David Gauke: There are signs that the Treasury is winning. And that more tax rises are coming.

19 Jul

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

When asked about the proposal by Henry Dimbleby that a new Salt and Sugar Reformulation Tax should be introduced, the Prime Minister responded by saying that he is ‘not attracted to extra taxes on hard working people’.

At one level, this is what one might expect him to say, given his reluctance to be the bearer of bad news. But some have taken this to be not just a holding response to the publication of the National Food Strategy, but a firm determination to hold the line against tax rises. If so, there may be problems ahead.

It was only a few months ago that Rishi Sunak delivered a tax-raising Budget, with the freezing of allowances and thresholds in the personal tax system, plus a hefty increase in the rate of Corporation Tax (which, in the end, will be paid by people because all taxes are). These increases may well be sufficient to meet the Chancellor’s fiscal rules ,but only if he maintains the current spending plans.

This looks unlikely. To take just three examples, the cost of Covid catch-up, social care reform and net zero could easily cost £10 billion a year a piece. Add to that the cost of levelling up, plus the risks that debt interest payments could increase significantly, the Chancellor’s target of current expenditure being paid for by current revenue and debt falling as a proportion of GDP looks precarious.

It would be fair to say that the cause of spending control has been strengthened in recent days. The Government saw off attempts to block the cut in overseas aid more comfortably than expected, with Sunak very heavily involved in talking round potential rebels.

The temporary uplift in Universal Credit is looking like it will indeed be temporary (although this is likely to store up problems, I suspect) and the Chancellor has – to all intents and purposes – ruled out a huge increase in the state pension, which would happen if the triple lock was applied in the normal manner. On the latter point, this is entirely sensible and has been met with little opposition.

A month ago, there were complaints from the Treasury that the Prime Minister was going around making unfunded spending commitments but Boris Johnson appears to have been reined in. Big promises on climate change seem to have been deferred to the autumn, and a supposedly big speech on levelling up involved a spending commitment of just £50 milliom. Whereas most observers considered the Coventry address to be one of the least impressive set-piece Prime Ministerial speeches ever delivered, the Treasury would have considered it a triumph.

An announcement on social care reform is imminent, but this does look like it may be properly funded by additional taxes, suggesting that ‘not attracted to extra taxes’ does not mean ‘no extra taxes’ after all. It is reported that it is the Chancellor who is sceptical about the proposed policy, although I suspect this is driven by Treasury doubts about pursuing a Dilnot-style cap on social care costs (which benefits those with the largest estates most), rather than by an objection to the principle that new spending commitments have to be paid for.

For the first time in a while, the cause of fiscal conservatism – ensuring that public finances are sustainable – is gaining the upper hand. There are two reasons for this.

First, the Chesham & Amersham by-election has caused some nervousness. The fear within Government is that high spending is all very well, but a section of the Conservative voting electorate will draw the conclusion that they are the ones who will have to pay for it. It was striking that the Prime Minister spent much of his levelling-up speech saying that he does not want to make rich places poorer, which may come as a disappointment to parts of the Red Wall, but is clearly designed to reassure the South East.

The second reason why a more cautious approach to the public finances might be pursued is the apparent return of inflation. This may be transitory as we return to some kind of normality, and adjust to Brexit frictions and labour shortages, but it may not be. If it results in higher interest rates, the costs for the exchequer in funding our debt could rise very quickly – as the Office for Budget Responsibility has pointed out. An increase in interest rates of one per cent would add £21 billion to our debt interest bill. If our fiscal policy is considered to lack credibility, our problems could be worse.

There remains, however, the question of how the Conservative Party maintains the support of the new supporters it gained in 2019, whose views on tax and spend are much closer to those of the Labour Party than the traditional Conservatives. On spending on public services in general ,plus investment in their localities, they will want to see evidence of delivery.

Boris Johnson will be given the benefit of the doubt and, I suspect, be able to retain most of the Red Wall at the next general election but the pressure to spend money – not least from Red Wall MPs – will be considerable. The Treasury has won a few battles of late, but with a Prime Minister prone to change direction like a shopping trolley (as one prominent Westminster pundit likes to put it), he may be on the other side of the aisle before long.

There is also another reason for raising taxes, as well as funding public services. Tax can be used as a lever to change behaviour. The Prime Minister has declared that he is on a mission to reduce obesity, and it is hard to see how this could be done without using tax to change behaviour.

Ultimately, this may not mean consumers paying much of a price because producers reformulate their products (as happened with the Soft Drink Industry Levy) in order to prevent consumers facing higher prices. It was an effective way of using the price mechanism to achieve a Government objective, but it did mean legislating for a new tax.

A similar argument can be made for using taxes to help achieve net zero. If we want people to consume less carbon, the most efficient way to do this is to ensure that the cost of carbon is incorporated into the price of products by using a carbon tax. (By the way, those of us who value markets as a means of allocating resources should be instinctively more sympathetic to meeting environmental objectives by using the price mechanism where possible, rather than through regulation which can be cumbersome and ill-targeted.)

In both cases, tax increases, as a behavioural stick, may be required. They are also likely to be regressive, which may mean compensating mechanisms of some description which – in turn – will need to be paid for.

All of this means that extra taxes on hard working people may be necessary to deliver sound public finances and to meet other Government objectives, however unattractive the Prime Minister considers them to be.

David Gauke: The Duncan Smith-Gauke Alliance. We band together to back Universal Credit.

5 Jul

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

No doubt most Conservatives are disappointed about not winning the Batley & Spen by-election – but one would have to be a very tribal Tory not to have some mixed feelings.

Kim Leadbeater demonstrated great courage and commitment to public service by putting herself forward to stand for Parliament after her sister had been murdered, . And seeing the ghastly George Galloway defeated should provide some cheer to all decent people. It would take a heart of stone not to laugh at him crying foul as he went in search of the Batley branch of Four Seasons Total Landscaping in order to threaten court action for some reason or other.

It is possible that some Conservatives consider that a result which stabilises Keir Starmer’s position as a good thing, although I am sceptical that the prospect of Angela Rayner as Leader of the Opposition will cause much lost sleep within the Government.

What I am aware of is that some Conservative MPs in southern seats – a little jittery after Chesham & Amersham – worried that the capture of another northern constituency might further re-orientate the Conservative Party away from its traditional base.

Even though the Conservatives failed to win, it was still a pretty decent by-election performance with a swing from Opposition to Government which, until recently, was very rare.

It also highlighted a challenge for Labour in maintaining its traditional support from conservative Muslim voters. At a time when the party has to work hard to rid itself of a reputation for antisemitism, some of their voters were demanding a policy of supporting a Palestinian State that runs “from the river to the sea”. In other words, voting Labour was conditional on supporting the destruction of the State of Israel.

Labour is also a socially liberal party that usually receives a lot of support from very socially conservative communities. Most Labour voters would want their party to defend wholeheartedly gay rights, but this risks being a vote loser in places like Batley if a populist candidate is willing to exploit widespread homophobia.

Labour will hope that this is a problem that is only material in by-elections. Galloway, for example, won the Bradford West by-election in 2012, but lost it to Labour in 2015. Nonetheless, Batley & Spen highlighted yet further tension within Labour’s coalition of support. It is not just the split between Leavers and Remainers that makes it hard for any leader of the Labour Party to hold their coalition of support together.

– – – – – – – – – –

Universal Credit has been one of the success stories of the Government’s response to the pandemic. There was a huge surge in claimants during the spring of 2020, but the system was able to cope, for which all at the Department for Work and Pensions deserve much credit. It is impossible to believe that the previous benefits system would have managed so well.

The Government also rightly increased the level of financial support available under UC by introducing a £20 a week uplift, which provided a greater level of economic security during the crisis. As we come through the crisis (we hope) and the temporary uplift due to be dropped in September, the question is: what happens now?

The six of us who served as Secretary of State for Work & Pensions from 2010 to 2019 (Iain Duncan Smith, Stephen Crabb, Damian Green, Esther McVey, Amber Rudd and myself – a politically disparate group, it would be fair to say), have written to the Chancellor arguing that the additional resources put in the UC should be maintained.

There are some tough choices to be made in respect of the public finances, but if we want to support those who are most financially insecure following the pandemic, maintaining the additional support in UC is the best way to do it.

That is not to say that maintaining the uplift is necessarily the right way approach. A simple £20 uplift was the best way to provide quickly additional support to those in need, especially at a time when many were not able to work. In normal times, however, there are better ways to improve the way UC works – such as increasing the work allowance or lowering the taper rate.

Consequently, we have argued for maintaining the current funding levels, but that the Government should consider how that money is spent. That will still come with political challenges – some people will see their UC payments reduced from current levels if there is any reprioritisation – but it will leave us with a system more generous than pre-pandemic and still focused on making work pay.

– – – – – – – – – –

It turns out that Matt Hancock wasn’t the only politician to have been contacted by the tabloid press recently and asked about his relationship with a glamorous colleague in his Ministerial office.

“I’ve just interviewed Love Island contestant and former civil servant Sharon Gaffka”, said the email from the Daily Mirror journalist, asking to talk to me about her. Sharon had worked in my private office when I was at the Ministry of Justice and she had mentioned this in an interview. Very kindly, she had even made some generous remarks about the experience, describing me as “the funnest Minister” she had worked with (it is possible I was the only Minister she worked with, but let us put that point to one side).

I have not had much to do with celebrity culture over the years, although I did become quite good friends with the chap who used to be the regular tax expert on Radio 4’s Moneybox. Flattered by the approach, I agreed to be interviewed but then realised the perils.

Getting the tone right would not be easy – one unfortunate phrase and I could sound po-faced or like a dirty old man; out of touch or trying too hard. I attempted to work out likely questions, but my mind filled with wildly inappropriate and (for the avoidance of doubt) inaccurate answers.

“What do you think about a former civil servant appearing on Love Island?” “I’m just disappointed that Nicholas Macpherson turned them down”.

“Will you be watching Love Island?” “I’m really not sure if I can get ITV2 on my television set”.

“She says you were ‘fun’ – how did you make her laugh?” “Tickling, usually”.

No, no, no!

I have done some challenging interviews in my time, defending unpopular policies to the toughest interviewers at moments of high political drama. I was more anxious about this interview than any of them.

As it turned out, my conversation with the Daily Mirror journalist was innocuous enough and, when subsequently published, had not been sensationalised for which I was largely grateful. But, I am ashamed to say, at one level I was ever so slightly disappointed that the headline was not “My fun with Cabinet Minister, says Love Island beauty”. Maybe another time.

David Gauke: Chesham and Amersham. Yes, a realignment is taking place in British politics. But it is likely to happen slowly.

19 Jun

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

Conservative MPs should take the Prime Minister at his word. He has told them what he is going to do and they should trust him to do it. He won’t let them down. There. I have said it.

For the avoidance of doubt, I am not talking about promises to level up, prioritise the education catch-up, simultaneously keep taxes and borrowing down while ending spending austerity, avoid new non-tariff barriers with EU trade, prevent new checks on Great Britain-Northern Ireland trade, stop veterans being pursued in the courts, deliver net zero without any pain for taxpayers or consumers, or maintain all existing agricultural standards at the same time as obtaining comprehensive trade deals around the world. Some of those promises might not be kept.

But when the Prime Minister says that he intends to open up on 19 July, I am sure he means it and I think he will be able to do so.

On Boris Johnson’s intentions, nobody should be in much doubt that he is an instinctively reluctant implementer of lockdowns and, if they were, the evidence of Dominic Cummings should dissuade them.

Over the course of 2021, the Prime Minister has been more cautious in unlocking (with considerable justification) but it is worth noting the reasons. Of most relevance is the fact that we have vaccines which are demonstrably the way out of lockdowns without yet further vast numbers of deaths. The existence of vaccines has meant that the end is in sight, but also that the case for caution is strengthened because further deaths are avoidable. It is this insight that has driven our lockdown policy for the last few months, and drove the decision to delay easing once again.

The Indian/Delta variant has disrupted the plans, because it is evidently much more transmissible and a single dose is less effective than against earlier strains. This has not resulted in abandoning the vaccine strategy but raising the thresholds. In broad terms, the Government has moved from being satisfied in unlocking, when 80 per cent of adults will have had the benefit of one dose and 60 per cent two, to moving up the thresholds to roughly 90 to 95 per cent and 80 per cent respectively.

A fair proportion of the Conservative Parliamentary Party is sceptical that the July unlocking will happen, presumably because they think that cases and hospitalisation will be high when the decision will be made. If that were to be the case, that might also suggest the decision to delay the June unlocking was wise.

But July 19 does – at this point – look like the right date. We will still get the benefit of summer, the long school holidays will reduce transmission and the vaccine programme will be very nearly done. Assuming that the vaccines work – and the evidence continues to be very encouraging – and we are not struck by a variant that looks as though it will escape the effects of the vaccine, the case for unlocking at that point will be very strong. I think he will do it.

– – – – – – – – – –

I have written elsewhere about the Chesham and Amersham by-election. It is a constituency I know well, having represented the neighbouring seat of South West Hertfordshire for some years, and I live just a short walk from the constituency boundary. The two seats have much in common.

During the course of the 2019 general election campaign I had lots of encouraging conversations – usually in Berkhamsted High Street – in which people would wish me luck before declaring that they lived in Chesham and could not vote for me. Presumably, most of those voters went Liberal Democrat on Thursday.

I have for some time argued that we are undergoing a political realignment.  As far as the Conservative retreat from the Home Counties is concerned, I think that is more likely to be apparent in by-elections before we will see it in general elections, because it is seen as risk-free to vote elsewhere. In 2019, the soft Conservative vote stayed Conservative because of the fear of Jeremy Corbyn, whereas no such threat exists in a by-election.

Even accepting all of that, the result seems to have caught most observers by surprise. Given that I am almost a local, a few people asked me if I had expected it, and I confess I hadn’t (a sharply reduced Conservative majority – yes; a comfortable Liberal Democrat majority – no).

However, on reflection, the only person in the constituency I had spoken to in the last week was the nice man from the Amersham branch of Majestic, and we didn’t discuss politics.

– – – – – – – – – –

As someone who is happy to defend Boris Johnson’s decision to delay the next stage in easing the lockdown, I do think he has rather got away with causing the delay in the first place. I listened to PMQs this week (as it happens, driving to receive my second dose in Watford Town Hall) and Keir Starmer asked a series of questions on the delay in restricting travel from India.

The Prime Minister responded with a series non sequiturs and evasions. Pakistan and Bangladesh went on the red list on 2 April, India (where cases were far higher) not until 19 April (and implemented four days later). I have not seen a good explanation for the difference in approach.

It is clear that the Delta variant was seeded in the UK because of extensive travel with India over that period. Despite our superior vaccine rollout (although the gap is closing by the day), the UK now has more cases per head of population than anywhere in Europe

At some point, the Government is going to have to explain what happened. If not, people will only assume it was because the Prime Minister did not want to abandon the chance to make a trip to India. It is a serious charge and deserves a serious response.

– – – – – – – – – –

The Chesham and Amersham by-election may be uncomfortable for the Conservatives but that is likely to be as nothing compared to the Labour discomfit if they lose Batley & Spen. In large part, this looks likely to be as a consequence of George Galloway’s campaign, and his criticism of Starmer for being insufficiently critical of Israel.

Assuming Labour loses, I wonder if the approach the Labour leadership should take is to lean into the issue and argue that – whatever the electoral consequences – the Labour Party under Keir Starmer (in contrast to his predecessor) will take a mature and balanced approach to the Middle East, and not put political expediency above responsible diplomacy.

I am not sure that is entirely true (there seems to me to be too much pandering to radical anti-Israel sentiment as it is), but it might not be a bad issue to be debating the wake of a by-election loss. Frame the debate as Starmer against the Galloway/Corbyn worldview.

As it is, Labour is in an impossible and ghastly position. It is either seen as too anti-Semitic to be elected or, in some places, not anti-Semitic enough.

David Gauke: My most useful day in nine years as a Minister – and its lessons for the Government on planning reform

22 May

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

There are lots of good arguments for building more homes where people want to live, and there are lots of people making those arguments.

Younger generations are denied the opportunities those of my age and older had to get on the housing ladder at a relatively young age. Instead, they are forced to spend a large part of their income of rent, making it hard to save for a deposit – unless receiving financial support from parents. Consequently, building more homes would help address intergenerational unfairness and a barrier to social mobility.

Granting planning permission for residential development increases the value of agricultural land by a hundred times.  It is also the case that when people move from places with low productivity to places of high productivity (and housing demand is generally highest where productivity is highest), their productivity goes up. Consequently, building more homes would help improve economic efficiency and productivity.

And, from the perspective of the Conservative Party, the consensus is that home ownership is a good indicator of a propensity to vote Conservative. Consequently, building more homes will bring long term political benefits for the Party.

For all these reasons, it has been a consistent objective of the Government since 2010 to increase housebuilding, and the consistent opinion within Government is that the greatest impediment to more housebuilding was the planning system. It was too slow, too uncertain and too easy for existing residents to block developments. The answer, it was concluded, was planning reform.

So would begin a series of fraught discussions in Whitehall. The Treasury would push for the boldest of liberalising options. The Ministry of Housing, Communities and Local Government (to use its current name) was usually a little more cautious, although Sajid Javid was an enthusiastic reformer. The Prime Minister, or at least Theresa May, would be very nervous of going too far, and the Whips would foresee a whole host of problems.

The conclusion of this process would result in incremental reforms. But the fact that very similar criticisms of the planning system are made by Ministers today as were made throughout the Cameron and May Governments suggests that previous efforts at planning reform have not fully addressed the issue.

We are now going through this process again, with the Government proposing a Planning Bill in the Queen’s Speech. The Bill has not yet been published, but it is already clear that the move towards zonal planning will provoke considerable opposition from the Conservative backbenchers.

Nor is this opposition doomed to failure even with an 80 seat majority: the Government has already had to abandon the algorithm that had allocated new houses in a way which was perceived as being unfair by Conservative MPs. Unpopular local plans contributed to some Conservative losses in the recent local elections, and it was striking that Ed Davey chose planning as the topic for his question at Wednesday’s PMQs. Home County MPs will be wary.

Before rushing to condemn these MPs, put yourself in their position. They represent constituencies where the population has already increased significantly over the last 30 years. In normal times, the roads are congested and the peak-time trains are standing room only. Good schools are often oversubscribed and GP surgery lists full. Many of your constituents moved out of London because they wanted access to the countryside and to live in a town or a village, not part of a suburban sprawl.

At which point, the Government – your Government – proposes to build vast numbers of houses in your patch. Your constituents are articulate, engaged and, before you know it, organised. They will make informed and plausible objections to specific proposals; they will apply population projections to the existing infrastructure and highlight its inadequacy. Some of the most prominent campaigners will be your local councillors and association officers who remind you of the promises you made when selected as the Conservative Parliamentary Candidate to put the interests of the constituency first. What would you do?

There is a risk that we go round in circles on planning reform. Bold proposals are made. Strong public opposition is provoked. MPs are responsive to constituency concerns. The Whips get nervous. Bold proposals are dropped. Commentators fulminate about the timidity of politicians until someone in Government decides that it is time for bold proposals to be made.

Rather than bemoaning this process, if the Government is serious about building more homes, it needs to find a way of breaking this cycle. As Sam Bowman of the Adam Smith Institute – pessimistic about the chances of substantial reform – has argued, local residents need to be incentivised to want development. We need to think more about what those incentives might be.

It is already the case that the Government has got much better at using infrastructure spending to support housebuilding in high demand areas through the Single Housing Infrastructure Fund, which Rishi Sunak expanded in the 2020 Budget with an additional £1.1 billion expected to unlock up to 70,000 homes, on top of the previous £4 billion, which is expected to unlock up to 340,000 homes.

(As an aside, I should declare an interest here, having initiated the original scheme. On a quiet August day in 2016, as Chief Secretary to the Treasury and with private office trying to find something useful for me to do in recess, I visited the construction site for the M1-A5 link road. I was told how it was going to benefit the residents of Dunstable, because their High Street would not be regularly grid-locked and allow thousands of homes to be built on land that now had excellent access to the road network.

The project – including the housebuilding – had strong local support. I went back to the Treasury that afternoon, and asked officials to look at creating a fund for which local authorities and local enterprise partnerships could bid for infrastructure funding that would enable more homes to be built. In the Budget three months later, the Housing Infrastructure Fund was announced. Forgive the bragging, but that construction site visit probably resulted in my most useful day in nine years as a minister.)

Improving transport infrastructure and community services will often be necessary, but it will rarely be sufficient. I would go further, and seek to address concerns that countryside is being lost. Often, this will be unexceptional farming land, little used by the local population. If greenfield land of this sort is going to be lost, we should consider a policy whereby for every acre of land used for housing, let us say, two adjacent acres are set aside to be turned into attractive common land – woodlands or meadows – that can become a valued amenity for new and existing residents.

Any benefits of this type come at a cost, but if we are to persuade communities that more development is required, we are going to have to win their support (or, at least, the support of significant numbers). This does mean increasing infrastructure spending in the south east and the Oxford to Cambridge corridor which is an unfashionable cause in these days of levelling up.

But if we really want to build more houses where the demand is greatest, we are going to have to be a bit more imaginative and come forward with an offer that local MPs can sell to their constituents. Until that happens, planning reform will result in much political pain and the risk of little extra housing gain.

David Gauke: Demographic changes in the Blue Wall will work against the Conservatives – they must pay close attention

12 May

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

This is a bit of a postscript to my article from Saturday. In the unlikely event of you not having read it (or that you are not going to rectify this unfortunate omission before proceeding to read this article), in summary I said that the election results were very good for the Conservatives with evidence of a vaccine bounce (the incumbents also did well in Scotland and Wales).

Furthermore, there was a political realignment in English politics that made it easier for the Conservatives to win general elections. A divide along cultural grounds, rather than economic or class grounds, left the Tories’ opponents split and their votes inefficiently distributed.

At the time of writing, we had seen some of the details of how Leave areas were swinging towards the Conservatives (most spectacularly in Hartlepool) but had not seen that much from the Conservative Remain areas, mostly in the south of England.

Now that we have got these results, the data shows that Remain areas are behaving very differently to Leave areas – large swings to the Conservatives in Leave areas, very small swings in Remain areas.

I thought I would take a look at two county council divisions in my old constituency of South West Hertfordshire. Berkhamsted is an attractive and prosperous market town. It is the type of place to which young professionals move from London when starting a family and then never leave.

As is not uncommon in Home Counties constituencies, the Conservatives have generally done better here in general elections than local elections, but Berkhamsted has always returned a Conservative county councillor (except in 1993 when the Conservative vote collapsed across the country), although not always comfortably.

In the last six elections, the Conservative candidate achieved between 40 and 45 per cent of the vote with the size of the majority varying depending up how the other parties’ votes were distributed. In 2016, the ballot boxes from Berkhamsted contained a large majority of Remain votes.

South Oxhey & Eastbury was a new county division which narrowly elected a Labour councillor in 2017.  It is made up of two contrasting areas. Eastbury is affluent Middlesex suburbia and solidly Conservative, but the bulk of the division is made up of a post-War London overspill council estate that has always voted solidly Labour (apart from 2009 when it infamously elected the BNP’s only ever county councillor). South Oxhey voted overwhelmingly for Brexit (“hardly any Remain votes at all” one of the counters told me on the night).

When Thursday’s results were announced, South Oxhey & Eastbury went blue with an eight per cent swing from Labour to Conservative which, looking at the district council elections, seems to have been the consequence of a strong Tory surge in South Oxhey. Meanwhile, in Berkhamsted there was a swing of 12 per cent from the Conservatives to the Liberal Democrats, reducing the Tory share of the vote to a record low of 30 per cent.

Admittedly, local factors are relevant (there is an unpopular local plan), but the Berkhamsted experience of affluent commuter area deserting the Conservatives was replicated elsewhere in the constituency in Three Rivers Rural and elsewhere in the county in Harpenden, Hitchin, Hemel Hempstead, Bishop’s Stortford and Hertford (all to the Liberal Democrats apart from Hertford which went Green). Looking outside Hertfordshire, places with similar demographics in Surrey, Sussex, Kent, Cambridgeshire and Oxfordshire did much the same.

Is this an immediate problem for the Conservatives? Taken in the round, probably not. The Liberal Democrats tend to over-perform in local elections compared to general elections. In individual constituencies, declines in some areas (such as Berkhamsted) were offset in part by advances in other areas (such as South Oxhey) – this is more complex than North versus South. And even if the realignment of British politics puts at risk affluent, well-educated, Remain-voting constituencies, there are far fewer of them than there are Labour Leave-voting seats that now look winnable for the Tories.

At a local level, however, there three reasons to be concerned. First, given that the electoral logic suggests that the Red Wall will be a bigger priority than the Blue Wall, Government policy will prioritise the Red Wall – if necessary at the expense of the Blue Wall (someone is going to have to pay for “levelling up”).

Second, demographic changes in these areas work against the Conservatives. The loyal Conservative vote is often quite elderly and the likely population increase will predominantly be newcomers from London. The pandemic is only likely to accelerate the process of these places becoming more graduate-heavy and small L liberal.

Third, a share of 40 per cent for a Government is very high. No doubt the vaccine rollout has made a big difference and, assuming the Conservatives will still be in office in 2025 (and not many are betting against that), achieving a similar share of the vote would be quite some achievement.

All of this suggests that the loss of a few southern seats on Thursday might not be a crippling wound for the Conservatives, but nor is this temporary.  The Tories will do very well to get many of these council seats back and there may be more to come.

David Gauke: These results show the Conservatives set for success in the 2020s – unless their opponents can adapt

8 May

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

By some distance, the most important aspect of the elections of 6 May is Scotland but as the final result here is still emerging, let us look at England. And the conclusion here has to be that these are stunningly good results for Boris Johnson and the Conservatives.

Before drawing any conclusions about what this all means, there are three qualifications that need to be made.

First, the success of the Covid vaccination process has undoubtedly helped the Government. There is optimism that we are emerging from this nightmare and gratitude to the Government in getting the jabs done. Labour has done relatively well in Wales and the SNP is, at the very least, maintaining its position which supports the contention that now is a good time to be an incumbent. However, there are additional factors that favour Johnson.

It was the UK Government that made the important decisions on procurement. And for some voters, the success compared to the EU validates Brexit (for what it is worth, I think we would have pursued our own vaccination procurement policy had we still been full members, but the important point here is that this is not the view of much of the electorate). Even though Brexit has been demonstrably disruptive for trade, the vaccine roll-out shifted public opinion marginally in favour of it.

Second, the Hartlepool success can, in part, be explained by the collapse of the Brexit Party vote. Writing before the result, James Johnson pointed out that the Brexit Party vote in Hartlepool was exceptionally high and that a Conservative win “would not be a political earthquake, but a seat playing catch-up with what already happened in 2019″ All true, but when the votes were counted, it was not just a win but a landslide.

Third, a further note of caution is that there are immense challenges for the Government ahead. The public finances have taken a battering and the current spending plans look very tight. Big promises have been made on “levelling up” without much of a plan as to how to do it (although the appointment of the impressive Neil O’Brien is encouraging). Brexit is causing disruption and that will become more visible, whilst the situation in Northern Ireland is unstable. Some of the allegations made against the Prime Minister have the capacity to do damage, even if voters do not seem to care for the moment. And there is Scotland.

Things can still go wrong for the Government and the Prime Minister, but they are going well at the moment in terms of political support, and not just because of short-term factors.

A familiar topic in these columns is how British politics is realigning not along class or economic lines but on culture and education. It is not a process I like – it results in polarisation and bitterness, sub-optimal economic policies and leaves some of us politically homeless – but it appears inevitable.

The results have been consistent with that realignment. The Conservative performance was much improved on 2016 and 2017 in Leave areas whilst being broadly the same in Remain areas.

It also leaves the re-fashioned Conservatives in a dominant position, essentially having a monopoly on one side of the debate (as long as no space is given for a Faragiste insurgency), whilst the other side is split between Labour, Liberal Democrats and the Greens (plus the SNP and Plaid Cymru in Scotland and Wales). The Conservative vote is also better distributed, with their opponents’ votes piling up huge majorities in the cities.

(By the way, finding the correct vocabulary here is tricky. It is not a matter of “left” versus “right”; “leave” and “remain” worked quite well but is now outdated; “populist”, “authoritarian” or “nationalist” sounds pejorative; “social conservative” does not really reflect Boris Johnson’s approach to life; “culturally conservative” is better but not perfect. A consensus on neutral terms to describe the two sides of the new political divide would be a small step forward, at least for those of us writing articles such as this.)

This new political landscape leaves the Conservative Party with quite a straightforward task. Do enough to keep its new Red Wall voters happy so they don’t go back to Labour (or whatever party Nigel Farage is leading at any particular moment) whilst not doing so much that it results in the loss of what remains of its relatively liberal base in the south.

This task is helped considerably by the inability of the Labour Party to pursue ruthlessly either flank of the Conservative support. Go for the Red Wallers and it would upset its metropolitan, liberal supporters; go for a wide, liberal coalition and it ceases to be a working class party and further elements of the Red Wall could fall.

In a somewhat tentative way, Keir Starmer has tried to recover the Red Wall by emphasising that (unlike his predecessor) he doesn’t actively hate the country. But that obviously was not enough for the people of Hartlepool. His hope has been that normal, class-based politics would return and that he could paint the Government as “the same old Tories”. He looks set to be disappointed on both fronts.

The Greens look to be having a good set of elections and could be that unashamedly liberal, middle class party but (unlike in Germany) are positioned on the economic far-left. As such, they are a threat to Labour (quite possibly a substantial one) but not to the Conservatives.

The Liberal Democrats, meanwhile, have an opportunity which they look determined to squander. At the last General Election, the Conservatives still received the support of plenty of Brexit-sceptic voters who had no great affection for Boris Johnson but feared Corbyn and saw a Conservative vote as the only way of stopping him. These voters – quite socially liberal but not radical and quite economically conservative (they are the ones who will have to pay the cost of “levelling up”) – could be a fruitful source of votes for the Lib Dems if they were so minded to pursue them. Instead, traumatised by the experience of coalition, they have fallen back into a comfort zone of being a centre-left “none of the above” party.

Boris Johnson is a fortunate general. The realignment of British politics has enabled him to capture the Red Wall and, on the evidence of these results, consolidate his gains and prepare for a further advance. There is a long term retreat in London (Shaun Bailey has done better than expected but there were 48 Conservative MPs elected in London in 1992, 21 now and 3 to 8 of those are at risk at

the next General Election) but he can bear such casualties. There is no sustained and effective attack on any Blue Wall which he has been able to leave only lightly defended.

At some point, politics will find a new equilibrium. The Conservative Party’s dominance relies heavily on white voters who left school at 16 and were born before 1960. Such voters will make up a declining proportion of the electorate. But unless their opponents adjust to the new alignment in English politics, the Conservatives are right to be optimistic for their prospects throughout the 2020s.

David Gauke: Free trade on vaccines. The EU may have made threats, but it is the US that has actually blocked exports.

24 Apr

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

One of the extraordinary attributes of the short-lived European Super League was that for almost everyone, there was something to hate. If you worry that the system is rigged in favour of the rich, driven by greed and the interests of the common man are ignored, this was a proposal to drive you to the barricades. If you are a believer in the importance of competition, openness and the need for creative destruction, this looked like a protectionist cartel. Socialists saw it as the unacceptable face of capitalism, capitalists saw it as feudal. Brexiteers argued that demonstrated an unaccountable elite conspiring against the national leagues; Remainers saw it as an attempt to “take back control” without thinking through all the consequences.

Like everyone else, I strongly disliked the plan and was relieved when it failed. Business might like certainty and predictability but sport thrives on the opposite. An attempt to insulate sporting teams from the consequences of failure undermines the excitement necessary to engage fans. Imagine life as an Arsenal or Tottenham supporter – there would never be much to play for.

And for those of us who support clubs outside the Big 6, the plan would have taken away all hope of ever making it to the top. I was very fortunate to grow up living the dream as an Ipswich supporter in the Bobby Robson years as a small town club regularly competed for the League Championship and won the FA Cup and UEFA Cup (I can happily recite the teams for both triumphs and, at a push, Alf Ramsey’s Championship winning team from ten years before my birth). That was an era when there was greater mobility in football but Leicester City’s triumph of 2015/6 shows that even recently dreams can come true.

The motivation behind the ESL seemed to be to replicate the models used for US sports with a secure franchise that provides financial security to the owners. It is also the case that within the US model there is an egalitarian draft system, as well as salary caps and redistribution of profits among the teams. To some extent, it looks more like a medieval guild – once in, you are heavily protected but you have to be on the inside.

I cannot say it appeals as a system much to me but – to the extent that it works – I suspect it only works because it applies to sports that are not played at a serious level outside of the US, so there is no international competition. Try setting up a system that so favours the owners with football by establishing a salary cap and the star players will end up going elsewhere. For all these reasons, I think the proposals were ill-considered.

The Government, of course, weighed in, made a number of threats and announced a review by the well-regarded Tracey Crouch. Establishing a review into the governance of the game seems entirely reasonable in the circumstances, although striking a balance between giving the fans a greater say and still ensuring that the Premier League clubs have deep enough pockets to attract the best players and build or maintain the best stadia may not be straightforward. We shouldn’t allow nostalgia to convince us that the past was better than the present (other than for Ipswich Town fans, obviously).

This was all good politics in demonstrating that the Government was on the side of the people. (I also think Boris Johnson making it clear that he is not a football fan was rather astute; football fans would rather politicians were honest about not being a fan rather than insincerely professing a love for a team).

Even so, I am uneasy about threats to impose a windfall tax or refuse to grant visas to the breakaway clubs. “You might not be breaking any laws, but do as we say or we will confiscate your assets” may have been a bluff, but even unpopular businesses are entitled to expect their property rights should not be threatened by the use of the tax system in a draconian or arbitrary way.

– – – – – – – – – –

I wrote here four weeks’ ago about how the criticisms of the UK Government’s approach as being “vaccine nationalism” was unmerited, threats to block EU vaccine exports were indefensible and that it wasn’t the UK’s fault that the EU had got its procurement wrong.

Some pro-EU commentators argue that neither the UK nor the US have exported much by way of vaccines, therefore both are guilty of vaccine nationalism, whereas the EU has exported lots. This is true but I still think it is missing the point.

What is the system that is most likely to produce the greatest number of vaccines? I would argue it is a system whereby if countries invest in developing vaccines, they are likely to see the benefits of that investment and that complex and cross-border supply chains can operate in confidence that such activity will not be impeded. In other words, a system that respects property rights will produce more vaccines.

I stand by my criticisms of the EU, but there are a couple of points to add. First, in recent weeks the EU is now making much better progress in getting jabs into arms – the largest EU countries have vaccination rates similar to ours during February and March. We are ahead of them but only by a few weeks.

Second, when it comes to getting in the way of free trade on vaccines, the European Commission may have made threats, but it is the US that has actually blocked exports and is sitting on millions of doses of AZ that it looks unlikely to use.

Had President Trump been re-elected, we would be hearing much more about it. President Biden should allow AZ to export the US produced doses to those who bought them. As for those doses bought by the US Government, if the US is not going to use them, send them to India.

– – – – – – – – – –

So the Government has abandoned plans to implement Johnny Mercer’s proposals to prevent enquiries into war crimes in Northern Ireland allegedly committed by army veterans.

The incident reminded me of my time in Government when the issue was causing a great deal of disquiet. At PMQs, Theresa May regularly faced a torrid time from Conservative backbenchers. Iain Duncan Smith implied that she was “abandoning veterans” and an irate Mark Francois quoted a Chelsea Pensioner who said that the Government was “pandering to Sinn Féin/IRA, while throwing veterans like me to the wolves”.

No one in Government wanted to see army veterans hauled through the courts but the subject was, to put it mildly, complex and the then Prime Minister didn’t want to promise something undeliverable. After all, there are issues with putting anyone above the law for committing torture as well as potentially risking the whole Northern Ireland settlement.

Two years later, the Government ends up in a similar position to that of May and accepts that a comprehensive carve-out for Northern Ireland veterans as sought by Mercer is undeliverable. He resigns but as yet there seems to be little outrage from others who demanded comprehensive protections for veterans from one Prime Minister and who then believed they were promised such protections.

David Gauke: Cameron’s values in government may be out of favour, but they are not wrong

13 Apr

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

The Government’s announcement that it is undertaking an independent enquiry of the Greensill Capital affair is unlikely to bring much cheer to David Cameron. He has endured weeks of bad publicity, and there is little chance that the story is imminently going to ‘move on’.

Whatever the rights and wrongs of the former Prime Minister’s actions – and he has acknowledged making mistakes – the furore is all the more painful because his reputation as Prime Minister was already at a low ebb. Critics of his economic policy accuse him of inflicting austerity which, they argue, were unnecessary, stunted growth and damaged public services; he is castigated by Remainers for calling and losing the Brexit referendum and by Leavers for being a Remainer; some on both sides accuse him of deserting his post by resigning the morning after the poll; his electoral successes have been surpassed by Boris Johnson’s thumping majority in 2019. Not unrelated to this, neither the man nor his political values appears to have much influence on the modern Conservative Party.

Defending Cameron’s record in office is deeply unfashionable. So I will do so.

Let us start with the economy. There are few defenders of ‘austerity’ in today’s public debate. Labour still want to argue that the electorate got it wrong in 2010 and 2015, just as they tried to do in 2017 and 2019 (which, incidentally, suggests that this might not be a guaranteed route to success). Johnson, meanwhile, is not temperamentally an austerian and enjoys the opportunity to demonstrate that he is new and different from recent Conservative history.

The economic debate has also moved on. Governments have been able to borrow vast sums of money in the last year without much of a risk of a sovereign debt crisis. Central banks have played a more active role, debt servicing costs have fallen and international organisations have advocated expansionary fiscal policies. This may all go wrong at some point – there is more reason to worry about inflation than for many years – but it hasn’t gone wrong yet.

None of this means, however, that the concerns of fiscal conservatives back in 2010 should be dismissed. The global financial crisis had resulted in substantially higher spending and permanent damage to tax revenues. The risks of a sovereign debt crisis – with consequences for inflation, debt interest costs and consumer and business confidence – were not imaginary. The IMF and the OECD advocated that countries needed to have credible plans to put the public finances on a sound footing, and many countries did just that. In short, the balance of risks and the expectations of the markets in the years after 2010 were very different to where we are now.

Did fiscal consolidation significantly hamper our economic recovery? It is true that economic growth in 2011 and 2012 was disappointing (although not as bad as it appeared at the time when the ONS early estimates suggested that we had had a double dip recession), but it is worth remembering that the independent Office for Budget Responsibility put this down to the lasting effects of the banking crisis, higher commodity prices and the Eurozone – not fiscal consolidation.

Looked at in the round, over the 2010-2016 period, the UK had the joint highest growth for a G7 economy, level with the US. It was also a period of rapid jobs growth, with the highest employment rate in our history and income inequality falling. Had the Brexit referendum gone the other way, there is every reason to believe that the post-2016 UK economy would have been characterised by high economic growth, rapidly rising living standards and strong public finances, as opposed to us falling to the bottom of the G7 league table.

Were public services were unduly damaged? Difficult decisions had to be made, but many of them were unavoidable given that the spending plans that we inherited were based on an over-optimistic, pre-crash assessment of what was affordable. It was possible to drive greater efficiencies and find ways of getting more for less. The British state has been placed under enormous strain in the last year by Covid but there have been some real successes. Just looking at two areas where I have some familiarity through Ministerial experience, HMRC was able to introduce the furloughing system in a matter of weeks, and the Department for Work and Pensions was able to cope with an extraordinary surge in benefit claimants. Neither would have been possible without reforms undertaken by the Cameron Government.

Having said all that, we relied too heavily on spending cuts over tax rises. It was politically easier at the time to cut spending rather than raise taxes and, as time went on, we got the balance wrong. Some areas of government spending – justice, for example, or social care – were squeezed too hard. But a period of spending restraint was necessary and inevitable and too many of Cameron’s critics fail to acknowledge that.

It was the decision to hold a referendum on the UK’s membership of the EU and then lose it that hangs most heavily over Cameron’s reputation. It will, unfortunately, always be for what he is remembered and, for many Remainers, this will never be forgiven. The referendum result created huge uncertainty and will, in my view, inflict lasting damage to the UK. But we should not kid ourselves that had he adopted a different approach our membership of the EU would currently be assured.

The Conservative Party was moving in the direction of being a Vote Leave Party – in part because of the fear of UKIP peeling off Tory votes – and the decision to offer a referendum was motivated both by a desire to win the 2015 general election by winning back UKIP voters but also by a recognition that a post-Cameron Conservative opposition would, in all likelihood, favour Brexit.

The best chance of staying in the EU, Cameron concluded, was to settle the issue early with a decisive Remain victory – the longer the issue was left, the greater the chance we would leave the EU. As it turned out, he was wrong to believe that he could deliver a Remain victory but he may have been right that this was the best chance of defeating Brexit.

As for the criticism that he should not have resigned following the poll, one lesson of the last five years is that the referendum did not tell us what exactly ‘Leave’ meant. I do not believe it is plausible to think that the European Research Group would have allowed the leader of the Remain campaign to define the answer.

More broadly, much of his political approach has stood the test of time. In wanting more women and ethnic minority MPs, caring about climate change and the environment and introducing equal marriage he took positions that were controversial at the time but have aged well.

Yes, Johnson’s majority in 2019 – and continued strength in the polls – exceeds anything achieved by Cameron, but it is not clear that a political strategy based on white voters without post-16 academic qualifications is the right long-term strategy for an electorate that is becoming more diverse and better educated.

Cameron represented fiscal conservativism, social liberalism and internationalism. These values may be out of favour but they are not wrong. It is too early to say to what extent his personal reputation will – in time – recover but the dismissal of the achievements of his Government is undeserved.

David Gauke: I’m a convinced Remainer – but believe nonetheless that the EU has mishandled its vaccine policy

27 Mar

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

At Thursday’s virtual European Council meeting, the EU stepped back from imposing a vaccine export ban. This is just as well.

At a time when all nations face the same enemy and seek to apply the same solution, the case for international co-operation is overwhelming. We all know that maximising the production and take-up of the vaccines is the way out of the Covid crisis, and we all know that using global supply chains should be the swiftest way of producing the vaccines we need. Talk of export bans makes this task harder.

For some on the Remain side of the Brexit debate, there is an instinctive desire to defend the EU and cast the UK as vaccine nationalists or selfish panic-buyers and AstraZeneca as contract-breakers, arbitrarily favouring one customer over another.

It is, however, an unconvincing case. In contrast, had the EU proceeded to block vaccine exports to the UK, its behaviour would have been indefensible.

If one believes in open markets, removing trade barriers, building up trust between trading partners and honouring contractual obligations, one should be prepared to be critical of EU behaviour contrary to those values, regardless of where one stood on the subject of Brexit. I am sure many Leave voters who share these values must, from time to time, hold similar views about some of the actions taken by the UK Government.

Some have defended the proposed export ban stating that others are doing it. It is not much of a defence, but it is true to say that the US – under both Presidents Trump and Biden – has used legislation to prevent vaccines manufactured in the US from being exported. The Indian Government has also stepped in to prevent the export of doses. On the charge of vaccine nationalism, the US and India are guilty and the EU, as yet, is innocent.

The charge that the UK has a de facto export ban is, however, nonsense. There is a clear distinction between an entity not being provided with vaccines because the export has been blocked by government action, and an entity not being provided with vaccines because it has no right to it because they have already been acquired by someone else.

Underlying the EU case is a confusion between the entity producing the vaccines and the country in which the vaccines are produced. Some EU leaders have argued that it is not right that a large proportion of ‘EU vaccines’ have been ‘exported by the EU’. As the Taoiseach, Micheál Martin, pointed out earlier this week ‘these are not European Union vaccines… these are vaccines paid for by other countries that are manufactured in Europe.’

Is it right for the EU to characterise AZ as the villains of the piece for failing to fulfil its contractual obligations? When this row first blew up in January, the Commission argued that once the procurement contract was published, it would be clear that AZ was in breach.

The contract was published and it established no such thing. Without delving too far into the complexities of contract law, if AZ were failing to allocate vaccine doses to the EU in accordance with its contractual obligations, it would be open to the EU to seek legal remedy. Given that the EU is not doing this suggests that the Commission has little confidence in its legal position that AZ is in breach of its contractual obligations.

Did AZ agree better terms for the UK than for the EU? This may well be the case, and would be consistent with the Commission’s lack of confidence in its legal position. Does this mean that the UK engaged in sharp practice in the deal it got? No. First, competently negotiating a contract is no sin. Second, the UK – and the UK taxpayer – played an important role in developing the vaccine, first with Oxford University and then with AZ. This engagement enabled AZ to ramp up its production following an agreement signed in May 2020, months before the AZ/EU deal. This early ramping up of production, by the way, has probably helped not hindered the EU.

There is a comparison to be drawn with Germany and BionTech. Germany supported BionTech, which developed the vaccine that is being manufactured by Pfizer. In contrast to the UK and AZ, Germany did not nail down priority supply either for itself or for the EU.

As a consequence, many Pfizer doses are manufactured in a country that refuses to export to the EU or is exported from the EU to those who have placed an order. It would have been perfectly reasonable for Germany (or the EU) to say “we’re funding the research and development and agree to purchase the first X million doses”. But neither Germany nor the EU chose to do so. Again, that is not the UK’s fault.

The botched procurement by the EU is the route of many of the problems. The Commission was focused on the wrong issues in the circumstances, worried about the price and liability in the event of vaccines causing harm. Speed mattered and gambling large sums of money at an early stage was the right thing to do, as the UK demonstrated. The Commission, perhaps because it does not have its own tax base on which to call, was more hesitant.

Many a commentator has speculated that, had the UK still been part of the EU, we would now be stuck in the EU slow lane. However, it is inconceivable that a UK Government seized of the need to make rapid progress on this front would have surrendered control over the vaccine programme.

In all likelihood, an alliance of the UK and Germany would have ensured member states retained control, resulting in greater urgency in vaccine procurement. As members of the EU, we were a consistent voice of scepticism towards greater integration and, in this particular matter, our absence has been to the EU’s detriment.

Where does that leave us? The EU is well behind the UK in the vaccine rollout, it does not appear to have a legal remedy against AZ (presumably because AZ is fulfilling its ‘best endeavours’ contractual obligations) but the relationship between the EU and AZ remains toxic. The immediate threat of an export ban has dissipated but EU politicians are under immense political pressure. Until this pressure eases, the risk of a foolish intervention by the EU remains.

This incident also emphasises that our relationship with the EU matters. On this occasion, the European Commission has behaved very badly in the same way that I think the UK has behaved very badly over the Northern Ireland Protocol. But we must do more than just apportion blame. We have to make this relationship work because, if we do not, both sides have the capacity to do the other side a lot of harm. More often than not, the smaller party – in this case, the UK – will come off worse.

On both moral and legal grounds, the UK is in a strong position in the vaccine dispute. But the wise approach would be to reduce tensions. The national interest would be served by making some contribution to helping them out, even if the Commission doesn’t really deserve it.

David Gauke: Is Britain really set to become a low tax, less regulated, free trading, buccaneering country?

13 Mar

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

Conversations about tax policy can take unexpected turns. It was during one such conversation in the late 2000s – I was the shadow tax minister at the time and developing our plans for corporation tax – that a senior tax lawyer at a city firm recommended a series of books on naval battles.

Peter Padfield’s Maritime Trilogy is, in truth, somewhat broader than that. Padfield alternates accounts of the most important maritime confrontations since the Spanish Armada with a broader account of the social, economic and constitutional development of the great powers.

His central argument is that there is a distinction to be drawn between maritime nations – with linked strengths of sea-fighting, trade, financial innovation and constitutional constraints – and land-based empires. The later relied on closed domestic markets, rigid hierarchies and centralisation, the former distinguished by liberty, flexibility and enterprise.

It is an analysis that many British Conservatives would share and, the argument goes, makes the UK well suited to the era of globalisation. We are historically and culturally accustomed to trade and with that comes a recognition that trading partners have other options. Our prosperity is dependent upon those partners wishing to continue to trade with us. Political stability; the rule of law; paying our debts; limited government; competitive and predictable taxes – all qualities that are necessary to succeed as a maritime nation and in the era of globalisation.

It was in this spirit that the Prime Minister’s first big speech following our departure from the EU was at the Old Naval College in Greenwich where – in extolling the virtues of free trade – he talked of recapturing “the spirit of those seafaring ancestors immortalised above us whose exploits brought not just riches but something even more important than that – and that was a global perspective”.

So how are we doing? Are we on course to be the open, outward-looking nation of which the Prime Minister spoke? Are we becoming a more flexible, enterprising, maritime nation?

My last column assumed that corporation tax rates would increase and argued that this would be a mistake. When I heard Government ministers defend the rise by saying that our corporation tax rates remained the lowest in the G7, I was reminded of my conversation with the tax lawyer.

The lawyer’s argument (which I found persuasive) was that we became economically successful from the 1690s onwards because our model was more like that of a small country dependent upon foreigners choosing to trade with and invest in us, taking inspiration from the Dutch rather than the French. Our modern tax system should seek to emulate this, he argued, encouraging international businesses to locate activities and investment in the UK. Our rates may be lower than other G7 economies but, if we see ourselves as nimble and competitive, our ambitions should be greater than that. A better corporate tax regime than France is not a proud boast.

How about freeports? The name could not be more evocative of our trading and maritime traditions. But the evidence suggests that they will achieve little other than displacing activity from one part of the country to another. And if we were really ambitious about a deregulated, low tax, low customs solution to our economic woes, why give these advantages to some places, why not everyone?

The emphasis on freeports reveals an approach to the levelling up agenda that I worry is more about creating grateful localities in exchange for pots of spending rather than a clear sighted vision for improving productivity. The suspicion must be that the preference for ad hoc ministerial decisions over a more defined industrial strategy will lead to a less economically rigorous approach. The suspicion will linger that party political considerations will be to the fore.

There is one surprising, if qualified, bright spot. We are becoming more open to talent. It was already the case that the requirements to get a work visa were much less restrictive than previously, and the Chancellor’s announcement on the skills visas is worthwhile. The qualification, of course, is that it is still much more bureaucratic for EU citizens to work here than it was – which brings me to Brexit.

Our history as a maritime nation is one often identified by supporters of Brexit – like the Prime Minister in his Greenwich speech. Even the word ‘Brexiteer’ evokes the naval escapades of buccaneers (although the Oxford English Dictionary also defines ‘buccaneer’ as ‘a person who acts in a recklessly adventurous and often unscrupulous way’). Liz Truss tops the ConHome Ministerial popularity charts largely on the basis of her energetic advocacy of Global Britain and for free trade as a benefit of Brexit.

The reality is that Brexit involves the erection of trade barriers with our largest market, as January’s appalling trade numbers suggest (although, to be fair, a clearer picture will only emerge over time). Given the Prime Minister was willing to agree to the Northern Ireland Protocol, it even involves trade barriers within the UK.

While good progress has been made by the Department of International Trade in completing free trade agreements with third countries, these have primarily rolled over existing agreements that we had as members of the EU. There was a flurry of excitement last week when the US dropped punitive tariffs on UK products that were in place because of a longstanding dispute with the EU over Airbus and Boeing. Brexit supporters rushed to declare it a triumph due to our new status, the Trade Secretary wrote a self-congratulatory piece in The Daily Telegraph. A day later, the US announced that it was dropping the punitive tariffs against the EU, too. The search for a trade benefit from Brexit continues.

What about regulatory flexibility? It is nearly five years since we voted to leave the EU, but there are still no bold plans to regulate in a different way. Plans to review workers’ rights have been dropped on the basis that this would be politically unpopular.

If the hard Brexit delivered by the Government has made trade with the EU much harder, the combative manner of our dealing with the EU has not only reduced trust but even undermined a key attribute for a trading nation – the rule of law. Having threatened to breach international law for three months over the autumn, Lord Frost has now decided to extend the grace period before internal checks come into place – unilaterally changing the terms of our agreement with the EU. A second breach of an international treaty only recently agreed begins to look like a habit. It does nothing for our reputation for trustworthiness.

The attributes of an outward-looking, open, trading nation are ones to which we should aspire. But in terms of our openness to trade, competitiveness on tax and adherence to the rule of law we are going backwards. In terms of the State telling businesses what they should do and where they should do it, we are becoming more centralised and more arbitrary.

For years, many in the UK have characterised the EU as centralised, interventionist, uncompetitive and protectionist. It would be a sad irony if our departure from it makes us more like the type of inward-looking, land-based power that we once used to disparage.