Rule By Failed Rock Star

SATURDAY, JULY 31, 2010

Rule By Failed Rock Star

Al finally makes it into the Merseybeats

BOM's old friend Rockin' Al Johnson has finally made the big-time. He's got his own rock show on the BBC. Even better, you're paying for it.

OK, it's called Alan Johnson: Failed Rock Star, but at least he's up there in the limelight, grooving alongside such all-time greats as the Merseybeats (pic). And as he cheerfully admits, if only he'd made it first time around back in the swingin' 60s, he need never have settled for politics to get the attention he craves.

And he's not the only one - from Bliar down, stacks of NuLab's ministers went into politics only after they'd bombed as rock gods. Even now, given half a chance to join the Merseybeats, most would drop their current has-been minister jobs like a shot.

Tyler was reminded of this on Wednesday afternoon strolling along a sunlit side-street in Westminster. Coming the other way were the Blues Brothers - stylish sunglasses, linen suits, hand clappin, foot stompin, funky-butt ... podgy. Obviously they were jive talkin', but as they passed, Tyler managed to catch a word. It began with eff and ended in ucking. At which point Tyler recognised disgraced Brown spinner Charles Whelan and disgraced Brown enforcer Nick Brown, making their way back from some lunchtime gig in a karaoke bar.

The thing is, rule by failed rock star turned out to be a great gig for those doing the ruling, but not quite so great for rest of us. If only Al had made it in the 60s, he need never have ended up floundering around as Home Secretary, or "at the helm" of the NHS or our social security system.

The man now at the helm of our nightmarish £200bn pa social security system is most assuredly not the rock star type. The one time he tried hishand in showbiz, his performance was devastatingly mocked by one critic as"the Walmington-on-Sea amateur dramatic society does Henry V". There's no way he'll ever be invited to join the Merseys.

Yet, as we saw once again yesterday, this self-styled Quiet Man of British politics is actually the one who looks like finally gripping the crippling inconsistencies and contradictions at the heart of our welfare system.

The most difficult question there, of course, is the one we blogged several times last week (eg here and here), and the one we investigated for the TPA's new paper Welfare reform in tough fiscal times. How do we make sure work pays for the near 6m working-age poor who currently depend entirely on welfare? And even more difficult, how do we do it now that the failed rock stars have blown all the bread?

As IDS spelled out once again in yesterday's consulation paper, after 60 years of our gargantuan welfare state, Britain's workless poor face a welfare trap of life-mangling proportions.

The paper contains the following chart, showing how the trap works for a couple with a single earner on the Minimum Wage, and two children. The family can certainly increase its net income (vertical axis) as the earner works more hours (horizontal axis), but only by a horribly small amount (ignore all the various bands in the chart - they simply show how the various benefits taper away as the family's own earnings increase: focus on the top line which shows how net income increases as hours of work increase):

This means "that someone at the National Minimum Wage would be less than £7 per week better off if they worked [up to]16 extra hours and earned an extra £92 (an effective wage rate of 44p per hour)". It also means that he faces "a Marginal Deduction Rate of 95.5 per cent on earnings between £126 and £218".

As the report puts it, "a system that produces this result cannot be right".

So what's to be done? The report offers three possible approaches:

1. A Universal Credit - all existing benefits abolished and combined into one simple to understand and administer universal benefit.
2. A Single Unified Taper - retains the existing range of individual benefits but "withdrawal would be through a taper that would be applied to their overall benefit eligibility, rather than the individual benefits as is currently the case".
3. Single benefit/negative income tax model - as recommended by the TPA (marking the very first time ever a TPA policy proposal has been explicitly picked up in an official government publication - hurrah!)

We can only welcome IDS's boldness and give him every support.

True, his paper does not mention the other key aspect of the TPA proposal - ie the need to fund these reforms by lowering the poverty line - but we can work on that.

The main thing is that after all the opportunities wasted by those wannabe rock stars, we finally have a government that has the guts not only to thinkthe unthinkable, but also to do it.

We hope.

PS So who is ultimately responsible for the fact that we ended up being ruled by fourth rate rock stars? Fundamentally you've got to blame these guys:


Their intoxicating combination of teen beat and cocking a snook at authority changed the world for people like Rockin' Al. As he says"everything changed and changed forever at the dawn of civilisation - the arrival of The Beatles... I used to try to model myself on Paul McCartney."No wonder he ended up in Bliar's government.

And while we're on the subject, Mrs T has been scouring the darkest recesses of the Tyler attic (filthy dirty, covered in cobwebs... but she's good with the kids). As we've certainly mentioned before, at about the time J Lennon was asking the Queen Mum to rattle her jewelry on live TV, Mrs T was bunking off school to visit the Fab Four in their Surrey mansions. In those days, it was nothing for 13 year old convent girls of a certain disposition to bunk off, hitch a ride, and knock on George Harrison's front door. And Mrs T has the snaps to prove it. Well, that is, she has the snaps somewhere. But unlike the granny who's flogging hers next week, Mrs T hasn't found a single one. Bah!

THURSDAY, JULY 29, 2010

The Natives Are Not Revolting

Tax is still the key to localism

Tyler recently attended another Westminster seminar on localism. You know, that's everyone's great idea for extracting more value from public services by running them locally rather than from Whitehall.

Like most such seminars, it was attended by a mix of civil servants, quangocrats, local government people, think tankers, private contractors, consultants, and various hangers-on like Tyler. In other words, it overwhelmingly comprised people who in one way or another are paid from the public purse (not, it should be stressed, Tyler).

All - well, pretty well all - were agreed that we must have more localism. After all, we currently have the most centralised system of government in any of the major developed economies, and that can't be right (see many previous posts eg here). Localism rocks.

But alas, the attendees could see problems. Very serious problems.

First, there's the issue of the locals themselves. I mean, have you ever actually met the locals? My dear! How can you possibly have localism when the locals are a bunch of fascists and/or idiots? How can they be trusted to do The Right Thing - ie the thing the people around the seminar table want done? There will clearly need be national guidelines and service standards, and locals certainly couldn't be trusted with say, setting their own welfare standards. Why, they might not take proper account of the European Decency Threshold. They might even revert to workhouses!

Second, there's the issue of capacity. Even if they were given more power over things like welfare, local councils just don't have the capacity to take on the job. Frankly, sweeping the streets and emptying the bins already stretches their meagre abilities to breaking point, and we need hardly dwell on the Baby P area.

Third, there's the closely related issue of infantalisation. Local councils themselves are fully aware of their own lack of capacity, and frankly they like it that way. They simply don't have the confidence and maturity to take on more challenging tasks. Mummy's apron strings offer a far safer and easier life.

Fourth, we could end up with a postcode lottery. A postcode lottery! Some councils might decide to provide different services to others, and then where would we be? Although it must be said that argument did take a bit of a hit when one speaker pointed out we already have a postcode lottery in much service provision - one often caused by administrative accident rather than deliberate policy.

Fifth, it would be expensive. No economies of scale, you see. All those little councils running their own separate little services, rather than relying on the super-efficient national services we currently enjoy. Er, yes... that argument also took a bit of a hit in subsequent discussion.

Sixth, few people out there among the locals actually seems to want it. The natives are not revolting. They are not manning the barricades demanding to be free. And stuffing localism down the unwilling throats of the apathetic locals sounds like a surefire recipe for disaster.

And you know, we've got some sympathy with many of those points - especially the last one.

We have long been strongly in favour of more localism, but it must be admitted that most people round our way don't actually want the council to have more power. True, the rubbish collection seems to work tolerably well, but that's long since been contracted out. Beyond that, people generally have very little confidence in the ability and judgement of the local council. There is no clamour whatsoever to give it more power, and precious little interest in who gets elected as councillors.

And Tyler himself has a pretty hypocritical attitude on this. He may be a big supporter of localism, but when he's actually been approached to stand for the council (there's a local recruitment drive going on right now), he's declined. He believes it would be a pretty thankless task, with no end of brickbats but precious little actual power. Responsibility without power - the classic meat in the sandwich between Whitehall and the angry citizens.

You see, at root, what we have here are our old friends Mr Chicken and Mr Egg.

Councils have lost confidence and capacity because over the last half century they've been gradually stripped of their traditional power and responsibility. They've come to rely on Whitehall for the vast bulk of their cash, and they therefore have to take instructions direct from Whitehall, rather than deciding things for themselves. Is it any wonder it's difficult to persuade people to stand for the council?

So now we face the prospect of localising control into the hands of our weak councils - quite a scary prospect. Yet if we don't do that, we will never start to rebuild all those capacities we've lost. We won't get the chicken unless we take a chance on the egg.

And what is the key step we need to take? As regular readers will know, we have long argued for fiscal decentralisation. Indeed we've even written research notes on the subject (eg see here).

What it means is that we need to go much further than simply have Whitehall hand over an even bigger pot of cash to our councils. What it means more than anything is making councils responsible for raising a muchlarger slice of their own cash for themselves from local taxpayers. We need to reverse the pattern of finance at least back to what it was before the terrible Wislon started the destruction of our local authorities in the 60s:

If once again, local councils were responsible for raising half their funding direct from local taxpayers, that would concentrate local minds wonderfully. Suddenly it would matter a whole lot who was running the town hall. People like Tyler would have a real incentive to get involved, and what's more, election to the council would never be a shoo-in.

If we are genuinely serious about localism, step one is the decentralise the tax system. Taxes always have been and always will be the key to local engagement.