Shaun Bailey: The pandemic is no excuse to break our election promise and reduce aid to Yemen

6 Mar

Shaun Bailey is the MP for West Bromwich West.

The 2019 election feels like a very long time ago, and a lot has changed since then. Our lives have been turned upside down by the Covid-19 pandemic, and it has been a time of incredible hardship for many of my constituents.

I’m proud that the Government has been there to provide support during this time, through measures like the furlough scheme and Bounce Back Loans. But the impact has been global, even if it has not affected us all equally.

The manifesto that my colleagues and I were elected on at that election could not have foreseen this turmoil, but it made one principled promise that should have withstood it – that our commitment to supporting the poorest countries would always be proportionate to our income.

I was sad to hear that promise abandoned in November, and this week has given us the first illustration of what it means in practice, which the announcement that our aid to Yemen is to be cut by 60 per cent.

Yemen is one of the poorest countries on earth, it has been ravaged by conflict for five years, and 80 per cent of its population rely on humanitarian aid to survive. The UN has warned that four hundred thousand Yemeni children are at risk of dying of starvation.

I may be naïve, but when I heard that the aid budget would be cut I expected support for crises of this magnitude to protected. I know my constituents have a variety of views about the merits of foreign aid in general, and some of them will be pleased to see our spending reduced. But I think there are very few of them who would look at Yemen, where half of all medical facilities have been destroyed, hundreds of thousands of people have been displaced from their homes, and a child dies every ten minutes from a preventable disease, and say that we should be doing less to help.

At the Urgent Question on the cut in Parliament, there wasn’t a single voice from any party in support of the move. MPs can see what the public see – that even when we have to tighten our belts, we shouldn’t do so at the expense of people who are on the brink of famine. Indeed no other member of the G7 is cutting aid in response to the pandemic: all six are increasing their contributions while we reduce ours.

Ministers are clearly aware that they do not have the support of the House in cutting support to Yemen, and it is becoming increasingly apparent that they may not have sufficient support for the wider proposal to reduce the aid budget to 0.5 per cent of GNI. They must give Parliament a say though, if they are going to avoid the same level of fury every time a new area of aid spending is reduced.

Whenever that choice comes, I will vote to keep the promise on which I was elected, because I refuse to accept that as a country we are stepping back when the world’s most vulnerable people need us to step up.

Damian Green: A Budget that proves this is a Conservative Government in the One Nation tradition

6 Mar

Damian Green MP is Chair of the One Nation Caucus.

Although the pandemic took away some of the Budget Day rituals (and I think next year it would be wise to go back to the usual picture outside No 11 rather than this year’s weird staircase ensemble), 2021 has observed some of the usual Budget rhythms. The day itself belongs to the Chancellor, the following day opposition politicians and sceptical journalists pick holes, and then the world moves on, or the Budget falls apart.

By Friday the world was already moving on, so the Chancellor has triumphantly passed the first and most important political test.

What is interesting is the route he chose to navigate while maintaining an incredibly difficult balancing act. He had to keep protecting jobs and companies for the last knockings of the lockdown, while giving a strong platform for recovery and, most difficult of all, showing responsibility towards the public finances.

The elegant way in which Rishi Sunak picked his way through these various obstacles is instructive in what it tells us about his approach, and more widely the Government’s approach, to its central economic task. The combination of necessary increases in public spending in the short term, the skewing of this support to traditionally disadvantaged areas, and the acceptance of tax rises over the longer term to pay for it, showed an admirable practicality.

It also showed an instinct that I am happy to recognise as a modern expression of One Nation Conservatism.

No Conservative wants taxes to rise, but in the real world there are times when borrowing that extra £50billion is not responsible and cutting public spending would be irresponsible. This is one of those times. Interest rates will not stay low forever, so free borrowing is not infinitely available. Equally, the private sector will not recover everywhere unless it receives some targeted stimulus, whether applied to individual business sectors or specific areas of the country.

I observe that much of the criticism has come from the sternest right-wing commentators who believe that in any circumstances we should put tax cuts first and that any deviation from this path will cut long-term growth. Would that this were true. If every tax cut in every circumstance led to higher growth, and therefore a better economy to underpin great public services, then no Government would ever have to take an unpopular decision.

In the real world entrepreneurial spirits will flourish when the surrounding landscape, both fiscal and physical, is friendly. For the UK in 2021 increasing productivity in those parts of the country which have been left behind for too long is the only route to levelling up. This in turn requires a mix of public spending (which needs to be paid for) and Tory business boosters like freeports.

One Nation Conservatives think the market needs to be augmented and underpinned by state action but want to use the power of the market to spread wealth and opportunity. This budget hits that sweet spot.

This is one reason why Labour has been so feeble in its response. Sir Kier Starmer’s problems stem from his faulty analysis of where this Government sits on the ideological spectrum. For all that he has the virtue of not being Jeremy Corbyn, he has drunk the Labour Kool-Aid that tells him this is a hard-right, hard-faced Tory Government aching to destroy the public services in this country. This is demonstrable hogwash, especially after this Budget.

Labour’s loudest point is to complain that some towns with Conservative MPs are benefitting. Since 14 of these towns had Labour MPs before the last election, all this shows is that disadvantaged areas have despaired of the Labour Party. As long as Labour persists in this line of attack, it will fail to gain any traction. Oh well.

While a successful Budget is of course principally a victory for the Chancellor, it also tells us something significant about the Prime Minister. For years he has insisted that he is a One Nation Conservative. Perhaps people will now start to believe him.

He was of course an unusual Brexit supporter in that his social and economic beliefs were always much more in the centre of the political spectrum than many of his followers on that march. For those on the left who like to demonise all Brexit supporters, it is not possible to be a socially liberal economic interventionist in favour of grands projets, and to have supported Brexit. Boris Johnson is a living refutation of their world view, so it’s not surprising they are reduced to frothing fury by his successes.

The last Prime Minister to seize the centre ground and reduce the opposition to this kind of impotent anger was Tony Blair in his early years. In so many ways he and Johson have little in common. But remember that Blair also tried to claim the One Nation mantle for New Labour. The lesson from this Budget is that it is now firmly retaken by a Conservative Government.

Newslinks for Saturday 6th March 2021

6 Mar

Budget 1) Nurses threaten strike over one per cent NHS pay rise

“Nursing unions have threatened to go on strike after the government offered NHS staff a below-inflation pay increase of 1 per cent. The Royal College of Nursing (RCN) has set up a £35 million fund to support industrial action. The union, which represents nurses, midwives and nursing students, has 450,000 members. Dame Donna Kinnair, head of the Royal College of Nursing, said that the 1 per cent pay increase was “pitiful” and that she was “bitterly disappointed”. Ministers say the economic damage inflicted by Covid-19 means lavish pay rises are unaffordable, insisting that NHS staff will get a rise denied to other public sector workers. RCN members will have to be balloted before any industrial action is called, although it is understood that the union believes a strike is a realistic possibility given the strain NHS staff have been under during the pandemic.” – The Times

  • Staff need bigger pay rise after Covid heroics, Tory MPs warn – Daily Telegraph
  • Johnson faces backlash over ‘pitiful’ NHS pay offer – FT
  • Hancock defends one per cent pay rise – The Sun
  • Public urged to join slow handclap protest – Daily Mail

More:

  • NHS pay backlash threatens to overshadow the PR triumph of Sunak’s Budget – Daily Telegraph
  • Health Service workers could be forced to have Covid vaccine – The Times

>Today: ToryDiary: Our survey. A majority of respondents back Sunak’s Budget. Under one in ten say it was bad.

>Yesterday: Left Watch: A looming battle between the Government and the health unions? Welcome back, old normal.

Budget 2) Ulster looks to its own corporation tax in wake of Budget

“Northern Ireland is setting up a fiscal commission that could lead to businesses there escaping a rise in the rate of corporation tax which would be twice that in the Republic of Ireland. The province won devolved powers to set its own corporation tax rate through the Fresh Start Agreement in 2015. This prompted promises from the main political parties to lower its rate to 12.5 per cent, in line with the Republic. However, those efforts tapered off when the UK reduced its own corporate tax rate to 19 per cent… Northern Ireland business groups, who campaigned heavily for the province to chart a path closer to the Republic’s corporate tax rate, expressed dismay at the increase announced by chancellor Rishi Sunak in Wednesday’s Budget.” – FT

  • ‘Landmark review’ says Brexit Britain must look to new frontiers for growth – The Sun
  • How Sunak made the budget work for Brand Rishi – The Times
  • Budget blow for middle classes as one in four families will lose child benefit – Daily Mail
  • Levelling up Fund bias in favour of Tory seats ‘pretty blatant’ – FT
  • Kwarteng: Town centres will evolve – The Times

Comment:

  • Sunak’s un-Tory Budget confounds assumptions once again – Camilla Cavendish, FT

>Yesterday:

Johnson to tout Britain’s vaccine success on India visit

“Boris Johnson is planning a springtime trip to India to tout Britain’s vaccine success and push for progress on deepening trade relations after Brexit. The visit will be the Prime Minister’s first official overseas trip in a year after the Covid-19 pandemic has kept him at home. Mr Johnson had initially planned his Indian tour in January but that was cancelled as the emergence of Covid variants sent the country into lockdown again before Christmas. The visit will happen before the G7 meeting of world leaders in Cornwall in June, with Mr Johnson possibly flying out as early as next month. While specifics of the visit are still being confirmed, Mr Johnson is expected to visit Delhi and possibly Pune, a sprawling city in the west of India.” – Daily Telegraph

  • Covid variants will not hold UK back, insists top scientist – The Times
  • Hancock reveals 40 per cent of Brits now have been vaccinated – The Sun
  • Oxford vaccine team use same tech to revolutionise cancer treatment – The Times

More:

  • Blocking exports harms global fight against virus, says Prime Minister – The Times
  • All who have to go into work now able to get access to rapid-result tests – The Sun
  • Government ‘unlawfully failed to publish’ details of more than 500 Covid-related contracts – Daily Mail

‘Secret plan’ to cut spending on war zone aid by two thirds

“Ministers have secretly drawn up plans to cut Britain’s humanitarian support in global conflict zones by up to two thirds this year, leaked Foreign Office documents reveal. In a highly controversial move, aid spending in Syria would be reduced by 67 per cent. Aid to Libya would be cut by 63 per cent, Somalia by 60 per cent and South Sudan by 59 per cent. The cuts have been made necessary by the government’s decision to reduce aid spending from 0.7 to 0.5 per cent of GDP from April on top of reductions triggered by the fall in the UK’s income as a result of Covid-19. As a result the Foreign Office faces having to reduce its annual aid budget from about £15 billion before the pandemic to £9 billion this year.” – The Times

  • Government is planning to slash hundreds of millions in foreign aid – Daily Mail
  • Hackers obtain sensitive data on UK aid projects overseas – The Guardian

Williamson hints school summer holidays could be shortened ‘permanently’

“Gavin Williamson today hinted that summer holidays could be shortened permanently as part of a move to a five-term year. The Education Secretary said the government is looking at doing things in a ‘different way’ as it scrambles to help children catch up after the coronavirus lockdowns. However, headteachers cautioned against a ‘knee jerk’ introduction of a five-term system, which could potentially mean children having just four weeks off in the summer rather than around six. The suggestion of a much deeper overhaul comes days before pupils are finally due to return to classrooms in England on Monday. There have been warnings that it could take a decade to heal the damage done to the prospects of youngsters – with the most vulnerable suffering the worst.” – Daily Mail

  • Johnson faces testing time as schools prepare to reopen – The Guardian
  • Postcode lottery over classroom return – Daily Mail

Channel ‘armada’ proposal blocked amid fears it would become ‘migrant magnet’

“Plans to deploy a Channel “armada” comprising a 400-capacity ship to support Border Force boats, dinghies and jetskis were blocked by Priti Patel amid fears that it would become a “migrant magnet”. Home Office officials drew up the plan to station the 2,000-tonne rescue ship in the middle of the Channel to take up to 400 migrants picked up from dinghies by Border Force cutters or boats. The 200ft Sentinel ships have been used in the Mediterranean as “safe havens” for migrants after deploying their own on-board rescue crafts and net-like structures that can scoop people out of the sea in rough weather. The scheme’s backers argued that it could be used to persuade France that migrants could be safely picked up at sea and taken back to Calais or Dunkirk if the country abandoned its opposition to accepting returned migrants.” – Daily Telegraph

  • Britain is home to ‘10,000 foreign criminals who could be deported’ – The Times

Downing Street ‘spent £2.6m refurbishing No 9 as media centre’

“Downing Street has spent more than £2.6m on renovations to hold White House-style press briefings – prompting a call for Boris Johnson to “hang his head in shame” given the 1% pay rise recommended for NHS staff. The cost of the refurbishments for televised question and answer sessions with journalists at No 9 Downing Street will add to pressure facing the prime minister over the funding of a separate revamp to his official residence. Labour questioned his priorities for shelling out millions on “vanity projects” while “picking the pockets” of NHS workers. An extensive overhaul within No 9 Downing Street began last year as the government announced plans to hold televised briefings. They will be fronted by Allegra Stratton, a former journalist who has also been head of strategic communications for the chancellor, Rishi Sunak, and was credited with carefully crafting his image.” – The Guardian

  • Johnson ‘persuaded Tory chiefs to secretly pay for Carrie Symonds’ £200,000 makeover’ of No 10 flat – Daily Mail

Northern Ireland protocol ‘puts pressure on loyalists from radicals’

“The organisation representing former loyalist paramilitary groups in Northern Ireland has warned that they are coming under increasing pressure from “radical elements” within their own ranks to take direct action over the Northern Ireland protocol. David Campbell, a spokesman for the Loyalist Communities Council, said there were fears that more militant members were seeking to reactivate the former terrorist organisations. He added that there were “elements” within the groups which had never been reconciled to power-sharing in Northern Ireland and were using the dispute over Brexit border checks in the Irish Sea to strengthen their hands. “Young people are absolutely incensed by the protocol,” he told The Times.” – The Times

  • Foster accuses EU of inflexibility over Ulster – The Guardian

More EU:

  • UK-EU trade falls sharply as Brexit disruption starts to bite – FT
  • Britain to lead world with freeports Brexit masterplan – Daily Express

More NI:

  • The inside story of the Fleet Street editor and the IRA – Daily Telegraph
  • Guardian apologises to Belfast woman over article written by Greenslade – Daily Mail

Comment:

  • Frost’s fight with the EU is political thuggery – Matthew Parris, The Times
  • The EU is suffering from a Napoleon complex – Robert Tombs, Daily Telegraph
  • Did Greenslade turn my husband into a target? – Kathryn Johnston, Daily Mail

>Yesterday: Iain Dale’s column: The EU has no interest in Northern Ireland’s future prosperity. It just sees it as a mechanism to exert its power.

Scotland: Johnson’s unpopularity in Scotland ‘irrelevant’ to Holyrood election, says Ross…

“Douglas Ross has argued that Boris Johnson’s unpopularity in Scotland is irrelevant in the Holyrood election as the SNP raised the prospect of another independence referendum this year if Nicola Sturgeon gets a majority. The Scottish Tory leader accepted the Prime Minister would “play a role” in the campaign ahead of the planned May 6 ballot but insisted the party he leads is “distinct” from the UK Conservatives. Pressed whether Mr Johnson was a “help of hindrance” to him, with the Prime Minister having low approval ratings in Scotland, Mr Ross did not directly answer the question but noted that “he is not standing for election to Holyrood – I am.” The SNP is expected to argue that Scots need to choose at the ballot box between being ruled by Mr Johnson or having another vote on separating from the UK, with Ms Sturgeon at the helm.” – Daily Telegraph

  • Deal leaves UK fishermen with less quota than before Brexit – Daily Express

…and he accuses SNP of ‘cover up’ as it emerges no minutes were made for two meetings

“First Minister Nicola Sturgeon last night faced growing calls to resign after it emerged no minutes were made for two crucial meetings the Scottish Government held with its lawyers to discuss the legal challenge brought by Alex Salmond over the handling of harassment allegations against him. MSPs on the Holyrood committee set up to investigate the Government’s botched handling of the case against the former First Minister had asked to see the record of conversations held on November 2 and November 13, 2018. Both SNP leader Ms Sturgeon and Scotland’s most senior civil servant, Permanent Secretary Leslie Evans, were at that later meeting, the Scottish Conservatives have claimed.” – Daily Mail

  • Nationalists accused of spending thousands on Salmond court fight after lawyer’s defeat warning – Daily Telegraph
  • Scotland’s leader fights for her political future – FT
  • Three SNP members are ridiculed for ‘copy and pasting’ identical tributes – Daily Mail
  • Billboards appear in Scotland’s largest cities urging Sturgeon to resign – Daily Telegraph
  • Independence ‘polls drop’ ahead of election – Daily Express

Comment:

  • The nasty, ignorant SNP has been unmasked – Douglas Murray, Daily Telegraph

Liverpool mayoral race in chaos as Rothery sues Labour

“A councillor is suing the Labour party after she was removed from the shortlist to become the party’s mayoral candidate in Liverpool, along with two other female councillors. The legal action – brought by Anna Rothery, who holds the ceremonial position of lord mayor of Liverpool – is the latest messy chapter in what one local MP described as the “shitshow” surrounding Labour’s handling of one of its most loyal cities, which has not elected a Tory MP since the 1970s. The party in Liverpool has been in turmoil since December, when Joe Anderson, Labour’s incumbent mayor, was arrested as part of a police investigation into corrupt property deals. He denies all wrongdoing but stepped down, prompting a rush to find a successor to contest May’s elections.” – The Guardian

News in Brief:

  • Drakeford’s unworkable and unworthy vision for the Union – Henry Hill, UnHerd
  • Why is the SNP afraid of issuing its own government bonds? – John Ferry, The Spectator
  • The New Keynesian inflation experiment – Tim Congdon, The Critic
  • Why shrinking the Army would be a huge strategic blunder – Freddie Fitzjames, CapX

Our survey. A majority of respondents back Sunak’s Budget. Under one in ten say it was bad.

6 Mar

Rishi Sunak’s ranking in our latest Cabinet League Table – still second; lowest score as Chancellor since Covid; overwhelmingly positive raing – sets the scene for our survey’s post-Budget question.

Add together those respondents who thought that the Chancellor’s plans were either good or very good, and you have 58 per cent – a majority.

Under one in ten believe that Sunak delivered bad Budget: a very different response from that of some of the newspapers that they will read.

You can of course argue that 42 per cent of the replies did not give his plans a thumbs-up, but that is to include the 34 per cent who saw them as a mix of good and bad.  The planned tax rises will doubtless count for some of the bad.

As an exercise, try dividing that 34 per cent by two, and adding half of it to the 58 per cent.  You get 75 per cent – and, as it happens, the Chancellor’s net positive rating in that Cabinet League Table was 74 per cent.

That’s as fair a summing-up of the whole as we can manage.  Finally, a balancing “very bad” category was lost between the conception and publication, for which we apologise.

It’s worth adding that its absence has made next to no difference.  If you think the Budget was very bad, you’ll either tick “bad” as a substitute, or refuse to complete the question.  Only one respondent out of 898 passed on the question, for whatever reason.

A looming battle between the Government and the health unions? Welcome back, old normal.

5 Mar

Ministers are squaring up to one of the big public sector trades unions for a battle over pay. Like the first buds of Spring, this story feels like the politics of the ‘old normal’ might be coming back after the long pandemic winter.

Health unions are furious that the Government is proposing to give NHS workers just a one per cent pay increase. Is this fair?

On the one hand, Health Service workers have been on the front line in the fight against Covid-19, with some putting in traumatic shifts on high-mortality wards during the worst phase of the crisis.

Critics have also pointed out that the decision sits very badly alongside last year’s decision to award teachers “the biggest pay rise in fifteen years“, even as the education unions fought tooth and nail against efforts to get children back to school. And speaking of holes dug in 2020:

Likewise, the Chancellor’s decision to turn on the taps to see Britain through the pandemic has some people asking: why not just add a pay bump for NHS workers to the bill?

But as our editor has previously explored, there is another side to the story of the last twelve months. Furlough may have spared millions from unemployment, but it still represented a 20 per cent income cut – and it fell exclusively on the private sector. Moreover a pay rise, unlike a one-off bounty of the sort offered by the Scottish Government, would be a permanent increase in public expenditure and couldn’t be written off as a one-off exceptional expense.

Sunak might consider copying Nicola Sturgeon’s policy instead, but the First Minister was heavily criticised for a policy which gave as much to the best-off NHS staff as front-line workers.

Given that, and in light of Rishi Sunak’s apparent determination to start getting the public finances in order at some point in this Parliament (at least, probably this Parliament), there is a strong case for focusing public expenditure on areas which will best facilitate private-sector growth and support those who have been unable to work during the pandemic, especially young people who have stalled at the very start of their careers.

(There’s no salvaging the optics of the parallel pay rise for teachers, though. Just evidence of the woeful state of the Conservatives’ battle against the Blob.)

Even without substantial pay increases, health is going to consume more and more public spending in the years ahead. Absent a big shift in public attitudes towards paying much higher taxes in perpetuity, at some point the Government is going to have to confront the hard business of NHS and social care reform. Will the Party’s new, post-2019 positioning make that harder? Or will all the spending have given ministers some credit they can spend on driving change without being immediately seen as the ‘same old Tories’?

Andrew Tettenborn: Protecting free speech at universities. The Government’s proposals are a start, but don’t go far enough.

5 Mar

Andrew Tettenborn is a professor of commercial law and a writer.

Politics is a bit like big game hunting. If you have a beast you want to bring down, as often as not you only get one shot at it before events move on. This is exactly the case with free speech in universities. The Government has commendably committed to legal reforms to ensure that students, student societies and professors have the right (and also the practical ability, which is not quite the same thing) to say what they like within the law. They must now get it right.

The present duty to respect free speech within the law, introduced by Margaret Thatcher in 1986 to deal with student mobs preventing (normally Tory) MPs from speaking, sounds good. University administrators can (and do) sanctimoniously trumpet their support for it; so also do bodies like the Equality and Human Rights Commission in its advice to colleges.

But it doesn’t actually work very well. Universities still regularly maintain blanket bans on speech that is sexist, racist, homophobic or whatever. Take a lecturer hauled before management for liking a Tweet, signing a letter or making a statement on social media. It’s often discreetly made clear that if they don’t tone down their comments they won’t be promoted and may be first in the queue for redundancy, and there’s not much they can do.

If a student society is denied a platform or booking (or registration with the SU), the prospect of being told that it can, at vast expense, seek an injunction or a judicial review is hardly very comforting, or very effective at making sure it is actually able to make itself heard. Again, if a class of students is threatened that what they say on Facebook may lead to disciplinary proceedings if it causes outrage to an interest group, they are most likely to hunker down. And so on. Things aren’t right.

The Government plans to do four things. It will extend the duty to respect free speech to cover student unions (which control many facilities available to students) as well as universities. It will make universities’ registration and entitlement to registration conditional on such respect and allow support to be withdrawn if it is not present. It intends to ensure that all academics’ contracts protect their right to engage in free speech within the institution without fear for their employment and promotion prospects; and it will give a legal right to students and academics to sue for damages if their right to free speech is wrongly curtailed.

This is several steps in the right direction. The prospect of liability in damages and loss of government support has a wholesome ability to scare university bigwigs, with their inflated salaries and their view of themselves as captains of industry and the institutions they run as profit centres. And the strengthening of academics’ contractual free speech rights within the institution can only be an advance, especially for younger teachers faced with overbearing administrators (sorry: line managers) threatening disciplinary proceedings.

But these proposals probably don’t go far enough. The Free Speech Union has been concerned with this issue ever since its foundation, and has considerable experience in dealing with such problems on the ground. And while as an organisation it has not stated any formal position on these plans, informal soundings among a number of people connected with it have shown widespread agreement that at least three further things remain to be done.

First, internal free speech is all very good; but we need for a degree of protection for academics’ lawful extramural political speech as well. Except where their pronouncements can be proved directly and substantially to damage a university’s interests over and above its general desire to protect its reputation, institutions should be forbidden to interfere with what they say in a private capacity. If complaints are made to a university by third parties about what one of its academics has said (an increasingly common way of silencing people these days), it should at the very least be under an obligation to stand back and decline to get involved.

Second, any protection for free speech is apt to be undermined by an insidious provision in the Equality Act 2010 (s.26, since you asked), outlawing any conduct seen as violating any other worker’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment. It needs to be made clear that in so far as speech is protected as free speech, this provision does not apply. A university must not be allowed to take away with one hand what it has given with the other.

Third, we must not forget students. They need specific protection for their lawful political speech, both within and outside the university. Even where posts on social media cause controversy or prove offensive to other students, they should not be able to be made the subject of disciplinary proceedings under speech codes or other regulations.

One more thing. To cement the protection of free speech and deal with the problem of selective “no-platforming”, in my view there is a need for yet a further provision. Universities and student unions, in so far as they make rooms and other facilities available to student bodies for meetings and talks, must be specifically required not to discriminate on the basis of the views held by such bodies or likely to be expressed at the event, unless they can show that such views are actually unlawful.

In other words, if an institution chooses not to allow political meetings at all on its premises, that is fine: as a private, albeit charitable, organisation that is its prerogative. But if it chooses to permit them, it should not be permitted to be selective in the views it allows to be expressed.

As we said earlier, the Government has a wonderful opportunity to preserve freedom on university campuses. But it’s one that, given the ways of politics, may not present itself again for some time. Gavin Williamson can’t afford another reform that goes off at half-cock. We must do things properly this time.

Anthony Browne: Why the Chancellor is right to increase Corporation Tax

5 Mar

Anthony Browne MP is a member of the Treasury Select Committee and former CEO of the British Bankers’ Association.

There is a change of direction in the Budget that is causing murmurings on the low-tax side of the Conservative Party: the increase in Corporation Tax (CT).

A decade of sharp cuts to CT were justified by saying that they not only boosted investment and growth but also actually increased tax revenues. Ireland too is cited as an example, where the sleepy Celtic moggy cut CT rates to 12.5 per cent, the lowest in the industrial world, and was transformed into a Celtic tiger.

I too want low taxes, and this Laffer curve argument is appealing because it suggests that tax cuts can pay for themselves. But the Government is now planning a sharp rise in CT from 19 per cent to 25 per cent in 2023 for the most profitable firms, with the Budget Red Book showing the Treasury expects this to raise more than £17bn extra a year by 2025. But hang on! If lower CT rates increases revenue, then raising them can’t. Why the change?

So, in technical language, just what is the peak revenue-raising rate on the Laffer curve on Corporation Tax?

Laffer curves exist for all taxes, and their peak rates depend on many factors, such as the substitutability of the product, the elasticity of demand, mobility of production, the fungibility of capital and labour, and what other tax authorities are doing. Tax on sugary drinks probably has a very low Laffer curve peak because a small tax just prompts people to drink otherwise identical zero-sugar drinks. The Laffer curve on fuel is very high – well over 100 per cent – because people can’t do without fuel to drive.

On Corporation Tax, the Laffer curve would be lower for highly mobile sectors that can shop around for the lowest tax regimes in the world, and higher for ones that can’t easily move.

It is absolutely true that CT receipts have increased dramatically since George Osborne started cutting the rates, from £36.3bn in 2010-11 to £55.1bn in 2018-19. But that is largely because corporate profits were hugely depressed in 2010 in the wake of the deepest recession for a century. Corporation tax profits – and so CT revenues – are super-cyclical: exaggerated versions of the underlying economic cycle. Aggregate company profits on which CT is charged fell from £203.6bn in 2006/7 to £151.6bn in 2010/11, and then bounced back to £267bn in 2018/19.

After both the 1990/91 recession and the dotcom crash, CT revenues took just three years to return to their long run average as a percentage of GDP, but after the financial crisis, it took eight years, presumably because of the lower rates. Other changes have also increased CT revenues since the financial crisis including the corporation tax surcharge on banks (about £2bn a year), and widening the base of corporation tax. As it happens, CT revenues also rose sharply before the financial crash, and that had nothing to do with their rates because they were static throughout the entire period.

But CT is one source of tax revenue – what about the others?

Lower CT rates leads to lower cost of capital for companies, and so should increase investment and thus increase jobs, wages, GDP growth and consumption, leading to higher rates of income tax, VAT and so on. HM Treasury started doing dynamic modelling on the effects of cutting CT tax, to take into account the overall effects. In 2013, HMT and HMRC published a detailed analysis from the dynamic modelling, showing an increase in investment, in GDP (between 0.6 per cent and 0.8 per cent) and wages (£405-£515 per household). That lead to greater tax revenues, but only enough to reduce the loss of direct revenues by between 45 per cent and 60 per cent.

In other words, even a Treasury analysis, presumably designed to support Treasury policy, admits the CT cuts reduce overall tax revenues rather than increase them. It also surveyed the academic literature from around the world on this, and they all estimated that between 45 per cent and 90 per cent of the revenue loss would be made up – not enough of an impact to actually increase revenues.

There are other reasons to cut CT taxes than raising revenues. Another argument used is that cutting CT increases investment, but that also isn’t really supported by the evidence. Business investment is the same now when CT is 19 per cent as it was in the late 1990s, when CT was 30 per cent. Between 1997 and 2017, we had the lowest CT in the G7, but also the lowest average non-government investment at 14.3 per cent of GDP (compared to G7 average of 17.3 per cent).

Whatever the impact of low corporation tax in Ireland, it is really not comparable to the UK. When it introduced them, it was a much more agrarian economy with little inward investment and a major exporter of skilled people. There was not a big corporate base, and so it had little to lose from cutting CT.

If you want to use tax policy to increase investment, then it is better to target the tax cuts directly at investment decisions, as the Budget is doing with its “superdeduction” on investment, which will mean the Government will write off 25 per cent of any investment any business makes against its tax bill. Here is a suggestion for the corporate world: cutting corporation tax has not lead to a surge in investment, and it is now it is going back up. If you want to keep the “superdeduction” investment relief and make it permanent, prove to the Treasury that it works.

Newslinks for Friday 5th March 2021

5 Mar

‘Tax-raiding’ budget gives Conservatives 13-point poll lead over Labour

“The Conservatives have enjoyed a significant bounce in the polls since Wednesday’s budget despite announcing the biggest tax rises in 30 years. A survey by YouGov found that the Tories had established a 13-point lead over Labour. Their budget was the most popular in a decade, with 55 per cent of people describing it as “fair”. The combination of the continued success of the vaccine scheme, the well-received spending plans and the easing of lockdown restrictions was likely to lead to a “strong” Tory showing in the May local elections, the pollsters said. The news will raise pressure on Sir Keir Starmer, the Labour leader, with one senior party member describing the outlook as “grim” and warning that matters are likely to worsen this summer.” – The Times

  • Investors lambast Sunak’s plans to raise corporation tax – FT
  • Corporation tax rise goes against Tory values, suggests former minister – Daily Telegraph
  • UK scraps EU cap on Covid grants for struggling businesses – FT
  • Councils to raise £7.5bn in stealth tax raid after Sunak relaxes threshold – Daily Telegraph

>Today: ToryDiary: Our post-Budget Cabinet League Table. Sunak is still second – though his score is his lowest as Chancellor since Covid.

>Yesterday:

Prime Minister under pressure to publish ‘levelling-up’ fund criteria

“Boris Johnson is facing calls to publish the criteria by which £4.8bn of “levelling up” funds are being allocated, as Labour leader Sir Keir Starmer claimed that Tory areas were being favoured in what felt like “pork barrel politics”. The row erupted after it emerged that Richmondshire in Rishi Sunak’s constituency in rural North Yorkshire was being treated as a “category one” area for receipt of money from the fund, while areas including Barnsley and Salford were in the second tier. “I think lots of people would scratch their heads and say ‘what is going on here?’” Starmer said, noting that 40 out of 45 towns receiving money from a separate “towns fund” were represented by Conservative MPs. In response to a question from the Financial Times on Wednesday Sunak said that the criteria for allocating money under the “levelling up fund” was based on “an index of economic need”.” – FT

  • Castle in Jenrick’s constituency to be restored using £25m handout – The Times
  • Tories accused of levelling up ‘stitch-up’ over regional deprivation fund – The Guardian

Comment:

  • The Budget lays the ground for an early election the Tories may regret – Fraser Nelson, Daily Telegraph
  • Sunak has turned into a social media star, but who is he trying to influence? – Marie Le Conte, The Guardian

>Today: Local Government: Labour’s claim that the Towns Fund is skewed for partisan advantage lacks credibility

>Yesterday: ToryDiary: The Budget. Sunak’s strong message that operation “level up” is under way.

Johnson faces Tory backlash over masks in classroom…

“The Prime Minister is facing a Tory backlash over face masks in the classroom as 32 MPs demand that the measure is dropped after Easter. Boris Johnson has been told in a letter from the MPs that it is “just not good enough” to impose the measure on millions of secondary pupils given that the evidence that it will help prevent the spread of coronavirus is “pretty thin”. It comes amid rising pressure on the Government over its latest guidance on masks, which says they should be worn by secondary pupils in lessons as well as anywhere indoors at school where it is not possible to socially distance. This goes much further than the earlier official recommendations on face masks in secondary schools.” – Daily Telegraph

  • Longer school years could be split into five terms, says Williamson – The Sun

…and wants ‘Fit Miles’ voucher scheme to help people lose weight

“Boris Johnson says he feels “full of beans” after losing a stone by cutting down on carbohydrates, chocolate and late-night cheese. The prime minister urged the nation to follow his example and lose weight to become happier as well as healthier. He is considering a “Fit Miles” scheme that gives people vouchers to lose weight and exercise after research linked Britain’s dire Covid-19 death rate to its high levels of obesity. Johnson was converted to the cause of interventionism on obesity after becoming convinced that his own experience with the virus was so bad because of his weight. He has promised £100 million to increase the prescription of diets and fitness apps in an expansion of NHS weight-loss schemes and is committed to banning advertisements and discount promotions for unhealthy foods.” – The Times

Brits ‘were misled’ about cost of May and Hammond’s net zero carbon target

“Brits were misled about the cost of the Government’s net zero carbon emissions target by 2050 after Whitehall officials played down the estimated £70billion annual hit. In bombshell emails released after a two-year FOI battle, Treasury civil servants admitted to then-Chancellor Philip Hammond that the cost of going green would likely be £20billion a year more than the £50billion figure they were told to champion publicly. Ex-PM Theresa May legally committed the UK to Net Zero by 2050 before Boris Johnson took over in 2019 – meaning any harmful gases and emissions will have be offset. Internal government modelling from the Department for Business showed it would be 40 per cent higher – reaching £1.275trillion by 2050.” – The Sun

  • UK lacks plan to reach net zero emissions by 2050, say MPs – FT

More:

  • EU judges find Britain guilty of failing to tackle illegal pollution – The Times

Home Office 1) Rutnam, civil servant in Patel bullying row, awarded £340,000

“Ministers have signed off a £340,000 payment to the civil servant who blew the whistle on the Priti Patel bullying scandal. In one of the highest compensation awards made to a departing Whitehall official, the Home Office agreed to settle with Sir Philip Rutnam to avoid an employment tribunal hearing. He was suing the government for constructive dismissal under whistleblowing legislation after claiming that he was forced out of his job for defending his staff against the home secretary. Under the terms of the deal, it is understood that he is not allowed to speak about the allegations that would otherwise have been aired in public at a hearing in September. He resigned last February after The Times revealed details of the bullying allegations against Patel.” – The Times

  • Johnson has ‘full confidence’ in Cabinet Secretary as latter is dragged into royal bullying row – Daily Mail

Home Office 2) Immigration rules changed to help NHS plug vacancies gap

“Priti Patel tweaked immigration rules yesterday to make it easier for the NHS and social care providers to recruit staff from abroad after the Covid-19 crisis. Senior care workers, nursing assistants and pharmacists are among several professions that were added to the government’s list of occupations with labour shortages. It will be easier for foreign workers in these sectors to obtain a skilled work visa in the UK as long as they are offered a job with a salary of at least £20,000. The government also announced that its new two-year visas for graduates will open for applications in July. All international students will be able to stay in the UK for up to two years after completing their degree without having a job.” – The Times

  • Health minister sparks fury by claiming one per cent pay rise for NHS nurses is ‘most we can afford’ – The Sun

Comment:

  • Brexit allows us to be immigration liberals – James Forsyth, The Times

Conservative rebellion grows over cuts to UK aid spending

“The government is facing a growing rebellion over cuts to aid spending and senior Conservatives say it is likely to be defeated if it asks MPs to vote on the issue. Cuts to UK aid to Yemen, which is facing a humanitarian crisis, are said to have galvanised backbench opposition to broader cuts, which is now enough to cause the government serious difficulty in passing a vote in the Commons or the Lords. The former international development secretary Andrew Mitchell said the government should bring a vote as soon as possible to test the view of MPs. “This week’s announcement on Yemen has shifted opinion yet further away from breaking a promise to the poorest and the manifesto commitment upon which we were all elected,” he said.” – The Guardian

  • Johnson ‘fears Carrie’s Number 10 makeover may cost £200,000’ – Daily Mail

EU will launch legal action against Britain ‘very soon’ over Northern Ireland

“Brussels has warned it will launch legal action “very soon” after Britain unilaterally delayed implementation of part of the Brexit deal relating to Northern Ireland. Maros Sefcovic, the European Commission vice-president, said the announcement by the Government on Wednesday was a “very negative surprise”. Boris Johnson has plunged deeper into the bitter row with the EU by announcing fresh measures in Northern Ireland, and the bloc on Thursday has threatened to hit Britain with trade tariffs if it fails to back down. Just hours after the UK moved to unilaterally extend grace periods for Northern Irish supermarkets by six months, the Government announced it would now seek to ease trade barriers on parcels.” – Daily Telegraph

More:

  • Italy uses EU rule to stop the export of Oxford-AstraZeneca Covid vaccine – The Times

>Yesterday: Henry Hill’s Red, White, and Blue column: Frost’s appointment shows the Government is not resigned to the Northern Ireland Protocol

Brandon Lewis: Our lawful steps are consistent with a good faith implementation of the Northern Ireland Protocol

“The temporary, pragmatic easements we have made do not change the legal obligations set out in the Protocol, and we will continue to discuss Protocol implementation in the Joint Committee. They are consistent with the common trade practice adopted by countries internationally – including by many EU Member States. It is vital the EU also recognise the serious, ongoing consequences of their actions in January when they sought to improperly invoke Article 16 – the emergency safeguards clause in the Protocol – seeking to introduce controls on vaccines to Northern Ireland. Not only did this action go right to the heart of the sense of identity for Unionist communities, it was also completely contrary to spirit of the Protocol, in breach of the balance provided by the Good Friday Agreement and continues to seriously undermine cross-community confidence in the Protocol’s operation.” – Daily Telegraph

  • Brexit risks pushing the Province to the brink – John Kampfner, The Times
  • The EU is jeopardising the Belfast Agreement – Kate Hoey, Daily Telegraph

Editorial:

>Today: Iain Dale’s column: The EU has no interest in Northern Ireland’s future prosperity. It just sees it as a mechanism to exert its power.

Drakeford says ‘remote’ Johnson is putting Union at risk

“The Welsh first minister has criticised how the UK government engages with the devolved administrations and suggested Downing Street’s approach is putting the union in peril. Mark Drakeford described his own relationship with Boris Johnson as “remote”, revealing he had only had one proper meeting with the prime minister. Giving evidence at the UK parliament’s Welsh affairs committee from an outbuilding in his garden because he is self-isolating, Drakeford said: “There is no institutional architecture to make the United Kingdom work. It is all ad hoc, random, and made up as we go along. And I’m afraid that really is not a satisfactory basis to sustain the future of the UK.” Drakeford said the lack of regular meetings made the “security of the future of the UK” more difficult.” – The Guardian

Sturgeon ‘will not pledge to resign’ if found to have breached ministerial code

“Nicola Sturgeon on Thursday suggested she will try to cling on as First Minister even if an independent inquiry finds she broke the ministerial code of conduct in the Alex Salmond scandal. Anas Sarwar, the new Scottish Labour leader, used First Minister’s Questions at Holyrood to challenge Ms Sturgeon on whether she agreed that “any minister who is found in breach” of the code should resign – the usual sanction for such an offence. But the First Minister refused to provide any guarantee she would honour the convention, instead telling MSPs that “we can debate in this chamber” what her punishment should be if she is found to have flouted the code. She made clear she will lead the SNP into May’s Holyrood election – despite chastising the Tories for “prejudging” two inquiries that are yet to report back with their conclusions.” – Daily Telegraph

  • First Minister set to survive any confidence vote after Greens signal support – FT

Comment:

  • Johnson must hold firm on refusing a Scottish independence referendum – Henry Hill, Daily Telegraph
  • There’s no such thing as true independence – Alexander Walker, The Times

>Yesterday: Profiles: Galloway, who “is going to vote for Beelzebub, I’m going to vote for a Scottish Tory”

Speaker outlines roadmap for MPs’ return to Commons

“A “roadmap” is being drawn up to steer the House of Commons back to normality as the coronavirus crisis eases and frustrations grow about most MPs having to participate virtually. Sir Lindsay Hoyle revealed to the Guardian he was putting together a plan that would retain the “bonuses” of parliament’s rapid modernisation, but drop some of the tough restrictions on proceedings. He said the document, due to be discussed at a meeting of the House of Commons Commission next Monday, would follow the latest advice from Public Health England. Hoyle voiced hopes that it could follow the government’s roadmap to ease measures in England by 21 June – the earliest point that England can enter the final phase of unlocking.” – The Guardian

News in Brief:

  • Are loyalists plotting a return to violence? – Ian Acheson, The Spectator
  • Sunak kicks the welfare can down the road – James Heywood, CapX
  • The Pope can’t save Iraq’s Christians – Max Joseph, UnHerd
  • How is Labour shaping up under Starmer? – Tom Hamilton, The Critic

Announcements on the end of LIBOR

5 Mar
The FCA has announced the dates that panel bank submissions for all LIBOR settings will cease, after which representative LIBOR rates will no longer be available. This is an important step towards the end of LIBOR, and the Bank of England and FCA urge market participants to continue to take the necessary action to ensure they are ready.

Our post-Budget Cabinet League Table. Sunak is still second – though his score is his lowest as Chancellor since Covid.

5 Mar

Here is a list of Rishi Sunak’s previous monthly ratings in the table as Chancellor: 93 per cent, 92 per cent, 92 per cent, 85 per cent, 83 per cent, 82 per cent, 82 per cent, 75 per cent, 80 per cent, 82 per cent, 95 per cent and 65 per cent.

So his post-Budget score above is both very positive – he holds his place at second – while being his lowest since before the pandemic broke.

All of which suggests that this week’s package has gone down well with Party activists, on the whole: we will publish the response to our Budget question in the survey tomorrow.

Elsewhere, the table is a mix of ups and downs, in the wake of January’s “vaccine bounce” and December’s “Brexit bounce.  Liz Truss is top for the fourth month running.

David Frost shoots straight in at fourth, just as Kwasi Kwarteng did last month.  On the negative side, Michael Gove is down by ten points and five places, which we put down to Oliver Lewis’ resignation, and the reporting of their positions on Scotland.

On the positive side, Matt Hancock is up by nine points and two places – bolstered by the vaccine success, we believe, and a sense that the worst of Covid is over (which we hope is correct).

His post-pandemic ratings have been what football commentators call, when a football player is booked, “taking one for the team”. Boris Johnson’s score barely registers a flicker: he’s up one point since last month and seventh, as he was then.