The Deal in Detail 5) Immigration

31 Dec

David Goodhart is Head of Demography at Policy Exchange and author of The Road to Somewhere: The New Tribes Shaping British Politics.

A sense that the country was changing too fast and a desire to reclaim normal national controls over who comes and goes and who, in effect, becomes a citizen was one of the primary motivations behind Brexit. And on January 1 the EU free movement rules will duly come to a formal end, with EU citizens no longer able to come and live and work here as if they were British citizens.

A last minute flurry of EU citizens arriving in the UK was expected, Covid-restrictions allowing, as anyone resident here for only one day prior to 2021 will be able to claim the right to live and work here for five years (and then apply for the right to stay permanently).

Most of the UK’s new “points-based” immigration rules, levelling the field between EU and non-EU people wishing to come for more that a visit, became law in early 2020, and the Withdrawal Agreement dealt with the rights of EU citizens already here. But the final Brexit deal did contain some new details on such things as the Erasmus student exchange system and on mutual recognition of professional qualifications.

Overall on the post-Brexit movement of people many important things will stay the same (visa-free short stays up to 90 days will continue to be allowed in both directions), many things will change quite radically (such as the ability of EU citizens to work in low-skill jobs) and some things remain uncertain (the mutual recognition of professional qualifications).

First, the bigger picture immigration story that began life on December 1 2020 for the rest of the world and January 1 2021 for the EU. Ian Robinson of immigration lawyers Fragomen puts it like this:

“We now have one of the fastest and most certain immigration schemes in the world for skilled workers, though it is also one of the most expensive. That said, it could never be as fast or certain as free movement”.

The new so-called points-based visa system liberalises skilled immigration, which now applies equally to EU and non-EU people, and essentially turns the UK into an employer-sponsorship immigration system for anyone with A-level equivalent qualifications or paid above £25,600. The previous cap of 20,700 on skilled workers from outside the EU is suspended and employers no longer have to observe the resident labour market test (advertising the job to British citizens first).

Immigration into lower skill jobs, by contrast, is essentially closed with no exemptions (apart from the seasonal agricultural workers scheme).

Will this reduce or increase overall numbers? In the short-term, the pandemic is likely to depress numbers arriving in the main work and student categories. In the medium term the numbers could rise, especially if there is a significant influx from Hong Kong, but the liberalisation for skilled worker immigrants is likely to be more than matched by the reduction in EU citizens coming to do low-skill jobs.

Government will have two tools for regulating flows if numbers do creep up: it could reintroduce a cap on the visa numbers if unemployment starts rising too high and it can increase the cost to the employer of bringing someone in. That cost is already high by international standards (though both Australia and the US are comparable), with a single person costing an employer £5,500 for a three-year visa, assuming the employer pays the annual health charge of £625 and the visa cost of £600, and for someone with a spouse and three children for five years the cost rises to around £27,000.

And what about the impact of the low skill immigration stop? The Government’s intention is that employers will make those jobs more attractive to those already living here or phase them out by investing in labour-saving equipment.

There is some tentative evidence that that is indeed happening. EU citizens make up about seven per cent of the UK workforce (17 per cent in London) and about two-thirds are classified as low-skill, but some sectors have become heavily dependent on them: food production (around one third), hotels (20 per cent), and warehousing (18 per cent). Only about four per cent of NHS nurses are from the EU, but that rises to eight per cent for the social care workforce. (If there is to be an exemption on low-skill immigration anywhere it is most likely to be in social care.)

Most EU citizens intend to stay, with around 3.5 million signing up for the EU settlement scheme which grants continuity of rights (though only permanently once you have been resident for five years). But by the end of June next year anyone who has not signed up will be regarded as an illegal immigrant and subject to the so-called “hostile environment”.

It is likely that the few thousand people who are likely to have slipped through the net will be granted some kind of amnesty, the problem for the Government is that will then set a precedent that many of the estimated one million illegal immigrants from outside the EU will want to exploit.

Things are likely to be somewhat more difficult for British citizens wanting to work in an EU country, with the exception of Germany and the Netherlands work permit systems tend to be highly bureaucratic. Moreover, the EU rejected the UK’s wish to continue with the existing system of mutual recognition of professional qualifications for doctors, lawyers, accountants etc. The Brexit deal has established a framework for making agreements in this area but these are usually quite hard to reach and it seems likely that the UK will have to negotiate 27 bilateral arrangements.

The other big story is students. EU students will no longer get privileged access to UK universities and will have to pay the same higher tuition fees as those from outside the EU. This is likely to leave a big dent in the number of EU students, currently 143,000 (including post-grads). The UK is also pulling out of the Erasmus student exchange scheme which has been running for more than 30 years. In 2017 about 16,000 UK students had a term (about three months) at an EU university and 31,000 EU students came here.

Both decisions have caused some dismay in the higher education world. But Erasmus accounted for less than half of all UK student exchanges and will be replaced by the Turing scheme with a more global focus. The Government argues that Erasmus was unnecessarily expensive, staying in the scheme would have cost hundreds of millions of pounds, and that the new scheme will underscore the two main things that Brexit is about: global Britain and levelling up.

The Government has committed to spending at least £100m on the Turing scheme with a goal of 35,000 student participants and instead of attracting generally affluent language students from Russell Group universities, as Erasmus has done, it will aim at a wider social mix.

Finally, one dog that didn’t bark. The Youth Mobility Scheme has not been extended to young people from the EU. The scheme currently attracts a few tens of thousands of people under 30 each year, mainly from Australia and New Zealand but also Japan and South Korea, for a two year period in which they are allowed to work. The UK was apparently quite keen on extending it to Europeans but the EU decided it didn’t have competence to negotiate it. Bilateral deals may well be struck. But as bar work, one of the staples for scheme participants, is going to be in short supply for a few more months the lack of an extension to young Europeans isn’t going to be missed.

The new migration rules will need time to settle and will produce some unintended consequences, but the decision to end free movement is a broadly popular one, and one that even most Remainers now accept. Most employers will be happy with the liberalisation of skilled migration though there will be pressure in some sectors for temporary exemptions from the low-skill ban.

More generally, under the new regime we might start to see migration anxieties shift from being felt predominantly among lower socio-economic groups to higher ones, complaining about affluent areas becoming unaffordable as more high paid professionals enter the country. The new migration landscape will also see an increase in short-term flows and a reduction in permanent residence, and that broadly fits with the democratic desire for the UK to remain an open country but with slower underlying demographic change.

This is the fourth in a series of pieces from Policy Exchange looking at specific issues that arise from the Brexit trade deal.

Sam Robinson: The case for comprehensive property tax reform is long-standing and crystal clear

31 Dec

Sam Robinson is a Senior Researcher at Bright Blue

Recently, yet another Conservative Research Group – this time the Property Research Group, comprising 29 Tory MPs – was launched.

With the vaccine arriving in the UK, it seems attention among those on the centre-right is starting to shift towards what happens after the pandemic is under control: specifically, making sure things do not just go back to normal on housing policy.

One of the Government’s main tax interventions during the Covid-19 crisis, the stamp duty holiday on the first £500,000 for any buyers, is set to come to an end in the next fiscal year. But we should be asking ourselves: do we really have to go back to the default settings of stamp duty and council tax when we come out the other side of Covid?

The short answer is that there is no good reason to.

Economists have long been in agreement that the UK’s current system of property taxes is horribly designed and inefficient. The evidence is incontrovertible. Stamp duty distorts the volume and timing of housing transactions; just look at the wild spikes in transactions during the current holiday. Indeed, a two percentage-point increase in stamp duty is estimated to reduce the mobility of homeowners by around 40 per cent.

And council tax regressively hits low-value homes located in less prosperous regions hardest: a person living in a property worth £100,000 may pay six times more, as a proportion of their property value, than someone in a house worth £1 million. As Paul Johnson of the IFS succinctly put it: ‘it’s rather like charging VAT at a lower rate on Bentleys than on Fords’.

The sticking point for reform has always been the politics. Partly, this is driven by competing priorities: many on the left want a tax system that is redistributive, while the right often slams policies such as stamp duty as a ‘tax on aspiration’.

But when it comes to property taxes, this is a false trade-off. There are many alternative models out there, such as proportional property taxes or land value taxes, that ensure a more equitable impact across regions and across the income distribution but without the economically damaging impacts of a transaction tax.

Many policymakers recognise this, but retort that while such ideas are good on paper, implementing them would be costly and unworkable, in particular due to the need for accurate and regular valuations. Perhaps this was true in decades past. But it’s worth noting that we already have an administrative system in place for regular property valuations, in order to calculate business rates liabilities. And with the rise of Automated Valuation Models, the digitisation of property and location-based data, and technologies such as AI and blockchain on the horizon, the administrative strain of property valuation is on a downwards trajectory.

Even the difficult task of valuing land is possible. Not only are there methods available to estimate the value of land in the absence of a deep market with many transactions, but several governments including Denmark and Estonia, as well as numerous US and Australian states, have experience of implementing land value taxes.

To be sure, radical property tax reform would bring implementation challenges. But such proposals are very much grounded in reality.

The real political issue is in truth electoral: substantive property tax reforms will create winners, yes, but a lot of losers too. But given that, eventually, tax reform will be needed both to pay off the escalating budget deficit and to address the complexity and inefficiency of the tax code, the question of winners and losers cannot be skirted indefinitely.

Analysis from the IFS lays bare the political economy of reforms to council tax, which the Treasury has allegedly got its eye on. If council tax were revalued and moved to a flat-rate, proportional system then council tax bills (assuming central government funding to local authorities was adjusted) could reduce by 20 per cent or more across much of the North, and conversely increase by a similar proportion in London and the home counties.

It is not difficult to see the political risk to the Tories of pursuing this line of reform. But this also presents political opportunities: the winners of a move to a fairer system of property taxes would comprise people in the regions paying over the odds on their council tax bill relative to those living in London and the south-east, as well as those in low value properties, who are often young and on modest incomes. Surely, these are the very people this Conservative Government purports to champion through their ‘levelling up’ agenda?

Aside from the principled argument for levelling up, if the Conservatives are to prosper in the long term then they will need to maintain their electoral coalition of voters in the red wall and shire seats; and they will need to win over young people, millions of whom would consider voting Conservative but have yet to be persuaded to do so in elections. Reforms that reduced tax bills on low-value properties and lowered the penalty on buying a house would reward the ‘just about managing’ yet deeply aspirational households that Conservatives have long sought to win over.

Evidence bears this idea out. Recent polling conducted by the Property Research Group shows that council tax is the most unpopular tax in the country: 51 per cent of people dislike or hate it. And levels of dissatisfaction are higher still in the North East, where the Tories will be hoping to consolidate their ‘Blue Wall’ ahead of the next election. In any case, roughly seven in ten around the country want to see council tax reformed to make it better reflect house prices.

Admittedly, stamp duty is potentially an easier political sell, for the simple reason that it is a ‘voluntary’ tax insofar as it is only incurred when you buy a house. Nevertheless, with the average home in England incurring £2,300 in stamp duty – £6,000 in the South East – the tax weighs heavily on purchase decisions and successfully deters many transactions. With the end of the stamp duty holiday in sight, around a third of buyers recently suggested they would pull the plug on their move if they had to pay stamp duty, with a further 43 per cent saying they would ‘most likely’ do the same. That’s hardly a ringing endorsement.

The economic case for comprehensive property tax reform is long-standing and crystal clear. But not enough attention is given to the political rationale for such reforms. Hopefully, with the birth of the Property Research Group, that could well be about to change.

The Deal in Detail 4) The environment and energy

31 Dec

Benedict McAleenan is a Senior Adviser to Policy Exchange’s Energy & Environment Unit. Ed Birkett is a Senior Research Fellow at Policy Exchange.

If you listen to much of the anti-Brexit rhetoric, you’d think that the EU was the sole driver of environmental progress in the UK and its only protector. Given half a chance, the UK would apparently repeal every environmental and climate change policy it could find. Given the UK’s cross-party support for environmental protection and for Net Zero, this risk was always theoretical.

The deal includes substantial provisions on the environment and on climate change as part of the ‘Level Playing Field’ and associated ‘non-regression’ clauses, which will require both the UK and the EU to uphold existing protections.

On energy, the deal introduces new mechanisms for the UK and the EU to cooperate on nuclear power, natural gas and electricity. The deal also looks forward to future cooperation on cross-border energy projects in the North Sea, which, as we’ve previously written, holds the key to a Net Zero economy. It also suggests an intention to cooperate on carbon pricing and hints at a linked Emissions Trading System. On both energy and the environment, this deal is a sensible starting point for longer-term cooperation.

Protecting the environment

On fishing, the big negotiation points were about the business of fishing fleets, not sustainability. So once the fisheries transition period ends the UK will be responsible for managing the sustainability of its own resources. Now that we understand how fisheries will operate with regard to our European neighbours, the UK Government should recommit to its sustainability pledges. This should include the sustainability of ‘shared stocks’, i.e. fish that swim across borders, so we’ll need to collaborate closely with the EU on marine standards.

The level playing field rules allow both sides to diverge on environmental standards. Throughout the Brexit debate, the EU has often been painted as a gold standard while the UK has been presented as quite the opposite. That isn’t accurate: The UK exceeds the EU on a number of protections, from climate policy to animal welfare. Diverging from the EU’s farm policies, for example, will be a major boon for the UK’s environmental wellbeing.

However, membership of the EU provided important environmental oversight. This has helped to address the tragedy of the commons which can arise from more local political trade-offs. The Environment Act aims to fill this void with an Office for Environmental Protection (OEP), which will replace EU institutions in scrutinising environmental protections.

The Deal’s ‘rebalancing’ mechanism (part of its level playing field provisions) will provide some checks on top of the OEP, but these will be limited. By allowing both sides the chance to impose tariffs (among other things) if the other loosens environmental checks, it may help to prevent backsliding. However, the provisions only relate to how the changes affect trade and investments. That is, if a loosening of regulations can’t be explicitly shown to impact trade, then they won’t come under the remit of the Deal. So, the onus is back on British politicians, the OEP, civil society and voters to ensure the environment is protected. That’s perfectly reasonable within the terms of a trade deal between sovereign nations.

Of course, the UK and the EU have different legal philosophies that govern the evolution of law and regulation. The EU’s French-style precautionary approach jars with the British ‘common law’ tradition. How they will manage divergence is still to be seen.

There’s also a question over devolved administrations. Environmental protections are mostly devolved to the Scottish, Welsh and Northern Irish administrations, so the UK government can’t easily prevent the Welsh, for example, from relaxing environmental rules and potentially affecting trade.

Cooperation on energy and climate

When it comes to energy, the UK and the EU have a lot to gain from cooperation, so it’s not surprising that the deal includes substantial provisions in these areas. The benefits of close cooperation will continue to grow. One area where the Deal is ambitious is cooperation on renewable energy projects, particularly in the North Sea. There’s massive potential for low-carbon energy projects in the North Sea, including offshore wind and offshore electricity grids.

By 2050, offshore wind capacity in the UK’s part of the North Sea is likely to increase tenfold. Both sides have recognised that, to make the most of the North Sea, they need to work together on offshore wind projects and offshore electricity grids.

When it’s windy in the UK, we can export our excess electricity to Norway, Denmark, the Netherlands, Belgium and France. Whereas on cold, still days, we will increasingly import electricity from the continent. This mutual cooperation directly reduces electricity bills by making the most of cheap renewable energy when it’s available.

From January 2021, Great Britain will no longer have access to the automated ‘market coupling’ system that improves the efficiency of trading electricity. However, the deal aims to develop a new system for trading electricity by 2022. In the meantime, electricity bills are likely to rise in both the UK and the EU. Any cost rises will be manageable, but the biggest effect could be felt by customers in Ireland and Northern Ireland, because the Single Electricity Market (which covers ROI and NI) is small and only interconnected to Great Britain.

The Deal also leaves open the possibility of cooperation on carbon pricing. For now, the UK is setting up its own Emission Trading Scheme (ETS) to replace the EU ETS. Longer-term, the UK and the EU could link these Emissions Trading Schemes, as Switzerland has done with the EU. As we’ve previously written, the UK and the EU should also explore cooperation on carbon border pricing, which is critical to decarbonising heavy industry without offshoring manufacturing jobs to countries with higher carbon emissions.

On electric vehicles, the UK and the EU have agreed transitional arrangements that will make it easier for EVs manufactured in the UK to qualify for tariff-free exports to the EU. This is a sensible step that will give UK car manufacturers more time to build up their supply chains for EVs, including battery “gigafactories”.

Under this deal, the UK Government regains control over regulation of emissions from vehicles. This will give the Government more freedom to go further and faster on the rollout of Electric Vehicles, including the ability to legislate to ban the sale of new petrol and diesel cars by 2030, which was announced as part of the Prime Minister’s ten-point plan for a Green Industrial Revolution. We have previously written about how a California-style Zero-Emission Vehicle Mandate (‘ZEV Mandate’) can reduce the cost of the transition to zero-emission vehicles powered by electricity or hydrogen. Under a ZEV Mandate, manufacturers would be required to sell an increasing proportion of electric and hydrogen vehicles each year. Next year’s Green Paper on the petrol and diesel phase-out is the perfect opportunity for the Government to introduce a ZEV mandate and show how we can use new-found regulatory freedom to boost both the environment and industry.

In summary, it’s a good deal, but there’s still work to be done to develop collaborative partnerships on energy systems and environmental protection. From liberal energy markets to legislating on net zero, both parties have been close for decades. The key now is to implement these provisions as smoothly as possible so that we can continue to trade with increasingly sustainable industries on both sides.

This is the fourth in a series of pieces from Policy Exchange looking at specific issues that arise from the Brexit trade deal.

U-turn of the year – A Level results and the Government abandoning the Ofqual algorithm for predicted grades

31 Dec

In a tight competition, A Level results were deemed U-turn of the year by our panel with 28.11 per cent of the vote. Many will remember the outcry in August after the Department of Education used an algorithm by Ofqual to predict grades, leading to huge disappointment among students. Gavin Williamson and the Ofqual soon apologised and decided that all A Level and GCSE results in England would be from then on be calculated by teacher assessments.

In at 25.87 per cent, our panelists felt that the Government’s position on free school meals was another big U-turn, followed by Sadiq Khan’s decision for London to have a lockdown and curfews, only to then fight for these to be avoided, and Keir Starmer in last place with his Brexit flip flopping. Either way, there was no stand out winner in this category, unlike some of our others.

Newslinks for Thursday 31st December 2020

31 Dec

Prime Minister lavished with praise over Brexit trade deal and for ‘saving democracy’

“After a bitter referendum, two general elections, three prime ministers and four and half years of negotiations, it was the day Brexit was finally done. It took five hours of debate for MPs to vote by 521 to 73 to enshrine Boris Johnson’s trade deal into law. And just after midnight on Thursday the Queen gave final approval to the legislation. Her signature puts the agreement into British law, preventing a no-deal Brexit at 11pm on Thursday when the transition period ends. “House of Lords is notified of Royal Assent to the European Union (Future Relationship) Act,” the House of Lords said in a tweet. Summing up the jubilant mood among Brexiteers on the Conservative benches, Sir Bill Cash said the Prime Minister had “saved our democracy”. Lavishing further praise on Mr Johnson, the Brexit “Spartan” added: “Like Alexander the Great, Boris has cut the Gordian Knot. Churchill and Margaret Thatcher would have been deeply proud of his achievements, and so are we.”” – Daily Telegraph

  • Brexiteers hail ‘new golden age’ as deal sails through Commons – The Times
  • May claims her own Brexit deal was ‘better’ than Johnson’s – The Sun
  • Tories unite in vote for Johnson’s Brexit deal – The Times
  • Brexit is not over and Britain must not ‘fall into traps’, Davis warns – Daily Mail

Comment:

  • Now we must loosen the EU’s chokeholds – Ambrose Evans-Pritchard, Daily Telegraph
  • Brexit is far from done, this deal is no ‘game, set and match’ – Anand Menon, The Guardian
  • Exit from single market closes a chapter UK did so much to write – Martin Sandbu, FT

Editorial:

  • Britain begins 2021 as the fully independent country it was always meant to be – The Sun

>Today: MPs Etc.: Geoffrey Cox is knighted

>Yesterday:

Three Labour frontbenchers quit after defying Starmer on Brexit deal

“Three Labour MPs have resigned as junior frontbenchers after defying Keir Starmer and refusing to vote for Boris Johnson’s Brexit deal. Within hours of the agreement being clinched on Christmas Eve, Starmer announced he would whip his party to support it, despite criticising the substance of the deal as “thin”. But some Labour MPs felt uncomfortable supporting a deal they believed would damage the economy, and feared it would be difficult to criticise the deal if the party backed it. Tonia Antoniazzi, the MP for Gower, Helen Hayes, the Dulwich and West Norwood MP, and Florence Eshalomi, the MP for Vauxhall, resigned from their junior frontbench posts so as to abstain as MPs voted on the legislation implementing the agreement… In total, 36 Labour MPs abstained in the vote, including staunch campaigners against Brexit such as Stella Creasy and Neil Coyle, and leftwingers such as Rebecca Long-Bailey and Diane Abbott.” – The Guardian

>Yesterday: Video: WATCH: The choice before the Commons is between this deal and No Deal, says Starmer

UK ministers to use new powers to sideline SNP over delivery of £100m fishing scheme

“SNP ministers are to be cut out of delivering a £100m scheme to modernise the UK’s fishing industry over fears that they would attempt to sabotage Brexit. The Daily Telegraph understands that the project is to be directly run by Tory ministers across the UK, despite fisheries being a devolved matter. The decision to seize control of the scheme, which will see tens of millions handed out in Scotland to revamp the fleet and fish processing industry, will outrage SNP ministers who will accuse their counterparts in London of trampling on devolution and snatching powers. It is understood that Scottish ministers have already demanded £60m of the £100m pot to run their own programme, with the figure reflecting the size of the fishing industry in Scotland, in behind the scenes talks. However, the UK will instead run the scheme directly using powers they obtained in the recently passed Internal Market Act, which gave the UK government more scope to directly fund projects in devolved areas.” – Daily Telegraph

  • Gove shames Sturgeon’s SNP voting for no deal Brexit – Daily Express
  • Holyrood and Stormont reject ‘disastrous’ Brexit trade deal – The Guardian
  • Brexit paperwork threatens Scotland’s luxury seafood business – FT

Comment:

  • Brexit’s second act may break the UK union – Philip Stephens, FT
  • Coastal communities have been shafted by Boris’ Brexit deal – Neil Hamilton MS, Daily Express

>Yesterday: Dr Graham Gudgin in Think Tanks: The Deal in Detail 3) Northern Ireland

Turing scheme to replace Erasmus will give students ‘pick of the world’

“If Boris Johnson is to be believed then the only meaningful difference between the Erasmus student exchange scheme and its replacement, a UK-only programme named after the mathematician Alan Turing, will be the number of students participating. The fact that only 15,000 British students at universities, colleges and schools travelled to Europe under Erasmus, half the number of EU students who travelled in the opposite direction, was one factor that led to the prime minister making what he described as the tough decision to withdraw Britain from the programme… Should its ambitious vision be realised, the Turing scheme — which has been given a cautious welcome by the higher education sector, if not Mr Johnson’s political opponents — will in theory enable more than twice that number to study in Europe and beyond.” – The Times

  • Ministers must ensure the successor to the scheme fulfils its potential – The Times

>Today: Anthony Browne MP in Comment: Post-Brexit Britain. Now we’ve taken back control, here’s what we can do with our new powers.

>Yesterday: Dr Gerard Lyons in Think Tanks: The Deal in Detail 2) Economics and regulation

Oxford vaccine approval means ‘freedom by Easter’, Johnson promises…

“Britain will open up by Easter with approval of the Oxford vaccine allowing an accelerated end to social distancing, Boris Johnson promised last night. At least two million people a week are expected to be vaccinated with the NHS aiming to have reached almost 30 million by the end of May. After regulators said that a single dose of the Oxford vaccine could achieve 70 per cent protection, the focus will shift to giving as many people as possible the first jab with second doses delayed for up to three months. Those due to have second doses of the Pfizer jab from next week will have their appointments postponed as the same strategy is adopted for both approved vaccines. The NHS will have 530,000 doses of the Oxford jab available when vaccinations start on Monday, with the rest of four million doses ready shortly afterwards as regulators approve each batch individually.” – The Times

  • Hancock reveals Britain will only have 530,000 doses of Oxford’s jab next week – Daily Mail
  • Race to roll out Oxford Covid vaccine to stave off third lockdown – Daily Telegraph
  • UK approves Oxford/AstraZeneca vaccine – FT
  • It doesn’t mean vulnerable pensioners can act with ‘wild abandon’ says Van-Tam – Daily Mail
  • Tesco offers to help with roll-out of Oxford vaccine – Daily Telegraph

…but UK faces ‘dangerous situation’ as new Covid cases surge

“The UK is in a “very dangerous situation” in its battle against coronavirus, facing a “grim and depressing picture” of rising infections and deaths as millions more were placed under the tightest tier of restrictions. The bleak picture painted on Wednesday by Jonathan Van-Tam, England’s deputy chief medical officer, followed news of the regulatory approval of the Covid-19 vaccine from Oxford university and AstraZeneca, which has raised hopes that the virus could be defeated. But that optimism faded as the UK recorded 981 coronavirus-related deaths, the highest daily figure since April. Infection rates soared to 50,023 new cases. The alarming surge in deaths spurred new measures to limit the spread of the virus… Nowhere in England will be in tier 2 after the government’s latest assessment of the coronavirus data. Only the Isles of Scilly, 25 miles off the Cornish coast, will be in the lowest tier.” – FT

  • Total national lockdown by the end of January is inevitable, says SAGE expert – Daily Mail
  • UK records 981 deaths in highest Covid toll since April – The Guardian
  • Most of England told to stay at home under Tier 4 Covid rules – The Times
  • Full list of areas going into Tier 4 and Tier 3 from tonight – The Sun

>Today: ToryDiary: Farewell, Sweden

>Yesterday: Video: WATCH: With the exception of the Scilly Isles, all of England will now be in Tier Four or Three

A million primary pupils to stay at home as sweeping school closures imposed

“One million primary school pupils will not return to classrooms as planned next term as Boris Johnson unveiled sweeping school closures and warned more could follow. The Prime Minister said that in order to combat the spread of the new coronavirus variant, the majority of secondary school pupils will now stay at home until “at least” January 18, two weeks after term was supposed to start. Those in exam years 11 and 13 will return on January 11. Only the children of key workers and vulnerable children will go back on January 4, the scheduled start date. It means the staggered start to term which had previously been announced will be moved back by a week. Primary schools in “high infection areas”, estimated to affect one million pupils, will also close for the first time since the spring for at least two weeks as Mr Johnson said “even tougher action” was needed because of the “sheer pace” of the rising infections.” – Daily Telegraph

  • Williamson orders schools to remain shut in worst-hit areas – The Times

>Today: Bill Bowkett in Local Government: The pandemic has shown the value of localism. But the Government seems to be ignoring this lesson.

>Yesterday: Dr Raghib Ali in Comment: Why we should put our children first and keep schools open

Matt Hancock: With our vaccine delivery plan, we can turn 2021 into our year of renewal

“The end of this pandemic is in sight and I am thrilled that we are able to end the year with a moment of hope and cheer. The Oxford vaccine, developed right here in the UK, has now been given the green light by the Medicines and Healthcare products Regulatory Agency – the single biggest stride we’ve been able to take since this pandemic began. This is a real British success story that has given hope to people here in the UK and across the world, bringing forward the moment when we can get our lives back to normal. The NHS has a clear vaccine delivery plan and will roll it out far and wide across the UK, as quickly as we receive it; and because the clinical advice says people get protection after the first dose, we can accelerate this rollout even further. We know that the next few weeks will be hard, with the virus advancing, and with tougher restrictions in place across the UK.” – Daily Telegraph

  • Niggling questions on Nightingale closures, ‘defeating Covid’ and vaccine protection – Rod Liddle, The Sun
  • Don’t leave the vaccine roll-out to the lumbering NHS – Matthew Lynn, Daily Telegraph
  • Oxford AstraZeneca vaccine is as close to a miracle as medicine ever gets – Professor Angus Dalgleish, Daily Mail

BBC film on Cummings ‘breached accuracy rules’

Shield“A BBC documentary about Dominic Cummings broke accuracy rules by suggesting that the prime minister’s former chief adviser was prejudiced against Muslims, the corporation’s executive complaints unit has ruled. Taking Control: The Dominic Cummings Story, presented by Emily Maitlis, risked misleading viewers by taking quotes from a think tank paper about immigration out of context, the unit said. It is the second time in a year that a Maitlis-fronted programme about Mr Cummings has been found in breach of the BBC’s editorial standards, after her Newsnight monologue in May. The documentary, broadcast in March, was promoted by the national broadcaster as its first in-depth investigation into the most powerful unelected figure in Westminster. It featured interviews with more than 20 people who have known Mr Cummings and included a segment about his past views on migration that violated the BBC’s accuracy guidelines.” – The Times

>Yesterday: ToryDiary: Best and worst Government moment: the Brexit trade deal and Cummings’ road trip to Barnard Castle, respectively

UK pledges an extra £47m in aid as agencies warn of ‘catastrophic hunger’

“The government has promised £47m in extra emergency aid for 2021 as it becomes clear that the coming year will see a dramatic rise in people struggling for food. The Foreign, Commonwealth and Development Office said on Wednesday it will provide more aid for food, water, hygiene and shelter in 11 countries, including £8m to Africa’s Sahel region, where the UN has warned of catastrophic hunger. “This extra emergency UK aid will mean people can feed their families and prevent these crises from escalating into widespread famine. We hope to see other donors step up to the plate with some extra funding to prevent these global crises getting worse,” said foreign secretary Dominic Raab. The government said another £8m will go to supporting vulnerable Syrians. The majority of the remaining aid will be spent through the UN’s World Food Programme (WFP) which has had to cut back on food aid because of a massive shortfall in funding.” – The Guardian

>Today: Harriet Baldwin MP in Comment: Cutting foreign aid is a blatant breach of our manifesto pledge – and I will not vote for it

News in Brief:

  • Johnson must now make the Union his top priority – Henry Hill, CapX
  • Unfixing Parliament – Joshua Rozenberg, The Critic
  • Deal sells out Northern Ireland and kicks the can down the road – Gerald Warner, Reaction
  • The perils of making Diane Abbott jokes – Meggie Foster, The Spectator
  • Blackford’s shoddy history and clumsy myth-making – Henry Hill, UnHerd

Farewell, Sweden

31 Dec

Yesterday, Matt Hancock announced in the Commons that all of England is to be put into Tiers Three or Four.  The response from the Conservative backbenches confirmed that the campaign for a Swedish-style alternative policy is over.

We gave three reasons for its collapse when the tiers were last adjusted.  First, the effects of the Covid “second wave” in Sweden itself (where a commission has now criticised the government’s record on protecting care homes).  Second, the arrival of the Pfizer vaccine.  Third, the rise of a Covid-19 variant that is more easily transmissible.

The effects of the last are feeding their way through into hospital admissions: the number of Covid patients in hospital throughout the UK is now at near-peak levels.  Bernard Jenkin reported that Essex has declared a major incident; Cheryl Gillan said that the NHS in Buckinghamshire in under severe pressure (and a major incident has also been announced there).

Conservative MPs are now pivoting to ask the obvious question: when will the roll-out of vaccines – the Health Secretary made the most of the Oxford version gaining permission for use – allow restrictions to be lifted?  Mark Harper, who co-chairs the Covid Recovery Group, zeroed in on the question.

Hancock’s answer is that all depends on the speed of manufacture.  It was all much the same story when Gavin Williamson made his statement on schools.  If the vaccines had not come galloping over the hill, there would surely have been turbulence on the backbenches.  Instead, Tory MPs concentrated their questions on when these will be available in schools.

No fewer than seven went down this line.  One, Rob Butler, asked in relation to keeping primary schools open whether the Government has “fully considered the safety of pupils and staff”.  That’s a measure of the shift of mood on the Tory backbenches.  It is only three months since Boris Johnson received a briefing from Sweden’s Chief Epidemiologist on how his country’s strategy was working.

Anthony Browne: Post-Brexit Britain. Now we’ve taken back control, here’s what we can do with our new powers.

31 Dec

Anthony Browne is MP for South Cambridgeshire and a former Europe Editor of the Times.

When I worked for Boris Johnson during his first term as Mayor of London, I led on devolving powers to City Hall, and went through it with Oliver Letwin, David Cameron’s policy honcho. One idea was to devolve VAT to London, copying regional sales taxes in North America. “We can’t. It is against EU rules. Not sure why,” said Letwin.

With our agreement with the EU, arguably the biggest change is not individual policy areas, but the sense of empowerment. Throughout government, naysayers and those suffering excessive status-quo bias have been able to stop any initiative saying: “you can’t. It is against EU rules.”

Sometimes – like the abolition of the tampon tax and banning live animal exports – it was a correct interpretation of EU law. But often it was just a general prohibition. It would end the matter, because no one really understood the EU rules, they were too difficult to challenge, and basically impossible to change. It bred throughout the UK government machinery an intellectual dependency on the EU that led to a pervasive “can’t do” attitude.

But from January 1, no longer will anyone be able to say: “you can’t – EU rules”. We have jumped from the passenger seat to the pilot seat. Can’t do becomes can do. So – what should we do?

Eighteen months ago, at the depth of our Brexit political paralysis, ConservativeHome asked me to write a series of 10 articles highlighting potential “Policy Gains from Brexit” – things we might want to do and would be able to do once we had left the EU. So how are we doing?

On most of the issues, we are making great headway. Across much of government, the new empowerment has led to a renaissance of democracy and policy making. The Department of Environment, Food and Rural Affairs used to be a body for transposing EU rules, with a bureaucracy that had gone native.

But under Michael Gove, Liz Truss and George Eustice, civil servants have transformed from passive recipients to enlightened creators, giving the department a buzz of excitement.

The Agriculture Bill – the first time we have had an agricultural policy for over 40 years – scraps the dysfunctional Common Agricultural Policy, and replaces it with environmental subsidies (it was a pleasure to do my maiden speech on it).

The Environment Bill (which I sat on the Bill Committee of) doesn’t just replace EU environmental law, but enhances it and tailors it for the UK, much to the delight of green groups.

The Fisheries Bill gives us our own, more sustainable, fisheries policy (subject to quotas agreed with the EU).

The Government is consulting on banning the export of live animals for slaughter, which the impotent Labour government was unable to do when it wanted to.

We now have a Department for International Trade, with our own trade negotiators, giving us a trade policy for the first time in forty years, and pumping out our own trade agreements. Agriculture and environment groups have been enthusiastically debating how we protect standards in our trade policy, something nobody discussed before because we had no power to deliver it.

The Treasury is reviewing the whole framework of financial services regulation, with the aim of setting out an ambitious financial services strategy. Previous strategies for financial services (which I played my part in, as chief executive of the British Bankers’ Association) were rather optimistic exercises – the UK government didn’t have the power to do very much. Almost all our financial services regulation we have inherited from the EU, but we need to ensure it is proportionate, and supports innovation and competition, as well as international competitiveness and high standards.

The Treasury has scrapped the hated tax on tampons, which EU rules had prevented George Osborne from doing. The popular duty free from EU countries is coming back after a 20 year absence – with the ferries from Holyhead to Dublin offering it from Friday. The Government is launching freeports to boost trade and regeneration of more deprived parts of the UK. The Home Office has scrapped the much-hated freedom of movement, and replaced it with a global immigration policy making sure we can get the talent that our economy needs.

But now that we have this empowerment, what else could we do now we have left the EU? Here are some other possibilities:

  • Reform public procurement (under the OJEU rules), to make it fit for purpose and give small businesses more opportunities.
  • Promote competition among retail banks by reforming EU inherited capital rules.
  • Remove VAT on housing insulation and other environmental products, and reform the biofuels regime.
  • Transform our waste and recycling regime, so it is not an exercise in hitting EU targets.
  • Reform the EU’s second company directive to reduce pointless red tape for public companies.
  • Reform the General Data Protection Regulation to protect privacy while reducing burdens on small charities and businesses.
  • Reform Solvency II so our insurance companies can compete globally.
  • Promote collaboration programmes with the Commonwealth, rather than just the EU.

It has been obscured by the dramas around Brexit and Covid, but the policy arena is the most exciting it has been for a generation. Say goodbye to can’t do. Say hello to the new “can do” Britain.

Geoffrey Cox is knighted

31 Dec

One pinches oneself at the news that Geoffrey Cox has been knighted only because he is so seigneurial a figure that one somehow believes he was a knight already.

But he wasn’t – so congratulations to Sir Geoffrey, as he will shortly become.  He played an important part in the struggle for Brexit, combining decidedly Eurosceptic views with commitment to the rule of law.

“This Parliament is a disgrace!” he declared in September last year (see above).  “This Parliament is a dead Parliament.  It should no longer sit.  The time is soon coming when these turkeys won’t be able to prevent Christmas.”  And so it proved.

Harriet Baldwin: Cutting foreign aid is a blatant breach of our manifesto pledge – and I will not vote for it

31 Dec

Harriett Baldwin MP was a joint Foreign and Commonwealth Office and Department for International Development Minister of State.

When politicians break manifesto pledges they pay an electoral price. Think George HW Bush and “read my lips: no new taxes” followed by tax hikes and a single term as president. Think Nick Clegg and “no tuition fees” followed by tripled tuition fees and the loss of 85 per cent of Liberal Democrat parliamentary seats. But break a manifesto pledge to spend 0.7 per cent of your national income on helping the world’s extreme poor and those who suffer can’t answer back at the ballot box. It will even be seen as a good thing by many readers of these pages.

That’s why it’s so important for those of us who have had the privilege of seeing the good that UK Aid does to speak up on behalf of those who will lose out from the decision in the Spending Review to cut the aid budget to 0.5 per cent.

First and foremost, it’s not a good idea to break any manifesto pledge, but to break only one and to pick on the most vulnerable people in the world is deeply shameful.

Anyone who has seen the nutrition being given to babies in Ethiopia or Somalia appreciates that aid for nutrition saves babies’ lives. Fewer babies will survive without UK Aid.

Anyone who has witnessed the invention and then the cold chain deployment of an Ebola vaccine to the furthest reaches of eastern Democratic Republic of Congo knows that this deployment, funded by UK Aid has helped not only to control Ebola but to protect us here at home and help us develop the skills we need today for deploying the Covid-19 vaccine. Vaccines save lives, including our own.

Anyone who has seen the enthusiasm with which girls in Sierra Leone study their lessons knows that the best chance poor countries have to move beyond aid is through universal access to quality education. Fewer children will finish school if we give less in aid.

The aid budget has already shrunk naturally due to the link to national income, with cuts of £2.9 billion this year. Not only that but other Western countries which link their aid to their economic progress will be cutting as well.

Our economy, our health and our wellbeing have suffered terribly this year and we certainly need to recover both our health and our finances. But the shock to the most vulnerable countries is much worse. Famine, which has not been seen on our planet since 2011 is now stalking 10 countries according to the Nobel prize-winning World Food Programme. How will we feel about cutting aid if we see the kind of shocking scenes of starvation that started Live Aid in the 1980s?

With the UK hosting the 26th Climate Conference of the Parties in Glasgow in November we will rightly want to contribute even more to help the poorest countries adapt to climate change. Cyclones like Idai which hit Mozambique in 2019 will continue to ravage poor countries with increasing frequency.

At the peak of the pandemic, almost one billion children were missing school and when the UK co- hosts the replenishment of the Global Partnership for Education this year with Kenya we will rightly want to be a leading donor.

Oxford University has developed a cheap vaccine. If approved, we should increase our vaccine commitment to the GAVI vaccine alliance to make sure that this vaccine reaches every poor country, proudly marked with the Union Jack UK Aid logo. In short, the lower aid budget will be spent fast.

The timing could not be worse. We have always proudly stated to our friends around the world that we are the only G20 country to spend the NATO target of two per cent on defence and the UN target of 0.7 per cent on overseas development assistance. We will begin our post EU future by dropping our soft power budget just as China’s economy recovers and they can increase their soft power projection. This will prove exceptionally short-sighted geopolitics.

For moral, diplomatic, humanitarian, educational and even for entirely selfish reasons about the kind of world I want to pass on to the next generation, I will certainly not be voting to break this manifesto pledge.