Wednesday, 19 December 2007

Future of British Liberalism

Nick Clegg leader of British Liberal Democrats

A few hours ago Nick Clegg was elected leader of the British Liberal Democrats by a a few hundred votes. I followed the moment of announcement on the Internet, and since then I've been following reaction from Liberal Democrat bloggers on the libdemblogs feed. I rejoined the party, I never left it in spirit, from Istanbul to make sure I could vote for Nick Clegg. After a cautious defensive election campaign against Chris Huhne who grabbed every chance to appeal to party activists with a more left wing kind of liberalism, Nick Clegg just made it to victory. The margin is irrelevant, though I often found Huhne deeply irritating before and during the campaign due to his rather transparent attempts to ingratiate himself with the activist core, his concession speech was admirably gracious and supportive. He has proved he is a great political campaigner, against the advantage Clegg had from overwhelming media support and support of well known party members. To some degree Huhne was benefitting from a deeply inbuilt bloody mindedness amongst the activist core about receiving advice from the party establishment, but it doe stake campaigning and argumentative talent to take advantage. Clegg was annoyingly passive for most of the campaign, but at some moments he showed the mixture of passion and reasoned calm argument he is capable of, and the victory speech was such a moment. The understated campaign cannot be taken as indicative of his approach to inter-party contests, though clearly he does not go in for demagogy as a style.

Which Liberalism?
Another poll I took part in, and I find just as interesting is on Liberal Democrat Voice an activist run news and discussion site. It is a poll which continues on where participants want the Liberal Democrats to be on the political spectrum.
Results so far

Not a scientifically based survey isolating variables, but probably genuinely typical of the views of more involved members. The significant result here is that the most popular option is Socially (meaning socially tolerant/open) and Economically Liberal (meaning free market in economics), but that this option is only marginally ahead of Socially Liberal and Economically Centrist and Socially Liberal and Economically Left-Of-Centre. Essentially there is a three way tie between these three positions, with a remainder left over of social conservatives.

As far as I am concerned the Liberal Democrats should be a party of 50% plus Social and Economic Liberals. That in itself covers a wide range of views from Hayek type almost-no-staters to those favoring a modest incremental shift towards open markets and choice in public services. I would place myself somewhere in between, at the point where anti-statist thinking and progressive welfarist liberalism border each other. Huhne's campaign was based on trying to colour even the most modest market based reforms of public services as dangerously right wing. My support for Nick Clegg was based on the belief that the party will move in that direction under his leadership, combined with his various leadership qualities. Clegg has not identified himself in such terms and would be unwise to do so, given that judging by this survey only just under a third of party members would define themselves in that way, though I am sure that is more than 1o years and even more than 15 years ago.

Where Clegg Should Go Further in Free Market/Limited State Liberalism
Certainly Nick Clegg is not calling for a reduction in the proportion of national income that goes on taxes and public spending. On the contrary he attacks the possibility that a Conservative government might reduce spending, though the Conservative leader David Cameron is vague on the topic. The accusation is in any case based on an ambiguity. Cameron has hinted at the possibility that tax/public spending might go down as a proportion of national income, this is not the same as a cut in spending or tax revenues. It is wholly compatible with increasing spending and tax revenues. A properly managed government can secure increased economic growth by reducing the disincentives to growth that are created by taxes.

Where Clegg is Already at the Right Point
It should be noted that the USA with a smaller proportion of tax/spending than the richer parts of Europe, is richer than those countries, has higher long term economic growth and spends at least as much in total public spending per person. Of course there are serious gaps in social provision in the USA, certainly the failure to institute universal health insurance is a scandal. Weaknesses in social provision is in large degree due to the very poor productivity and inefficiency of public services in the USA compared with Europe. Public services are heavily unionised in the USA, those unions have a lot of cash from very high membership subscription, and are brilliant talented lobbyists. We can see what happened in California where a popular persuasive governor, Arnold Schwarzenegger, was unable to get referendum support for proposals for very moderate public sector reform, such as increasing by one year the probationary period of employment. The public sector in California, and elsewhere, is full of inefficient working practices and staff who cannot easily be sacked regardless of financial circumstances or their personal performance .

Public Services in Britain
The UK, under Tony Blair and Gordon Brown, has suffered from growing problems of that kind. Despite mythology about New Labour being the same as the Conservatives, the fact is since 1997, public spending has increased dramatically particularly in health and education. Apart from some politically high profile targets, such as reducing waiting lists for operations, the growth in spending has not been a success. State health services continue to be dogged by poor hygiene in hospitals, a high proportion of new spending has gone on wage inflation. State school education in Britain continues to be very inferior, particularly for low income groups, compared with private education in Britain and state education in other parts of Europe. Though there is not as much room for reform as in the USA, there is plenty of room for greater competition in the provision of public services and the greater efficiency which results from the kind of disciplines that exist in the private sector.

Clegg's Promising Policies
Clegg was rather quiet about it during the leadership campaign, but at some points he made clear that he favours consumer choice in public services, and importantly money following the choice. He hinted at a move away from party policy on favouring free university tuition There is nothing socially progressive n levying taxers on low earners to pay for the relatively week off to go to university and become more valuable commodities on the job market. Making soft long term loans guaranteed by the state creates a reasonable balance between keeping down taxes and making higher education widely available. He has ruled out private insurance funds as contributing to state health services, but past remarks suggest he is open to any reform which would leave health care universally available and free at the point of use. Sıme substitution of competing private insurance funds for general taxation would not block universal access.

Clegg seems to be taking long standing Liberal Democrat committments to localism seriously, he has said his leadership will be active in the localities. Tying this into clear policies to shift taxation and control of public services to the local level could producer a great shift away from central state power, and Clegg has clearly supported such a position. He has shown a committment to reducing unnecessary legislation, as in his proposal for repeal of unnecessary laws, the Great Repeal Act. This proposed title echoes the Great Reform Act of 1832 which spread voting rights and reformed electoral practices, and was a very serious shift away from the previous system of a Parliament of oligarchy, patronage and landed interests, a great moment for liberal reformism.

My idea of the best results from the Clegg leadership are as follows:

  • A clear shift towards a party that is Socially and Economically Liberal, in other words leaning towards a limited state and free markets.
  • Reduction of tax and spending as a proportion of national income in order to encourage economic growth and consequent increases in total public spending.
  • Seeking to repeals laws and regulations where the costs outweigh benefits.
  • More competition and choice in the provision of public services.
  • More privater providers of public services.
  • Use of private health insurance funds as a partial substitute for general taxation in funding universal services.
  • A big shift towards localism in tax , spending and provision of services; and in the whole political culture.

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