The Future of Politics

The second principle for responsible taxation is honesty. Politicians need to be straight with people about the choices involved. It is simply not acceptable to say, as William Hague’s Conservative Party has done, that you can have tax cuts and more spending on schools and hospitals. That is an implausible position to take, and one clear indication of why the Conservative Party has become so irrelevant. In the run-up to elections, politicians must tell the public precisely how much their programme of public sector spending will cost, and how it will be paid for. Wherever they wish to introduce new taxes or set different levels they must explain exactly why the changes are occurring, and where the new money is going.

Liberal Democrats have produced a fully costed manifesto at both of the last two general elections. We have shown how much our plans would cost, and how we would pay for them. Some people have responded to this by saying, ‘You can afford to be honest about it because you’re the third party.’ But being the third party does not mean we can get away with being out of touch with the mood of the nation! Our decision to be honest about taxes is based on an awareness that this is what the nation wants.

When we first proposed that we would, if necessary, raise taxation by 1p in the pound to pay for investment in education, commentators believed it would be unpopular. It was the subject of much passionate debate within the party before the 1992 General Election. People like Robert Maclennan, Simon Hughes, Matthew Taylor and myself were strongly in favour. I supported it because it was such a clear-cut, honest platform upon which to fight an election, and it was a definite departure from 1983 and 1987, when no-one, least of all ourselves, really understood what issues we were fighting on. Most importantly, it sent out the message that we were a party prepared to be honest about the money we needed in order to change things. Now, polls regularly indicate that as many as seven out of every ten voters are in favour of paying an extra penny on the pound for education or health.

Hypothecation is a term redolent of something technical and extremely complex. In reality it is just the opposite. It is the principle that people are able to see exactly where their money is going. If more money is needed for schools and hospitals, then hypothecation means that government will explain the costs to people, and where the money will be raised. People do not resent giving money in such a situation. I want every citizen to receive a statement with their tax return, which sets out in simple terms where their money has gone. It should also say what the main targets were for the public services, and how far they are being achieved.

The third principle is fairness. Taxes must be applied and collected in a fair way. It is grossly unfair that, at the moment, someone who earns £8,000 pays the same rate of income tax as someone earning £25,000. We should demand the greatest contribution from those with the greatest ability to pay. I strongly favour asking those who earn over £100,000 a year to pay more, through the introduction of a 50 per cent rate for anything earned over that figure. That would enable us to help the worst off in Britain, by taking around half a million people out of paying income tax altogether.

The fourth is sustainability. Taxes must favour job creation and the environment. Rather than being seen as the government’s penalty upon the wage earner, taxes must be presented as the means by which we achieve a fairer and healthier society. Cutting tax for the low paid would be a major step in helping to create jobs and encourage people into work. Tax should also be used to discourage pollution by taxing the use of fossil fuel energy sources and the use of harmful chemicals in industry. The money raised can be used to reduce tax in other areas, so that people are not hit twice. I want to see logic prevail in the way taxes are used. For instance, putting money from petrol taxes straight into asthma research or money from tobacco straight into cancer research. At present, some industries are able to undermine people’s health – whether by the sale of cigarettes, alcohol, junk food, or by pollution. Taxing them is one way of redressing the balance, so that they start to pay some of the costs they are presently imposing upon us.

There has to be a shift in the way the money gathered from taxation is spent. We would set our long-term policies with the aim of building a fairer society: reforming and investing in education; giving more of the nation’s wealth to the NHS; increasing job opportunities for the long-term unemployed and others disadvantaged in the workforce; making more affordable housing available; and working for a healthy environment. With a Social Justice Audit in place, the government would have to state its aims for social spending and report each year on how well these were being met. That way, we could see whether policies were in fact expanding opportunities and promoting a more equal Britain. There was a time when manifestos were a new concept: that government should say in advance to the electorate what it intended to do was a strange idea. In the modern world, surely it should not be too much to require the government to explain whether it is achieving its promises. It is the logical progression of the manifesto.

We could also achieve better results through different types of spending. In education, we have to focus new spending on early years education to give children the best possible tuition in core skills of reading and writing. In the area of health, much greater attention needs to be paid to preventive medicine, and it needs to be realized that environmental factors make an enormous impact on health. That could mean GPs being able to prescribe home insulation as a preemptive treatment, instead of waiting until somebody is ill with pneumonia before treating them.

Britain clearly needs a more efficient and accountable tax system to fund a programme of social repair, but more money is seldom the only answer, and sometimes pouring resources into a bottomless pit can exacerbate the problems it was supposed to solve. The state has a duty to act as a safety net, but it has an equally pressing duty not to become a permanent crutch, lest people lose the will to walk themselves. We need to be agile in our thinking when it comes to bridging the deep social divides at the heart of Britain and, rather than simply providing funds on tap, we have to encourage individuals and communities to help themselves.

Help Yourself Politics

The responsibility for social disparities and their swift repair lies with the state, but many of the means to effect long-lasting change lie beyond it. The state should encourage and support the groups with the know-how and utilize their expertise.

This has not been happening because too often governments have taken a dim view of the voluntary sector as a whole. Perhaps because those in power draw a salary for running the country, there is a dangerous view that only the salaried are competent. Volunteers – even though they often use the same skills by which they can also earn a living – are seen by some as well-intentioned sources of interference. Others feel that a thriving voluntary sector symbolizes the gradual withdrawal of the state from every responsibility apart from the protection of property. It is – so the thinking goes – dangerous to over-encourage charities or voluntary work, lest the government give up altogether.

A vigorous voluntary sector is not a sign that the state is abdicating; instead, it is the sign of a healthy nation. A strong interest and involvement in voluntary groups shows that civic Britain is strong. That there is a lively public spirit, and that citizens are willing to work together for the benefit of others, can only be good news, but this community spirit has been in crisis for the last two decades. While the machinery is still in place, and our nation is enriched by the activities of a diverse and vibrant voluntary sector (Age Concern alone reports 250,000 volunteers nationwide, and receives a third of its annual £27 million income just from donations), the notion of community was dealt serious damage by the egocentric culture of the eighties. How could it be otherwise when the leader of the country said that the pursuit of equality was a mirage and that there was no such thing as society? Meanwhile, as the Pet Shop Boys sang ‘Let’s Make Lots of Money’, city bonuses soared. Benefits for the poor were systematically undermined, while TV advertising extolled the virtues of ambition, self-reliance and basic greed. Small wonder concern for community hit an all-time low.

At the same time, I believe we can only pick through the rubble left by the eighties for a given time, and that time is past. After a decade, and a change of government, the time has come to start rebuilding a civic Britain, in which individuals and communities look out for each other.

A thriving voluntary sector signifies a healthy society because it shows people do not expect government to be Sole Solver of All Problems. As a postgraduate student in the early eighties, I spent time in the USA, at Indiana University. This experience proved to be a powerful influence on my view of the world: what impressed me above all about the States was the tremendous can-do energy.

It is interesting to compare the way that people complain about things here and in the States. Here they tend to say, ‘What is the government going to do about it?’; over there, they are as likely to say, ‘Get the government off my back so I can do something about it.’ Americans are also more likely to see government as responsible to the people, rather than accept the state as master. That is more than a turn of phrase – it illustrates a state of mind.

There is a belief, rooted in the American culture, that every individual has huge opportunities as well as a responsibility for their own destiny, which results in a real drive among individuals to carve out their own future. It is a spirit reinforced by the decentralization of power and authority in the USA.

This can take a variety of forms. Jonathan Freedland’s provocative book Bring Home the Revolution: How Britain can live the American Dream

(#litres_trial_promo) has some interesting tales to tell. In Hanover, New Hampshire, the local people bypass government altogether once a year with direct democracy. They meet every May in a school gym and then vote on their own proposals about how the community should be governed. For the rest of the year, citizens can call an emergency meeting through a petition. Their achievements are considerable and even include keeping the ubiquitous McDonald’s out of their town. In Ithaca, New York, the local people staged a successful campaign to prevent the construction of a giant out-of-town Wal-Mart. They also instituted what is now the largest local currency in the world – of which more anon.

Such approaches – and the fact that Americans vote for many more of their public officials than in Britain – allow individuals to reconnect with the notion of government – there is a much closer identification with local government in many areas. This civic spirit or connectedness is also seen in areas of life well beyond government. Freedland explains that 82 per cent of Americans belong to at least one association or group. Germany stands at 67 per cent, and Britain at only 54 per cent. Americans get involved in an incredible range of community groups, sometimes simply to pursue a hobby, but often to carry out functions that in other countries are carried out by government – or are simply not done at all. Perhaps the most graphic example of this is that 73 per cent of American households give to charity, compared to only 29 per cent in the UK – and they give at much higher rates in the USA.

This is not to say for one moment that everything about American society is perfect. I find it obscene, for example, that in a society of such enormous wealth, millions of people live in constant fear of illness or accident because they cannot afford basic medical insurance. Yet I still admire the get-up-and-go energy which I saw in America in the early eighties, and which exists there today. We have that spirit in the best of our entrepreneurs in Britain, but if Britain is to prosper in the century ahead, we need to foster more of that energy, enterprise and drive, and we need to apply it to the sections of our community where it is most needed. We have huge inventiveness in our country – but we seem far less able to make it work.

There are reasons for this. It is often said that the Americans lack a sense of irony, which may be true, but British irony seems – in the booms and slumps of the last twenty years – to have turned in on itself, and what we have in its place is cynicism. Cynicism, disillusionment, and a belief that people who try to change things are misguided zealots, that too much damage has been done in the past for our country to have a future.

There is also a very British fear of failure which dogs the efforts of individuals and communities to work together for the common good. It originates, I believe, in a combination of British reserve – a fear of losing face in front of our peers – and the market-driven culture of the eighties. We are over-eager to set people up and then knock them down. I am pleased to live in a thriving market economy, but less pleased that we are living in a market culture, in which value means the same as money. In the voluntary sector, people are valued in terms of the time they give over to a project and the skills they can bring to it. I want to live in a society where the idea that a person’s worth is related to what they do for their community, not how much money or purchasing power they have, is a core value.

To bring this about, there has to be a turnaround in our thinking. For community initiative to flourish – whether in tackling crime or homelessness, or in providing opportunities for youth – people need the room to experiment, to innovate, to take risks and to make mistakes. There needs to be a new culture of community and self-reliance, in which individuals feel confident enough to take a stand for or against the issues that matter to them, and to band together to make changes, to challenge government when they need to, and to know that their voices will be heard.

Examples of individuals and groups effecting real change on their communities are much vaunted in the press, but mainly because they are rarities. On a problem estate in northern England, parents organized a rota to ensure that all schoolchildren were safely escorted home in the dark winter months. In London, older West Indian men are recruited by schools to befriend boys from their community who lack the influence of a father figure in their lives. On the island of Eigg, off the coast of the Scottish West Highlands, crofters kicked back against a string of controversial landowners and abortive attempts to secure the tide to the land, creating their own trust, bidding for ownership and achieving this in 1997. I don’t wish to understate the bravery and determination of the people responsible for these initiatives, but I want to see a society where these things are not news, but the fabric of daily life. That’s a true democracy.

This kind of local activity outside the economy is absolutely essential for making society function, just as the work parents and communities do to bring up children is vital to all of us. The author of Future Shock, Alvin Toffler, used to ask senior executives what it would cost them in cash terms if none of their employees had ever been toilet-trained. The truth is, business depends on parents, and parents depend on active communities.

Let’s get some brains together, along with community leaders and voluntary workers, and think creatively about ways in which we can foster a civic society, in which everyone feels they have a part to play. For example, in an age when more and more school-leavers are going into tertiary education, why do universities only look at A level results when selecting candidates? There could be a points system for community action and voluntary work, which they could take into account alongside academic achievements.

I am also in favour of a JFK-style Peace Corps, to involve young people in a range of community projects. I have no interest in using this as a threat over the unemployed. A person’s benefits should stay the same whether they joined Charles Kennedy’s Peace Corps or not, but if employers were encouraged to recruit within the ranks of this corps – or if points earned counted towards academic qualifications or student loans – then unemployed young people would have a clear incentive to get involved.

People’s ‘outside’ activities should be encouraged wherever possible. If a low-paid mechanic spends his weekends teaching underprivileged kids to play football, he could accrue credits, which in turn entitle him to have his roof repaired by another volunteer. With people living longer than before, retired people, who often have more experience and patience than their younger counterparts, are an under-utilized resource. Their involvement in the community could be exchanged for similar credits, or even for credits which they could pass on to their working children or grandchildren, so, in return for helping a neighbour’s child with her schoolwork, an elderly person could be entitled to weekly lifts to and from the shops. They wouldn’t have to rely on charity or hand-outs, they would earn the lifts themselves.

The idea of using time as a kind of money has proved popular on a global scale. Time exchange schemes are especially successful in the USA and Japan. In Washington DC, 300 residents of a problem housing estate performed 79,000 hours of voluntary work in 1997. By working, each person earned a fictional currency – time dollars – which could be exchanged with other residents for services they needed. The name of the currency illustrates the principle of the idea perfectly – in this case value has got nothing to do with money, it’s about the time a person is prepared to give over to helping others. In New York state, one college allows its students to pay off their student loans in time hours – that is, by doing voluntary work in their local community.

‘Let us give generously, in the two currencies of time and money,’ said Tony Blair in March 2000, but he hasn’t understood the implications of this. The point is that we can all see around us the enormous amount of tasks that need doing, even if the government doesn’t consider that doing them constitutes a ‘job’. Society apparently cannot afford to pay with money for all the old people who need help, the schools who need volunteers, the neighbourhood watchers and the youth leaders. We spend much time in politics worrying about scarce resources and cutting budgets, and assuming there isn’t enough to provide for what we need. Yet all around us there are enormous untapped resources, of which older people – with their wealth of knowledge and experience – are only one. The old and the young, in particular, both wish to make a contribution, and we need to find ways of using these forgotten resources and directing them at society’s intractable problems. We should encourage people to earn time credits through time banks, and then recognize them, for example by letting people buy recycled computers with it, as they do in the USA.

There are other kinds of exchange schemes all over the world which help people buy the basic necessities of life in local currencies. In Ithaca, New York state, the community where they saw off the Wal-Mart, a local currency was created, based on the mutual exchange of goods and services between local people within the scheme. It has been so successful that the organizers calculate $1.5 million dollars have been created in local trade in five years, and around 300 businesses in the town are within the scheme – helping many local businesses, such as struggling organic farmers, find a market. The federal government has decided to let it carry on without interference.

In areas of high unemployment and poverty, people’s skills are quite literally going to waste alongside their communities. Local exchange schemes help people keep their skills fresh, as well as develop new ones. The isolation that often goes hand-in-hand with joblessness is tackled into the bargain.

There are currently 400 Local Exchange and Trading Systems (LETS) systems operating in Britain, involving around 35,000 people. Groats, reeks, bobbins, bricks and concrete cows may not be quoted on the stock market, but these unofficial currencies are doing much to improve individual quality of life and revive communities across Britain. Over 100 local authorities are now funding the development of these systems as a means of tackling social problems. Hampshire and Surrey use them as a means of getting people with mental health problems back into the world of work, while Bristol and Gloucester are linking them to local allotments, so that fresh fruit and vegetables can be given to people in exchange for their services.

In this country you tend to hear about schemes like local currencies and credit unions on the sort of day when there hasn’t been much news and the Independent is short of something to fill its column space, but anyone registering as unemployed in New Zealand is automatically advised to join their local green dollar scheme, and governments in Australia, Ireland and Holland have ruled that participation in local exchange schemes does not affect people’s entitlement to benefit. Their relative obscurity in the UK is undeserved.

The culture of British government has always made it reluctant to think laterally about social problems. For too long, people have thought in terms of two models: tax-and-spend or tax-concessions-and-huge-dole-queues. But there are alternatives. Voluntary organizations and local exchange schemes – whether they are exchanging time or local currencies – can and do have a real impact on society, by fostering and developing the skills and habits of public involvement.

Schemes like these are of particular importance in harnessing the enormous potential of our ageing population. It is a paradox that while we live in an increasingly ageing society – one where people survive to increasingly greater ages – we seem to attach less and less respect to the aged, and more and more to the young. The term New Labour is itself very telling – it suggests that, behind the nomenclature, there is a value system at work. Old equals bad, new equals good. We also see it when William Hague has a fashionable haircut and sports a baseball cap – as well as saying to the young, ‘I want your vote,’ he is effectively saying to the old, ‘I’m not so bothered about yours.’ Of course we must endeavour to engage the young, because they are the future – the disillusionment of young people with politics is an issue of particular concern to me – but we must not advance the values of youth at the expense of the elders.

I am keenly aware of this for two reasons. My parents are now both in their seventies, and far from being on the scrap-heap, they lead lives which are in some ways more full and active than when they were at work. But they have numerous advantages: they live in a small and close community, they have made adequate provision for the future, and they have a network of friends and relatives close by. I am fully aware that the same is not true for many people of the same age.

The importance of the silver vote was also made clear when I visited Miami for the Democrat primaries. There, every morning, the candidates hosted huge breakfast meetings in order to rally support. These were sell-out events and, understandably in a retirement state like Florida, dominated by people of retirement age. They formed a vocal, powerful and formidable body and the US politicians knew only too well that their success depended on securing their support. Politics has to take greater cognizance of the specific needs and concerns of the elderly. I think it telling that Tony Blair has given us a drugs Czar and a Heart Czar. Drugs and heart ops are emotive subjects, a gift for the press. The needs of the elderly are no less urgent, but they are, clearly, less fashionable. That’s why we probably won’t, under the present government, be seeing a Pensioners’ Czar.

The elderly and the young alike find themselves excluded when it comes to the new credit economy. Between six and nine per cent of the UK population have no bank account, and therefore no access to small loans, other than by turning to loan sharks who charge exorbitant interest – sometimes even up to the equivalent of 6,000 per cent APR. The disappearance of so many bank branches means it’s hard enough for many people, especially in rural areas, even to get hold of cash.

Credit unions allow people to help and be helped at the local level: people band together to save small amounts, and they can also borrow from the fund when they need to. They have their roots in the old friendly societies, which by the nineteenth century were an unofficial welfare state for over half the British workforce. Currently, we have around 400 in the UK, and under half a million people are involved, half of those in Northern Ireland.

Measures like these are more important than ever. New forms of money, such as credit and debit cards, smart cards, telephone and Internet banking are creating an electronic economy where money is invisible. All of this is exciting for society, and for those of us with secure incomes and bank accounts, but those on low and insecure incomes are being more or less excluded from this new economy, and need help if they are to become engaged.

Credit unions not only extend credit to disadvantaged people, but they also provide a range of financial advice and services. They need a new infrastructure to back them, to enable them to provide access to anything from small loans for the micro-businesses that provide much of Britain’s employment, to mortgages on hard-to-let properties. This new generation of self-help financial services should also go hand-in-hand with measures to make sure the big banks lend their far larger resources in a fairer way. We should, perhaps, shame banks into ending their refusal to operate in some neighbourhoods with a Bill along the lines of the highly successful US Community Reinvestment Act, which forces banks to reveal their lending patterns, and has levered over $1 billion in investment into poor neighbourhoods during the past twenty years.

An area where community input is particularly valuable is in the fight against crime. Crime, and the fear of it, touches every person and community in Britain – although certain groups are disproportionately likely to be victims. Those who serve their communities are at particular risk. This was brought home early in 2000 when Liberal Democrats in Cheltenham lost an invaluable friend and dedicated party worker, Councillor Andrew Pennington. Andrew had gone to the aid of Cheltenham MP Nigel Jones, as a man wielding a sword attacked him in his constituency office.

Such high-profile cases are outnumbered by the thousands of other violent crimes committed every year. Total recorded crime doubled in the eighties and early nineties. While some property crime declined in the late nineties, violent crime continued to rise. And now the overall crime rate has risen again. In the year to September 1999, recorded crime in this country rose by 2.2 per cent – the first in five years. This general figure masked especially large rises in certain sectors. Most worryingly there was a 6.3 per cent rise in violent crime, and robberies were up by 19 per cent.

There is undeniable evidence that the bulk of crimes are committed by those with the least opportunities: men and women from the most disadvantaged sections of society. It follows that a major weapon in the fight against crime is the pursuit of equality, but we must also not forget the victims. The justice system should always serve the victims’ rights: rights to medical help, counselling, financial compensation, and welfare and legal services. Victims have already suffered at the hands of a criminal. At present, too many go on to suffer at the hands of the system.

When a mugger is sent to prison, he may, arguably, be repaying his debt to society, but he is not, in any sense, making amends to the person he mugged. Even worse for victims is the fact that many offenders are not given any kind of sentence at all. Around three in five young offenders are given a police warning or a caution.

That is why I strongly believe in restorative justice programmes. They take a variety of forms: there is usually a meeting between offenders and victims, but only if victims agree to take part. The aim is to confront offenders with the consequences of their actions, and to make them see the impact they have had on the lives of their victims.

Thames Valley Police have been one of the leading innovators in this area. A couple of years ago they ran a pilot restorative justice scheme in Aylesbury, focusing particularly on young offenders committing shop theft. They held almost 170 restorative cautions or conferences involving the offender, their family and the victim. The initial results were telling. Re-offending fell to 4 per cent, compared to 35 per cent in other parts of the country. Equally importantly, the scheme was popular with people who had been the victims of crime.

The well-worn cry for ‘more Bobbies on the beat’ still rings true, but it only provides a partial solution: it is not, and never has been, a panacea for reducing crime. Nonetheless the role of the police is vital. That is why Labour’s promise to be ‘tough on crime’ rings so hollow now. In opposition they pledged more police officers. After three years in power there were 1,600 fewer police on the beat than when they came to office. That is a dreadful betrayal of the promise they made to the British people.