Time for a windfall tax?

Something has to give soon. British Gas are now set to increase fuel prices by 9.2%, and as a consequence bills for millions of customers are set to reach an average of more than £1,400 per annum. No politician is denying that this is a serious concern, but it seems that few politicians are devising suitable strategies to solve the problem. David Cameron’s call for people to switch from British Gas isn’t exactly the most inspiring move. Likewise, you wouldn’t be totally satisfied with advice to simply switch banks if your current bank is ripping you off. Is it time for (a return of) the windfall tax?

There’s no doubt that Ed Miliband’s 20 month price freeze plan is intuitively attractive, and fears of blackouts and a return to the 1970s are gross exaggerations. However, the plan does not account for ‘The Big Six’ energy companies simply hiking their prices before the freeze would occur, effectively making the aims of the freeze redundant. Furthermore, the Labour Party have conveniently ignored the fact that Miliband was the Secretary of State for the Department of Energy and Climate Change in the last Labour Government, so we shouldn’t be led to believe that he will offer something wholly new and alternative. Nevertheless, energy companies are hiking prices now, so it’s no good for the Government to simply sit on their hands and protest that stronger action on the issue will simply lead to higher prices again; to sum up more succinctly, the choice between either higher prices or higher prices two-fold is not an enthralling one. That’s why I think a windfall tax on the privatised utilities is a good idea.

It’s not often that I give praise to New Labour, but in the context of the windfall tax they got it right. In a rare move of attacking vested interests (they were quite happy to leave the banking sector untethered), the tax was levied by the means of a 9 times price-earnings ratio. It was designed as a response to the perception that the privatisation of utilities in the 1980s had yielded low returns alongside excessive profits; the tax raised around £5 billion, and financed a welfare-to-work programme (a ‘New Deal’) for the long term unemployed. I think a repeat of this tax would be both a populist and a pragmatic move. The money raised could be used for various purposes such as reducing the costs of energy bills, providing another ‘New Deal’ for the unemployed, reducing the deficit, or ideally a combination of all three. Although it would have support from the Left, this need not be the construct of a radical agenda; if the Coalition Government were happy to initiate a banking levy in 2010, why would a windfall tax on privatised utilities be such a bold departure?

This tax has intuitive appeal, and inevitably it will have its drawbacks. Whilst raising considerable finance, it doesn’t necessarily address the issue of escalating energy prices. Collusion could be another factor; any Government adopting the policy would not wish to rock the boat too much, perhaps leading to a murky compromise where energy firms agree to the tax provided they can substantially increase their prices again without Government objections. Furthermore, if all of the proceeds are ploughed into paying off the deficit, an economically sound move would be negated by customers being back to square one in terms of coping with escalating costs. However, this shouldn’t put us off clamouring for the tax, provided the tax is part of a wider package of reform. In The Independent, the director of ‘Energy Bill Revolution’ Ed Matthew is quoted as saying “We call on the Government to use carbon tax to super-insulate homes. We could make half a million homes super energy-efficient every year, saving an everyday family £400.” Potential policies like this in tandem with a windfall tax could provide a potent solution.

Ed Miliband’s price freeze plan is seriously flawed and I don’t support it, but at least it is a bold attempt to cope with the serious issue at hand. Simply telling the country that the price hike is “very disappointing”, and that people should simply switch company and “wear jumpers” is not enough. Strong intervention and reform needs to be made. The windfall tax is a good start.

Do Party Conferences still have value?

As the fractured two party system evolves into a multi-party dynamic, party conferences are as valuable and relevant as ever. For political members, it offers a chance of democratic accountability and involvement, whilst for the general public it is an opportunity to scrutinise the party leadership and observe what values are on offer.

I admit that speeches from various MPs and leaders can descend into hot air, soundbites and rhetoric. However, key events and quotations in political history can be traced back to conference season. Who can forget Tony Blair’s abolition of the Labour Party’s Clause IV in 1995, or David Steel’s “go back to your constituencies and prepare for government” battle cry at the Liberal Assembly in 1981? Margaret Thatcher’s famous “the lady’s not for turning” speech was made at the 1980 Conservative Party conference. These quotes are of course far more famous than the venues where they were uttered, but the conferences nevertheless supplied the platform for their formulation. Public scepticism of political leaders highlights the urgency for a conference to deliver rather than for it to descend into irrelevance. Miliband has announced headline-grabbing policies such as abolishing the bedroom tax and freezing energy prices for 20 months just as serious question marks were emerging over his capabilities, not to mention the Opposition’s shrinking poll leads.

People of the view that these events are irrelevant may argue that Prime Minister’s Questions is a worthy test of a leader’s mettle. However, it all too often descends into playground politics, with immature barracking and point scoring. Party conferences aren’t exempt from these tendencies, but in a two pronged approach they at least force the Prime Minister and the opposition parties to answer to both their own party and the country. Furthermore, in terms of policy making the conferences can offer an indication to what the manifestos will look like at the next General Election. As a party member myself, attending a Spring Conference in 2012 gave me a fascinating insight into the democratic processes, and it was a great leveller to see MPs mingling with delegates in between speeches. When I talk of democratic accountability, I’m not at all suggesting that party members contain some sort of omnipotent veto; indeed there often isn’t enough democratic power for members of certain political parties. However, what I am suggesting is that conference season is a good examination of a political party; it can be the difference between whether someone chooses (or stays with) a political movement, and indeed whether they’ll vote for them at the next election.

There is common apathy in modern day politics, and enthusiasm can often wane. However, this makes party conferences more important than ever as opposed to the converse view. As party members and voters, we have a right to see our leaders and policy makers put to the test on the big issues.

Hatred should have no place in politics

The Daily Mail’s attack on Ralph Miliband shouldn’t surprise us. Their political leanings are obvious, so much so that they are an easy target to stereotype and ridicule. However, this doesn’t excuse the fact that hatred and vitriol should have no place in politics, but it is all too prominent on many levels.

Having read the Daily Mail article, any seriousness that I was prepared to afford to the piece was soon lost when it talked of Ed Miliband “bringing back socialism”. Socialism is hard to pin down to a single summation, and it can all too easily be lost in ambiguous buzzwords such as ‘social-ism’, ‘ethical socialism’ and ‘democratic socialism’, but if we are to broadly look at it in economic terms, such as the original Clause IV’s “common ownership of the means of production and exchange”, are the Mail seriously suggesting that Ed Miliband is a socialist? The main aim of the article seems to be to accuse Ed Miliband of being a socialist by association with his Marxist father, but how should the death of Miliband Snr in 1994 shape our views of Ed in 2013? It is a smear campaign, pure and simple.

I find it hard to believe that Ralph Miliband, having served in the Royal Navy, hated Britain. If he did, then so what? His Marxist views didn’t lead to an uprising in Britain, and to consider that Ed Miliband is sneakily creeping his way up the political ladder to impose his father’s views is not only one of Machiavellian proportions, but it is a scenario which sounds like a bad soap opera. That the Mail should include a picture of Ralph’s gravestone with the caption “grave socialist” (it was later taken down) is shameful. I’m not a fan of Miliband junior, but surely there are better and more tasteful ways to criticise him? For The Times columnist Danny Finkelstein’s irritance at the mocking use of “call me Dave” for the Prime Minister read “Red Ed”. Grown-up politics is a rare commodity. In America, Barack Obama is also ludicrously labelled as a socialist by his detractors. However, he’s also been called a terrorist, Hitler and so on. To quote Barack Obama from a State of the Union address in 2009, such quotes would be “laughable, if they weren’t so cynical and irresponsible”.

Hatred in politics surfaces in other areas, too. When seeing leaflets from protesters at the Conservative Party Conference with the words “Tory scum”, I couldn’t help but see the ‘egalitarian paradox’. I’m on the Left myself, but it seems to be a prevailing feature with certain people who lean to the Left to espouse the desire for greater equality and egalitarianism, yet when differing viewpoints arise the bile can emerge. I’m not condemning the right to protest, far from it, but are we really going to label members of the Conservative Party as ‘scum’? I remember when the BNP had a mini-surge in 2009, and people rightly took to the streets with the words “Hope, not hate”; it would be interesting to see if any of those same people gleefully hailed the “Tory scum” literature.

I’m fully aware that there are copious examples of hatred and bloodshed in politics around the world, and that the examples I’ve listed here pale in comparison. I don’t wish to degrade those examples, but my point is that as a seemingly tolerant country (which on the whole Britain is), we can do far better than resort to petty and hurtful antagonism. I’d of course prefer everyone to get along, but I’m not speaking out against conflict or confrontation in politics; we need scrutiny and criticism of our leaders. However, it shouldn’t descend into personal affronts. I’m no saint; if someone announces to me that they have Conservative political leanings, I’ll at least give them some good-natured stick. However, it would be quite another level for me to then pick a random far-right leader and try and associate someone close to that person with their views.

No party is squeaky clean when it comes to personal attacks. Indeed, no political end of the spectrum is squeaky clean, as you’ve seen in the examples above. Political swordfights are great for our democracy and often engaging; Prime Minister’s Questions, when it’s not engulfed by childlike conduct, has been a lively arena for many a generation, and has also been a great leveller of certain personalities. Furthermore, the General Election TV debates were a great way to put the political leaders on a platform and to test their mettle. When political debates descend into hatred and offensive repute, it is not only regrettable and irresponsible, but it is often a sign of someone desperately losing the argument.