Sajid Javid: Britain has a democratic deficit as big as its budget deficit

Sajid Javid, currently based in Singapore with his wife Laura and four young children, has been a Conservative Party activist for many years and joined the Candidates List this month.  He will be returning home to England next month.  He is a Managing Director with a large European bank, specializing in emerging markets.  In this Platform he urges more powers for backbench MPs, a reclaiming of powers from the EU and a decentralisation of power to local councils and voters. 

Last week, a Commons Select Committee published its long awaited report on a profession that it believes helped cause the current crisis.  MPs found that the profession's remuneration culture was “fundamentally flawed”.  They called for greater transparency and a new code of ethics, and also noted that the followers of this profession displayed a “degree of self-pity, portraying themselves as the unlucky victims of external circumstances”.  As you may have guessed, the MPs on the Treasury Select Committee were referring to bankers and the financial crisis but equally, as we now so plainly see, they could have been talking about their own profession and the political crisis. 

At this point I should declare that I am currently a banker but hoping one day, believe it or not, to join the profession of the members of the Select Committee.  Prior to Expenses-gate, when asked why I wanted to join the political class, I would joke that I wanted to join a profession that had a better image.  Clearly, the events of the last two weeks have decapitated that line.

But the connections between the crisis in finance and the crisis in politics are very real and of grave concern.  Dealing with the financial crisis successfully requires the public to trust the politicians that need to make brave decisions, and accept that they are acting responsibly and willing to be held to account.  It also requires the public, many of whom are facing redundancies, negative equity and economic hardship, to understand why they may have to temporarily pay higher taxes and why certain public services need to be cut.  In his thoughtful speech in Cheltenham last month David Cameron talked of the “Age of Austerity” and of the sweeping changes that we will need to combat the financial crisis:

“I’m talking about a whole new, never-been-done-before approach to the way this country is run….The age of austerity demands responsible politics, [because] over the next few years we will have to take some incredibly tough decisions on taxation, spending and borrowing – things that really effect people’s lives.  Getting through those difficult decisions will mean sticking together as a country – government and people.  That relationship, just as any other, is strengthened by honesty; undermined by dishonesty.”

This is absolutely right and increasingly more relevant.  But if the public continues to hold the political class in utter contempt, why on earth would we expect them to “stick together” with the government?  If politicians can’t show any responsibility and accountability with respect to their own actions, why should they expect the public to?  Many feel that there seems to be one law for the governing class and another for the rest us.  Most people are financially honest, and would not dream of fiddling their expenses or keeping their income from the taxman.  They rightly expect just as much from those that seek to govern them. 

Thus, as well as an “Age of Austerity”, Cameron needs to lay out his stall on an “Age of Integrity”.  It’s not just the budget deficit that has grown to historic proportions, but also the democracy deficit – these are the Twin Deficits of today and must be addressed together.  When a financial crisis collides with a political crisis we ought to be very worried.  Japan experienced the same Twin Deficits we now see at home some 20 years ago, when a serious economic downturn was accompanied by a series of political scandals.  The Japanese lost faith in their politicians, and their economy went through the now infamous Lost Decade.

Cameron has shown a strong understanding thus far on the Twin Deficits.  Conservatives now needs to show that they recognise that the closing of the budget deficit is inextricably linked to the closing of the democratic deficit.  The party political broadcast on Friday was a good start – but, as Cameron rightly recognised, there is a long way to go in regaining public trust.  Only the Conservatives can begin this process and rescue the perilous state of our economy and politics.  In the Age of Austerity speech Cameron smartly laid out how we will tackle the financial crisis, and now its time to do the same on the political crisis.

First, Michael Martin, the Speaker, has to go.  He has done nothing but defend the system of allowances and shown that he is on the side of the executive and not the public.  His speech yesterday was farcical, where he called for a meeting that he should have held ages ago.  Let's also not forget that he failed to defend Parliament when the police came looking for Damian Green.  MPs of all parties should support the brave motion of no confidence in the Speaker put forward by Douglas Carswell.

Second, MPs that have carried out the gravest offences need to be dealt with by their constituency associations.  For those that have committed fraud, the public need to know that no one is above the law.  There also needs to be an immediate overhaul of the Parliamentary allowances regime by independent actors and with cross-party support.  Cameron, again in sharp contrast to Brown, has already shown early leadership on this.

Third, Cameron needs to lay out his vision to restore the power of Parliament.  He needs to give a heartfelt speech on the Age of Integrity – how the Conservatives will make politics representative, transparent and accountable.  At the heart of this must be a plan to strengthen Parliament and give MPs greater power, only then in the longer term can we restore the connection between the electorate at the constituency level and Parliament.  People need to know that their vote counts.  MPs should have greater ability to scrutinise legislation; more power and opportunity to hold the executive to account; the right to appoint select committee chairmen and the heads of significant public bodies; the right to investigate the civil service; the right to contribute to the Parliamentary timetable; and a minimum debating time for major legislation.  The public should also have the right to introduce bills that Parliament would be forced to consider, and we should commit to holding referendums on any major changes to the way we are governed (starting with the Lisbon Treaty).  We should also re-emphasise that we will introduce a British Bill of Rights and explain what it means in plain language.

Fourth, over the last three decades we have ceded far too much power to Brussels.  We need to lay out exactly how we will take much of these powers back, so that Parliament scrutinises and decides on all laws that affect our country.  Furthermore, we need to make clear that we will address the West Lothian question and put an end to the constitutional vandalism of Labour.  English MPs only should vote on issues that affect only England.  With regard to the House of Lords, at a minimum we should make sure that members that break the law are evicted.

Fifth, we should push decision making down to lower levels, allowing the public to feel more involved and, as a result, more accountable.  We should give local councils back much of the power that has been taken by successive governments; elect local police chiefs; give constituencies the right to recall their MP; and allow local voters to veto excessive council tax increases.

The Twin Deficits represent the gravest set of problems facing our country since my political hero Margaret Thatcher became Prime Minister.  We have said how we will fix the economy, and now need to show that we understand that this goes hand in hand with restoring public faith in our politics.  Conservatives have risen to the challenge thus far and represent our only hope.