Devil in detail part 9: inheritance tax cut for the super-rich

14/12/2010, 01:02:06 PM

by Neil Lovatt

Under new government proposals published last week, it will now be possible for the super rich to use their pension assets to avoid inheritance tax. The requirement for pension assets to be paid out within a person’s lifetime is removed in the new arrangements. But pension assets sit outside the IHT regime. Thus by leaving substantial assets in their pensions at death, the very wealthy will henceforth be able to avoid enormous amounts of inheritance tax.

The full set of the government’s proposed pension changes is here, and they are unlikely to be read by anyone other than the odd policy wonk, such as myself, or a specialist journalist with a readership of a few hundred. It’s hardly front page news, but it should be.

The problem with pensions is their inflexibility. The tabloid media waste no time in stoking the flames of hate over pension rules restricting access to your money. (more…)

Facebook Twitter Digg Delicious StumbleUpon

I am not a Lab Dem. I am a free man.

14/12/2010, 07:00:16 AM

by Dan Hodges

Still they come. Nick Clegg’s tired, hungry, huddled masses. The Liberal Democrat refugees.

Labour is providing them with sanctuary. Of the 30,000 new members who have joined the party since the election, almost a third of them are reportedly former Lib Dem members.

The pace of the relief operation is set to intensify. The Sunday Times carried “a bold appeal” from Ed Miliband for “disaffected Liberal Democrat MPs to join the opposition to the coalition”. There are rumors that the shadow cabinet is preparing a charity re-mix of the Red Flag in time for Christmas. Billy Bragg is considering a “Lib Aid” concert at the O2.

OK, I made up those last bits. But our tanks are no longer parked on Clegg’s lawn. They’ve bulldozed through the French windows and are rumbling towards the dinning room.

In the wake of the tuition fees debacle, it may appear to be a sound strategy. The Lib Dems are a broken party. Just look at Vince Cable. At the start of the year he was one of the brightest stars in the political firmament. Standing at the dispatch box on Thursday, attempting to justify his tuition fee betrayal, he resembled one of the Germans at the end of Raiders of the Lost Ark who have unleashed the furies of the covenant. It was as if the life force were being sucked from his body. (more…)

Facebook Twitter Digg Delicious StumbleUpon

Wonking in a winterval wonderland

13/12/2010, 01:00:49 PM

by Atul Hatwal

Santa is coming, bringing his annual sleigh of seasonal stories – will it or won’t it be a white Christmas; who can stop an X-Factor number 1 and that festive favourite: council bans Christmas so as not to offend minorities.

The “war on Christmas”, as Fox News puts it, is raging. From thwarted nativities in primary schools to international conspiracies to rebrand the whole thing as Winterval, a blizzard of synthetic outrage is blowing.

As these stories speckle the media through December, an old challenge awaits the new leader of the Labour party: the Christmas test.

Remember the Tebbit test? Well, add some tinsel and substitute cricket with Christmas.

Ed’s choice of Christmas cards will come under the spotlight. Do they mention the word Christmas or is there just vague talk of “happy holidays”? How will the first Jewish leader in well over half a century handle the c-word – Christianity? And what about on the day – will it be turkey with all the trimmings or does he prefer the vegan option?

Forget fees or cuts, commentators will pore over the answers to resolve the most pressing question of the day: Is Ed Milliband on the side of middle England, Christmas decency or does he stand with nativity-hating, godless, Wintervalistas? (more…)

Facebook Twitter Digg Delicious StumbleUpon

Replacing nanny with a nudge is no joke

13/12/2010, 07:00:54 AM

by Michael Dugher

Andrew Lansley, the health secretary, recently announced the government’s plans to improve public health in the white paper, Healthy Lives, Healthy People.  So what exactly is the plan?  Well… it’s to “nudge” people more.  They want to nudge people to make the right decisions when it comes to their health, rather than the so-called “nanny state” approach taken by Labour, where the “man in Whitehall” was telling people how to live their lives.  The idea is that people can be enticed, instead of being coerced, into making better decisions.  It is, of course, total nonsense.

“Nudging” is one of the government’s new buzzwords. It was made popular by Professor Richard Thaler, an adviser to David Cameron in the cabinet office’s behavioural insight team or “nudge unit”.  And, no, I am not making this up.  This is the infamous, supposedly civil service, team that includes former Conservative party staffer, Anna-Maren Ashford, Cameron’s personal image consultant and head of “Brand Dave” before the election.

Labour made huge improvements in public health, but the new government’s white paper comes against a backdrop of the NHS, and indeed other healthcare systems around the world, struggling to cope with the demands of a population that is eating too much, drinking too much, smoking and not doing enough exercise.  I speak from some experience, though I gave up smoking several years ago in a moment of good sense. It is curious to remember that the founding fathers of the NHS actually believed that demands on the institution would gradually decline over the years, as people were treated and made healthier and would therefore not need to use the health service as much. Instead, of course, demand rocketed as people began to live longer, as technologies and treatments improved exponentially, and as we grapple with the health problems associated with twenty first century living. (more…)

Facebook Twitter Digg Delicious StumbleUpon

Intra-school rankings could improve social mobility

10/12/2010, 12:00:06 PM

by Nick Keehan

The first episode of Ian Hislop’s Age of the Do-Gooders broadcast on BBC Two last week told the how in 1854 Charles Trevelyan introduced the practice of competitive examination for entry into the civil service. The reform was the first step towards a system in which government positions were filled based on merit, rather than being handed out to political allies or reserved for the younger sons of the aristocracy. “From the time this measure receives Royal assent”, a Times editorial in support of the reform proclaimed, “it will be the fault of the people if the public service does not become their birthright, according to the talent, education, and industry of each”.

Not that it was expected that all parts of the public service would become the birthright of all parts of the people. Competition was open to all, but it would still only be the “lower class of appointments”, those “small posts which might recompense the industry of the head boy in the village school”, and which would be “filled by just such an examination as the readiest and best-conducted lads in these schools would succeed in”, to which young people from the lower orders could realistically aspire. Those positions “of great importance and pecuniary value, demanding the attainments and worthy [of] the pursuit of the most educated Englishmen” would in all likelihood remain the preserve of the better off, in whom, it could be safely assumed, the highest levels of talent, education and industry resided.

Attitudes towards aspiration have changed greatly since then, of course. Social mobility is the ideal of all political parties. Nowadays, very few would maintain that talent and industry are the monopoly of the offspring of upper echelons of society. So how to explain the overwhelming predominance of young people from better-off families at elite institutions?

Take universities. On Tuesday David Lammy released some research he had conducted on Oxbridge admissions. While it contained interesting details and highlighted the extent of the problem, the research, for the most part, served to confirm what was generally well-know about our elite universities in general: that they are dominated by the upper and middle classes and that the poor are generally excluded.

Commenting on Lammy’s research, education secretary, Michael Gove, stated that the reason for the lack of poor people at Oxbridge was that “our schools system is not good enough”. This is only partly right. The problem is not the overall level of quality in our schools – after all there is no shortage of applicants with the necessary grades to get into Oxbridge – but with its distribution. Put simply: children from poor families do not get to go to the best schools. The better-off do not monopolise talent and industry, but they do tend to dominate when it comes to receiving the highest standards of education.

Can it be right, however, that the quality of education received should deny young people an opportunity that their ability and hard work would in other circumstances permit them to enjoy? If their standard of education prevents them from benefitting from that opportunity to the same extent as someone who has received a higher standard of education then, maybe, yes. Research, however, suggests that this is not the case.

A five-year research study, co-funded by the department for business, innovation and skills, the national foundation for educational research, the Sutton trust and the college board, found that comprehensive pupils outperform independent and grammar pupils in university degrees. For example, a comprehensive school student with three Bs at A-level is likely to perform as well at university as an independent or grammar school student with an A and two Bs, or two As and a B. At the same time, comprehensive school pupils also performed better than similarly qualified independent and grammar school pupils in degrees from the most academically selective universities and across all degree classes.

These results suggest that it would be worthwhile for university admissions departments to consider the educational backgrounds of applicants. This has always been an option for universities and many do consider educational background and other similar factors when deciding on applications. However, given the general failure of our elite universities to ensure a socio-economically diverse student population, government could also have an important role to play in supporting these efforts.

In 1999, Peter Wilby proposed a radical reform of university admissions: give every school an Oxbridge place. Basically, the top student at every sixth form or college would be offered a place at Oxford, Cambridge or another top university. Set out in the deliberately crude way that WIlby chose to explain it, the policy was never going to be politically tenable. But the principle was, and is, sound. With some minor changes and a bit of fine-tuning it could work.

An altered version of the policy could operate as follows: alongside the traditional A-level and GCSE grades, exam boards would publish a student’s position within the school based on those grades, either as a ranking, or as a percentile or some other fraction. Universities would be under no compulsion to consider the rankings when making admission decisions. A-level grades could still form the primary basis for university offers. The rankings would, however, be a useful and readily available source of information for admissions officers that would enable them to see how applicants fared in relation to those who achieved the same standard of education. It would be one of those nudges that David Cameron and Steve Hilton like to go on about. One that would enable universities to distinguish more easily between, in the words of Michael Gove, “rich, thick kids” and “poor, clever” ones.

It would not be a panacea. Improving the performance of schools catering for the worst off and ensuring that their pupils felt that going to a top university was something to aspire to would still be necessary goals. The details would need working out. But such a policy could be useful for Labour as it seeks to promote social mobility and equality of opportunity and to further test the Tory-Liberal government’s professed commitment to those ideals.

Nick Keehan works in Parliament.

Facebook Twitter Digg Delicious StumbleUpon

Let’s not defend our record – it’s been trashed by the voters.

10/12/2010, 07:00:17 AM

by Dan Hodges

Oh how we laughed at the new socialism. Ed Miliband leaping like Nijinsky to embrace the “audacious reinvention” of his party. A cacophony of explosions: irresponsible capitalism, the financial crash, the illusion of the third way. Our stressed, stretched insecurities soothed by the mellow balm of the good society.

Neal Lawson and John Harris’ New Statesman essay initially bordered on self-parody, then thought “to hell with it” and stormed across the border with a full cavalry division and accompanying regimental band. “Whereas New Labour tried to bend people’s aspirations to their resigned and deflated worldview, the new paradigm seeks to grasp our hopes and fears”.  To summarise, the new socialism involves closing Bluewater, reading the Gruffalo more often to our kids and ensuring that a cleaner in Vladivostock earns the same as one in Clapham. For what it’s worth I’m against the first, for the second and haven’t a clue how to achieve the third.

Comrade Lawson has many qualities, but self-awareness isn’t amongst them. I once laughed out loud when I received an e-mail urging me to purchase his book on the perils of consumerism at a special discount price. (more…)

Facebook Twitter Digg Delicious StumbleUpon

AV would end the scourge of tactical voting

09/12/2010, 11:24:00 AM

by Luke Akehurst

One of the great myths about the alternative vote (AV) is that it will predominantly benefit the Lib Dems.

I’ve spent all my political life trying to expose the Lib Dems and resisting calls for tactical voting for them. As an election agent one of my proudest moments was when Hackney Labour reduced the Lib Dems from 17 seats to just 3 on our local council.

But I see no contradiction between this and my support for a Yes vote in the AV referendum next May.

The starting point when judging any electoral system is not a snapshot of the partisan benefit to your own party, but whether that system delivers for voters.

AV isn’t proportional representation, so it does not necessarily deliver an improvement on first-past-the-post (FPTP) when it comes to proportionality (that is, share of votes relating to share of seats). (more…)

Facebook Twitter Digg Delicious StumbleUpon

This Tory-Lib Dem government is particularly clobbering women

09/12/2010, 07:00:28 AM

by Sally Bercow

Women don’t matter to this government. This is not a sweeping, attention-grabbing, rhetorical assertion, but a shameful reality. The cold, hard truth is that women will bear the brunt of the cuts to benefits, jobs and services. The Tory-Lib Dem government’s policies will bring about a huge reduction in the standard of living and the financial independence of millions of women throughout the country.

As Yvette Cooper has highlighted time and again, the comprehensive spending review, combined with the measures announced in June’s “emergency” budget, mean that women will be clobbered much harder than men. Indeed, she went as far as to say “This is the worst attack on women in the entire history of the welfare state”.

In government, our party did much to advance the cause of women’s equality: increasing maternity pay, improving maternity rights, introducing the minimum wage, boosting women’s pensions, creating more flexible jobs and extending childcare and support. Doubtless, there was more we could (and should) have done – notably to close the gender pay gap – but nonetheless it is a record of which we can be proud. Now, however, the government’s policies and savage cuts to welfare benefits and public services will not only halt the progress made on gender equality but turn back the clock in the most frightening fashion. (more…)

Facebook Twitter Digg Delicious StumbleUpon

Open data: by itself, the big society amounts to little more than “behave decently”

08/12/2010, 12:00:10 PM

by Jon Bounds

Cablegate, while sounding like a new property development in a run-down corner of Birmingham city centre, has provoked a little bit of excitement.

For me, though, it felt like a diplomatic version of Facebook. Suddenly, the minutiae and all the slightly wrong things that we all say in private are recorded and popped onto the internet for anyone who can be bothered to search. And, if you are realistic, and not prone to Daily Mail-ish bouts of outrage, the content was not that shocking.

What has been shocking is the reaction. Both in the press – which should really be able to square Wikileaks with the principles of investigative journalism – and within governments, which are all for transparency and open data these days, aren’t they?

Transparency and open data are the new online panaceas. They are wonderful. Except, of course, when they arise from anything that is not tightly controlled by government. Releasing spending data is “forward-looking”; releasing diplomatic cables (or even details of transactions alleged within FIFA) is “not in the national interest”. (more…)

Facebook Twitter Digg Delicious StumbleUpon

Tory lies, Lib Dem lies, Phil Woolas and a mystical shaman of truth

08/12/2010, 07:00:18 AM

by Tom Watson

Truth, for some politicians, is a percentages game. There is the platonic “noble lie”. There is the outright denial in the face of facts. There is the Nick Clegg pledge. And now the judges have added a new category. They’ve added the Woolas campaign leaflet to the taxonomy of political truths and lies. It’s a decision we will all regret.

The wikileaks debacle says a lot about truth and lies. None of the words published on the Wikileaks website belonged to Julian Assange. They were the secret communications of the elites of our international political system. They didn’t want you to know what they really thought. And when Assange published the documents that exposed elites to scorn and ridicule, somebody somewhere tried to stop you reading their candid words.

The powerful have gone to extraordinary lengths to stop you reading on wikileaks what three million security cleared Americans can read whenever they like. With state department operatives allegedly parked outside the home of his lawyer, can we politicians really be surprised to witness the morphogenesis of Assange into a mystical shaman of truth with a global following? (more…)

Facebook Twitter Digg Delicious StumbleUpon