Coalition’s priorities will make progressive benchmarks hard to reach

What does ‘progressive’ actually mean, and by the time of the next election, how would voters be able to judge if the government had lived up to its rhetorical promise.

Our guest writer is Ed Wallis, editorial manager at the Fabian Society

At the start of the general election campaign, the Fabian Review published a series of benchmarks for the next parliament. We didn’t know who the government would be, but we knew that they would come to power calling themselves progressive. But what does ‘progressive’ actually mean, and by the time of the next election, how would voters be able to judge if the government had lived up to its rhetorical promise?

Before the election, Left Foot Forward previewed the tests and you can read them here. In order to make them fair, achievable and non-partisan, we farmed out the setting of the tests to recognized experts, and limited their scope to areas of policy where there was a semblance of common ground between the three main parties.

So now we have a government (albeit in a somewhat surprising format), a document in the shape of the full coalition agreement, and a date: May 2015, when theoretically the next parliament will end. How does the coalition agreement stand in regard to our experts’ tests? The outcomes cannot be judged until the end of the parliament, but is the framework there to put the government on the right track to meeting them, or are they setting out a different course?

Are health inequalities narrower?

Thankfully the agreement’s opening call for “a Big Society matched by big citizens” is an unsightly bit of political jargon rather than a literal statement of intent, and improving the nation’s health is an apparent priority for ‘the new politics’. Furthermore, the issue of health inequalities is one that all parties have made a great deal of noise about, and David Cameron even went as far as saying he would ‘banish health inequalities to history‘.

The crux of Sir Michael Marmot’s test of progress in the next parliament is “the degree to which a new government puts in place a cross-department strategy to deal with the 6 major domains that cause inequalities in health”.

So to what extent has the battle been taken outside the Department of Health and deep into the fabric of Whitehall?

Well, the ‘NHS’ section of the coalition agreement doesn’t mention health inequalities at all, so perhaps this means the message has been taken on board and the focus of health policy has indeed shifted to other departments?

Actually, no. In fact it seems possible the coalition’s approach will be the worst of all worlds in terms of health inequalities. There is no indication in this document that health is in any way a concern of any other department, but nor is there any suggestion that they rate as a priority for health policy: “We will measure our success on the health results that really matter – such as improving cancer and stroke survival rates or reducing hospital infections.” This seems significant: reducing inequality is not a measure of health policy success for the coalition.

So we find the agreement says; “We will guarantee that health spending increases in real terms in each year of the Parliament, while recognizing the impact this decision will have on other departments.’ Fair enough, but with all health eggs being placed in one basket and repercussions for budgets in other areas, this is the opposite of the “new whole of government approach” Professor Marmot says we need.

Vince Cable warned the Fabians earlier in the year of the dangers of such a policy approach, saying it was “bad economics and bad politics to ring fence any policy”, as it would require “brutal cuts” in other areas. It’s not clear whether the Business Secretary still thinks this, and if not, why he’s changed his mind.

There is a short section on public health which does recognize the existence of health inequalities and states a desire to deal with them. But it’s terrifically vague: “We will investigate ways of improving access to preventative healthcare for those in disadvantaged areas to help tackle health inequalities.”

But as Marmot shows, the problems of health inequalities are not just about access to care: they’re about healthy living, early years’ education, employment and above all, social inequality. There is no recognition by the coalition of any of this, and on the basis of this agreement, Professor Marmot is likely to be disappointed and his test unlikely to be met.

Are fewer children in poverty?

“We will maintain the goal of ending child poverty in the UK by 2020”. This is a promising start, as this pledge is vital to maintaining the political will necessary to achieve what is, as the Labour Government discovered, a Herculean task. But as Martin Narey says in his test, the “danger is that the target will be warmly supported but progress toward it in the next Parliament will be negligible”.

Success will be dependent on the coalition’s welfare reforms and above all, managing to nurse us back to economic health. The argument over cuts appears to have been won: £6 billion now, more to come. Meeting Narey’s target of reducing the proportion of children living in poverty from 18 per cent to 13 per cent by 2015 is clearly dependent on this strategy working, and the David Blanchflowers of this world being wrong about it being a recipe for a double dip recession.

The IDS model of welfare reform has long been debated by think tanks and now it’s going to get a run in government. As Kayte Lawton pointed out on LFF, it is heartening to see a Tory with genuine passion for social justice in charge of this crucial department; but there is much to question in his plans – the proposal to “reduce the couple penalty”, the creation of a single welfare to work programme, and its  fierce conditionality.

On the child poverty test it is a case of wait and see: the goal is there, there is a minister who wants to fix it. The question is how successfully his policy approach translates from the pages of Centre for Social Justice reports into practical measures.

Is the economy greener?

The point of setting these benchmarks was to get ahead of political posturing: to demonstrate the impact of policy rather than its symbolism. The environment is a good example of this: an administration could make some high-profile and important green policy gestures on big ticket items – such as cancelling the 3rd runway at Heathrow – but still make no overall impact on the ultimate goal of reducing carbon emissions.

So, sure enough, the welcome pledge to scrap the 3rd runway is here in the coalition agreement, as is a commitment not to build further runways at Gatwick or Stanstead. But what about the bottom line? How far will the coalition go towards making the economy greener in the long run?

Interestingly, given the Tory’s position on Europe, the government is putting its faith in the EU. The coalition “will push for the EU to demonstrate leadership in tackling international climate change, including by supporting an increase in the EU emission reduction target to 30 per cent by 2020”.

Perhaps this is evidence of tacit acceptance of the importance of the European project for delivering a crucial national aim, and an example of where the Lib Dems have pushed the Tories towards the centre. But it’s possible the government’s power to “push” the EU has been reduced by the Tory’s decision to align themselves with “nutters, anti-Semites, people who deny climate change exists and homophobes”, as the Deputy Prime Minister Nick Clegg once tartly put it.

There are plenty of fleshed out measures on the environment, and this is an example of an area of the agreement where there is evident progressive passion: plans for an emissions trading scheme; investment in Carbon Capture and Storage; smart grids and meters; a green investment bank; feed in tariffs; increasing the renewable energy targets. Even George Monbiot seems reasonably happy.

But there is limited detail and no figures on all this, nor is there any mention of an overall CO2 reduction commitment. So it’s useful to have Jonathon Porritt’s target of reducing CO2 emissions by at least 20 per cent, and by the end of the parliament we will see whether all these measures amount to a hill of beans.

Is society stronger?

In David Cameron’s Hugo Young lecture last year, he quoted approvingly from Richard Wilkinson and Kate Pickett’s book The Spirit Level, agreeing that “among the richest countries, it’s the more unequal ones that do worse according to almost every quality of life indicator”. Wilkinson and Pickett’s progressive benchmark for the government takes this insight to its logical conclusion: “By the end of the next Parliament, reduction of income inequality should be established as a national target”.

But looking at the coalition agreement this has clearly not happened, meaning that the specific goal of “the ratio of incomes of the top 20 per cent reduced to no more than 5 and a half times the incomes of the bottom 20 per cent” is highly unlikely to be met.

The agreement does promise a “fair pay review in the public sector to implement our proposed ’20 times’ pay multiple”. This is clearly a good thing and shows a welcome attempt to establish a national pay ratio. However of course it only applies to the public sector and as such will leave the much greater pay differentials of the private sector untouched.

It will have little if any effect on overall equality. So it’s hard to see this as a measure motivated by a genuine desire to tackle income inequality rather than an attempt – both ideologically driven and in order to bring down the defecit – to rein in the public sector.

One major policy in the agreement that is likely to increase income inequality is the change to the tax system that will raise the tax threshold to £10,000. This is a Lib Dem policy that Tim Horton and Howard Reed said in a recent LFF paper “fails the fairness test”. The paper criticizes the policy for doing nothing to help the poorest who don’t pay income tax; only spending £1 billion of the £17 billion cost on lifting low-income households out of tax; and benefitting rich households proportionally more.

This stirred up quite the debate in the Lib Dem blogosphere, who accepted most of the charges but countered this was a selective reading of Lib Dem tax policy which, when other proposals were taken into account, was redistributive overall. Of course, most of these measures that hit the wealthy – restricting pensions tax relief to the basic rate, the ‘mansion tax’ on properties worth over £2 million – have not made it into the agreement, moving the Lib Dem fairness argument from shaky to non-existent.

Only the capital gains changes have survived, and even those are increasingly threatened by a revolt by the Tory right. So we are left with a policy that will increase income inequality, pushed through by the Lib Dems and gratefully acquiesced to by the Tories – who would have struggled to push through a traditional tax cutting policy on their own steam.

Are people more powerful?

With Richard Reeves leaving Demos to special advise Nick Clegg, he will be in a strong position to monitor progress on his test personally. Perhaps if he had been around for the drafting of the agreement he could have done more to get some firm commitments in from the start.

In terms of giving people more power over the political sphere, there is much in place. It remains to be seen whether the referendum on the alternative vote will materialize and furthermore can be won – success on this is clearly crucial. But there are a plethora of measures to increase citizens’ involvement in democracy: power of recall, Lords reform, primaries, power to petition parliament, and power to instigate local referendums.

But as Reeves test points out, it is in the workplace that can really make a difference to people taking control of their own lives. And on this the coalition are much less impressive and much more vague.

There is rhetorical support for “the creation and expansion of mutuals, co-operatives, charities and social enterprises” and a new right to form employee-owned co-operatives in the public sector.

This political support is a good thing and it’s pleasing to see the government getting out in front and saying that this is the kind of society we want to see. But, as Reeves says, this needs to be backed up by concrete government support: “tax incentives, advice support and venture capital funding”. Reeves set an ambitious target of 8 per cent of firms to be employee-owned; at the moment, it’s very much a case of wait and see as to whether this can be reached.

Are the poor richer?

Much has been made of Phillip Blond as the man who has provided the “mood music” for David Cameron, but for all Cameron’s progressive Conservatism speeches, there has been much scepticism as to the extent to which Red Toryism would actually make an impact on any Conservatism government programme. Now we get to find out, and Phillip Blond’s test to judge whether the poor have been recapitlaised – the key plank of his creed – must surely be indicative of how seriously the coalition takes this agenda.

Blond asks that by the end of the next Parliament, the proportion of wealth owned by the bottom 50 per cent is raised from 1 per cent to at least 2 per cent. This is a modest goal – too modest perhaps – but would nonetheless show real progress in the direction of narrowing the gap between rich and poor.

But reducing wealth inequality is not mentioned in the coalition agreement as a specific goal, and nor do the proposals offer much hope. It’s also an issue which gives a perhaps revealing demonstration of how the language of the agreement develops into the actual policies of the government.

The Child Trust Fund was a noble attempt to address Britain’s wealth inequality, by encouraging the ownership of assets for all, particularly amongst the asset poor: it encouraged saving and ensured that everyone had access to the kind of capital at 18 that the better off take for granted. So it was disappointing but not surprising that the coalition agreement stated “We will reduce spending and the Child Trust Fund”.

And then it turned out that, at the insistence of the Lib Dems, reducing spending became scrapping altogether, thus meaning the end to one of the few serious attempts to ‘recapitalise the poor’ that a government has ever made. This is not only bad for the chances of the government reaching Blond’s benchmark, it’s a worrying hint as to the direction in which some of the vague language in the agreement might firm up to in practice.

One positive development is the absence the Tories inheritance tax cut, although not doing something that would increase wealthy inequality is clearly not the same as doing something to reduce it. But reducing the defecit is the explicit priority of this government and “with the main burden of deficit reduction borne by reduced spending rather than increased taxes”, meeting Blond’s benchmark seems a slightly forlorn hope: with public spending tending to be pro-poor as apposed to tax rises which hit the rich proportionally more, there is a clear public policy choice being made that is likely to increase rather than reduce inequality.

In terms of an overall impression, the coalition agreement does not look especially promising for meeting these tests

Mostly these issues are just not a priority; they do not appear to be in the coalition’s DNA. It’s clear when you read through which things elicit genuine enthusiasm: the sections on civil liberties and political reform sparkle with reformer’s zeal; there is a clear passion for schools and desire to help disadvantaged pupils. The strength of these sections is not to be underestimated, and the government has some bold and exciting plans.

But on so many of the measures set out by our experts, the language is vague, hidden or grudging. So my worry would be that, to make any significant progress on reducing inequality, helping the poorest and other progressive measures, its got to be the foundation of your programme, the reason you are doing any of this – and Labour’s mixed results show that it didn’t embed fairness into its policy framework deep enough.

The coalition agreement is coming from a different place and, particularly in tough economic times, will prioritise political choices in a different way – one that will make many of these progressive benchmarks hard to reach.

6 Responses to “Coalition’s priorities will make progressive benchmarks hard to reach”

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  2. Helen Willis

    RT @leftfootfwd: Coalition's priorities will make progressive benchmarks hard to reach: http://bit.ly/dl8Sqr « analysis well worth reading

  3. Robert

    In terms of an overall impression, the coalition agreement does not look especially promising for meeting these tests.

    And new labour does. you have to do a lot of talking to make me believe that…..

  4. Hitchin England

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