The Myth of Localism

The best-informed decisions are those made by local people about their own communities. Unfortunately, this government’s localism agenda has shown that Orwell’s 1984 “doublespeak” (“War is peace. Freedom is slavery. Ignorance is strength”) is alive and well in 2014. Localism has come to mean the complete opposite of what had apparently been intended.

A community has the right to bid to run public services if it so wishes. However, when such a bid is made, a full-scale tendering process is triggered – allowing large and distant corporations – with armies of lawyers and accountants – to move in: how can neighbourhood groups compete? This is privatisation of local services behind the smokescreen of giving people a greater say.

A community has the right to buy assets in its neighbourhood. However, this is no more than a right to bid, the owner being entitled to reject such a bid, even if it is the best offer on the table.

And neighbourhood plans allow local people to shape their communities – so long as those communities accept the future includes building lots of new homes – with numbers dictated from on high.

The greatest scandal of localism is its use to roll back the state – shutting public services down and hoping families and charities pick up the pieces – Cameron’s ‘Big Society’ a pale echo of Thatcher’s ‘Care in the Community’. This taps into a perception that public services are often a second-best to doing it ourselves at home if we can. But as things stand, this would be the most regressive step for women possible to imagine – a return to the world before the welfare state – men went out to work and women stayed at home to look after the children, the sick and the elderly. 

Volunteering may be an answer. However, current government policies of privatisation cut right across the ethos of volunteering. People will volunteer for local charities, schools and hospitals, but are less inclined to help private providers make greater profits or reduce costs by making paid staff redundant. Privatisation undermines attempts to get more volunteers; public services run directly by the state or by voluntary organisations are more likely to attract them. 

People will volunteer, but only if the overall social framework is one of cooperation and mutual support, not one of competition and greed. “To serve is beautiful, but only if it is done with joy and a whole heart and a free mind.”

Malvern and its Food Bank

Malvern has a food bank. Words I never thought I would utter. While it is a phrase that should gladden us – after all “You can judge a society by how they treat their weakest members” – we must ask why it is that Malvern needs a food bank.

This week we have learnt that more than 1,400 people (over 600 of whom were children) received emergency aid from our local food bank. Even our relatively prosperous town is being hit by two pernicious philosophies that are leading to the devastation of public services – and to the concept of ‘public service’.

First, we have “trickle-down” economics – if we allow the richest in our society to become even wealthier (the household wealth of the top 10% is 100 times the wealth of the poorest 10%), some of that wealth will, eventually, “trickle down” to the least well-off. Feeding from the crumbs of the table of the rich is no basis for a caring and just society. The rich rarely know when they have enough and need to share. Successive governments of whatever persuasion have not been inclined to encourage them to do so.

At the same time there is the belief that the marketplace delivers more cost-effective and better-quality services. Whether it is the NHS, higher education, public utilities, transport – now the Royal Mail – history has taught us that a marketplace of privatised monopolies, where the short-term interests of shareholders are prioritised ahead of the needs of citizens, is no guarantee of the quality or cost-effectiveness of essential services.

Further we have the myth of ‘localism’ – government dressing up its disinclination to deliver essential public services as an exercise in giving communities the ‘opportunity’ to take on that burden – but without the resources and support to do so. Ever more services once delivered by qualified professionals are now run by well-meaning, but essentially amateur, volunteers, doing their best in the face of government indifference.

I urge you not to give in to politicians of every hue seeking to turn us against the weakest in society, but to support the likes of the Food Bank. Let’s be thankful that we have those willing to step in when government abrogates its responsibilities. But it is no cause for celebration.

Papering Over The Cracks on Executive Pay

Many of us were appalled, though not surprised, by the recent IDS report that, at a time when many ordinary people are suffering terrible hardships as a result of the worst recession in generations, the average pay of FTSE 100 directors rose in 2011 by almost 43%, and now averages more than £2m a year.

David Cameron’s response to this (hijacking Ed Miliband’s recent pronouncements on the matter, which themselves owed much to recent LibDem thinking) has been to announce plans to give shareholders binding powers to veto excessive increases in executive pay. It is a feeble response - empowering those with the least stake in a company to act as the brake on executive pay. If you were cynical, you might almost imagine that Cameron is aware that, while his proposals play out well in public, his boardroom allies will have nothing to fear in practice.

It has become obvious in the past couple of decades that the shareholder model (even as reworked by Cameron) – while a good one for raising revenue that allows entrepreneurship to flourish – is not one that guarantees an acceptable level of corporate governance – one that will prevent boardroom excesses that cause workforce resentment and therefore company inefficiency, leading ultimately to a poor deal for the consumer.

Company ownership in the UK (and indeed the US) is one that is predicated on maximising shareholder value. And yet of all the stakeholders in a company, shareholders are the ones whose commitment is the least secure – able as they are, in a moment and with just a few keystrokes, to remove their investment – switching to another vehicle that they think offers a better chance of a quick return. This leads to uncertainty and short termism at every level of company management and contributes nothing to holding directors to account. It should also be said that many companies are owned by corporate shareholders – which themselves have a shareholder constituency to satisfy – leading to a ‘you scratch my back and I’ll scratch your back’ culture. Good governance is the least of their priorities.

Dr Bryn Jones of Bath University has recently written:

"In researching corporations striving to optimise shareholder value, I have found that this aim [for businesses to increase profits in way that creates sustainable shareholder value] often clashed with a business's undertaking to promote social and environmental objectives. In these circumstances, the latter commitments were abandoned. Workers were sacked, community assets stripped and carbon emissions increased by closures and 'offshore' relocations - all in the interests of sustaining 'shareholder value'."

The Greens are the only major political party in the UK that is calling for a fundamental overhaul, advocating measures that should be taken to improve corporate governance so that we do not see such excesses. One policy would be to introduce legislation requiring that the maximum wage in any organisation is no more than ten times its minimum wage.  Another is to ensure that those with the greatest stake in the success of a company – its workforce – are given a governance role by the formation of workers councils – as has become the norm in Germany and other north European countries. Rather than stifling innovation, as many on the Coalition Government's benches suggest, such measures are proven to lead to a more empowered workforce, using its know-how, experience and commitment to the long term to design policies that benefit the corporate body as a whole. This is a factor that has played no small part in the success of those north European economies in recent years.

It is vital for the health of the nation - and not only for the well-being of those who daily have to battle the effects of social deprivation - that there is greater income equality. The neo-liberal economists who have held sway in the developed world over the past couple of decades would have us believe that by using deregulation and tax cuts, the very wealthiest are freed to create additional wealth, which is then invested so that society as a whole benefits - the so-called 'trickle down effect'. The facts however are very different. As Ha-Joon Chang has argued in a recent work: "concentrating income in the hands of the supposed investor ... does not lead to higher growth if the investor fails to invest more." In free market capitalist economies, there are no mechanisms to ensure that investment actually happens. In contrast, in countries with a strong welfare state it is a lot easier to spread the benefits of extra growth that follows from upward income redistribution through taxes and transfers. "In other words, we need the electric pump of the welfare state to make the water at the top trickle down in any significant quantity." Given that in an economic downturn the best way to boost the economy is to redistribute wealth downward, as poorer people tend to spend a higher proportion of their incomes, then now is the time to introduce measures to ensure that wealth is more fairly distributed.

Business as usual is no longer an option. It is time to stop papering over the cracks and introduce real accountability into our boardrooms.

Planning for our future

In an excellent piece in the Guardian (Monday 5 September 2011; http://www.guardian.co.uk/commentisfree/2011/sep/05/george-osborne-motorway-sustainable-development), George Monbiot wrote the following:

Impervious to experience, strangers to reason: the communities secretary, Eric Pickles, and the chancellor, George Osborne, have learned nothing from the economic crisis. They claim that laxer town planning ‘is key to our economic recovery’. But the European countries hit hardest by the economic crisis – Greece, Italy, Spain and Ireland – have weak planning controls and urban sprawl. The nations that have proved most resilient have tougher laws and compact settlements.

Strong planning is one of many factors, but it is symptomatic of a political culture that puts the national interest above the self-interest of the rich and the long view above the quick buck. Pickles and Osborne are seeking to rip up England's planning system for the same reasons that they want to drop the proposed new banking rules: corporate power, cronyism and plutocracy, the forces that got us into this mess.

Weak planning exacerbates economic problems because capital is diverted from productive uses into speculative ventures; cities decline as they hollow out; and badly sited businesses, disaggregated settlements and long travel times drag down economic efficiency. On Sunday the New York Times reported that doubling urban density raises productivity by between 6% and 28%.

Economic growth should not be the purpose of the planning system. It should ensure that human needs are met while the environment is protected. But if growth is your aim, strong planning is more likely to deliver it than weak planning. The government's attack on planning is likely to deliver the worst of both worlds: trashing the environment while trashing the economy.

In Malvern, we are being asked to consider the South Worcestershire Development Plan, the successor to the plan developed under the last government’s regional spatial strategy. It is a plan that seems to be grounded on the belief that building houses – whether or not they are needed, whether or not they are of the right kind, whether or not they are affordable, whether or not they are sustainable, and with no reference to any other policies to promote the local economy – is in itself sufficient to ease the worse effects of the financial crisis.

Very quickly, a consensus seems to have emerged – on the Town Council, the District Council and, judging by the Gazette features this week, among the Malvern population more generally – that the current ‘preferred’ option is seriously flawed, in that the density of housing that Malvern has been allocated cannot be supported by the current infrastructure (not only road transport, but shops, schools, health service and so on), and that the planners are unable to offer any guarantees that such infrastructure will be put in place any time soon. There is also a perception that housing is being planned with no clear indication that it will be required as a result of economic/industrial growth within the town – that in effect it is being planned in a vacuum.

That being the case, we have a number of options:

1) We can plan to put in place the infrastructure, namely the roads, that will support the planned development. Each one of us might have our own ideas about what roads need to be improved or built and where any new roads should be routed. I suspect that such a proposal will find a lot of support locally – there is already a perception that the traffic situation in Malvern generally (and along the routes to Worcester in particular) has deteriorated and that ‘something needs to be done’. An assumption that more housing will mean better roads will be welcomed by many.

I have a number of reservations about this approach. Firstly, putting in new routes to support such housing simply allows us to plant a large urban development on the outskirts of the town, and to move the population of that development in and out of Malvern more easily. In other words, the assumption that we would be making is that such developments would largely be for those working outside the town – perhaps in Worcester, but more likely further afield. (And it assumes that travelling to and from work would largely be by road – as it would take no account of our existing rail or bus network.) So we would be planting a significant development on the edge of town on the basis of supporting a workforce largely based outside the town. Apart from a boost to house builders and in the short term the local council, it would do very little longer term for the economic health and the vitality of the town. Nor would more road building ease our current congestion problems and the concerns of local people. It would simply mean that there was more traffic on more roads – and that traffic density would remain unaltered. This would do little for existing businesses and would not allow us to promote tourism and to bring more visitors into the town.

Perhaps the most important reservation is that plan as we may to build these routes, all the evidence suggests that in the short to medium term (at the most optimistic), those routes are simply not going to be built: budgets are being slashed, services are being cut – there is no political will for significant infrastructure investment. And we must take care not allow ourselves to be burdened with developments on the back of unsubstantiated and unsustainable promises of future investment.

2) If we are to site significant new developments within Malvern, then we must ensure that employment opportunities are included within or as close to those developments as possible – permanent office space for companies or to allow remote working for example – so that those living in such developments have the opportunity to live as close as possible to their working environments and other local amenities – perhaps within walking/cycling range. There must be much greater mixed use development. A seriously forward-thinking and visionary plan would be one that actively promoted a much more integrated approach to development – that would link industrial production with housing (not separate them) – so that the creation and use of energy would be in close proximity with one another (and waste and sewerage treatment too – because that can also become an essential element of a zero carbon energy economy rather than representing another piece of the infrastructure burden to be dealt with). (As an aside the SWDP policy on sustainability and renewable energy seriously lacks ambition and in 20 years’ time will look prehistoric, It needs to be seriously reinforced.) 

The current plan presumes ‘business as usual’ – and you certainly get the impression that 2030 is being treated as though it were just next year, with much the same proportion of the population expected still to be travelling in much the same way from home to the factory or to the office, and to shops in Malvern and Worcester, in their motor cars, and still grumbling about how long it will take because of the traffic congestion, just as they do now.   

It is already apparent that ‘online’ and ‘out-of town’ shopping is changing retail patterns dramatically; and that teleconferencing, the internet and the new generation of electronic communications is set significantly to transform the way we work – with far more work time being likely to be spent remotely from the office – in the ‘home-office’, and that the need for face-to-face meetings – the thing that still takes most of us to work – is steadily being replaced by electronic conferencing and communication. And this is all before the rising costs of transport fuel, as world oil supplies peak, really kicks in and forces more home-working.

All that, of course, is a comment on trends that we know are going on.  But the other big problem with this Development Plan is that it does not seem to allow for ‘the uncertain’ or for the unknown changes – changes that history tells us surely to expect, but which we don’t yet know much about. So if we have to do 20 year land-use plans then at least we should be: a) more imaginative in anticipating and responding to change; b) more flexible in relation to changes in technology about which we don’t yet know; and c) more committed in embedding ‘sustainability’ into the pattern of development – which implies a much widely distributed pattern of additional housing across South Worcestershire – not just more urban extensions to Worcester and Malvern and the like.

Which brings me to the third option.

3) While not wanting to drill down too far into the numbers, there is a real question to be asked (and answered) as to whether the numbers of houses proposed for Malvern is not only wrong for our town, but whether it is the best way to ensure the viability of the many local communities in the countryside around our town. Opting for more urban extensions/bolt-ons (like Newland), providing cotton-wool protection for the ‘open countryside’, and allowing for only very limited development in the villages, may seem the safest and most comfortable choice when viewed from today’s context and sets of assumptions – but it is surely to be questioned whether it is sufficiently far-sighted in terms of achieving real sustainability for communities over the next twenty years. There is significant evidence to suggest that allocating a small number of houses to a far greater number of outlying communities will not only relieve the pressure on Malvern, but will boost the local economies of those communities without putting a significant strain on their current infrastructure. Some of these communities are struggling to survive – with post offices, local shops and pubs, garages and so on closing. A small number of additional housing would provide a much needed boost to those local economies. And it would allow us to plan realistic and sustainable growth for Malvern that would benefit existing citizens and businesses.

Go Green … For a Change

On Thursday 5th May, I will be standing for the first time as the Green Party candidate for Malvern Link. Elected, I will campaign for the following:

•        More spending on services for people and less on council management

•        Keeping our local government local

•        Improving community transport

•        Preserving waste collection services and improving recycling

•        More local housing options

•        Regular consultation on the issues that matter to you

More spending on services for people and less on council management

Under this council, you are getting less for your money. While the council has been required by national government to hold the level of council tax at its current rate, the council is now offering far fewer services for that money. It has shed responsibility for a range of services (customer services, revenues and benefits, regulatory services, building control, IT, personnel, licensing), started to charge for services that once were free (e.g. planning advice and pest control), and has spent on services that were not required (CCTV cameras, which were installed at great expense and have now been removed, when the money could have been spent on bobbies on the beat).  Yet at a time of low frontline investment, the council continues to pay high salaries to its senior managerial team and is withholding a significant proportion of council tax revenue – more than £1.5m of your money – ‘for a rainy day’! I will campaign against further erosion of local services and ensure that council tax money is spent on the people of Malvern – amenities and services for the young, the old, families, those in work, those on benefit – rather than on layers of wasteful council bureaucracy.

Keeping our local government local

The people of Malvern best understand how Malvern should be governed, yet this council has been negotiating with Stratford on Avon to share its officers and services. Council staff travelling backwards and forwards would waste money, energy and time – as well as being environmentally damaging.  Malvern should not be governed part-time from a council almost 40 miles away. We should resist more sharing of council services and management with other local authorities because it involves loss of control and undermining of local government. The Green Party wants to revive local government, with the introduction of proportional representation and with grassroots democracy spreading through the use of smaller community and district councils. Such authorities should have enhanced powers, and in due course new tax-raising powers. There should be referenda on local government decisions if called for by 20% of the local electorate.

Improving community transport

Our roads and footpaths have fallen into disrepair, every day becoming more congested and dangerous. This council has dispensed with its transport officer and handed control of transport to Worcester. There is no longer any locally co-ordinated strategy. We need fresh impetus to develop community transport schemes to provide more reliable and timely access to vital facilities such as shops, railway stations, surgeries. People need community transport services to get to doctors’ surgeries, the hospital, town centre shops, the retail park, the Theatres, children’s parks, and so on.  The council must once again take responsibility for local transport, and seek green transport solutions – easing congestion and parking problems by reducing the number of vehicles on our roads.  For example we should promote community transport through low or zero fares, the use of electric vehicles, dial-a-ride and pooled car schemes. Ultimately, we need to make streets safe; make them public spaces again. We need to plan for mixed-use developments where shops, housing and businesses are closely located and connected by pavements and cycleways.

Preserving waste collection services and improving recycling

Recycling has certainly improved, but there is a long way to go to achieve international levels and to get everyone participating fully. People want to recycle, but it has to be made as easy as possible. Therefore, I will campaign to increase the range of materials (e.g. glass) that can be collected at the kerbside and recycled.  I will work to set up more localised recycling centres to allow people to minimise waste and reduce the number of car journeys to Newland Recycling Depot. We should do the simple things, like providing a free compost bin and composting advice for anyone who wants them. And we must allow councils to integrate locally the domestic and commercial waste systems.

More local housing options

The council is preparing a new local plan and I will work to ensure that the current policy of tacking more estates around the fringes of Malvern is replaced by one of building new ‘low carbon’ self-sufficient communities, with higher standards of thermal insulation and greater use of renewable energy sources. The emphasis must be on more affordable starter homes for young people and on smaller properties for older people who want to retain their independence but wish to down-size.  Homes should be built on the basis of need, not profit, and in areas that can sustain such development – with schools, shops, surgeries and green spaces. We must minimise encroachment onto undeveloped ‘greenfield sites’ wherever possible by reusing previously developed sites that have fallen into disuse. We should introduce a free home insulation programme for all homes that need it, with priority for pensioners and those living in fuel poverty. And we must introduce incentives to encourage homes to become more energy self-sufficient. We should also set building regulations to require excellent energy standards on a points-based system, which will cover embodied energy of building materials, energy used in construction, energy consumption in use, on-site energy generation

Regular consultation on the issues that matter to you

Councillors are your local representatives and should be seen and heard all year round, not just at election time. I would consider it a privilege, not a right, to represent you and, if elected, I will consult you regularly on the issues that matter to you. I intend to hold fortnightly surgeries, held at times convenient to you – weekdays, evenings and weekends. It is the very least that we can expect of the councillors in whom we put our trust that they consult us on the issues that matter, and I aim to redress this if elected.

But how can we afford any of this?

We are living in extremely difficult economic times. In an effort to tackle the national debt – whether it was caused by the last Labour administration or by global economic factors– we are daily being told that we must tighten our belts. As a consequence the government has made drastic cuts to public services on which we all rely, including cuts to our police and armed forces, is intending a root and branch reform of the NHS that no-one wants, has tripled tuition fees that will lead to a brain-drain from this country of our finest young people, has increased VAT and national insurance, which has had a crippling effect on small and medium sized enterprises. These and other measures that the Coalition has taken have seen unemployment increase, tax revenues fall while the welfare bill has increased, people’s spending power decrease and confidence hit an all-time low. But, these are tough times, and they require tough measures, right? We are ‘all in it together’. But how true is that? 

The fact is that the level of national debt as a proportion of gross domestic product is lower today than it was under the Major Government – and lower than many other countries in the developed world. The level of interest on that debt is lower than it was under Mrs Thatcher. But while the Coalition Government seeks to reduce the national debt by shifting it to every man, woman and child, the banks that were largely responsible for the crisis – banks that the taxpayer had to bail out costing each one of us tens of thousands of pounds – have returned to such a level of profitability that they are able to offer their staff £7bn in bonuses. Before repaying the British taxpayer, they have chosen to reward staff who would not have had jobs had we not saved them. And the Coalition’s response to this – David Cameron telling us it was time to stop ‘bashing the banks’, and proposed reforms that will do nothing to stop the crisis of three years ago recurring.

The truth is that the cut backs in the public sector are ideologically driven – a desire to roll back the state – and would have happened had we been in recession or not. The hope that the Liberal Democrats would temper the very worst excesses of the Tory Right have, sadly, proved groundless.

The debt does need to be tackled – but far more gradually and in a measured way that will not see public services slashed to pay for the excesses of the banks. It is time that we got tough with the financial sector which has got out of control. Among other measures, the Green Party supports the idea of a Robin Hood Tax, sometimes called a Financial Transactions Tax. It would involve a very small tax (maybe 0.05%) on the value of every financial transaction between financial institutions worldwide. Globally this tax has the potential to raise as much as £250 billion, as well as help stabilise the financial markets. We would crack down on tax havens and other methods of tax evasion and avoidance. And the Green Party wants to rehabilitate progressive taxation. This requires two things: raising taxes fairly and explaining them honestly. The Green Party is open about what we would cut, what we would defend, and about the fact that we need to raise taxation from 36 per cent of GDP in 2009–10 to around 45 per cent in 2013 (by among other things introducing a new higher rate of income tax of 50% for the most well off). This would halve the gap between Government expenditure and revenues by 2013–14 and progressively close the gap thereafter. 

There is an alternative to the Coalition’s austerity drive. There is an alternative to the cuts in the services on which you rely. And it is only the Green Party that has had the courage to stand up and say so. If you want to defend public services, then do not vote for the Coalition parties that are driving home the cuts. If you believe that people should have a say in how their lives are run, then do not stay at home on polling day. Instead, Go Green … for a change.

Why The Tories Fear AV

In recent weeks, the No to AV campaign has launched a series of extrordianry attacks on AV that smack somewhat of desperation. One is forced to wonder why they are going to such extremes (eg, if we adopt AV specialist baby units will have to close - something the Government seems perfectly capable of doing without AV) to defend an outmoded electoral system.

I do not want here to rehearse all the arguments in favour of ditching first past the post - the current system that allows a small minority of voters in a small minority of seats to decide the result of election after election. The corollary between the existence of so many safe seats and so much corruption (duck house, moats and chandeliers), and the disengagement of the electorate - why so many voters just choose to stay at home - is not a difficult one to draw.

No, what I want to focus on here is the argument put forward by the No campaign that AV will allow minority extremist parties to gain representation, that they will be given a disproportionate amount of power, that a vote for AV is tantamount to welcoming the BNP to the House of Commons. On so many levels, this is completely absurd.

Many countries that use PR (let's leave aside for now whether AV is PR) employ a quota system to ensure that such an eventuality does not occur - unless a party receives, say, 5% of the national vote, then it is not entitled to national representation. As many minority parties stand in only a small proportion of the seats that they could stand in, then they are likely to be unable to clear this hurdle. This is a crude mechanism for keeping out the extremists - but an effective one.

I would not employ such a quota, because, as with first past the post, it is fundamentally dishonest. To take the BNP as an example. If they are able to persuade 15% of the people of Bury, Blackburn, Burnley, Bradford etc to support them - then there is a reason for that. Most members of the electorate will rightly find the views of such parties repugnant and distasteful - but if they have managed to persuade a significant minority to support them, then this is something that we all have to deal with. It is puerile to do so by rigging the electoral system - first past the post or quotas - to ensure that these parties are not represented. We need to grow up and confront them head on and make the absurdities of their policies plain for all to see. More than that, we need to deal with the root causes - whatever it is that has lead to a proportion of the electorate - albeit a small one - voting the way they have. First past the post allows us to bury our heads in the sand. AV will force us to address the issues. It is grown-up politics.

This is an indication of a wider problem with first past the post - it is a fundamentally dishonest voting system. The Tory No campaigners are wrapping themselves a cloak of respectability by justifying their opposition to change by a need to silence the extremists. Yet the electoral system that we have hides the extent to which they may draw support from those same extremists. They are either hiding their heads in the sand, or else they are glad to accept that support - so long as it is not obvious where that support is coming from. At present, the electoral system is rigged so that no-one who supports a minority/extremist party can hope to gain representation in parliament; they know that a vote for their candidate in a general election will be ‘wasted’ - their man or woman will lose come what may. They can chose to vote for that candidate anyway, or else they can choose to stay at home, or else they can choose to vote for a candidate that has a chance of winning that most nearly reflects their views. And it is the degree of support that winning candidates receive from extremist voters that is perhaps key to why the Tory No campaigners are so vociferous. Let me give you an example from the last election, from my own seat, West Worcestershire.

West Worcs is a traditionally Tory seat, but one where the Lib Dems have recently run the Tories close. Labour usually pick up a few thousand votes - but are never in contention - and UKIP are a little way behind them.  In the 2010 election, there was every possibility that the result would be a close one - that it would go right down to the wire - but in the end the Tories won by nearly 6000 votes. Both Labour and UKIP performed rather more poorly than might have been expected. So what happened?

On the morning of the general election, a trailer sponsored by UKIP toured the constituency with a poster suggesting that if the LibDems were elected, the floodgates to immigration would be flung open. This was a scurrilous attack, but in the week leading up to the election, immigration had become a ‘hot’ topic. So, what effect would this message – vote LibDem and let in the immigrants – have had on those who had been intending to vote for UKIP? Given that the result was expected to be a close on, anyone voting UKIP in West Worcs would have had to accept that voting for their woman may have allowed the Lib Dem candidate to inch past his Tory opponent and win the seat. How could they stop something that they so obviously did not want? By switching their support to the Tory candidate, to ensure that she beat the LibDem.

So, how many of them voted tactically in this way - voting not for their woman but for the Tory, to deny the Lib Dems victory? Well, of course we have no way of telling, because to stop the LibDems they had no choice but to cast their vote for the Tory candidate. And the Tory candidate and now MP is able to claim a disproportionate level of support - even though she must know that some of those who voted for her would rather have voted for their own party – an extremist one at that. In other words the vote was fundamentally dishonest - and tells us nothing about the sort of support that secured the winning MP her seat.

Under AV, it is quite possible that the final result would have been the same - the Tory would have won. But it would have been a more transparent result. In the first round of voting, the natural UKIP supporters could still have ‘done the honest thing’ and voted for their candidate, knowing that in common with just about every seat in the country no candidate would achieve an outright victory in the first round. They would then, perhaps, have expressed a second preference for the Tory candidate - and it is those votes that would see the Tory candidate home and dry.

The upshot of using AV is that the electorate are able - in the first instance - to vote for the candidate who best represents their interests, and should that candidate not be elected, then express their preference for the candidate who best represents their interests from those who remain in the race. And we as an electorate are able to see the exact make-up of the vote secured by the winning candidate - from where they have drawn their support in the first and subsequent rounds.

It is this sort of transparency that I suspect the Tory party fears. I suspect too that the old Labour opponents of AV are also averse to such openness with the electorate. If they wish to remain the passive beneficiaries of extremism, they will have to accept that that will be a matter of public record. If they do not wish to be such a recipient, then they will have to make it clear to the extremists that they do not welcome their support. This will lead to honest campaigning and honest voting. Who could possibly object?

Holding Our MPs to Account

Our public services face the severest cuts in living memory – to be replaced by a sound bite ‘The Big Society’. The NHS is being effectively privatised, as the higher education sector was when the government decided to withdraw funding and allow universities to triple tuition fees. Welfare reforms will hit the most vulnerable, as has the VAT rise, which additionally has put a strain on small businesses and put the brakes on an economic recovery the first signs of which were showing when the coalition came to office. Police numbers are being reduced, serviceman have been told by email that they are being laid off. And as we are told that we are ‘all in it together’, one sector, that which caused this chaos in the first place – continues to act with reckless abandon as if the past three years had not happened. The banking industry, returned to profit after the biggest bail-out in history, is shamelessly rewarding its top earners with seven-figure bonuses. The coalition government has refused to call the bankers to account: indeed the reverse is true. Mr Cameron lectures us that it is time to lay off the criticism, and all the signs are that he and his Chancellor are planning less regulation of a sector that has shown beyond doubt that it is incapable of self-control.

In these circumstances, it is important that our elected representatives are called to account for what they are allowing to happen. I have tried engaging my MP – newly elected Tory MP Harriet Baldwin, arriving at the House after a career in the City – on the issue of the banking sector. To date it has not been as illuminating as I had hoped.

I emailed Ms Baldwin about bankers’ bonuses on 30 January and, having received no reply, emailed her assistant on 8 February, as follows:

I contacted Ms Baldwin over a week ago, pointing out that if the £7bn that the government is allowing banks to pay its senior staff in bonuses were instead paid to offset the cost of the tuition fees imposed by this government, then it would pay for 250,000 students to receive three years’ university education. And I asked her whether she thought the government had got its priorities right. I wonder if and when I might get a response to my enquiry?

Additionally, I wonder whether she would be willing to comment on government plans to exempt from UK corporation tax the profits of large companies (though not small companies) earned abroad when that money returns to this jurisdiction (the practice being at present to tax the difference between the UK and overseas rate), while allowing those companies to offset against UK tax the cost of running those overseas branches. This will not only deprive the Treasury of a significant tranche of revenue, but will encourage the export of jobs to those overseas jurisdictions. This seems a particularly surprising move in these austere times. Will Ms Baldwin be supporting these plans?

I would be grateful if, when responding, no reference were made to the plans of the previous administration, or to what Labour might have done had they won the last election. I am not a Labour voter and am interested in what the Tory-led coalition are doing, and not in the hypotheticals of a Labour administration.

On 10 February I received in the post the following reply from Ms Baldwin.

Thank you for your emails of 30 January 2011 and 8 February about bank bonuses and the profit of large companies aboard and UK Corporation Tax. 

HB: Last year, there was a one-off tax on bank bonuses. Can the Chancellor confirm that this year the higher bonuses will attract the 50% income tax and 12.8% employer’s national insurance rates.

Mr O: Of course it is right that they attract both income tax and employers’ national insurance contributions.

You imply in your question that you would rather see bankers’ bonuses taxed at 100% or perhaps set at £0. I hope that you were pleased by today’s announcement on bank taxes and bonuses which will see banks pay more taxes, pay less bonuses and lend more to business and society.

With reference to your additional technical question about UK corporation tax, it is the first I had heard about this matter. I am not aware of any tax changes in advance of next month’s budget but I will write to the Chancellor with your questions.

On 14 February, I replied to that letter as follows:

I would like to thank you for your letter of 9 February, responding to my emailed enquiry concerning bankers’ bonuses and the taxation of profits, earned by oversea branches, but later repatriated to the UK, of companies based in the UK. On this latter point, I look forward to hearing how the Chancellor responds to your query.

I did indeed listen to the Chancellor’s announcement on the ‘deal’ reached with the banks. Given that the taxpayer bailed out the finance sector, costing every man, women and child in this country tens of thousands of pounds, I was disappointed to hear that there were no new taxes on bankers’ bonuses (the fact that they will be subject to existing income tax rates was not a cause for celebration), and that in return for an unenforceable undertaking that the banks will lend more (of our) money to small businesses (presumably at commercial interest rates: see further below), they will reveal just how much is being earned by a handful of their best paid employees.

I will not be alone in being surprised that, just two years after the bail-out to rescue this sector, the banks are now able to report profits of such magnitude as to justify bonuses of £7bn. Given that the country has been suffering a recession that has required the coalition government, among other things, to require the trebling of university tuition fees, and massively reduce grants to local councils that will require the public sector to lay off large numbers of staff and cut frontline services to the most vulnerable in society, how have the banks managed to perform so spectacularly well? One is entitled to ask whether, in fact, these profits are a reflection of continued public subsidy rather than outstanding performance.

Therefore, could I ask whether you would support a call that the Independent Commission on Banking investigate fully whether there are in fact hidden public subsidies (or perhaps ‘stealth’ subsidies, to use a phrase beloved of the Conservatives in Opposition), along the following lines:

●        The ‘Too Big to Fail’ subsidy: The government now provides a public guarantee, effectively insurance against banks going bust. This gives banks a huge commercial advantage over other firms in a market system. It means banks are able to borrow money much more cheaply than if they were not ultimately underwritten by the public. Exchanges with leading auditors in front of the House of Lords Select Committee on Economic Affairs in January 2011 confirm this. A conservative analysis reveals that this hidden subsidy could be worth £30 billion annually. It means that bonuses to senior staff for ‘performance’ and dividends to institutional investors are at least in part a straight transfer from the taxpayer.

●        The quantitative easing windfall subsidy: When it was decided that the economy needed more liquidity, the Bank of England pumped in money using ‘quantitative easing’. To meet various, and sometimes self-imposed, requirements, it did so by purchasing government bonds through investment banks. Merely for being passive conduits for this ‘risk-free’ arrangement the banks took a cut of every trade. Banks enjoyed a significant windfall, but that lack of transparency keeps the likely amount hidden.

●        The ‘make the customer pay’ subsidy: Looked at sympathetically, the banks have been put in a difficult position. At the same time as being required to rebuild their capital, they are also under pressure to lend. In response, the banks have tried to manage this by increasing the gap between what they have to pay to borrow money, and what they charge people to borrow from them: the so-called interest rate ‘spread’. But of course the banks have a choice. They could recapitalise by reducing or eliminating bonus and dividend payments until their capital base is rebuilt. As it is, the taxpayer is subsidising the banks twice over: once through taxpayer funded public support to the banks, and secondly through paying much higher interest to borrow than the banks do at a time when small and medium sized businesses need money to be leant at competitive rates. This hidden subsidy to retail banking and one part of the investment banking world amounts to at least another £2.5 billion each year.

Finally, are you in a position to confirm recent reports that half of the funding for the Conservative Party emanates from the City?

Having received no reply, on 1 March I emailed Ms Baldwin asking whether George Osborne had responded to her query on corporation tax. I received no response, so I emailed Ms Baldwin again on 9 March – but this time copying the email to my local newspaper. I received a response from Ms Baldwin's office a few hours later, saying that I could expect a reply shortly.

I shall post a further blog to report its content. Given it has taken five weeks for Ms Baldwin to reply, I look forward to a detailed and illuminating response.