The government's opportunistic support for referenda will damage democracy

The tool of dictators and demagogues makes its return.

This government has implemented or announced referenda for three things: a national referendum on whether or not the electoral system used in general elections should be switched to AV; a local referendum whenever a council decides to increase council tax by more than 2 per cent in one year; and a national referendum, to be held in the second half of the next parliament if the Tories get a majority and David Cameron manages to renegotiate Britain's treaties, on whether or not the UK should stay in the EU.

That is not the pattern of a government which has a coherent belief in when norms of democracy require referenda; it is, rather, the pattern of a government which believes in the art of using referenda to manipulate the agenda under the guise of democracy.

The AV referendum is the sort which, under the shaky constitutional settlement which emerged from the Blair years, is now a requirement. Major constitutional changes require the consent of those hit by them. Major, in this case, has previously meant a change to electoral politics, or substantial delegation of sovereignty (the exception being Northern Ireland, where the Good Friday referendum was integral to building a coalition of support for the Good Friday agreement). There was ridiculous, infantile campaigning, but the need for a referendum was clear.

The referendum on membership of the EU is less clear. The referendum is apparently justified based on the fact that there has been a significant amount of change in the EU since the last referendum in 1975. But Britain, with its unwritten constitution, is almost characterised by gradual but persistent change. In the last hundred years, the roles of the monarchy and the House of Lords have changed dramatically, without referenda. The UK has also joined, and strengthened its ties to, the UN, NATO, the IMF and the WTO, without referenda.

This is likely part of the reason the referendum is predicated on the idea that Cameron wins "concessions" from the EU. That way, what is being voted on isn't continued membership in an institution which has gradually changed, but rather a straight proposal to directly change a number of things in our relationship with that institution.

But the referendum proposal which really demonstrates the government's desire to use the system as a political bludgeon is Eric Pickle's suggestion that councils which raise council tax by more than two per cent should have to hold local referenda.

There is no constitutional or theoretical justification for this whatsoever. Pickles says:

I don’t have a problem with councils that want to put up council tax if they have a good reason – to fund local opportunities. But I do have an issue if they don’t ask permission first. They have to man up. Be straight with people. Take them into their confidence. If the public believes you’ve got a sensible case they might well listen. But councils should also stop treating residents with contempt.

But if that is to be a guiding principle for future referenda, then why did the government not "man up" when they raised VAT? And ought they to have been "straight with people" when they ended EMA? They certainly didn't "take them into their confidence" over their decision to proceed with a top-down re-organisation of the NHS.

If this government did decide to move to a Swiss-style system of direct democracy, that would be a major constitutional change. Ironically, it would probably be so large as to require a referendum to give it the mandate to do so.

But it transparently has no desire to do so. Instead, the referendum lock on council tax is just a method to impose a cap in a way that replaces toxic language of "central government control" with happy words like "democracy" and "consultation".

We already have democracy, of sorts, in the UK. It is representative, and it relies on parties and candidates running for election with clear sets of promises and priorities, and then sticking to them once elected. If Mr Pickles does want to attack "democracy dodgers", he could do worse than to look at his own coalition partners, authors of the most famous fictional manifesto in British political history. But offering votes on things you'll win, then ignoring public opinion on things you won't, isn't democracy in any sense I recognise. It's more recognisable as the tool of dictators and demagogues Atlee warned of.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.