Thursday, 30 October 2014

I am standing for the Lib Dem policy committee. This is why.

Why would you, after all? Nights crawling home on the late train. Sitting in interminable debate about the intricacies of social care till way into the dark. Queuing up for half an hour in the rain to get through the equally interminable parliamentary X-ray machines. I’ve done it before and I want to do it again.

Let me explain by describing the email I received from the party a few days ago asking me to respond to a simple question with a one-word answer: what is the issue that will be most important to you at the next election?

Come on, answer – quick, quick? What is it: health? The environment? Immigration?

The odd thing about this survey, and so many other similar surveys where the results were solemnly studied around the committee table in the past, is that it begs so many questions that it isn’t really worth asking.

Is there really any difference between health and the environment, for example?  Does pretending there is misunderstand either issue in some people's minds?

If I say health, what would it mean? That I want the NHS to stay the same as it was in 1978? That I want it to undergo radical change to survive? That I want to privatise it? That I don’t want to privatise it? That I want more or fewer hospitals? That I believe resources should be shifted to prevention instead? That I believe air quality should be improved? That there should be more or fewer targets? Or not?

The answers to every one of these questions are somehow assumed? What does it mean that I think health is important – as I do? Has anybody wondered?

There is far better and more intricate polling being done by political parties these days, including in the Lib Dems. But this apparently simple, actually meaningless, survey betrays the old paint-by-numbers approach to policy – that all political platforms are kneejerk, that there is no new thinking, that it is all about positioning, and positioning from a point of view as free as possible from ideology or meaningful content.

I want to join the FPC (federal policy committee, for the uninitiated) because I don’t believe this. In fact, I don’t believe any political force which believes these boneheaded things can survive.

It is de rigueur to criticise party strategists when you are standing for an internal election, and I know this isn’t fair – they are actually increasingly sophisticated. But there is a fear, deep in the Lib Dems, of ideas. And I want to be at the table to put the opposite point of view as strongly as possible.

The world is about to change fundamentally, as I argued a few days ago. This is not the moment to assume that the existing systems, or the existing compromises, represent the only possible world.

It is particularly important when it comes to economics, the traditional blind spot among Liberals everywhere. The present dispensation is unravelling day by day. Everyone except mainstream economic policy makers understands that change is coming.

I am a Liberal. I believe in the potential of the party I joined in 1979 and the bundle of changing ideas they represent. If the party is going to survive as a potent force, it also has to represent an intellectual force, a force of coherent new ideas that allow us to navigate a safe way through the forces that threaten us.

That is especially so when it comes to inventing an economic dispensation that has some chance of spreading prosperity through the world, rather than hoovering up the available wealth like so many vampire squids.

If the Lib Dems become the cutting edge of policy thinking for the future, setting a bold course for change – and on people’s side, not compromising them for the sake of the survival of existing institutions and technocratic compromises – then the party will come back strongly in the years ahead, and just in time for the big shifts due around 2020.

That’s why I’m asking people to get me into a position where I have some chance of doing something about it. Fingers crossed...

Wednesday, 29 October 2014

The strange re-emergence of virtual currencies

I used to consider myself an expert on the future of money.  I realise I am not any more.  Experts on the future of money have to include more IT geek about them than I will ever have, and this realisation follows finding this: a table of some of the market capitalisations of the most valuable 'virtual currencies'.

The roller-coaster success of bitcoin has launched a flurry of activity, unfortunately somewhat similar activity - from darkcoin and feathercoin to litecoin and auroracoin.  Many of them - and there are anything up to 500 of them - are created by rather shadowy figures, often with codenames, using the bitcoin 'blockchain' technology that allows the currencies to bypass the control of banks.

The best introduction I've seen is by my colleague Leander Bindewald, who explains that we are seeing the beginning of a new kind of currency platform about as different from the conventional banking way as it is possible to be - using transparency where the banks use secrecy.

We will see, but this is certainly an awkward step towards the multi-currency world I've been predicting for some time.  But it isn't yet the diverse multi-currency world that I've been expecting.

But what I really find extraordinary about this is the way the financial world has been taken by surprise by it, because we have had parallel currencies of one kind of another since 1933.

I was staggered to see on Wikipedia that the term 'virtual currencies' "appears to have been coined in 2009".

This makes me feel more ancient than really I deserve.  In 1999, a good ten years before that, I was commissioned by Financial Times Business Reports to write an expert study called Virtual Currencies.

I wrote it and it retailed at the shocking price of £495.  It didn't sell terribly well, but then - as the boom collapsed around then - many of the virtual currencies I was talking about, flooz or beenz for example, were no more.

I put the concluding chapter online here not long ago, since it is now interesting primarily as a museum piece.  It is pretty clear that I didn't envisage the explosion of bitcoin-style lookalikes - perhaps because of the demise of digicash not long before - and it included this paragraph:

"Do financial service companies have a unique role in the development of virtual currencies? Probably not, but they are in a good position to capitalise on them, because of the inherent trust which the industry can provide to new kinds of money..."

I'm not proud of this.  I was right but for completely the wrong reason.  In fact, the idea that financial service companies might lend trust to currencies is now completely laughable.  Bitcoin and the other coins are testament to the opposite trend.

In fact, the financial services are so untrustworthy that people have been flocking to invest in a money system so anonymous that its creators are still unknown.

And if you read it, cut me a bit of slack.  I wrote it 15 years ago.

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Tuesday, 28 October 2014

The world will change around 2020

Something is happening out there.  A fascinating article in Der Spiegel (thanks, Joe) puts the issue pretty succinctly: the global economy is no longer working as it should - the banks are not lending, and the huge sums to be distributed by them simply shore up their balance sheets, the middle classes struggle increasingly to make ends meet - and the poor just struggle.  While the handful of those at the top - less than one per cent actually - extract more and more.

It is the Piketty thesis and it is accepted increasingly in every area of modern life, except among national policy-makers.  The idea that the institutions of modern capitalism have become extractive - as institutions have done occasionally in history, with disastrous results - is becoming increasingly accepted.  The problem is that there are few agreed solutions, even tentative ones.  Certainly not from Piketty.

This is how Michael Sauga puts it in the article, describing the economist Daron Acemoglu:

He became famous two years ago when he and colleague James Robinson published a deeply researched study on the rise of Western industrial societies. Their central thesis was that the key to their success was not climate or religion, but the development of social institutions that included as many citizens as possible: a market economy that encourages progress and entrepreneurship, and a parliamentary democracy that serves to balance interests....

Extremely well read, Acemoglu can cite dozens of such cases. One is 14th century Venice, where a small patrician caste monopolized maritime trade. Another is Egypt under former President Hosni Mubarak, whose officer friends divided up key economic posts among themselves but were complete failures as businessmen. These are what Acemoglu calls 'extractive processes', which lead to economic and social decline.  The question today is: Are Western industrial societies currently undergoing a similar process of extraction?

The parallel I draw in my book Broke: How to Survive the Middle Class Crisis is with Spain at the height of its imperial power, where the gold poured in, the ability to manufacture withered away and inflation finally overtook the empire.

It may be that deflation is the demon that will do for us.  It does look increasingly as though the struggling big banks will go through another period of instability, as the big economies begin to struggle again  A new settlement is required - and one that can include people again - and, history has a habit of providing these things once the situation is really desperate.

What is more, those moments of reboot seem to happen pretty regularly every 40 years or so.  The last one was in 1979/80.  The one before was the rapid political and economic shift in the UK and USA in 1940/41.  Before that, it was the new settlement ushered in by the People's Budget of 1909 and Teddy Roosevelt's busting of Standard Oil, which ended finally in 1911.  The big political shift before that came in the mid-1860s.

We are not quite overdue for a major reboot, but it is coming and - by my 40-year pattern - it should emerge around 2020.  We don't know how it will happen, or what constipated failure to tackle the underlying forces at work will provoke it, but we can be pretty clear already the kind of shape it will be.

And here the Der Spiegel article reaches a parallel conclusion, quoting Acemoglu again:

What is needed, he argues, is a new political alliance that takes a stand against the power of the financial industry and its lobby. He sees the anti-trust movement from the beginning of the last century in the United States as a model. It was a broad coalition from the center of society and finally achieved its great victory after decades of struggle: the breakup of major corporations like Standard Oil.

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Monday, 27 October 2014

Lidl, Tesco and the need to control us all

I've never felt much kinship with Lidl.  The bare, rather unfriendly aisles, the functional and inadequate space  for paying, never gives me much comfort to be there.  It feels somewhat alien, even now.  But I warmed to them when I saw their advert giving Morrisons a good kicking.

You can read it here.  It explains the palaver of getting a Morrisons loyalty card, fiddling around with passwords, remembering what food items qualify for the system of loyalty points.  As they say at the end: 'Or you could just go to Lidl'.

It must have enraged Morrisons, and so it should do.

The advert makes things horribly clear to me, especially since Tesco now seems to be on a terminal slide to takeover.

The first was that, if we had the sense to realise it, a 2005 survey by The Grocer - which I now can't find a copy of - should have given us a clue about what was about to happen.  It found that, of all the major retailers, Tesco was the bottom of the list for enjoying shopping there.

Waitrose came top.  I remember thinking at the time that the survey had identified something important.  It was simply unpleasant shopping in Tesco, from the badly designed aisles to the security guard peering at you.  What I didn't realise at the time was that there would come a time when this would be count.  When people understood that, actually, Tesco wasn't really cheap after all - even the street markets in London were cheaper at the time - then the fact that it was no fun to shop there would suddenly matter very much.

There was a kind of sneering atmosphere about the place - a bit like Ryanair - a smug, knowing attitude that people simply had to shop there because it was so cheap.  There was a whiff of contemptuous monopoly about it.  And the result now is all too obvious.

But Lidl's advert makes me realise how far that contempt has spread through the biggest organisations we deal with, public and private.  You read through the list of Morrison's instructions, padded out somewhat by the copywriters, and realise that the most important aspect of the way we are treated these days, by those who rule us, sell to us, supply us with energy or anything else, is control.

Tesco thought they controlled us.  The other utlities, banks, public services and superstores, have designed customer service systems primarily with control in mind.  They are designed to make us easier to process.

And then we wonder why people seem so angry that they are apparently prepared to vote for a party led by a man who used to sing Hitler Youth songs at school (sorry, the story was 'exaggerated', I gather).

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Friday, 24 October 2014

Is the NHS pulling in opposite directions?

Years ago, I remember sitting in the Lib Dem policy committee talking about I meant to call 'preventative health', but which I accidentally kept on referring to as 'health prevention'.

Half-way through, Conrad Russell - the much-missed Earl Russell - tapped me on the shoulder, indicated his packet of cigarettes, and said: "I'm just popping outside for a bit of health prevention".

All of which is a way to say that prevention as the key to the future of the NHS is hardly new.

Even so could you imagine anyone coming out with a report on the future of the NHS which is clear about the problems, honest about the solutions, minces no words and gets the overwhelming endorsement of absolutely everyone?  Because that is what Simon Stevens has managed in his Five Year Forward View, published yesterday.

That is a huge achievement in itself.  It is a bold approach to prevention and local control that everyone appears to be embracing.  It only has a paragraph on what I would call co-production, but Stevens evidently gets it.

Three things occur to me.

The first is kind of partisan: the combination of prevention, flexibility and integration is precisely what the Lib Dems set out - though in slightly different terms - in their new public services programme debated in Glasgow.

I'm not sure what it means when the NHS chief executive comes up with the same themes a few weeks later.  It may mean the Lib Dems were right; it may also mean that they didn't go far enough.

The second is that prevention requires a little more thought.  The New Labour approach to prevention patently didn't work - advertising and professional exhortation to us to drink and eat a little better.  Part of the problem is that effective prevention policies can't be pursued by the NHS alone - because they involve food policy, employment policy and much else besides.  Stevens hints at this but it requires very high level backing indeed.  As he says, it needs to be a national 'movement'.

It also implies a serious shift in funding away from hospitals. Which is when the trouble starts.

The third is that this report seems to me to mark the end of conventional competition in the NHS.  There will still be a market, and a commissioner-provider split.  There will still be choice - but there is no way that Monitor, for example, can preside over the kind of integrated care that is set out here and regulate it as a market in the way that Andrew Lansley originally intended.

In fact, I find what passes for a debate about the NHS at the moment really rather peculiar.  Partly because the left seems to forget that the original turbo-competitive version of the Health and Social Care Act wasn't actually passed.  Partly because the Department of Health seems to be going in two directions at once - on the one hand towards more formal competition, on the other hand towards more integration.

The two can live alongside each other up to a point, but only just.  One of them must be compromised, and the idea that the NHS is being 'sold off' in some way - which we hear constantly from commentators - is not quite accurate.  Something else is going on as well.

Yes, there is a great deal of private investment and private sector provision, though far too few social enterprises and mutuals being commissioned.  The narrowing of contract culture is having a serious effect - the real problem here, it seems to me.  Yet at the same time, this report is evidence that there is another direction entirely being planned - integrated primary care, integration between the NHS and social care.

How does this live with more competition?  I don't know but I think we should be told.

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Thursday, 23 October 2014

Plunging ourselves into delusory data

The principle that numerical measurements will always be inaccurate if they are used to control is now known as Goodhart's Law.

The law was formulated by Charles Goodhart to shed light on macro-economic policy, but it mainly now informs - or, more accurately, fails to inform public services.

The point is that, however incompetent staff may be, they will always be skilful enough to make targets work for them rather than against them. Take for example, the rule that patients shouldn’t be kept on hospital trolleys for more than four hours.  It was early in the targets story that hospitals got round this by putting them in chairs. Others bought more expensive kinds of trolleys and re-designated them as ‘mobile beds’. 

In similar ways, we transformed services into a huge industry dedicated primarily to making the output numbers seem as if they are rising. This is achieved sometimes despite the job they are supposed to do, and often instead of it.  See more in my book The Human Element.

But it is the inaccurate measurements that concern me here.  And this is where the staggering naivety of management consultants seems to cause so much trouble - and I've been thinking about this in relation to the idea that GPs should be paid £50 for diagnosing dementia.

There are no effective treatments for dementia now, so the only possible justification for this idea is that it will provide more accurate data about how many people have this problem.  That is pretty much the conclusion of Ann Robinson's article in the Guardian.  But by creating a situation where doctors are tempted to fall over themselves to diagnose dementia, as a way of plugging the growing hole in their cashflow, the last thing we will have is accurate data.

Data is the new icon.  We worship it.  The prime minister sits demanding graphs, imagining they can make visible the tiny changes around the nation.  We assume that, once we have the data, no further action is necessary.

But what the new utilitarians forget is just how inaccurate this data is - and especially when we give such an incentive to game it.

The same is increasingly true of financial data, gamed from inside the banks or the dark pool traders.  We are awash in a sea of inaccurate data - no problem there except that we appear at the same time to be losing our scepticism about it and loading it into the machines which manage the nation.

Wednesday, 22 October 2014

Supporting business by breaking up the big banks

A fascinating conversation the night before last has made me realise that, although I don’t think I’ve got it wrong on the banks, I only had half the picture.

I was aware that, compared with other businesses – and certainly compared to the salaries and bonuses they pay – the big banks are no longer profitable enough to carry out the basic jobs of providing banking services that they were originally designed to do.

Love them or hate them, everyone seems to agree that banks need to end the pretence of free banking. It isn’t real and it leads to the kind of swinging charges on the people who can least afford them.

But no bank can realistically go it alone on this, and if they try to agree between them they will go to prison. So what can they do?

The answer seems to me that the government needs to facilitate some kind of legal discussion on the future of public service banking, involving all their stakeholders, so that these issues can be resolved in public.

And also, some kind of agreement whereby the banks pay for and mentor the local lending infrastructure that can lend in the places and sectors where they quite patently can’t.

But there is another element to this, which is finally now being spoken by regulators in the USA. The big banks over there have paid out more than $100 billion in fines over the past six years for their behaviour, but still seem unable to reform.

New York Federal Reserve chief William Dudley said, quite rightly, that it they were too big and complex or their systems were irredeemably unfixable, then they would have to be broken up. This is what he said:

"If that were to occur, the inevitable conclusion will be reached that your firms are too big and complex to manage effectively. In that case, financial stability concerns would dictate that your firms need to be dramatically downsized and simplified so they can be managed effectively.”
That moment is now arriving and not before time. But there is a big difference now.

Six years ago, at the height of the crisis, frontline politicians were nervous about taking the big banks apart because it looked vindictive. It looked anti-business.

Now it seems to me to be the other way around. Enterprise is crying out for effective, trustworthy banks, that are no dedicated to short-termism and are not dedicated either to sucking up all the available talent and capital from the productive economy,

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Tuesday, 21 October 2014

Detroit, change and the shift to bikes

One of the main purposes of writing blogs, it often seems to me, is to prove yourself right. Preferably so many times that you even come to believe it yourself.

I try not to do too much of this, in case it becomes embarrassing, but I noticed today some evidence of one of my repeated theses: in this case, that – despite all the rhetoric about technology – change is actually slowing down and has been for some time.

After all, I have been driving in Minis and flying in Jumbo Jets my entire life (I’m 56), and – although I know their internal machinery is very different – that is only what you would expect.

The first submarine entered service in the Royal Navy back in 1901, and half the period since has seen the rapid development of submarine technology, culminating in 1960 with the launch of the nuclear powered Dreadnought.  The second half has just been rapidly slowing variations on that theme.

See my book Unheard, Unseen for details (at least about early submariners).

In the past generation, we have seen the return of real shops, real food, bricks, trams, and the delivery of food to the door rather as our grandparents experienced it.  I know we also have mobile phones and Facebook, and I suppose that does change the way people live, but not in comparison to the vast changes going on a century ago.

So what are we to make of the reinvention of the failing city of Detroit as a centre of bicycle manufacturing?  Like Oxford, Detroit began as a bike manufacturing centre, and became as a result a twentieth-century car manufacturer.  Detroit seems to be edging back, according to an article in the latest edition of Fortune.

Seven bike manufacturers have set up there in the last few years.  Detroit Bikes even invested 2.5m for a 50,000 sq ft factory.

What is interesting about the article in Fortune is their misunderstanding of the way Europeans think.  They assume that it is the collapsing population of Detroit, which means less traffic, which is encouraging people to move around by bike instead.  In Europe, I think we see it the other way round: it is the complete impossibility of navigating across London by car that is leading so many people to take up cycling.

It isn’t exactly plus ca change, but it is an example of technological history coming full circle.  And this time, history seems to be saying: do it right.

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Monday, 20 October 2014

IT + big organisations = stupider people = stupider IT

I'm having trouble with my car (a Citroen C3).  The engine keeps cutting out at the most awkward moments, even going along the motorway.  I've searched the internet and find that this is actually surprisingly common, and nobody knows what causes it (yes, I've changed the crankshaft sensor, in case anyone asks).

It is pretty extraordinary that this kind of thing should stymie a otherwise perfectly effective car.  It is, of course, to do with the sheer complexity of the electrical and IT system that now inhabit every bonnet, and especially perhaps Citroen bonnets.

Once the garage has run a scan on the engine, and found nothing wrong, there seems little more they can do.

But there also seems to be a lesson here for the administration of public services.  Even perhaps a clue to the conundrum I was talking about so bitterly earlier in the month - the bizarre failure of every utility to manage the simple business of me and my family moving addresses.

I know the problem of complexity is hugely interesting and debated when it comes to biology and maths, and natural systems.  But it is remarkably little discussed in relation to the business of government - and the other knotty question of why it is so difficult to make anything happen in government without an endless stream of unpredicted, unpredictable unintended consequences.  Complexity again.

The classic story was the, probably mythical, one about the man in Alaska whose windows wound down automatically in a blizzard and who died of exposure.  The previous model would have allowed him to wind them down manually.

In fact, I have a feeling there is some new law that lies behind all this, and I'll come to Boyle's Next Law in a moment.

I am a huge admirer of Bryan Appleyard and his thesis, in his book The Brain is Wider Than the Sky.  He argues that we have deliberately shrunk our idea of what human beings can achieve just to fit into our narrow ambitions about what machines can do.

There is something similar going on here.  The sheer complexity of cars, and the sheer complexity of administrative systems, disempower their keepers and make them stupid.

Because it isn't actually complex when you're operating the system.  It is ridiculously, stupidly, naively simple.  Try talking to a call centre about anything slightly out of the ordinary and you find that they can't deal with it, because their software system hasn't got anywhere to click for it.

They can't get into the main system and tweak anything, any more than the mechanics can mend my car.

For the last two decades, after the so-called 'Corporate Re-engineering' revolution, our businesses have been rendering themselves more stupid with CRM and ERM software which turns flexible human systems into concrete, inflexible, stupid systems, minded by disempowered humans.  See more in my book The Human Element.

That's the first part of Boyle's Next Law: IT in big organisations tends to make people stupid.

But it gets worse, because these nearly constrained, newly blinkered employees, who do everything by numbers, are then involved in writing more software.  Of course it makes things worse.  Here's the formula:

IT + big organisations = Stupider Humans = Stupider IT.

Simple, isn't it.  Not actually very complex at all.   But don't please assume that I am some kind of neanderthal who doesn't like computers.  It is the combination of big organisation thinking and IT, and the complexity involved - the the boneheaded complexity of my car - that makes me cross.  Because that is seriously neanderthal.

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Thursday, 16 October 2014

The coming revolt of upper middle England

I have always understood that the last recorded words of Roy Jenkins were: "Oh, upper middle, if you don't mind."  He was in hospital and being offered some middle-brow biographies...

That is a way of introducing the revolt of middle England.  There is certainly something about the rage of Nigel Farage, reproduced in so many public meetings around the regions, that is frightening, something of the fierce contempt of the sidelined for sophisticated capital cities everywhere.

But it raises the question: what about upper middle England?  Because I have a feeling that their revolt will follow later next year.

I was reminded of that reading the reports today that the French fracking company are appealing against West Sussex County Council's refusal of planning permission to drill in Wisborough Green.

I have been reminded of it also in the last few days by the news that Ecotricity, the green energy company, was considering joining the group legal action against the vast government subsidies for a new nuclear power station at Hinkley Point.

This may seem like a small squall in comparison to the Ukip revolt, but I suspect it may be very much more than that.  Because if there is one form of energy which is even more unpopular with wind farms, it is fracking - with the fear of polluted ground water and the environmental destruction that has followed in some parts of the world.

And the next most unpopular energy source is nuclear, not just for the sheer expense, but the fears of radiation and plutonium theft.

Whatever you might say about windmills, they do not carry the perceived risks of either of those and, in particular, the threat to the health of our children.  This is what will drive the revolt of upper middle England, and despite Owen Paterson, who prefers to subsidise nuclear than windmills, and whose views were given an outing this morning on the Today programme.

There might have been a time when we trusted our leaders enough to take their reassurances about nuclear and fracking safeguards at face value, but not now.  It spells trouble.

Not at first, but once there is a scare - the first fracking mistake, the next nuclear leak, the first poisoning of cattle, the first lost plutonium.

And let me make one other prediction while I'm about it.  Ukip will find itself divided over renewable energy, just as the Tea Party movement has been in the USA: not because some people love wind farms after all, but because - as it turns out - solar energy offers a measure of energy independence to people which they crave.

So, yes, if I was either a Conservative or a Labour candidate now, I might worry about the impact of Ukip on the coming election, and on the traditionally tolerant stance of the English.  But I would be even more worried about the rage that will be unleashed on them a year from now if fracking and nuclear expands.

There is nothing so frightening as lawyers on picket lines, and middle class mothers chaining themselves to diggers on a major scale.  That will be seriously scary for the establishment.  Quite what it will mean politically, I don't know - but hold onto your hard hats.

And make absolutely sure you don't accept the post of Secretary of State for Energy and Climate Change in the next administration.

Wednesday, 15 October 2014

Towards a fiercer liberalism

There are sharks who live below the line at the Guardian.  It is a frightening place.  I know this.

I wrote a comment article for the Guardian yesterday about the sign at Beddau RFC urging over-enthusiastic parents to calm down a little.  I found myself defending serious parents against the idea that somehow nothing really matters.

In the circumstances, I escaped pretty much unscathed - but then it would have been very silly of me to read absolutely all the comments.

What does seem to have irritated people was this section:

"It’s tough out there. So tough that I’m not planning to compete by the usual rules. But I’m aware that I do have to buck up a bit. I’m tired of the old maxims: letting children decide on religion or politics or careers when they are older. I’m finished with the I-don’t-want-to-foist-my-ideas-on-them style of parenting.

The truth is, I do want to foist my ideas on them. In fact, I’m wondering whether my failure to do so risks letting them grow up like Bertrand Russell, of whom it was said that he had lived with an open mind for so long that he couldn’t get the damn thing shut.

The psychologist James Hillman suggested that failing to give your children a steer may not give them anything to react against, and they may need that to find their own way. I insist that my children go to church – I even manage to get them to do so occasionally. I insist that they should also be Liberal Democrats. This policy is working: my 10-year-old realises that he can irritate me by praising the Labour party."

Now you can see why this might have irritated the more sanctimonious atheists, but I also seem to have annoyed people I very much respect.  It has forced me to think about this a little.

I suppose it is inevitable that I might have given the impression that I am enforcing these beliefs with a rigid disciplinarian approach.  Of course I'm not.  And just because I am partisan, that doesn't seem to me to absolve me from the duty of explaining to my children what all the different sides of these political and religious issues are - but also explaining to them, because they ask, what I think and why.

I'm aware that I have a duty to do this in an open-minded way, and not to disparage the motives of people who think differently.

But I don't want to leave my children rootless.  I don't believe political or religious convictions are consumer choices, something you put off - like dating - until you are old enough to see the smorgasbord of choice.  I don't want them growing up without structure, without convictions, without depth.

No, I won't ban them from the house when they disagree with me - as they inevitably do - but if liberalism means that everything is relative, and there is no content, no culture to grapple with, then I want none of it.

Fortunately, Liberalism is not the same as post-modernism.  It isn't the same as moral relativism.  Nor is it the same as the apparently contradictory post-modern ideas that nobody can understand anyone else's culture but nonetheless, we enlightened ones must shun content, culture and roots altogether.

I'm not one of those people who believe that somehow it is possible for me to convert to a range of different global faiths without years of study, because these are cultures with extraordinarily deep and complex ways of looking at the world.

I believe that the post-moderns are wrong on both counts.  People need cultural roots, but they can transcend them.  We are not consumers, looking for the best deal from our political and religious convictions.

As a parent, I want to show - if at all possible by example (difficult at the best of times) - that I can be understanding about people's point of view but to have convictions, live by them, and expect my children to as well.  There may come a time when they see things differently for themselves, and then I will not have a meltdown - but until then, I don't believe they should be keeping their powder dry for religion or politics or morality.

I may not always keep to it.  But that seems to me to be a genuine Liberalism, and a fiercer version than wishy-washy post-modernism.

Tuesday, 14 October 2014

The peculiar changing purposes of privatisation

I had such an interesting response yesterday about dysfunctional customer service systems fuelling widespread, and rather unfocussed rage.  It may also have been significant that more people read what I wrote than any one day hit-rate I've had this year.

It also focused my own attention on the huge change in the stated purposes of privatisation. Not that I have difficulties with the idea in theory – there is bound to be private investment in services and there should be.  It is the practice that has changed so much, and apparently without anyone noticing.

First let's go back a bit.

It wasn’t until after the Falklands war and her 1983 election victory that Margaret Thatcher’s ministers grasped the sheer power of the privatisation idea. It was obvious to anyone who tried to use them that the nation’s telephone boxes were largely out of order, and so the privatisation of British Telecom in 1984 was a popular move. As many as 2.3m people brought shares.

Three years later, the Treasury had earned £24 billion from privatisation, and the sale of British Gas provided four per cent of public spending for 1986/7. The idea of privatising state industries had spread to France and the USA and Canada. Even Cuba and China were testing it out.

The merchant bank Rothschilds set up a special unit to organise privatisations, under the future Conservative frontbencher John Redwood, and Conservative theorists were muttering darkly about selling off the Atomic Energy Authority and the BBC. In fact, selling nuclear power stations was the thin end of the wedge. No amount of spin could disguise the fact that they weren’t economic.

A pity that knowledge has not survived the decades since.

The original impetus to sell BT was partly to find private investment for telecoms and partly because of Peter Drucker’s original idea that private companies were more efficient than public ones.

By 1985, efficiency was just one of the benefits – it was also supposed to help employees get a stake in the business, provide wider share ownership and reduce the role of the public sector.

All those happened, though one of Redwood’s team – another future Conservative star Oliver Letwin – said that actually there was very little evidence for the idea that privatised companies were more efficient.

Even so, there was a logic about the idea that added up. Privatising public services would break those bureaucratic straitjackets, and get a new entrepreneurial energy about the place. They would focus on customers. Things would happen. There would be enterprise and imagination. The human element would weave its magic.

But that didn’t happen. The early privatisations led to dramatic increases in effectiveness but, after that, things slowed down. Private corporate giants turned out to be as inflexible and hopelessly unproductive (at least as far as the customers were concerned) as the public giants: they just provided considerably fewer jobs.

Here is the point. Most privatised services are now as sclerotic, inhuman and monstrous as their public sector predecessors were.

The Conservative theorist Ferdinand Mount realised this as early as 1987. “It is becoming increasingly clear that the regulators have no teeth and the operators no conscience,” he wrote, and so it proved.

See more about this in my book The Human Element.

The real problem is that the purpose of privatisation has changed. Now it is about paying down the national debt, and perhaps more broadly about competition. Not even the greatest advocates of privatisation seem to believe that private services will be more effective. Quite the reverse.

This is made worse by the effects of central targets and contract culture. In fact, the main advantage that private contractors now enjoy over their public sector counterparts is not effectiveness - not all the time but enough times - is their facility at delivering the right target numbers, to increase the illusions of the ministerial offices that services are being delivered better, when they are simply spraying costs around the system.

This delusory element to contracted out services is the main obstacle to reducing costs in public services. It is just very hard to persuade managers of this, because it would mean persuading them that the figures being delivered to them only tell part of the story.

That is precisely the point. The numbers are believed to be useful because they are simplified. Therein also lies their danger: a simplified, one-dimensional and – as a result – expensive public service system.

Monday, 13 October 2014

Why everyone is so angry these days

I have moved house, as I have probably mentioned before.  This has taught me a great deal, but I also think I've learned something about the national mood.

Let me explain.  Without a telephone, I spent the first three weeks after moving in call centre hell, on a mobile phone.  Not one of the utility services have been able to handle the simple matter of somebody moving in or moving out.

Let's start with the phones.  BT (my new supplier) have been fine.  Reliable even, when they eventually acted.  But I am still wrestling with my previous phone company, ACN, which seems unable to accept that I wanted to end the contract when I moved house.  They sent me the wrong form to fill in back in August - unable to take any instructions over the phone - and are still refusing to cut off the phone at my old address.

Internet.  I've long regarded AOL as the most useless company I've ever dealt with.  They refused to shift my account to a new address unless I also bought phone services from them, which - having experienced their completely dysfunctional call centre - I was never going to do.

Water.  Southern Water sent me three identical letters in different envelopes informing me that my address doesn't exist/

Gas.  E.on has proved next to impossible to phone directly.  I've tried many times.  After hanging on for 40 minutes I eventually got through to the complaints department - to explain that they had lost my meter reading and had sent me an estimate so seriously wrong that the meter still hadn't reached the number they estimated for a starting figure.

"I'm so sorry you had to wait so long," said the complaints lady.

"Really?" I said.  "It's always like that, isn't it?"

There was an embarrassed giggle from the other end of the line.  "Well, yes..." she said.

An excellent article about the phenomenon was in the Guardian last week.

The point is that, for most ordinary people, this is what life is increasingly like.  We are constantly treated with contempt by 'rationalised' customer management systems which can't even manage simple shifts like a change of address.

Our public services are beginning to veer in the same direction, partly since the imposition of centralised targets under Blair and Brown, which add to the delusions of the senior managers.  They see the figures going up for those irrelevant aspects of the service they measure, and convince themselves that things are getting better.

Our privatised services have long since adopted the same rationalised systems: it is their justification for reducing costs - though actually I believe that tightly measured systems tend to spray costs onto other parts of the system.

It is one of the bizarre ironies that privatisation was heralded in the 1980s as the way to make systems work effectively - a potent justification for selling BT - but that is no longer the purpose.  Nobody believes privatised public services will work better any more.

My suggestion is that this agglomeration of dysfunctionalities is one of our main experiences of services of all kinds.  It causes a constant sense of betrayal - I don't believe that is putting it too strongly - and then rage.

I'm not suggesting that the rise of Ukip is somehow because their supporters have to hang on to call centres for long periods of time.  I am suggesting that the delusory contempt of the managers for the managed, in so many areas of life, may explain a little why everyone is so angry these days.

And make no mistake.  They are angry, and the failure of mainstream parties to get on people's side, and in a radical way, fuels a somewhat unpleasant mixture of xenophobia and threatens to give it political power.

Thursday, 9 October 2014

The drawbacks of mental health targets

I see the Guardian is impressed with Nick Clegg's speech.  They didn't like everything - how could they? - but they were right that it was a speech of confidence from a leader, as they said, "at ease with himself".

I think this was right.  It was impressively delivered and it was a powerful case, uncompromising in some respects.  Even for someone like me who is instinctively nervous about 'split the difference' messages.  I'm not sure the case for a middle way could have been put better.

But then it was more than that.  The final line of the speech put this most starkly:

"The only party who says no matter who you are, no matter where you are from, we will do everything in our power to help you shine..."

That is the message of Liberalism in all ages and it was good to hear it.  But there was a story at the heart of the speech - the targets for mental health waiting times - and it has got a good deal of publicity.  It certainly is important given the appalling state of mental health services, but I am sceptical about the use of targets and seems worth saying so now.

I fully accept that, when the rest of the NHS has targets for waiting times, then any service which doesn't will get corroded.  It is a kind of beggar-my-neighbour approach.  I'm even prepared to except the idea, from the King of Blairite Targets Michael Barber, that very poor services need a shock dose of targets to start with.

But you only have to see what contractual targets are already doing to talking therapies in the NHS to realise there is a problem.  A recent report by Chester University set out some of the effects of the combination of Any Qualified Provider and Payment By Results (PbR) on psychological therapies.  They found that the combination of tariff structure “produces widespread perverse incentives for providers and perverse outcomes for patients.” 

These were that:
  • The tariff and PbR becomes a factor in the decision to take patients on, and the type of treatment to offer them.
  • There is a destabilisation and some deterioration in service and a destabilisation of provider organisations affecting their viability. 
  • The pressure of mechanistic throughput of patients affects decision-making and quality. 
  • There are financial incentives to misuse measurement scales within therapy to improve measured outcomes and trigger payments, when these measurement scales were not designed or validated as a payment method. 
There was already “severe strain” among providers in the Any Qualified Provider areas for talking therapies, and it meant that they were taking on work against their professional judgement.

One anonymous large provider had been threatened with insolvency because the tariffs had been set too low and commissioners had been forced to recommission the service, at great expense.  It is true that the new arrangements had reduced the waiting list, but that had been a factor in the gaming by providers – with less demand, they were being forced to rely on the throughput of patients who might not really have needed the service.

One provider told the report authors:

“There is a distinct danger that I am aware of. In stepped care, if a client has only one session it is considered as no therapy and no payment. If it is two sessions, the therapy is considered completed and therefore the provider can claim a flat rate. It makes a slightly perverse model where some rogue organisation might be able to get a sizeable fee just by offering two sessions and claiming a flat fee. There’s a bit of a joke in some circles that ‘oh, all I need to do is deliver my two sessions’.”

On the other hand, so many providers were unable to meet the requirements of commissioning or could not afford the tariffs. Patients were also being rejected because they did not fit the ‘recovery model’, the timescale set down before therapies were supposed to be effective.

I understand that announcing waiting time targets for mental health has huge political and symbolic significance.  But it won't solve the basic problem, and we may find it gets in the way - as all these forms of administration-by-numbers tend to do.

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Wednesday, 8 October 2014

We need banks with boots on the ground

It is a nerve-racking business summing up a debate at a party conference. Will you be able to reply effectively on the podium? Will you think on your feet? Will you trip over the steps?

But I have worked a long time to formalise the Lib Dem commitment to community banks – and now they have.

I also took the opportunity to pay tribute to the work of Susan Kramer and John Sharkey and their colleagues in the Lords, who did the political spadework for this in recent years, and so successfully.

As I got off the platform (see what I said, from 2:36:10), I got a text from friend of mine who had been watching the debate from London (thanks, Emma) who said this:

“Since the recession, I’ve been able to borrow enough to buy a house, but [husband] still can’t raise a business loan from the bank, and he employs about 15 people. Bonkers isn’t it.”

It certainly is, and the story illustrates the peculiar way the centralised UK banking system has developed – designed primarily to fuel and profit from asset bubbles rather than financing productive business.

Still, Ian Swales did an excellent proposing speech and there was only a little opposition.

It now commits the Lib Dems to working for a new local banking infrastructure, alongside the big banks and the credit unions, which is capable of supporting small or medium and social enterprises.

I know only too well that this commitment won’t be taken seriously unless the party explains how – and now they do: the big banks will fund and mentor the new infrastructure, as they do in the USA.

The real argument will now be with people who say that challenger banks are emerging anyway. There are more than 30 new banks awaiting licences from the regulator. They will emerge.

The problem is that they will emerge far too slowly and mainly in the places which need them the least desperately – and which don’t provide the crucial element: an ability to asses local risk properly.

I’m not saying that the new generation of community and co-operative banks will look exactly the same as the old ones. They may not have bricks and mortar branches in the old style.

But we need an alternative to the current ‘drone’ style of banking, operated virtually from Wall Street or the City of London. When it comes to the kind of surgical lending we need locally, it is a hit or miss affair, often with civilian casualties.

What we need, and what we will get if the Lib Dems can turn this commitment into reality, is banks with boots on the ground.

Tuesday, 7 October 2014

Being authentic about runways

I remember that Howard Dean, briefly a contender for the Democrat presidential nomination, once said - or was it his adviser, I forget - that politicians need to go off message if they are going to come across as authentic.

This seems to me to be overwhelmingly true.  The politicians we trust are relatively uncontrollable.  But there is more to authenticity in politics, and part of it is the paradox of compromise.

Politics is all about compromise.  But it isn't just about compromise.  And therein lies the dilemma for the Lib Dems, and anyone else who really believes in diversity and the necessity of working with people you don't agree with.

Because politicians who just believe in compromise tend to come across as inauthentic, slippery and mildly devious.  To make compromises possible, they have to be real - which means they have to be uncompromising and clear about they believe.  They have to be clear about what they want.

This is all a way of congratulating the party for sticking to what they believe about runways in the south east, and about air travel generally.

Rather unexpectedly, Duncan Brack demolished the amendment designed to open the door to a runway at Gatwick - during the debate on the party's pre-manifesto in Glasgow - and did so overwhelmingly.

Party managers are worried, of course, that the vote will look like a betrayal if future coalition negotiations end up forcing some kind of agreement on the Gatwick runway.  This is certainly true (though it suggests that maybe they would have been wiser not to have brought it up in the first place). But if the party pre-negotiates its position on everything beforehand, the even greater danger is that it will end up with a flabby set of compromises - with no authenticity.

I do find it bizarre that the political establishment has simply accepted the airport lobby case that they need new runways.  There has been little or no resistance from an economic point of view - no examination of Heathrow's bloated operation, no genuine study of needs and wider costs.

So, yes, I'm proud of the Lib Dems for refusing the kowtow.  There will be no end to airport expansion in the south east - a kind of driver for economic centralisation - unless we take the political decision to stop.  Otherwise every extra terminal needs another one, every extra runways means pressure for one more.

Wander around the impoverished neighbourhoods of Southall, under the relentless Heathrow flight path, and you will be able to see the sacrifices we force on the poor - now and, all the more, as the climate changes - just for more intensive reliance on air travel..

Which brings me to the climate change debate.  Nothing is so depressing than the failure of humanity to rise to the challenge of tackling a changing climate.

In fact, it is so depressing that I'm beginning to wonder if the political language has to change too.  I detect a reluctance to use the term, to join in the debate at all, for fear of revealing ourselves as angry pessimists - authentic, perhaps, but in the wrong way.

But if we need to change the dialogue on climate change - to shift to reducing our wasteful energy, to providing prosperity more widely - we shouldn't assume that somehow we forget about the original objectives.  However you describe it, extra runways - yet more take-offs and landings to feed the huge shopping centres of Heathrow and Gatwick - is a staggering waste of resources.

Lib Dems may not get the seats they need to resist successfully, but it is at least authentic to set out what you believe.  And they have.

The transformative force of civilising women

I am in Glasgow, theoretically to hand over my crown as Lib Dem blogger of the year last year to this year's winner: the granddaddy of the Lib Dem bloggers, Jonathan Calder.  Unfortunately, being habitually late for everything, I missed the awards - but it is still much deserved and I wish I'd been there.

I also came here, partly, to speak in the debate on public services.  I have blogged in similar style about public service flexibility, and how it goes beyond narrow choice, many times before and I won't try anyone's patience by repeating it now.

The debate was two and a half hours long and, as I watched and listened, I realised that the party was about to change in a far-reaching way that I hadn't realised before.

Time after time, I found myself watching, highly effective, articulate and powerful women future candidates for parliamentary seats which the party either holds or could hold.

There was Helen Flynn (Harrogate), Jane Dodds (Montgomeryshire), Layla Moran (Oxford W), Kelly Marie Blundell (Guildford), Vikki Slade (Mid Dorset), Julie Porksen (Berwick), and of course Julia Goldsworthy (Camborne) who introduced the debate.  I could go on (these are just the ones who spoke in that debate).

If the party wins these seats, and they certainly could - they have all been Lib Dem seats within the past decade - it will transform an overwhelmingly male parliamentary party into something else.

Very quietly, and without a great deal of agonising about it in public, the party has gone about choosing women for many of their most winnable seats.

There are a number of cliches about the presence of women in politics which I don't entirely buy.  I tell myself that there is nothing intrinsically different about women once they are in Westminster.  The system takes over.  But there is another part of me that doesn't quite buy this either.

If these women are elected - the generation born in the 1970s and 80s - they will be a hugely impressive, articulate and civilising intake.  I don't know what they will do to the country, but they will transform the Lib Dems.

Thursday, 2 October 2014

The re-alignment of the Right

The phrase 'Re-alignment of the Left' began with Jo Grimond in 1956.  It happened briefly when the SDP split away from the Labour Party in 1981, but the Left then contrived to align itself back into its old dysfunctional shape.

For some reason, you almost never hear the phrase 'Re-alignment of the Right'.  Yet, listening to David Cameron's speech yesterday, with the ghost of Ukip peering over his shoulder, convinced me that that may be what is happening.

The Conservative Party is an uneasy alliance between two elements which have little in common - the old-fashioned conservatism of family and community, and the new conservatism of markets and big business.  Sometimes a broad Cameronian rhetoric of moderation can hold the two sides together; sometimes it can't.

The last time they came apart spectacularly was during the early years of the last century - half of them backing protectionism and 'imperial preference' and the other half a kind of liberal commitment to trade, with a rump around prime minister Balfour where they had, as one of them put it, "nailed my colours firmly to the fence".

The Ukip insurgency seems to be uniting one kind of conservatism - suspicious of foreigners - from across the parties, against the other kind.  Business lobby groups are in despair.  Something is about to shift.

So when former Cambridge MP David Howarth argued in the latest Liberator (not online) that there is no constituency for Jeremy Browne's vision of a new kind of free market Liberalism, there is a 'yes, but...'

Because the long-term prospect is to re-align the Right so that the old curmudgeons in Ukip take over the rump of the old Conservative Party, and the modernisers, moderates, small enterprisers and open traders join the Lib Dems.

There is a 'yes, but' here too.  Because it provides an opportunity for Liberals to claw back the original meaning of 'free trade' from the conservatives and advocates of turbo-capitalism.

Free trade as it was originally understood, developed by liberals for Liberals, was the right of free people to trade with each other, communicate with each other and be hospitable to each other.  It emerged out of the anti-slavery movement as the antidote to the kind of economic bondage which faced former slaves in the Deep South or former serfs  in Russia.

It was not what it has become: an assertion of the right of the powerful to ride roughshod over the powerless.

It was originally an antidote for monopoly; it has become a justification of it.  In the Re-alignment of the Right, if Liberals embrace it - and make the intellectual running - that has to change.

It is a historic opportunity for Liberalism to take back control of a concept which they invented.  I'm rather looking forward to it, especially if we can re-align the Left at the same time.

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Wednesday, 1 October 2014

Two expensive paradoxes of the politics of the NHS

Let's call it the Westminster Paradox, shall we?  I can't believe it has always been true, but it is definitely true now.

It is this.  Westminster politicians constrain themselves in a whole range of ways in their understanding of what they can change - they are constrained by international trade treaties and treaty obligations, by a creaking economic belief in 'trickle down', and the overwhelming need to carry on with the economic consensus of the 1990s.  It sometimes seems as if they dare change very little.

On the other hand, get them on a conference platform, get them talking about the NHS and they sound staggeringly and unrealistically powerful - 'grandiose', the psychologists would call it.

Ed Miliband promises the finance for another 30,000 more NHS staff, unaware perhaps that the finance is the least of the difficulties here - you can't just conjure up 30,000 professionals in a year or so.  Are they in training?  Are they already trained and wanting to hear his bugle call?  Or will his people go out to the developing countries and offer enough money to their newly trained professionals and ship them over?

David Cameron promises seven-day-a-week GP surgeries, at the same time as his Chancellor promises continued austerity - at a time when primary care is shuddering under the impact of extra costs passed on by private NHS contractors and the peculiar by-product of contract and target culture and payment-by-results.  Where will these new GP surgeries emerge from?  Where will the extra doctors come from?  Are they in training?

The answer is that they are not, at least on that scale.

But then Cameron has realised - as we all have - that the issue of getting an appointment with your doctor is going to be one of those key election issues that can sink a sitting government.

It has a symbolic value for middle England, despite the fact that - in practice - many of the most imaginative practices have managed to find solutions.

In the Blair years, this would have been solved with a vacuous piece of sticking plaster - a 48 hour target, which gave people the right to see a GP in two days if they needed to.  Targets always have perverse ways of making the situation worse and this one did so especially - soon you could only get an appointment within 48 hours, no earlier and no later, and practices hoarded their appointments in the most bizarre and irritating ways.

But we have a different kind of target these days, called something else.  Also, there is no doubt that surgeries need to expand their horizons, and to take back responsibility for the disastrous out-of-hours care, which was taken away from them in the equally disastrous pay agreement under the Blair government in 2004.

But then, where is the money to come from?  Contracting out the out-of-hours service has been so disastrous that handing it back to GPs would cost a small fortune, just in increased insurance costs.

We also need to know rather better whether demand is actually rising in primary care and why.  My own sense is that this is, at least partly, the result of target and contract culture.

This has tended to go hand in hand with contracting out to the private sector, but it actually has no necessary connection.  The problem isn't which sector delivers healthcare, it is what happens inevitably if you try to define the numerical outcomes which a contractor is responsible for delivering, and to squeeze the cost at the same time.

By chopping deliverables up into figures that are easy to measure and report on, all the rest gets lost - and the resulting costs land on the NHS as a whole.  Staff find themselves under pressure to minimise their broad efforts, except where it relates to crossing the numerical thresholds.

See my book The Tyranny of Numbers about the perils of too much measurement.

None of this would matter if you could actually measure the full range and depth of what a good health professional does, but you can't.  Anecdotal evidence suggests that doctors who build a relationship with patients deal better with risk - the patients need less reassurance and the doctors commission fewer tests.

Actually, nobody as far as I'm aware has tested this hypothesis - mainly, I suppose, because it flies in the face of current assumptions.

So there's another paradox.  The more you focus on narrow costs and numerical deliverables, the more costs go up.