Daniel Hannan: Where is the money coming from? The question that Conservatives don’t know how to answer.

27 Oct

Lord Hannan of Kingsclere is a Conservative peer, writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.

Alright, but where is the money coming from? I know that’s considered an indelicate question these days. Politicians don’t like to ask it, for fear of coming across as Scrooges. But it isn’t their own dosh they’re talking about, for Heaven’s sake. The debts they are running up will fall on all of us – including those our national poet called “your children yet unborn and unbegot”.

Billions have already been briefed in advance of today’s budget, as if Britain were a country with a healthy budget surplus. Five hundred and sixty million pounds to improve adult maths skills, £170 million extra for apprenticeships, £355 million more for improved street lighting and CCTV, £628 million in border technology and an eye-watering £7 billion on transport projects outside London.

Individually, each of these items might be defensible. But – again, I don’t like coming across as a miser, but someone has to say it – we are already spending and taxing at record levels. The state is spending a trillion pounds a year: two million pounds a minute. As Harry Phibbs reminded ConHome readers the other day, public expenditure has risen to a staggering 46.5 per cent of GDP.

Yes, the pandemic was a one-off challenge. Almost all free-marketeers understood that, and acquiesced in levels of emergency expenditure that they would never normally have countenanced. But that is not what we are talking about now. These are not spending rises caused by the epidemic or by the shutdowns. Those – the furlough, the emergency grants to businesses and so on – can reasonably be treated like a war debt, to be paid off over many decades. No, this is something else: a generalised and permanent increase in the size of the state, unrelated to the recent crisis.

Even when it comes to healthcare, we are way past contingency spending. The NHS was recently awarded an extra £36 billion in the last three-year settlement, but is reportedly in line for more than £4 billion more to pay for digitisation. By 2025, the NHS will account for fully 40 per cent of all government spending, up from 28 per cent in 2005. Britain is well on the way to becoming a healthcare system with a government attached.

At the same time, we are promised significant hikes in public sector pay and in the minimum wage. Once more – sorry to be a bore – where is the money coming from? Real wages tend to rise over time as technology advances and productivity improves. But simply decreeing higher wages, Ceausescu-like, does not make a country wealthier; it pushes up inflation. We are now hearing a deranged argument to the effect that higher wages are needed to pay for rising prices. Do I really need to spell out where that ends?

None of this profligacy is the result of Covid-19 – not directly, at any rate. There are, though, two ways in which the epidemic has indirectly altered the terms of the debate. First, and most obviously, it has blasted away our pre-2020 notions of proportionality. When a government is conjuring hundreds of billions of pounds into existence through quantitative easing and spending it furiously in emergency grants and subsidies, it becomes much harder to question hundreds of millions – vast sums by any normal reckoning – allocated to transport, policing or whatever.

Second, as this column has been glumly observing these past 19 months, the epidemic has altered our brain chemistry. Behavioural psychologists have long observed that wars, natural disasters and other collective threats make people more authoritarian, less tolerant of dissent, more demanding of the smack of firm government. Hence the overwhelming support for almost every lockdown measure, regardless of how founded it was in science. And hence the rise in support for a big state.

I have previously drawn a pessimistic parallel with 1945, when the authorities proved reluctant to let go of powers they had seized on a supposedly wartime basis. Identity cards remained until 1952, rationing until 1954, conscription until 1960 and most of the economic controls until the 1980s – not because voters were prepared to put up with them, but because voters actively demanded them.

There is another melancholy parallel to be drawn with 1945. Then, as now, there was a huge mismatch between what the nation could afford and what the electorate felt it had earned through its privations. Then, as now, the national debt was colossal (it is currently around 100 per cent of GDP). Then, as now, the recent trauma had engendered a collectivist mood. In 1945, it found expression through the creation of a monolithic welfare state. In 2021, it takes the form of public sector pay rises, nationalisations and industrial strategies.

In the short term, these things are very popular. Even in the longer term, they do little harm to their authors’ reputations. Clement Attlee is remembered as the man who gave poor people a safety net, not as the man whose nationalised behemoths eventually led to the collapse of the 1970s. There is a deal of ruin in a nation.

I don’t doubt Attlee’s decency. He believed he was spreading opportunity to those who had never had a chance. The trouble is that his reforms were not affordable in a state which had just emptied its treasury in the struggle against Nazism. Subsequent governments sought to inflate the debts away, with a catastrophic effect on our national competitiveness. Not until the Thatcher reforms was our decline arrested.

Just as Attlee had set his heart on state-funded health and welfare systems, so Boris had set his on some gargantuan government-led projects: levelling up, the nationalised financing of social care, big infrastructure schemes, net zero. Neither PM had the money to do the things he wanted. But, with the electorate demanding more government, it is always easier to spend today and let others worry about the bill.

For the avoidance of doubt, I want Britain to be a high-skills, high-wage economy. Who doesn’t? I want us to have first-class public services. Who doesn’t? The question is how to pay for these things. Do we gouge a chunk of revenue out of the private sector now, thereby shrinking our economy overall? Or do we try to ensure that GDP grows so that wages rise naturally and there is plentiful revenue for the Treasury?

Margaret Thatcher knew the answer. Contrary to widespread belief, overall public spending rose in every year that she led the government. But she ensured that the economy grew faster than the government. So while public spending fell in proportionate terms, it rose in absolute terms. Every leading member of the present government lived through that era. They know that her approach worked. How sad that they seem too scared to copy it.

Emily Carver: The UK’s efforts against climate change will mean nothing without the world’s biggest polluters onboard

27 Oct

Emily Carver is Media Manager at the Institute of Economic Affairs.

The pinnacle of every environmentalist’s calendar is upon us! With only four days to go until COP26, ministers are falling over themselves to talk up the conference.

Their adoption of the language of crisis is stark: Alok Sharma has said that “If we don’t act now, the end destination is climate catastrophe”; the Prime Minister has warned that we must act “before it is too late”; while Downing Street has even hosted a ‘Kids Climate Press Conference’ to help win the “fight against climate change”.

Outside of government, the refrain that we’re not going far enough continues. Activist Greta Thunberg is rallying the troops to join the climate strike in Glasgow. National treasure David Attenborough has delivered his annual warning to save the planet from extinction. And then there’s the interventions from our favourite luvvies, like Ab Fab’s Joanna Lumley, who has suggested with all seriousness that we “go back to some kind of system of rationing”.

The problem with all this, of course, is reality. A month ago, Johnson hailed COP26 as a “turning point for humanity”. Now, the chances of COP26 success are “touch and go”, as he told children that he’s “very worried” the conference may not secure the agreements needed to avert climate change.

The harsh truth is that our entire net zero strategy relies on other countries following suit. Acting alone, or even with similar-minded nations, will make little to no dent in global emissions. This is not controversial. Indeed, it was acknowledged at the time of the formation of the Climate Change Committee, the independent body that is responsible for advising government on climate policy, that the success of the UK’s decarbonisation strategy depends on high-emitting countries adopting similar carbon targets to our own – otherwise, our efforts to prevent climate change would prove utterly futile.

It’s true that more and more people are demanding for something to be done to avert the rise in global temperatures. A new poll undertaken by the UN Development Programme and the University of Oxford, found that 65 per cent of the nearly 700,000 adults surveyed across G20 countries believe climate change is a ‘global emergency’. Whether this translates to advocacy for specific or costly policies that hit people in the pocket is, of course, harder to gage.

But, while the public calls on the UK government to do more, global carbon emissions are only on their way up. According to the World Meteorological Organization, even though the pandemic saw a 5.6 per cent overall decline in emissions of carbon, the build-up of warming gases in the atmosphere rose to record levels; it is predicted that this will drive up temperatures in excess of the goals of the Paris Agreement of two per cent. The UN has also issued a warning that greenhouse gas emissions are on course to be 16 per cent higher by 2030 than they are now.

Many high-emitting nations are either avoiding COP altogether or stalling when it comes to committing to carbon targets. China has said that fossil fuels will form less than 20 per cent of its energy mix by 2060, and that it will peak coal emissions by 2025. Hard to believe, considering it continues to invest in new coal mines and, last year, built more than three times as much new coal power as the rest of the world combined.

Crucially, it has also made clear that climate policy will not come at the expense of its other priorities, including energy security and other economic interests. Then, there’s Putin, who has now committed to reaching net zero by 2060, but will not show his face at the climate summit. And at the same time, leaked documents show that countries including Saudi Arabia, Japan, Australia, and India are reportedly lobbying the UN against moving away from fossil fuels.

This is not to say that the UK and others should give up on going green. The possibilities of green technology are hugely exciting, and the benefits to our economy of pioneering new eco-friendly innovations are very real. However, it would be deluded to believe that the likes of China and India will come to the world’s rescue and slash their carbon emissions in line with our own – at least not anytime soon.

As a new paper from the Institute of Economic Affairs lays bare, the UK’s Climate Change Committee has failed to address the reality that it is highly unlikely that the UK’s leadership and influence will be enough to bring about the reductions in global emissions, and limit temperature rises, to the levels considered necessary to avert damaging climate change.

Therefore, if the world is indeed heading towards climate catastrophe, the UK desperately needs a rethink. First, we should ask why is the CCC and government prioritising mitigating climate change over climate adaptation? Why are we putting our energy security at risk, by subsidising green technologies that may or may not stand the test of time? And, crucially, why is the CCC and government not asking if the costs borne by British taxpayers, consumers and businesses have yielded proportionate benefits?

Over the next two weeks, we’ll see world leaders flexing their muscles, extolling the importance of cutting emissions to avert climate change. However, as it becomes ever more obvious that a global consensus is a pipedream, it’s clear we urgently need a review of our climate policy priorities – and an injection of realism.

Michael Mosbacher: Woke ideology has captured our public institutions. But there is a way to fight back.

27 Oct

Michael Mosbacher is Head of the Liveable London Project at Policy Exchange.

Public institutions are under unprecedented pressure to make amends for the alleged wrongs of their past – and many have already acted upon such demands.

Haberdasher’s Aske’s Schools are dropping the schools’ motto and their founder’s name from their commonly used titles – because just over one per cent of the value of his estate, he died in 1689, was represented by shares in the slaving Royal African Company; the Church of England is “in discussions” to “return” two Benin bronzes in its possession, although these examples were not looted alongside others in 1897, but were gifts from the University of Nigeria to then Archbishop Robert Runcie and were freshly minted in the 1980s; Stroud Council is considering removing an 18th century statue of a small black boy, which has stood in the city for 270 years, due to its “association”, however “directly or indirectly”, with the “slave trade and colonialism”, something which “cannot be ignored”.

Institutions have been left to their own devices as to how to respond to such demands; there have been no national guidelines they could turn to for assistance on such matters. In a report published this week by Policy Exchange, History Matters: Principles for Change, the writer and broadcaster Trevor Phillips proposes three key parameters any public institution should adhere to when considering such changes:

  1. any decision-making body must be identified clearly, with its composition and powers set out publicly and unambiguously;
  2. any changes must be lawful and consistent with the stated aims and purposes of the institution;
  3. and any individual or board making a decision about change in a public institution must be accountable to those who support the institution, including the taxpayer.

These principles would ensure no drastic changes, such as renaming a much-loved building or a museum’s decision to “return” important artefacts from its collections, would occur without widespread consultation.

Institutions would not be at risk of a drastic panicked, knee-jerk reaction to appease a particularly vocal but unrepresentative campaigning group; indeed they could throw back these demands, by explaining the rigorous process that they will have to go through to evaluate each case.

Some museum curators have been at the forefront of making demands for the UK to make amends for its colonialist past. For example Dan Hicks, the Curator of World Archaeology at Oxford’s Pitt Rivers Museum and a professor at the university, has called for “the physical dismantling of the white infrastructure of every anthropology and ‘world culture’ museum”.

The Pitt Rivers is currently advertising for an assistant curator whose task it will be to “return” human remains in the museum’s collection, including – as is the case in the vast majority of these objects – where no one is asking for them back and it is unclear who the descendent community they might be returned to are.

Thankfully Hicks is an outlier in the museum community. Phillips’ report has been welcomed by Nicholas Coleridge, Chair of the Victoria & Albert Museum, Samir Shah, Chair of the Museum of the Home, formerly the Geffrye Museum, and Sir Ian Blatchford, Director of the Science Museum.

None of these figures are conspicuously associated with the Conservative Party; it is not just Conservatives who have become fed up with the ahistorical demands of today’s grievance merchants. The museum world still has many sensible, high profile voices who have thankfully not succumbed to the attractions of wokery, however crowd pleasing they might temporarily be.

They are privately aware that the demands of Hicks and other radicals in the museum world pose a grave threat to their institutions. If the agenda of those who are calling for a decolonisation of our museums were implemented our cultural heritage would be irreversibly damaged. It is to be hoped that, with Phillips and the three museum leaders speaking out against such demands, others in that world will have been given the space and intellectual self-confidence to vocalise their own concerns.

As importantly, if the report’s principles were to be adopted as policy even an institution led by someone who did subscribe to radical, anti-Western notions would not be at risk of hasty “dismantling”; the consultation process would ensure that no irreversible decisions would be taken without its risks being carefully evaluated.

It appears that the Government is listening to Policy Exchange – a senior government source has stated that Phillips’ “paper is an important and thoughtful contribution to the debate around our shared history… Too many institutions are rushing to please a vocal minority when it comes to changing history. Instead, they should follow due process, the law, and pay attention to the concerns of the majority – including museum visitors, the taxpayer and other important stakeholders”.

It is sometimes argued that Boris Johnson, with so many other pressing issues that inevitably have to be dealt with by a Prime Minister, has lost sight of how the woke left’s ideological reimagining of our nation’s history risks undermining societal cohesion.

Johnson is among Britain’s most historically-minded Prime Ministers – and arguably the most accomplished history writer – since Churchill. His speech at this year’s Conservative conference shows that he has not give up on countering the woke agenda: “As time has gone by it has become clear to me that this isn’t just a joke; they really do want to re-write our national story, starting with Hereward the Woke. We really are at risk of a kind of know-nothing cancel culture iconoclasm.

“And so we Conservatives will defend our history and cultural inheritance, not because we are proud of everything but because trying to edit it now is as dishonest as a celebrity trying furtively to change his entry in Wikipedia, and it’s a betrayal of our children’s education”.

Defending our museums against those who wish to dismantle them remains part of this fight. Schools, universities, councils and other public bodies are subject to similar pressures. The principles that Phillips has set out will do much to help institutions resist the demands of self appointed and unrepresentative campaigners.

David Davis: We must show we did not ‘take back control’ in order to turn our back on the world

26 Oct

David Davis is a former Secretary of State for Exiting the European Union, and is MP for Haltemprice and Howden.

“When people are free to choose, they choose freedom,” said Margaret Thatcher. That was true during the Cold War and it remains true across the world today. It’s true, to coin a phrase, of our money, of our laws and of our borders. The freedom to choose is a lode star that the Conservative Party forgets at our peril.

Thatcher always used to say, that the foundation of conservatism was “freedom under the law”. We should seek, for our citizens, the opportunity to spend the maximum amount of their own money. We should offer them the maximum amount of responsibility for their own lives, and their children’s lives.

We should hold sacred their freedom to choose. And we should trust them to make their own choices.

The upcoming Comprehensive Spending Review, followed by consideration of the Nationality and Borders Bill in November, is an ideological fork in the road. We need a truly Conservative economic strategy: more deregulation, more competition, and more – not less – economic freedom. At stake is our place in a post-Brexit world; at question is whether Britain stands up for freedom around the world or whether we leave migrants to drown and children to starve.

They say great men make great nations. But that could not be further from the truth. Great ideas make great nations. And we might not have invented freedom but, my word, we have embraced it more than any other country over the last two hundred years. It was indeed a great man who said that there must be “both a ladder on which everyone could climb, but also a safety net below which no one should be allowed to fall.”

Yet Winston Churchill would surely question why we have slashed our overseas aid to countries ravaged by conflict and why our beaches are to be where we deny those seeking refuge their liberty. The proposal to refuse to even consider the plight of genuine refugees, while denying them viable safe and legal routes to seek asylum, cuts the safety net at the same time as we kick away the ladder.

The Treasury claims that the cuts to overseas aid are temporary, while at the same time choosing to use weaker Office of Budgetary Responsibility figures than they need to. For children staving during a famine in Yemen, that is of no comfort.

The Government have failed even to account for the consequences of their cuts. No impact assessments were made. No figures have been published for the number who have perished. And yet credible independent assessments suggest that it could well be comparable to the total death toll from Covid, which is still grimly reported on a daily basis on our TV screens. Just because it isn’t happening here, doesn’t mean it isn’t happening.

The cuts to overseas aid represent just one per cent of the £400 billion cost of dealing with Covid. We should treat it like war debt and get it off the nation’s short-term balance sheet. We should issue long-dated Covid bonds and sell them at home and abroad. Then in 50 years from now, Covid will be just a distant memory and a distant cost.

But if we persist with the cuts, we will drive migration from war torn regions in the Middle East and Africa. We will, as Tom Tugendhat, the Foreign Affairs Committee Chairman, has argued, fail to create the strategic depth needed to protect our borders.

By cutting aid in Somalia, we have boosted Al Shabab. By cutting aid in Nigeria, we have encouraged Boko Haram. By cutting aid in Lebanon, we have assisted Hezbollah. And by cutting aid in Syria we have emboldened Daesh. That’s the assessment of Tobias Ellwood, the Defence Select Committee Chairman, and he is not wrong.

For all those Afghans who chose freedom but couldn’t make it out in time, who had to burn their passports knowing they no longer have freedom under Taliban law, we owe them a safety net as well as a ladder. We can’t allow them to make their way to Calais and be trafficked by people smugglers. We need a viable system for them to report to a British High Commission and fill out their paperwork. We need them to be able to arrive on a plane, not risk taking a boat.

To truly take back control of our money, our laws and our borders, we need the Treasury and the Home Office to embrace the true spirit of both Thatcher and Churchill alike. I am sure that Priti Patel and Rishi Sunak have what it takes.

Gavin Rice: There are better ways to invest in Universal Credit than the £20 uplift

26 Oct

Gavin Rice is Policy Director at The Centre for Social Justice.

It’s only when history comes to be written that unsung heroes emerge.

Edmund Hillary may be remembered as the first person to climb Everest, but it was Tenzing Norgay who carried his bags. We have all heard of Neil Armstrong and Buzz Aldrin, but how many know that Michael Collins orbited the Moon alone for 21.5 hours while his colleagues made history?

Likewise, while the cause celebre of the pandemic has been Rishi Sunak’s salary-saving, budget-busting furlough scheme, the quiet saviour of the lockdown has been Universal Credit.

In the first two weeks of the pandemic, Universal Credit (UC) processed one million new cases. At the peak of demand the number receiving this lifeline benefit more than doubled, from 2.9 million cases before the pandemic to a high of over six million – an increase of over 100 per cent. In September there were still 5.8 million claimants, more than was ever originally envisaged, and after the end of furlough last month there will be more to come. Through the economic maelstrom of the last 18 months, 96 per cent of payments were made on time.

Not that Chancellor will be talking about that when he reveals his Autumn Budget on Wednesday. His decision to end the £20 per week uplift in October led to six former Secretaries of State for Work and Pensions, and 50 Conservative backbenchers, to call publicly for its retention.

UC was designed by the Centre for Social Justice (CSJ) with two main goals: reducing the complexity of the old, “legacy” system by rolling six overlapping benefits into one, and eliminating financial disincentives to work.

Before UC, welfare claimants could find themselves no better off even when taking on work, since their benefits would be withdrawn. In some cases 100 per cent of someone’s earnings could be lost in withdrawal, removing any incentive to work more. UC slashed these barriers via the “taper”, meaning work would always pay.

Inefficiencies were eradicated by means testing on a household basis. UC produced a data-rich system, with clear information about each household’s income available centrally to the DWP. And conditionality was introduced, meaning claimants would be obliged to look for work if they were able. Work coaches helped hundreds of thousands to stand on their own two feet.

But the pandemic came like a bolt from the blue. The Chancellor and Thérèse Coffey, the Secretary of State for Work and Pensions, agreed an emergency increase of £20 to the Standard Allowance – the basic rate of UC given to all claimants. In this way they protected people’s incomes at a time of national crisis. Work search duties and sanctions were rightfully suspended.

More money in welfare isn’t everything, but the £20 increase followed a decade of cuts to benefits through the benefits freeze and benefits cap, which kept UC falling in real terms. That’s why the Centre for Social Justice supported keeping it, as a way of partially redressing these reductions.

But there is now a vital conversation to be had about the future of UC. There are many other ways the Government can invest in this vital national infrastructure other than the much-discussed £20.

First, it could cut the taper rate of UC down – the CSJ originally recommended a rate of 55p in the pound, rather than the current 63p. Softening the taper would eliminate the situation, flagged by Sir Keir Starmer, in which someone on UC who is working full time on minimum wage could face a withdrawal rate of 75 per cent, since they would be liable for income tax and national insurance. This would seriously benefit the 40 per cent of UC claimants who are in work.

Money saved by removing the £20 uplift could be put back into the Child Element to support households with children, thus helping families struggling with the cost of living at a time of high inflation and soaring energy prices.

The maximum amount of childcare covered by a UC award could be raised from 85 per cent to 100 per cent, as called for by the CSJ. And, at zero balance sheet cost to the Treasury, the maximum rate of monthly debt recovery for UC recipients eligible to repay arrears or historical benefit overpayments could be reduced from 25 per cent of their incomes down to 10 per cent.

But there could be much more to Universal Credit than that. The goal of levelling-up, reskilling for a low-carbon economy, increasing labour productivity, and relying less on low-skilled immigration will need a streamlined, time-tested state apparatus to drive it.

We have record numbers receiving benefits, yet also have a labour shortage. UC should provide the structure to link the welfare system to the jobs market. Why not ‘bake’ skills into claimant contracts?

The DWP should become a skills department, not just a deliverer of cash. Through partnership with employers and educational providers, UC should become the engine of opportunity.

No-one is going to sing about it. Wednesday’s budget will barely mention it. But just like Sherpa Tenzing and Michael Collins, Universal Credit will do the heavy lifting in this recovery.

Chris Skidmore: For the UK to become a global science superpower, the Chancellor must set out a clear plan this week

26 Oct

Chris Skidmore MP was Science and Research Minister between 2018-2020 and co-author of Britannia Unchained.  

10 years ago, I was sat around a cramped room in Westminster with four members of the Cabinet – the current Foreign, Home, Business and Justice Secretaries. We had recently launched our first book, After the Coalition at Conservative Party Conference, which attempted to chart a course away from what seemed like endless compromise with our Liberal Democrat partners.

Now we were planning a second – not on domestic policy, but instead on how Britain risked missing out on the huge transformational changes on the international stage, if we did not begin to chart our own course as a nation that looked to Asia and other emerging economies for lessons on how to deliver future economic growth. Rather than accept a diminishing role for the UK, why not begin to invest in a strategy that could maintain our international influence?

So Britannia Unchained was born, as each of us decided upon a chapter we would write. I chose what seemed an obvious and essential narrative: the need for the UK to take science, R&D and innovation seriously. By 2011, government investment in science had basically flatlined, while our investment in research and development as a proportion of overall GDP had slipped backwards, to an embarrassing 1.6 per cent of our total national spend.

Meanwhile, other nations such as the US and China had bold plans to be reaching three per cent and above, spurred on in part to the emerging science and tech powerhouses of South Korea and Israel, who were spending around 4.5 per cent of their expenditure on investment in the technologies of the future.

As a result, both nations had transformed their economies from largely agrarian to high-tech within a few decades, bringing in international private investment while at the same time becoming global leaders in electronics, computers and communications. Establishing clusters of high-tech businesses where none had existed before, this investment in R&D resulted in an entire upskilling of their populations, making them some of the most educated in the world.

It shouldn’t be hard to see, I argued then, the importance of why investing in research and science effectively was the same as investing in your future success as a nation in a century dominated by technological change. We could be another Israel or South Korea too – but only if we took a long term and strategic vision of where we wanted the UK to be. We had some of the best universities and researchers in the world, particularly in the life sciences, but they were managing to achieve extraordinary results with little money.

That needed to change. Fast forward seven years, and as Science and Research Minister, I had the opportunity to make that investment, securing the Government’s manifesto commitment to raise its spending on R&D from £12 billion a year to £22 billion by 2025.

In turn, this had the potential to leverage in additional private research investments from international companies into the UK, thanks to the establishment of R&D tax credits, ideally to the tune of around £70 billion a year – allowing the UK to finally reach around 2.4 per cent of its GDP being spent on science and research by 2027, a target set back in 2017. Even with this investment, the UK would only sit in the middling league of the OECD average, watching as other nations continued to pull ahead.

The UK could still be another Israel or South Korea, if we set ourselves a strategy and stuck to it. But that most important commodity of all in politics, time itself, is slipping away. The Spending Review is Boris Johnson’s last chance to deliver a successful vision for increased investment in R&D. The money promised in 2019 has yet to materialise, and if there is not a clear plan from the Chancellor this week, then the Prime Minister’s vision of the UK as a ‘global science superpower’ would have been torn up by the Treasury.

And with but days until the UK takes the leadership of the international stage at COP26 in Glasgow, expectations are set that it will be investment in new renewable technologies, nuclear power and innovation in carbon emissions reductions that can deliver net zero by 2050. None of this can happen without the UK stepping up to make investments in research, which is desperately needed.

The alternative is that we slip not only further behind in the global race, watching as South Korea, Japan or China disappear over the horizon, we will start to go in the wrong direction: researchers and companies choosing to place their faith elsewhere, in countries that recognise the integral purpose of science to future economic growth.

2021 has demonstrated the incredible potential that science, research and development has not only to transform lives, but to save lives also: the UK has been rightly praised for its early investment in its vaccine programme, which was made possible thanks to our life sciences industry and high levels of existing R&D spend. To paraphrase Isaac Newton, we are standing on the shoulder of giants, of those generations before who made those strategic choices to invest in pharma in the UK.

What we cannot afford to do is to end 2021 by not continuing to place our faith in research and development, the investment for which must flow. As I wrote back in Britannia Unchained a decade ago, we can build a new future for the UK by recognising that future should be grounded in innovation and research. That future, and the Prime Minister’s vision of the UK as that science superpower, risks being lost this week if we do not act now.

James Frayne: The Conservatives’ next challenge? Persuading voters they know how to cut Government waste.

26 Oct

James Frayne is Director of Public First and author of Meet the People, a guide to moving public opinion.

The Conservatives retain buoyancy in the polls largely because of provincial English working class loyalty towards the PM. Long used to being let down by politicians, the PM has delivered Brexit and tighter border controls and he’s making the right noises on “levelling up”. They respect him for it; Starmer is irrelevant.

Budgets are written with the national picture in mind, particularly during times of crisis. An ongoing pandemic and rapidly rising living costs put this week’s Budget squarely in the crisis category. But on these pages we explore politics – and the reality is, politically speaking, the most important audience for the Budget is this big group of working class voters. So how can the Government best appeal to them?

I’ve devoted many columns here to answering this question. From the advance coverage – like the suggestion they’ll be putting money into sport and culture to encourage civic pride – it looks like the Government is planning many of the right things. But today, I want to consider something extremely limited in scope and entirely defensive which I think could be very important in the coming months to working class voters: cutting Government waste.

Waste is an issue usually written off by political consultants as irrelevant or eccentric; the idea being no one believes politicians when they say they’re going to cut waste (and therefore only the politically naive take an interest in it). I have some sympathy with the presumption of public scepticism; wherever you get big Government, you get waste and it’s hard to think of a Government that successfully persuaded people they’ve been successful in reducing waste.

So why look at Government waste now? Fundamentally, because it’s vital – in the context of a high tax economy and squeezed living standards – that voters see the Government go through a process of actively considering and cutting unnecessary spending wherever they can before retaining high taxes or considering new ones.

While the Government isn’t expected to announce significant new taxes this week, we await the introduction of higher NICs and we seem to be a couple of years off meaningful tax cuts (from a high base). Waste retains an immediate relevance, therefore.

The opinion research I’ve conducted in recent times suggests waste has been growing as an issue for voters for some time, even before the recent NICs announcement. After the big injection of cash into the NHS pre-pandemic, while the public supported the move, in focus groups you’d regularly hear moans about NHS inefficiency and poor procurement practices (stories about over-payment for basic drugs, for example, regardless of the merits of the argument).

It’s a feature of the polls too: in a recent poll for the TaxPayers’ Alliance – centred around the cost of living – the poll showed people have a base level of scepticism in Governments’ ability to spend sensibly. Asked how much money the Government wastes, 50 per cent said “some of it, and more than enough of It to be a problem”, while 17 per cent said most of it.

By 40 per cent to 30 per cent (with the rest saying neither agree nor disagree or don’t know), people agreed with the statement that much of the money put into the NHS is wasted – although they said they thought the most wasteful departments were FCDO and DCMS.

Of course, this doesn’t meant voters necessarily believe the Government can cut waste. Nor does it imply that the Government can somehow win on waste by moving the polls on the issue; this would be very difficult. This is not my point; rather, it suggests the Government needs to focus on waste in the short-term so that it doesn’t lose on tax in the medium-term. Simply put: the Government needs to “prove” it has cut to the bone to justify existing or higher taxes.

How much of an issue is this really for the Conservatives? After all, surely no one will believe the Conservatives are more wasteful than the high-spending and ever-eccentric Labour Party? Worryingly for the Conservatives, in our poll for the TPA, more people said they would trust the Labour Party than the Conservatives on cutting waste. (By the way people also said they’d trust Labour more on tax). The truth is, the Conservatives self-image is a long way from the image of it held by the public.

Consider this: as a Conservative, would you sooner justify high taxes having done a review into Government waste or not? A review into waste wouldn’t drastically improve Conservative fortunes, but would help them soothe some very irritated and stressed out taxpayers.

‘The cost… has been catastrophic.’ Paterson’s statement on the Parliamentary Commissioner for Standards’ inquiry.

26 Oct

Media Statement from Rt Hon Owen Paterson MP
Tuesday 16th October 2021

  • The process I have been subject to does not comply with natural justice
  • I raised very serious issues i.e., the fact that milk and ham were contaminated with carcinogenic prohibited substances and that milk contained residues that cause AMR, which is predicted to be a major cause of worldwide death by 2050 – lives will have been saved
  • No proper investigation was undertaken by the Commissioner or the Committee
  • I was pronounced guilty by the Commissioner without being spoken to and the 17 witnesses who came forward to support me were also not spoken to and their written evidence ignored
  • Unchallenged witness evidence must be accepted within any fair process 
  • The Commissioner has admitted making her mind up before speaking to me or any witnesses
  • This process would not survive a challenge in Court but Parliamentary Privilege denies me access to the court
  • There has been an absolute denial of justice which must be seen to be done and not delayed – this has taken 2 years
  • I am not guilty and a fair process would exonerate me
  • I challenge Parliament to waive privilege and permit me to prove my case in Court
  • I lost my beloved wife of 40 years and this process was a major contributory factor 

On 30 October 2019 the Parliamentary Commissioner for Standards wrote to me informing me that she was starting an Inquiry following an article in The Guardian. This raised some questions regarding my publicly disclosed paid consultancies for Randox Laboratories and Lynn’s Country Foods Ltd.

Anyone who has been involved in a workplace investigation knows that the allegations are first put to the accused, usually in a meeting and then the investigation collects the evidence which involves speaking to witnesses.

The Commissioner didn’t speak to me until after she had made up her mind and that is admitted by her. The Commissioner and the Committee didn’t speak to any of the numerous witnesses at any stage.

The allegations were not put to me until AFTER the Commissioner admits she had made up her mind.

This is a biased process and not fair. It offends against the basic standard of procedural fairness that no one should be found guilty until they have had a chance to be heard and to present their evidence including their witnesses.

The Commissioner told me that she conducted an investigative process and she alone would decide what investigations would be undertaken. I was not permitted to know what steps the Commissioner was taking or invited to make suggestions as to who she should speak to.

As I answered the questions put to me, the Inquiry was broadened out, far beyond the original accusations made by The Guardian. As I answered one allegation, another different one was presented.  My responses were seemingly ignored.

The Inquiry has been protected by Parliamentary Privilege. I have been forbidden to challenge this unfair process or even discuss it, as the Inquiry must remain confidential until the outcome is published.

I reject completely the findings of the Committee for Parliamentary Standards. The methods of the investigation do not create a just and fair outcome.  Most importantly, not one of my 17 witnesses have been interviewed during the course of the investigation despite the passage of 24 months – not by the Commissioner, and not by the Committee. These highly reputable and reliable witnesses are the very people who say I am not guilty. What court, what work-place investigation, would ignore such evidence and call its procedures fair?

The Commissioner’s failure to investigate matters led to some bizarre decisions. For example, the Commissioner initially found that I didn’t speak to certain key officials who I should have spoken to about contaminated milk. In fact, I not only spoke to them, but I subsequently set up the Milk Quality Forum to help improve milk safety. Some of those officials who I was accused of not meeting attended all our meetings and we had most productive discussions, recommending measures to protect consumers. They gave evidence for me, which was ignored.

I am found guilty of non-declaration of interests when the substantial volume of witness evidence is that I always declare my interests

One of the formal and stated House of Commons requirements of an investigation such as this is that natural justice must be applied. That key requirement was breached, and the conclusions reached by the investigation are thereby unreliable.

I raised serious issues of food contaminated with unlawful carcinogenic substances, to protect the public. I did not gain any benefit, financial or otherwise, either for myself or for either of the two companies that I advise.  Neither has any evidence of gain by those companies been suggested.

My actions are permitted by the rules of the House. I acted properly in raising serious issues of health and officials I engaged with have accepted this.

The MPs’ Code of Conduct says that ‘Members have a general duty to act in the interests of the nation as a whole’. The rules clearly permit all MPs to initiate discussions with ministers and officials to address ‘a serious wrong or substantial injustice’. I was acting in the public interest when I raised these 3 issues of public health:

1.     The fact that milk in supermarkets was found to contain an antibiotic residue, Florfenicol, which is prohibited in dairy cows and prohibited from being present in milk because it is a danger to health. Parents would want to know that the milk they were buying for their children could increase the risk and spread of antimicrobial resistance which the World Health Organisation says will be the biggest killer worldwide by 2040. I would not wish to conceal this knowledge from the public or from Government having gained knowledge of it.

2.     The fact that a foreign food manufacturer was marketing a ‘natural ham’ that contained a banned carcinogenic nitrite that is recognised as a significant cause of bowel cancer. I would not be fulfilling my duty as an MP if I kept this matter concealed. Full disclosure was in the interests of the public. The company which had been using this banned chemical would also want to know and correct its product. As a result of my intervention the prohibited substance was removed.

3.     A priority for UK overseas aid is the improvement of health in developing countries.  This objective, and our resources, are undermined by the very poor application of laboratory quality control systems in some countries – to ensure reliable results and diagnoses.  As a result of frequent misdiagnoses, lives are lost and valuable healthcare resources wasted.  Any MP with this knowledge has a duty to share it for the benefit of the recipients of UK overseas aid and for effective use of significant sums of taxpayers’ money.  Here is a serious wrong that the UK can readily address.

The rules are specific that MPs may raise a ‘serious wrong or a substantial injustice’ even if they or their external associates benefit incidentally, but neither Randox nor Lynn’s had any benefit (incidental or otherwise) from my actions to protect the public.

Despite this tortuous and inadequate investigation, I would not hesitate to act in the same way again if confronted with new information about serious harms or wrongs requiring urgent remedy. I would also expect other MPs to do the same as it is no less than the public would demand.

As a result of my interventions, staple foods consumed by millions, milk and ham, are now safer than before.  Experts in Overseas Development now know that many of their laboratories abroad are underperforming, failing to protect the health of aid recipients and potentially wasting UK taxpayers’ money.

On a personal level, the cost to me and my three grown-up children from the manner of this investigation has been catastrophic. Last summer, in the midst of the investigation, my wife of 40 years, Rose, took her own life. We will never know definitively what drove her to suicide, but the manner in which this investigation was conducted undoubtedly played a major role.

Rose would ask me despairingly every weekend about the progress of the inquiry, convinced that the investigation would go to any lengths to somehow find me in the wrong. The longer the investigation went on and the more the questions went further and further from the original accusations, the more her anxiety increased. She felt beleaguered as I was bound by confidentiality and could not discuss this Inquiry with anyone else. She became convinced that the investigation would destroy my reputation and force me to resign my North Shropshire seat that I have now served for 24 years. She would also be a casualty, forced to resign her post as Chairman of Aintree Racecourse and a Steward of the Jockey Club, two roles of which she was rightly enormously proud.

I believe that no other MP should ever again be subject to this shockingly inadequate process. As in normal judicial proceedings, MPs subject to investigations must have a chance to see their evidence fully considered. There must be no mystery about interpretations of law that investigations apply. The Committee for Standards has been clear that the Office of the Commissioner is under an obligation to respond to points made by MPs under investigation. Normal judicial processes, such as the levelling of charges and the interviewing of witnesses, must be followed. If witness evidence is not challenged, it must stand.  It is absolutely extraordinary that not one of the 17 witnesses, all of whom supported my narrative, were never contacted let alone spoken to by the Commissioner or the Committee.

Parliament’s internal system of justice needs to operate properly within the principles of natural justice.

In my case, I am very clear that I acted properly and within the rules, putting my lifetime experience, my many years as an MP and my service as a Cabinet Minister towards ensuring the public good.

I am quite clear that I acted properly, honestly and within the Rules.

‘Paterson’s actions were an egregious case of paid advocacy’. The Committee on Standards publishes its report.

26 Oct

The Committee on Standards’ report briefly summarises the Commissioner’s findings before setting out the Committee’s own analysis and conclusions.

The Commissioner’s findings

Mr Paterson has been a paid consultant to Randox, a clinical diagnostics company, since August 2015, and a paid consultant to Lynn’s Country Foods, a processor and distributor of meat products including ‘nitrite-free’ products, since December 2016.

The Commissioner found that Mr Paterson had breached the rule prohibiting paid advocacy, set out in paragraph 11 of the 2015 MP’s Code of Conduct, in making three approaches to the Food Standards Agency relating to Randox and the testing of antibiotics in milk in November 2016 and November 2017; in making seven approaches to the Food Standards Agency relating to Lynn’s Country Foods in November 2017, January 2018 and July 2018; and in making four approaches to Ministers at the Department for International Development relating to Randox and blood testing technology in October 2016 and January 2017.

The Commissioner also found that Mr Paterson had breached paragraph 13 of the 2015 MP’s Code of Conduct, on declarations of interest, by failing to declare his interest as a paid consultant to Lynn’s Country Foods in four emails to officials at the Food Standards Agency on 16 November 2016, 15 November 2017, 8 January 2018 and 17 January 2018.

Lastly, the Commissioner found that Mr Paterson breached paragraph 15 of the 2015 MP’s Code of Conduct, on use of parliamentary facilities, by using his parliamentary office on 25 occasions for business meetings with his clients between October 2016 and February 2020; and in sending two letters, on 13 October 2016 and 16 January 2017, relating to his business interests, on House of Commons headed notepaper. Following further evidence from Mr Paterson, the Committee accepted that the number of meetings in question was 16, not 25 – though the Committee questioned why Mr Paterson could not have made this further evidence available to the Commissioner during her investigation.

Mr Paterson acknowledged that his use of headed notepaper for two letters relating to his business interests breached the rules of the House and apologised to the Commissioner and to the Committee for doing so. Mr Paterson maintained that he had not breached the Code in any other respect.

On the conclusion of the investigation the Commissioner’s draft memorandum was made available to Mr Paterson, in December 2020.

The Committee’s findings

The Committee noted at the beginning of its report that it was “painfully conscious that Mr Paterson lost his wife in tragic circumstances in June 2020; and we wish to express our deepest sympathy to him for his loss. This last year must have been very distressing for him and we have taken these circumstances fully into account in considering Mr Paterson’s conduct during the period of the investigation”, and recorded that it had “striven to ensure that Mr Paterson has had every opportunity to represent himself as fully as possible before the Committee, in person and in writing. We have extended deadlines at his request and we have accepted his request to be accompanied by his legal advisers and to make a formal opening statement to us”. However, the Committee noted that the allegations against Mr Paterson, which are the subject of the Commissioner’s memorandum, relate to his conduct between October 2016 and February 2020, before Mrs Paterson’s death. The Committee stated that “it is these allegations on which we are required to adjudicate, impartially, without fear or favour, and with a sole eye to the rules of the House and the requirements of natural justice”.

The Committee found that Mr Paterson repeatedly used his position as a Member to promote the companies by whom he was paid, and therefore breached paragraph 11 of the 2015 MP’s Code of Conduct.

The report noted that there was no immediate financial benefit secured by Randox or Lynn’s, but that Mr Paterson’s approaches could clearly have conferred significant benefits on Randox and Lynn’s in the long term and even in the short term secured meetings that would not have been available without Mr Paterson’s involvement.

Mr Paterson argued that the majority of his approaches fell within the ‘serious wrong’ exemption in the lobbying rules, which permit an MP to approach a responsible Minister or public official with evidence of a “serious wrong or substantial injustice” which would otherwise breach the lobbying rules, as long as any benefit conferred is “incidental”. With the exception of his meeting on 15 November 2016 with the Food Standards Agency regarding milk testing, the Committee doesn’t accept that Mr Paterson’s approaches fell within the ‘serious wrong’ exemption. Mr Paterson argued that the remaining approaches, namely his contact with the Food Standards Agency in 2018, were not in breach of the rules because the FSA had raised an issue with him. The Committee concluded that Mr Paterson had in fact raised the issue with the FSA and therefore breached the rules. Approaches under the ‘serious wrong’ exemption may only be made “exceptionally”. The Committee report concluded that “it stretches credulity to suggest that fourteen approaches to Ministers and public officials were all attempts to avert a serious wrong rather than to favour Randox and Lynn’s, however much Mr Paterson may have persuaded himself he is in the right.”

Mr Paterson told the Commissioner, and the Committee, that he was fully aware of his obligations under the paid advocacy rules when he acted, but was relying, having neither consulted the rules nor sought advice, on a recollection that the rules made provision for “exceptional circumstances”. The Committee concluded that, at best, Mr Paterson was relying on an exemption he thought probably existed but of whose terms he was unsure and at worst, Mr Paterson was knowingly in breach of the lobbying rules.

The Committee agreed with the Commissioner that Mr Paterson’s breaches of the paid advocacy rule are of sufficient seriousness also to have caused “significant damage to the reputation and integrity of the House of Commons as a whole”, and therefore also conclude that Mr Paterson breached paragraph 16 of the 2015 Code of Conduct.

The Committee also concurred with the Commissioner that Mr Paterson breached paragraph 13 of the 2015 Code of Conduct in failing to declare an interest in four emails to officials at the Food Standards Agency. The Committee accepted that Mr Paterson was more punctilious in declaring his interest in meetings, and those with whom Mr Paterson dealt were probably aware of the capacity in which he was acting, and therefore also agreed with the Commissioner that, taken alone, this was a minor breach of the Code.

The Committee found, following additional written evidence from Mr Paterson, that he breached paragraph 15 of the 2015 Code of Conduct, on use of parliamentary facilities, in holding 16 meetings relating to his outside business interests in his parliamentary office between October 2016 and February 2020.

The Committee also agreed with the Commissioner that Mr Paterson breached paragraph 15 of the 2015 Code of Conduct in sending two letters relating to his business interests on House of Commons headed notepaper. The Committee noted that Mr Paterson promptly acknowledged the latter breach and apologised. Taken alone, the Committee regards this as a very minor breach of the rules.

Mr Paterson made a number of arguments and allegations about the process followed in this case. The Committee addressed each of Mr Paterson’s arguments in detail in the report and set out its reasons for rejecting them.

In an article on 19 October 2021, the Daily Mail claimed that it had received a leaked copy of Mr Paterson’s statement to the Committee and proceeded to relay a series of allegations Mr Paterson had made. The only people known to have access to the information were Committee members, a small number of House of Commons staff and Mr Paterson and his advisers. Every member of the Committee and staff who had access to the transcript has stated on record that they did not leak the transcript. The Committee condemns this leak, and considers that it was probably an attempt to bounce the Committee or seek parliamentary privilege for potentially actionable comments.

The Committee’s conclusions and recommended sanctions

The Committee commented that it does not doubt that Mr Paterson sincerely believes that he has acted properly. Mr Paterson is clearly convinced in his own mind that there could be no conflict between his private interest and the public interest in his actions in this case. But it is this same conviction that meant that Mr Paterson failed to establish the proper boundaries between his private commercial work and his parliamentary activities, as set out in the Guide to the Rules. The Committee concluded that being able to judge the difference between one’s private, personal interest and the public interest is at the very heart of public service and a senior member of the House with many years standing should be able to make that distinction more clearly.

In accordance with normal practice, before considering sanctions the Committee noted any aggravating or mitigating factors in the case. Aggravating factors included:

  • No previous case of paid advocacy has seen so many breaches or such a clear pattern of behaviour in failing to separate private and public interests.
  • Mr Paterson’s financial remuneration from Randox and Lynn’s amounted to nearly three times his annual parliamentary salary.
  • Mr Paterson’s actions demonstrate a failure to uphold the Seven Principles of Public Life.
  • Mr Paterson has made serious, personal, and unsubstantiated allegations against the integrity of the Commissioner and her team.
  • Mr Paterson is a former Minister, and an experienced long-serving Member of the House.

The Committee also noted mitigating factors, including:

  • Mr Paterson’s wife took her own life in June 2020. The Committee consider it very possible that grief and distress caused by this event has affected the way in which Mr Paterson approached the Commissioner’s investigation thereafter.
  • In respect of the breaches relating to use of his parliamentary office, Mr Paterson had suffered a period of ill health which made him less able easily to leave the parliamentary estate.
  • Regarding the breaches of paid advocacy rules, Mr Paterson has an evident passion for and expertise in food and farming matters which, in itself, is admirable, as long as it is channelled within the rules of the House.

The Committee determined that Mr Paterson’s actions, in particular those relating to paid advocacy, constitute a serious breach of the rules.

The Committee found that Mr Paterson’s actions were an egregious case of paid advocacy, that he repeatedly used his privileged position to benefit two companies for whom he was a paid consultant, and that this has brought the House into disrepute.

In line with previous cases of a similar severity, the Committee recommends that Mr Paterson be suspended from the service of the House for 30 sitting days.

As the Government Deputy Chief Whip confirmed on 9 September 2021, it is the usual practice for the relevant motions to be tabled by the Government and debated as soon as possible. The Committee recorded its expectation that this should be within five sitting days of the publication of the report.

The full report is here.