What the Americans can teach us about local democracy

It should be easier to call local referendums in the UK. Politics is too important to be left to the politicians.

On Tuesday we saw Americans in 37 states vote on a total of 157 “propositions” or “initiatives”. These are referendums on an array of issues. Some are significant – others symbolic or of little consequence. Often there are highly controversial or emotive issues that make it onto the ballot paper. There are other decisions which sound, to an outsider at least, rather tedious and mundane.

Let us take California. This year Californians had 11 different propositions to vote on. (One can see how the queues get rather long when there is a high turnout.) In order to get something put to the vote a petition is needed with a sufficient number of signatures. The tally must come to at least five per cent of the number who voted in the last election for Governor. So that might be around 600,000. Some of us have fond memories of Howard Jarvis’s  Proposition 13 which was passed in 1978 and cut property taxes in California by 57 per cent. (Rather equivalent to the “Proposition 13” in Wandsworth the previous month when the Conservatives gained control of the Council from Labour in the local elections.)

Tax is still a subject which crops up – although generally Californians are less keen on cutting it than they were. This year we had Proposition 5 on the ballot, which I’m sorry to see did not pass. The “California Association of Realtors” (what the Americans call estate agents) had helped gather up the signatures. It proposed allowing pensioners wishing to downsize to pay the same level of property tax. Usually moving involves an increase in property tax as it is based on the amount you paid when you bought the house. So if someone wants to move – perhaps due to disability or to be nearer their relatives – they are penalised. That would also free up the housing market and increase the supply available for others. “Exactly,” responded the critics claimed these “realtors” would benefit from extra commissions. I’m sure they would have – but so what if the change would be of wider benefit? Anyway no point in rerunning the Proposition 5 campaign. I feel it is important to accept the result of a referendum.

Californians also voted against extending rent controls, to increase the amount of space farmers must provide for their hens and pigs, and to allow private sector emergency ambulance employees to be required to remain on-call during work breaks. They voted against cutting fuel tax and to end Daylight Saving Time.

The Vox website reports that among votes elsewhere, Massachusetts saw backing for “transgender rights” – effectively that men who identify as women can use the women’s lavatories and vice versa. Here are some of the other decisions:

“Alabama and West Virginia voters passed measures that cease to recognize and protect a woman’s right to have an abortion, while Oregonians rejected a measure to ban public funding for the procedure. But unless the Supreme Court overrules Roe v. Wade, the restrictions protecting the sanctity of life remain symbolic, since they’re not decided at the state level.

“Florida passed the historic Amendment 4, which will allow up to 1.4 million ex-felons to regain their voting rights. Maryland, Nevada, and Michigan are hoping to enact laws that allow same-day voter registration, automatic voter registration, or both, while Arkansas and North Carolina wish for voter restrictions by issuing changes on voter ID laws.

“Arkansas and Missouri both voted to increase the minimum wage, which will give raises to a combined total of 900,000 workers in the two states. And several states voted on whether to expand the legalization of marijuana: Michigan fully legalized marijuana, while Utah and Missouri voted to legalize medical marijuana, and North Dakota rejected a measure to legalize marijuana.”

Americans for Tax Reform, headed by Grover Norquist, notched up a victory in North Carolina:

“In the Tar Heel State, voters have lowered North Carolina’s constitutional income tax cap, currently set at ten per cent, to seven per cent. Voters passed the Income Tax Cap Amendment with more than 57 per cent of voters approving of the measure.

“The state’s income tax rate stands at 5.499 per cent and is scheduled to drop to 5.25 per cent on January 1, 2019. Governor Roy Cooper and the North Carolina Democratic Party came out against the measure, even though the reduced income tax cap of seven per cent would still permit a more than 33 per cent state income tax increase.”

Voters in Washington, Missouri and Utah rejected various proposals for energy and fuel taxes.

The scale of all this popular decision making is pretty extraordinary. The debate about the respective merits of direct democracy and representative democracy has been with us for a long time – the ancient Greeks agonised about it as do the Americans today. I am not suggesting we should go anywhere near as far as the United States. There would, for instance, be no point having a referendum to legalise cannabis in Enfield – as Enfield Council would not have the power to carry out such an instruction from its residents. In any case it would seem an unlikely idea to decide a matter on such a local basis. Would not the junkies from Broxbourne, Barnet, Haringey and Waltham Forest be encouraged to move in. One of my favourite films, The Rise and Rise of Michael Rimmer, is an anti referendum classic.

Yet I would suggest that we should take a few cautious steps in the American direction. Brexit should not only mean more decision-making in the House of Commons but also some powers being passed down to town halls. The existing power to bring in (or remove) the system of a directly elected Mayor offers a chance to shake things up when they are working badly. The effective veto on excessive Council Tax due to the requirement to hold a referendum has worked well – although allowing increases of twice the inflation rate before this kicks in is too lenient. There should also be the power to challenge Council Tax levels that are already extortionate. As with California, it is right that the requirement for signatures on a petition should be pretty onerous. But if such a hurdle is met then residents should be able to trigger a petition to cut the level Council Tax.

What about a referendum on weekly bin collections? Or a planning policy that would ban new tower blocks? The petition threshold is a safeguard against too many issues being put forward – or of them being too frivolous or too complicated and obscure to be understood.

I am familiar with the retort that if people don’t like what their councillors are doing they should vote them out. Should the alternatives not appear much better they can stand themselves. Certainly that is the fundamental remedy. But in much of the country it is not working. Our local politics is ossified. Membership of political parties fluctuates a bit, but is on a long term downward trend. Low calibre councillors are seldom deselected – and so can drift on for years in safe wards claiming allowances. Cynicism has eroded the public service ethos and so good people are discouraged from taking part.

In short, politics has become too important to be left to the politicians. Making it easier to hold a referendum would invigorate the system. Inevitably council leaders will not like having constraints put on their power – especially the amount of our money that they can spend. Rather than undermining council elections, interest and participation would be enhanced. Perhaps some of those motivated to get involved by campaigning on a single local issue might then broaden their interest and become local councillors.

WATCH: Cooper on the reasoning behind her vote against the Labour leadership on tax cuts

The former shadow home secretary speaks of the need for a “plan that is fair”.

1 November 2018 – today’s press releases

We’ve got a veritable torrent of press releases today, starting with an example of the Party being rather more radical than Labour… Cable: £1.3 billion for higher-rate payers should be used to reverse welfare cuts The Liberal Democrats have announced they will be voting against the Government’s plans to raise the higher-rate tax threshold to […]

We’ve got a veritable torrent of press releases today, starting with an example of the Party being rather more radical than Labour…

Cable: £1.3 billion for higher-rate payers should be used to reverse welfare cuts

The Liberal Democrats have announced they will be voting against the Government’s plans to raise the higher-rate tax threshold to £50,000.

The policy – announced in Monday’s budget – will cost an estimated £1.3 billion pounds next year, money which could instead be used to reverse cuts to Universal Credit or end the benefits freeze a year early.

Leader of the Liberal Democrats Vince Cable said:

Government is about priorities. With public services desperate for investment, now is not the time to reduce taxes for high earners. Instead Philip Hammond should use the money to further reverse cuts to Universal Credit or end the benefits freeze a year early.

In Government Liberal Democrats focused tax cuts on lower earning families, and we support continued efforts to do so.

We encourage Labour MPs who disagree with both front benches about the raising of the higher rate threshold to vote with us against it and put pressure on the Treasury to change course.

Police ‘shouldn’t be forced to choose between burglaries and hate crimes’

Responding to comments from Sara Thornton, chair of the National Police Chiefs’ Council, that forces are ‘over stretched’, Liberal Democrats Home Affairs spokesperson Ed Davey said:

The police shouldn’t be forced to choose between investigating burglaries and investigating hate crimes. The Government must give them the resources to do both.

Unnecessary Conservative cuts have taken thousands of police officers off the streets, and put enormous pressure on those who remain.

The Liberal Democrats demand better. We will end the Conservative cuts and invest an extra £300 million to give forces the resources they need to keep communities safe.

Davey: Govt must take action on organised crime

Responding to reports from the National Crime Agency that show the extend of organised crime in the UK, Liberal Democrats Home Affairs Spokesperson Ed Davey said:

The true cost of organised crime extends well beyond the financial impact. It includes the children exploited by gangs, the vulnerable people held in modern slavery and the lives taken by trafficked weapons.

That’s why the Liberal Democrats are demanding an extra £300 million a year for the police, to rebuild the community policing that helps to prevent gangs from operating, and greater investment in the Border Force to stop the trafficking of people, weapons and illegal drugs.

But the biggest threat to the fight against organised crime is Brexit, which risks robbing us of crucial cross-border tools like the European Arrest Warrant and information-sharing systems. That’s why we are fighting to keep those tools, by giving the people the final say on the Brexit deal, with the option to remain.

Welsh Lib Dems Protecting Rural Schools

A new code introduced today by Welsh Liberal Democrat Cabinet Secretary for Education Kirsty Williams is another example of the transformational impact Welsh Lib Dems are having on rural schools and rural Wales.

The new, strengthened code includes a presumption against the closure of rural schools and is part of a wider Rural Education Plan that also includes a Small and Rural Schools Grant.

The School Organisation Code has been revised to include a more detailed set of procedures and requirements that local authorities and other proposers must follow when putting together proposals to close a rural school. This includes a description of a rural school and the schools that fall under this definition.

Welsh Liberal Democrat Cabinet Secretary for Education Kirsty Williams said:

Rural schools are at the heart of community life and key to our National Mission for Education. I want to make sure that we’re supporting pupils and teachers in rural areas and that all our young people, no matter where they live, receive the very best education.

That’s why we have acted to strengthen the School Organisation Code, ensuring that councils and other proposers do everything they can to keep a rural school open before deciding to consult on closure.

Welsh Liberal Democrat Leader Jane Dodds said:

Welsh Liberal Democrats have always uniquely understood and stood up for our rural communities and today is yet another example. Kirsty is transforming rural education to make our schools the best they can be. This shows once again the difference Welsh Lib Dems can make in government.

Brexiter ranks filled with dodgy demagogues

Commenting on news that Arron Banks has been referred to the National Crime Agency Liberal Democrat Brexit spokesperson Tom Brake said:

This is an extremely concerning development. People have known for a long time that the Brexiter ranks were filled with dodgy demagogues, today’s news will be little surprise.

Brexit will cause great damage to this country and it cannot happen on the back of a Leave campaign littered with lies, deceit and allegations of much worse. That is why the people must have a final say on Brexit.

Government inaction on fixed-odds betting terminals ruining lives

Liberal Democrat MP, Christine Jardine, has criticised the Conservative Government’s response to the delay in implementing a planned and much needed reduction in the maximum stake on fixed-odds betting terminals.

This delay is completely unacceptable. The Government’s inaction is ruining lives and they must not be allowed to continue make these excuses that only benefit bookmakers.

The £2 maximum stake for fixed-odds betting terminals must come into force immediately. The damage that is being done to individuals by these machines will persist with hundreds of pounds being lost in seconds, day after day.

Perhaps they can compensate by also extending the maximum stake reduction to online games such as blackjack, where you can also bet and lose some thousands in just one hand.

PM must end FOBT delay

Responding to the announcement that DCMS Minister, Tracey Crouch, has resigned from the Government over their handling of fixed-odds betting terminals, Liberal Democrat MP Christine Jardine said:

When the Minister responsible for a policy steps down, you know the Government is moving in the wrong direction.

These machines are a blight on our society and undeniably damaging to vulnerable people.

Tracey Crouch knows this, so why doesn’t the Prime Minister? Theresa May should come to the floor of the House and explain why this will not be implemented for another year.

Lib Dems lead rebellion against Tory tax cuts for higher earners

Commenting as 21 Labour MPs voted with the Liberal Democrats against raising the higher rate tax threshold, Lib Dem Leader, Vince Cable said:

Despite the best efforts of their whips, 21 Labour MPs put principle above party and voted with the Liberal Democrats against the Government’s indefensible tax cuts for higher earners.

It is beyond belief that a party which claims to stand ‘for the many, not the few’, decided not to oppose the Government on this. Using the money to fund Universal Credit or end the benefits freeze would have been a far more progressive way of using the money.

On Brexit, Universal Credit and now the Budget, the Liberal Democrats have shown that we are the real opposition.

In today’s Budget let’s send the world a message that we will thrive outside the EU

The last Budget before Brexit is a spectacular opportunity to send a message to the world that the British economy will not just survive but thrive outside the EU. In order to do that, some very clear messages need to be sent out. This is the vision thing which neither the Prime Minister or the […]

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The last Budget before Brexit is a spectacular opportunity to send a message to the world that the British economy will not just survive but thrive outside the EU. In order to do that, some very clear messages need to be sent out. This is the vision thing which neither the Prime Minister or the Chancellor seem able to do.

We need a vision of a low-tax, low-regulation economy, which will overpower Germany and France as the largest economy in Europe. The number one lesson of economic history is that freedom works: there is no more robust an economic relationship than that between economic freedom and prosperity. And if you’re going to make a statement, it needs to be a big one – because economic behaviour doesn’t change with small tweaks to the system.

So how does the Chancellor make a big statement with very little money? When I worked at the Institute of Directors, we lobbied the previous Chancellor to pre-announce cuts in Corporation Tax. This made business happy about tomorrow, even though they weren’t that much better off today.

The rate of Corporation Tax stood at 28 per cent in 2010 and has been progressively reduced to 19 per cent today, with a commitment by the Government to reduce it to 18 per cent from April 2020. This what we need now: a promise from the Chancellor to deliver progressive reductions in Corporation Tax until the rate reaches just 10 per cent in 2025. Outside of tax havens, that would be the lowest rate of corporation tax in the world. This is a tax cut as much about the message as the money. Moreover, it is doable over that timeframe because each percentage point costs around £2 billion in lost tax revenue – before taking into account any dynamic supply-side effects which might increase (not decrease) revenue.

HM Treasury in part justified the previous Corporation Tax cuts in the wake of the financial crisis, as being necessary because of the economic shock the economy had experienced. Well, the Treasury seems to think both in the short and long term that Brexit is a negative shock to the economy; and so on the basis of its own argument, it needs to reduce Corporation Tax again, and in the same pre-announced manner.

I’m happy to use the Treasury’s argument against them, even though I fundamentally disagree with their long-term assessment of the economic consequences of Brexit. The problem here is that it’s very difficult to critique the Treasury’s assessment because it seems to have recognised the flaws in its previous methodology – published before the referendum – and abandoned it, but refuses to provide any detail of its subsequent approach and the assumptions behind it.

If HM Treasury is so confident in its analysis, why be afraid to publish it? The suspicion must be that they’re not confident and are only coming up with big negative numbers because of the questionable assumptions they employ about the post-Brexit world.

Research published by Economists for Free Trade (of which I am a part) shows that with the right policies, GDP could be 7 per cent higher – not lower – by 2030 as a result of Brexit. We can argue about how big that number is, but the key point is that it is positive not negative. With regard to no deal, other commentators, such as Open Europe, have recently published research which essentially says, yet again, that all the gloom and doom and Project Fear is way overdone. And they’re not advocating the domestic and international policies of economic liberalisation advocated here, which would increase the benefit of Brexit.

The most important supply-side liberalisation in the wake of Brexit is international, not domestic. It would mean that the UK could use exit from the Customs Union and the Single Market to reduce tariff and non-tariff barriers on imports from all over the world. The static (consumers and intermediate producers pay lower world prices) and dynamic (competitiveness and productivity are raised) gains from this liberalisation, in combination with domestic economic liberalisation, would set Britain on the road to far greater prosperity in the coming decades.

With negotiations not concluded, the Chancellor probably doesn’t want to say too much about the future of the City, but one thing he should be saying in private is that HM Government will unleash the City to ensure that it remains the number one financial centre in the world.

And if the Chancellor wants to make sure just-in-time logistics continue to work smoothly after Brexit, why not spend some more money on road investment to make sure overall transport times are reduced? As with pre-announced tax cuts, pre-announced road infrastructure investment would not break the bank now, or in the future, but it would change the mood music and begin to help people catch the post-Brexit vision of an economy intent on maintaining and improving its status as an FDI magnet.

Where there is no vision, the people perish.

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