Having A Teletubby Moment

One of the other joys of the new technology is that, if you've missed the morning's business, they repeat it again for you at lunchtime! Mind you, quite why I'd want to be subjected to even more of Theo Butt Philip than I already volunteer for is beyond me... (only kidding, and Theo, hear hear!)

I'm glad at any rate that my own view on the matter of LVT was aired in the hall (yes we should have it, but it should be national, not local). But then, given the way LVT has been treated by the party generally, buried away in ALTER and forced to fight from there, we shouldn't be surprised that they decide to fight for the headline policy rather than burrowing into the less-storied overall policy.

Nevertheless, the way LVT is campaigned for does turn me off, even though I generally agree with the idea. Above all, I hate the insistence that it must be an either/or decision, the insistence that income tax is something that is uniformly bad. The aim of this tax paper was the shifting of the marginal tax rates towards the rich and I fail to see how you do that if the only tool you have to work only affects a proportion of someone's economic activity and not all of it.

We need both taxes in a system that deals holistically (that word again!) with the needs and aims of local and national government. Vince's speech hit the nail right on the head and I'm delighted that we've once again demonstrated that we are the party with considered and fair tax proposals.

Meanwhile, I fear I will miss the live debate on the Poverty paper, so if anyone at Conference is reading, all I'll say is, vote to value young people's work, vote Option B!

Calling All Stations Between Free And Fair

How is shipping fuel taxed?

I ask for two reasons. Firstly, because for all the discussion of aviation taxes, the global economy does not yet revolve around air freight and all those ships have to burn oil and the results of that burning have to go somewhere. But secondly, and more importantly, I ask because I support fair trade and that does not make me guilty of liberal thoughtcrime.

One of my funniest formative political experiences was attending a party political Q&A for Fairtrade Fortnight early in the Cameron era. On the platform with a Lib Dem MP, a Labour Councillor and representatives of the Greens and Respect (sic) was a young(ish) Tory who, throughout the whole debate, could not bring himself to even say Fair Trade. It was wonderful to see someone who could expect to be part of the new, young Conservative Party unable to think of trade as being anything other than free.

And yet the same attitude lives and breathes in our own party. Somewhere along the line, Fair Trade became, for the pure liberals at least, a lefty conspiracy to destroy the global economy through rampant protectionism. Support for anything other than free trade would result in the demolition of both our cherished economic credibility and our liberal credentials.

Now I don’t deny that free trade is, as a moral and academic position, a lofty and desirable goal. But life is neither a moral nor an academic exercise, it is something you live, and that requires an additional level of imagination.

The trouble is, the current stretch of my imagination is catastrophic. I have seen no compelling evidence yet that global free trade could result in anything other than the wholesale purchase of the developing world by the developed, entrenching the current situation where wealth generation is a pipedream and the benefits of natural resources and manpower flow inexorably northwards. The necessary simultaneous growth in transportation would meanwhile tip an already burdened planet well over the edge and into environmental meltdown.

[/end socialist-sounding rant]

Ultimately we want trade to be free but that does not mean it has to be loose. There must be restrictions on the system, and these must be mandatory, governmental controls (if I hear another case for market mechanisms being the way forward I swear I’m going to hurt someone) but they must be global controls, produced on an equitable framework that is designed from the start to evolve to meet changing market conditions.

My vision, then, is for a global trade system where no trade is prohibited, but where governments are permitted to tax all products on the basis of their carbon cost in production and transportation. At the same time, we must ensure global standards for labour rights that include a minimum wage proportionally related to wealth generation, so that everyone benefits fairly from their economic efforts.

But just in case anyone still thinks such a system is illiberal and ignorant of our heritage, allow me to remind you of one thing; we have always, always, always believed that freedom is nothing without the realistic ability to use that freedom. Freedom is nothing, then, without fairness; how is what I am proposing any different?

The Inexorable Call Of Duty

And lo the tax proposals came to pass. Amidst all the media bluster about the amendments and the challenge to Ming, no-one really mentioned that the proposals themselves were always going to sail through.

But the whole thing did leave me wondering what the endgame would be. Big ticket flat taxes are surely the way to start, but what do we want or need environmental taxes to turn into?

So allow me now to open a debate; I’ll describe a reasonably comprehensive environmental tax system, then you can tell me why it’s a load of twaddle that would never work. I’ll probably lose, but you’ll have to ask yourself the question, which is probably the more important thing.

The mechanism I would choose is VAT. Yes, it’s regressive, but it is a tax directly levied on behaviour and behaviour is what we are seeking to modify. Moreover, the regressiveness can, at least politically, be tempered by the process.

In my system, we consider all goods and services according to three criteria;

• Delivery – This considers everything that gets the goods or services to the point of sale. Primarily this will be the energy cost of producing and transporting the item on the manufacturer’s and vendor’s part and the resulting environmental impact.
• Utilisation – This considers the environmental impact of using the product as sold. In some cases (e.g. petrol) this will be a direct emissions impact, but it largely refers to waste output and the cost of disposal.
• Social Impact – This considers the cost to society of the use of a particular product. Through this category, things like alcohol and cigarette duty become empirical quantities rather than political footballs.

For each quantity, a points score is assessed, initially on a rather generic basis (for example, Delivery = Production Energy + (Mass x Distance Transported)), and these are added to produce the VATable rating. The government then assigns a percentage value per point to give the rate of tax levied on any particular item.

Once the generic study is completed, companies may then apply for specific certifications where their products are better than the assessed standard; for example, if the average car is 40% recyclable but the car I produce is 80% recyclable, I apply for recertification and the VATable rating of my product goes down.

The result is a VAT system that, far from being flat and arbitrarily regressive, is scientifically assessed and socially, if not academically progressive. It provides a direct financial incentive to consumers to improve their behaviour and to producers to improve their products.

The primary downside, from a liberal perspective, is obvious; the initial assessment and management of the scheme requires an independent agency on an unimaginable scale using an IT system that would make the iSoft debacle look positively puny.

But the question remains; what is the endgame? President Bush loves to tell us that technology is the way to beat global warming. This is a solution where we have the technology; can we rebuild him?

Ed Balls Thinks I'm Stupid

It’s been a good year for political quotes, particularly my favourite kind, the ones that reveal a deeper meaning to the usual diet of spin and drivel. But with the conference season out of the way, it appears unlikely that my quote of the year award will be going anywhere other than the prohibitive favourite since February, everyone’s favourite Brownite lackey, Ed Balls MP, for this classic from Question Time;

“You can’t claim to be a progressive and simultaneously oppose tax credits”

Edward, (says he adopting the Noel Coward-esque condescending tone of voice at which he excels), I have a bachelor’s degree and will soon have a master’s degree from the University of Manchester, plus I’ve won University Challenge and am currently ranked British #45 competitive quizzer. And even if that weren’t true I would only need the intellect of a boiled cabbage to construct an argument that would allow me to claim to be a progressive and simultaneously oppose tax credits.

Posit; you’re in government and want to help parents in work avoid the benefit trap. What is the most direct way to do this? By reducing the tax burden on the lower end of incomes that is the primary cause of the poverty trap. To achieve this, you could raise the income tax threshold above minimum wage, increase the personal allowance for qualifying families, etc.

Which is all well and good, except that for New Labour the original question is wrong. Posit; you’re in government and want to help parents in work avoid the benefit trap in the most visible way possible. You could raise the income tax threshold or the personal allowance, but that only gets you a few stories in one news cycle. If, however, you institute a system where people get their tax repaid to them, every working parent in the country gets a cheque every month that is subconsciously signed G.Brown.

Now there’s nothing inherently wrong with that, except that it does require the government in question to be able, say, to recognise a well-run IT contract when it whacks them in the face. Suffice to say, if there’s one thing New Labour know how to cock up, it’s IT contracts. What we have instead is a vicious system that ruins the lives of families across the country every single day.

My point is, this is exactly the sort of thing we need to be whacking Labour on every day; not only is it cynical vote-grubbing of the very worst order, but we just happen to have passed a policy that would do what tax credits do without destroying lives. When we are the best, most progressive option and can prove it, we should be shouting it from the rooftops. And I can guarantee that the parliamentarian who has the gumption to stand up and do it will be the next leader of this party.