyped as representing the interests of another producer group, namely business owners, in a modern, share-owning democracy, an interest in the wellbeing of private business is very broadly spread. And New Conservatism is actually about achieving social justice, which means governing for everyone, not a coalition of special interest groups.
I don't know whether David Cameron saw Gerry Robinson's programme earlier this week, whether he has been in touch to ask for Sir Gerry's help, nor whether Robinson is minded to accept the challenge. But I hope the answers are yes, yes and yes - not for me, or the Party, but for the country.
Wednesday, 18 November 2009
The Thin Black Line
When I began this blog, back in January, I set out to make the case for the advancement of social justice through Conservative policies. Along the way, I've written plenty about the state of the economy, and how best Britain can rebound from the recession. I make no apology for doing so: few things are less socially just than losing your job, business or home as a result of an economic shock in whose making most of us had no part.
Recently David Cameron took a significant further step in explaining the philosophy that underpins today's Conservative Party. Giving the 2009 Hugo Young lecture, he talked about creating a 'big society', as an antidote to the 'big state' that has burgeoned under New Labour. As well as resulting in a more cohesive nation, and one in which the views and aspirations of the individual, family and community are more accurately reflected in public policies and the allocation of communal resources, I believe that such a philosophy can also be adapted to provide the best possible engine for economic recovery.
At the heart of the UK's current financial malaise is the fact that the country's outgoings have exceeded its income, not only since the banking shock of late last year but in the preceding boom time when, supposedly, Gordon Brown was pursuing policies driven by 'prudence' but, in reality, was building up the interventionist state and weaning a sizeable proportion of the working class into benefits dependency. Redressing the balance will require output to exceed expenditure for an extended period. It also requires either spending to fall or income to rise - for people to receive less, or give more. Whichever way it's presented, these are the axioms on which any sensible government must act.
How does this translate to individuals? Imagine a thin black line, scored vertically down the middle of a sheet of paper. To the left are people who take more out of society than they put in; to the right, those who are net contributors. For the country to return to solvency, we need the latter to contribute more than the former take out. And for our nation to be a harmonious one, we need to minimise the number of people who are not net contributors and thus are resented by the rest.
That's a big ask. Read the Daily Mail - something many politicians disdain to do, looking down on its predominantly lower middle-class readership, but actually an essential requirement for anyone who has respect for the biggest and most psephologically volatile constituency within the British electorate - and you'll see plenty of resentment among those who see themselves as net contributors toward those who they perceive to be on the take. The takers, incidentally, come in many shapes and sizes: health tourists and fraudulent asylum seekers, 'lifestyle' benefit claimants, Quango gravy-train passengers, expense-manipulating MPs. Loading extra costs onto those who already perceive themselves hard done-by will lead to resentment, possibly even a breakdown in social cohesion, and of course to mass emigration of those whose co-operation we most need.
The first objective of any policy must therefore be to ensure that there is no feeling of resentment among the contributors toward those who are net beneficiaries. And the simplest way to do this is to ensure that those who take the most out of the communal purse repay that support in some way. Much has been written about workfare, a term widely stigmatised, but I see no reason why someone who is not working and in receipt of benefits shouldn't undertake work of benefit to the community. Whether it's doing the shopping for the frail elderly, providing childcare for working parents or running community centres, it behoves their own self-respect, and the esteem in which they're held by others, that they should contribute in some way.
Another attraction to this approach is that it affords opportunities for the state to pare back spending, in favour of passing responsibility for many areas of socially beneficial provision from local and national government onto the third sector, underpinned by benefit claimants and volunteers.
At the other end of the spectrum are people whose net contribution to society is significantly above the norm. Among their number are the altruistic minority who give up enormous amounts of their time to undertake voluntary work, or who contribute very generously to charities. Perhaps we should incentivise, reward or thank such people, for instance by giving them tax breaks? Then there are the very highly paid, whose tax bills are therefore very substantial. Are we sure that a flat rate of tax (albeit tiered) is the most just way of raising revenue from individuals' incomes? Other options have been suggested in recent months, including a much increased personal allowance of perhaps £10,000, combined with a much simplified tax credit system, but I wonder whether work is also needed at the top end, such as tapering tax above a certain threshold. The alternative could be to lose many of the country's greatest wealth- and job-creators.
So far, I've dealt with those on the outer edges of the scatter diagram: the non-contributors who are resented, and whose continuing presence threatens social cohesion, and the most generous contributors, whose continuing goodwill we need to preserve. In reality, most people are pretty close to the thin black line, and small differences in policy can have huge impacts on their lives and, crucially, their life decisions.
A pertinent instance of this emerged last week, when Gordon Brown stepped back from the brink of a hugely unwise decision to remove childcare vouchers from the majority of the population in favour of entirely free childcare for those on very low incomes. The truth is that, by the time childcare costs are paid, many couples on average, or even slightly above-average incomes, are barely any better off as a result of mothers working than they would be if they stayed at home. This is even more true once all the costs of being employed are taken into account, including commuting costs and a working wardrobe. But the cost to society of women deciding to stay at home are much greater - more families would qualify for tax credits and social housing, the tax and national insurance take would be reduced and, of course, the women in question would have substantially lower lifetime earnings and hence spending power.
By the same token, foolish meddling such as the previous attempt to abolish the basic 10 percent rate of income tax result in large numbers of people finding themselves worse off as a result of working than they would be if they took the benefits option. And, setting aside questions of tax and benefits-in-kind policy and looking purely at details of implementation, one of the most callous aspects of the New Labour state is that many people who are dependent on benefits dare not take jobs because they know that if, for whatever reason, a new role doesn't work out, the system will leave them penniless for up to 10 weeks while faceless workers, on secure, public-sector contracts, in a back office somewhere, process their claim to revert to state support, during which time they may have little alternative but to resort to loan sharks for temporary support and will be ineligible for a swathe of forms of indirect support such as children's free school meals.
Such policies can also have very personal implications. There are many single mums who remain alone in part because the financial cost of becoming part of a couple, in terms of withdrawal of benefits, is so onerous. Even if a potential partner is earning a good income and willing to support her and her children, the jeopardy if the relationship doesn't last can be considerable. Likewise, the system for allocating social housing encourages dependency, reduces social and geographical mobility and is difficult, if not impossible, to exit.
By ensuring that the biggest net beneficiaries of social support make a commeasurate contribution, the stigma of accepting such aid will be much reduced. We should also ensure that the safety net is easy to both enter and exit. That way, those who are moderate net contributors to the system - the 'hard-working families' about whom Gordon Brown so often speaks, the Daily Mail readers, Worcester women and Mondeo men, will have much less reason to resent their status, because they will be reassured by the fact that the safety net will be there for them if their circumstances change for the worse. One of the great sadnesses of the recession has been hearing tales of people who've worked all their adult lives having to claim the dole for the first time and finding that, despite their many years' contribution, they were entitled to a mere £60.50 per week, whereas if they had chosen from the outset not to own their own homes, and if their partners weren't working or they were single, they would receive much more support.
I wonder, too, whether the tax and national insurance and benefits system shouldn't also have more of the characteristics of an insurance scheme: the more you pay in, the more you could get out, should you need it. For instance, if you are fortunate enough to qualify for social housing at one point in your life, that tenancy is, in essence, for life; in contrast, if you buy your own home on a mortgage and lose your job, the best you can hope for from the state is that it will pay the interest component on the first £200,000 of your loan, for a period of two years.
In reality, those who are able to support themselves tend to get re-employed relatively quickly, so the cost of tying support if things go wrong to previous contribution levels needn't be onerous. But the benefit of doing it is that it would become a lot easier to retain the support of the net contributors at a time when more may be demanded of them.
Recently David Cameron took a significant further step in explaining the philosophy that underpins today's Conservative Party. Giving the 2009 Hugo Young lecture, he talked about creating a 'big society', as an antidote to the 'big state' that has burgeoned under New Labour. As well as resulting in a more cohesive nation, and one in which the views and aspirations of the individual, family and community are more accurately reflected in public policies and the allocation of communal resources, I believe that such a philosophy can also be adapted to provide the best possible engine for economic recovery.
At the heart of the UK's current financial malaise is the fact that the country's outgoings have exceeded its income, not only since the banking shock of late last year but in the preceding boom time when, supposedly, Gordon Brown was pursuing policies driven by 'prudence' but, in reality, was building up the interventionist state and weaning a sizeable proportion of the working class into benefits dependency. Redressing the balance will require output to exceed expenditure for an extended period. It also requires either spending to fall or income to rise - for people to receive less, or give more. Whichever way it's presented, these are the axioms on which any sensible government must act.
How does this translate to individuals? Imagine a thin black line, scored vertically down the middle of a sheet of paper. To the left are people who take more out of society than they put in; to the right, those who are net contributors. For the country to return to solvency, we need the latter to contribute more than the former take out. And for our nation to be a harmonious one, we need to minimise the number of people who are not net contributors and thus are resented by the rest.
That's a big ask. Read the Daily Mail - something many politicians disdain to do, looking down on its predominantly lower middle-class readership, but actually an essential requirement for anyone who has respect for the biggest and most psephologically volatile constituency within the British electorate - and you'll see plenty of resentment among those who see themselves as net contributors toward those who they perceive to be on the take. The takers, incidentally, come in many shapes and sizes: health tourists and fraudulent asylum seekers, 'lifestyle' benefit claimants, Quango gravy-train passengers, expense-manipulating MPs. Loading extra costs onto those who already perceive themselves hard done-by will lead to resentment, possibly even a breakdown in social cohesion, and of course to mass emigration of those whose co-operation we most need.
The first objective of any policy must therefore be to ensure that there is no feeling of resentment among the contributors toward those who are net beneficiaries. And the simplest way to do this is to ensure that those who take the most out of the communal purse repay that support in some way. Much has been written about workfare, a term widely stigmatised, but I see no reason why someone who is not working and in receipt of benefits shouldn't undertake work of benefit to the community. Whether it's doing the shopping for the frail elderly, providing childcare for working parents or running community centres, it behoves their own self-respect, and the esteem in which they're held by others, that they should contribute in some way.
Another attraction to this approach is that it affords opportunities for the state to pare back spending, in favour of passing responsibility for many areas of socially beneficial provision from local and national government onto the third sector, underpinned by benefit claimants and volunteers.
At the other end of the spectrum are people whose net contribution to society is significantly above the norm. Among their number are the altruistic minority who give up enormous amounts of their time to undertake voluntary work, or who contribute very generously to charities. Perhaps we should incentivise, reward or thank such people, for instance by giving them tax breaks? Then there are the very highly paid, whose tax bills are therefore very substantial. Are we sure that a flat rate of tax (albeit tiered) is the most just way of raising revenue from individuals' incomes? Other options have been suggested in recent months, including a much increased personal allowance of perhaps £10,000, combined with a much simplified tax credit system, but I wonder whether work is also needed at the top end, such as tapering tax above a certain threshold. The alternative could be to lose many of the country's greatest wealth- and job-creators.
So far, I've dealt with those on the outer edges of the scatter diagram: the non-contributors who are resented, and whose continuing presence threatens social cohesion, and the most generous contributors, whose continuing goodwill we need to preserve. In reality, most people are pretty close to the thin black line, and small differences in policy can have huge impacts on their lives and, crucially, their life decisions.
A pertinent instance of this emerged last week, when Gordon Brown stepped back from the brink of a hugely unwise decision to remove childcare vouchers from the majority of the population in favour of entirely free childcare for those on very low incomes. The truth is that, by the time childcare costs are paid, many couples on average, or even slightly above-average incomes, are barely any better off as a result of mothers working than they would be if they stayed at home. This is even more true once all the costs of being employed are taken into account, including commuting costs and a working wardrobe. But the cost to society of women deciding to stay at home are much greater - more families would qualify for tax credits and social housing, the tax and national insurance take would be reduced and, of course, the women in question would have substantially lower lifetime earnings and hence spending power.
By the same token, foolish meddling such as the previous attempt to abolish the basic 10 percent rate of income tax result in large numbers of people finding themselves worse off as a result of working than they would be if they took the benefits option. And, setting aside questions of tax and benefits-in-kind policy and looking purely at details of implementation, one of the most callous aspects of the New Labour state is that many people who are dependent on benefits dare not take jobs because they know that if, for whatever reason, a new role doesn't work out, the system will leave them penniless for up to 10 weeks while faceless workers, on secure, public-sector contracts, in a back office somewhere, process their claim to revert to state support, during which time they may have little alternative but to resort to loan sharks for temporary support and will be ineligible for a swathe of forms of indirect support such as children's free school meals.
Such policies can also have very personal implications. There are many single mums who remain alone in part because the financial cost of becoming part of a couple, in terms of withdrawal of benefits, is so onerous. Even if a potential partner is earning a good income and willing to support her and her children, the jeopardy if the relationship doesn't last can be considerable. Likewise, the system for allocating social housing encourages dependency, reduces social and geographical mobility and is difficult, if not impossible, to exit.
By ensuring that the biggest net beneficiaries of social support make a commeasurate contribution, the stigma of accepting such aid will be much reduced. We should also ensure that the safety net is easy to both enter and exit. That way, those who are moderate net contributors to the system - the 'hard-working families' about whom Gordon Brown so often speaks, the Daily Mail readers, Worcester women and Mondeo men, will have much less reason to resent their status, because they will be reassured by the fact that the safety net will be there for them if their circumstances change for the worse. One of the great sadnesses of the recession has been hearing tales of people who've worked all their adult lives having to claim the dole for the first time and finding that, despite their many years' contribution, they were entitled to a mere £60.50 per week, whereas if they had chosen from the outset not to own their own homes, and if their partners weren't working or they were single, they would receive much more support.
I wonder, too, whether the tax and national insurance and benefits system shouldn't also have more of the characteristics of an insurance scheme: the more you pay in, the more you could get out, should you need it. For instance, if you are fortunate enough to qualify for social housing at one point in your life, that tenancy is, in essence, for life; in contrast, if you buy your own home on a mortgage and lose your job, the best you can hope for from the state is that it will pay the interest component on the first £200,000 of your loan, for a period of two years.
In reality, those who are able to support themselves tend to get re-employed relatively quickly, so the cost of tying support if things go wrong to previous contribution levels needn't be onerous. But the benefit of doing it is that it would become a lot easier to retain the support of the net contributors at a time when more may be demanded of them.
Monday, 26 October 2009
Gardeners' question time: how to nurture green shoots
Last week we learnt, against media expectation, that the UK recession did not end in the third quarter of 2009. While this is just a provisional finding, with decline for the period estimated at 0.4 percent, there are many indications I've received in my working life that lead me to believe that those who predicted that the economy is unlikely to hit the bottom until the final quarter - and even then, largely because of the ending of the car scrappage scheme and VAT reduction - may well be vindicated.
For it's my view that while consumer confidence may have improved marginally, feeding through to retail sales that are less disappointing than many had feared - the fact is that companies are not investing in jobs, or anything approaching capital expenditure. At the heart of this problem is the sad fact that bank lending to businesses large and small continues to decline. The much-trumpeted Enterprise Finance Guarantee Scheme has largely failed, the few loans being made under the initiative being either replacement lending for existing facilities or, where they're new loans, they're being advanced against fixed assets or directors' property-backed guarantees - or both. There is a dearth of lending to back entrepreneurial activity: at the lower end of the market, start-ups and expansion and at the top end, management buyouts.
Sadly, this is unsurprising. The banks continue the long, hard slog of improving their balance sheets, and exercise that requires them to take minimal risks and charge the highest possible margins. Sterling is being artificially depressed to permit interest rates to remain at a historically low level for a record period in order that banks can lend out money at rates that barely deviate from the long-term norm, generating record profits, which are translating into (much resented) record bonuses for key personnel. Meanwhile, the rest of the economy is starved of the kind of lending that creates jobs in small businesses, drives efficiencies in big ones and generally keeps the wheels turning.
There has been much talk in recent days about whether bankers' bonuses are immoral or bad for society. Lord Griffiths, who chairs Goldman Sachs International, says that they are "good for Britain" and we should learn that "inequality is a way of achieving greater opportunity and prosperity for all". As a Conservative, I have some philosophical empathy with these statements, on an abstract, philosophical level: I'd rather than money was earned (and spent) in the UK than elsewhere, and I accept that some degree of inequality generates growth, as long as those who benefit from it spend it locally and wealth is used as a beacon to which all can aspire, rather than a cap on their aspirations.
But in the context of bonuses, I think he's wrong. Every penny paid out in this way is money not sitting on a bank's balance sheet, delaying the date when proper lending can resume and jobs and affluence can be spread more widely. George Osborne's response, which echoes proposals supported by most G20 countries, is that, until banks are truly solvent, in the sense of being able to survive without governments as shareholders or guarantors of debt or dodgy assets, any bonuses should be paid in the form of equity, to be held until that solvency returns.
Of course, there are difficulties with this approach, not least that greedy bankers will insist on higher basic salaries, to cushion them from the short-term damage to their personal cashflow positions that such parsimony threatens. And it's true that there's a risk of losing the best brains to our competitors. Unless, of course, we use the G20 as anti-capitalists fear, albeit to an end that they would applause: as a cartel. If every major nation agreed a policy on controlling bankers' remuneration, we could cap their earnings without risking damage to any individual nation's banking industry. Ironically, this would benefit the UK more than any country, with the possible exception of the US, and yet it's Brown that has blocked the introduction of such a measure.
Ideologically, I feel uncomfortable about countries forming cartels: on one level, that's what the EU has been guilty of for years, freezing out imports from (mainly developing) countries, whether overtly, through import duties, or surreptitiously, by introducing ever-changing CE certification standards that companies and farmers in less affluent territories struggle to keep pace with. But sometimes it's necessary to fight fire with fire. One of the reasons why the misdeeds of some bankers proved so catastrophic to the world economy is the same reason why it's hard to squeeze their excessive remuneration out of the system now: there are simply too few banks, and by extension, too few experienced bankers. A process of ongoing consolidation over the past century, which accelerated in the 1980s in the UK and Europe and 1990s in the States, means that there are actually fewer banks now than when the horse and cart was the preferred means of transport in the world's capital cities. That has to be wrong.
So any attempt to moderate bankers' pay must be accompanied by a determined, activist programme of encouraging the creation of new banks. Not only would this allow more people with the relevant intellectual capacity and application become bankers, widening the gene pool and reducing the pricing power of key individuals and their employers, but it would also foster and incentivise the creation of different banking models, practices and norms. The credit crunch happened because banks had become the dinosaurs of the world economy: large, slow, aggressive but stupid, they survived on a narrow diet, gorging themselves on derivatives until they neared collapse. I'd like to see banks run by charities (Age Concern for old people, Gingerbread for single mums), retailers (Tesco and Marks and Spencer have white-labelled others' retail banking services for years - it'd be interesting to see how they'd do it themselves), while the Institute of Directors could open one aimed at small businesses. And while part of me quakes at the prospect of Labour-run local authorities running banks, if they were truly reflective of their areas I think they could do a lot of good in generating suitable jobs.
How can Government 'encourage' the creation of new banks, and is it the state's role to do so? On the latter question, my view is a resounding 'yes'. Even the driest Tory believes that the state has two roles: defending its citizens and protecting the free market. As to the means, the simplest is to sell off the constituent elements of the banks part-owned by the state separately, rather than together: it's not many years since Lloyds Banking Group, for instance, was four independent entities - Lloyds, TSB, the Halifax and Bank of Scotland.
Another option is to use the tax system to encourage investment in the creation of entirely new institutions - say a tax break on the earnings of newly-formed retail banks for an agreed period and incentives for solvent individuals and organisations to invest in such businesses - and fiscal disincentives for businesses that are cash generative on such a scale that they could found (or fund) new financial institutions to hoard that cash or distribute it as dividends.
One of the enduring sensitivities, the elephant in the room, is that the UK has lived well on the proceeds of the banking industry over the past 10-15 years and nobody wants to threaten the sector's success. But the fact is that the sector failed, publicly and expensively, last year. Creating more and better banks should strengthen our ability to compete globally, not undermine it.
I suspect the public harbours a residual suspicion that we Conservatives are the friends of big business, even when it's greedy and corrupt, rather than of the man in the street: Wall Street rather than Main Street, in American rhetoric. I believe that David Cameron's closing address to conference went a long way towards disabusing the electorate of this notion. While he is unlikely ever to take on the fashionable 'Red Tory' label, Cameron certainly believes in localist, decentralised politics and the economic model that goes with it, which is one that instinctively prefers small business to big.
I therefore hope, and believe, that between now and the General Election, my party will develop policies aimed at disrupting cosy oligopolies wherever it finds them, starting with the banking industry. Mervyn King's frustration with New Labour's (read Gordon Brown's) inactivity on reforming the sector most recently came to a head last week, with the question of whether banks that are too big to fail should be broken up, and specifically whether 'casino'-type activities should be confined to banks that are separate from the mainstream, retail ones. Even setting aside the compelling arguments about such measures preventing a recurrence of the credit crunch, I believe that such a program would be a crucial first step along the necessary path of creating more banks, which in turn will create more liquidity and, with it, more opportunities for small businesses to be started and expanded, and more jobs to be created.
For it's my view that while consumer confidence may have improved marginally, feeding through to retail sales that are less disappointing than many had feared - the fact is that companies are not investing in jobs, or anything approaching capital expenditure. At the heart of this problem is the sad fact that bank lending to businesses large and small continues to decline. The much-trumpeted Enterprise Finance Guarantee Scheme has largely failed, the few loans being made under the initiative being either replacement lending for existing facilities or, where they're new loans, they're being advanced against fixed assets or directors' property-backed guarantees - or both. There is a dearth of lending to back entrepreneurial activity: at the lower end of the market, start-ups and expansion and at the top end, management buyouts.
Sadly, this is unsurprising. The banks continue the long, hard slog of improving their balance sheets, and exercise that requires them to take minimal risks and charge the highest possible margins. Sterling is being artificially depressed to permit interest rates to remain at a historically low level for a record period in order that banks can lend out money at rates that barely deviate from the long-term norm, generating record profits, which are translating into (much resented) record bonuses for key personnel. Meanwhile, the rest of the economy is starved of the kind of lending that creates jobs in small businesses, drives efficiencies in big ones and generally keeps the wheels turning.
There has been much talk in recent days about whether bankers' bonuses are immoral or bad for society. Lord Griffiths, who chairs Goldman Sachs International, says that they are "good for Britain" and we should learn that "inequality is a way of achieving greater opportunity and prosperity for all". As a Conservative, I have some philosophical empathy with these statements, on an abstract, philosophical level: I'd rather than money was earned (and spent) in the UK than elsewhere, and I accept that some degree of inequality generates growth, as long as those who benefit from it spend it locally and wealth is used as a beacon to which all can aspire, rather than a cap on their aspirations.
But in the context of bonuses, I think he's wrong. Every penny paid out in this way is money not sitting on a bank's balance sheet, delaying the date when proper lending can resume and jobs and affluence can be spread more widely. George Osborne's response, which echoes proposals supported by most G20 countries, is that, until banks are truly solvent, in the sense of being able to survive without governments as shareholders or guarantors of debt or dodgy assets, any bonuses should be paid in the form of equity, to be held until that solvency returns.
Of course, there are difficulties with this approach, not least that greedy bankers will insist on higher basic salaries, to cushion them from the short-term damage to their personal cashflow positions that such parsimony threatens. And it's true that there's a risk of losing the best brains to our competitors. Unless, of course, we use the G20 as anti-capitalists fear, albeit to an end that they would applause: as a cartel. If every major nation agreed a policy on controlling bankers' remuneration, we could cap their earnings without risking damage to any individual nation's banking industry. Ironically, this would benefit the UK more than any country, with the possible exception of the US, and yet it's Brown that has blocked the introduction of such a measure.
Ideologically, I feel uncomfortable about countries forming cartels: on one level, that's what the EU has been guilty of for years, freezing out imports from (mainly developing) countries, whether overtly, through import duties, or surreptitiously, by introducing ever-changing CE certification standards that companies and farmers in less affluent territories struggle to keep pace with. But sometimes it's necessary to fight fire with fire. One of the reasons why the misdeeds of some bankers proved so catastrophic to the world economy is the same reason why it's hard to squeeze their excessive remuneration out of the system now: there are simply too few banks, and by extension, too few experienced bankers. A process of ongoing consolidation over the past century, which accelerated in the 1980s in the UK and Europe and 1990s in the States, means that there are actually fewer banks now than when the horse and cart was the preferred means of transport in the world's capital cities. That has to be wrong.
So any attempt to moderate bankers' pay must be accompanied by a determined, activist programme of encouraging the creation of new banks. Not only would this allow more people with the relevant intellectual capacity and application become bankers, widening the gene pool and reducing the pricing power of key individuals and their employers, but it would also foster and incentivise the creation of different banking models, practices and norms. The credit crunch happened because banks had become the dinosaurs of the world economy: large, slow, aggressive but stupid, they survived on a narrow diet, gorging themselves on derivatives until they neared collapse. I'd like to see banks run by charities (Age Concern for old people, Gingerbread for single mums), retailers (Tesco and Marks and Spencer have white-labelled others' retail banking services for years - it'd be interesting to see how they'd do it themselves), while the Institute of Directors could open one aimed at small businesses. And while part of me quakes at the prospect of Labour-run local authorities running banks, if they were truly reflective of their areas I think they could do a lot of good in generating suitable jobs.
How can Government 'encourage' the creation of new banks, and is it the state's role to do so? On the latter question, my view is a resounding 'yes'. Even the driest Tory believes that the state has two roles: defending its citizens and protecting the free market. As to the means, the simplest is to sell off the constituent elements of the banks part-owned by the state separately, rather than together: it's not many years since Lloyds Banking Group, for instance, was four independent entities - Lloyds, TSB, the Halifax and Bank of Scotland.
Another option is to use the tax system to encourage investment in the creation of entirely new institutions - say a tax break on the earnings of newly-formed retail banks for an agreed period and incentives for solvent individuals and organisations to invest in such businesses - and fiscal disincentives for businesses that are cash generative on such a scale that they could found (or fund) new financial institutions to hoard that cash or distribute it as dividends.
One of the enduring sensitivities, the elephant in the room, is that the UK has lived well on the proceeds of the banking industry over the past 10-15 years and nobody wants to threaten the sector's success. But the fact is that the sector failed, publicly and expensively, last year. Creating more and better banks should strengthen our ability to compete globally, not undermine it.
I suspect the public harbours a residual suspicion that we Conservatives are the friends of big business, even when it's greedy and corrupt, rather than of the man in the street: Wall Street rather than Main Street, in American rhetoric. I believe that David Cameron's closing address to conference went a long way towards disabusing the electorate of this notion. While he is unlikely ever to take on the fashionable 'Red Tory' label, Cameron certainly believes in localist, decentralised politics and the economic model that goes with it, which is one that instinctively prefers small business to big.
I therefore hope, and believe, that between now and the General Election, my party will develop policies aimed at disrupting cosy oligopolies wherever it finds them, starting with the banking industry. Mervyn King's frustration with New Labour's (read Gordon Brown's) inactivity on reforming the sector most recently came to a head last week, with the question of whether banks that are too big to fail should be broken up, and specifically whether 'casino'-type activities should be confined to banks that are separate from the mainstream, retail ones. Even setting aside the compelling arguments about such measures preventing a recurrence of the credit crunch, I believe that such a program would be a crucial first step along the necessary path of creating more banks, which in turn will create more liquidity and, with it, more opportunities for small businesses to be started and expanded, and more jobs to be created.
Tuesday, 22 September 2009
Election battleground revealed: who's the better butcher?
As the conference season opened this weekend it became clear, if ever there was any doubt, about the ground on which the election will be fought: which party does the public most trust to scythe away the fat that has grown around the midriff of our bloated public services in recent years, without harming the flesh?
Last week we were treated to the spectacle of Gordon Brown's first ever endorsement of the c-word. I wonder how hard Darling and Mandelson had to work on him to extract that concession. Next, timed perfectly to spike Nick Clegg's opening address guns, Ed Balls weighed in with the bombshell that he can slash £2 billion a year from the education budget. Cleggy offered up surprisingly little meat, leaving that honour to the man his nominally politically correct, but in reality institutionally ageist members must now be wishing they'd chosen to lead them, Vince Cable, to do the honours: he wimped out, preferring headline-stealing but insignificant tax-raisers such as an annual levy on owners of £1m-plus homes to an extensive programme of public expenditure economies and asset sales. This position was undermined only two days later, with Richmond Park MP Susan Kramer not unreasonably pointing out that £1m doesn't go that far in many parts of London, including her (marginal) constituency, resulting in swingeing taxes targeting people living in relatively modest homes in the capital.
As an enthusiast for the writings of George Orwell, and someone with an interest in politics, I feel a certain envy toward him for having lived in an era when politics mattered more than today. In the 1930s, fascists and communists alike marched through London. Rich and poor alike engaged in political debate as an economic system collapsed and the world edged toward war. In recent years, it has seemed as if the choice of who to support in an election was just another consumer decision: Tesco or Sainsbury? Who's best at managing the economy, and whose brand do you feel best for buying?
At face value, a cuts-driven election campaign based on brand strength looks like a shoo-in for my party: New Labour created the mess, so will be disregarded; the LibDems talk mainly about tax rises; meanwhile, the Conservative brand has always been associated with a smaller state and the current leadership took the lead in opposing major projects such as the proposed national identity card scheme, so has the great benefit of appearing consistent, and hence credible at a time when others are hastily adopting cost-cutting credentials.
My concern is therefore with the election due to take place in 2014 or 2015, not next year. I worry that if spending cuts are implemented wrongly, the result will be a deterioration in public services, and that the public will punish us by voting us out. Worse, if the axe falls in areas such as state schools and the NHS, areas in which the electorate harbours a residual suspicion that we are naturally inimical, our brand will be further weakened in these regards, harming our long-term electability.
So - how to cut without harming? Get that one right, not just in the privileged context of a blog but in the hectic, pragmatic, day-to-day battle of implementation, and my party will not only reassert itself as the natural party of government but also make the UK a very much more tolerable place to live over the next decade than it would otherwise be.
'Holby City' is on the TV as I'm writing this: a weekly drama about a fictional Bristol hospital. We see patients, doctors and nurses, one manager and barely any managers. The reality, as we all know, is that the NHS is packed to the gunwals with Directors of Stakeholder Engagement, Diversity Officers, Sustainability Consultants and an army of other self-serving leaches. In a typical NHS Trust there will also be teams of highly paid interim managers, management consultants and huge sums outflowing under poorly negotiated PFI deals. So it's not only the left-leaning middle classes that are bleeding the health service of resources, but the private sector too.
It's an axiom of human structures that elites are self-perpetuating: they utilise their power to surround themselves with others who think alike, to ensure they're not threatened from within, and modify the system over time to augment their power and the resources they control, to protect themselves against external threats. To an inefficient, profligate public sector organisation, a new government committed to making savings is a threat. If such an administration takes the easy route to achieving cost reductions - trusting the existing management team to find the money somewhere - it's human nature that they will start in the area furthest from their own back yard, with the least powerful, most vulnerable people in the structure.
It's my guess that the public would much rather their local NHS Trusts shed non-clinical staff than doctors and nurses. And they'd rather the doctors and nurses sacrificed their final salary pensions than that there should be fewer of them. But it would take a courageous manager to pursue such an agenda. Which tells me that citizens, as the end users of public services, have to be involved in the process of determining how cuts should be implemented.
There are some in my party that believe we are about to enter a brave new world in which we can move towards an Athenian model of direct democracy in which major decisions are taken by the entire populace through regular referenda, possibly through mechanisms such as online and text voting. The public is happy to determine the winners of reality TV shows by these means, goes the thinking, so why not matters of national import?
The flaws of this approach are manifest. For a start, the outcome of X-Factor requires little thought, the payback is immediate and there's no jeopardy if you get it wrong. Second, while a General Election run on such lines might result in an increase in participation, familiarity breeds contempt, and I question whether people can be bothered. Finally, re-engineering public services for cost efficiency is not a binary decision but rather an endless series of small choices requiring ongoing, detailed engagement.
But there are ways of ensuring that the public is at the centre of reforms, without requiring them to vote. I advocated in my previous blog that the objectives of a system should be determined by its customers, as should the measurement of the extent to which those goals have been achieved. In the context of cutting public spending, the first step should therefore be to establish what taxpayers deem to be a good service, then building the process around ensuring that those benchmarks are hit. Any processes, people or external costs that are incidental or irrelevant to those goals can be excised. And at the other end, user satisfaction can be measured and processes revised or reversed if needs be, if the outputs aren't up to scratch.
On one level, this is Tesco versus Sainsbury: if the above approach is as beneficial as I believe it could be, and if my party adopted it, we might enjoy a competitive advantage. But many such advantages are eroded over time - as happened, for instance, with loyalty cards.
Is this inevitable? In business, unless a concept can be covered by a patent, copyright or an exclusive arrangement, yes; except where a company not only pioneers an initiative but shouts so loudly about it that it makes it a permanent part of its brand. Others can mimic the initiative, but they will always be seen as copyists.
In the political context, I believe it's time to reassert the notion that politics matters and declare, proudly, that our party has a philosophy that is superior to others, one which underpins the fact that we are uniquely well placed to fix the problems that face our country. New Labour didn't create bureaucracy and waste because they were stupid or uncaring: they did it because they believe that big government is a good thing and that those at the centre know better what's good for the people than the people themselves. In contrast, we will put the people at the heart of what we do. As Conservatives we believe that we're the electorate's servants, not their masters, that the state should do only those things that the people want, in the way they want it done. Unlike New Labour we will not be in the thrall - or the pay - of any vested interest, whether that be the public sector unions or big business.
The small-state, consumer-driven party? On one level, this is nothing new: the Conservative party has always been an advocate of a smaller state. In the past, however, the suspicion has been that our objection to a bloated state was driven by a desire to cut taxes for the wealthy, and for companies, betraying favouritism toward the wealthy, and big business.
But not this time. If we're going to succeed in trimming public spending, and hence the national debt, without scything the services that matter, the axe will fall disproportionately on high earners in the public sector, as well as the big companies who sell their services to state agencies and their well-paid employees. If we play this right, we can position ourselves as modern-day Robin Hoods, redistributing wealth currently bestowed on the lavishly rewarded quangocrats, PFI bankers and the like and investing it in maintaining the number of primary school teachers, student nurses and others whose numbers are much larger (more votes!) and whose impact on the average voter is much more tangible.
I believe that one of the biggest threats to our democracy is the high level of cynicism about politics: many people believe that politicians are driven by self interest and that it little matters how they vote. We can't change this before the next General Election: but we'll win that one anyway. We desperately need to earn the public's confidence by the end of our first term, and I believe the best way to do this is to show that we are focused on shaping policy, and the delivery of services, around their priorities, and quality of life. And it is this philosophy that represents the best way to butcher the bloated public sector.
Last week we were treated to the spectacle of Gordon Brown's first ever endorsement of the c-word. I wonder how hard Darling and Mandelson had to work on him to extract that concession. Next, timed perfectly to spike Nick Clegg's opening address guns, Ed Balls weighed in with the bombshell that he can slash £2 billion a year from the education budget. Cleggy offered up surprisingly little meat, leaving that honour to the man his nominally politically correct, but in reality institutionally ageist members must now be wishing they'd chosen to lead them, Vince Cable, to do the honours: he wimped out, preferring headline-stealing but insignificant tax-raisers such as an annual levy on owners of £1m-plus homes to an extensive programme of public expenditure economies and asset sales. This position was undermined only two days later, with Richmond Park MP Susan Kramer not unreasonably pointing out that £1m doesn't go that far in many parts of London, including her (marginal) constituency, resulting in swingeing taxes targeting people living in relatively modest homes in the capital.
As an enthusiast for the writings of George Orwell, and someone with an interest in politics, I feel a certain envy toward him for having lived in an era when politics mattered more than today. In the 1930s, fascists and communists alike marched through London. Rich and poor alike engaged in political debate as an economic system collapsed and the world edged toward war. In recent years, it has seemed as if the choice of who to support in an election was just another consumer decision: Tesco or Sainsbury? Who's best at managing the economy, and whose brand do you feel best for buying?
At face value, a cuts-driven election campaign based on brand strength looks like a shoo-in for my party: New Labour created the mess, so will be disregarded; the LibDems talk mainly about tax rises; meanwhile, the Conservative brand has always been associated with a smaller state and the current leadership took the lead in opposing major projects such as the proposed national identity card scheme, so has the great benefit of appearing consistent, and hence credible at a time when others are hastily adopting cost-cutting credentials.
My concern is therefore with the election due to take place in 2014 or 2015, not next year. I worry that if spending cuts are implemented wrongly, the result will be a deterioration in public services, and that the public will punish us by voting us out. Worse, if the axe falls in areas such as state schools and the NHS, areas in which the electorate harbours a residual suspicion that we are naturally inimical, our brand will be further weakened in these regards, harming our long-term electability.
So - how to cut without harming? Get that one right, not just in the privileged context of a blog but in the hectic, pragmatic, day-to-day battle of implementation, and my party will not only reassert itself as the natural party of government but also make the UK a very much more tolerable place to live over the next decade than it would otherwise be.
'Holby City' is on the TV as I'm writing this: a weekly drama about a fictional Bristol hospital. We see patients, doctors and nurses, one manager and barely any managers. The reality, as we all know, is that the NHS is packed to the gunwals with Directors of Stakeholder Engagement, Diversity Officers, Sustainability Consultants and an army of other self-serving leaches. In a typical NHS Trust there will also be teams of highly paid interim managers, management consultants and huge sums outflowing under poorly negotiated PFI deals. So it's not only the left-leaning middle classes that are bleeding the health service of resources, but the private sector too.
It's an axiom of human structures that elites are self-perpetuating: they utilise their power to surround themselves with others who think alike, to ensure they're not threatened from within, and modify the system over time to augment their power and the resources they control, to protect themselves against external threats. To an inefficient, profligate public sector organisation, a new government committed to making savings is a threat. If such an administration takes the easy route to achieving cost reductions - trusting the existing management team to find the money somewhere - it's human nature that they will start in the area furthest from their own back yard, with the least powerful, most vulnerable people in the structure.
It's my guess that the public would much rather their local NHS Trusts shed non-clinical staff than doctors and nurses. And they'd rather the doctors and nurses sacrificed their final salary pensions than that there should be fewer of them. But it would take a courageous manager to pursue such an agenda. Which tells me that citizens, as the end users of public services, have to be involved in the process of determining how cuts should be implemented.
There are some in my party that believe we are about to enter a brave new world in which we can move towards an Athenian model of direct democracy in which major decisions are taken by the entire populace through regular referenda, possibly through mechanisms such as online and text voting. The public is happy to determine the winners of reality TV shows by these means, goes the thinking, so why not matters of national import?
The flaws of this approach are manifest. For a start, the outcome of X-Factor requires little thought, the payback is immediate and there's no jeopardy if you get it wrong. Second, while a General Election run on such lines might result in an increase in participation, familiarity breeds contempt, and I question whether people can be bothered. Finally, re-engineering public services for cost efficiency is not a binary decision but rather an endless series of small choices requiring ongoing, detailed engagement.
But there are ways of ensuring that the public is at the centre of reforms, without requiring them to vote. I advocated in my previous blog that the objectives of a system should be determined by its customers, as should the measurement of the extent to which those goals have been achieved. In the context of cutting public spending, the first step should therefore be to establish what taxpayers deem to be a good service, then building the process around ensuring that those benchmarks are hit. Any processes, people or external costs that are incidental or irrelevant to those goals can be excised. And at the other end, user satisfaction can be measured and processes revised or reversed if needs be, if the outputs aren't up to scratch.
On one level, this is Tesco versus Sainsbury: if the above approach is as beneficial as I believe it could be, and if my party adopted it, we might enjoy a competitive advantage. But many such advantages are eroded over time - as happened, for instance, with loyalty cards.
Is this inevitable? In business, unless a concept can be covered by a patent, copyright or an exclusive arrangement, yes; except where a company not only pioneers an initiative but shouts so loudly about it that it makes it a permanent part of its brand. Others can mimic the initiative, but they will always be seen as copyists.
In the political context, I believe it's time to reassert the notion that politics matters and declare, proudly, that our party has a philosophy that is superior to others, one which underpins the fact that we are uniquely well placed to fix the problems that face our country. New Labour didn't create bureaucracy and waste because they were stupid or uncaring: they did it because they believe that big government is a good thing and that those at the centre know better what's good for the people than the people themselves. In contrast, we will put the people at the heart of what we do. As Conservatives we believe that we're the electorate's servants, not their masters, that the state should do only those things that the people want, in the way they want it done. Unlike New Labour we will not be in the thrall - or the pay - of any vested interest, whether that be the public sector unions or big business.
The small-state, consumer-driven party? On one level, this is nothing new: the Conservative party has always been an advocate of a smaller state. In the past, however, the suspicion has been that our objection to a bloated state was driven by a desire to cut taxes for the wealthy, and for companies, betraying favouritism toward the wealthy, and big business.
But not this time. If we're going to succeed in trimming public spending, and hence the national debt, without scything the services that matter, the axe will fall disproportionately on high earners in the public sector, as well as the big companies who sell their services to state agencies and their well-paid employees. If we play this right, we can position ourselves as modern-day Robin Hoods, redistributing wealth currently bestowed on the lavishly rewarded quangocrats, PFI bankers and the like and investing it in maintaining the number of primary school teachers, student nurses and others whose numbers are much larger (more votes!) and whose impact on the average voter is much more tangible.
I believe that one of the biggest threats to our democracy is the high level of cynicism about politics: many people believe that politicians are driven by self interest and that it little matters how they vote. We can't change this before the next General Election: but we'll win that one anyway. We desperately need to earn the public's confidence by the end of our first term, and I believe the best way to do this is to show that we are focused on shaping policy, and the delivery of services, around their priorities, and quality of life. And it is this philosophy that represents the best way to butcher the bloated public sector.
Tuesday, 11 August 2009
Conservatives: the true progressives?
It's pleasing, if coincidental, to see the ideas floated in this blog being picked up and developed by senior figures in the Shadow Cabinet. Interviewed on this morning's Today programme, George Osborne sought to position the Conservative Party as the progressive force in British politics because of its willingness to reform public bodies to cut costs without damaging services. Here's an excerpt that, for me, neatly encapsulates the goal:
"I think because of the debt crisis that the country faces we have a choice: we can either reform the way those services are developed so that the money goes further and you get more for less, or you can face frontline service cuts."
Inevitably, an efficiency drive on the scale required by many of the UK's public services will result in job losses, and public sector workers have votes, like anyone else. I've written previously that the key to this apparent paradox is to stress that the objective is to eliminate unproductive initiatives, bureaucracy and internal politics: sins committed principally by a relatively modest number of senior managers, whose meddling not only affects the people the culprits patronisingly call 'customers' or even 'clients' but also creates a never-ending cloud of frustration for those lower down the hierarchy charged with implementation and exposed, on a daily basis, to said end users.
Apposite, then, to have had the pleasure, last week, of attending a session organised by the influential centre-right think tank Policy Exchange on the abolition of command and control from public services. Led by occupational psychologist turned management consultant and author John Seddon, whose mission in life it is to fight the imposition by central Government of arbitrary targets, the event was attended by a mix of MPs, policy wonks and management consultants.
Seddon argued convincingly that targets are counterproductive: introduce one and an organisation works towards it, which eliminates the possibility that, without such guidance, it might otherwise have achieved a much better result. Moreover, a push to achieve a measureable result may mask structural and procedural flaws in an organisation by encouraging managers to throw more resources at achieving the target, as opposed to questioning whether the systems have been optimised and hence the opportunity created to achieve good results with much more modest inputs.
One area the speaker covered only in passing, but which interests me greatly, is the question of processes. The National Audit Office, and a number of spending Departments, have decreed not only what must be achieved (targets) but how they must be reached (processes). As a Conservative, I believe in competition and diversity. I'd like to see neighbouring local authorities, schools and NHS Trusts try different ways of organising themselves to see who can best deliver the only result that matters: not a ticked box on a bureaucrat's inspection sheet but satisfaction on the part of those who use, and fund, the services in question.
At one point I found myself in disagreement with Seddon, to the point that I wondered whether he was, in fact, a closet sympathiser with the worst elements on the public payroll: bizarrely, he believes that all workers are motivated primarily by recognition and praise for doing a good job. It therefore follows that while he supports the notion of measuring performance (judged by customer satisfaction) he doesn't agree with offering rewards - financial or otherwise - for those who excel or penalties for persistent underperformers.
Worse, he poo-pooed my suggestion that league tables be produced of comparable service units ranked by quality then introduce measures to identify best practice in the high-performers and inspect the underperformers to establish whether they could benefit from adopting some of their more successful peers' ideas ". The answers are to be found within the organisation itself" was his riposte: a strange approach, I thought, for someone who made his name popularising and adapting the Toyota Production System in the UK public sector and selling management consultancy, a service that, as a management consultant myself, I recognise is e3ssentially about identifying good practice in one context and adapting it for another.
I came away excited by the notion that there are people who are close to the Conservative Party who are keen to question the way in which public bodies go about delivering services to the public, shifting the emphasis away from inputs ("how much can we boast that we're spending?"), processes ("you have to do it our way") and targets ("can we tick this box, then move on?") to thinking about the people who use and pay for services, what they want, and whether they're satisfied. While I was unconvinced that John Seddon offered all the solutions, I felt relieved to see a think tank that enjoys considerable influence within the party inviting him to speak, because I enjoyed the way he questioned the status quo.
Interestingly, Osborne's Today interview followed a speech he gave Demos, hitherto seen as a centre-left forum, and one closely associated with Blairism. Could it be that the progressives who were attracted by the then fresh-faced Labour leader's energy for challenging the shibboleths of the remote, arrogant and self-serving public services are now keen to share their ideas with a newly radicalised Conservative Party?
Destroying entrenched privilege and spreading the benefits with the marginalised and underprivileged are principles often associated with the left; but when the privileged are well-paid, over-pensioned, generously cushioned senior managers in the public sector and the dispossessed are over-taxed, poorly served members of the public, the agenda is one that Conservatives are keen to progress. Let the debate commence...
Monday, 29 June 2009
How the other half live...
I've mentioned in previous blogs that when I was a student I briefly flirted with the Left. What drove me into its arms was not so much a desire for social justice (the factor that, today, makes me a Conservative) but, rather, a hatred of privilege - especially when combined with complacency, or contempt for the less fortunate.
Back then, I had cause to feel that way. Having been brought up in a single-parent household with an absent and irresponsible father, money was tight. I'd won a scholarship to a private school and witnessed a certain kind of arrogance on the part of many of those whose parents' affluence had put them there; I briefly attended Cambridge University which, back in '87, still contained a smattering of dimwit kids whose parents had money, who'd scraped in on the back of two Es at A-level and a pass, post-crammer, of the infamous entrance examination. I also seen how some of these kids conducted themselves: there were private clubs, open only to the alumni of certain, select schools; food fights and mistreatment of what they insisted on calling college 'servants' was commonplace, as was contempt for those of lesser means. When I told one fellow student I'd grown up on a housing estate, he couldn't resist asking whether my parents had a Hilda Ogden-style flying duck mural on the dining room wall...
Today I detect new class resentments forming in the UK. The upper class, and the old-moneyed middle class, are no longer the object of hatred: for the former, decaying estates and the obligations that accompany them are now widely recognised as burdens, while the latter has learnt humility, in contrast to the hubris I encountered more than two decades ago. In order to demonstrate the source of this gnawing sense of injustice, let me provide an illustration.
How would you like to live in Pan Peninsula, the UK's tallest and most luxurious apartment block? Situated a couple of minutes from Canary Wharf, it's 50 storeys tall. Designed by award-winning American architects Skidmore, Owings and Merrill, it boasts panoramic views of London, including the Thames. Inside, uniformed concierges provide hotel-style services to residents, from valet car parking to booking theatre and plane tickets. Communal facilities include a luxurious, air-conditioned private cinema, a business centre, a Six Senses spa, a 50th-floor cocktail lounge, a residents' gym (with pool) and a restaurant. The apartments themselves are air-conditioned, triple-glazed and wired for sound. Interior design is by the same designer that fitted out the world's only seven-star hotel, Dubai's Burj Al-Arab.
There are two ways to own such a home. You can either be prosperous; a banker, perhaps, from the Wharf, looking for a bachelor pad or perhaps a pied-a-terre. Or you can be relatively poor, in which case you'll be pleased to learn than 27 of the apartments have been set aside as 'affordable' housing, according to the criteria set out by the London Borough of Tower Hamlets. So, as the many people who work in Docklands who earn relatively modest incomes in the private sector - the secretaries, IT engineers, salespeople and journalists - brace themselves for a hot, sweaty, packed Tube ride back to the suburbs, where they own their own, heavily mortgaged, far less salubrious homes, they can comfort themselves with the fact that a handful of privileged souls, many of them economically inactive or employed by the public sector from their taxes ('key workers' being the official term) will already be home, perhaps sipping a cool drink in that 50th-floor cocktail lounge...
I stress that the concept of homelessness in a wealthy country such as the UK appalls me; I'm also concerned for those whose homes are clearly unfit for human habitation or insufficient for their needs. But by no stretch can it be argued that these luxury Docklands apartments represent a sensible way for funds garnered from taxpayers to be used to alleviate such social ills. given that the entry price for a one-bedroom apartment was around £400,000 when the project was released a couple of years ago, it would surely have made more sense to sell all the units on the open market then, through the corporation taxes levied on the developer and stamp duty raised from purchasers, provided solid, adequate homes in an area in which land is not at such a premium, for those in genuine need?
Not that, ironically, the UK's most lavish social housing is likely to appeal to those in genuine need. For a start, they're available only on a part-buy, part-rent basis and prospective owners need to be able to put down a deposit of at least 12.5 percent of the purchase price. The latter is subsidised, but nevertheless, the cheapest apartments cost £260,000 - roughly double the average UK property price - so only those with £32,500 in savings need apply. There are parts of the country where that's enough to buy a home outright. Then there's the rent or mortgage on the rest - £6825 a year, in the former case. Plus you'll need to allow for service charges which, given the panoply of exclusive residents' facilities, isn't cheap - it'll set you back another £3600 per annum, making a total of more than £10,000 a year. OK, in some cases housing benefit may pick up the tab (which raises the question of whether the £32,500 savings ought to be a bar to claiming, but I'll waive that aside for now), but in most cases I'll wager these homes will go to people who could afford to provide themselves with perfectly decent housing a commute from these rather more salubrious, taxpayer-subsidised homes.
Thus is wealth transferred from those who work hard to stand on their own two feet to those who'd rather live off the endeavour of others. That's the first group of people that I think is becoming widely reviled in Britain in 2009. The recipients of unduly luxurious social housing provide just one instance of this; for others, check out the voluntarily unemployed - those who know how to work the benefits system to maximum personal advantage - and those who exploit the immigration system to gain unwarranted residency in the UK then take full advantage of the NHS, benefits and housing system while making little or no contribution to the tax coffers.
The second group is those who allow, or even encourage, them to get away with it: the army of ostensibly altruistic rule-setters and caseworkers who've created and applied rules and regulations in a way that makes it possible for flagrant examples of social injustice to go unpunished and who, all too often, encourage or defend those guilty of such actions.
As always with generalisations based on groups rather than individuals, these are stereotypes, and the risk is that every social housing tenant, benefit claimant or asylum seeker is assumed to be a freeloader until proven otherwise, while every public sector worker is presumed to be engaged in living away the nation's hard-earned wealth unless there's firm evidence to the contrary. Such assumptions undermine social cohesion, as they make pariahs of people who may, respectively, be needy and conscientious.
Which is why any Government that places a high priority on maintining a peaceful and cohesive nation has a moral duty to change the culture in our public services to one in which those employed to set and administer the rules recognise that their primary duty is to ensure that taxpayers' money is not wasted. In the context of social housing, for instance, the benchmark for success is not the number of people placed in 'affordable' accommodation but, rather, the number of people homeless or housed inadequately; in the benefits system, the number of people trapped in real poverty or unable to support themselves and in the immigration process, the number of people wrongfully granted the right to remain in the country.
I've written before that we seem to be entering an election campaign like no other, with Gordon Brown keen to position the Conservatives as poised to cut public services, in contrast to Labour's committment to maintain 'investment'. In recent days this debate has taken an interesting turn, as it has emerged that the Government plans to defer the Comprehensive Spending Review until after the Election, enabling them to make uncosted commitments about maintaining public spending while pushing David Cameron to put numbers to his plans, enabling them to point to reductions and create scare stories about worsening services.
I believe that this approach will be unsuccessful because, with almost a year to go before the poll, we already have independent voices such as Mervyn King and the OECD warning the Government that it needs to announce concrete plans to contain spending if it is to continue to borrow at sensible rates. If the public don't hear such messages from Brown, it will conclude, rightly, that he's being reckless with their money. Perhaps more important, I believe the culture I've described in this blog is becoming sufficiently widespread for the public to appreciate that cutting public sector spending and slashing services are two very different things.
In order to get its message across, my party has to play to this sentiment, stressing that there are some things the State currently does, or is planning, that are illiberal and instrusive and can simply be stopped, and many more than are inefficient and can be achieved more effectively at lower cost. It's important, though, that in sending out such signals we take care not to demonise everyone working in the public sector, or every recipient of its support. For a start, there are a lot of them, and they all have votes; but also, we need the goodwill of many public sector workers, and the forebearance of those whose need for support is genuine, in helping us make the transition from the current mess to a new, leaner, more just delivery of services for all.
Meanwhile, Labour will continue to portray us as the 'nasty party', hell-bent on depriving those most in need of support, by implication because we're a party of the privileged. We should fight such stereotyping, stressing that, in fact, we want to deliver better services for those genuinely in need, by redistributing taxpayers' money away from undeserving recipients. As long as quarter of a million pound, triple-glazed apartments with access to a private cinema are allocated to people deemed to be 'in housing need', that shouldn't be too difficult...
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