6 intentionally controversial ideas for new Lib Dem policies

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I wasn’t at Lib Dem conference last week – Bournemouth is quite a way from Hanoi – so I had to settle for experiencing it vicariously. That’s a shame because it sounds it sounds like it was actually rather pleasant.

Writing in the Independent, Daisy Benson seems to suggest that it may actually have been too pleasant:

…looking at our agenda this week there is a retreat to old comfort zones. The issues we’re discussing are far too safe. Many of those, such as housing and the NHS, have been debated many times before. We are simply restating old policies.

Even in the discussion on the refugee crisis, an area where our new leader Tim Farron has led the public debate, as one new member reflected: “It was boring – everyone just agreed on everything.”

……

As controversial as the Orange Book was at the time, it stimulated debate and got members thinking critically about policy matters. We don’t need a new Orange Book, but what we do need is a set of thought-provoking ideas learned from the crucible of government, and from the public.

So in that spirit here are 6 policy ideas that meet the following criteria:

  1. a) In my opinion, they further Liberal Democrat aims, objectives and values;
  2. b) To my knowledge, they have not been Liberal Democrat policy before; and
  3. c) In my estimation, they will upset a fair number of Liberal Democrat members.

Three seem thoroughly sensible to me. I think a couple are probably right but I have misgivings about them. One is quite possibly mad. I’ll let you decide which are which.

1. Shred the planning system

The idea: Under the current structure, local councillors make convoluted plans and then sit on planning committees and make rather arbitrary decisions about whether or not applications comply with those plans. Instead, we ought to have a minimal set of transparent rules and give the role of deciding whether or not they have been complied with to an independent tribunal.         

Why it is desirable: If you constrain the supply of something, its price will rise. That will transfer wealth from those who want to buy that thing to those able to sell it. Unfortunately, in this context that means making the old and rich better off at the expense of the young and poor and thereby accomplishing the opposite of what anyone interested in equality should be aiming for.

Furthermore, while it’s true that decisions to build, alter or demolish a building will often generate externalities, the way the current system tries to manage them should unsettle liberals. For good reasons, we usually separate the role of legislator and judge. Yet in the planning system councillors perform both roles and as a result often wind up making what are effectively judicial decisions with electoral considerations in mind.

The result is a system wholly lacking a sense of proportionality: more tall buildings might be bad for the views of London but they’d be good for the people and businesses who would no longer be excluded from the city by high property prices. And that’s to say nothing of the ‘bland agricultural land conservation scheme’ AKA the Green Belt.

Why some Lib Dems wouldn’t like it:     There’s a long and ignoble tradition within the party of equating liberalism with localism and localism with maximising the power of local councillors, who not co-incidentally are a key part of our activist base. Many Lib Dems might also fear that they’d no longer be able to harness NIMBY sentiment as part of their local campaigning.

2. Determine school admissions by lottery

The idea: If a school is oversubscribed decide which children to admit at random rather than with catchment areas, admissions exams or by looking at the parent’s religion. 

Why it is desirable: It creates parity between middle and working class families. Buying a house in the catchment area, paying for Tabitha to be tutored for the 11+ and buttering up the local vicar are equally impotent to change the outcome of a lottery.

Why some Lib Dems wouldn’t like it: See the above point about a desire to maximise the influence of councillors. Plus there’s probably a reasonable correlation between being a Lib Dem voter and living in the catchment area of a good school. And to be fair, there are practical difficulties that would need to be worked through. It’s also rather counter-intuitive that the way to make school admissions fair is not to try and match the right student with the right school.

3. Stop exempting family firms from inheritance tax

The idea: Currently private firms – most of which are family run – can don’t count towards the value of an estate when determining the amount of inheritance tax due on it. We should start including them.

Why it is desirable: The UK has an unusually high percentage of family run businesses. It is also a productivity laggard. These two facts are not unrelated: the fact your Mum or Dad was a good manager does not mean you will be.

However, the exemption provides incentives for families to continue managing businesses themselves. Removing, it would encourage more family firms to become companies that separate management and ownership. That in turn allows them to bring in professional managers selected for their ability to do their job rather than their bloodline.

There’s also a good argument that both equality of opportunity and outcomes probably suffer when some people have multi-million pound businesses dropped in their lap’s tax free.

It would also raise around £250 million.

Why some Lib Dems wouldn’t like it: It’s politically risky. The losers will easily be able to spot they are losers and change their votes accordingly. By contrast, the benefits will be diffused across everyone in the country.

4. Abolish tax subsidies for corporate borrowing

What is the idea: If a company wishes to raise money from investors there are essentially two ways it can do it. Firstly, it can issue debt either by taking out loans or selling bonds. In this scenario, in return for their money, investors receive the right to be repaid a set amount of money in the future. Alternatively, it can sell part of itself by issuing shares. Here, the investors hope to eventually make back their money by taking a share of the company’s future profits. While they serve the same basic function, for tax purposes they are treated very differently. Companies can treat the interest payments on their debt as expenditure, which they can deduct from their profits and thereby reduce their corporation tax bill. But they can’t do that with dividend payments. This effectively creates a subsidy for corporate debt.

Why it is desirable: Removing this subsidy would encourage companies to borrow less and instead rely more on selling shares. This ought to make the economy more stable. The value of a company’s shares fall in tough times. By contrast, their debt repayments remains fixed. With the same liabilities but less opportunities to earn revenue to cover them, other things being equal, more debt will increase the risk of companies going under. In this way, tilting the balance from equity to debt is likely to increase the severity of a subsequent downturn. Untilting will therefore promote stability.

There would be other benefits too. Banks are the principal issuers of debt and therefore the primary beneficiaries of any subsidy on it. Abolishing that subsidy will reduce their role in the economy. It would shut down the wheeze Starbucks uses to go tax rate shopping.

In addition to that it would raise colossal amounts of revenue.

Why some Lib Dems wouldn’t like it: It can be perceived as unfair to firms that are too small to issue shares and therefore have to rely on borrowing.

There’s a problem once again that the policy is counter-intuitive; because the value of shares fluctuate they look less stable than debt and encouraging more of them to be issued seems like it should make the economy less rather than more stable.

5. Commit to negotiating for free migration zones

What is the idea: In recent years with global trade talks stalled, countries have instead reduced trade barriers by striking smaller deals on a country to country or regional basis. I wonder if a similar approach might help make progress on immigration. If public opinion, is unwilling to countenance a general opening up to migrants, perhaps our government could negotiate the removal of immigration controls for citizens of certain countries on condition they do the same for British citizens. Free movement of people within the EU provides a precedent for this.

Why it is desirable: It may represent the path of least of resistance when it comes to liberalising immigration. Migrants from countries economically and culturally similar to the UK don’t generate the same kind of anxieties that immigration generally does. And the reciprocal element would provide an additional benefit to point to.

The obvious countries to make such agreements with would the US, Canada, Australia and New Zealand. While citizens of these countries have a relatively easy time getting into the UK – and British citizens have a relatively easy time getting into them – immigration controls are still a burden that could be done without. For starters, they involve a lot of bureaucracy. And they can generate strange incentives. Take for example, an Anglo-American couple I lived with for a while. In order to get permanent residence in the each other’s countries they postponed settling permanently in one country and instead moved across the Atlantic at regular intervals.

Why some Lib Dems wouldn’t like it: It would strike many as unfair to scrap barriers for rich Americans who generally don’t really need to emigrate to the UK rather than for poor Syrians or Ukrainians for whom that might be a life changing opportunity. In addition, some of the more ardent Europhiles within the party might object to anything that looks like a rival to the European single market.

6. A soft power push

The idea: ‘Soft power’ was a term coined by the American political scientist Joseph Nye. It essentially describes the power a country wields by being liked rather than feared. It represents the ability to persuade rather than pressure.

Why it is desirable: For the first time since the Cold War, there is a viable contender to liberal democracy as the organising principle for societies. Russia and China are devoting significant resources to their own soft power pushes. Confucius Institutes are proliferating and Russia Today – sorry RT – is hiring more journalists to produce Putinite propoganda. While these regimes may not be actively trying to export their system of government like the USSR did, liberals should still find their new ideological assertiveness alarming.

In particular, we ought to be concerned about their efforts to tilt international organisations away from a concern with the rights of individuals towards the rights of states. For example, Russia has been trying very hard to prevent the UN recognising LBTQ rights as human rights. To offset this there needs to be a countervailing soft power push from more liberal states.

Fortunately, this is a domain in which the UK excels. In fact, it may well have more soft power than any other country. We should aim to preserve and even accentuate this edge. We ought to being encouraging more foreign students to study at British universities, nurturing rather than constraining the BBC and pumping money into the British Council.

Why some Lib Dems wouldn’t like it: Soft power is still power and power plays are a zero-sum game. When Ukrainians decided they wanted their country  to be more like Europe and less like Russia that weakened Russia. Lib Dems are not instinctive Kissengerites and this way of looking at the world would make many in the party uncomfortable.

In addition, the idea of using British soft power to promote liberal values depends on the UK being protected by American hard power and America is an uncomfortable topic in the Lib Dems. The party was almost uniformly opposed to the Iraq War and to post 9/11 abuses like Guantanamo Bay and Rendition flights. But not everyone saw it the same way.

Some within the party recognised that it is hard for a global behemoth – especially a wounded one – to move without destructive missteps. Others saw the damage the US was doing as evidence of a moral equivalence between the it and its competitors and concluded that it was the real threat to international stability. Those in the later camp would not appreciate essentially acting as cheerleaders for America’s preferred international order.

Just how did the BBC’s popularity become an argument against it?

The BBC’s popularity, both in the UK and abroad, should be welcomed not disparaged.

The political soundtrack surrounding the BBC has once again turned ominous. John Whittingdale. The Culture Secretary has implied that the Corporation has become too large and has strayed from its core mission. He’s even discussed moving from the licence fee to a subscription model.

Responding to this torrent of depreciation in an article for Den of Geek, Simon Brew skewers the most counter-intuitive argument that’s made against the Corportation:

Yet it seems the popularity of the BBC – certainly in the current political climate – may yet be its Kryptonite. There appears to be a growing feeling amongst the current government that the BBC should be using its substantive receipts from the licence fee to fund more niche programming, rather than chasing ratings. In the last month, we’ve learned that over £600m from the BBC’s coffers is set to fund the licence fee for over 75s, at a time when job cuts at the corporation are already being announced. Yet that’s just the beginning of what most concede to be times of real change for the organisation.

Ultimately, on the surface at least, it’s the high ratings that continue to paint a target on the BBC’s back. The argument runs that the BBC should use the bulk of its money – as it actually does, but let’s go with it for a second – on more niche programming. Why spend the money on shows like Doctor Who and EastEnders, when there’s no commercial organisation that wouldn’t? (overlooking, of course, the fact that the BBC took a gamble on both to start with. And that through its most popular show, EastEnders, it’s given a voice to issues that struggle otherwise to get an airing).

It’s not tricky to see the road ahead with the argument here, and it doesn’t point to a happy future for the corporation. Let’s say the BBC stops mixing in populist output amongst its content. It would be fair to assume that its ratings would drop. When said ratings drop, in comes the next argument: why should everyone have to pay a licence fee, when the programmes just aren’t as popular any more?

I not only wholeheartedly agree with this argument but actually think it can also take on a global dimension. I’ve already blogged this week about how the BBC helps to raise the UK’s prestige and status around the world. We tend to think of this as being about news but it’s much wider than that. Top Gear has/had (?) a larger audience than the entire World Service. Budget cuts may already have forced the BBC to stop broadcasting in Mandarin (because Mandarin speaking people aren’t an important audience right?) and the Communist Party may block its website but there’s still a Sherlock themed café in Shanghai. So even if you think ITV can pick up the slack at home, you should still want the BBC to flex those mass appeal muscles so it can remain popular abroad.

Indeed, this is part of the reason why a subscription model misses the point. Whether or not you watch the programs the BBC makes, you are still benefiting from the work it does as an ambassador for our country.

The real menace to free speech is China not North Korea

The financial clout of the China means that the communist party’s censors now hold sway over much of what you see at the cinema.

A still from the 2012 remake of Red Dawn. The army invading the US was originally intended to be Chinese but became North Korean in the editing room.

 

In a fascinating article for Foreign Policy, Isaac Stone Fish suggests that the sound and fury regarding North Korea’s efforts to have the Interview pulled distract from a bigger problem regarding free speech in Hollywood.

No major studio today would dare greenlight a film that would be that offensive to the Chinese Communist Party: The financial costs could be immense. A film studio that was even known to have publicly floated an idea such as this could expect to be effectively blacklisted from working with Beijing — and China is where Hollywood studios will make an increasingly large percentage of their money in coming years.

China’s box office revenue surged to $3.57 billion in 2013, a 27 percent increase from 2012. The country is already the world’s second-largest film market, and the most important source of growth for Hollywood releases: “Box office receipts in the U.S. are sliding nearly 20 percent compared to last year, while China’s is booming in 2014, up 33 percent in the first quarter alone,” according to Yahoo Finance. “Every mainstream studio is keenly aware of not offending the Chinese market, because it’s become such an important revenue stream,” Tom Nunan, a visiting professor at the University of California at Los Angeles School of Theater, Film and Television, told Bloomberg.

Chinese film studios are increasingly seen as the gatekeepers by which Hollywood can enter this 1.4 billion-person market. Ryan Kavanaugh, the chief executive of the media company Relativity Media, has successfully made co-productions in China. But he noted recently that one of the differences between making films in the United States and China is that, in the latter, films have to be “meaningful both to the government and the Chinese people.” In other words, don’t offend Beijing.

Consider the case of Metro-Goldwyn-Mayer, which several years ago released a remake of Red Dawn, the 1984 cult classic about Soviet, Cuban, and Nicaraguan troops invading the United States. Originally, the script had Chinese soldiers tromping through the United States — but the producers switched them to North Koreans. “The movie was changed because we couldn’t get distribution for the movie from any of the distributors here,” Red Dawn producer Tripp Vinson told USA Today. “They didn’t want to offend the Chinese, I am assuming.”

Or consider The Mummy: Tomb of the Dragon Emperor, which Chinese censors tweaked before release: Producers were reportedly cautioned that the ancient ruler in the film wasn’t allowed to resemble China’s liberator and dictator Mao Zedong. Or Iron Man 3, a film in which Chinese government officials were reportedly allowed onto movie sets to monitor the filming and ensure plot lines wouldn’t offend Beijing. Or World War Z, a 2013 movie based on a popular book of the same name, where a zombie epidemic starts in China and spreads throughout the world. According to the entertainment website The Wrap, the producers dropped the reference to China as the source of the plague.

After Sony cancelled the release of The Interview, U.S. President Barack Obama criticized the studio, saying, “We cannot have a society in which some dictator someplace can start imposing censorship here in the United States.” Yet in the case of China, this has been happening for years: Hollywood studios have opted to censor their films to appease a foreign political party. Hatred — and North Korea — have nothing to do with it.

This points to an uncomfortable reality about current geopolitical struggles. The Chinese Communist Party is much less ideologically rigid than its fallen Soviet counterpart. That makes life much more bearable for the citizens of China who no longer have to endure the nightmare of being test subjects for an experiment in building utopia. It does, however, allow Beijing to compete in areas Moscow never could. For example, the CCP can make compromises with Hollywood studios which allow it to buy the ability to project soft power using their output. This is I think an indicator that whilst authoritarian capitalism may be a less destructive ideology than communism, it’s also likely to prove a more tenacious adversary for liberal democracy.