Snap Analysis 10 June, 2024

The GEek, Liberal Democrat Manifesto Reaction

Smaller parties in our two-party system feel less constrained by the realities of implementation. After all, it’s easier to set out a “fully costed” programme if you’ll never have to countenance the implications of the taxes that you say you would raise. For the same reason, it’s also easier to set out radical ideas when you are well removed from the challenges of delivery.

This manifesto fits the pattern. It includes a clear set of large tax rises (Capital Gains and Digital Services would both be set for a big increase) and an eye-watering list of smaller changes: more forums, ministers, independent reviews, and procedural changes.

This manifesto sees the Lib Dems back away from regional mayors, create the conditions for more judicial review, and hand over final decisions to ‘reviews’. For a party with ‘democrat’ in its name there is a surprising amount here which is about taking decisions further away from from people and the politicians elected to be their representatives.

And while the Lib Dems’ new spending commitments are offset by costed savings and tax rises, their forecasts ignore pressures on core departmental spending not already factored into current government plans.

🥇 REFORMING POLICY

Young people's mental health

In 2011, the coalition government set out an ambition to achieve “parity of esteem” between mental and physical health. Since then, outcomes for children and young people’s mental health have deteriorated, with one in five experiencing a “probable mental health disorder” (up from one in nine before the pandemic). It is encouraging to see an evidence-based approach in today’s manifesto.

The Lib Dems are committing to open-access mental health hubs in every community, something Reform argued for in 2022 (with the caveat that these should be delivered through upper-tier local authorities not the NHS) and a mental health professional in every school. Both positive ambitions, though as we noted back then, retention of mental health staff in schools will be key. Currently, a lack of vertical progression opportunities makes it difficult for schools to hold onto these staff, and recruitment can have knock-on implications for children and young people’s mental health services.

Extending young people’s mental health services to 25 is also welcome. Interviewees for our 2022 paper pointed to the “cliff edge” that currently exists between children and adult services, leaving people without support through a difficult period of transition — although given how limited provision is at present, outcomes are unlikely to radically improve.

Where we are more apprehensive, is how these policies will be funded: by tripling the Digital Services Tax (a tax on revenue of companies providing online services) to 6%. There’s an argument that social media companies have an impact on young people’s mental health — but levying such a significant and sustained tax on this particular sector could undermine growth.

😤 REACTIONARY POLICY

Stepping back from regional leadership

This manifesto includes a (fairly short) section on Communities and Local Government, including welcome language about tackling the funding crisis in the sector. However, there is little sense of a coherent vision for the future of the sector. The Lib Dems are promising to broadly support decentralisation (great!). They also pledge to “end the top-down reorganisation of councils and the imposition of elected mayors on communities who do not want them.” There’s no further detail. Elsewhere, there is a promise to wind down Police and Crime Commissioners — and, rather than have regional mayors absorb these responsibilities, set up local police boards.

We need more regionalism, with strongly accountable directly-elected mayors, not less. It is already incredibly difficult to establish combined authorities, with or without mayors, without the approval of all of the existing authorities within a jurisdiction. Decentralisation is strongly dependent on the presence of consistent regional-scale institutions: the biggest ‘missing piece’ from the English system of local government.

It is also a mistake to shy away from the reorganisation of local systems. English local government is a variable and opaque patchwork, filled with contradictions. It would be wrong to imagine that it is somehow optimised in its current state and could never benefit from structural change, wherever that change comes from.

💬 QUOTE OF THE MANIFESTO

“Our plan will tackle the crisis at both the front door and the back door to the NHS: investing in public health and early access to community services, including GPs, pharmacists and dentists, so fewer people need to go to hospital in the first place, and fixing the crisis in social care to stop so many people being stuck in hospital beds. Liberal Democrats understand that we need to fix social care to save our NHS.”

👍 GOOD MANIFESTO FOR

Early years

The Liberal Democrats have pledged to improve the quality of early years provision and address the attainment gap, by giving disadvantaged children aged three and four an additional five free hours of childcare entitlement per week, and tripling the Early Years Premium to £1,000 per year.

This is a progressive way to provide more early years support to ensure that the children most in need are school-ready. Additional free spaces are part of the solution to the attainment gap, and improving the quality of provision for disadvantaged children through the Premium is another.

This is more targeted at the poorest families than current government plans, to extend childcare entitlement to 30 free hours per week for all working families. This is undermined by the Lib Dem pledge to move towards universal full-time entitlement for two and four year-olds when “public finances allow.” The workforce to provide either of these policies is hopelessly over-stretched and under-staffed.

Social housing

The Liberal Democrats have committed to building 150,000 social homes a year, backed up by part of a £6.2 billion investment. Social housing is sorely needed, at a time when more than one million households in England are on housing waiting lists, and billions in housing benefits are being paid to private landlords. This is a positive step which could save the government money in the long term. However, little detail is provided on the practicalities, and other manifesto policies — for example the proposed creation of a ‘Wild Belt’ for nature’s recovery — could make housebuilding harder by restricting the availability of land.

Public health

The Liberal Democrats emphasise the importance of proper health prevention policies as tools which can effectively improve the health and life-satisfaction of the nation. The Public Health Grant — which has been cut by 28% on a real-terms per person basis since 2015-16 — is set to be increased, with more deprived communities being targeted to receive additional funding.

As well as increasing funding for public health, the party pledges to tackle some of the consumerism which encourages poor health choices, particularly for children. For instance, they are set to introduce regulations on vapes, junk foods, and high sugar-content drinks.

Another quick, deliverable, and outcome-focused public health measure is the introduction of a ‘kitemark’ for health-related apps. This change has long been called for, and will build public confidence in high-quality healthcare. And more importantly, the policy also calls out the ‘snake oil’ of apps which don’t improve mental health, thus increasing transparency for consumers.

Enterprise

Sustainable funding for public services relies on growing the economy.

Policies to reinstate the Industrial Strategy Council (previously commended for its breadth of experience and genuinely expert input on industrial strategy); expand the British Business Bank (increasing access to patient capital for small and medium-size businesses); and increase R&D investment to 3% by 2030 are all eminently sensible.

It also notes the importance of expanding regulatory capacity, an often overlooked area that’s crucial to accelerating innovation, with a specific pledge to increase the MHRA’s capacity to “halve the time” taken for new treatments to reach patients.

Replacing Business Rates

The Lib Dems have pledged to abolish Business Rates and replace them with a Commercial Landowner Levy (CLL) to support small businesses and help high streets.

It is widely accepted that Business Rates are complicated, deter investment, place a significant financial and administrative burden on business owners, and disproportionately affect capital-intensive sectors, such as manufacturing.

The Lib Dems’ new levy would be based on the land value of commercial sites — as opposed to the value of the building, machinery, etc. on the land — and would shift the tax onto landlords. This would remove the disincentive for investment in business expansion, save time and money for small businesses, and be beneficial for spreading growth across England (as more deprived areas have cheaper land).

This reform is not the silver bullet to transforming high streets or saving council finance, and we need to hear more about how to ensure landowners don’t hand back the extra cost in rent prices, but it is an important step in reforming local taxes and supporting local businesses.

👎 BAD MANIFESTO FOR

Too many cooks

There are 32 seats around the Cabinet table in the current Government, an unwieldy size for a decision-making body by any standard. They are supplemented by a large Government payroll of more junior ministers. The Liberal Democrats would grow these numbers still further, with Ministers for Tackling Loneliness, Rural Communities and Tourism, a Chief Secretary for Sustainability in the Treasury, and a Cabinet Minister for Children and Young People. All of these responsibilities are within the remit of current Ministers. Will the specialisation of ministerial roles lead to better decisions — or more confusion?

More judicial review

We count at least nine new statutory duties or pieces of legislation which set requirements on public bodies, including a general duty of care for the environment in businesses, enshrining the Ministerial Code in legislation, and a duty to consider the Armed Forces Covenant. Legislating, even for important issues, can have serious unintended consequences — particularly the risk of delays and uncertainty through judicial review.

Passing the buck

The Liberal Democrats have outlined to at least 17 new reviews of topical areas — from the level of bus fares to the northern leg of HS2, further education finances and the rates paid to childcare providers. Particularly absent on detail is the policy that three pay review bodies (teachers, police officers and NHS) should be made ‘truly independent’ from government — with no clear analysis of why their current independent status is not fit for purpose.

Efficiency in public finances

Many of the Liberal Democrats pledges are funded by making savings in current budgets — mainly from cutting the size of the asylum backlog, with more caseworkers to reduce processing times and speed up returns. Given most failed asylum-seekers can’t be returned because of the conditions in their country of origin, the latter seems unlikely to happen, so regardless of how quickly their claims are processed they will still incur support costs in the UK. Given that, a 91% saving (£4.27 billion on a £4.9 billion budget) seems unlikely, with small boat crossings continuing to be near record highs.

Social care

The Lib Dems have committed to universal provision in multiple areas, most notably personal social care where they propose a system where “provision is based on need, not ability to pay”. Care is a crucial issue to address, but a universal offer based on need, rather than affordability, directs scarce public funds to those who could pay for it themselves (if necessary by selling assets). Rather than a model which further benefits wealthy families, the government should focus on improving access to affordable care for all, via targeting support at those most in need. In our 2017 paper Reform called for prefunding later-life care through an insurance-based approach.

Say what?

Ministerial communications

The Lib Dems have pledged to require that all Ministers’ instant messaging conversations involving government business must be placed on the departmental record. Furthermore, all lobbying of Ministers via instant messages, emails, letters and phone calls should be published quarterly.

This requirement would require a major administrative undertaking, to record thousands of messages, emails, phone calls . Given government’s record on publishing transparency records (e.g. departments fail to regularly publish Outcome Delivery Plans), this new requirement shouldn’t be the priority for civil service resources.

It also raises further questions. What counts as “government business” and “lobbying”? Will sensitive, confidential discussions be published? How will government differentiate between sensitive and non-sensitive content? More transparency would improve the functioning of our democracy, but these key concerns must be cleared up first.