Matt Kilcoyne: The G7’s aim to establish a global tax cartel is at odds with national independence. It deserves to fail.

6 Jun

Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.

In a statement immediately following his meeting with Finance Ministers from the G7, Rishi Sunak said an introduction of minimum corporate tax rates will “finally bring our global tax system into the 21st Century.”

It’s a curious phrase. We don’t operate a global tax system. There isn’t one, we operate national governments, and sovereign states set tax rates within their borders. A quarter of a millennium ago the Americans famously broke from Britain to make the point that you can’t set the tax policy of others without their consent, and just five years ago the British decided that the prospect of sharing tax policy and ever closer union with the Continent was to be taken off the cards. And yet, seemingly, that has just changed.

A decade-long debate by the world’s most powerful western countries has broken through to set the terms of taxation that will see competition between states diminish. The reform to force corporations to book their tax in the places where they take revenues is seen as an immediately popular policy.

It is intuitive to people that if you’re selling a good in Britain, you have to book the sale in Britain and tax be levied in full here.

Yet little thought is given to what got the good to you buying it in the first place: the investments, the logistics, the marketing, the IP, the trade, the staff, the pensions and various insurances. Booking activity and cross-subsidising operations across jurisdiction has led to us having the greatest living standards and the greatest variety of choice in human history.

The cost of thinking simply and trying to straightjacket every company into operating as global finance ministries desire will be borne by the likes of you and me through higher prices, and via lower choice as firms decide to shift operations and cut operations.

It is one thing to say something out loud and another to implement it. Any changes to our legal system will require Parliamentary consent, anything that could even possibly represent a powergrab over devolved laws will undoubtedly see resistance from Sturgeon and Drakeford.

A policy being announced as a fait accompli on a sunny Saturday afternoon via social media does somewhat undermine the convention that Parliament hears its matters first.  While the Treasury’s usual response to those inquiring about their works is to say that “tax matters are for the Chancellor,” Sunak may find that backbenchers remind him that tax matters are actually for them.

And of course the Crown Dependencies and Overseas Territories that have just seen, without so much as a by-your-leave from UK Central Government, their independent fiscal policies smashed to pieces. Our Caribbean states help drive the global system of trade. They’re not just brass plates, ask The Guardian about the benefit of being able to move investment offshore to ensure the continuation of the free press.

That’s just the internal battles. The G7 is a bit of a misnomer, because it includes the largest seven free world nation states (the USA, UK, Japan, Canada, France, Germany, and Italy) but also the EU as a whole. It is unclear if the EU can sign up its members to a new tax reality when fiscal powers are explicitly reserved by its member states.

Ireland has come out already to say that they expect to lose around 20 per cent of their corporate tax revenues under the reforms agreed at the G7 — about €2.2 billion. With Sinn Fein on the rise in the South and desperate to secure largest party status in the North, despite their historic left-wing positions, we await to see how they will respond to this curtailment of Irish sovereignty and prosperity.

When Estonia was acceding to the bloc in 2002 Mr Vahur Kraft, Governor of the Bank of Estonia, said:

“In my view it is obvious that as long as the European Union remains to be the alliance of independent member states, there will be neither need nor possibility for any additional communitisation.”

Either the alliance is transformed without treaty to the status effective of a nation state or the Council President Charles Michel and Commission President Ursula von der Leyen have spoken without authority. Whether they have the power to force the issue is very much questionable. Can the bloc carry the likes of Ireland and Cyprus and Hungary while sticking two fingers up to the model on which they’ve built their economy in recent decades?

The UK itself of course already has a corporate tax rate above 15 per cent, and the Chancellor presumably sees little threat in letting our competitors agree to raise those under their thumb to that level (including our nearest and of course dearest neighbours Ireland) to give him a bit more room to raise our own rate back to 25 per cent by April 2023. But that might not always be the case and why should a Conservative want to create a ratchet effect that only ends up with higher tax rates?

The crux of the matter for all cartels is what mechanism keeps them all pulling in the same direction. Finance Ministers have the dual responsibility and joy of having to maximise the revenue that they take from their citizens to finance the projects that their fellow politicians push, but also for promoting and inducing economic growth.

While all the stars have aligned and G7 Ministers managed to agree for once to work together to extract a little bit of extra tax revenue from the likes of Facebook, Google and Amazon the consensus is unlikely to hold between states that are friendly but highly competitive.

When it is to be implemented too is debatable. The Treasury insists it’s after the issues of superdeductability have passed and so our investment strategy is sound, but the tax cartel has to hold for a long time to work. Consensus requires trust and that’s short between Britain and the EU, it was non-existent between Trump and the EU. There’s little to say it will be there with the next occupant of the White House.

Chris Giles, Economics Editor at the FT, recalls a G20 meeting where a deal restricting profit shifting was announced. He asked them to commit to a date he voiced for full implementation. Only the Chinese Finance Minister half raised a hand to agree to it, realised he was alone and dropped it. The idea is back at a smaller scale. Which tells you that it failed once to get traction with more competitive partners, partners that are on the rise and which will be eyeing up business that is looking at less onerous markets elsewhere. But also that it’s taken a decade to get to this point suggests it’s weak in its current form too.

The mood of Sunak’s announcement was upbeat but the tune we are asked to dance to is miserable. The West’s states are closing ranks against the private sector that is the cornerstone of our prosperity just as we need it most to build back better after the pandemic.

 

Matt Kilcoyne: Streamlined lawmaking would make the UK a richer, safer, fairer and better place to work and live

9 Apr

Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.

We’re now over a year into the pandemic radically shifting the creation of legislation, from a long-winded process studded with Parliamentary scrutiny and debate to laws affecting so many now so often made on the fly.

Frankly if any Member of either House tells you that they know what each of 600 sets of regulations (plus primary legislation and 1014 Statutory Instruments (SIs) used to amend past legislation) does and how it has updated laws previously in place, including that of the 1833 St Helena Act, then they’re having you on. No one could understand or advise on what has happened in whole to the laws our Parliament makes, amends, and repeals.

Now a lot of the SIs that went on in Parliament, last year especially, were to do with converting the EU’s acquis into British law. These SIs were put in place to ensure the promise of Britain starting independence from a position of non-divergence was kept;

This past year could be seen as an exposé of what’s been happening more generally with our legal system for decades: Parliament dictated to by foreign bodies, impacted by devolved ones, and bypassed by executive order. No one could tell you what has occurred across all our laws and the tens of thousands of pages of additions. Yet ignorance of that law is no excuse, and it can cost dearly to not know.

Our Common Law system, uncatalogued laws with no search function, and the lack of understanding about case law specifics and Parliamentary reasoning all add to the cost of compliance for firms. In turn that adds up to lost innovation and productivity, lower wages, and fewer life chances. All told the cost of regulation was estimated by the National Audit Office to be over £100bn in 2017, and a large chunk is just checking you’re on the right side of the law.

But wait, wasn’t one of the reasons that we left the EU that we could look again at all the little laws and silly additions to our statute and start to rid us of these meddlesome interventions? Didn’t Boris Johnson in 2019 order a bonfire of red tape?

Well, yes and no. Johnson’s bonfire is as mal-quoted as his “f**k business” exclamation. The latter was a broadside at corporates pretending to speak for the whole market when they actually speak only and rightly in the interests of themselves and their shareholders.

Likewise, the ‘bonfire’ was actually an explicit attempt at introducing mercantilist procurement practices rather than having non-discrimination of bids by nationality – the vast majority of which have actually now been kept in place via the UK-EU Trade and Co-operation Agreement.

However there are some signs of life in the government’s plans for deregulation. Or as they’d rather call them, plans for better regulation.

Before alighting to lead preparations for COP, Alok Sharma set up a series of consultations and reforms across industries and sectors. Kwasi Kwarteng’s brush with the unions and the FT over an employment rights review put paid to any labour market shake-up, but all the rest continue.

Some of these were supposed to be of higher stakes than others — we’d all assumed the consultation on a new subsidy regime was bigger than the reform of audit, at least until a former Prime Minister’s relations to a certain financial services company started hitting the headlines.

Jacob Rees-Mogg has oversight of the vast bulk of Covid legislation because of the sunset clauses backbenchers forced the Cabinet to put in place on the emergency powers. I think it’s reasonable to trust the Leader of the House’s desire to return ancient liberties to modern Britons and so I suspect some simplification will be coming our way purely by the ticking of the clock.

The real big potential, though, is thought to be with Rishi Sunak’s Better Regulation Cabinet Committee, which has oversight across all departments and involves the likes of Kwarteng, Lord Frost, and Michael Gove all in one place.

Quite what is within scope is less certain than what isn’t. Anything ringfenced by the manifesto or which could go viral on social, such as environmental standards or labour standards, is out. But technically everything else is in, including how and what and when to diverge whole sectors from Europe, when to sandbox as the UK did successfully with fintech, and even the form and role of lawmaking at Westminster.

The Adam Smith Institute’s latest paper, Ignorantia Legis, tries to give the Chancellor some neat new ideas to ensure we get better laws, rather than just more of them.

The first thing is to stop the direction of travel towards more laws as a matter of course. A lot of this stems from process-driven regulation. This year the full cost of that way of thinking was laid bare with the precautionary principle and the vaccine in Europe. Expedited experiments where there is a clear cost-benefit case to do so would allow circumvention of onerous process-driven regulation, replacing it with clear result-driven approaches.

Higher risk, and higher personal responsibility and in ordinary times assigned liabilities, but with higher rewards. Moonshots if you will.

From moonshots to sunsets, so much of regulation is designed to stop the possibility of the very worst outcome happening. Often this is done where the potential for such an outcome is not known at first but becomes known over time. There are plenty of laws already on the statute relating to harming others, duplicating them time and again when new issues arise is unnecessary and often duplicates legislation.

To combat this, MPs should make more frequent use of sunset clauses when passing penalties and regulations, so that they can be routinely revisited and then set aside if and when the harms or moral panic they were designed to address have either been dealt with or failed to materialise.

Ministers will not win the war on wasteful legislation if they start looking for individual wins or headlines. They should instead commit to reducing lines of rules, pages of books, and issues contained within Acts. Doing so will cut the.bill the Government imposes to British businesses and each of us as citizens. That will make the UK a richer, safer, fairer and better place to work and live.

Matt Kilcoyne: The pluses and minuses of vaccine passports – and the discrimination that comes with them

4 Apr

Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.

Vaccine passporting is not a clear-cut issue, and those that say that it is are doing our public discourse a disservice. Honest debate leads to the best policy outcomes, and we need it on an issue of such importance as the potential introduction of a new, lawful discrimination.

What is actually being proposed is this: that you should be able to show your vaccinated status; that employers or government and firms should be able to request you to show that status, and then use it to determine whether to discriminate for or against you in accepting or fulfilling a contract. To do it, we’ll need a new discriminatory characteristic to be assignable and recognised in law.

Discrimination comes with costs and benefits. The benefit to those that choose to exercise it is that they know that their staff or those on their premises cannot fall sick or (as evidence increasingly suggests) make others sick from this virus. Lower liabilities and lower risks could be coupled with the benefits of potentially removing social distancing requirements.

Around 20 per cent of publicans say they want to access punters and staff for proof of vaccines to ensure their staff’s and all of their families’ health. Polling by Ipsos Mori shows 78 per cent of those surveyed think you should have one to travel abroad, and the same amount to visit a relative in a care home. Over half would have it to let people go to pubs and restaurants that are opening outdoors in just over a week.

Insurers may want passports to provide future policy cover for venues, or places in East Asia that have been proven to be capable of causing super-spreader events. Trade Unions or individual employees want to be able to refuse work in unsafe conditions. Passports may help employers know they can provide it, and get back to full capacity as quickly as possible.

But vaccination discrimination comes with obvious costs, too. Punters at the pub or restaurant goers that are asked to show their status face another annoyance when going out. While it would be a minor inconvenience for many to get out their phones, any increase in friction could mean people heading home rather than staying for a bite to eat – or else not leaving home in the first place.

Ministers have let mistrust seep in over the truthful nature of their intentions. Trade associations and prominent publicans have been quick to pour scorn on the idea of vaccine passports, because they’ve been burned by quickly implemented decisions over the past year, with huge financial implications.

Increased costs might seem minor to Ministers, but they add up, and non-compliance even more so. Businesses fear being pushed out of profitability after a year of doing the right thing, and their staff facing increased public ire while actual risk recedes.

Reports this week suggesting that Ministers are going to trial vaccination, antibody or negative antigen tests for access to events at the Brit Awards will fuel fears of a cascade right down through the entertainment industry.

Lawful discrimination is not a decision to be taken lightly. The young have lost out this year but, for some, the discrimination against them and their families has been decades and centuries old. The vaccine’s take-up has been lower in some ethnic groups, first generation migrants, and the undocumented.

So MPs voting on the issue should know that, whatever we end up with, they will face accusations of active discrimination that hits ethnic minorities, migrants, the disabled, or asylum seekers. Indeed, we have seen some of this in warnings from the Editor of the Spectator this weekend.

In America, the debate is going nearly 180 degrees in the opposite direction. Florida has said it will ban vaccine passports altogether, because of the demographic breakdown of vaccine takeup. This comes with enormous costs to the confidence and safety of citizens and sides against the silent majority, and the ability of consenting adults to contract privately – and with an outspoken minority leaning into angry identity politics.

Think about how employers such as Care UK say they’ll mandate their staff to be vaccinated to allow them to continue or sign up as a new employee with the company. Vaccinations reassure their patients and their families that they will provide care with no undue extra risk to those hit hardest by the virus.

Now if we agree with the right of relatives and patients to want to be cared for by those that are vaccinated, then we’ve got to a point where we think vaccination should be allowed to be mandated in private contracts between consenting adults.

Government’s role, then, is to allow and facilitate the accreditation of data it safeguards, and enforce the safety of transfer and storage of medical data held by any third party, and your rights to access it.

Given that we know international flights will almost certainly require them, a workable system is needed. But backbenchers will be wary of any pan-European system, and the fact that Tony Blair’s think tank has shouted about the issue loudest, and has met with Ministers, will expose Conservative fractures on law and order and civil liberties.

Making mandatory a system reliant on a single private company would risk issues with a business possibly going bust; but making everyone sign up to the NHS app would risk throwing away innovations in remote healthcare access made during this pandemic. And inaction would means a hotchpotch of people asking their GP for a copy of records that can cost up to £30 each, with no uniformity and no guarantee of acceptance abroad.

The hospitality industry has said that the Government could rebuild trust by being explicit on mandatory vaccination only for international travel. This could be coupled by saying that visitors should only have to show their vaccinated status at the borders.

The Government could require vaccination of those of front-line clinical workers, but rule out in law that requirement for anyone seeking medical services from the NHS. They should make clear the exemptions for those medically unable to have access, and be honest about an acceptable level of fraud risk given there will be some that conscientiously object to taking a vaccine, and our tolerance level given the mass take-up so far.

ime limits to the laws and six-month or yearly review on the requirements could ease tensions over hits to employment, and to those sections of society that haven’t been able to be jabbed yet or won’t, for whatever reason.

Finally, and because after a long year he deserves it, Boris Johnson should take some Cabinet Ministers to a pub on the 12th April for an outdoor pint – and make it very apparent that no-one is checking their vaccination status upon arrival.

Matt Kilcoyne: Vaccine certification is an idea that should be allowed to sink or swim in a free market

31 Mar

Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.

Since vaccines started being approved by British regulators at the very end of last year, the country has undergone a psychological transformation unlike any in my lifetime.

From fear of an unending cycle of lockdowns and limited freedoms came news from one Kate Bingham. Her work gave purpose to the privations that were coming, helped all of us that kept faith that there would be end to this disease by human ingenuity and within time to mean our actions to save lives, avoid economic scarring and adaption to a non-normal economic situation that would then have to be readjusted to soon after at even further cost too.

Given the mortality rates we’ve seen across the world and even here with extensive curtailment of our ancient liberties, it is reasonable to say the number of lives Bingham has saved alone will number in the tens if not hundreds of thousands and given greater evidence to the rightness of the choice to retain the jobs held in stasis by Bank of England furlough scheme.

These people and jobs saved through her tight and spread-bet pre-purchase agreements and the use of Britain’s comparative advantage in legal agreements, trade credit and other forward payment mechanism, and experience dealing with and preparing for rogue states that shut down exports or expropriate private property mean I fully back calls for Bingham to be elevated to a Duchess should it please Her Majesty.

The change in the psyche and morale of the British people her decisions enabled means that Cabinet can take positive decisions of true gravitas in a time of true national and international crisis. This requires careful and assured action. It might require prompt, wide impacting, and sensitive personal and national topics.

It could, let’s say for the sake of argument, include things like vaccination certificates for Covid. The idea hits all the right buttons to rile everyone in such divergent ways that they’ll talk past one another and fail to see the issues that are being discussed, why, and what is actually being proposed.

The first thing to say is that you personally have a right to full knowledge of medical data and records that are kept on you, assuming you are of appropriate age and sound mind. The governments within the UK have a near monopoly of service provision for healthcare save for all the private GPs that actually have a local duty of care to you to hold and maintain your personal records. They also can, via their contracts of supply and commissioning of care of other services with the NHS and associated parts, pass data onto third parties with your consent.

The lack of a series of principles over the free use of data between consenting individuals and third parties, and the lack of direction even by government towards the suitability or otherwise, never mind the likely legal consequences of using the data of vaccine take up to determine suitability of access to new or existing roles.

In the space provided by a lack of determination in good time, trade associations burned by huge restrictions announced against their members’ interests and often provided with evidence after the event with the scope and scale of restrictions decided by committees rather than parliament in the primary role.

All action must now and in future, and should’ve been the case throughout the pandemic, be based upon scientifically testable hypotheses, all the reasoning deduced and relied upon and all assumptions set out.

It is telling of a lack of trust between governed and government that pubs do not trust the word of a party that prides itself as being one of business to promote policies as we get back to the business of living that would enable them as far as possible now they’ve jabbed enough arms to reduce risk of reinfection and mortality.

Laws from now should be freedom-oriented to remind Tory voters that actively value the ability to enjoy the things that make life worth living they will be able to enjoy them. Around 20 per cent of publicans say they want to access punters and staff for proof of vaccines to ensure their, their staff and all of their families’ health.

The Government’s role here is to ensure that individuals have access to the ability to consent to their records being displayed by an accredited source (whether just their GP signing and by word of their bond confirming, or a company that facilitates access that across multiple GPs in a usable format for other firms without contravening data protection rules).

We know well the issue of mission creep with ID cards a totemic Tory issue after the defeat of Tony Blair’s flagship policy and David Davis’ whole career centred around civil liberties. But this is a facilitation not a coercion or anything mandated. Even if Blair is a principle agent of the campaign to promote their use — and I share concerns about the number of meetings he has had with serious ministers and civil servants on the topic given a the financial gain any company could get from providing either national or international accreditation of such valuable information on behalf of an individual. And elsewhere yellow fever and rabies certificates are in use regularly when crossing borders. Nigeria could teach us a thing or two about digital storage and transfer of said data and forgeries still emerging.

Government can signal intent on rejection of mandate by declaring it will not check status upon leaving the country or ahead of access to existing NHS services. The areas where people will encounter officialdom most keenly.

Liberalism demands freedoms to associate and self organise, and Conservativism demands the liberties of the individual by upheld by institutions acting in their care. Vaccine certification is actually a simple idea that should be allowed to sink or swim in a free market. Let’s let them, and keep an eye on vested interests with cosy relationships benefiting friends for sure. But let’s enable anything that let’s us live our lives again.

Matt Kilcoyne: A wealth tax is a bad idea at the best of times – let alone in the aftermath of a pandemic

10 Dec

Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.

There really is nothing as worthless as the repetitive debate about wealth taxes. No matter the issue at hand, the answer is always the same from the same old left-wing activists: impose a tax on wealth. This year’s offering comes from the Wealth Tax Commission — the clue about what conclusion they came to is in the name.

A wealth tax is designed to be levied on all held assets (of all forms) in a one-time deal without any notice to bring in a big boost to the state’s coffers at someone else’s expense. The particular one proposed demands large liabilities be made on taxpayers without warning across all asset classes and investments to the tune of one per cent of total wealth per annum for five years. It amounts to little more than petty theft by installments.

The proponents this time say that the pandemic is the perfect time for this kind of one-off money grabbing exercise, because the state has spent so much money. So far, you can follow the logic. We need to get the finances back onto sure footing, it runs: so we cannot survive a deficit of 20 per cent per year without serious recourse to increased taxation, decreased government spending, or a hefty increase in inflation. You can guess which the Wealth Tax Commission would like to do first.

Yet we’re not facing that future or even really that choice at all. One of the better arguments in favour of deficit-led spending to prop up businesses throughout this pandemic, was that it was causing a big one-time shock like a natural disaster, and that credit was a good resource to call upon.

Yes, the deficit ballooned but the worry about our future prosperity may be misplaced. The summer’s opening up showed the public’s desire to get back to normal. Once jabbed in the arm by a vaccine we should expect the same.

This means that instead of a long Covid winter stalking the land, or real interest rates rising beyond the growth rate in the near future, it is, as Julian Jessop wrote for the Institute of Economic Affairs, “more likely that interest rates will remain relatively low and that a rebound in growth will help to stabilise the debt-to-GDP ratio at a sustainable level.” Intervention during this pandemic was to stop widespread economic scarring and adaptation to non-normal trading conditions – that benefit is diffuse and ongoing, so the cost can be the same.

The UK has a hard-won reputation for paying its debts, and so the credit options are more diverse for one-off shocks like this. Argentina, which voted to implement a wealth tax to finance its pandemic response, has fewer choices, thanks to its government’s regular inability and unwillingness to meet the debts it has built up time after time. There the tax will be ruinous, but it is a last resort due to past recklessness. Your word is your bond, and bonds are worth as much as your word.

People have felt most aggrieved in the past year when they have felt that, through no fault of their own, their lives and livelihoods have been at threat, and everything looks like it might be lost. What the Wealth Tax Commission is proposing is to double down on this bad feeling to avoid an increase in the long-run debt position of the Government, with a hugely concentated cost on those who have done no ill to earn it.

It is a hefty cost, too. Over eight million people would be hit to a collective tune of £250 billion by a wealth tax of one per cent per year for five years at a threshold of £500,000. Including pension pots, shares, and home ownership, we’re talking about a lot of regular people, not the uber-rich. Regular ConHome readers will know well the ire that another wealth tax, inheritance tax, creates among the voting public.

We should be aware too, of the dishonesty of the proposal being presented as a one-off. The fact it’s proposed to take place across five years reveals the true intent of its proposers to make it become permanent. There’s form for that, too, (disastrously) overseas.

In Spain, the wealth tax (or Patrimonio) has been in place since 1977, when it was brought in as a one-off (¡qué sorpresa!). Since then a whole raft of exemptions have been built up, including deductions on the value of the main family home, business assets, pension rights, intellectual property rights, and family companies. Each of these creates a distortion effect that has made a dog’s dinner of the tax system — the report itself mentions this as a risk, but as it’s only selling this (dishonestly) as a one-off it feels it needn’t be addressed.

The Wealth Tax Commission’s own report argues that “delivering a one-off wealth tax from inception through to full operation would be a major undertaking. Although one can point to entirely new taxes introduced within the recent past, there are none on this scale.”

It goes on to say that something equally as broad in the form of national insurance had its institutional beginnings in 1943 before being implemented in 1947. If the best guide they can give is a tax that took four years to bring in, one first has to question how long they think this pandemic is due to last after vaccination scenes hit our screens yesterday, and then how on earth the Treasury would keep the plans a secret.

For secret the plans would have to be. For as soon as you know your property is going to be grabbed, it is entirely sensible to try and get your money out. If the economy is in the doldrums, the last thing we need is money flowing out of the country.

After a year limiting the private sector’s abilities, the vaccine’s rollout provides the perfect time to set them free and for Boris Johnson to win the peace by lowering capital gains tax, making it easier to build a profit-making business here, to engage with trade partners the world over, to employ top talent, and cheaper to transact at home and abroad. A wealth tax, delivered by stealth, disproportionate to the problem, and hitting our country at its most crucial time for recovery would not lead to a wealthy nation.

This Government is keen on recycling, but it shouldn’t pay any heed to this recycled garbage. In fact, the idea of a wealth tax so ruinous deserves to go into the trash once and for all.

Matt Kilcoyne: CANZUK is a bold, imaginative, and popular blueprint for a global Britain

19 Aug

In less than a year the Conservative and Unionist Party will face a threat to its existence.

Maybe not the Conservative bit, but certainly the Unionist portion. Coming down the tracks are the Scottish election and a renewed Nicola Sturgeon is positioning herself and her party to rip apart the United Kingdom.

Unionists need to offer something better. Something bigger than Scotland, frankly bigger than Britain. That offer should be Canzuk.

Time is running out. The polls are going in the nationalists’ favour. Poll after poll, in fact, shows that the Union is on the back foot. We know what Nicola Sturgeon is likely to spin Scottish independence as being natural, inevitable, and the sensible option.

Far from being shown up by a pandemic that has hit Scotland hard, Sturgeon is buttressed by an impression of strength and a compliant media north of the border, and no scrutiny south of it.

The First Minister, using all the privilege that position entails, is going to cast independence as both normal, and a reprieve from chaos. Set Scotland free with Sturgeon, or risk being bound to Brexit Britain with Boris. Tories should understand the danger of this messaging, the party used it with great success against Ed Miliband in 2015.

What worries me is that, while there may be plenty of policies on offer, there is a lack of a narrative and a lack of an incentive for Scots to choose to stick with their fellow Brits in the years ahead.

My proposition to the leaders of the Conservative party then is simple. Use something popular, something bold, and something global to counter a proposition that would sow division, narrow Scotland’s worldview, and limit the freedoms of our people.

Offer them the world. Offer them the right to live and work right across Britain, Australia, Canada, and New Zealand. The North Atlantic and the South Pacific. A global alliance of modern, diverse, liberal, English-speaking democracies united by common cause, a shared head of state, institutions, businesses, academia, legal systems, and of course all important family links.

Scottish Nationalists look at the pandemic, some even at the possibility of manning the border and kicking out the Sassenach, and think their time has come. Tories should be telling them it has not, and that rather it is the hour of the Unionist instead.

For Unionists across all the Canzuk states are moving in tandem on this issue. Canzuk is now official policy of the Canadian Conservatives, it is the stated aim of the New Zealand First, ACT and National parties, and today we at the Adam Smith Institute launch a paper by Australian Senator James Paterson supporting the alliance.

His proposition should be studied carefully. New Zealand and Australia have a unique relationship in the same way that the United Kingdom does with Ireland. They treat each other with respect, understanding that lawmakers want the citizens of each to be safe and have high quality assured in the products they buy and services they procure. They recognise each other’s qualifications so teachers, and nurses, and engineers can work back and forth across the Tasman Sea.

If the EU weren’t trying to meld together ex-communist, ex-fascist, constitutional republics, monarchies, federal states and unitary government; if it weren’t pushing together 28 states with different languages and legal systems and centuries of mistrust and warmongering together, then they might try something similar. If Ireland weren’t in the EU we’d probably propose a similar idea across the whole of the British Isles.

We can, though, propose such a network between our high-trust English speaking allies. The ones with whom we share the Queen and who sit in the Five Eyes alliance. We already trust each other with the highest classified state secrets, we should be able to trust that Jenny from New Zealand can be a nurse talented enough to look after our Prime Minister without making her have to apply to have her qualification recognised.

Trust is what trade is all about, and you can trust your mates the most. We’ve fought and died together. No matter if you’re white, British Asian, Afro-Caribbean, or Cantonese, you’re likely to have family in one of the Canzuk states. In fact, 80 per cent more Brits live in CANZUK states than across the whole of the neighbouring EU, with 1.2 million Brits living in Australia alone.

Polls have consistently shown the idea is very favourably received in each of the states, with a recent poll for CANZUK International (based in Canada) showing supporting majorities in each with New Zealand highest (82 per cent in favour), followed by Canada (76 per cent), Australia (73 per cent) and UK (68 per cent). Over 300,000 people from the four states have signed a joint petition to encourage governments to commit to the idea.

Together these four states are emerging as a global force by sheer force of fact. Whether that’s challenging China over Hong Kong, or protecting the biodiversity of the oceans, or standing up for press freedom, we’re championing the liberal rules-based order that is the cornerstone of our prosperity on the global stage.

Our Canzuk states share a love for freedom, and it’s an offer that shines bright with opportunity and promise. A global future for a generation that has been disillusioned with a politics that has been inward looking. An idea that connects them to our shared civilisation, and to their own global families too.

Give Brits an offer they can’t refuse: give them Canzuk.

Matt Kilcoyne: Anti-democratic China is testing the West’s resolve, and it’s CANZUK that has risen to the occasion

11 Aug

Matt Kilcoyne is Deputy Director of the Adam Smith Institute

When I was growing up, I believed that the West had won. Not just won militarily, economically, or even culturally. But philosophically.

The enlightenment values of the United Kingdom, the free market popularised by thinkers in the United States, and the pragmatism of European countries converging after decades spent tearing each other asunder. No more a half-century long battle between communism and capitalism, no more chance of fascism or socialism holding down the liberties of the world’s peoples.

Slowly, but surely, the world had changed. Gradual liberalisation was inevitable. I thought, foolishly, that the empirics of a world made richer, with more choice, happier, freer, more tolerant people, engaged in commerce with others right across the world would be obvious to all.

I had not yet got that old enmities die hard and traditions die harder, or even that institutions really matter. I had misunderstood that, to a great degree, the victory of the liberal world order was one built on universal claims of the rights of men, but predicated on an uneasy realist peace between American, CANZUK (Canada, Australia, New Zealand and the UK), and European ideals.

I had mistaken the peace and prosperity that coincided with the end of the Cold War as a victory of our civilisations – when really other rulers, some far colder and more cruel, were always waiting to stake their claim.

To do so was wrong. Russian expansionism has re-emerged in Ukraine and Georgia and Putin has spent the past decade sabre rattling at Middle Eastern and Baltic states. Erdogan’s Ottomanite expressions in Turkey and his dalliances in Syria and Libya stand out too. And, of course, China – in its outwardly hostile relations to Taiwan, military skirmishes over the border with India, and treaty-defying legislation over Hong Kong.

Each of these states are nations, but I suspect that the leaders of them think of the international order they find themselves in as too limiting of their ambitions. They mean to mould the world around their vision for their own seemingly exceptional civilisations.

I suspect you know this in your heart of hearts. Russia’s consecration of the Main Cathedral of the Russian Armed Forces was egregious in its scale and its pomp. Christ has been co-opted to glorify the victories of the Red Army. Erdogan’s reconversion of the Hagia Sophia to a mosque marks the effective end of the secular republic of Ataturk. China’s placement of party power in Hong Kong, in silencing critics and arresting students for holding flags, shows a commitment to its communist ideology above that of international treaty obligations.

Foreign policy is not something the Adam Smith Institute focuses on too heavily. We prefer the domestic, and learning from the best of the rest around the world. The relations between foreign governments and our own is a fascination of some policy wonks, but we’d far rather ambassadors were left handing out Ferrero Rocher than having any real bearing on the everyday dealings between companies, scholars, friends, and family.

To that end our policies are focused on trying to make life as free as possible for people here, while proposing policy that would open up new opportunities overseas for trade and exchange. Sometimes though, the rest of the world comes knocking and you should not ignore when wolves are at the door.

Adam Smith said in his Lectures on Jurisprudence that “Opulence and Freedom, [are] the two greatest blessings men can possess.” I do not for a second suppose that he mistook the order of his words. People can tolerate lower levels of freedom if they’re rich enough to have choices left. However, there comes a point where a lack of freedom threatens the peace of a place.

In his first book, The Theory of Moral Sentiments, Smith makes the correct observation that “little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”

I’m afraid to say that Hong Kong’s opulence looks set to diminish. Yesterday the tolerable administration of justice was tested right to breaking point.

The arrest of the founder of Apple Daily, journalist Jimmy Lai, the arrest of ITV News freelancer and British National Wilson Li, young pro-democracy activist Agnes Chow and the likes of Reuters, AP and AFP from a news conference show that individuals are now targets of the state. It shows too that the commitment under Article 4 of the new National Security Law supposedly upholding freedom of the press is not worth the paper it is printed upon.

This is a test of the West’s resolve and our ability to act. But the West is splintered. Macron’s acquiescence to Xi Jingping showed up a coward’s response. The French president is a man of action as his stint in Lebanon shows but no action is forthcoming on China. Merkel decided her little chats with Beijing were worth more than the rights of Chinese people. The EU Commission called the National Security Law deplorable but again did nothing beyond pushing the press release to save face at home.

The CANZUK states though, and the US, have risen to the occasion. Canada, Australia, New Zealand and the United Kingdom joined the USA in condemning moves to shut down free and fair elections in Hong Kong this autumn. Australia and the UK joined Taiwan in offering refuge from those looking to escape communist control of the city.

The universal values that we preached, that we set in the basic law of Hong Kong, have been an inspiration to Hong Kongers that took to the streets. It was the Union Jack and the Stars and Stripes that flew in protestors hands.

Yes the fact of easy geography plays to regional blocs strengths. But our common cause in recent months with CANZUK states on Russia and Chinese aggression has shown the ease with which we, with common language, common political systems, common history, common sense of purpose, translate into a sheer force of fact re-emergence of a global role that has eluded the mandarins in the foreign office for far too long.

Our civilisation needs champions to save it from opponents and challengers abroad, but also nationalists at home. Greater freedoms for us all, and expanded out to include those in our sister countries overseas allow us all to be the champions of it through our deeds. We must defend the gains of globalisation for the whole of the world, while challenging those that seek to usurp the norms that made those gains possible.

Adam Smith was right when he argued that there was a great deal of ruin in a nation. But there might yet be a great deal of good in our civilisation.

At 6-7pm tonight, the Adam Smith Institute is hosting an event titled: In Defence of Globalisation. Click this link to register your place.

Matt Kilcoyne: An unholy alliance is frustrating our freedom to shop on Sunday. Johnson should take it on.

24 Jun

Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.

An unholy alliance of small shops, supermarkets with convenience stores, unions and the church has formed again to oppose ending Sunday trading restrictions. The whole argument against letting the big shops open after 6.00pm appears quite confected. After all, no other industry has this weird restriction in place. Our NHS doctors and nurses can work Sunday night.

Few small business owners will refuse to help a customer if they come a-knocking after hours with a genuine need. You can even order online and have it delivered on a Sunday.

Meanwhile, if you’re a reporter with a sharp nose for a story it doesn’t matter if it breaks after your shift. Notably, an article announcing opposition to ending Sunday trading restrictions was published in Monday’s Daily Telegraph, indicating at least some of the editing was undertaken after 5.00pm the previous day.

Indeed, I’ve done something rather naughty while writing this. For you see, most of this piece was itself written on the Sabbath, by my own free choice. And unlike shift workers, I don’t even get paid to do so.

Yet for some reason, we arbitrarily do not allow shops larger than 3,000 square feet to open for more than six hours between 10.00am and 6.00pm on a Sunday. Deuteronomy is famous for its niche laws governing every aspect of the observant’s life, but I must have missed the verse that says shops with 3,001 square feet are too big, and that opening for more than six hours is forbidden.

The Old Testament calls for a day of rest. We have those written into law, just at times of our own choosing rather than convention. Universality is lovely in morals, but can be poor in practice.

Our restrictions hurt consumers, workers and businesses. They hold workers back from flexible and well-compensated hours; they reduce consumer choice; and they put pressure on time-poor and cash-poor parents in tight spots.

These current laws unfairly punish larger shops, when in fact these larger shops are precisely the ones that allow for much greater social distancing in the context of Covid-19. It is, to be frank, bizarre to encourage people to go to smaller shops, with the higher risk of interaction and contagion.

The same arguments Conservatives made against Sadiq Khan shutting down the tube at the beginning of this pandemic apply to those that want to control hours of opening for Sunday shoppers.

A great deal of our economy has gone off the cliff  but, like Wiley Coyote, we seem to have not yet realised. Instead of debates over the shopping habits of the past, we need as many ways as possible to increase transactions, consumption, and employment as we can muster.

We also need to find ways to keep us safe against the undimmed viral threat by allowing greater social distancing in stores, which is certainly helped by spreading out shoppers and staff over the week.

We consumer capitalists at the Adam Smith Institute have noted before that shoppers actually like the extra bit of choice: when Sunday trading laws were suspended during the Olympics, sales increased 2.8 per cent inside of London and 6.2 per cent outside of London.

The current restrictions are not even that traditionally British. Scotland has no restrictions on Sunday trading — workers have a right not to work on a Sunday should they so wish. Northern Ireland has even stricter laws than England and Wales, meaning you can only go to the supermarket between 1pm and 6pm.

Keep Sunday Special is made up of: the Association of Convenience Stores and the National Federation of Retail Newsagents; the Federation of Wholesale Distributors; the Union of Shop, Distributive and Allied Workers, the Church of England, and post offices.

Beside the Church of England, which understandably wants us all in the pews rather than pounding the high street, you may have spotted the giant vested interests in this campaign. All the shops are themselves quite happily open on Sunday (and that includes some supermarkets with smaller inner city stores too), those that supply these small stores, a union that wants to limit labour competition, and the post offices that are reliant on corner shops.

This has nothing to do with keeping Sunday special. It has everything to do with shutting out the competition.

The idea that we’re a downtrodden people beholden to capitalists that want us to work every single second of every single day like Scrooge himself is both wrong and wrongheaded. The opposition and the quick backtrack from Number 10 also shows something much more worrying: a weakness for sticking to a choice when it’s made at the heart of a government.

Instead of the surety that should come with an 80-seat majority and the public’s support, we’ve had another U-turn in record time. In the face of obvious vested interests and a small but vociferous campaign that says it can muster 50 MPs to its cause, but only managed seven names on an open letter. And there’s something really off and quite worrying about the Chief Whip’s personal opinion ending up on the front page of theTelegraph.

For a Government that is supposedly obsessed with public opinion, this decision shows a deaf ear. A recent YouGov poll found 48 per cent in favour of abolishing Sunday trading rules with just 31 per cent against. Conservative voters were most in favour – with 53 per cent of self-identified Tories saying they would support relaxed trading hours rules.

Nobody is going to suddenly turn up at your house at 6.00pm on the Lord’s day, and drag you out of the house to a supermarket and stand over you while you weep in the veg aisle. But your opposition to Sunday trading should not prevent me from having that choice.

Boris Johnson should take back control of the agenda from a vocal minority on Sunday trading. The existing rules are inconsistent and hypocritical. They do not reflect a 24/7 economy, where people can purchase online and receive deliveries any time. They are backed by vested interests masquerading under a campaign of faux outrage. In their place, with a decisive move to liberalise, could come more opportunities to work, hours that meet our needs and reduced risk — and a reflection of the values of the voters that put the Conservatives back into power in December.