“It is my unquenchable conviction that if we place our faith in people rather than in institutions, our future, and the future of new progressive politics, is bright.”
Deputy Prime Minister and Liberal Democrat leader Nick Clegg this evening delivered the Hugo Young lecture – you can read it in full below.
Check Against Delivery
Hugo was the great anatomist of British politics of his generation, with a particular passion for civil liberties, European cooperation, government transparency, and pluralism in politics. Tonight, I will argue that progressive politics is undergoing a period of reinvention; a reinvention that would have mostly met with Hugo’s approval.
Hugo was a passionate believer that open politics, a politics based on faith in people, rather than institutions, was the generator of real social progress. I agree, and I think that among the many extraordinary changes of 2010, one of the most important will prove to be a watershed in the development of progressive politics.
There are those who see the crisis in the public finances as a catastrophe for progressive politics. Who believe that cutting the deficit means cutting progressive aspirations. In fact, it provides an opportunity for renewal.
Is it possible to be progressive when money is tight? I will argue tonight that it is.
The need for fiscal discipline is sharpening the choices we face. It is forcing us to be clearer about what it really means to be progressive. With less money, we need more focus.
The need to make choices is revealing an important divide between old progressives, who emphasize the power and spending of the central state, and new progressives, who focus on the power and freedom of citizens. For new progressives, the test is not the size of the state, it is the relationship between the state and the citizen. Old progressives conflate the idea of progress with the control and reach of the central state.
Labour are at risk of being on the wrong side of this divide, and of becoming the conservatives of British politics — defending outdated approaches, rather than looking forward to a new progressive future. In the mid 1980s, a senior Labour politician wrote that Labour must be the “we will make you free” party, not the “we know what’s best for you” party. It is not very often you’ll hear me say this, but I think the author, Roy Hattersley, was right.
I will illustrate the divide between old and new progressives in five critical areas of policy and politics:
– deficit reduction and state spending;
– public service reform;
– fairness and equality;
– and finally, pluralism in the conduct of politics itself.
I will be focusing tonight on domestic policy; in the New Year I will be setting out in some detail the new progressive approach to foreign policy. For now, just let me say that while old progressives instinctively hoard power to the nation state, the new progressive approach is intrinsically internationalist on issues such as Europe, migration, trade and foreign aid.
Nor will I say too much tonight about civil liberties. Not because there isn’t a clear divide here between old and new progressives. On the contrary. Old progressives pose a trade off between individual liberty and national security. But, for liberals, liberty is the guarantor of our security. It is a false trade-off.
For old progressives, national priorities will automatically trump individual freedoms. By contrast, the Coalition Government has already halted ID cards, and set out plans to regulate CCTV and end the indefinite storage of innocent people’s DNA. We will also shortly be published the results of our counter-terrorism review.
Deficit reduction & state spending
First, let me tackle the general issue of the size of the state, and the specific, topical one of deficit reduction in the UK. The old view defines being progressive as being straightforwardly in favour of more state spending and activity. On this analysis, a state spending 50 per cent of GDP is more progressive than one spending 40 per cent – while a government spending 60 per cent would be more progressive still. This is clearly nonsense. The question is not how much the state is spending, it is how it spends it.
The new progressive test for any form of state intervention is whether it liberates and empowers people. There are some areas where a new progressive approach would imply more state intervention and investment, such as early years, narrowing educational inequalities and promoting a greener economy. That is why I have argued many times that it makes no sense whatsoever to use a phrase like ‘small state liberal’. It is not the size of the state, but what the state does, that matters.
This approach underpins my view on tackling the deficit. I reject the idea that it is more progressive to pay off the deficit more slowly than to act decisively. Delay on the deficit will mean higher interest rates on mortgages and a greater burden on tax payers both now and in the future. So while delay might look more “progressive” in the sense of reducing the immediate scale of spending cuts, it is not more progressive if we consider people’s lives and budgets in the round and, if we look to the future.
There is nothing progressive about saddling the next generation with our debt. Progressive politics must also take into account fairness between, as well as within, generations. This is true for the economy and the public finances, and even more so for the environment and climate change.
The Government’s plan for deficit reduction has inevitably dominated coverage of the Government’s plans. If you ask people what we are about, right now many would say paying off the deficit. I am confident that people will see that we are about very much more than this. Reducing the deficit is a necessary but not sufficient condition for our plans.
Out of the fog of war generated by the arguments over the deficit, you can see the building blocks we are putting in place for a better, fairer, and more open society.
Some of the most important of these building blocks will be reformed public services – and this is a second area where the difference between old progressives and new progressives can be clearly seen. New progressives focus on placing power in the hands of citizens, communities and localities, while old progressives prioritize central state spending and standardization.
Let me take the NHS as an example. For old progressives, the NHS needs more money, more targets and more national standardization. For free marketeers, the problem with the NHS is that it is a monopoly with state funded care, squeezing out the possibility of a fully-fledged market in health. For new progressives, the problem with the NHS is not that it is monopolistic, but that it is monolithic. The NHS should offer more diversity, more personalisation, and more flexibility – but all within a tax-funded public system that is always free at the point of delivery.
Personal budgets are a perfect example of new progressive policies, giving social care users and people with chronic health problems more control and choice. We are accelerating moves to personalize health and social care, and we are aiming to have a million budget holders by 2013.
In education the same principles apply. A tax-funded, free education system — but a system that allows for parental choice, diversity, and freedom. Parents and schools should be given the maximum amount of freedom, rather than being subject to control by diktat from Whitehall.
That’s why this government is setting schools free – our vision is that, over time, all schools will become Academies, exercising real freedom over the way they teach and the way they support their pupils. Diverse providers of education in a system overseen by the local authority, acting as the democratic champion of parents and children. The education White Paper published tomorrow takes us a huge distance down that road by opening up the option of Academy freedom to all schools – and I mean all schools, including Pupil Referral Units and special needs schools – so that every school has the freedom to innovate and improve.
Add to that something I have been writing about and campaigning for for years: extra funding, directed at the children who need it most. That is what we are delivering through our pupil premium, which by 2015 will be targeting an additional £2.5 billion a year of help to the poorest pupils in our society, wherever they live.
The state education system, the welfare state, the NHS: these are the institutions and services that make for a civilized nation. And old progressives can be proud of their role in creating them. But if you were building these today you would take a different approach to their early architects. You would start with the citizen and build upwards, rather than starting with the central state and projecting down.
New progressives are committed to all of these institutions. And committed to radically reforming them to better reflect the modern world and contemporary needs and demands. In essence, within these institutions new progressives seek to rebalance the relationship between citizen and state, putting the citizen in charge.
The difference between old and new progressives in their approach to individual power is also visible when it comes to tackling poverty and promoting fairness. Old progressives see a fair society as one in which households with incomes currently less than 60% of the median were to be, in Labour’s telling verb, “lifted” out of poverty.
Now, I am certainly not arguing against this aspiration. But the weakness of the old progressive approach is that it leads to huge amounts of money being devoted to changing the financial position of these households by fairly small amounts – just enough, in many cases, to get them above the line. But poverty plus a pound does not represent fairness. It represents an approach to fairness dominated by the power of the central state to shift money around, rather than to shift life chances.
The other weakness of this approach is that it pays insufficient attention to the non-financial, dimensions of poverty, particularly in terms of access to services. Of course it is better to have more money, even if it is only a little more. But poverty is also about the quality of the local school, access to good health services and fear of crime.
So the old progressive approach to poverty is too narrow. But it is also too static. Can we really think that a society in which people are temporarily lifted above a statistical line by a few pounds is, in the long run, fairer than one in which opportunity is genuinely dispersed and people’s future life chances are fundamentally improved?
Inequalities become injustices when they are fixed; passed on, generation to generation. That’s when societies become closed, stratified and divided. For old progressives, reducing snapshot income inequality is the ultimate goal. For new progressives, reducing the barriers to mobility is. This difference in approach is at the heart of many of the arguments that have taken place about the fairness of the decisions taken in the spending review.
There have been studies undertaken of the impact of the spending review that use one measure – income – at one point in time. And they are valuable for precisely this reason. But they are not a full depiction of all of the things that matter in a person’s life. You cannot airbrush out the services that make a difference to a person’s fortunes: the support you get in the classroom when you are young; the care you receive from the NHS if you are sick; the childcare services you can rely on when you are working. You have to take into account the lives that people live in practice, not that they live on paper.
That is why the Government’s own analysis, which did include services, showed a different picture, one which showed the richest fifth losing the most from the spending review, and the poorest fifth losing less.
Our decisions to protect NHS funding, increase schools funding, and provide additional early years provision all channel resources towards the poorest. The snapshot, income-based analyses are not wrong — they are simply providing a partial analysis of a comprehensive spending review.
Ed Miliband said this week that the UK is a “fundamentally unequal society”. I agree. Let us put aside for a moment that he said this after his party had been in power for thirteen years. He also says that “for some people the gap between the dreams that seem to be on offer and their ability to realize them is wider than it’s ever been before.” Again, I agree. The UK is unequal in precisely the way he identifies – in terms of social mobility, life chances and opportunity to move ahead.
But then comes the lurch to old progressive thinking. Having correctly identified social mobility as the problem, he suggests the 50p top tax rate as the solution. Old progressives are obsessed with one single marginal tax rate paid by a tiny fraction of the population. They focus on one aspect of the tax system – and financially speaking a pretty insignificant one – rather than looking at the overall system. They make a shibboleth of a single tax rate and allow symbolism to trump real reform. By contrast, new progressives want to reform the tax base fundamentally, towards taxation of unearned wealth and pollution, rather than people.
The Coalition Government inherited a complex tax system that was unfair in many important ways. So within weeks of coming into power we had increased the income tax threshold by £1,000 to £7,475 and raised Capital Gains Tax by ten percentage points to 28 per cent. As you know, the Coalition Government has pledged to prioritise cuts to taxes on income, particularly low income, rather than cuts in inheritance tax. In the Budget we also announced that we would examine the case for switching aviation tax from per passenger to a per plane duty, as well as a review of the climate change levy to give more certainty and support to the price of carbon. Our tax system needs fundamental reform, not political symbolism.
The shift, from a static, income-based definition of fairness to an approach focused on mobility and life chances also informs the Government’s approach to the funding of higher education.
It is no secret that the Government’s proposed reform is not the same as the policy my party and I campaigned on. It is taking everybody some time to realize that in a coalition, parties are not always able to deliver on their preferred policy options. This is what coalition means: both partners having to make compromises and neither partner being able to deliver the full programme of a single party government.
But, on Higher Education, I want to be crystal clear. I will defend the Government’s plans for reforming the funding of universities, even though it is not the one I campaigned for. It is not my party’s policy, but it is the best policy given the choices we face.
I know that more protests are planned by students tomorrow. I make just one request of those planning to protest: examine our proposals before taking to the streets. Listen and look before you march and shout. Our plans will mean that many of the lowest income graduates will repay less than they do under the current system. And all graduates will pay out less per month than they do now. Nobody will pay a penny back until their earnings reach £21,000 per year, compared to £15,000 now. The highest-earning graduates will pay back the most. We will spend £150 million a year to lower the financial obstacles for applicants from the poorest backgrounds. For the first time since Labour introduced fees, we will abolish the requirement for part-time students to pay upfront for tuition. These students are generally older and poorer and make up 40% of all students. Providing they are studying for at least a third of their time, our plans mean they will no longer face an upfront fee.
And, perhaps most important of all, we will make sure that universities wanting to charge more for degrees are made to open their doors to the many, not just the few. For those institutions seeking to charge more than £6,000 a year – up to the proposed £9,000 limit – there will be stringent access requirements and real sanctions for those who fail the meet them.
In fact, looked at objectively, our graduate contribution scheme is very close to the so-called graduate tax advocated by the NUS. Except it’s even fairer in the way it’s applied.
There is lots of anger about higher education at the moment and I understand it. I am angry too. Here’s what makes me angry. Oxford and Cambridge take more students each year from just two schools – Eton and Westminster – than from among the 80,000 pupils who are eligible for free school meals. Scandalously, the number of disadvantaged students going to these universities is going down, not up. And a young adult from an affluent background is now seven times more likely to go to university than one from a poor background.
These are the things that make me angry: these are the facts that would make me take to the streets; these are the injustices that our policy will remedy. Higher Education should be a powerful engine for social mobility. Right now it isn’t. Our policies will finally make higher education open to everyone.
The next area I want to address is the relationship between national and local power. Most national governments are formed with a promise to give more power to localities. Most completely fail to deliver on this promise. So I know it is very much easier to preach localism than to practice it. Labour had some important early successes, with devolution to Scotland and Wales especially. But these represented what Professor Vernon Bognador calls “horizontal devolution” — from one level of the nation state to another — rather than “vertical devolution” of power down to local authorities, communities or citizens. In terms of vertical devolution, our recent history is lamentable.
The lure of hoarding power to the central state proved too great for recent prime ministers to resist. Mrs. Thatcher declared war on local authorities. Blair and Brown continued the hostilities.
Localism is an important dividing line in progressive politics and, once again, not one that maps neatly onto party lines. There are localisers and centralisers in all the major parties, although I think the Liberal Democrats can fairly claim to be the most consistent party of localism.
One of the unifying themes of the Coalition Government is the drive to decentralise power. If you are serious about this, it means handing over real financial power. Given that Local Authorities are being asked, financially speaking, to do more with less, we should give them much more freedom as possible over how they do it. That includes the ability for councils to borrow against their future tax revenues, and we are now working on letting councils retain business rate revenues and apply greater discretion to them. And already the Government has removed the ring-fences from more than £2 billion worth of local spending, and rolled 18 separately earmarked grants into the main formula grant.
Opponents of localism protest that local authorities can’t be trusted to keep spending on the right projects, and that provision will varying from area to area. But the real point is this: local authorities will be accountable to their own electorates for the decisions they take about spending and services, just like central government. If people don’t like what national politicians do, they can chuck them out at the next election. This is called democracy. It is just as important at a local, as at a national level. If people dislike local decisions, they can chuck local councillors out, too.
Opponents of localism brandish the phrase post code lottery to dramatize differences in provision between areas. But it is not a lottery when decisions about provision are made by people who can be held to democratic account. That is not a postcode lottery — it is a postcode democracy. For new progressives, the localisation of power – which means, necessarily, of money – is one of the most urgent tasks facing us. Reversing a century of centralisation will not be a quick or an easy task. But we have made a good start.
The final divide between old and new progressives I want to touch on tonight is in regard to their attitudes to political parties and to political pluralism. New progressives are instinctively pluralist in their approach to politics. Herbert Morrison famously said that socialism could be defined as “whatever the Labour party does in government.” But the triumph of one political tribe over another is not the singular purpose of politics. Progressive politics is defined by an openness to parties working together.
For the Liberal Democrats, this is the kind of politics we have been campaigning for for decades. The Conservatives, under David Cameron, have to their credit, embraced two-party working with integrity. For obvious reasons, I think Labour – and, dare I say it, the media – are still struggling to come to terms with it. Our political culture has become attached to binary, “winner takes all” politics, with political argument seen as a zero-sum game, always with one winner and one loser. Labour is in danger of being left behind, of becoming stuck in an anti-pluralist rut. When we practice plural, coalition politics, they cry foul. But if you see every compromise as a betrayal, you will never understand plural politics, and will certainly never be able to engage in it.
The most interesting and important divide in politics today does not fall neatly along party lines or a left-right axis. Perhaps that is why the new politics of coalition, plural politics, is being well received by the public. I hope my Conservative colleagues will forgive me for reminding you that in the election they painted a scary picture of what they called the “Hung Parliament Party”. You may remember that this party was going to be dithering, indecisive and weak. Well, it hasn’t turned out like that. The British public, long assumed to be opposed to the idea of coalition, are now in favour.
The Coalition Government is beginning to rewrite the rules of British politics. It is of course still early days. We are six months into one of the boldest experiments in British politics, six months into a five year coalition government. The new politics is still very much a work in progress. But the early signs are encouraging.
So, there is a clear divide between new and old progressive approaches to policy and politics. Old progressives measure success by the power and spending of the central state. New progressives measure it by the power and freedom of individual citizens.
As John Stuart Mill wrote, “A State which dwarfs its men, in order that they may be more docile instruments in its hands even for beneficial purposes — will find that with small men no great thing can really be accomplished.”
I do not underestimate the scale of our challenges a nation. We face very deep problems: the crippling deficit, threats of terrorism, climate change and social division. But you cannot be a liberal without being an optimist. And it is my unquenchable conviction that if we place our faith in people rather than in institutions, our future, and the future of new progressive politics, is bright.