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490   23 October 2002   

Beneficial Housing Benefit

Bravo!  The Government has decided to reform the Tory system of Housing Benefit, introduced in the 1980s, which was simply a form of outdoor relief for the rentier class.  Reform has defeated previous Governments, while even the seediest private slum landlords have rejoiced.  Now Labour is proposing a fundamental change of course, by way of new form of Housing Allowance.

Originally, when the Tories decided to “pay market rents” on behalf of the poorest benefit claimants, they were simply writing big pay-cheques for the private Landlord.  Little wonder, then, that “market rents” soared, and the Housing Benefit budget mushroomed.  Even when they had to reform it themselves (I seem to remember that John Major tried, am I right?) the wealth-transfer to the private landlord remained very high indeed.  It was the same story with private old-peoples’ homes – although that reform (where I also have suggestions) is much more complicated.

Instead of paying subsidy direct to the Landlord, ostensibly, Labour will pay each Claimant a standard periodic (weekly, monthly) subsidy, with which the Claimant will seek rented accommodation in the locality. The value of that subsidy (which is essentially a rental voucher, although the terminology is unattractive) will reflect local rents and price-levels.  Under the Tory system, the HB subsidy cheque was sent direct to the Landlord, fuelling the market for honest and dishonest landlords alike, and Housing Benefit fraud became very common. 

Labour’s subsidy, in true Third Way style, will strengthen the Claimant as consumer, as purchaser in a premises market-place.  Paradoxically, the Labour solution would make more effective use of market-mechanisms than the Tories’ did.  The Claimant is seen as making a personal “market” judgment, armed with additional financial resources.  It is a honourable solution, in that the individual Claimant is entrusted with making his/her own decision, armed with support from the community. 

The cheque will be payable to the tenant, not the Landlord.  In short, the market mechanism is being deployed into order to constrain rents, rather than inflate them.   The plan is that, eventually, Claimants will be entitled to “spend their voucher” in the housing-association and Council-housing sectors, as well as the private sector.

  • I wish the Government well.  Housing Allowances are sound in principle, and should be made to work.

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491   23 October 2002   

Employers should leave
the pensions stage

Why is the Government continuing to waste time with the Employers, and with occupational pensions? 

Surely it must now be clear that private “employers” are unreliable pension providers? The fragile formalities of the “company pensions trust” arrangements leave workers grievously exposed to the weaknesses of the employment relationship - their eggs tragically committed to one basket.  Public service employers are likely to remain reliable, but not the private sector.  

In any event, the occupational pensions system has proved hopelessly divisive and discriminatory, in the private sector.  Great for senior executives (like me, I must confess…) but no good for the majority.  No more than 50% of the workforce was ever covered by occupational pensions, and some of those were at derisory levels. Women workers were seriously disadvantaged.   

What are socialist reformers like Frank Field and John Monks doing, in such company?   Employers are likely to make even worse partners in future, unless massively coerced by Government.  And statutory coercion would be very bad for everyone, in my view – bad for the labour market, bad for our international competitiveness, and bad for workplace relations. 

Labour should build a future pensions system upon firmer institutional foundations, public foundations.  “Private employers” are a busted flush.  There should be three pillars of any future system – 

  1. A decent redistributive flat-rate State Old Age Pension, payable at age-70 at the level of £140 per week, indexed to 30% of national average wage, payable out of NI contributions and other tax resources as necessary; 

  2. State Pension Bonds, paying a State-guaranteed minimum cumulative interest rate, for ploughing-back only, offered in respect of identifiable “pension” benefits (e.g. the right to receive the £140-equivalent at 69, or 68, or 67); sums collected might be reinvested by the State, at its discretion; savers might be given the opportunity of switching their private or occupational savings into these guaranteed-return State Pension Bonds. 

  3. Supplementary private savings, meeting market requirements (e.g. early retirement, or supplementing the State Pension when payable), provided openly in the City market-place, without detailed regulation. 

Only State guarantees of this kind will now command the confidence of future generations.  That is the real nettle which Labour has to grasp. And the Government could extract massive negotiating advantage from employers’ interests, as a precondition of “letting them off the hook”….

Let me know what you think

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492   23 October 2002   

Perpetual Innovation

What is wealth?   I have an unconventional view. 

I say that “wealth” is simply a reflection of the capacity of a society to keep all its people busy, active, moving, all the time.  Societies will access to raw materials, and clement climates, clearly have natural advantages, that is not to be disputed.  Poor societies are plagued by inactivity, where it is impossible to turn labour and time to good account.  

Motor vehicles and roads are good for wealth because they enable so much more to be done – E-communications are the same, as is street lighting, with its colonisation of the night.  Excessive TV-watching and leisure reading, however pleasurable, are a real drag upon economic growth, as is drug-consumption - including alcohol. The debilitating effect of intoxication cannot be ignored.  Who can doubt that the spiralling rates of alcohol consumption in contemporary Russia are bad for the post-Soviet economy?  

Equally important are social conventions which release all people (including women, the elderly, and the disabled) to engage in a buzzing network of activity.  I am at one with Gordon Brown in his perception that the availability of work is central to the success of a social system.  Whether or not activity is remunerated is a secondary consideration.  Voluntary networks, and family child-rearing networks, contribute powerfully to the strength and vitality of an economy, as does the provision of public and charitable services, in particular education of all kinds.  A society that keeps perpetually active is one which generates new jobs, new transactional devices for the redistribution of wealth.  This measure is much more important thatn material measures, such as the possession of white goods, or cars-per-household, or cash-at-bank. 

Internationally, there is no doubt that trading considerations are removing from our shores certain “activity opportunities”, both in the manufacturing of physical goods and the provision of E-services of all kinds, including call centre services.   Lower wages rates elsewhere, other things being equal, will constantly erode those opportunities. If we are to remain an active (= wealthy) society, we must constantly search for new things to do.  Activity-rates are all.  

This is much more than generating new patentable “inventions” – although I agree with the Science Minister David Sainsbury that we are much better at that than we give ourselves credit for.  The Government is rightly seeking to encourage serial innovation in business, by removing some of the personal and legal obstacles thrown up by our Victorian bankruptcy laws.  Entrepreneurial activity is to be encouraged in every sector, the public and voluntary sectors, as well conventional business processes - and particularly among graduates.  I was for some years a Trustee of the School for Social Entrepreneurs, and I am in no doubt of the importance of social innovation.   

Indeed, given the UK’s huge advantages in terms of education and trading experience, we should be leaders in a process of perpetual innovation, allowing our ideas to be taken over by others in due course. 

That is, I believe, our destiny.  But many are sceptical. With "manufacturing" in decline - "How will we keep the merry-go-round of mutually supportive activity going in the future?"  

This is my answer.  These will be our future productive preoccupations.  These will all generate the new "products" of the future economy.

  1. Recycling – it is clear that the imagination of millions is captured by the image of a re-cycling society, capable of enjoying life without unnecessary depletion of the earth’s resources.  Non-polluting motor-vehicles will generate the most enormous boost to the world economy – even the present ideas about recycling cooking-oil in diesel engines are exciting!  The idea is a powerful one, with the capacity to motivate and excite millions, both in paid jobs employment in the voluntary sector.  Without importing any great increase in conventional personal material wealth, the process will generate great swathes of new relevant activities.

  2. Social services – it is clear that a a much higher proportion of adults “should” be engaged in helping others – helping the young through maturation, helping the inactive into gainful employment, caring for the sick and disabled, helping the old to survive – these are great ideals, releasing great energies.

  3. Selling goods and services – ours is a consumer society, where millions of us derive great personal satisfaction from deploying our skills in the selection of goods, food, services, and there is a myriad innovations still to come in the development of the retail trading process. 

  4. Travel – most people enjoy travelling, value the stimulus of new environments, meeting new people, exploring new personal horizons – the whole process of visiting and settling in new territories will provide a massive stimulus for future generations.  Nor does that imply travelling in more and more luxurious circumstances: the process will prove to be more important than the luxury of the mode of travel, and travelling will occupy millions of our successors for hundreds of years to come. 

  5. Community governance - there will be a huge increase in democratic participation in community affairs, greatly increasing local levels of satisfaction, both for volunteers and new ranges of salaried staff.

  6. Inventions of all kinds will be important – not merely the conventional patented “device” or the new strain of rose, or new glassware designs - but new ways of doing things, simpler techniques, short-cuts and methodological improvements of all kinds. 

This philosophy (for that is what it is) is particularly important for distant provinces like Wales and Scotland, who do not share the trading advantages of metropolitan London or the central heartlands of the Continent.  In these distant provinces, the need is all the greater for a culture of perpetual innovation, which alone will put such provinces onto the higher rates of economic growth.

Let me know what you think

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493   28 October 2002   

Estelle
The real issues

The departure of Estelle Morris from the Department of Education generated few real ripples, but signified no substantive change in government policy or prospects. 

But I have two niggles, neither of which will go away.  

First, is it conceivable that Estelle Morris was torn apart by being forced to implement divisive and selective policies which she knew were profoundly unpopular throughout the Labour Party, and for which the Government has no mandate?  She was reported as deeply opposed to introduction of a new system of top-up University fees. Did she really believe, for example, in the reintroduction of selective education, and the brutal abandonment of the comprehensive ideal - as a teacher with long personal experience of comprehensive education?  Did she really believe in all those invasive, managerialist strategies which were clearly destroying the morale and confidence of the teaching profession? 

  • I suspect she did not.  I suspect that as a committed Party loyalist, from a committed Labour family, her ultimate act of loyalty this week was to misdescribe her disaffection - taking the burden upon her own shoulders, rather than attacking the awful Tory policies she has been required to implement.  Her loyalty to Blair and to the Party preventing her telling the truth about her motivation, her policy disagreements. She took the rap herself, to avoid damaging the Government.  That rings true, to me.

Second, there must surely be some truth is the perception that she may not have been made of the "stern stuff" expected of a modern media Minister.  Remember, it was her very first senior job, after only a very short junior apprenticeship.  I suspect that (as she hinted herself) she was "over-promoted", or perhaps simply promoted too early. But who did that, and why?  Who must take the blame for the over-promotion?  Not Estelle, certainly.

The promotion was the act of the Prime Minister, and reflected his judgment.  And I suspect that two factors were at work. 

  • He is not in any event a good judge of character - elsewhere, I have explored his mistakes

  • But he is also short of talented recruits. And that is because he has generated within his team a scorched earth policy of orthodoxy.  He is as ruthless as Margaret Thatcher ever was in preaching that promotion will go only to the loyal, to those who harbour no doubts about the rectitude of the New Labour cause.  He has brought in over a dozen Ministers from outside Parliament, preferring them to his own Party MPs.  They are totally dependent on his patronage, lacking any other legitimacy. Dissenters and independent thinkers are kept strictly away from real power - Meacher, Short, Hain

The truth is that Blair was over-hasty in his original promotion of Estelle Morris - she was promoted simply because she was "one of us", presumed to be a compliant creature. I suspect that Estelle was asked to bend too far - but was simply too loyal, or too decent, to say so. 

  • It is Tony Blair, not Estelle Morris, who should be having the occasional sleepless night.

Let me know what you think

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494   28 October 2002   

My Knight's Tale...

As the Granada/Carlton merger proceeds, a unitary national commercial TV image is to be developed, to facilitate the process of selling advertising space to the major national and international companies that see the UK merely as a pinpoint market in a global frame.

I deeply regret the loss of local identities, both in TV and in radio.  I started my local broadcasting with Anglia TV in 1962, when I needed a part-time job to fund my PhD studies at LSE.  David Frost had just been sacked, as the Anglia "serious interviewer", for having written a frank exposure letter in the Liberal weekly Time & Tide, demonstrating the extreme profitability of commercial TV - the Canadian Lord (Roy) Thomson was subsequently to describe a TV broadcasting-franchise as a "licence to print money", but that was later.  Poor old David Frost was sacked, and moved on to more successful pursuits in London.

I took over, on a part-time basis.  I was working at the time on my Sociology PhD, at the London School of Economics.  It was a gruelling timetable.  I was not allowed to spend a week-night away from London (an archaic University "residential" requirement which then subsisted), and so I drove up to Norwich from London early on Monday morning, recorded two interviews in the morning for later transmission, and then stayed on to broadcast a further two interviews live on the Monday evening About Anglia news magazine.  About Anglia was a pioneering programme (then, with Bobby Wellings, a Cambridge contemporary and fellow Footlights cabaret artist).  It was a forerunner of the genre which has since developed, and which has virtually replaced old-style news programmes.

Part of my job was commenting, live, on the Budget, as it came off the tickertape machines (or whatever).  I wrote my own commentary, and I had only perhaps 20/30 minutes to prepare, broadcasting at 6.00 pm. And one year, I got carried away by an actual decrease in the Excise Duty on wines and spirits, which I described (I thought jocularly), as a "sop to the wine-drinking classes" (of whom I was of course one..)

  • Anglia TV were, however, not so jocular. 

  • I was sacked.

  • So endeth the first lesson.

Let me know what you think

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495   28 October 2002   

ale...

As the Granada/Carlton

 

 

 

 

 
 


 

 
 

 

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