Libertarianism for the rich, paternalism for the rest

The rich are trusted to make "intelligent" decisions, the rest have to be regulated.

Many will think that the spectre of a "surveillance state" conjured up by the government’s proposal for the real-time monitoring of email and social media will come to haunt the Conservatives.  At first sight, it is nothing but a brutal assault on civil liberties totally at odds with the conservative tradition; indeed, something worthy of the heavy-handed centralism of Gordon Brown. Still, this judgment merits further reflection - for rather than a total anomaly, such a paternalistic approach has already been applied to a subsection of British society. While the rich have enjoyed the light-touch of libertarian incentivising, the poor have been "regulated" by the current government.      

The coalition’s chosen approach to dealing with the causes of the recession, as well as the economic slump that came in its aftermath, was to "incentivise" - at least as far as the rich are concerned. The government did set out to reform the finance sector; it did so, however, through gentle nudging rather than an effective shove. The proposed "penalties" on the "greedy bankers" were set in terms of "mutual co-operation" and were largely undertaken on a voluntary basis.  Likewise, the attempt to revive the anaemic economy has been by way of incentives, most notably those proposed in the Budget. Cutting both corporation tax and the income tax of top earners was presented as a panacea expected to revive the economy, with business investment predicted to increase by 40 per cent. Similar aspirations, but very different methods, compared to the New Deal of FDR… only history will tell which approach is more effective.   

The government’s approach to incentivising employment on the supply side has been markedly different. The Welfare Reform Act replaced some perverse incentives not to work that were embedded in the old system with rather decisive regulations. For instance, neither the requirement for couples with children to increase their weekly work load to 24 hours in order to claim the working tax credit nor the household benefit cap - i.e., the limit of the total amount of benefit that working-age people can receive – can be readily interpreted as "gentle nudges". In a similar vein, the Mandatory Work Activity - the scheme mandating six to eight weeks unpaid work for up to 30 hours a week to those who "have little or no understanding of what behaviours are required to obtain and keep work" - is not in any way voluntary, as indeed is suggested in the name. In these cases, the government might be seen to be taking a rather paternalistic, or "nannying" approach. Of course, one could argue that there is nothing wrong with nannies, nor for that matter with father figures who know what is good for the kids. Still, with the government regulation in question, this approach should be applied consistently.   

When the government opened the Behavioural Insight Unit, its mission was presented as "finding intelligent ways to encourage people to make better choices for themselves". Some complained at the time that the idea of "nudge", central to its operations, was premised on the oxymoron of libertarian paternalism. Perhaps a bigger problem is that the libertarian element of choice and the paternalistic prescription were applied to two different social groups - the rich, with a bit of nudging, are to trusted to make "intelligent" decisions, the rest have to be regulated.

Patricia Kaszynska is a Senior Researcher at ResPublica

Youngsters play football up against a boarded-up pub in the Gorton area of Manchester. Photograph: Getty Images.

Patricia Kaszynska is senior researcher and project manager as ResPublica.

Getty Images.
Show Hide image

The trouble with a second Brexit referendum

A new vote risks coming too soon for Remainers. But there is an alternative. 

In any given week, a senior political figure will call for a second Brexit referendum (the most recent being David Miliband). It's not hard to see why. EU withdrawal risks proving an act of political and economic self-harm and Leave's victory was narrow (52-48). Had Remain won by a similar margin, the Brexiteers would have immediately demanded a re-run. 

But the obstacles to another vote are significant. Though only 52 per cent backed Brexit, a far larger number (c. 65 per cent) believe the result should be respected. No major party currently supports a second referendum and time is short.

Even if Remainers succeed in securing a vote, it risks being lost. As Theresa May learned to her cost, electorates have a habit of punishing those who force them to polls. "It would simply be too risky," a senior Labour MP told me, citing one definition of insanity: doing the same thing and expecting a different result. Were a second referendum lost, any hope of blocking Brexit, or even softening it, would be ended. 

The vote, as some Remainers note, would also come at the wrong moment. By 2018/19, the UK will, at best, have finalised its divorce terms. A new trade agreement with the EU will take far longer to conclude. Thus, the Brexiteers would be free to paint a false picture of the UK's future relationship. "It would be another half-baked, ill-informed campaign," a Labour MP told me. 

For this reason, as I write in my column this week, an increasing number of Remainers are attracted to an alternative strategy. After a lengthy transition, they argue, voters should be offered a choice between a new EU trade deal and re-entry under Article 49 of the Lisbon Treaty. By the mid-2020s, Remainers calculate, the risks of Brexit will be clearer and the original referendum will be a distant memory. The proviso, they add, is that the EU would have to allow the UK re-entry on its existing membership terms (rather than ending its opt-outs from the euro and the border-free Schengen Area). 

Rather than publicly proposing this plan, MPs are wisely keeping their counsel. As they know, those who hope to overturn the Brexit result must first be seen to respect it. 

George Eaton is political editor of the New Statesman.