Friday 13th November the Today programme on BBC Radio 4 had features about the Government looking at rule changes to clamp down on benefit tourism.  It was quite clear that all the rules looked at were going to hit sections of the UK working population and it may well be that the main aim of these suggested rule changes is to cut the amount of in work benefit paid, not to stop benefit tourism.  

Currently the government is trying to work out a change in the rules on in-work benefit - it seems that they are trying to cut the level of in-work benefit available under the pretext of stopping EU migrants claiming it.  

There is a very simple change to the rules on in work benefit that could be brought in without any major impact on most UK claimants which would impact on those benefit tourists who are coming to the UK.  That would be to say that to claim in work benefit you must have:

a) been resident or substantially resident in the UK for at least four of the previous six years.

or

b) paid four full years of national insurance contributions.

Provided no starting age is set on rule (a) it would permit access to benefits for those aged 18 to 22.  Allowing for any four out of the previous six years would allow for those who go and live or work overseas for limited periods, e.g. gap year students.

Rule (b) would cover those workers who by nature of their work are working overseas for UK based companies, like many of the freelance IT consultants, who continue to pay at least the voluntary contribution in the UK whilst working overseas.

These changes would effectively stop most benefit tourism without hitting those normally resident in the UK or who are contributing via the NI system.

Perhaps the greatest threat to the long term economic future of the developed world and in particularly the Anglo-Saxon model of capitalism is rampant short-termism in business.

This was brought up at a previous Liberal Party Assembly, but the issue has never had the wider public airing it needs.
An obsession with dividend payments and ever high share prices has led to businesses in developed economies to abandon long term business investment, job creation, and hence wider economic growth, simply to produce another impressive business update and an often unsustainable dividend.

Anybody who remembers Sir John Harvey Jones and his 1980’s book, Making It Happen, would be familiar with an unglamorous pre-90s culture of succession planning, long term business growth and investment, with a steady but modest dividend.

By comparison modern executives know that their continued reign is dependent on an uninterrupted stream of positive business updates and profit statements. The business press is littered with numerous examples of CEO’s who’ve departed after a below par trading statement or reduced shareholder pay-out.

Work forces have commonly been slashed to reduce costs and more often this has been done to directly pass on the saving to investors as labour costs are certainly the highest single item on a company’s books.

This often leaves the remaining workforce to carry the burden with the implied threat of redundancy if they do not cover the increased workload.

As Liberals we recognise the advantages of the capitalist business process and cycle, but we also cannot be blind to the erosion of economic development and the wests industrial base.

If we do not invest in new business, plant and machine, and of cause workers, we risk falling behind other economic regions. Then where will be the fruits of economic prosperity to fund public servers?

Since it is undesirable to set levels or ratios for profit and dividend, we need to seek alternative routes to encourage more inward investment and hence economic activity.

You will never convince companies or their investors of the merits of a long-term view. They will always need to be ‘encouraged’ to adhere to this principle via tax breaks and incentives which cost the exchequer money. The trick is to make such concession revenue positive, or at least revenue neutral.

This may involve tax breaks for R&D and direct investment, reduced NI contributions for apprentices, lower business rates or corporate tax. It will involve wider investment in training and education and the nation’s infrastructure.

It also involves a learning process for business and their investors to understand the negative long-term effects on local economies, as well as their own businesses of their own short term pursuit of another unsustainable dividend.

NB The original feed back from this documents circulation amongst the NEC was to highlight the part share options
also influence executives behavior, which is a very important point.

The idea of full employment re-surfaced during the run up to the last election, but failed to be more that a fleeting media episode as the main political parties attempted to embellish their political credentials.

The Liberal Party certainly hasn't rejected the idea of full, meaningful employment, paying a living wage, and it should not be dismissed as some sort of unachievable utopian idea.

Full employment would imply full employment for the UK workforce and population. This in itself entails a ethical conundrum as to the ethics of displacing those in employment who are of foreign origins.

A full employment policy would need to enable the long-term unemployed and those on benefits to be matched to employment opportunities thus potentially displacing foreign workers.

The reality is that despite record levels of employment and work force participation, far too many people remain parked on benefits, unable to take up meaningful employment, necessitating immigration to plug the gap.

The first obstacle is the concept of structural unemployment, the persevered equilibrium level of unemployed. This represents the hardest to place and employ, due to their to their lack of skills or location, or lack of mobility.

Structural unemployment was once thought to be about 4.25% of the workforce in the UK but in recent years appears to have drifted up to 5.5%. That equates to about 1.75 million perpetually unemployed, and  an increase of 450000 on previous perceptions.

Put another way, economists and government ministers feel a 5.5% unemployment rate is manageable, even desirable, to balance inflation.

When economies are growing, and creating jobs, they encounter wage push inflation, where shortages of labour, and by implication skilled labour, begin to force up wages as employers are forced to pay more for peoples skills. This happens in tandem with inflationary pressures from other scare resources, most obviously raw materials.

As has been said elsewhere no economic cycle ever died of old age, they were all killed by central banks increasing interest rates to curb inflation and an overheating economy.

As I have previously argued a better educated, more mobile work force may be able to hold down wage push inflation, certainly not indefinatly, extending the period of economic activity before policy makers reach for the brakes.

The path to full employment involves the creation of an attractive investment environment, with the right balance of tax and regulatory environments, and a skilled, mobile workforce to attract long-term investment in the country.
It requires affordable housing for essential workers, good transport links and accessible public transport.

For all the official league tables placing the UK in 6th place for educational achievement, employers continue to bemoan the lack of literacy and work related skills in the employment market. Apprenticeships and vocational training need to be empathised and supported.

Full employment has unquantified benefits. A higher domestic rate of work force participation reduces the need to employ foreign workers, reducing immigration, and the persevered pressure's on housing and schools.

People in work, on a living wage are in less need for working tax credits, heating allowance and housing benefits. They are likely to be less stressed and have better self respect and self esteem, reducing both physical and mental heath issues.

There will always be those who are on invalidity benefits because of ill health, and these people have the right to an adequate level of support in our society. However nobody should be told that the door to meaningful employment has been closed and they can stay at home on a drip-feed of benefits because its easier to find somebody else to take up that employment opportunity.

I was originally asked a question on our parties policy towards zero hours contracts and this in turn led me onto the 
more general issue of changing employment patterns and the proliferation of low wage employment, with an emphasis on the UK.

Economies have historically progressed from agriculture to manufacturing and on to to service industries over time. 
This has been most marked in the Post 1945 era as far eastern economies have taken advantage of improved global transport and now communication  links, which has allowed low wage and hence low cost production centres to proliferate outside Europe

In our country the 2007 recession has accelerated one manifestation of this in the creation of the squeezed middle, where the gradual economic erosion of the employment market has created a lot of high paid, and lots and lots of very low paid jobs, but nothing in the middle.

The off shoring of  many service jobs means that that often only low grade staff are now needed in the UK, as anything more technical has been out-sourced to the lowest cost foreign call-centre and middle earners are gravitating to the bottom segment of the wage market as their jobs are undercut.

In theory as wages rise globally, and the low cost locations dry up, the cost base will even out. China is now finding that its economy is being undercut by low wage produced in Cambodia and Laos, but where to after that? Africa is often sited as the last remaining frontier, but there are numerous issues to be addressed on the continent from reliable electricity supplies, to basic employment skills, governance and regional stability.

There is the possibility that some manufacturing  or service functions will come full circle and return to its country of 
origin as costs even out, although this theory has yet to be proven. Political and cultural demands are often behind the move back to a UK cost base for call centre's.

The issue is how do we develop a working and economic environment which creates and retains living wage jobs, encourages and maintains economic development and prosperity whilst reaping the benefits of lower costs. 

Creating jobs encumbrances providing the incentives to invest, adequate infrastructure, a mobile, skilled workforce able to finds affordable accommodation and the right level of taxation and regulation.

As this formula is known to all globally, there is little scope for gaining a competitive advantage. The Irish republic tried lower corporate tax rates, but was eventually forced to abandon these as part of the EU rescue package.

I understand a recent discussion in the FT suggested negative income tax rates for the lowest earners or a basic minimum income, some thing which has been mentioned on the Liberal mailing list, but all fail to address the source of such funding. However these ideas simply tide people over and address the symptoms of the squeeed middle, without providing a long term solution.

The debate on anonymity for defendants in sex offence trials, most commonly alleged rape, has been a hotly debated subject in the recent past and I'd like to distil some of the various strands of the debate.

Under the current arrangement, the identity of any defendant will be  formally announced when their name is read out in court at a remand hearing. In reality it is likely to have  already been leaked to the media via the general public or more likely the Police, a practise which is all too common and should be deplored.

The main argument for naming the defendant is that more potential victims in serial abuse cases are likely to come forward if a name is in the public domain. I understand this has indeed triggered other victims to come forward in some high-profile trails and increased the likelihood of securing a conviction.

The victims of rape are by contrast granted almost total anonymity irrespective of the out-come of the trial.

Much of the debate on anonymity for defendants has come from a handful of high-profile acquittals, when in fact far too few rape cases come to trial, and 60% of cases end in a conviction, although this figure is below previous highs.
The Police and procecutors still have much work to do to ensure the sympathetic treatment of victims, and to mitigate the stigma and hostility victims meet when making accusations. 

Our adversarial, as opposed to a fact finding orientated legal systems leads to confrontational cross examining of victims, which has in itself has sparked a debate about the legal process and conduct of trials.

Perhaps the issue should really how we treat defendants after a trial, particularly having often spent a protracted period on remand, only for a case to collapse or be quitted, as happens in about 40% of cases.

There is no currently compensation for time spent on remand, and as Alan Davies found out, his own political party has reduced the re-payment of legal expenses to legal aid rates, which means somebody is unlikely to get back more than half their costs.

Another issue is that somebody is never found innocent; legally the case against them was not proven. I would presume this would allow prosecution in incident involving perjury or perverting the course of justice. This still leaves a question mark over their aquittal.

I am aware of two cases where young men have spent 9 months on remand accused of rape, only for the cases to collapse within days. One involved a first year undergraduate, and a Police office involved in the case stated that he considered that the defendants life had been ruined by the accusation. 

The stigma of arrest, remand and aquittal will remain with these two young men for life, and would have almost certainly prevent the later from returning to university, as most institutions would almost certainly decline his application.

In these cases, as with any other acquittals the establishment needs to be more forth coming with comprehensive compensation, rather than just sending people on there way with a ruined life and potentially crippling debts.

As has been pointed out before, having been accused of a crime, a defendant is effectively left to his own resources and has no choice but to fight their case against a criminal justice system with unlimited resources and the power to employ the top barristers and Queens Council for which cost is no object.

I therefore believe that any policy would be better directed towards both better justice both for victims and those
acquitted, rather than focussing on the issue of  anonymity in isolation.

I have just joined The Liberal Party and am pleased to be part of this historic group. However, it is probably fair to say that most people in the UK are unaware of the party, or if they are, they confuse us with the Lib Dems. 

Although we are small, with just a handful of councillors, and a very small budget, how can we promote the party, increase membership, and raise our profile so that we see growth?

The party in its current form has been around since 1989. We are a strong party, but tiny. Is it time for a more pro-active approach to growth? Time to work on growing local branches and taking things from there?

I applaud all that the party has done since its rebirth, and the hard work that members and supporters have put in to keep Liberalism alive in the face of the Lib Dems, the Greens and others. But can we do more?

Obviously, social media is a huge opportunity for the party, but again, is it one we are using to its full potential? Being able to join online via paypal is a huge bonus, but could we make more use of video for example? I appreciate that all of this takes time (and in some cases money), but perhaps we as a party need to form a group that will act solely to promote the party and raise our profile. It need not be many (perhaps only one or two).

I am prepared to put my money where my mouth is for this, and welcome comments (for and against). Thanks!

As 2015 draws towards a close, how do we think policy in the Liberal Party should develop, and how can we promote said policy to the wider public?

I will be brave and start the thread on this subject, are we better IN! or OUT! ? I believe Britain is better being part of the union but it must be reformed, so what do people think, what should Britain's relationship be with Europe, closer with Britain leading the way or do we sit on the edge and let Europe tell us?

I was recently asked about our policy on immigration, but had to admit free movement of labour has been rejected by the general public.

One issue to bear in mind in this discussion is this country is employing well in excess of 100000 foreign workers in the NHS, including perhaps 89000 nurses and 37000 doctors. How would changes in our immigration policies affect the provision of a qualified and skilled workforce without compromising the day to day workings of the NHS?

The first issue is a revamp of our education system. Despite arguably the 6th best education system in the world, too many school leavers lack basic skills or qualifications and too many employees deplore the lack of similar skills in recent graduates.

Apprenticeships are lacking, and training needs to be made a life-long journey. A better qualified domestic work force will certainly displace the need for foreign born labour in the first instance.

As one example nursing is now a degree vocation. Until recently there was no vocational route into nursing, and the one now being touted by the NHS and Royal Colleague of Nursing is by their own admission simply a feeder route for degree courses. It appears geared to training people to a level no higher than a nursing auxiliary or care worker.

As the same time funding for domestic nurse training has been cut back, further aggravating the issue and further increasing the pressure for foreign recruitment.

As much as we’d like to have the best qualified nursing work force, we have set a standard which can only be filled long-term by foreign employees. Can we not supply these numbers domestically?

Once people are trained in any vocation, there may also be a need to relocate people from areas of high unemployment to areas of high vacancies. Nobody wants to leave their home town, but according to studies the vast majority of people move no more than 20 miles from their place of birth.

Such an initiative needs to include a properly thought out and funded relocation program, with affordable housing and efficient transport links at their destination.

Studies have shown that immigrants make informed decision when choosing countries to move to. A country with a low wage employment environment, such as the UK, will encourage immigration, as people know there is work to be found.
Conversely they will have nothing to offer to a high tech, high wage economy, unless they have the skills to match.

Secondly is reform of the visa or work permit system, perhaps using a point’s based system as in Canada or the US. The current system in our country appears driven by a desire to limit numbers, rather than attract applications or fill skills gaps.

The US certainly has an identical issue, artificially restricting the number of green cards, whilst business is crying out for skilled workers the domestic economy cannot supply.

The UKs revised scheme has also discouraged large numbers of foreign students, who were paying to study in this country, and then staying on to work and develop business, both to the benefit of this country, and ultimately their home country when they return home.

The final strand is a workable border controls, and the detention and deportation for those illegally entering and working in this country.

Our country has an unenviable reputation for porous borders and lax controls. Throwing up barbed wire fences and prefabricated walls at the channel tunnel is very much a case of closing the stable door after the house has bolted.

People need to know that if they have not followed an approved entry route, they will be deterred from entering the country by tighter controls, and if they do so, they will be detected and sent back to their country of origin.

I fell this document is somewhat laboured, no pun intended, and perhaps illiberal in some respects, but it is a pragmatic compromise between the need to take action on key points, and the need to have answer for the general public.

As ever I welcome any comments

Stephen

The issue of optimum population for our island nation has received  increased media attention in recent years, almost always in relation to population size and immigration. However its correct application is environmental and not economic sustainability.

In the late 1980's when I was involved in conservation work in East Anglia, one of our local group was a former senior member of the Green Party, who has been forced to step down due to mental illness.

He revealed that the great unpublicised debate within the Green party in the 1980's had been optimum population size for the UK. This was the level at which the population was in balance with the natural environment. They had settled on a figure of 45 million, about 10 million less than the countries then population, and perhaps 19 million less that today.

By another widely quoted figure the UK is estimated to being consuming 3.5 times this nations natural resources. This would imply the natural population level was a mere 18 million.

In fact this nations population increase comes from a combination of immigration, and greater life expectancy. Basic economic and industry activity continue to expand, demanding further labour. As we are unable to supply this domestically, this leads to immigration.

At the same time an ageing population, needing more long term care, and a lack of suitably qualified and experienced UK citizens to work in care related industries, adds to the issues of immigration.

As Liberals we value our freedom of choice, but tinged with responsibility for our actions when planning a family.
However the  current birth rate in this country is still below the natural replacement rate of 2.1 children per couple. It is also now heavily slanted towards births from foreign born mothers.

This means that long-term there are not the number of young people born in this country to sustain industry and the increasing demand for care for the elderly in the future.

It is not simply a case of replacing 1.5 million foreign born works, and their families to reduce the nationals foot print.
We simply can't ask millions of people to leave this island, when our country is for ever dependent on foreign labour to maintain economic activity and industry in the absence of sustained numbers of skilled home grown workers.

What  we really need to do address the labour market short comings which mean millions are drip fed benefits, when with the proper support they could be actively working and contributing.

Any comments on this draft are always welcome.

Stephen