On Politics and Language

September 13, 2013

This will be the last post for the foreseeable future on this blog, as I have accepted a politically restricted position and will be ceasing partisan comment. Given this, I’ve decided to actually explain the blog’s title, which – alongside people pointing out its obvious pretension – is something that has apparently caused some confusion.

Logos (pronounced low-goss), from the subheading given above, refers to a rational principle. It is an ancient Greek word, and has taken on many meanings for a range of different authors, differing even from Plato to Aristotle. It is Plato’s meaning which is relevant here: the logos is the means by which we access the eidos, the Forms. For those not familiar with this theory, a coarse form of Plato’s argument is as follows. We can recognise a unity across differing objects – for example, we can see a red car and say that it is red, see a red brick and say that it is red, and see a red bucket and say that it is red. How do we recognise red, when there is not one red in one form, but various in many? There must be an exemplar that we call upon in order to recognise such abstract concepts, such unities. This exemplar is a Form, an eidos.

We can have Forms of any abstract concept: the Form of a horse, say, is a perfect exemplar of Horsiness. All particular examples of any abstraction approach the perfection of a form, but do not fully achieve it, but it is in their proximity to the ideal that we are able to recognise them. We gain knowledge of the Forms through a logos, which is a way of expressing the content of a Form. The classical example is that of shape: Socrates says in the Meno, when asked how one would explain shape to someone with no understanding of it, that shape is the limit of a solid. This latter clause is the logos of the eidos of shape. It looks rather like a definition, and indeed one could claim that Plato holds a theory of meaning that states that a word has a fixed meaning given by a fixed definition, and that definition can be uncovered through philosophy, which allows one to identify the logos of a particular Form, or the rational principle by which one accesses it. This is a very primitive statement of his argument, but it will suffice for the point I wish to make.

This understanding of meaning as fixed is one that is perennially popular in philosophy, even to this day when at least one famous academic has made his career from taking as the starting point of his argument: “We want words to have a fixed meaning. What needs to be the case for this to work?” However, it is almost trivially untrue, as even the most cursory reader of Wittgenstein will be aware. Instead, words take part in games of meaning, in which participants in a particular game may assign a meaning to a word while other games assign a different meaning. Meaning is thus fluid and only given in how the word is used. However, it remains crucially important, even without the fixed points of eidos: only with a shared logos can we successfully communicate.

What does any of this philosophical abstraction have to do with politics in the real world, you might be asking? The answer is a great deal, because our main political parties have all been complicit in activities which subvert the logos for their own ends, and in doing so have created a situation in which we are governed by groups of people who in a very meaningful way no longer speak the same language as the public.

The first example of this – indeed, the example that directly inspired the title of this blog – is a phrase used extensively by the Liberal Democrats: ‘local campaigner’. Typically, this phrase is used in the Party’s public-facing literature to describe candidates at both local and parliamentary levels. It seems innocuous – the overwhelming majority of Lib Dem candidates do campaign on local issues, and do so genuinely. My objection to it is not based on dislike of candidates, but rather on the way in which its use in this context changes its meaning. The habitual use by Liberal Democrats of this phrase to refer exclusively to their candidates in their literature and not people who campaign for their local area without political aspiration adds to their logos for this phrase, while the public spirit inherent in campaigning lends the phrase an air of altruism when interpreted by the public. These logoi are as below:

libdem

While it may seem unusual to think of Lib Dems as seeking power, it is clear that the use of this phrase packs in a great deal of utility: the leftmost logos presents an inducement to vote for the candidate.The Lib Dems are not lying when they use this phrase to describe their candidates – in my experience, politicians rarely lie – but instead they have bastardised the meaning of a phrase for political gain.

Of course, the public is not quite so easily deceived as I paint here, but we have two options for their response: either they accept the Lib Dems’ use of ‘Local Campaigner’ as being equivalent to their use (and thus the Lib Dems are not really communicating with them as they are in two different language games) or they recognise that the Lib Dems are using the phrase differently and that actual communication is not happening. Either way, the use of this phrase with its Lib Dem logos erects a barrier to genuine conversation between politicians and the public. It is the case, however, that they are not necessarily aware that this could be in any way considered untoward, which I shall consider later.

The second example I want to pick up on was used by Ed Milliband in his speech to the TUC conference. In it, he claimed that he was presenting a ‘fundamentally different vision of our economy’. In practice, this means a greater emphasis on apprenticeships and potentially something like Germany’s KfW running alongside the existing Green Investment Bank, with perhaps a greater reluctance to deregulate employment thrown in. ‘Fundamentally different’ is, as a result, an exaggeration at best. However, it is highly likely that Milliband believes that he is presenting something very different, because of a feature of political trench warfare: all differences are magnified by competition. Thus, we have two logoi that are even further apart:

labour

Nonetheless, this use of the phrase retains its utility, as it prompts party supporters to believe that Labour is genuinely pushing for real change. However, the sheer disconnect on show here means that such supporters will necessarily be disaffected as time passes, because they are literally incapable of communicating with their leadership using phrases like this.

To maintain parity, the last phrase I want to consider is the current form of the perennial political favourite ‘hard working families’, the slogan of the Conservative Party: ‘For Hard Working People’. This phrase is interesting, as bound up with its positive tone is its negative: it is against people who don’t work hard. It is also deceptive, functioning like ‘local campaigner’ by providing the implication that it will support all hard-working people, even if they fall foul of another more capricious hard-working person who employs them. We therefore have:

tories

Again, communication is hampered by meanings that differ; meanings that have been subverted in the name of political utility. The practice of assessing messages against both polling and focus groups is done with the explicit intention of finding a package of words that delivers support regardless of what those words mean to the person saying them.

The end result is a political class that is incapable of communicating with the general public, and more troublingly, with each other: all three parties have their own language games, and debate between relies upon the protagonists being sufficiently intellectually adept to move between games at will. It is hardly surprising that the public is increasingly disaffected with a political class that does not speak the same language as them – not, in its normal usage, because they use big words and overblown rhetoric, but because they do not share a common logos. UKIP does at present, which partly explains its rise, but the temptation of the sheer utility of abusing meaning in this way will overcome them in the end.

People working in politics will doubtless find this very odd, overly abstract and unimportant compared with the big issues of the day. What does it matter that they distort the meaning of a few words in order to save the NHS, for example? To answer this, I’d like to use an analogy with the foreign exchange market. At every moment, large computers are comparing prices for currency in all the markets around the world, and where they find a momentary opportunity for arbitrage, conducting hundreds of trades a second. The profit on each trade is typically in fractions of a penny, but the sheer volume of these trades makes the practice very lucrative indeed. The same applies to the abuse of the logos: each time a politician says something using a meaning with which they privately disagree, they commit a fractional sin. When they do it hundreds of times a day, they commit a much bigger sin. Even worse, by sheer repetition the sin is normalised, to the point that most political types reading this will respond with ‘Well, that’s just how it is’.

It cannot continue. Without a genuine effort to communicate with the public using meanings that we all share, our political system is left at risk of even greater disaffection and the dangers of a public growing disenchanted with democracy. Without bravery from our politicians, the logos will continue to decline.

Following on from my previous post, I want to discuss MacIntyre’s claim that stories and the roles that people play in them contribute something fundamental to personal identity. This is crucially important to modern politics, because storytelling – in the form of political narratives – is at the core of how parties present themselves and their ideas.

I first encountered the slightly arcane world of political messaging when I began working for the Liberal Democrats many years ago, back when they were cool. Over beers in a bar somewhere in deepest darkest Brighton, I was enthusiastically given the stripped-down story that constituted the Lib Dem narrative in all seats in which we fighting Labour:

  1. The Government isn’t delivering.
  2. Labour have let us down.
  3. Only the hard-working local Lib Dem candidate knows what you want.

This, of course, can be recapsulated around any particular issue, and it’s a useful starting point for this discussion because it’s a very clear statement of the narrative form:

  1. Setup (Disappointment in Government empathised with)
  2. Conflict (Traditional sources of hope for change no longer available)
  3. Resolution (Ergo, vote Lib Dem)

It is, however, fundamentally an impoverished story. The previous discussion covered how MacIntyre’s view of narrative as at the heart of personal identity leads to an interesting point: the tellers of stories shape the lives of those who opt for roles described by those stories. The only role accessible to the audience in this story is that of the disappointee; there is no scope for participation beyond that. There is the audience and the protagonists, and the protagonists are clearly distinguished from the audience. Even the emphasis on empathy and understanding and ‘local’ is insufficient to overcome the difference of roles.

This is significant, because other political narratives have expanded on the roles available to the audience in an interestingly prescriptive way. This week saw the funeral of Margaret Thatcher, whose political narrative can be summarised as:

  1. The country is in a shocking state
  2. Reactionary forces, such as unions, want to imprison economic enterprise in their grasp or that of the State
  3. I shall set you free to enjoy the rewards of your own industry and ingenuity

This narrative ascribes at least two roles to the audience: that of a reactionary force, and that of the industrious and entrepreneurial masses. This faces a very different impoverishment to that of the Lib Dems: that of non-exhaustive roles. The call is for the audience to become protagonists in the battle against the state of the nation, for which Government is an enabler. The audience can either be entrepreneurs or dinosaurs. No other course of action is available.

The roles permitted the audience are non-exhaustive in the sense that people could very well fall outside them; they are not simply the audience, they are active participants in the story. If they are unable to participate, then the story has nothing for them. It is clear that Thatcher believed her own story: the closure of the coal mines was supposed to lead to the of flowering a service economy driven by all the entrepreneurship pent up behind the floodgates of state ownership. One can see Thatcher’s legacy as a tremendous experiment into the fungibility of labour in a context in which there is no other source of wealth available. Unsurprisingly, the answer to the question of, “Can a labour force skilled for a particular profession based in a particular geographic area readily transfer those skills to new employment once the major source of local income is eliminated?” is “No”. The demand by other members of her Government that the newly redundant demonstrate their get up and go by getting on their bikes neglected the fact that bikes costs money. No Conservative government has ever argued for a bike allowance for the unemployed, a fact which must remain a mystery.

Without fungibility of labour, Thatcher’s narrative missed out great swathes of the population, who were left without a role. An interesting analogue of this problem affected the narrative of New Labour, which can be summarised like this:

  1. Public services you rely on are in a shocking state
  2. The Conservatives have failed to deliver better services even when times were good
  3. We will let capitalism rip and feast upon its proceeds in order to deliver better services

This is a an exhaustive narrative; the public are either capitalists or service recipients. The passivity of the latter raises an interesting comparison with the Lib Dem narrative above: one can trace political lineages through the stories they tell, and the shared passivity in both approaches indicates that the Lib Dem strategy was to be Labour, but better.

New Labour assigned a role to capitalists that in the end they could not play: that of a never-ending source of wealth. In this, they failed to define roles which matched reality, in much the same way as Thatcher. The assumption that the reality of people will match a politician’s story about them is all too common in politics.

We can see from the above three stories that impoverishment comes in many guises: that of an ill-fitting role that can just about extend to all, but fails to prescribe that role in an interesting fashion, that of an assumption about how far a role can extend, and that of an assumption about those who play a role which already exists. Political stories do not describe reality, but rather touch upon it lightly in ways which appeal to the politicians that tell them. However, it is easy to describe and condemn with the benefit of hindsight, so in my next post I shall examine Ed Miliband’s version of the One Nation narrative. As something directly inspired by MacIntyre’s work, it should be interesting.

I have been broadly uninterested in the interminable debate over the passing of Margaret Thatcher; arguments about whose disgust and loathing is better justified hold little appeal (that being said, there’s an interesting article here which ontology fans may enjoy). Even more tedious has been Twitter, which is now the domain of an intense competition over who can be the most meta in their outrage. The Daily Mail has joined in by promoting outrage over an outrageous attempt to demonstrate outrage over Thatcher’s legacy, culminating in the following amazing sentence about a song from a children’s musical:

“The BBC would not confirm exactly what part of the song would be aired tomorrow, but most of the lyrics contain the offensive phrase.”

The Conservative Party is at a loss to know what to do about an instance of free speech about which they happen to disagree, and in being so demonstrate why I will always find their political philosophy repellent.

I am in interested in politics because to be so is the natural outcome of an interest in philosophy and morality; one cannot really describe the morality of the individual without paying some regard to the society in which they find themselves. If one’s interest in politics springs primarily from philosophy, then the most important principle by which anyone’s politics can be judged is that of coherency. Regardless of how much I disagree with someone, if I can see the chain of reasoning behind their approach to politics I can, as a minimum, respect them. The death of Thatcher has revealed the incoherency of conservatism in the UK: at once opposed to taxpayers being hit by pay rises for public servants and then stinging us for a £10 million posthumous bonus for a public servant’s performance in office; at once opposed to restrictions on hate speech, and then clamoring for them when they are the subject of it.

It is a political philosophy that appeals to principle when convenient and emotive rhetoric when principle gets in the way. Moreover, it is a political philosophy that believes in using the State to enforce its incoherent worldview upon the nation: the use of taxpayers’ money to fund a celebration of the life of someone about whom the nation is bitterly divided is precisely that. I dislike it but simultaneously accept it: conservatism is not based on reason, but emotion, and as a liberal I cannot demand that everyone approaches politics in the same way I do. As a result, much like the poor, it will always be with us. It is likely that these two facts are related.

One of the most impressive chapters in the Orange Book was by a chap called Clegg. It put forward the quite astonishing suggestion that, given our focus on ensuring that the right amount of power is wielded at the right sort of level, we should have a think about which powers it would be best for the EU to have and which areas it would probably be better to leave to member states. His initial suggestions for powers that should be repatriated revolve around social and agricultural policy, while powers that could be usefully shifted up largely focus around foreign affairs.

We’re a Europhile party, even now – especially now, when it’s hardest to be such a thing – but we haven’t really progressed our thinking on Europe for some time. So, I ask each of the candidates who’ve announced that they’re standing for our European Lists today. What single power is it your priority to repatriate from Europe?

Political parties are broad churches, and comprise many different ideologies and ways of interpreting the world. In the UK, it is almost certainly the case that one of the biggest pressures leading to membership of the Conservatives or Labour is being opposed to the other; both parties make such a significant play of the evil of the other that one suspects the only reason that, say, libertarians and right-wing Christians get into bed together is to upset people they view as socialists.

Even still, one can normally point to a few trends the members of a party have in common, perhaps for the Conservatives a belief in emergent order arising from free markets and historical tradition. For the Liberal Democrats, this is more difficult, as they are not aligned on a traditional left-right axis, and their internal debates on economic issues are not necessarily framed in this manner. The purpose of this post is to gain a better understanding of the Party. To do so, it is instructive to look at what the Party did at this year’s Autumn Conference in sodden Brighton, and develop a framework with which to explain it.

To be clear: trying to explain a series of events is to not try to say whether one’s ‘side’ won or lost; the boring and turgid debate between those who want slightly more markets and those who want slightly more Government intervention is not the focus here, unless one can provide more explanatory value than the other. Rather, what I am interested in is identifying threads that bind the party together, to which all its members to a greater or lesser extent would assent to, even if they arrive at them from a different direction.

I will consider the motions put to Conference and passed by it. Handily for our purposes, all the motions to put to Conference this year were accepted, with some amendment and counter-amendment. I will attempt to identify a philosophy that best captures all the motions, but is sufficiently prescriptive to be distinct from the other two main parties. In doing so, it is important to stress that just because one ‘side’ lost out it does not automatically mean that another provides the best explanation; the rejection of proposals to water down the planning system does not mean the converse of classical liberalism holds sway. Similarly, the rejection of secret courts does not mean the Party is now opposed to all forms of state power. While catch-all explanations like that have a certain attractive elegance, they do not adequately cover the full range of policies that the Liberal Democrats have decided to advocate.

We can, however, make an easy observation. This is that education remains important to the Party. However, this is trivial; education has always been a preferred good of Lib Dems. What is interesting is looking at the language used within the linked motions to understand why it is a preferred good. There are various strands here to unpick. Firstly, education is important because a child’s development is important. Secondly, a child’s development is important, but a parent’s freedom to work is also important. Thirdly, that circumstances that present limitations to development should be overcome. What we can pick out from that is that education is a good inasmuch as it relates to one’s personal development, and that one should be free to develop oneself through employment as one sees fit.

Moving on, consider these motions on the House of Lords, on welfare reform and on the economy. The twin goods here are the dispersal of power to citizens and the empowerment of those citizens as a result. The latter makes particular sense in the context of the previous section on education; development is empowerment, and if one is dispersing power to citizens one would prefer if they were sufficiently empowered to utilise it.

In the context of the above, this implies that Government and its institutions – in this instance the police – are, to Liberal Democrats, the servants of empowered citizens. This is interesting, because it implies a radically different relationship between citizens and State than either of the other two parties. The State is not the sole deliverer of all virtuous things in the world, or a scurrilous imposition upon the backs of the common businessman, to viciously characterise Labour and the Conservatives. Rather, the State is an extension of society; society not being wholly defined as the State or wholly without the State.

This is important, because much of contemporary political discourse rests on a hard distinction between the State and its citizens. Railing against ‘Big Gubbermint’ makes less sense when you’re referring to an organisation to which you by extension belong and have influence over. It is very clear that a cornerstone of Liberal Democrat ideology is that the citizen should take as full a role in their own Government as possible, not simply through elections, but through direct civic participation. Petitioning your local councillor – or indeed standing for election – should be thought of in the same breath as volunteering in an old people’s home. While this is an individualist philosophy, it is not concerned with freeing the individual from the shackles of the State so much as giving that individual as much influence over the governance of the community in which they live as they care to take up.

On this model, the State is not Leviathan, but rather a club to which we all happen to belong. It would make no sense to give that club a privilege over its members, as it is comprised and run by its membership for its benefit. Break the rules and you get kicked out, of course, but should be able to apply for readmission once you’ve proved you can obey the rules. The club has an interest in providing resources for its members so that they can play a full and active role within it, rather like how sports clubs normally have beginner classes as well as competitive teams. The club, of course, is not all of the life of its members, but rather something in which they can participate if they choose to do so. It arises from that voluntary action, not from imposition.

The relative balance of free markets and State intervention in the economy is almost incidental on this view: far more important is the role each play in facilitating the development of members of society. A Lib Dem argument for markets, on the approach I have outlined, would not focus on economic growth as an outcome but rather the importance that participating in a self-governing market can play in one’s personal development, with one’s successes and failures judged by an intersubjective process. People should certainly be able develop their role in society in any way they choose; it seems absurd that a sports club would tell you in exacting detail exactly how you should train, although it can of course provide suggestions. Tutelage has an immediate role for new members, but is certainly something that should not last too long.

The problem with the above is obvious: it is a fundamentally bourgeois philosophy based on the perspective of someone who already participates fully in society and wants to help others do so too. It is a philosophy of a governing intellectual class, rather than necessarily something with mass appeal. It represents an attempt by the bourgeoisie to expand civic participation into all branches of society, that they might be more like them. If one is fond of just-so stories, one could say that the decline of the Liberals to the betterment of Labour at the start of the 20th century was as a result of Labour offering a new model of civic participation to the working classes who had once formed a core part of their vote. With that model, of bourgeois intellectuals using the political support of the working classes to put forward ‘collective’ social goals, the more gentle Liberal approach of slowly turning everyone into the bourgeoisie was set aside. Of course, when the working classes realised that the intellectuals’ social goals were not necessarily their social goals, they lost interest in politics, and have become much less likely to vote. The Lib Dems have yet to be able to enunciate their alternative in such a compelling way as to attract back those voters, but there may yet be scope to do so.

In conclusion, we can say this: the philosophy of the Liberal Democrats is that every individual should be able to participate in their own governance, and the role of the State as an extension of a society of individuals to provide the resources that enable every individual to achieve that civic participation. This does not necessarily speak to the Party’s’ potential electoral success after the Coalition, but as the above makes clear, for the Lib Dems, it’s the taking part that counts.

The Party is currently running a consultation on our climate change policy, which you can find here. As you would expect, it touches on almost every aspect of our lives, and so I’ve decided to respond and to make that response public. I warn you, this is a pretty long post as there’s a great number of questions to respond to. You may note that I grow increasingly irksome as it progresses.

This is a personal response, and should not be considered to be related to any of the organisations with which I am affiliated.

What should the UK’s greenhouse gas emissions reduction target be for 2050?

120% on 1990 levels. The sequestration of carbon emissions from biomass plants actually reduces the level of carbon dioxide in the atmosphere, offering an opportunity to Britain – with its extensive North Sea sequestration facilities – to take a radical lead in combatting climate change. It gives the lie to claims of opponents of unilateral action on climate change that our contribution can only be miniscule compared to that of, say, China. Aiming for a negative carbon Britain could provide commercial opportunities under an appropriate international framework to sequester CO2 from countries unable to do it for themselves. Such a target – as yet beyond the imagination of any other party – would demonstrate how radical Liberal Democrats can be on climate change.

Should targets be based solely on reductions in emissions or should they take into account the emissions of other countries that produce goods exported to the UK? How could such a target be set, measured and enforced?

Any targets must take into account the carbon costs of imports, to avoid inadvertently offshoring emissions and thus providing a cost to our economy without any commensurate emissions reduction. This can only be enforced through an import tariff based on the life-cycle emissions of goods imported from outside areas with which the UK has agreements on carbon pricing, such as the EU.

Would sectoral targets assist in maintaining momentum for long-term targets and, if so, how should such targets be set?

Sectoral targets are essential to avoid political horse-trading between Government departments. They must be set by a rigorous technical appraisal of the potential for emissions reduction across the economy, with the strongest targets set for those sectors with the greatest potential for reduction – and the greatest potential to reduce emissions in other sectors. For example, the successful decarbonisation of the electricity sector will permit further decarbonisation across other sectors through the use of a zero-carbon energy source.

How can future governments be held to account for the achievement of the targets?

Governments should only be held to account by the public the vote, and in this instance the correct method of holding to account is for a Government to elected on a platform of setting legally binding targets for emissions reductions. Such targets, having received the assent of the electorate, can then be used to assess the policies of future Governments, potentially opening them up to judicial review if they appear likely to fail to meet the targets.

How can we ensure that industry, electricity consumers and the public accept greenhouse gas emissions targets and are prepared to make the behaviour changes needed to achieve them?

This is a fantastically broad question, and tailored solutions for each sector would be too detailed to enter into here. However, in broad terms, the Government should work with civil society to achieve popular consent for behavioural change, and bring forward a package of incentives to help achieve such. We should reject the argument that the Government advocating in favour of its own policies is somehow subverting the democratic process; the incentives provided by the tax system for activities the Government is seeking to minimise (i.e. the carbon price floor and so on) are on a continuum with PR.

Should there be an EU emissions reduction target for 2030, together with 2030 milestones for renewables and energy efficiency, on the model of the 2020 targets?

An EU emissions target is a useful tool to provide a direction of travel for economies throughout Europe. However, a renewables rather than low-carbon energy target is excessively prescriptive in terms of the kinds of energy member states will deliver. In particular, it may place countries with extensive carbon sequestration opportunities like the UK at a disadvantage. Member states should be free to play to the strengths of their particular geography and economy. For the UK, this is wind, wave & tidal, and sequestration.

What mechanisms and structures should be put in place to ensure more effective delivery and coordination of policy across government to work towards a zero-carbon Britain?

DECC should be reconfigured as a kind of Carbon Treasury and given responsibility for managing each department’s carbon budgets, set in line with sectoral trajectories. This would put carbon emissions at the centre of departmental planning, in the same way as finance is now. It would give DECC a much stronger hand when wrangling with Treasury over the costs of decarbonisation too.

Should local authorities be given a statutory duty to develop and implement low carbon plans?

Yes.

How should government empower, support and encourage local authorities to play their part in the transition to a zero-carbon Britain?

The General Power of Competence brought in by the Localism Bill, coupled with City Deals that have decarbonisation at their heart, can help provide local authorities with the decision-making power and additional funding needed to enable them to play their part in decarbonisation.

How can we develop a UK carbon pricing regime that is effective, coherent and fair?

A carbon price should only be set as part of a basket of policies covering a range of mechanisms for delivering decarbonisation, and should cover those sectors where the Government is not competent to provide appropriately fine-grained incentives. While attractive from a classical liberal point of view, a blunt carbon tax may actually cost more to deliver the same amount of emissions reduction compared to, say, direct subsidies for low-carbon generation. For those sectors with large-scale and transparent markets where the cost of Government intervention can be properly priced (i.e. energy), direct intervention through subsidies and other regulatory instruments is preferable to a carbon price. For other sectors, an increasing carbon tax on the Nordhaus model is preferable to drive long-term carbon reduction.

What further action is needed at EU level to improve the EU ETS, so that it can create a long-term and stable carbon price to facilitate a shift to a low-carbon economy?

Radical action is required to rescue the ETS from its present form, in which it has been subject to political horse-trading and an excess of Emission Unit Allowances on the market. While a carbon price is less preferable than fine-grained intervention, an emissions market is less preferable again owing to its scope for wrangling over permits for sectors. A transition to an EU-wide fixed carbon price is preferable, but probably politically impossible. In its absence, a move to all permits being issued by auction in line with a linear trajectory towards a 2030 decarbonisation target may be the best option.

Should the Liberal Democrats encourage low-carbon investment by ring-fencing receipts from the EU Emissions Trading System or the Carbon Floor Price?

No. Popular consent for green taxes is greatly aided by them being perceived as cost-neutral, and the revenues from such taxes should be used to reduce the levels of income tax paid by the least well off in our society.

As carbon pricing measures are developed, how can we help energy intensive industries to manage the transition to a zero-carbon economy?

By making the measures cost-neutral; an increase in carbon pricing should be matched by a commensurate increase in another levy. It may be worth having a separate corporate tax bracket for energy-intensive users in order to facilitate this.

In light of the CRC review, what carbon pricing measures should apply to non energy intensive companies and organisations?

All companies should be obliged to pay a carbon price directly in line with their emissions. To achieve this, aggregators or exchanges easily accessible to UK businesses should be set up by Government, ideally in co-operation with the private sector. Companies should have the option of paying a flat fee to an aggregator in line with their emissions or play in the EUA market themselves.

Should we seek to reduce total electricity demand; if so, how? Should there be binding targets for reducing electricity demand?

We should certainly seek to increase the energy efficiency of our economy, but a demand target is difficult: a decarbonised electricity sector would permit increased electricity use in other sectors, potentially radically increasing demand while driving decarbonisation. Preferentially, we would have a fuel poverty target, setting out the maximum percentage of income anyone should expect to pay for energy in the UK. This could be achieved through measures like CERT, delivering energy efficiency for the worst off in society.

How can future electricity policies allow for uncertainties around future demand and capacity, technological developments and the international context?

Primarily through flexibility; subsidies should have automatic review points depending on the deployment of technology, there should be a process for the rapid accession of new technologies into a policy regime, and a mechanism for shifting the cost of volatility in the wholesale fossil fuel markets onto energy suppliers should be developed.

How and when should we prepare for the decarbonisation of the electricity system?

By 2030, in line with the CCC’s recommendations. Decarbonisation should be delivered by a mix of technologies, to ensure that it does not come with a risk of reducing system security. These technologies may include wind and other renewables, CCS and nuclear. The ones actually utilised should dependent both on price and on operational characteristics. For example, wind’s role as a fuel saver helps reduce the system cost of electricity generation in a high-fossil-fuel price scenario.

Should there be a new UK target for renewable energy, for beyond 2020?

A decarbonisation target coupled with expected technologies trajectories conditional on cost (i.e. gigawatts of offshore wind deployed should be dependent on cost reduction) would be more helpful, by providing developing technologies with additional certainty.

Should a target for decarbonisation of the electricity sector be enshrined in legislation; if so, what should the target be?

The CCC recommends a target of 50g/KWh by 2030. This should be in the Energy Bill, or at a minimum set in secondary legislation via an independent body.

How can the electricity market be reformed so as to provide robust incentive mechanisms to reduce total energy demand?

This can be achieved through the Capacity Mechanism as proposed in the Electricity Market Reform white paper, by allowing demand-side measures to take priority over new plant. In addition, an Energy Efficiency Feed-in Tariff would provide businesses and consumers with a direct and understandable incentive to reduce their energy use, overcoming concerns about the cost of capital for efficiency measures for an uncertain return.

How should the above reforms be designed to ensure they do not interfere or undermine the existing EU framework the UK is part of, such as the EU Emissions Trading Scheme?

We must ensure that any electricity that enters the UK market has paid for the emissions caused by its generation in some way. This requires ensuring that the UK’s market is fully coupled to those of our neighbours we trade with via interconnection; currently, a coal plant in the Netherlands can sell electricity via interconnector to us without necessarily requiring an EUA to do so.

What further measures might be needed to allow new market entrants and community energy projects to invest in the UK’s low carbon future?

On the supplier side, the obligations placed on suppliers above a certain number of customers effectively provide a cap on their ambition. Supplier obligations should be better scaled in line with customer numbers, and not all be imposed at once when a company hits a single threshold. Different obligations should have different thresholds, allowing for a company to expand more smoothly. On the generator side, a feed-in tariff for small-scale projects (<10MW) which replaces the RO, rather than requiring them to enter into the more complex world of Contracts for Difference, would be helpful. However, a broader challenge to medium-scale development is offtake risk, and the Government should look at including a buyer of last resort in its current policy proposals.

What policies are needed to deliver a higher level of renewables penetration?

  • Appropriate strike prices under Contracts for Difference set on a technology-specific basis using a transparent and evidence-based process
  • A single counterparty for CfDs that is ultimately indemnified by the Government. This can be through the willingness of the Government to take on the administration – and hence the obligations of the CfD – in the event that a participating suppliers comes into difficulty.
  • Forward visibility of the Government’s ambition for each technology through technology trajectories, set up to 2030.

Should the UK meet its 2020 renewables target solely from electricity generated in the UK?

This is a complex issue, as countries with a high renewable resource who manage to exploit it early should clearly be awarded by attracting a premium for their product on foreign markets. Given the level of appetite for offshore wind development, this may yet be the UK, and we should not rule out the possibility of us doing this by denying it to others.

Should the UK support overseas renewable electricity projects and interconnectors as a cheaper way of meeting renewable targets; if so, how?

Yes. Interconnectors should be allowed to participate in the proposed Capacity Mechanism, at a level derated for their likely load factor from a given market. The UK should not, however, allow overseas projects to participate in our incentive schemes.

To what extent do we want to see the UK develop biomass electricity, which, for larger plants, requires imports of wood chips or pellets? Is this a sustainable way in which to generate electricity?

In combination with sequestration, this may be a powerful way of extracting carbon dioxide from the atmosphere. However, there must be strong sustainability regulations around any biomass used for electricity generation; clear-felling forests to generate electricity is clearly counterproductive. A fixed lifecycle emissions target for any biomass plant must be put in place, and enforced through an incentive mechanism. Biomass, as reactive plant, has a crucial role to play in ensuring system security.

What role should nuclear power have in the UK’s electricity generation mix between now and 2050?

A role entirely depending on cost. If nuclear power can deliver low-carbon baseload electricity at a cost cheaper than another type of plant or amalgam of plant (i.e. wind combined with gas CCS), then the UK should permit its development.

Where safe to do so, should the life of existing nuclear power stations be extended?

Yes; they have amortised their capital costs to a great extent and are a cheap form of low-carbon electricity.

How should ‘public subsidies’ for new nuclear plant be defined?

Any form of Government intervention in the market which reduces costs (e.g. capital costs) or increases revenue is a subsidy. CfDs are a subsidy, and claiming otherwise makes us look ridiculous. An EU emissions target, rather than a renewables target, would allow us to claim that subsidies for nuclear power are intended to help comply with legislation and hence potentially circumvent EU state aid rules.

What other measures, if any, are needed to encourage the development and commercialisation of CCS technology?

The Government should provide capital support for demonstration projects and revenue support for projects nearing commercial viability. Beyond this, there is a strong role for the Government to provide the Transmission System Operator with the responsibility to deliver a national network of CO2 pipelines to facilitate the sequestration of carbon. Many of the UK’s existing power plants are inland, away from likely sequestration hubs, and as a result would find it prohibitively expensive to participate. Infrastructure of this kind is something that Government is good at.

Should any support for CCS be spread across fuel types or focussed on coal, gas or biomass?

The Government should not pick winners in this field; the commercial sector should be provided with support for those investments in which it sees the greatest commercial opportunity.

Should CCS for industrial processes be supported; if so, how?

By the provision of a network for the export of emissions, and through a carbon price where appropriate.

What role should gas-fired generation play in the GB electricity system (i) before 2030 and (ii) between 2030 and 2050?

No unabated or non-peaking gas should be present on the UK’s electricity system post 2030. All gas plants built in the UK during this decade must be CCS-ready, and any gas plants built post-2020 should be required to bear a significant portion of the cost of the CO2 pipelines they will require.

How can we balance any role for peaking gas plants in providing energy security with the need to ensure that the GB electricity system is on a path to decarbonisation by 2050?

By introducing a market for capacity, as outlined under the EMR proposals. This will allow increasing incentives for gas plant used in a peaking role as time goes on and unabated gas as baseload becomes obsolete. Coupled with a strong EPS for new plant that decreases over time – pushing gas into a peaking role – this should remove unabated plant from the system while maintaining system security.

How can we ensure that the electricity transmission and distribution networks can adapt to a low carbon future?

Adaptation by the System Operator and the various TOs and DNOs will depend on their ability to integrate smart grid operation into existing arrangements. NGET have this in hand already; the best role Government can play is to specify through regulation standards for smart grid interoperability. The Government can help by requiring Ofgem to allow demand-side response, potentially via aggregators, to play a role in any balancing markets that are produced as a result of its current cash-out review.

What policies are needed to ensure that the components of a smart electricity system are in place when they are needed?

The MCS for electric heating devices does not specify smart grid compliance, and there is no requirement for electric cars to do so at present. Any additional large demands must be time-shiftable, and regulations must specify this. Government should work with NGET and businesses to develop these standards.

What new regulatory and fiscal incentives are needed to encourage take-up of energy efficiency in buildings?

An energy efficiency feed-in tariff will help overcome obstacles to building retrofit. Thought must be given to the levels that will be required to deliver deep retrofit where appropriate, and how planning laws could potentially interfere in this.

Should the UK set a separate target for building renovation to 2050? How should this target be expressed?

Such a target would be extremely difficult to enforce, and could represent a severe cost to the householder. Far better to provide incentives and strengthen new-build regulation, as well as require housing being sold on the open market to be given an energy efficiency rating.

How can planning authorities (a) enhance the environmental performance of new and existing buildings while respecting local views and (b) be encouraged to set higher energy efficiency standards, even compared to building regulations (until zero-carbon building regulations apply? What legislative changes, if any, are needed?

This is a question that local authorities should be responsible for answering; a carbon reduction requirement and empowerment to deliver it will allow a variety of answers to this difficult question to be tested.

What other policies (for example the use of regulations) are needed to promote changes in consumers’ energy consumption behaviours?

Low carbon energy will cost more in the short term, albeit less than relying on increasingly expensive fossil fuels. This will lead to a reduction in energy demand by itself without any other intervention by the Government. The Government can provide information on ways of reducing energy consumption while maintaining comfort, as well as providing support for energy efficiency measures to mitigate fuel poverty, as outlined above.

What specific actions to promote energy efficiency in various sectors such as industry and buildings should the Liberal Democrats push for at EU level? Should they include setting energy efficiency targets for post-2020?

An energy efficiency target – especially for products – is welcome. As outlined above, a properly tailored EE FiT would provide an incentive for deep retrofit where appropriate.

 

 Are new measures needed to reduce car and van emissions?

Unless oil prices decrease rapidly from the $80-100 barrel level, the current incentives should drive increased uptake of low-carbon vehicles and reduced vehicle use.

To what extent would lowering speed limits and encouraging greater eco-driving behaviour assist in cutting greenhouse gas emissions?

This is unclear, but the Government’s efforts are better spent on encouraging the uptake of low-carbon solutions, rather than behavioural change better driven by price signals.

How can we address barriers to the uptake of electric cars and vans?

The Government has a clear role in providing the infrastructure electric vehicles require to become successful, but identifying the correct type of infrastructure to supply is fraught with difficulty. Consumers may prefer to use their domestic supply to recharge vehicles if this turns out to be cheaper and battery life can be sufficiently extended. This would require both additional distribution network upgrades and time-shiftable demand. Conversely, short-range vehicles would require a network of charging points to be viable. New technologies, such as charging from strips in the road or via contactless electromagnets may be disruptive. The Government may be better off extending the current voucher scheme to encourage uptake, and let the market decide.

In addition to electrification and HS2, what further investment in rail is likely to make the greatest contribution to reducing emissions from the transport sector?

Quite frankly, the Government should either get out of rail provision entirely or fully nationalise the service, but this is besides the point. The role of rail should be reduce short-haul flights, so the continued extension of High-Speed rail between major cities and Government subsidised tickets on the service would be helpful.

What efforts should be made to improve operational and energy efficiency of the existing rail network?

Sell the whole thing and allow people to build new tracks to aid competition, as well as own both tracks and trains. No Government over the past few decades has managed the railways properly, and it is difficult to imagine one ever doing so. Higher prices for carbon emissions should make them a viable commercial prospect once more.

What longer term steps should be taken to reduce carbon emissions from road freight traffic?

Road freight is highly unlikely to be electrified. The Government may wish to look at the provision of Compressed Natural Gas (CNG) in the short term, and hydrogen in the medium term.

What steps should be taken to manage the anticipated growth in emissions from domestic and international air travel?

Ensure that airlines globally are included within the EUETS, and provide incentives for the use of biofuels to replace fossil fuel consumption. Decarbonising air travel is hard, and direct fuel replacement may be preferable.

What further steps should the Government take at the UK and EU levels to promote less carbon intensive shipping?

Again, inclusion within the EU ETS for global shipping is helpful.

What new mechanisms are needed to ensure that such fuels are sustainably sourced?

Regulation – specify what exactly will count as a ‘biofuel’ against EUETS liabilities and what will not.

To what extent will bio-fuels make a meaningful contribution to meeting the 2050 emissions reductions targets?

Without a hydrogen air fleet, if we want to keep flying we’ll need to use biofuels. Ideally there should be a target to have the entire fleet running on low-carbon fuels by 2040.

Should we encourage the use of biomass by industry; if so, how?

Biomass may have a role in high-temperature processes, and it should be largely up to industry whether they’d prefer to use biomass or fossil fuels plus CCS to decarbonise those processes.

What new policies, if any, are needed to incentivise the use of CCS in industry?

As mentioned above, a carbon price coupled with an accessible CO2 network.

The production of energy crops diverts agricultural resources away from food production. How much arable land should be dedicated to energy crops?

This is impossible to say. This really is something better left to the market, and any consequent food affordability issues dealt with via social policy.

What can we do to increase forestry significantly?

Allow people to amortise their carbon emissions by planting trees.

In which sectors are specific strategies needed for reducing the amount of waste sent to landfill?

Quite frankly, all sectors. The target should be a ban on landfill for everything but the most stubborn forms of waste.

 

How can we ensure that the GIB can access greater investment resources?

Allow it to borrow on the wholesale money markets, with limits on leverage. It should also provide specific products for pension funds, helping to break into these sources of finance.

 

How can we provide individuals with more opportunities to invest in low carbon infrastructure?

This is already being provided by the market through the provision of Green Bonds for some infrastructure projects. A clear way the Government can support this is by aiding community projects when attempting to clear a particular financial structure through the FSA.

How should the government encourage greater innovation in the development and adoption of low carbon technologies and services?

Government is bad at fostering innovation. Providing start-up funding for individuals and groups coming out of low-carbon research centres might be helpful, but costly.

What further action can government take to ensure it leads by example in the procurement of low carbon goods and services?

Departmental targets for emissions should be set. All departments should aim to be zero-carbon for their own operations by 2025.

Should the costs of environmental and climate change policies be recovered on a consumption, or ‘per unit’ basis, rather than a flat rate per gas and electricity consumer, with support provided to low income households through the Warm Home Discount and ECO?

Yes, although this broadly happens already.

What new policies should be introduced to deliver the requirements of the Warm Homes & Energy Conservation Act 2000?

CERT was extremely successful, and ECO will do well to match it. However, it is clear that utilities delivering CERT found accessing particular social groups very difficult. The Government could consider fostering partnerships between utilities and relevant local stakeholders to help overcome these obstacles.

What further action should be taken to empower consumers through collective purchasing and switching?

Allowing more suppliers onto the market by reducing the impact of supplier obligations on new entrants, as outlined above, would increase choice.

What additional action is needed to ensure that there are adequate skills to support a green economy?

Additional funding for employees transferring into low-carbon roles.

What are the correct roles of government and business in this matter?

Government should provide funding for training needs identified by business. It should not be the Government’s role to predict training needs for the private sector.

Should the UK aim to take an international lead in climate policy? Would it be more sensible, given the weakness of the economy, to aim not to cut emissions faster than Britain’s main economic competitors?

The UK should certainly aim to take a lead, if only because our comparative advantage in certain low-carbon sectors will lead to our economic competitors looking to buy our products. Rebuilding the economy on low-carbon lines will require investment, innovation and new products. It will require green growth.

What other steps should the UK/EU take alongside the climate negotiations to maximise the chance of them succeeding, and to promote cuts in emissions?

Carbon tariffs, for all countries without robust systems in place to monitor and properly price the emissions of their products. The unilateral dropping of all other tariffs to countries which do undertake to reduce their carbon emissions provides an incentive.

Should we begin to draw up options for an alternative approach should the international negotiations for a new climate treaty fail?

No; conceding the failure of internationalism runs counter to one of our party’s principles.

And it’s the job of this man:

In all the debate about what the Tories might offer the Lib Dems to get their precious boundary changes, there’s a fundamental truth that seems to be being avoided. While both Lords Reform and changes to constituency boundaries are ostensibly constitutional issues, they don’t lie at the heart of the reason the Coalition was formed. The real electoral dividends are to be reaped from a strong performance on the economy, and this is why Osborne needs to go.

The deficit reduction strategy formed a key part of the Coalition Agreement, and relied on growth picking up in short order. This has not happened. The ostensibly independent Office for Budgetary Responsibility, which Osborne set up, has managed to get every single one of its growth predictions incorrect. If it were managing a fund based on its predictions, it’d already be out of business. We are now back in recession, and Osborne’s response to this is to attempt to restrain one of the few remaining growth sectors we have in order to take an economy-wide punt on gas prices going down – right when the market expects them to rise. Take a look at the price of gas in Winter 2014-15 on the futures market for an indication of the kind of stories we can expect to see at the beginning of the next General Election campaign.

If we have been part of a Government that has failed to deliver growth and plunged hundreds of thousands of people into fuel poverty, we can expect to be decimated by the electorate, even without changes to constituency boundaries. Therefore, Osborne has to go, to be replaced by one of our own. Hell, even William Hague would be better.

On Excessive Executive Pay

January 26, 2012

Vince Cable’s been in the news with his proposals for curbing executive pay. These amount to small increases in transparency and shareholder power, and have been vilified by both left and right, normally a proxy for good Lib Dem policy-making. George Monbiot wants to see a cap on maximum pay, set at a level amusingly below that of his editor. The IEA thinks the Government should stay out of the business of executive pay entirely, and that shareholder interference should be avoided.

The Right argues that high executive pay is the result of a newly globalised market for executives pushing up prices. This appears to be based on the assumption that a global market will be competing for a fixed pool of executives, and the expansion of that pool will therefore increase wages paid. It would also imply that executive pay should be proportional to exposure to foreign markets. Let’s test this. As a proxy for exposure to foreign markets, I will use both inflows and outflows of foreign direct investment, and stats for the US as they’re the easiest to come by:

Sources: Forbes/OECD

That looks like a pretty strong correlation to me. Having a cap on wages would only mean that Britain wouldn’t have access to the international executive market. If there is a limited supply of executive talent globally – and the stats appear to indicate that is the case – it’s worth considering why this should be the case. The strength of the market should incentivise more people to try to enter it. An explanation may be that overseas expansion by multinationals pushes out competition, and this combined with overseas merger & acquisition activity would serve to reduce the pool of individuals with global CEO experience. However, having fewer firms in competition for CEOs should also lower CEO compensation.

It may be that barriers to entry are unnaturally high as a result of corporate directors picking people like themselves, in which case Cable’s reforms should have concentrated less on shareholder representation over executive salaries themselves and more on ensuring that shareholders are represented during the shortlisting process. However, it’s clear that while his reforms are welcome, they don’t get at the root of the problem. High executive pay is a global phenomenon, and has little to do with the UK’s corporate governance.

Today’s announcement by Nick Clegg of measures to facilitate more employee share ownership has been leapt on by Labour media darling Chuka Umunna as an endorsement of Ed Milliband’s ‘Responsible capitalism’ idea. Leaving aside the somewhat audacious claim that Ed Milliband came up with the John Lewis model of business, Umunna’s response demonstrates that Labour have failed to understand the intellectual direction of this Government – and the implications of that for the Labour Party.

I have previously written about how the parties of the Coalition are expressly aiming to use Government to overhaul the way in which the public perceives the private sector, by putting the burden of demonstrating the ethical worth of private enterprise squarely on its shoulders. A drive for greater employee ownership must be seen in this context – co-operatives and mutuals have always been perceived as more ethically sound than models of ownership which concentrate more shares in fewer hands. It puts the cost of an ethical stance on the company, rather than enforcing ethics through legislation. In doing so, it reduces the scope for dissatisfaction with capitalism, limiting the political space open to the likes of the Occupy protestors. It overcomes a very specific challenge: if wages represent a falling share of GDP compared to returns on capital, then the way to overcome this is not simply through higher wages, but the redistribution of capital itself. The share of GDP accorded to wages becomes an insignificant issue.

British liberalism has always recognised that the condition for a free society is the consent of all its members. By moving towards a model which places the burden of securing that consent upon business, Clegg is diminishing the space available for a Labour Party that would seek to secure that consent via the State. Labour’s complicity in this may yet be their undoing.

I’ve put up a post on Labour’s internal coalition and why the Lib Dems should look at working with the unions.

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