Key Questions To Answer

1) Where are we on exam reform?
2) Coalition red lines.
3) Who exactly is where in terms of the [shadow] Cabinet?

More should be added to this list.

The Manifesto

My first very rough draft is in progress at https://docs.google.com/document/d/19AMBD6N1SsnUpnRXq33srAoj4WVPUajwHeH_bwJbMwQ/edit

Everyone feel free to edit and contribute.

Our five key pledges

Knocked this up a 3am, rather extremely rough, but I think it could be a useful base. (I thought the Military is particularly poorly worded.

Our five key pledges

The EU: Letting the people choose

While the Liberal Democrats continue to be a Europhilliac party we recognise that the current format of the EU is suffering severe stress, and that a liberal party should never seek to hold the people in something as large as this, against their will. In recognition of this the Liberal Democrats promise a straight in-out referendum after the next general election, if the Eurozone crisis is over by this point we believe that the people of Britain we choose to stay within Europe, and if not, then perhaps it is time to leave.

Crime: Fixing a broken system

The current criminal system in Britain is not working. People who commit victim-less crimes are needlessly imprisoned (At a time where putting a person in prison for a year costs the public £65,000), while many violent offenders recommit soon after release. The Liberal Democrats are committed to solving this, we not take the easy route of being ‘Hard on Crime’ like so many previous governments. In order to do this the Liberal Democrats will begin the transition to treating drug addiction as the medical problem it is instead of the criminal one it is not, and on the other hand funnelling the money saved from such into rehabilitating those who can be, while making sure those who can not, remain separate from the public.

Defence: A Modern Military for a Modern World

In an era of guerrilla and cyber warfare the British Military is still more suited to fighting a ground war in the German Plains. The Liberal Democrats wish for the British Isles to be defended, and for Britain to be able to act as we did in Libya, Sierra Leone and the Former Yugoslavia, but this does not mean we need a standing army of hundreds of thousands. The Liberal Democrats are committed to rolling back unneeded forces, while increasing those which are useful in a modern age, namely the Air Force and Navy.

Economy: A liberal deal for Britain

[Ice/AndyC can write]

Constitution: Bringing it into the 21st Century

In the past it has seemed the Liberal Democrat party has placed a too great an importance to reforming our constitution, it is not close to being the most important issue to us, but at the same time, it does matter. Firstly we are committed to the setting up of English regional Assemblies, it is wrong that all other areas of the UK have their own self electing bodies while England is deprived of such, but at the same time a single ‘English Assembly’ can not truly represent the diversity there is across the Nation, regional assemblies are the perfect solution to such. Secondly we support the transition of Britain’s various electoral methods (There are five currently) to STV in most areas, and AV for Mayoral Elections, and any other single member elections. Thirdly we support continuing reform to the House of Lords. Lastly we support the removal of the farcical Police Commissioner elections, and further Mayoral referendums where there is local demand.

Ideas

These are my ideal additions to the agenda, a mixture of big ideas and small-but-important steps that could form planks in our manifesto. Obviously there is going to be opposition to some of these, and you guys can pick and choose what you like. But yeah, this is policy I could really get behind:

Immigration

• Put immigration policy under the purview of BIS rather than the Home Office (which would still handle enforcement). This would highlight the importance of immigration as an economic concern.
• Promote massively higher levels of immigration in order to boost long-term growth and help reduce the deficit more painlessly.
• There's some stuff about the economics of immigration here, here and here.
• This rather interesting OBR table illustrates my point.

• So, as far as policy goes, this might mean easier paths to citizenship that don't require you to know absurd things that few British people do.
• It might also mean - and this is a big step - selling visas, allowing anyone who wants to to live and work in the UK for, say, £3000. This would, at a stroke, massively increase the size of our workforce, increase fiscal sustainability, reduce illegal immigration and put Russian people-smugglers out of business.
• This would be easier to sell than you might think - we could present it as the choice between sending jobs out and bringing workers in.
• We should also make it much easier for tourists to come to this country. The next few decades are going to see a flood of middle-class Chinese visiting Europe, and we want them to come to London and buy our kitsch.

Taxes, Benefits and the Budget

• I broadly agree with AndyC's excellent and detailed post, but there are a few ideas that I'd like to add.
• One of the groups that gets really screwed over by a universal credit system is single mothers. This would be lessened if, as I have suggested before, we incorporated existing provisions into a major childcare subsidy. This would help encourage more women to enter the workforce, and hopefully also increase fertility, which is important long-term. It fits into the overall theme of supporting work.
• One much more controversial proposal would be to shift the tax burden from income to consumption. The economic arguments for this are strong - income taxes discourage work, whereas consumption taxes encourage saving, consumption taxes are not regressive because consumption is the point of income in the first place, consumption taxes are much less distortionary and much easier and cheaper to collect. In practice, this would take the form of cutting income tax and raising VAT.  AndyC's demogrant would fit into this as a progressive universal rebate. This would also be a much more realistic way of implementing a de facto wealth tax, like Clegg has been talking up (people who paid high rates of income tax when they earned the wealth they have now would also have to pay high rates of consumption tax when they spend that money). And announcing it would stimulate spending now - in the same way that Labour's proposed VAT cut would, by bringing purchases forward, but without breaking the budget - thus helping to get the economy back on track. I know some of you probably won't like this idea, but it's worth discussing.
• We need to reverse cuts to public investment, which are the most destructive and short-sighted way to close the deficit. Instead we need to seriously look at potential savings in 

Education

• We should set aside a significant sum to do some experiments in schools - trying out longer school days, higher teacher salaries, maybe something like a voucher program like what's starting to catch on in America. Who knows - we might learn something.

Science & Innovation

• We should massively increase R&D and technology spending. We have a chance to make the UK a world leader in science, in research into groundbreaking technology in alternative energy, electronics, biology etc.
• Maybe we could provide tax incentives to research, to try and generate tech clusters?
• Intellectual property law is increasingly outdated in the digital age and we need to think about encouraging more innovation through patent reform etc.

Licensing

• We should make it so that it's easier to get accredited in the industries where that is necessary, remove unnecessary licensing restrictions and make foreign qualifications transferable.
• More, we should reform the process to give a greater role to intermediate professional qualifications. Doctors spend far too much of their time doing things that they didn't need ten years of medical training to qualify them for. The same thing is true of lawyers. There's a lot we can do to fix this.

Defence

• Here, there are a few questions to answer:
• What do we want our military to do? Personally, I think we need to spend only as much as is necessary to defend the Falklands, maintain a nuclear deterrent and do Olympic security / riot control / other emergency stuff.
• How much is that going to cost? If we go with a pared-down military, we could save a lot of money - money that could get spent on deficit reduction, schools, etc. Defence is the ultimate low-hanging fruit, spending-wise, and we throw a lot of money at it as things stand.

The Other Thing

• I can't stress how much difference reforming the Bank of England's mandate would help deal with economic problems. The concept of NGDP targeting is gathering momentum, and was recently endorsed at Jackson Hole by Michael Woodford (probably the best and most respected monetary economist alive). Yeah, most people won't understand it, and this isn't a real election. But, seriously, this is a really good idea.

Anyway, I'd like to know what everyone's opinion is of these thoughts.

Other Roles

One point that has come up in discussion is the potential to double and triple-hat.  Not only will it ensure we cover the gamut of the Cabinet Posts, it'll give us more scope during potential Coalition negotiations and ensure that we don't get too down if things aren't going swimmingly for our main portfolio.  I'd suggest taht we use this post to register our preferences so Stefan can make an informed decision.

Personally, I'd love the Energy Portfolio to go with my main one.  A third one would probably have to be Work and Pensions since my first post left that portfolio with not much else to do ...

Departmental Spending Changes

This from AndyC's PM.

Posted via this as I can't create a new post on the blog from my work account (I can comment but not post - the joys of being locked into IE6!)
Current Government spending breakdown in detail is at http://www.hm-treasury.gov.uk/d/pesa_2011_chapter1.pdf
The most useful tables (in my opinion) are the ones comparing expenditure in real terms (1.4 Resource Budgets, 1.7 Capital Budgets).
We should all have a look and suggest changes to the budgets. Bear in mind that beyond the levels in my Tax-and-benefits post (which includes £5bn spend on house building), the closing of tax loopholes will bring in an extra £11.8bn, which I propose spending rather than saving.
Note that AME is very difficult to control; however, I reckon that a withdrawal from Afghanistan could free up £2bn per year from the Defence AME budget (leaving Defence RDEL and CDEL unchanged)
My personal take has capital DEL increasing from 39.2bn in 2013-14 (nominal expenditure in table 1.6) to £61.2 bn as a capital stimulus (mainly on housing (£8.8bn), transport (more than doubling current transport CDEL, focussed on road building/dualling: £7.7bn), Energy & Climate change £3.3bn (again, more than doubled, focussed on energy generation - details later), and BIS +£3.3bn (from 0.75bn) - assuming that BIS will be where the space program is lodged ... 
To pay for this, I'm cashing in all of the tax avoidance savings, £2bn from withdrawing from Afghanistan and reducing the International Development CDEL from £1.95bn to £0.9bn - back to 2008/9 levels (still a slight increase in real terms from 2007/8, before the Crash)
RDEL I'm (in my proposal) keeping level but shifting cash from the Cabinet Office (0.5bn) and Int Dev again (3.5bn; again back to 2007/8 levels) to BIS (£1bn - towards a reduction in student fees and a restoration of some research funding cuts), Energy and Climate Change (£1bn - towards restoring subsidies for solar panels on housing) and Education (£2bn, but I'm not sure what to spend it on ...)
All suggestions more than welcome. That's just my stab at prioritisation.

Macroeconomic stance, Departmental spending and Bank Capitalisation

More thoughts from the Treasury:

1 - NGDP Targetting.  Raised by Theo in the Ideal UK thread and promptly misunderstood by everyone there: NGDP targetting can be explained as having the Central Bank target the SUM of inflation and GDP growth.  That is, targetting nominal GDP (thus the name) rather than real GDP or inflation separately.

There is some belief that the Bank of England is engaging in a practical form of this already, as they haven't raised interest rates to combat the persistent high inflation that we've had through much of the recession - because to do so would likely choke off whatever growth there is.  This manifests the core tenet of NGDP targetting: increasing interest rates to reduce inflation is a very bad idea in a bust; reducing interest rates to increase inflation (demanded by a symmetrical target) is a very bad idea if the economy is already booming.  An NGDP target of 5% (for example) would aim as follows:

- GDP growth of 4%; inflation 1%

- GDP growth of 3%, inflation 2% (the implicit target during the Brown Years)

- GDP growth of 0%, inflation allowed up to 5% (to raise interest rates would be very foolish for the economy and high inflation erodes the value of debt - very useful when the "stabilisers" kick in and the cyclical deficit is therefore high.

It appeals on the grounds of elegance - it's a self-feedback mechanism on the economy and inflation.  I'd institute it promptly with the caveat that whenever one element (either real GDP or inflation) becomes greater than 80% of the sum, a meeting is held between the Governor of the Bank of England and the Chancellor in order to ensure the target is appropriate and no other action needs to be taken.

2 - Bank Capitalisation.  Often forgotten in talks of monetary policy (too often it is seen as a "one club golfer" strategy of manipulating interest rates) this is an element which is often left unmoved.  It is wise not to manipulate too many variables in any case and a little stability is never a bad thing - however the fraction of deposits retained looks as though it was incorrectly set at Basel II.  I would not change it during the recovery - we have enough of a liquidity issue as it is - but I would seek to reconvene the international financial ministers community to explore whether we need a consensus at a different level of capitalisation (for example, under Basel II, banks were required to keep capital of 8% against loans, but only 4% against short-term liquid securities and 1% against lending to sovereign banks: thus the ultra-willingness to lend to Greece (for example) during the boom and the shift from loans to securitised trades to reduce the amount of capital required and increase leverage was a rational response.  As it turned out, those securitised trades were poorly understood and a bloody bad idea!  Basel 3 (coming into effect 2013) won't help things as it stands).

3 - Departmental annual spending rollover.  A long-term bugbear of mine (ever since the first time I handled a large budget in the public sector) has been the handling of underspends against a budget: the budget is "punished" for inaccuracy by having any unspent funds withdrawn and the next years budget reduced by a corresponding amount.  Thus any late deliveries of goods or services can really screw you up and overestimating the requirements in one year can be fatal.  The standard reaction is that whilst overspends are regrettable, underspends are to be avoided like the Devil himself and every Department tries a lunge of last-minute spending in the Financial Year to consume their remaining budget (I know of one car park outside an Officers Mess in Lincolnshire that's bee resurfaced every March for decades ...).  My proposed solution is that any underspend gets rolled over into the next year's budget and the following budget is unaffected.  A Top Level Budget holder can voluntarily surrender any amount of budget at the end of the year in return for a bonus amount to be spread amongst his/her staff.