ConservativeHome's 100policies

Matthew Dear: Business tax credits

Matthew Dear has worked in the voluntary sector since 2002, and is married with two young children. He has a degree in Theology from Oxford University, is a committed Christian, and is an admirer of the campaigning tactics (if not the politics) of Bill Clinton.

> Policy Summary

To enable medium-sized and large businesses to earn a rebate on part of their overall tax bill through showing evidence of effective corporate social responsibility programmes.

> Policy Explanation

It has long been recognised in Conservative circles (and beyond) that the voluntary sector has an outstanding track record of providing help and services to the vulnerable (in areas as diverse as palliative care, social housing and international development), and that there is a need to move away from the expensive “keyhole surgery with a hacksaw” approach of publicly-funded, publicly-managed services working in this sector.

New Labour’s PFI initiatives have proved to be the worst of all possible worlds – having been bureaucratic and overly expensive, and having exposed these vital services to vested int

erests and potentially unhealthy influences from large corporations, with few, if any safeguards.
The challenge is how to strengthen voluntary sector provision without recourse to public funds and all the waste and hazards that this would bring, at the same time as ensuring the voluntary sector’s independence to get on and do what it does so well.

Under this proposal, companies would be able to deduct from their overall tax bill the total cost (as appearing in their audited accounts) of such things as setting up charitable trusts and foundations (this programme subsuming and bettering the current tax-deductibility of donations thereto); gifting employees’ time and expertise to voluntary initiatives; innovating such activities from scratch; and creating jobs in the UK (say, a rebate on the costs associated with the recruitment process for new – but not replacement – positions, thereby encouraging growth.) It would be counter-balanced by a tightening of more traditional “no benefit” tax-avoidance loopholes and strengthened enforcement of tax evasion.

> Policy Risks and Opportunities

As a policy it would have a broad appeal – it would appeal to “the Right” as it is eases the tax burden on wealth-creators; and to “progressives” as it incentivises business and corporations to engage with civil society – strengthening the latter and contributing to social change.

It diversifies provision of such services – outsourcing, but without being seen as ‘privatising’, which is an unpopular term with the public. There would need to be a legal curb on the influence that companies providing funding can have on the services provided, especially having regard to possible vested interests.

The policy may need to be branded to as to disassociate it from the existing Tax Credit system, which a new Tory government will likely overhaul, replace or abolish on account of it’s gross complexity. In that vein, it would be important that this policy’s operation should be as simple as possible and not be seen as extra bureaucracy for businesses who already struggle to cope with paperwork – something that a new Tory government should also address.

> Questions for ConservativeHome Readers

• Can you suggest a less “Brownite” name for the policy?
• Offering a tax-deduction on all spending is bold but could be too expensive – how do readers feel?
• Does the potential size of this scheme leave it open to abuse?
• What legal restrictions should be placed on the role funders play in shaping the direction of the services they are providing?

> Costs

It may be possible for this policy to be funded by a reduction in demand on some public services and particularly in “waste” spending on activities anciliary to PFI (legal, consultancies, over-tendered contracts etc.) The closing of other tax loopholes should also help with funding.

 

Alex Deane: Remove the broadcast regulations on impartiality

Alexander Deane is a barrister, author and former Chief of Staff to David Cameron.  His recent articles for ConservativeHome's Platform section are posted here.

> Policy Summary

Remove the regulations currently in place on broadcast media (i.e. TV channels and radio) that require them to be politically impartial.

> Policy Explanation

Unlike the print media, broadcast media in the U.K. is required by law to be politically “neutral.”

One instinctively has sympathy with the perspective of those who support the regulations because they oppose bias in the presentation of news, as opposed to comment and opinion.  But people are perfectly capable of understanding that sources have different perspectives – look at the market for newspapers of different points of view.   And alas, the neutral newscasters envisaged by the regulations don’t really exist in the current environment anyway.  There’s great bias is in the system already – but it’s all one way.  Rather than ensuring neutrality, the regulations serve to protect the institutional left wingery of our national broadcaster, and stifle any real ripostes.

> Policy Risks and Opportunities

Opportunities

As I have made clear in this post I support the creation of a news channel that is overtly of the right, which this policy would facilitate.  Such a channel would not be a cheerleader for the party, nor could it be if it is to maintain credibility.  It would no doubt criticise the Conservatives from time to time – from the right, just as the BBC criticises the Government from the left (on education, Iraq, privatisation etc) or over questions of implementation and emphasis.  Thoughtful criticism from within the conservative caucus can only be of interest and assistance to those in the parliamentary party interested in genuine debate.

The change would help the BBC, whose awkward position vis a vis the taxpayer probably helps to explain the continuation of this restraint of freedom of speech in the first place.  The Beeb could lose any lingering guilt it might have about its constant leftism.  There’s a place for that analysis, after all; but it shouldn’t be the only analysis.  On the other hand, it may be that the Beeb remains the sole broadcaster bound by a neutrality requirement, as it’s state run.  Perhaps the policy will therefore be the catalyst for privatisation of the BBC or at least the TV element (well after time).  Or perhaps the most fervent of its correspondents will go to the new Leftist News Corp.  In any case, the brickbats (fairly) thrown at it would cease when there is balance in our media.

Risks

This change would by no means be purely in conservative interests.  It would assist freedom of speech for everyone, right across the political spectrum.  Judging by the prominence Waterstones always gives those left wing mags one has to push aside to get to The Spectator, there’s clearly a market for a channel for the far left (it could be called Red TV – though on reflection, perhaps that’s already been taken..!?). 

The point is that we should be for this freedom on principle, as well as for the pragmatic reason that it will benefit us – we are for freedom for everyone, and once that freedom exists, we should have faith in the fact that our arguments are strong enough to win in the open market.

> Questions for ConservativeHome Readers

• Do you think (as I do) that such a change would benefit the right more than the left?
• Do you believe (as I do) that there is an important principle concerning freedom of speech at stake?

> Costs

None – indeed, the deregulation and consequent advertising on specialised media would generate profits and subsequent tax revenue.

Mark Wadsworth: A House of Lords representing local government

> Policy summary

Existing life and hereditary peers will only be allowed to sit and vote in the House of Lords (“HL”) if they are nominated by a local authority (“LA”).

In turn, each LA will be allowed to nominate a number of peers to represent it, depending on how many MPs represent that area. LA means the lowest level, in other words a City council but not a county council; a London Borough but not the GLA.

The HL will be given full powers to propose bills and to amend, block or veto legislation referred from the House of Commons. Responsibility for allocated regional funding will be taken out of the hands of Whitehall and be given to the HL.

> Policy explanation

A reform of the HL has been on the cards for a century, and while it works better in practice than it should in theory, there are problems with the perceived lack of democratic legitimacy. Because of this, the HL is very much a secondary power; it can only delay legislation and cannot vote on or amend the Finance Bill. Thus power is incredibly concentrated in the hands of the Prime Minister. As an indirectly democratically appointed Chamber, there is no reason why the HL should not enjoy the same powers as the House of Commons.

As some contributors pointed out in the discussion on a National Waste Management Strategy, LAs should be given more power to experiment; some experiments will go horribly wrong, but councils will hopefully learn from these mistakes (or be booted out). The government seems happy to adopt a liberal immigration policy and adopt EU regulations wholesale, but it is LAs who have to deal with the problems that this causes. LAs have relatively little real power or responsibility of their own and no power to influence legislation. Under this proposal, centralising bills that impose unnecessary burdens on LAs are much less likely to be enacted.

Thus this measure would kill at least two birds with one stone.

A directly elected HL is not really a runner, because MPs fear that they would have to share power; most people are already allowed to vote at local, regional, national and EU level, but it is only the General Election that matters; adding yet another layer of elections would impose extra costs without any real devolution of power; and finally, this would be a terrible break from tradition.

There are around 20,000 local councillors; the breakdown by party is closely proportional to each party’s overall national share of the vote, and around nine percent of councillors are independent. Local councillors would be able to vote for peers from a shortlist on a "first, second, third … past the post" system, so that large City councils (Leeds or Birmingham, with eight MPs each) would nominate peers from all parties. In smaller LAs, such as the London Boroughs (two or three MPs each), which are narrowly controlled or NOC, the two largest parties would nominate one or two peers each.

Nominations will not always be along party lines. For example Newham Council in East London is Labour controlled, but might well nominate Lord Coe, as the face of the 2012 Olympics. Westminster, with its many theatres and cinemas, may well nominate Lord Lloyd Weber or Lord Attenborough. And in rural areas, it is quite possible that the local hereditary peer would be chosen.

Hardworking and experienced peers such as Baker, Howe, Ashdown, Owen, Williams or Kinnock should have no difficulty in finding a nomination. Barnett Council (which includes Finchley) has one pretty obvious candidate...

The “loans for peerages” affair suggests that wealthy businessmen are prepared to pay £1m for a life peerage. While this policy would not interfere with the way in which life peers are appointed, a life peerage in itself would only be an honorary title. To actually be able to vote in the HL, peers would have to find a LA to nominate them, which would make buying a seat in the HL prohibitively expensive.

Turnout at local elections, which is very low, would increase because voters are getting two votes for the price of one, they can directly influence the composition of their LA and thus indirectly influence the composition of the HL.

A related topic is regional funding. There is increasing disquiet over the Barnett Formula; the London Weighting is the equal and opposite of this. The way in which the Department for Communities and Local Government allocates the Formula Grant of around £60bn is one of the worst examples of central interference imaginable. Even though Conservative and Lib Dem councils in the South East and South West have the lowest spending per capita, the Formula Grant is skewed towards Labour controlled Councils, so that Labour Councils have, on the whole, the lowest Council Tax bills. If all LAs are allowed to agree the allocation between themselves, acting via the HL, self-interest will probably lead to a situation where the grant is allocated equally to all LAs.

> Political risks and opportunities

This policy is not a primarily a party political issue; it is intended to redress the imbalance of power between Whitehall, the HL and democratically elected LAs. As most political activists and party members are at local level - and may well be local councillors - there is no reason why the proposal should not be popular to members of all political parties.

It is true that the Government of the day will not be over-keen to implement the proposal (short of their being a hung parliament or coalition government), but on the other hand, most local activists, even in the party of Government would support it, and the idea that voters can influence the composition of the HL, even if only indirectly, must be a popular policy.

Neither is the policy particularly radical; in the short term, the members and composition of the HL would remain broadly the same and there would be a similar number of the same peers, although it would move closer to proportional representation.

> Questions for ConservativeHome readers

• A balance has to be struck between the independence of peers and the power of councils to withdraw their nomination from peers who do not vote in the interests of the council that nominated them. If peers have to seek re-selection every four years (the normal electoral cycle for most LAs), then LAs have more power and peers less independence; if peers are nominated for a longer period, the reverse holds. Which would be the ideal term – four years, ten years or for life? In the last case, should LAs be allowed to withdraw a nomination in exceptional circumstances?
• It will seldom happen that any party has an overall majority in both Houses of Parliament, thus legislation will be enacted on a much more conciliatory and inclusive basis, with the emphasis always being on continuity and the devolution of power to LAs. Is this in itself a desirable outcome?
• Would the proposal have any unintended consequences?

> Costs

The cost to the taxpayer will be minimal, as it does not involve any major reforms or a further layer of elections.