Building Equality In The UK - 03 July 2016

TL;DR

Many people in the UK feel disenfranchised with our politics, distant from our politicians, and also feel that the world is designed for the rich while their own areas are left to rot by a society that favours London and the South-East. I believe that we need to deal with this before it becomes too late by:

• Improving the infrastructure outside of London
• Restructuring and devolving powers to the regions
• Move Parliament outside of London
• Introduce a basic income
• Build more social housing

Background

There are many areas of the United Kingdom that have been neglected over many years, there are many people who are politically disenfranchised and economically abandoned by our society. These people feel they have nothing to lose, they feel that they are already losing and therefore they were far more willing to vote to Leave the European Union. The general feeling is that the economy is run for the wealthier regions and for the wealthier people, not for the ordinary person, in the ordinary regions.

The economy is vitally important, the money that is generated by the wealthier regions helps to fund our NHS, the welfare state (our safety net), our education system and all the other myriad of vital public services that keep our society running. The wealthier cities, mainly London, are net contributers to our country but so many regions are net recipients, without places like London they would suffer massively trying to fund their services. Yet there must be something we can do to balance-out the economy, to give the poorer regions a sense of control rather than feeling like they should be grateful for the scraps off their plate.

The Politically Disenfranchised

Our political system, First Past the Post, is the remains of a two-party system that has its history in the United Kingdom's struggles towards democracy. It is a representative democracy that involves electing a local representative to sit in Parliament on their behalf, the people who best represent their views and who they trust to make decisions on their behalf.

However, the country is split into safe seats and marginal constituencies, where in general elections the results of most constituencies are already known, where the voters in the marginal constituencies have the most direct power and influence over the results. People in safe seats who do not agree with the incumbent party feel that it is pointless to vote, as their vote will not count, they know that they will be out-voted by everyone else.

In most constituencies the turnout is so low that if everyone who did not vote actually voted one way or another the result could easily be changed, so to some extent the idea of a safe seat is a psychological one. There are other factors at work, those who did not vote cannot all be assumed to have the same politics, they may all believe in different things and therefore not be aligned enough to swing the vote in a constituency.

Some of the people who do not vote may feel that there "vote does not count" as regardless of who they vote for they will not personally see any difference in their life. They have been let down by successive governments, their life feels to be worse-off and they do not feel that anyone listens to their vote. Some, the more politically engaged, may decide to turn up and vote, but vote for a more extreme party as a form of protest but many choose not to vote. Many have lost faith in politics and politicians, no one is offering them a a compelling "vision of hope" for themselves.

The political classes, the Westminster elite, were at one time only from the wealthier classes in society, the politicians were not paid by society so you had to be independently wealthy to partake in politics. At that time the poorest in society did not even get a vote so there was little chance of the poorest being involved in politics. With the rise of the Unions, the Labour Party and in 1911 the first salary for being an MP the path was opened up for more working-class people to become MPs. People grew up working, through the unions they were politicised, they learned to debate and champion the causes of the working classes and then became MPs.

Over time, this path seems to be fading, at least in public perception. It is now seen that the path to becoming an MP starts with studying politics, economics or PPE (Oxford) then joining a right-wing or left-wing think tank, becoming a Special Advisor or an intern with an MP. The party will then "parachute" their favoured members into safe seats to become MPs who will then, after a few years, be on the front-benches. This may not be the entire truth, lots of MPs have worked for many years, often in professional environments, having worked as councillors before chosing to stand as an MP. The term "career politician" has been coined as a negative term over the past few years, suggesting that people are feeling increasingly disconnected from the politicians who represent them.

To some extent, the world of academia, the professional world, and even the political world, can become echo chambers that isolate people from the rest of society they represent. There can be an intellectual superiority and even a dismissive attitude to the lower classes, to the less educated.

The Economically Isolated

There is a growing feeling that the UK economy, that the world economy, is built to satisfy the needs of a wealthy elite. That wealth will protect wealth. There is a feeling that the laws to which the general public are held can be ignored by the wealthy, that they believe themselves to be above the law and can get away with subverting the law.

The wealthy form powereful lobby groups, they insert themselves into the lives of MPs and those in power, they offer MPs money for consultancy in their companies or even offer themselves directorships in their companies. In time, the businesses hope (at least in the minds of the conspiracy theorists), that the MPs will become depend on them and will vote with their own best interests in mind, i.e. the best interests of the companies and vote against the interests of their constituents.

In areas where there is high unemployment, especially high youth unemployment, seeing the wealthy corporations, the wealthy people get away with not paying tax is an outrage.

People in these areas see that London can get up to 24 times more infrastructure spendinging per capita than the North-East and wonder why their own communities are abandoned by the government. George Osborne talks of the "Northern Powerhouse" but keeps cancelling infrastructure spending to help the North grow, yet keeps the spending on the London and the South-East.

It is rather ironic that many of the regions so desperate for government funding have voted to leave the EU in the EU Referendum when it was the EU that provides them the most funding. One conjecture that I would like to propose is that these people voted to Leave because they felt there is nothing to lose, that their communities cannot be worse-off by making a change, that they can gamble on a better future as they see no hope if things carry on as they are.

What can be done about this?

Improve non-London infrastructure

Investment has to be made in infrastructure of the UK that exists outside of London, there were plans for a high-speed train-line to link many of the major Northern cities, this now seems to have been put on hold yet HS2 is going to continue in linking London to Birmingham. Some say this will improve the economy of Birmingham but others seem to think that this is mainly to draw more people, more money into London. There are doubts that the second-phase of HS2 will ever occur, linking to Leeds and Manchester, simialr to the expansion of the A1 into Scotland that never really occurred. Once London has felt the benefit the investment will stop.

Creating a network of high-speed lines, not just North-South but East-West, would help connect our major cities and provide a boost to our economy with the jobs that are provided.

It is not just the transport infrastructure that needs replacing, investment in healthcare, investment in education and even investment in sports facilities needs to be improved, areas need to be regenerated. There needs to be a feeling that the UK cares about the rest of the UK, not just London and the South-East.

Restructuring and devolving powers to the regions

At the moment the UK is in a constitutional mess, with a haphazard devolution of powers to different areas of the UK depending on who is shouting the loudest at the time.

One solution is to stop and re-think, to take a look from the Parish Councils to the House of Commons, to the House of Lords and see how the powers have been devolved. We should not just be devolving powers and creating more bodies in hierarchy of government we should have a root-and-branch re-design of where powers should be located. I would like to see a more uniform, more consistent, more federalised view of the UK with clear demarcation of powers.

This leaves the people closer to their centre of power, they are closer to the people making the decision and that should help to make better decisions for the regions.

Tax-raising powers should be partially devolved, a minimum taxation set by the central government with different regions able to change the amount that they raise from people and businesses. The central government fund should be there to fund the larger-scale government interests, e.g. defence, but should also be there to fund a regional development fund. The more a region puts into this fund the less it can take out, it can be used by the poorer regions to offset a reduction in taxes for people and businesses to attract money into the area.

Move Parliament

Currently, the UK's centre of politicial power and current centre of economic power is based in London. This can help to create the idea that the "elites" are only focused on London because that is where they exist and their proximity means that it is far easier for the London businesses to lobby MPs.

The Houses of Parliament need extensive repairs and could end up costing the UK up to £6bn. It is considered cheaper to fix the issues if we decide to abandon them for the moment, move the House of Commons and the House of Lords out while the repairs are underway, but what if we choose a more dramatic option? What if we choose to move them permanently to a non-London location?

Could we, for say £1bn, move Parliament to somewhere in the North, to the border of Yorkshire and Lancashire? These areas need more infrastructure and it would be a massive economic boost to these areas to have Parliament built there and to remain there.

It would mean that we separate out the political and economic centres of the UK, it would also be cheaper for the tax-payer as I would also suggest the building of purpose-built flats to house the politicians and Lords. My view is to randomly assign MPs to 2-3 bedroom flats, enouh for them to stay while Parliament is in session and space for their family to stay, this would get rid of the need for other MP expenses. These would be maintained by the state for them, if they choose to buy properties in the area and live in those it is their choice but MPs will not get the expenses for those properties.

Also, all MPs would get a season ticket for the train from their own constituency to Parliament. We can make the system simpler, more cost-effective, and fairer.

Introduce a Basic Income

I am increasingly convinced that introducing a Basic Income/Citizen's Income is the way that our post-industrial economy is going to have to move. The idea is that each person would get, from the state a minimum income, a basic amount of money that is considered essential for living with no/few other benefits.

The current benefits system is hard to regulate, often quite inflexible to people's needs, difficult for people to understand exactly what benefits they can claim or not claim. People can get trapped on benefits as they fear they will lose benefits the instant they get a reasonable job, they can end up being worse-off having to pay for child-care while they are working or simply that they have no benefits. Temporary jobs may not pay, it require people to "sign-on" again, there may be delays in receiving payment from the state, there are many factors that can made people nervous about taking jobs. Under a Basic Income scheme a person would always be better off taking work.

Another advantage of the Basic Income scheme would be that it should open up more of a market at the lower-end of the pay scale, companies would have to become better employers or they would find people unwilling to do the job, the job would simply not become worth-it. The Minimum Wage would be greatly reduced by this act, allowing companies more freedom in how and who they employ.

Job centres would become not places to try to monitor people's efforts to find a job, to sanction them if they are not deemed to have done the right thing (which often can be overturned) but they would become solely focused of linking people to jobs. They would be focused on talking to potential employers, helping to solve public transport issues that may prevent people taking a job, talking to places that need seasonal work to make sure people are free.

Taxation could start at a much smaller income threshold, as I said above people would always be better off taking work, even if we are taxed from the first £1 raised.

By some estimates people need roughly £75 per week as a minimum income but would receive no other benefits, the only exceptions that I would make are around social housing and disability benefits. Housing has been priced-out of the range of many people and the country cannot provide sufficient funds to cover the cost of housing for everyone in the country.

How would Basic Income affect people?

• Children could have their funds divided, some money going to the parents for living costs, some money going into child-care/education vouchers. If £50 of the child's £75 per week were diverted to their education then the school would receive £2,600 per child per anum, vastly reducing the amount of money they state would need to spend on the schools individually.
• Unemployed people would have the safety-net of the minimum income but they will always be better off finding a job. They would not be trapped in unemployment. Though the state may have to improve adult education/retraining etc.
• Low-income working-age people would have a safety net should they become unemployed they would have the minimum income, though there would be no more national insurance scheme to give extra money should your company collapse.
• High-income working-age people would not necessarily feel the benefit from this, they would probably be the ones hit by higher taxation but I believe that this is a price that we have to accept for more social cohesion.
• Pensioners would no longer have the state pension, instead they would get the same Basic Income as everyone else in society.

The downside of a Basic Income is that the richest in society and our companies need to accept the potential for higher taxation, at an assumed £75 per week per person this would cost the UK around £250bn (assuming a population of 70m people). According to the Office for National Statistics, we spend about £110bn on pensions and £44bn on Family benefits, income support and tax credits, assuming that we can make savings in some of the areas we need to raise £50-100bn in extra taxation. This would be hard for the richer in society to swallow but this is now a fundamental debate about the kind of society we would like to have.

Build More Social Housing

This is, I guess, a very specific case of non-London infrastructure but I think this applies to London as well as the rest of the country, it is a very specific area in which I feel the UK needs to improve.

In 2014, it is estimated that up to £25bn of housing benefits could be going to private landlords charging closer to market rates. This is a phenomenal amount of money that is being taken out of the social system and that I believe that the rents payed to private landlords are higher than those that would be paid for state based social housing.

It is my belief that it was a mistake in the 1980's to introduce the right to buy without allowing the councils to build more social housing. I firmly believe it is the duty of the state to help people who are in need of a home, and as I said with the Basic Income section we cannot afford to pay everyone enough to afford market rates in our booming housing market.

Councils need to rebuild social housing for changing demographics, the housing stock from the 1960's was probably not the best suited to the increasing numbers of single people in need of housing benefit. Had we been building more social housing since the 1980s we would have built more housing for single people and there would have been less need for the spare bedroom subsidy (aka the bedroom tax).

My view is that we should change the nature of the rent paid for social housing. Of all the benefits, I would means test this, the rent a person pays for their housing would depend on how much they earned. If a person could afford to pay for a similar property but at market rates outside of the state system they would be charged more than the market rates, to subsidise the rents of the poorest people.

I also support the right to buy but I think that this should have always been a case where the money raised should be re-invested into the construction of new social housing. Assuming that someone could purchase their council property at roughly a two-thirds discount, I believe that there should be restrictions on the properties bought at a massive discount from the state:

• It should not be possible for the person who bought the council house to rent it out (except perhaps rent a room where they are still resident) for a period of 10 years.
• If the property is sold within 5 years then a third of the property's value should be paid back to the Council.
• Over the following 10 years (5-15 years) the amount that would have to be paid to the Council should be reduced by 3% of the property's value per year.

These safe-guards would prevent opportunism of people buying cheap and selling on to others for a massive profit. It protects the people who do need to move from fluctuations in the market, if the market drops they are only liable for a third of the sale value rather than a third of the original value of the property.

This may have a massive effect on the current housing market, may cause a devaluation in the market and a recession, which is why it may not be politically possible in the current climate. However, I think that the current market is not working for the majority of people, with house prices being over-inflated outside the reach of many people and so a readjustment of the market is needed. On the positive side, a large-scale social housing construction project would provide thousands of jobs and boost the economies.

Conclusion

I don't think that all of the above will build true equality, but they are stepping stones on the way to reducing both political and economic inequality in the UK. They are ways to try to help empower people, to give them the basic needs to live and eat while not trapping them in poverty, to build jobs to grow their regions without drawing people to the major cities and leaving the poorer regions to suffer.

Recent Posts

See more posts...