EU: Making A Failing Democracy Worse

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I promised that I would dip a toe into the acid bath of EU matters, and with my feet well protected in rubber boots I will wade in….ankle deep at any rate.

Whatever your viewpoint, the first fox that needs shooting is that the EU is primarily an economic organization. In my view, that is a diversion. It is actually a political structure that lists economic management as one of bailiwicks, and uses economic arguments to further its statist ambitions. Once you accept this proposition then the debate about whether we should stay in the EU or leave becomes more a matter of political taste and where you sit on the tribal spectrum.

It was the vision of European leaders that the EU would use political, economic and social policies to unite the continent in an ever closer union in order to suppress the nationalistic tendencies that did so much damage during 2 world wars. For the founding fathers, political union was accepted as being a long game but it would become inevitable once centrally imposed social and economic policies developed poorer countries and ultimately bound them together in a unified political process. Harmonised fiscal and social policies, a single currency, a parliament, commission, foreign policy and, as recently announced by Juncker, an aspiration for an EU army, are much more than an economic single market. They are the trappings of a state.

Now there is no doubt that the EU has been beneficial for former Soviet Union countries like Poland. However, the question is whether a political union is still necessary to save Europe from itself and maintain stability in the post Cold War era? In my view it is no longer necessary. For a start, it is pie in the sky to think that the EU could ever deploy its own army. There is just too much historical baggage and a plethora of differing opinions for effective policy formulation. Think about the current and past EU foreign policy disagreements such as the Yugoslavia fiasco, and more recently, the different attitudes within the EU towards Russia. This is why NATO, acting solely as a security mechanism and backed by a strong US should remain the foundation of Western European security. The alliance has a clear mission that is universally supported by its members, and its security focus is unencumbered by the distraction of European political state-building. Moreover, it is my view that free markets in goods and services will ensure the economic interdependence of states and act as a far tougher glue than any social or political engineering by a central European authority.

Turning to the politics, the EU is essentially dominated by socialist and social democratic parties that have an altogether different viewpoint that is at odds with the political culture here. Despite the current polling balance of left and right parties in the UK, I believe that the British instinct is essentially Conservative in nature and not in the mould of European social democracy although I would accept that the situation in Scotland currently seems to be different to elsewhere (but watch what happens when they are responsible for raising their own taxes). This difference in political culture is readily apparent by the behaviour and constitution of the European Parliament which by British standards is as left-wing as anything we have seen here in the UK since the Michael Foot days. Whilst the British electorate periodically elects Labour governments it only does so when the Party moderates its politics towards the centre, and in my view this demonstrates that mainstream Britain sits further to the right of the political spectrum than most of our European neighbours.

Whilst differences in political culture causes practical problems for policy, my main issue with the European project relates to its size. I have previously discussed some of the factors that seem to be undermining the credibility of our political process here in the UK, but perhaps the main issue is the feeling that politicians are too remote and that voters feel unrepresented and unable to affect the outcome of the political debate. For many, it seems that a vote cast has little value, and voters therefore feel powerless and disenfranchised from the decisions affecting their lives. This problem is not just confined to the UK and is characterised by the rise of extreme and populist political parties at each end of the spectrum with potentially destabilising implications. When voters become disenfranchised they eventually take matters into their own hands by voting for decisive change with unpredictable results. Witness the rise of the far right in France, for example.

History suggests that the feeling of disenfranchisement gets worse as political structures get larger especially if power is retained centrally. It is far harder to represent an individual voter’s opinion if he/she is one individual in a massive sea of people with different political views and culture. On the other hand, whilst smaller structures improve representation they can be inefficient and prevent administrations from balancing competing needs between regions. It comes down to balance again, but one things is for sure, if the existing UK political structures have become too large and distant for voters, then we are making the situation worse by hitching our wagon to the European monolith where the democratic deficit is magnified tenfold.

I am increasingly concerned about voter apathy, cynicism and disenfranchisement and where we might end up if we don’t fix this democratic deficit soon. The more I have reflected on the matter, the more I am favouring a massive devolution of power, including taxation, away from a central federal government based at Westminster down to some newly created English regions plus Scotland, Wales and Northern Ireland. We have a population of 65m, and with other countries operating very well with populations of 6 million or even less, there is plenty of scope to design our regions such that they would be economically viable and capable of operating more like the states in the US. Decentralisation to a federal model would increase local political accountability and promote voter engagement. Crucially, as part of this project, we should take back powers from Europe and return them to the British people. Decision making needs to come closer to the people not further away from them.

There are many that argue that we would be damaged economically if we withdraw from the political structures of the EU but I believe this is a disingenuous distraction with political undertones. I will offer one fact that illustrates why trade with the mainland would continue whatever political alterations are made to our relations with the EU: half of the cars that are made in Germany are purchased in the UK. We just buy too much of their stuff for them to close their trading doors to us.

This is a political matter not economic. We need to bring decision making closer to our electorate, and EU integration is going in the wrong direction. I would vote OUT in a referendum at the moment but I remain open-minded about potential reform. The changes would need to be significant, however, rather than superficial.

More hay and rumination, Fritz and Pierre?

Pick and Mix Policies for the Politically Homeless

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The problem with tribal politics is that politicians and voters are forced into narrow categories where there is little scope for interpretation or shades of grey (no we’re not going there today). Politics has always been tribal to some extent, but the 24 hour scrutiny of a media that is hungry to write stories about internal divisions has made party politics even more partisan and boring. The Whips hold sway, and with some notable and interesting exceptions, politicians rarely put their head above the parapet to challenge their party orthodoxy with interesting and new ideas. I discussed some of this in a previous post, Avoiding the Debate.

Recently, I have started to reflect on which political pigeon hole I should adopt as my home, and I found that I don’t really fit anywhere particularly well. I suppose if I was forced, I would say that I’m socially liberal but economically conservative. I believe that self-reliance should be promoted wherever possible as it enriches lives, but on the other hand I want the State to provide a temporary safety net for those of my fellow citizens that fall on hard times. But, note, a safety net not a means of dogmatically redistributing wealth, and so I would place limits on the extent of taxpayer support (see here for my post on the welfare state). In a similar vein, I think that the State should be as small as possible for efficiency but that does not mean zero state activity as government intervention in some areas is necessary and beneficial. I don’t think governments should run trains but they should run the security services and law enforcement, for example.

Even on other economic matters I do not necessarily adhere to conventional doctrine as whilst I believe in a free market I also think that limits should be placed on its excess. I don’t want higher taxes but I do think Google and the like should pay their way if they expect to trade here. Similarly, I’m not opposed in principle to the private sector providing public services so long as it is properly regulated to ensure the necessary standard. Sometimes, the private sector can do a better job than civil servants, and that can offer value to taxpayers so long as we don’t get ripped off. And, finally, do let the bankers make loads of money so long as its not at our expense, they pay their taxes and they don’t rely on us to bail them out when they cock it up.

On other topical matters, I have decided that on balance I would like the UK to leave the political and legal structures of the EU and to implement proper immigration controls (see post here) for the benefit of all the people living in these Isles. Yet, I also want to protect the rights of our existing immigrant population now that they have settled here. I see them as British as myself. On civil rights, I believe in our democratic rights and legal system but I also think that with citizen rights come responsibilities and that the balance occasionally gets skewed the wrong way by inappropriate laws some of which are imposed from outside the country. On social affairs, what’s wrong with gay marriage, for example? Why should I try to stop someone experiencing the same happiness that I have found in my own union. It affects me, my lifestyle and my country not one jot. It is only religious and extreme political dogma (see post here) that would oppose such ideals and I have no truck with that.

I think a bit of me is also nationalistic in the sense that I believe we should act in the interests of the UK and all its citizens. Now that may sound a bit scary or suggest that I could be a closet EDL or BNP supporter but I could never vote for them because I believe in the equal rights of all British citizens whatever their ethic origins or religious beliefs. I believe that the UK should continue to play a role on the international stage but with our own interests placed at the centre of our approach to diplomacy and international aid, and not necessarily for the benefit of those around us (depending on the issue, they may coincide, of course). In this regard, I would like to see us deploy our overseas aid budget more strategically to support foreign policy.

Above all, I want to feel that I have some kind of influence on what happens around me. That means that I am gravitating away from the centralized Westminster political model towards a more federal system of government. That is the preferred Labour answer for English devolution if I correctly understood their comments following the Scottish Referendum. Following my earlier post on Devolution, blackandwhiteram made some interesting remarks about the US federal system, and on reflection I think that the size of our population could now make a similar system viable for the whole of the UK. A fully federal system would allow the regions to tax and spend (but not borrow) in order to provide services but with a greatly reduced federal government at Westminster providing mainline services such as defence and foreign policy. There are some difficulties with this model which we discussed previously and it would be necessary to design the regions carefully (or come up with an English Barnett formula to reduce regional inequality – see the Devolution post I linked). A federal system needn’t cost a lot more if Whitehall was reduced in size and a layer of local government stripped away to make space for the regional assemblies or whatever you want to call them. Most importantly, it would improve voter representation and influence, and we could get away from this charade that is currently taking place in the run up to the general election.

So I am indeed politically homeless. There are signs of new thinking. I notice that Tim Montgomerie has started to promote a right-leaning initiative that challenges the Conservative orthodoxy by introducing an element of social justice, and maybe this is a sign that some of the dogmatic political boundaries are starting to erode. Its worth a read although its still not quite right for me.

So, homeless for the moment. Good job I’ve got a sheep shed to sleep in.

Devolution: Who’s Accountable?

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Since the Scottish referendum, there has been much discussion about devolving power down to the regions, and the recent announcement by the Government that it intends to devolve a £6 billion health and care budget down to the Greater Manchester area has been largely greeted with approval across the political spectrum. For sure, it gives local authorities the responsibility to set health and care priorities and to shift cash around but does it actually increase accountability and promote value for money for the taxpayer?

Well, I expect that there are few that would disagree that centralized structures are unwieldy and often struggle to get value for money despite the attractions offered by the economics of scale. We’ve heard about the £10 Whitehall paperclip too often for this not to be true. There is also no doubt that a centralised and corrupt political system often directs resources for political purposes rather than on the basis of actual need. Where it is allocated altruistically, it is often misdirected owing to a lack of understanding about particular local conditions and requirements. Local spending also gets better scrutiny and is more transparent as budgets are smaller and easier to inspect than the national versions.

Devolved budgets look attractive then, but in my opinion it is only by owning the right to spend and to raise revenue that proper democratic accountability can be enforced. If it is only the power to spend a budget that is devolved then there is little to stop the spender using up all the cash and then pointing to the central government when it finds it has run out of resources. ‘It’s not our fault, you haven’t given us enough’ will be the excuse. Particularly from a Labour-run council with a Conservative Government (or vice versa). On the other hand, if an authority has to raise the cash that it wishes to spend then it is totally accountable for both sides of the equation. It may decide to raise more revenue through an increase in local taxation and spend a little more but to do this there will have to be a conversation with the local electorate who may see things differently. That is proper democracy at work and a powerful driver for encouraging tax-payer value for money. Moreover, if that conversation takes place at a local level then the debate is often better focussed and able to highlight the real issues rather than a centralized argument that gets lost in all the Westminster noise.

So, it’s an open and shut case: we should devolve the maximum power down from the centre. Well, perhaps not. Whilst a centralised treasury sometimes misdirects resources through corrupt politics or incompetence, it does allow the central authority to at least have a stab at resolving geographically competing needs. If we fully devolved tax-raising and spending powers to small regions then the sparsely-populated or poorer areas would be completely disadvantaged, and it is unlikely they would be able to offer the same standard of services. In extremis, this could encourage significant population movements
to the metropolitan areas which could be destabilising and suddenly increase the pressure on services in particular areas. On a more philosophical note, I suppose one aspect of belonging to a country is that the population has a common interest in looking after each other regardless of location. Isn’t that why we have the Barnett formula for Scotland? That collective insurance would soon disappear as the devolved regions started to become more like autonomous mini states.

I am instinctively against big government and so the devolved solution looks attractive. But it is not a straightforward case and it requires careful thought. It may be that a half-way house solution that partially devolves tax and spending would provide the right balance of efficiency and accountability. In this regard, a locally levied sales tax (with commensurate reduction in VAT) might be one way of devolving tax raising powers without going the full hog. However, our Union has already suffered some shocks recently following the Scottish referendum and I think we need to move cautiously to avoid the unintended effects of any fiscal actions we take too hastily. It is probably a question of scale. The Soviet Union was too big to run from a centralized authority but, on the other hand, we can’t live in little tribes. Thoughts?