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As one form of government must be allowed more perfect than another, independent of the manners and humours of particular men; why may we not enquire what is the most perfect of all, though the common botched and inaccurate governments seem to serve the purposes of society, and though it be not so easy to establish a new system of government, as to build a vessel upon a new construction? The subject is surely the most worth curiosity of any the wit of man can possibly devise. And who knows, if this controversy were fixed by the universal consent of the wise and learned, but, in some future age, an opportunity might be afforded by reducing the theory to practice, either by a dissolution of some old government, or by the combination of men to form a new one, in some distant part of the world? In all cases, it must be advantageous to know what is most perfect in the kind, that we may be able to bring any real constitution or form of government as near it as possible, by such gentle alterations and innovations as may not give too great disturbance to society.

Idea of a Perfect Commonwealth, David Hume, 1754

We talk a lot about constitutional reform in the Liberal Democrats. And a lot about devolution and localism. But how far dare we go? My fundamental position is that the atomic unit of British democracy is the individual citizen. Or at least it should be. That the social contract is something voluntarily entered into by the individual, agreeing to surrender some part of his or her sovereignty and choice only so far as is necessary to achieve some agreed common good.

And so the presumption, as at present, that power is handed down from the highest level, circumscribing what lower levels of government are able to do with huge amounts of legislation and bureaucracy, is anathema to me. The absolute opposite of what a liberal state, or commonwealth, should look like. It is bonkers that those we trust (constitutionally speaking) with the greatest share of our civic contribution are those most remote from us electorally. If we have to have choices made for us, surely it would be better to have them made by people closest to us, people we can hold to account next time we bump into them at the local pub or supermarket queue, people to whom we can regularly communicate our preferences for them to take them into account because we see them in the street, at work, on the school run every day.

So to me the level of governance that ought to be the most keenly democratic, the one with the general powers, is the one closest to the electors - the parish or community council. These councils could have certain community duties, such as to ensure some minimum standards, and what they can't do acting alone, they can club together to procure services. Counties could be responsible for most strategic services such as procuring enough large scale health facilities for their populations.

In David Hume's system, above this level would be representatives sent up to the capital by the counties, with legislation flowing both ways - suggestions from a number of counties triggering debate in the national senate and initiatives by the senate being subject to scrutiny and revision by the counties. So the state ends up dealing with no more than those biggest issues that a few neighbouring counties cannot cobble together a mutual agreement to do for themselves.

This is not government from Westminster down, but from the individual and the parish upwards. Combined with the Citizens' Income providing a safety net that allows individuals basic financial freedom and their own choice of provider for most essential services, parishes and counties would raise most or all of their revenue locally, through any combination of taxes or service charges they can get past the electorate, to achieve local redistribution or, as locally agreed, to procure better than the minimum standards of provision for their electors. Emboldened and empowered parish and community councils could be the initial vehicle for a radical decentralization of public provision of services from central and local quangos.

The Tories talk the talk on localism, but their most recent history in government belies their much vaunted claims as the party of small government. It was in Thatcher's hey-day that the proportion of local government spending, for example, raised locally fell from more than half to around a fifth of their budgets, with the increasing proportion dependent on central government policy, diktat and oversight. Similarly for all they promised radical reform in 1997, Labour have bloated the quangocracy instead of redemocratizing in most areas, as they continue to tinker with local government structures.

The idea that the "Sovereign Individual" should be the atomic level of our democracy from whom all powers flow is an essentially liberal one that the twentieth century has all but wiped out. If we want to talk about devolution and localism we need to be prepared to take some very bold steps towards reducing the centre, including, especially reducing the number and competencies of national elected representatives, as more decision making is restored to the most local level possible.

The chap who drew me to joining the Institute of Economic Affairs (yes, me!) Fred Harrison, publicising his new book "Ricardo's Law: House Prices and the Great Tax Clawback Scam", has a piece in the Yorkshire Post today detailing how it ain't so:

LONDON Mayor Ken Livingstone claims that the capital subsidises the rest of the country.

Taxpayers in London and the South-East, we are told, pay such heavy taxes that the Treasury transfers about £13bn to regions like Yorkshire.

This is one of the appalling myths that cripples public policy and prevents people in the regions from enjoying a square deal from the public purse.

In reality, people in the South-East are subsidised by the regions. And the housing market is the vehicle for delivering this shameful result. For the tax policies of the Treasury, which are supposed to transfer income from the rich to help the poor, are biased to achieve the opposite effect.

Something potentially quite significant saw the light of day today. The launch of the "Liberal Conspiracy" website/blog seeks to provide a forum (network hub as they call it) for those in the "broad left" to coalesce and celebrate and promote their liberal similarities rather than their leftist sectarianism.

It is the sort of thing that I would have thought a few years ago would have fitted my political outlook like a glove. I worry slightly though, from their launch document, that they might well be more "American liberal" than "British liberal", so will watch with interest for now to see how it pans out.

As both my readers will know, I am absolutely and unshakably convinced that the ideas of what could then have been called the "liberal left" in the late nineteenth century were the solutions that were never implemented that would have created a more equitable world in which our current "state of welfare" would not have been needed. And that these solutions have been merely delayed thanks to the fragmenting of the "left" into liberal and socialist and the hijacking of British politics throughout at least the latter two thirds of the twentieth century by a ding dong battle between the protectionists of business interests and the protectionists of labour interests.

So, I'd like to be part of this conspiracy, if they will have me, and if I see that what they mean by liberalism can accommodate such old-fashioned radical liberalism as mine...

I'm off this afternoon to get vetted, or maybe that should be "doctored", for next year's council elections. It always seems early, but I guess it's only eight months away from elections with maybe another election in between where candidates for the next locals can get their face about a bit. I thought I would share some of my candidate approval form with you (there's some of it for the panel only I'm afraid!). Would you allow me to stand?