Crime and punishment in the Labour manifesto

The Labour manifesto contains some important commitments in the area of criminal justice. Recognising that there is no more money to spend on the police, the focus is on protecting neighbourhood policing while creating new pressures for service improvement. So (as with health and education) there are to be entitlements to a basic standard of service and mechanisms of redress if those are not met.

In policing, redress is to come via Her Majesty’s Inspectorate of Constabulary, which will have powers to intervene and replace the management team of either a police force or a Basic Command Unit if performance is poor over a prolonged period. This is to be welcomed: at the moment the Home Secretary has the power to sack a Chief Constable on grounds of poor performance, but these powers are never used. This is because ministers fear they will be accused of political interference in policing if they get too involved in firing police chiefs. This new proposal has the advantage of setting out clear criteria to assess performance, with an automatic ladder of intervention if matters do not improve.

There is now clear blue (or clear red) water between the Conservatives and Labour on policing: Labour favours takeovers by other forces or the dismissal of the management team adjudicated by the independent inspectorate, while the Conservatives favour elected police commissioners with powers to hire and fire. The reason the Conservative plan is so unpopular in the police service is because of the risk of politicising policing decisions through direct election. ippr has produced its own alternative elsewhere, involving a new role for local councils in holding the police to account.

A second interesting innovation in Labour’s criminal justice plans is in the area of punishment. Over the last decade Labour has talked a good talk on community sentencing, but community justice has remained under-funded and hence under-used by the courts as an alternative to custody. Hence there are many people in prison for relatively short periods who would be more effectively punished and rehabilitated by the use of community-based penalties. The manifesto contains welcome new pledges to strengthen forms of community payback and to ‘reduce the number of women, young and mentally ill people in prison’.

Rick Muir

Why limit top pay only in the public sector?

In an article in today's Guardian David Cameron proposes establishing a fair pay review into pay inequality in the public sector and asking it ‘to consider how to introduce a pay multiple so that no public sector worker can earn over 20 times more than the lowest paid person in their organisation’.

Putting aside the vagueness of the language – Prime Ministers have to make decisions, not pass them over to a review to consider and I’m left wondering what would happen if the review refused to contemplate the idea? – this is a proposal with some merit.

But why limit it to the public sector? David Cameron argues that a pay multiple would ‘help tackle unfair pay policies’ and ‘improve cohesion and morale’. Shouldn’t unfair pay policies be tackled in the private sector too? Wouldn’t improved cohesion and morale in the private sector help the economy recover more strongly from recession?

Whatever the result of the general election, the next government will expect senior public sector workers to behave more like their counterparts in the private sector. They will be expected to deliver the ‘efficiency savings’ that both the main parties hope will prove to be a painless way of reducing the budget deficit (they won’t, but that’s a different story). They will be charged with lifting productivity growth in the public sector into line with productivity growth in the private sector.

So why not treat senior workers in the public and private sectors the same. Forget the review. Just stop anyone in any organisation earning more than 20 times the pay of the lowest paid person in their organisation. According to David Cameron, ‘Some of our most successful private sector companies operate a pay multiple’. Let’s try it out on all of them.

Tony Dolphin

Target financial advice where it’s most urgent: the City

Yesterday the Commons public accounts committee delivered a devastating indictment of the Government’s ‘complete failure’ to tackle high levels of consumer debt. The Committee found no one holding the reigns on the Government’s money guidance service, which aims to educate people to avoid debt problems. While advice is available at crisis point in the UK (the CAB soldiers on!), there is virtually no independent financial advice.

Given the public purse is cash-strapped it makes sense to target financial education to those who need it most.

Statistics show that debt problems are most common in low income households. But dig deeper and you find few examples of risk-taking behaviour. The number one cause of over-indebtedness is not ‘bad’ behaviour but job loss. The explosion of personal debt was driven in the main by the over-mortgaged middle classes who gambled on the buy-to-let bubble.

Looking further afield it becomes clear where money mismanagement is most problematic. A friend once met a City trader at a party. Politely making conversation, he said it must be a difficult job, derivatives sound so very complicated. ‘It’s easy really’, the trader replied, ‘you don’t have to understand them to sell them.’ Feckless bankers and overpaid traders repackaged, relabelled, and sold on shed loads of debt – and the entire country now faces a decade of high unemployment and savage cuts to public services as a result.

To be really effective money guidance initiatives could target the City regulators, MPs, and the bright young things in the Treasury. It’s a shame they weren’t implemented earlier. A cross-party class to advise Ken Clarke and Gordon Brown may have covered the perils of a cavalier attitude to regulation. The late Eddie George would have benefitted from homework on the importance of capital ratios in the banking system. Surely report cards for the Woolworth’s management – who wiped out 25,000 jobs in one swoop – would have read ‘could do better’.

The City offers one clear lesson: advisers on commission tend to give bad advice. Former RBS chief Fred Goodwin and his contemporary Victor Blank at Lloyds TSB were both ‘advised’ and ‘guided’ by advisers who made vast profits on the toxic takeovers of ABN-AMRO and HBOS. Better money management won’t help ordinary households to avoid spiralling debt. Sir Fred and his pals, however, should surely be first on the list for independent money guidance.

See our blog post on basic bank accounts Read our report Strength Against Shocks

Tess Lanning

Daddy Dearest

A new poll published by Aviva this Wednesday suggests that there has been a ten-fold rise in stay-at-home dads over the past decade. With the election campaign in full swing and each party keen to win over the ‘mums net’ and ‘motorway man’ vote, all the main parties are advocating more flexible working despite the very challenging economic and jobs market. Of course there are differences in the approaches of the main parties – particularly around sharing maternity leave and who should have the right to request flexible working. But one thing that remains the same is that when politicians use ‘parents’, they are really thinking about ‘mums’.

The introduction of paid paternity leave in the UK is a fantastic achievement, but it’s only two weeks, whilst paid maternity leave is nine months. We know who policy makers think should be at home. And most ‘family friendly’ proposals still imply that whilst roles are changing men are the primary breadwinners and women the primary carers. We will only see major changes in the way jobs and home life work together when men are routinely able to, and then actually make, the same kinds of changes to their working lives as women do when they become parents. Unless men are able and prepared to step up, we will always have a gender pay gap and women will always play second fiddle in the work place.

Kate Stanley

Labour and income inequality

The gap between rich and poor in the UK has widened since 1997, according to the results of a recent study by the Institute for Fiscal Studies. It found that income inequality in 2007-08 was higher than when Labour came to power and ‘higher than in any year since at least the 1950s’.

On the face of it, this is unwelcome reading for Labour supporters. What is the point of 13 years of Labour Government if it cannot prevent widening income inequalities?

Dig deeper into the IFS’s analysis, however, and it becomes clear that the gap between rich and poor has widened despite the Government’s efforts, not because of them. In the 1980s, when government policies seemed designed to benefit the rich, income inequality increased by an enormous amount. The increase in income inequality under Labour has been far smaller because changes to the tax and benefit system since 1997 have favoured poorer households at the expense of richer ones.

But what is missing from this analysis is an understanding of the causes of the increases in inequality that have occurred before the effects of government policy are taken into account. Throughout the last three decades, it seems, underlying inequality has been increasing. In the 1980s, this was exacerbated by government policy; over the last 13 years it has been mitigated by it. But under Conservative and Labour governments alike, it has remained a powerful trend.

There are a host of explanations for this trend, including globalisation, technological change and the dominance of the financial sector in the UK economy and we need to develop a full understanding of them because – as Richard Wilkinson and Kate Pickett have demonstrated so conclusively in their book The Spirit Level – greater inequality leaves everyone worse off.

So, while it is right to challenge the main political parties during the election campaign on how their tax and benefit policies might affect income inequality, it is perhaps more important to ask them what they intend to do about the growing disparity in pre-tax incomes. If they are, to quote Lord Mandelson, ‘intensely relaxed about people getting filthy rich’, they shouldn’t be.

Tony Dolphin

There are better things to tax than jobs

So the first big argument is over tax. Labour argues there will have to be a small increase in National Insurance contributions, as well as spending cuts, to help reduce the deficit. The Conservatives disagree, arguing that increasing NI contributions (which they describe as a tax on jobs) will be damaging and that they can close the deficit simply through spending cuts.

On the immediate row over National Insurance contributions, I guess Labour are right. Any incoming government will have to raise money quickly in order to get the deficit under control and it seems sensible to do this through a mixture of tax rises and spending cuts - to do it all through spending cuts alone would have a severe impact on public services and the wider economy. National Insurance also has the advantage of being a fair tax which varies according to the amount you earn. It’s not perfect - we already tax jobs quite heavily - but it’s the fairest way for a quick fix.

But while raising NI is necessary for achieving a short term goal, it falls woefully far of the bar as a long term policy on tax. Such a narrow debate misses the broader problem – that for the last few years Britain’s tax system has not raised enough to fund quality public services, that it disproportionately hits the poor, and that it lets important areas such as wealth and carbon emissions off the hook.

A more radical approach would be for politicians to try to tackle these bigger problems. It would shift away from taxing low and middle incomes (effectively a tax on people’s hard work and effort), towards taxing wealth (much of the wealth that is generated in Britain is based on little more than the luck of rising land and property prices and inheritance from family members).

In my opinion, an ambitious long-term pledge on tax might include:

1. A tax that captured a portion of rising land values and property prices
2. A 50% income tax for pay slips over £100,000 a year
3. A financial transactions tax or ‘Tobin Tax’
4. A tax that penalised carbon emissions

These would all take a while to put in place, and until that time NI will have to be raised to plug the deficit. But they are a more sustainable solution to funding the investment this country needs, and a far fairer way of doing it.

Jonathan Clifton

Extreme domestic bias?

The announcement yesterday that Gordon Brown will miss Obama’s nuclear summit is yet another indication of how domestic is trumping foreign policy in this election.

A domestic bias isn’t really surprising of course. In the scrabble for votes politicians focus – naturally – on obvious vote winners; and the electorate focus – naturally – on what happens in their own backyards.

But this concentration on the domestic feels extreme compared even to past electoral battles. Whereas in the past Iraq, the Gleneagles commitments or the need for an ‘ethical foreign policy’ figured large, in 2010 only two ‘foreign’ policy issues are attracting even a marginal degree of attention – Trident and Afghanistan. And crucially, though each encompasses a set of complex considerations, they have been reduced in electoral sloganeering to a simple domestic core, ‘can we afford it?’ (Trident), and ‘how many Brits will die?’ (Afghanistan). (Indeed, the extent to which Afghanistan is now being seen solely through the lens of soldiers’ deaths – ignoring issues of British security, Afghan security, cost, the future of international cooperation, the ‘war on drugs’ and numerous other issues – has become so extreme that even the Army is complaining).

There are two worrying aspects to this trend. First, it seems likely that we are focusing so much on the domestic because things here in the UK seem so bad. When the economy has looked rosy, when we have felt confident about our place in the world – indeed, at times of ‘Cool Britainnia’ – it has been easy to consider events beyond our borders. But when things look rough, when we have to cut a deficit, find jobs for our young people and try to find a way to make our banks work for us, there is a tendency to hunker down. In other words, this isn’t just an electoral trend. Dealing with the deficit and reorganising our economy is a major task which seems likely to preoccupy the next government, whoever is in power.

Even if we have our fingers in our ears, the tree falling in Afghanistan, or the US, or Europe, or China, still makes a sound. In fact, as ippr’s National Security Commission made clear it’s a sound we can less and less afford to ignore. President Obama is calling a summit to try to limit the growing spread of nuclear weapons – a terrifying prospect for the UK. Why do we not see it as a priority? And this is just one of many challenges (including climate change, poverty, terrorism and banking regulation) in our interdependent world that require us all to act together. Let’s start by listening.

Laura Chappell