ConservativeHome's 100policies

David Cooper: Opposing road pricing and tracking

David is a solicitor who has practised in employment law for 20 years, advising many small and medium sized businesses, and is a branch chairman of the party in South Staffordshire.

> Policy summary

Clear and robust opposition to the Government’s stated intention to introduce road pricing and vehicle tracking (“RPVT”).

> Policy explanation

The broad reasons to oppose RPVT – another tax increase upon already overtaxed motorists (promises of revenue neutrality ring very hollow indeed), the fact that fuel tax already reflects mileage, Government “form” on infrastructure overspends and poor results from technology based projects, and the onward march of the surveillance society and the Bully State – are well rehearsed. A number of further detailed grounds, non-exhaustive and possibly overlapping, are set out below. Some may sound trivial and far fetched but there are analogies with the time honoured principle of today’s satire becoming tomorrow’s reality!

Economic Damage: -

1. Areas served mainly by premium rate roads would become wastelands as their business occupants moved out or ceased trading.

2. Job mobility would decline as a result of increased disincentive to drive to better paid work, with income tax revenue falling in parallel.

3. Great hardship for key workers who needed to drive but could not charge for their overheads, e.g. doctors, health visitors. Exemptions would be perceived as unfair and open to abuse.

4. Mobile service industry (e.g. home deliveries, tradesmen) severely affected as higher overheads were passed on to end users who then reduced or stopped their custom.

5. Consequential unemployment as disposable incomes fell, and inflation as the worst affected sought to recover their increased overheads via higher prices.

6. Possible “last straw” inspiring more high earners to emigrate. 

Hidden Costs and Inefficiencies: -

1. Unproductive public sector payroll increased – car inspectors, camera watchers, data processors, etc.

2. Drivers’ time and resources wasted in attending for fitting of in car monitoring devices. Insult to injury if drivers forced to pay for the devices.

Increased Crime: -

1. Risk of more “hot cars” on the road, untaxed and uninsured, with consequential effect of their involvement in accidents – all the more so if the inevitable increase in the cost of driving instruction led to more unqualified drivers on the roads.

2. No guarantee of data security, e.g. dishonest camera watchers passing details of airport car park users to burglars.

General Law of Unintended Consequences: -

1. Congestion not cured but only moved to non-premium rate roads.

2. Adverse effect on tourist areas poorly served by rail, e.g. Cornwall, Lake District.

3. Risk of serious injustice from system errors, number plate cloning etc.

4. Disincentive for leisure pursuits needing car travel, e.g. sport, out of hours school activities – indirectly, a less healthy nation.

5. Family ties weakened (e.g. deterrent to visit far flung parents in rural areas) and pensioners virtually imprisoned.

> Political risks and opportunities

With our party’s prior support (albeit lukewarm?) for the principle of road charging, misguided as many may have believed this, a fresh policy of unequivocal opposition to RPVT might inspire more allegations of “flip flopping” and “not wanting to save the planet”. Indeed, the grounds for opposing RPVT may be dismissed as scaremongering. We should not hold back on asserting that the grounds for its introduction are far more deserving of that charge, indeed that they amount to a giant confidence trick.

This is, of course, a policy of opposition and does not expressly set out to propose an alternative. The principle remains that the status quo is infinitely better than RPVT. A general question for Conservative Home readers may be “what practical measures not involving further high tax and erosion of freedom would it be better to take against the perceived problem?”

To the extent that face may need saving, there may be no problem confirming that if individual cities wanted to consider such schemes (and felt that they could live with the local consequences), a Conservative government would not stand in their way as long as this had no nationwide effects.

With the Downing Street petition opposing Labour’s RPVT proposals now exceeding 1,600,000, we surely would not want UKIP to tune into the popular mood by proclaiming themselves the only party to be unequivocally opposed to RPVT.

There is every advantage in putting clear blue water between our party and a manifestly unpopular scheme such as this. “No mobility tax/no Big Brother in your car under the Conservatives” is clear and distinct, consistent with our renewed robust opposition to ID cards and our ideal role as a party of incentives and not penalties, and a vote winner through and through. 

Avoiding the massive civil disobedience that might flow from RPVT going live must be a good incentive too (!).

Put at its simplest, RPVT would make our lives a misery. There are great gains to be made from clear, unequivocal and principled opposition to it now.

> Costs

In the first place, look at the savings of not implementing RPVT. The writing off of anything spent on it by Labour prior to its scrapping is a relatively minor issue (think of ID cards again and the marker we have just put down on that issue).

If a fraction of what would otherwise be committed to the infrastructure of RPVT was diverted towards driver friendly road improvements and better rail service, all well and good.

The supposed net profit from RPVT should be ignored in context. Leaving aside the inherent unfairness of such a further tax rise, it is well known that the only other example of road pricing in the UK – London’s Con Charge – is notoriously poor value for money and arguably only profits from penalties and fines.

 

Russell King: Bringing the school year into the 21st century

Russell is a Councillor for Balham Ward, Wandsworth.

> Policy summary

Our current school year consisting of three school terms with a long summer holiday originates from the need to have the children working in the fields during harvest time. I believe that in the 21st century a school year that reflects the economic needs of a modern dynamic economy would brings benefits to parents, kids, teachers and the taxpayer.

Conceptually my proposal is very straight forward - I am simply aligning the school year with the business year. There will no longer be school holidays. However, children will not be in the classroom for any longer than they are now. The extra time available to schools will be used for extracurricular activities such as sports, music and community work (potentially children who are behind in their academic subjects could sacrifice extracurricular time in order to catch up).

> Policy explanation

There are several problems with the current school year:

Impacts on teachers – anybody who knows teachers will be able to tell you that by the end of a school term teachers are exhausted and close to burn out. This is due to the nature of the school year. In effect we ask teachers to cram a full years teaching into about forty weeks. The only way that teachers can do this is to burn themselves out during term time by working excessive hours and then spending the holidays recovering. This is not a healthy lifestyle and has significant impacts on the quality of our education system. First of all, the quality of teaching inevitably deteriorates as teachers get more tired towards the end of term. Secondly, it leads to a very high incidence of stress related absenteeism amongst teachers and thirdly, it results in many teachers leaving the profession prematurely either through early retirement (in order to prevent burn out) or leaving in order to change their lifestyle.

Impacts on Parents – the main impact on parents is a financial one. During the school holidays many working parents have to pay for expensive childcare in order to continue to work. Additionally, holidays for parents and their children are very expensive because everyone is going away at the same time. 

Impacts on Children – the impacts on children can be seen in two areas. First of all, their education suffers as their teachers are often tired and they have to cram in their learning into forty weeks. Secondly, during the school holidays many children (especially those in more deprived areas), participate in unstructured (and often destructive) activities. This increases social problems such as obesity, anti-social behaviour and outright criminality.

Impacts on Taxpayers – we continue to get poor value for money from our education system, which fails to turn out highly educated children well prepared for the economy of the 21st century.

> Political risks and opportunities

The biggest single risk is how teachers will respond to these proposals. Although, I believe that there are significant advantages for teachers we know that any change will be met with some level of resistance. 

The advantages to many parents of these proposals will provide us with significant political opportunities.

> Questions for ConservativeHome readers 

• One of the major issues that need to be tackled is when the children and the teachers get holidays. Conceptually the answer to this should be simple – at any time during the school year (exam times may require a holiday embargo). Teachers can have up to 25 days a year (similar to other professions). The disadvantages of not having a teacher in school for a day (or even a couple of weeks) should not be an issue when compared to the benefits of having energised teachers who have had plenty of time to prepare for lessons. I do not believe that taking the children out of the class for holidays will cause a significant headache for teachers. All children by the end of the year should still have had the same amount of teaching. Am I downplaying the holiday issue?
• One of the (many) problems in our education system today is that many policies from Westminster assume a one size fits all approach is best. In reality every school is different and faces different circumstances. Therefore, would we want to roll this out to all schools or would we want to run pilot schemes? Alternatively we could ask schools to opt-in or force schools to hold referendums allowing parents to vote on whether the school year changes.

> Costs

When the total costs of looking after our children are taken into account, including education, youth services, extended schools, childcare, etc and given that our schools and wider services are currently awash with cash, I do not believe that the extension of the school year has to incur an increase in costs (although there are issues about how this money is reallocated). I do not expect teachers to do any more work (teaching in the classroom being only one element of what a teacher does in school) than they do now. In fact, we are improving their quality of life. Therefore, I would not expect to see an increase in teacher costs.

 

Andrew Morrison: Close directors' dividends loophole

Andrew Morrison is a member of the Scottish Conservative & Unionist Party's Policy Forum.

> Policy summary

To close the tax-loophole whereby directors pay themselves dividends out of their own companies in place of a salary which often results in a nil tax liability whereas the typical employee of the same earnings would be paying 22% income tax and 11% national insurance.

> Policy explanation

Although technical in nature, it is important that the ordinary taxpayer comprehends this one issue because at its heart is a fundamental unfairness between ordinary employees, and self-employed people who are able to establish their own small private company, and become directors of that company.  Whereas the employed person receives a salary and must pay tax and national insurance on those earnings, often at very high marginal rates, the person who becomes director of his own company can declare dividends payable to himself amounting to approximately £32,000 per annum and have a nil tax liability.

The Inland Revenue recently entrenched this inherently unfair practice through their Inland Revenue Ruling 35 ('IR35' for short) which provoked an uproar among the accounting profession.  This ruling has served as a 'green light' to directors of smaller and medium sized entities (known as SMEs) to continue this totally legal tax efficiency practice.

The Inland Revenue has a definition in tax law of these smaller companies, which are referred to as 'close companies'.  A company is defined as being 'close' if it is under the control of the directors.  This in practice means the directors have a majority shareholding.

To redress this imbalance in the tax system which deprives the treasury of tax receipts each year, all we would need to do is change tax law so that any dividends made from a company defined as being a 'close company', to a director of that company, so that the sums are treated as being a wage instead.

> Political risks and opportunities

While the Conservative Party, and any other centre-right party for that matter, has typically been affiliated with at least the agreement that a low tax economy is a healthy economy, and at least harbour the desire for a tax cut even if its actual policies are contrary to that, it is important that by actioning this policy we spell out to the public that this is not a tax rise; instead, we are making the system fairer by closing down an easily exploited loophole.

The primary opportunity of this policy is if the treasury is collecting the proper amount of taxes that the spirit of the law intends, then the government will have sufficient funds to offer strategic tax cuts, such as for low earners and abolishing inheritance tax, without being accused of cutting back funds allocated to public services.  This reconciles with the party's pledge to maintain investment in the NHS, and improving the armed forces, schools, infrastructure and so on.

There may be some protests from groups championing the causes of the smaller entity however.  What is needed to counter these is a clear demonstration in layman's terms that we are restriking the balance to employees and directors of owner-managed small companies so both are taxed at the same rates appropriate to their earnings.  Support by the wider public would drown out criticisms from those benefiting from the existing unfair scheme, so long as the issue is put forward in a clear manner that the wider public can comprehend.

> Questions for ConservativeHome readers

• Does this tax reform seem fair, or do directors deserve to earn ~ £32000 per annum tax free?
• Can you think of a manner to sell this policy to the public, so we can gain more political capital from its enactment?
• Are there any other tax-loopholes which could be closed that come to mind?

> Costs 

There are no costs envisaged in implementing this policy, other than resources spent in Parliament enacting the necessary legislation.  What would occur as a result of this however, is a boost to the amount of tax receipts receivable at the treasury.  Increasing tax receipts by collecting the proper amount of tax that the spirit of the law intends would in fact permit the government to cut taxes elsewhere.

 

Jonathan Munday: Rule by Referendum

> Policy summary

That all controversial social and constitutional topics should be put to a compulsory referendum and subsequently enacted.

> Policy explanation

When parliament was set up in the 13th century it took 3 weeks for MPs to travel from their constituencies and it was impossible for them to quickly consult their voters, who had to rely on their judgement. Now with the internet and modern communication it is far easier. There is no reason why important decisions of morality or constitutional or treaty law cannot be made by the electorate as a whole. Indeed there is increasing evidence that MPs as a class are failing to represent their constituents both for Party reasons and because they are different from them in kind - more male, more chattering class, more metropolitan. There is an economic theory called "the wisdom of crowds" that says that crowds i.e. the electorate as a whole are more likely to come up with the right answer than "experts" e.g. MPs.

Social issues e.g. gay marriage, GM foods, hunting, cloning and constitutional issues e.g. English parliament, EU treaties are issues which cut across party lines. Often they are unwhipped. They are issues where the personal opinions of 646 MPs are no more valid than that of their 60 million constituents. They are binary choices of morality or of constitutional importance well within the grasp of the electorate. MPs are elected because of their views on income tax and the NHS, not GM foods. Lords are not elected at all and their views are their own.

The Conservative Party has suffered much over the last 25 years from the media and from special interest group pressure for a social and constitutional agenda that is social democrat and profoundly anti-conservative. This has been promoted ubiquitously in the media and has become the new orthodoxy. To cavil against it has had us described as the nasty party. This proposal allows us to appeal over the heads of the media to the quiet people of England who are much more "small c" conservative. If we lose, at least we know that it is the popular will of the English people and not just the enacted prejudices of a metropolitan elite.

This proposal is that we should enact a law that all these issues should be put to a referendum and then the result enacted. The detail of any law would be left to the government and MPs in the House but as a security, the Law Lords must issue a certificate that the law enacted was in accord with the letter and the spirit of the referendum result before it could take effect. If the government refused to bring in a law, then it would be up to the electorate to punish them at the subsequent GE. Perhaps in the case of a constitutional question, the Queen should have the duty to dissolve parliament and cause a general election, if no law is forthcoming within 24 months of the referendum.

Any political party, which had more than 2m votes in the previous election would be able to suggest 3 referendums over the lifetime of the parliament and any pressure group would be able to ask for a referendum if it could present a petition to parliament with 500000 signatures of voters on the electoral register. Referendums would take place at the next national election i.e. EU or GE so that the electoral admin. and cost were kept to a minimum. In order to stop perpetual referenda on key topics, the Law Lords would have the power to refuse a new referendum on any topic until 10 yrs after the enactment of legislation that they deemed to be on the same topic.

> Political risks and opportunities

The cost of the ballot papers. All campaigning costs would be borne by interested parties.

> Questions for ConservativeHome readers

• Do you trust your MP?
• Can we call ourselves a democracy when there is no capital punishment in the UK despite 20 years of opinion polls suggesting that that is what people want?
• How long are you prepared to wait for an English Parliament or another vote on the EU?
• How well is the House of commons working these days as a democratic tool?