I have written this morning about the dangers inherent in Tory plans to devolve powers to the UK's cities. This got a response on twitter:
Let me put this in context. Kristian Niemietz is a senior research fellow at Margaret Thatcher's favourite think tank, the Institute of Economic Affairs. His twitter home page has this picture:
So let's be clear about it. The chaos that could result from devolved taxing powers is not accident: it is planned. And planned by the Thatcherite right to undermine the state.
Those who embrace this idea for UK cities should take note.
And at the same time the need for a theory of devolved power is pressing.
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I don’t see the problem. Those areas that believe that higher spending, taxes and borrowing will generate more growth can test their theory and those that believe the neo-liberal opposite can test theirs. We can then answer the burning question of which system is better.
The only thing we have to sort out is how to deal with any bankruptcies.
I hope you are joking
Like a cancer drug trial….?
Sort of. In drug trials there is control group. If the trial goes very well it isn’t unknown for doctors to stop the trial and give the drug to everyone. If problems are found then the upside and side effects can be compared against the control and we’re all informed.
What doctors don’t do is put all the sufferers on the drug no matter how much research has been done and how much the proponents of that drug believe it will save life.
You are out of your depth
The ramifications of this policy are so obvious I’m in danger of thinking that I am just getting more cynical with age.
As I think that you have said before Richard, what the Tories may want to see is cities competing with each over business rates/local taxes to attract inward investment. A race to the bottom will ensue, all labelled as ‘market forces’ at work. And what does that mean to local authorities who are starved of cash or are just in th wrong area of the countrty (those still suffering from mine and other industrial closures since Maggies’ time)?
As for SimonF – doe you really think it ethical to try out ‘theories’ like this on the population with no safety net? Oh dear.
Niemietz – he looks very gullible and about to burst into tears in the presence of his heroine in the picture – poor, young impressionable lad that he is. Aaah. Bless’.
We can only hope that a party gets into power one day who has no ideological hatred of anything and reverse this hostile policy. However, for now we have no choice but to sit back and watch.
“As for SimonF — doe you really think it ethical to try out ‘theories’ like this on the population with no safety net? Oh dear. ”
Which theory are you talking about? hat a high spending, high tax high borrowing State will work or that a small State will work?
What I’m talking about is letting local people decide which they want, and I don’t think many will go for either extreme, and then we can find out what works and what doesn’t. That way if any don’t work it only affects a small number of people so the rest of us will be in a position to bail them out. If we make the whole country do something extreme, be that a Courageous State or a Classic Liberal free market State and it doesn’t work then the whole country suffers an there’s nobody to bail us out.
If you honestly think the mixed economy I describe in the Courageous State is extreme then you have a very, very weird idea of extremes
No.
Niemitz is the incarnation of utter farce who clearly believes that there are no communities, no societies, who has barely a ‘topographical’ grasp of the human as a free agent. He seems to be unaware of the huge waste that privatisation of public assets involves in human energy and resources. Clearly his head is in a place where the sun ‘don’t reach.’ His vision of every citizen (if he acknowledges the concept) beaming with evangelical entrepreneurial zeal and adding their quanta to the invisible hand is profoundly naive -although the IEA does publish books supporting LVT (it’s only redeeming feature).
Maybe “extreme” has pejorative overtones but the Courageous State and the classic liberal small State are at opposite ends of the centre ground. If it is taken as pejorative I apologise to proponents of both systems.
But my point still stands, if either is tested on the whole country and the proponents are wrong then the whole country suffers. Allowing cities and regions to test what works and doesn’t work has the benefit that the rest of the country can learn by copying success or helping to pick up the pieces of failure.
Extreme left is to deny the right of a market
As I said, you are so far right you do not even comprehend what the middle ground is
If we are talking (neo) classical, (neo) liberal thinking, they utterly lost of any centre ground years ago. Social Darwinism would be another way of describing this
“Allowing cities and regions to test what works and doesn’t work has the benefit that the rest of the country can learn by copying success or helping to pick up the pieces of failure.”
That would imply a strengthened welfare state, then, yes? Or is The Big Society in its pomp?
SimonF
If you are insinuating that the Left has tried such experiments in this country then please look at your history a little more.
Patently they have not.
The UK is not the old USSR – some sort of state calling itself socialist or communist – and it never has been. Up to about 1979, there was a mixed political economy that led to a rough consensus of sorts – totally unlike the one we have today where only markets are supposed to deliver happiness and stability even when they blow up the world like they did in 2008.
Which politics am I referring to in my first post? Why the high spending Coalition (the bedroom tax has not saved money because cash has been poured into Discretionary Housing Payments to help people cope with it), high borrowing (look at figures on Coalition borrowing all available on line because they flat lined the economy) and high taxing (they put VAT up to 20% – not Labour) led by the Tories of course!!
And who started the devolution you speak of and yearn for? Why New Labour – of course.
I like the fact you think people will want to bail out their fellow citizen if things don’t work out. Admirable. However, with the Tories please do realise that they will do their best to put the plight of these people across to you as a burden and undeserving of your pity and your pounds.
Remember (and I’m trying not to sound patronising here I really am) that the Tories are very good at trying to pit people against each other – just as they have done to win this election. This idea you have that people think for themselves and do the right thing and are not led by the media stirring things up smacks of naivety.
My advice to you is to let more facts get in the way of your convictions. One of the reasons localism is so underdeveloped in this country is from the Thatcher years, where LA budgets were constantly being cut and there was the extreme centralisation of power at Whitehall.
Nicholas Ridley (a Thatcherite Minister) once said that Councils only needed to turn up once a year to set up service contracts and then they could all go away again and leave unelected privateers to deliver services. Wow what commitment to localism.
And yes, New Labour did try to micro manage public services centrally with acres of silly targets, but at least they did stump up more cash on the whole to the regions.
If you feel passionately about something as you do, take responsibility for it and make yourself fully informed. Because trust me – you are not!
If there was an Olympic prize for jumping to conclusions you’d have a good chance of wining it. You have no idea about my political affiliations, which I deliberately kept out of the comment.
As it happens I agree that Thatcher and her followers were centralisers and did more to undermine local authorities than any Government in my lifetime, and I go back a long time.
So I may as well put my cards on the table. One of the reasons I like this scheme is that I think that the Labour controlled Manchester and Birmingham cities are some of the most forward looking and thinking councils in the country, better than a lot of Tory councils, including my own, and will make a better fist of running their own economies, health and social services any Governement, be they Tory or Labour, could dream of.
I certainly don’t think they will fail, unless central Governement gets vindictive at their success, and that success may well lead to the mixed economies of the 1970s that you appear to yearn for, but to my mind it will be a lot stronger than that.
But then I’m an old school Yorkshireman, brought up in the West Riding, and I believe that the working man collectively knows what’s best for their areas. Interestingly, I was in Morley on Sunday night, passing through and visiting a niece. From my brief discussions with some of the locals, and yes this is anecdotal, part of the problem Ed Balls faced was that the average working man has lost faith in the Labour Party represented by the likes Ed Milliband and the rest of the political elite. There was respect for the Tory candidate who gave up her job and moved in with her mother 2 years before the election and worked tirelessly. Whether she turns out to be the constituency MP they deserve only time will tell.
I’d just like to make a comment on Tories pitting people against each other in the election. Every time I turned on a news bulletin or listened to a Nicola Sturgeon speech she was telling us how they were going to lock the Tories out of power forever. To then complain that the Tories hit back with some negative tactics is a bit naive. And that is no comment either way about whether or not her politics were good or bad, just an observation on the political process.
I understand why Ed Balls was rejected
See John Harris in the Guardian this morning
And I have sympathy with localism
But, to say it will work when budgets will be slashed and redistribution needed (which us the real aim) is naive, I think
If you are saying that I am ‘jumping to conclusions’ well I’m not jumping to conclusions at all – far from it SimonF – I am watching you fall for a very bad idea from a Government who have factually been cutting LA budgets since they got in 2010 and did so during previous terms in office (you acknowledge this).
This government is neo-liberal in its outlook. The fact that you like these proposals does not make you a neo-lib. In fact you sound like one of those who is totally fed up with politics – understandable. However, I do agree with others here that you are naive. There IS an agenda here and it is a nasty and vindictive one which I think Sandra Crawford exposes below.
When Sandra says that LA s will get less power and more responsibility she is dead right. The Tories will sugar coat what is essentially a risk displacement policy onto a local authority as ‘freedom’.
You have been warned.
Quote from Nye Bevan sent to me by my son from the City State of London
“No amount of cajolery at ethical or social seduction can eradicate from my heart a deep burning hatred for the Tory Party. so far as I am concerned they are lower than vermin”
goes for me too.
Trog
I totally understand what you are feeling.
But rather than ‘hate’ let us ‘think’ instead.
The Modern Monetary Economist Bill Mitchell wrote an article about Scottish Independence, stating that it would be very foolish to become independent unless it had its own currency and central bank. We can see how little power Greece has over its economy due to borrowing from the ECB like other countries in the Eurozone it has lost control of its fiscal policy.
Deficit spending and quantitative easing in sovereign currency is not open to them.
Taxing is limited if the population is living in poverty, so the problem is systemic.
I think I see parallels with devolution to councils. With severe cuts in grants and the local economy degrading Councils intake of taxation will fall. Basically giving it more responsibility and less power.
To have real local power councils need either much larger grants or their own personal nationalised central bank, and the ability to tax the land.
You have correctly identified the problem
In federal systems, this problem is sometimes said to be fixed by fiscal transfers, perhaps depending on how the transfers are determined.
However, it is difficult to see how real responsibilities are transferred in such federal systems.
Clearly there are much more informed contributors here than me, so I’d like to ask whether they can point to any federal system that works well and allows the component parts to develop their economies independently to any significant degree. If you can, where are they?
Giving individual councils the power to tax land is dangerous. Councils like Kensington & Chelsea could raise all the revenue they need from a tiny percentage of their astronomical land values.
SimonF
Check this out:
http://theconversation.com/osbornes-devolution-plan-could-be-a-poisoned-chalice-for-cities-41848
This is a very interesting idea as it seems to knit nicely into the myriad of global trade agreements (CETA, TTIP, TTP, TIPP, TPP, FIPA, and the worst of which is the TISA). All of these trade deal have a driving core clause (liken to a hidden virus) called the ISDS or investor-state dispute settlement. In essence it is the mechanism for corporations, usually foreign, to sue any piece of legislation or regulation which they believe might in any way tamper with their absolute right to maximize shareholder profits.
The one, I referred to, the Trade in Services Agreement is the ultimate undo of all that is government and is mandated to do and for, ‘the public’. See bilateral.org for specific details and analysis in at least 4 languages. So, back to the TISA, under this deal, all that is public (pensions, education, individual private banking data, insurance protection, healthcare, resources deemed salable, etc) is viewed as a total impediment to necessity of maximizing profits. Any and all laws and regulations, must only protect corporate access for one purpose of profits, nothing else. One other aspect, to complete the encapsulation of all government levels is the provision to naturally control,would naturally all local public services and procurements–under their privatized net. Having devolved taxing powers would simply seal the last privatizing stitch..
This is the capture of the power of the state fo R corporate goals
Or fascism for short
Exactly – time people were reminded of the textbook definition of fascism. Whilst ‘socialist’ is freely thrown around when attacking the ‘left’ we are a very long way from any kind of textbook socialism. And it’s not something I’d want personally
On the other hand, I’ve thought for a while that today’s Tory party would tick quite a few text book definitions of fascism.
Correction–One other aspect, to complete the control of all levels of government would be the provision to make private, both public services and procurements, usually done by municipal councils.
There is already a move towards the full commissioning council. With directly employed staff reduced to around 150 staff in total, commissioning support services would be provided by the private sector and, of course, commissioned from the private sector. There’s a council in North London doing it already (Barnet?) and Northampton talking about being next. In the NHS local Clinical Commissioning Groups (CCG) were set up in place of the old Strategic Health Authorities with the mantra of them being GP led units which understood local conditions. As GPs actually have little or no experience of running complex health economies they each ‘needed’ a Commissioning Support Unit (CSU). The CCGs are already turning into management dominated businesses and are forming consortia with private companies. Rather than the 211 local groups that started out there will be something like a dozen large corporate representatives, each backed by one of half a dozen CSUs, also from the corporate sector. Government is operating as a corporate enabler at all levels. As Richard says, fascism. In the 1945 Labour manifesto the relationship between the Tories and Big Business was described a ‘totalitarian oligarchy’. I wish people these days were not afraid to use such language.
Hi Richard,
I am thoroughly libertarian but please indulge me if you will I do consider the Conservatives in their current form to be more Fascist than Conservative given their recent actions post election regarding interference in the personal lives of individuals. Let’s hope they deliver on their income tax, minimum wage and free childcare promises.
Given the difficulties endemic in the EU arising from the variable rates of taxation, the variable incomes and the variable expenditures of the individual EU nations some of which may or may not have to come out of the single currency in the near future to allow for devaluation of their particular currency in order to meet future financial obligations, why would a government want to recreate such a mess in the UK albeit on a smaller scale?
Am I completely misunderstanding what it being proposed or what might eventually evolve if this policy were to be continued and expanded on over a period of time to eventually become a miniature version of the EU?
Would the role of the Central Government simply be to set spending, borrowing and/or taxation thresholds for the various devolved authorities to act within? Perhaps also to provide some form of standardisation of products again as in the EU?
How would the funding of the Central Government be achieved? by levy on each region? Would such a levy fall unequally as in the case of the EU? Would this not lead to favouritism for some regions which supported the extant central government whichever party that happened to be?
What protections would be in place to stop a corporation bribing the members of the devolved authority to make decisions in accordance with their wishes, this already being one of the major problems in the largest of Western democracies, I cannot see smaller authorities having anything but larger problems in this regard.
As you may recall I am from Jersey; given the poor quality of our representatives locally and the ease with which they are persuaded to opinions, which are not beneficial to the community, whether through financial emolument or just because they are of limited intelligence, I cannot see that the same would not be the case in many of these devolved authorities.
The only way I can see this working is if power is devolved to such small authorities that literally everyone in that authority knows each other personally and they make collective decisions on a direct democracy basis, based on the needs of that very small community those needs being well known to all as all the individuals know each other.
Such small authorities being totally inappropriate for the provision of many of the services government currently provides due to the economies of scale available in for example health care.
I am quite happy to see the State stop trying to “manage the economy” as it has failed utterly for the whole time it has tried to do so but I really don’t think this is the way to achieve that aim.
I can though see that it is a bureaucrats dream, as they are then exempted from making any decisions and so there is no risk of them making a mistake.
On balance, don’t like this idea.
Politely Darius this is utter drivel
You say:
I am quite happy to see the State stop trying to “manage the economy” as it has failed utterly for the whole time it has tried
What sort of nonsense is that?
You are saying that education and healthcare has failed?
That the innovation the state has funded has been of no benefit?
That we have not improved housing and the environment?
You want a return to mass poverty?
The state achieved these things
Stop talking nonsense as the basis of an argument and I might take note
As it is this is so wrong I ignored the rest
Richard
What can I say Richard?
I can only suggest that if you, too, lived in Jersey, then your faith in government might be equal to mine.
Than took a big world view
Jersey is not a representative sample from which to draw conclusions
Darius
This State that ‘failed to manage the economy’ – it wasn’t the one presided over by Maggie Thatcher in the early 80’s was it, where they put up interest rates and destroyed lots of our businesses?
Maggie practised pure neo-liberal doctrine for around 2 years and then dropped it on the quiet. Only the Falklands war saved her career – not the economy.
The problems faced by the previous Labour Callaghan government were created by a number of factors that had nothing to do with competency.
1) The price of oil went up because the West decided to support Israel when it went to war with Muslim Egypt. We were punished for backing the wrong side and paid for it with inflation and strikes over wages.
2) Western capitalism gave birth to asset stripping – the Jim Slaters, Tiny Rowlands and James Goldsmiths of this world who went around raiding perfectly good companies to turn their plant and wage bills into pure monetary returns for shareholders across the world but mainly America and Australia. British law could not defend business from this predatory capitalism and still can’t (witness Cadburys recent history).
It’s strange how the last Coalition did austerity for the first time 2 years of their term and dropped that on the quiet too. Some of the most incompetent Governments since 1979 have been Tory ones. That is a fact. And they are incompetent ON PURPOSE to sully the name of the State and turn people against it.
See also Thatchers performance on debt/deficit management
Mark – Machiavellian as it sounds, I think your hypothesis about deliberatly discrediting the state might well be true. I’ve thought it before. Even when privatisations going wrong as so many do, it is invariably painted as the States failure to manage or regulate.
Talking of which there has been remarkably little rigorous analysis and publication of of the performance of privatisation, PFI and outsourcing. I’ve seen quite a few and along with colleagues, we know that it’s frequently, possibly mostly dismal.
The party line is about ‘efficiency’ – the reality is about getting capital and heads off the books, even if that damages longer term financial performance. Plus saving money by savaging employees Ts and Cs, and failing to invest. Those who’ve been on the inside know this only too well.
Scope there to expose and shoot a very large elephant (with apologies for the metaphor)
This is part of a letter from my colleague Labour Land Campaign colleague, Peter Latham, which was published in the Morning Star a couple of weeks ago (edited – this is his original – not available online). Although it was related to the Lutfur Rahman debacle, Peter’s book which is referred to (which was sponsored by the Labour Land Campaign) is particularly relevant to the devolution of power to mayors.
I agree with Jim Denham’s critique of the editorial defending former Tower Hamlets US-style directly-elected mayor Lutfur Rahman. However, as both fail to point out, the Communist Party’s 2015 General Election Manifesto calls for the “abolition of the cabinet system and directly-elected mayors” (p.20).
Moreover, as I showed in The State and Local Government (Manifesto Press, 2011) such mayors — and now US-style directly-elected police and crime commissioners – should be abolished because they lead to cronyism, patronage and corruption; remove the working class from this layer of local democracy and replace them with a brigade of full-time career politicians; are the optimal internal management arrangement for privatised local government services; create an arena focused on personalities, not politics; have not increased turnout and lack voter support; have an undemocratic voting system; and can only be removed if there is evidence of corruption or other law breaking.
The support for Lutfur Rahman by Unite, George Galloway, Ken Livingstone and Christine Shawcroft from Labour’s national executive committee does not invalidate Jim Denham’s detailed arguments: e.g., exposing the double standards on the left that in the past has praised decisions of the archaic electoral court, which should be abolished and replaced with a quicker and simpler mechanism. Moreover, power in Tower Hamlets – even before the imposition of commissioners – was too concentrated in the hands of one person. Cabinets and directly-elected mayors should therefore be replaced with the committee system, which gives all councillors the right to make policy again.
(Dr.) Peter Latham, Flat 8 “Scoresdale”, 13 Beulah Hill, London SE19 3LH (tel.: 02086530248) 248 words