Thursday, 16 March 2017

'Spreadsheet' Phil is weakened but safe

The relationship between the prime minister and the chancellor of the exchequer is the most crucial one in British government, but it hasn't been studied very systematically, although I attempted a typology in my Economic Policy in Britain.

'Spreadsheet' Phil Hammond has suffered a blow to his reputation after he was forced to withdraw his increase in national insurance charges for the self-employed. The expressions of studied neutrality on those around him as he made his statement yesterday told their own story.

The line from Downing Street is that the Chancellor was warned beforehand about the political risks of the increase, but felt he had to go ahead to meet new spending demanded by the prime minister. Indeed, the Treasury line is that the prime minister and her aides are too keen to spend additional money, although something had to be done to provide additional funding for social care. Quite how the £2 billion hole in what was a fiscally balanced budget is going to be repaired remains to be seen. The Government has boxed itself in by its manifesto pledge not to increase income tax, VAT or national insurance, the main means of raising revenue.

In the longer run, something is going to have to be done about the erosion of the tax base by the growing numbers of self-employed, some a by-product of the digital economy, but many of them attracted by the tax benefits which include allowances not available to the employed. Employers also benefit from not having to pay NICs. However, it would have been surely better to wait for the results of the review being conducted by Matthew Taylor which will also look at the narrower range of benefits received by the self-employed. Certainly, Phil Hammond did not display much political awareness.

In the longer run, there is a need to look at the rationale of separating national insurance and income tax. National insurance is another form of income tax, but one not applied to particular groups such as the elderly. Whether any party would be prepared to tackle this particular hot potato is open to question.

What is the immediate political fallout from this U-turn? It shows that the Government is vulnerable to determined resistance by small groups of backbenchers, given its slim majority. School funding formulas will be the next target. It also showed once again that Jeremy Corbyn is unable to take advantage of government errors.

The SNP economy spokesman suggested that relations between No. 10 and No. 11 could revert to the days of Tony Blair and Gordon Brown. That will not happen because Phil Hammond has no ambitions to be prime minister. He is a Derek Heathcoat-Amory rather than a Gordon Brown. From Theresa May's point of view, it suits her to have a weakened chancellor beholden to her so his job is safe for now.

Wednesday, 15 March 2017

Too much policy reinvention?

A new report from the Institute for Government argues that there has been too much policy reinvention in British government, leading to waste and lost policy effectiveness. Three areas which have certainly suffered from constantly changing policies are examined in detail: further education, regional governance and industrial strategy: All change?

What one can do about it is another question, given the susceptibility of governing parties to fads and fashions and the incentives for ministers to build a reputation as policy innovators, even if the policies are reheated.

One suggestion made by the report is that the institutional memory of departments needs to be improved, but current personnel policies militate against this. One might also heretically that the days of paper files provided more prompts about what had been tried in the past.

Monday, 13 March 2017

How to be an effective minister

Based on interviews with former ministers including Ken Clarke and Alistair Darling, this report for the Institute for Government looks at what it takes to be an effective minister and whether they have sufficient preparation for their roles: Ministers Reflect

Wednesday, 1 March 2017

Public services could be pushed to breaking point

The Institute for Government has published a report on the performance of public services in the period of austerity since 2010: Performance tracker

The report finds that the 2010 spending review was largely successful in terms of its objectives. My interpretation would be that there were efficiency gains to be made in public services which did not substantially affect their quality.

However, it is a different story since 2015. Performance is being adversely affected and some services could be pushed to breaking point. In the case of prisons, they are already beyond that point.

The report warns, 'In the upcoming Budget, the Chancellor cannot simply choose to ‘tough it out’, eschewing any reference to how the Government will deal with the mounting pressures in public services, as he did in the 2016 Autumn Statement, when his only announcement was emergency funding for prisons. The Government risks being bounced from crisis to crisis, unable to get a grip on the situation. Without action, within the next two years it could face a disastrous combination of failing public services and breached spending controls against a background of deeply contentious Brexit negotiations.'

Friday, 10 February 2017

Shift in electorate not good news for Labour

We are all familiar with arguments that the old left-right divide is being replaced by one between those in favour of/benefitting from globalisation and those who have lost out from it. It is reflected in tensions within the Labour Party between the metropolitan faction from Remain voting constituencies and those MPs from the north representing Brexit voting areas.

A paper in the British Journal of Political Science by Will Jennings and others using data from the British Social Attitudes Survey from 1985 to 2012 found that British young people are more right-wing and authoritarian in their views than previous generations. Although they are more socially liberal on matters of equality and women's rights, they are also more consumerist and individualistic on issues such as the welfare state.

The generation that grew up in the period of Conservative rule starting with Margaret Thatcher hold more right-wing views than their predecessors. But 'Blair's babes', who came of age while Tony Blair and New Labour were in power, are even further to the right of the political spectrum. New Labour essentially reinforced Thatcherite policy values, reproducing them and making them more embedded.

There has been a clear rise in negative attitudes towards the benefits system, the unemployed, benefit recipients and the welfare system. Younger people also take a harder line on previous generations, despite crime levels having fallen.

Thursday, 26 January 2017

Brexit challenge for civil service

Britain's civil service will struggle with the workload of Brexit after a 19 per cent reduction in its staff since 2010, with some of the most severe cuts hitting the departments with the biggest Brexit challenges, e.g., Defra with a one third cut in its staff since 2010 despite its heavy EU related responsibilities. This is the central argument of the latest Whitehall Monitor from the Institute for Government: Brexit challenge

The report says that the decision to create a separate Department for Exiting the European Union was unnecessary and it would have been less disruptive to plan Brexit policy out of the well-established Cabinet Office. However, it should be remembered that this was a politically driven decision to create a high profile role for David Davis.

Thursday, 19 January 2017

Remembering Tony King

Taking an interest in someone's work because they have passed away is a shamefaced admission to have to make. However, I had been meaning to read Anthony King's Who Governs Britain? for some time, but the past year has been one of the most eventful in my life. My copy arrived today.

Tony did speak to me about the chapter on interests and was kind enough to cite my 2000 book on pressure groups as the recommended further reading on the subject. Indeed, my central memory of Tony was of an urbane Canadian who was always polite and pleasant to me. His reassuring, unflustered voice was a hallmark of election night broadcasts and contrasted with the more manic style of Bob Mackenzie with the swingometer. even (Sir) David Butler could get into a lather when the Silly Party started to outpace the Sensible Party.

His recent book on Blunders of British Government with Ivor Crewe was widely read and well received. A friend of mine who is a historian by training said it was on of the few books written by a political scientist he ever thought worth reading. Perhaps, however, it did not fully answer the criticism made in The Times obituary that he had never written a major, single authored work. It is unfortunate that he never turned his doctoral thesis on the 1906 general election into a book, which was promised from time to time, as it might have countered that criticism.

Nevertheless, what he had to say in the 1970s about government overload was a message that should stay with us today. There is a tendency for the reach of governments to extend their grasp and they should focus on those things which they can do better than anyone else (not much, some would say).

Tony was very interested in the British decline debate and invited me to talk about this at Essex way back. How long ago it was is shown by the fact that I had to ask people in the audience to refrain from smoking as I had a sore throat!

One of my children subsequently took the first year course he assiduously taught on the UK. For an essay with a decline focus, I gave her a couple of pieces of work in progress which she duly quoted. As I recall, the mark awarded was 62.