Spending Review 2020: Think tank response round-up

25 Nov

Adam Smith Institute

Matt Kilcoyne, Deputy Director:

“The Chancellor set out plans for big-spending and big-borrowing to get the country through the pandemic, and set the course for the country in the years ahead. It is necessarily expensive to confront the Covid-19 pandemic. But this public sector spending splurge fails to put the United Kingdom onto a strong fiscal footing for the recovery. Rishi Sunak cannot tax our way out of debt or spend our way out of a recession. 

“Increasing departmental budgets as the economy shrinks is just spending money we don’t have. It is fair that while private sector wages have fallen, public sector wages do not rise. Every public sector worker does not automatically deserve a pay rise while the rest of the UK loses out. 

“Raising the minimum wage during a recession will hit the most vulnerable the hardest by preventing businesses from hiring out-of-work Brits. It risks fewer jobs and hours for the lowest skilled, young, and minority workers. For the party of business, the lack of thought about their needs and the increase in costs they’re facing coming from the government, this is a massive and unforgivable oversight.”

Institute of Economic Affairs

Mark Littlewood, Director General:

“The Chancellor’s diagnosis was correct – and it is encouraging that he grasps the scale of the problem. The eye of the economic storm has yet to hit. The Covid contraction is more than double that of the Great Depression in 1931. Five years from now our economy will be smaller than it was at the start of 2020.

“If the diagnosis is good, the medicine is inadequate. ‘No return to austerity’ is a good slogan, but austerity there will be – either in the public or the private sector. It is just a question of when, and the longer the delay the more austere it will be.

“While today was a Spending Review rather than a Budget, the Chancellor must swiftly turn his attention to mapping out a path to recovery. This will involve creating a better tax and regulatory environment, so businesses can bounce back and thrive.”

Centre for Social Justice

Edward Davies, Director of Policy:

“Amidst the eye-watering barrage of numbers, the focus first and foremost on jobs, was the right one. It is not just important for the recovery of the economy but as the Chancellor said, a job is the best route to personal prosperity – an identity, purpose, and reason to get up each morning. Various investments in housing, city growth deals, and a very welcome community levelling-up fund will all help to enable this.

“And for those out of work the announcement of the £3bn Restart Programme is welcome too. This can build on and expand the Work Programme and Work and Health Programme. But it must be personalised and human, as per the original design of Universal Support, to go alongside Universal Credit. As the Shadow Chancellor said it must address the needs of those furthest from the job market and work with the small local actors, who know their communities best.

“Lastly, support for the most vulnerable such as rough sleepers, and our prisons was welcome, but warm words on families and communities, where many find their greatest support, must be followed by action.”

TaxPayers’ Alliance

John O’Connell, Chief Executive:

“The lack of focus on value for money in today’s spending review will no doubt disappoint taxpayers.

“Coronavirus has undeniably left a large hole in the nation’s finances. But instead of forever dipping back into taxpayers’ pockets, the government should prioritise policies to get the economy going.

“With the tax burden at a 50 year high, targeted tax cuts will be vital for employment, productivity and, ultimately, economic growth.”

Centre for Policy Studies

Robert Colvile, Director:

“Today’s spending review recognises the extraordinary scale of the Government’s fiscal response to the pandemic, but also the extraordinary and long-lasting economic damage that it has inflicted.

“It is right to prioritise jobs, health and public services now, rather than immediately closing the deficit, but also right to acknowledge the enormity of the challenges ahead. The temporary cut to international aid and the imposition of public sector pay restraint, both called for by the Centre for Policy Studies, recognised this changed environment – but the country is still committed to increasing spending on a shrunken tax base.

“The Chancellor’s announcements on infrastructure investment and levelling up were extremely welcome, echoing for example the CPS’s proposal for a National Infrastructure Bank. But ultimately it will be the private sector, not the public, which digs us out of this economic hole – so as the pandemic recedes we urge the Chancellor to embrace pro-growth, pro-enterprise stimulus measures, such as tax incentives to encourage businesses to hire and invest.”

Joseph Rowntree Foundation

Helen Barnard, Director:

“Remarkably for a much-hyped statement on levelling up opportunity across the country, the Chancellor’s word’s ring hollow as weaker local economies will be getting less money than previously in the aftermath of the pandemic.

“The growing numbers of people in or at risk of being pulled into poverty in our country will have taken little solace from the plans laid out by the Chancellor today. The latest economic forecasts are stark and deeply troubling.

“Behind the figures there are real families wondering how they will get through this winter and beyond. The Chancellor has not risen to the challenge facing the nation. In the here and now families need to know how they will pay for food, childcare and keep a roof over their heads.

“The Chancellor has failed to live up to their manifesto commitment to invest significantly in skills around the UK and allow the funds to be administered locally via mayors, devolved administrations and local authorities. The additional funding for employment support is eye catching and necessary because of the anticipated wave of long-term unemployment in the coming months.

“There is mounting concern in the UK about tackling poverty and inequality, and the time to tackle these issues is now, as we recover from a crisis which has already hit the worst off hardest. This was a moment when the Chancellor could have taken action to solve poverty – instead many families will now be preparing for still harder times ahead.”

Resolution Foundation

Hannah Slaughter, Economist:

“The Chancellor has confirmed a modest increase in the National Living Wage for next April – the smallest since 2013. After large increases in recent years, the slowdown reflects that the wage floor is rightly linked to typical earnings which have taken a hit during the crisis.

“Crucially, this increase still leaves the Government on track to abolish low pay by the middle of the decade, with one of the highest minimum wages in the world.

“Continuing on the path towards ending low pay – with bigger rises in the National Living Wage coming as earnings recover – should form part of a wider post-Covid settlement for low-paid workers, including more dignity and security at work.”

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.

Morgan Schondelmeier: State-directed research is no substitute for the marketplace of ideas

14 Aug

Morgan Schondelmeier is Head of External Affairs at the Adam Smith Institute.

While we find ourselves in “unprecedented times” it seems that the Government is increasingly dipping into precedent policies. From revamping Milliband’s 2015 food advertising ban to proposing spending that would make Corbyn blush, the Government seems dead set on recycling old ideas.

So why then, if they can’t even think of particularly new policies, are they proposing that Government bureaucrats dream up scientific advancements?

We saw in the spring budget the creation of a grand narrative, and £800 million, devoted to reinventing British science, technology and innovation through the creation of the British Advanced Research Projects Agency (ARPA). Just like the first ARPA was a response to the Soviet Union, this agency would be the answer to China’s state-sponsored technological progress, cementing Britain’s place on the global scientific stage.

But what is ARPA? In a new paper out this weekend by Professor Terence Kealey, the Adam Smith Institute looks at the history of the state directed research project from the USA and the hopes of its champions in the UK.

It’s yet another example of old ideas dying hard. ARPA, soon to have a British sibling after being strongly championed by Dominic Cummings, was plucked from a project established in the United States during the 1950s. In response to the Soviet’s launching Sputnik, Eisenhower established ARPA to fund pure scientific research – in the hope of creating the technology to beat the Soviet Union.

Eventually, ARPA was found to be inefficient and expensive and so funding was cut and their purpose was limited to purely defense-related applications. Symbolically, the organisation became DARPA, with the D standing for defence. Its proponents thought this change in the early 1970s would lead to the downfall of American science. But instead, as history showed us, private innovation flourished.

You may have heard the story about how the Internet and personal computer technology were funded by the US government. In reality, ARPA made only tangential contributions that largely came to fruition after the leading minds left the organisation as it became focused on defence applications. The ‘brain drain’ from state-funded ARPA to privately backed research ventures like Xerox PARC was the real impetus for the technological revolution. Xerox PARC are the ones who created windows, the mouse, the laser printer, and ethernet.

So what has led Cummings to emulate, to the letter, a less than stellar project from the US? Firstly, he conflates the success of ARPA with the success later found in Xerox PARC and Silicon Valley, and as having all been borne of state funding.

But secondly, and perhaps more saliently, this Government is making the same mistake socialists have made across history; thinking that the genesis of economic growth is central direction rather than bottom-up, market-led innovation. That without government direction, we won’t ever reach the next technological milestone.

And that is the grand misconception with research and development. The idea that the market and private enterprise is failing to devote resources to new and untested technologies, because the risk is too great. So the Government must step in to ensure that our answer to Silicon Valley is Tees Valley. But in reality, instead of bringing jobs and growth to our left-behind towns, it will be a boon to PhD students in established university and metropolitan areas to pursue their pet projects.

Our approach to technological research and development is fundamentally broken. We need to rework our attitudes towards innovation, not just our funds. The Government is seeking to give with one hand, while taking away with the other. It has throttled innovation and enterprise through its policies and throwing money at the problem, without fundamentally changing the environment in which it hopes to make innovation flourish, won’t actually bring jobs or growth or create new technologies.

For too long, our adherence to the European Union’s precautionary principle, whereby we regulate innovative technologies like GM crops, has strangled new developments. Our approach to patents is overzealous and makes it harder to stand on the shoulders of the giants who came before us. High corporation taxes and the factory tax make it too expensive to conduct business in the UK, pushing our leading minds overseas.

All of these things can be fixed, and without spending a dime. Far too often governments, like this one, fail to acknowledge their role in hampering the progress which would otherwise be brought around in a free marketplace. Instead of recognising themselves as the problem, they are set on trying to be the solution.

So instead of spending £800 million trying to copy an idea the United States gave up on 40 years ago, the Government should take a critical look at the ways in which they can revamp our approach to innovation.

Were we to step back and look at what works around the world to increase innovation and scientific progress, we wouldn’t find ARPA, but a free and liberal marketplace for ideas which allows great minds to pursue the radical notion that our best inventions are yet to come.

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.

Daniel Pryor: Letting asylum seekers work is common-sense Conservatism

30 Jul

Daniel Pryor is Head of Programmes at the Adam Smith Institute.

Just over a year ago, former Home Secretary Sajid Javid told Parliament that “it is time for reform” of the outdated ban on asylum seekers working in the UK.

The world has hugely changed since then. But there remains an urgent need to allow asylum seekers to become less dependent on taxpayers, contribute to our economy, and support integration.

That’s why we at the Adam Smith Institute are proud members of the Lift the Ban Coalition: a group of over 200 businesses, trade unions, charities, think tanks and faith groups that campaign for the right to seek work for people seeking asylum.

In a new report, the coalition is calling for the Government to lower the waiting period before asylum seekers can work from one year to six months, as well as letting them apply for jobs outside the highly restrictive Shortage Occupation List (which includes classical ballet dancers and hydrogeologists).

Giving those seeking asylum the right to seek work – unconstrained by bureaucrats who think they understand the labour market better than British businesses – is common sense. Relaxing our current year-long work ban would promote integration with local communities, protect vulnerable people from forced labour, save the taxpayer money, and give asylum seekers the dignity of providing for themselves and their families.

The Home Office announced a review of the current policy 18 months ago, but have been silent since. Unfortunately, Home Office delays are a big part of the problem with our asylum system. By March 2020, the majority of people (31,516) waiting for a decision on an asylum claim were doing so for more than six months: the highest number since public records began. Those awaiting the results are left struggling to support themselves and their families on just £5.66 a day.

Conservatives pride themselves on championing the dignity of work: the sense of meaning, purpose, and belonging that comes from gainful employment. This is something that many millions of us have come to appreciate the value of even more as vast swathes of the United Kingdom remain furloughed.

Frankly, it is cruel and counterproductive to deny that opportunity to asylum seekers who want to use their skills to help rebuild our economy. Sitting at home all day with no job and a meagre government-granted allowance – all in the midst of the Covid-19 pandemic – is a challenge for anyone’s mental well-being.

It also makes it more difficult to successfully integrate into their local communities. Work would give asylum seekers the opportunity to meet and socialise with people, as well as a strong incentive to improve English language skills.

The economic case for reform is equally compelling. Our latest estimates show that lifting the work ban could save taxpayers £98 million through more income tax receipts and less asylum support payments. Previous research on the effects of work bans also points to a potential reduction in crime from lifting the ban: hardly a surprise for conservatives who recognise the link between labour market opportunities and crime.

Other developed countries seem to recognise the benefits, and the UK remains an international outlier on its waiting periods: Australia, Canada and many European countries have far less restrictive rules.

Critics raise concerns that allowing asylum seekers to work would encourage more to come to Britain. But worries about creating such a ‘pull factor’ are not based on real-world experience. A systematic review of research into the relationship between labour market access for asylum seekers and overall numbers failed to find a single study showing a long-term relationship. This should hardly be surprising – most asylum seekers aren’t even aware that they are banned from working upon arrival in the UK, never mind the idea that they base their decision on such information.

Most Brits are rightly unconvinced by the ‘pull factor’ argument. Reform has proven to be consistently popular with the electorate and UK businesses. Survation polling has found that a remarkable 71 per cent of the public believe lifting the ban would help integration, while more than two-thirds of business leaders are supportive of the change.

Lifting the ban is also in keeping with this Government’s wider approach to immigration policy. The Prime Minister has already scrapped the notorious ‘tens of thousands’ target, revived the post-study work visa, and mandated lower, looser salary thresholds in our post-Brexit immigration system. Following these sensible changes with asylum working reform would be a welcome instance of consistency from the Government.

If we’re serious about rebooting Britain post-Covid, we should let asylum seekers work. People from many different political backgrounds support reform, but the key arguments in favour are most familiar to Conservatives. If this Government continually denies access to paid work in favour of state handouts, maintains barriers to integration, and hobbles our vulnerable economy with unnecessary red tape – what is the point of the Conservative Party?

Stamp duty cut welcome, but concerns about “tomorrow’s taxpayers”. Centre-right think tanks react to Sunak statement.

8 Jul

Adam Smith Institute –  Matthew Lesh, Head of Research, said:

“Stamp duty is Britain’s worst tax. This temporary cut is the right move at the right time to get Britain moving. Temporary measures to get young people work experience, to build inwork skills, are also welcome in the face of an increased minimum wage.

“Furlough continues for a few more months but reality will hit eventually. In the forthcoming Budget, the Chancellor should cut the cost of hiring by permanently reducing the burden of employers’ national insurance, remove red tape like occupational licenses, and abolish the factory tax to get businesses investing in their futures.

“The stimulus proposals are very questionable. The VAT cut and subsidising restaurants will be expensive and provide limited benefit. People aren’t spending on food, accommodation and attractions because of safety concerns, not lack of demand or cash.”

Centre for Policy Studies – Robert Colvile, Director, said:

“We welcome the focus on jobs and training, which is what the CPS recently called for in our report ‘After the Virus‘, but the challenge will be how to support the economy as we transition to new ways of working in a post-virus economy.

“You can see the Government is trying to strike that balance with this package, but these measures are temporary, and will have to be paid for down the line. This is why we would like to see the sort of long-term structural change that will maximise growth, support businesses and encourage them to create new jobs without placing the burden on the taxpayer.”

TaxPayers’ Alliance – John O’Connell, Chief Executive, said:

“The chancellor announced a ‘plan for jobs’ but it’s tomorrow’s taxpayers who will have to work hard to pay for it all.

“While the jobs retention bonus will help ensure that the furlough scheme isn’t just an expensive pause on mass lay-offs, taxpayers will be concerned about how and when they will pay the bills for ever-more spending promises.

“It is cheering that the chancellor appreciates the economic benefits of cutting taxes and in particular lifting the stamp duty threshold will provide a boon to the housing market.

“That said, while easing the burden on taxpayers is always welcome, we must look at longer-term tax simplification and put a stop to temporary fiddles.”

Institute of Economic Affairs – Professor Syed Kamall, Academic and Research Director, said:

“We are in an unprecedented situation and there remains the issue that many individuals and families are fearful of leaving their homes to resume every day activities. The Chancellor can only do so much in terms of measures introduced to get the economy moving.

“The cut to Stamp Duty is welcome but why isn’t it permanent? It is a destructive, regressive tax that clogs up the housing market and limits labour mobility. Making it permanent would get the property market moving and encourage those who want to downsize as well as those looking for family houses, freeing up homes for first-time buyers.

“It is disappointing more was not announced to encourage private investment in infrastructure – such as reopening old railways or rezoning to allow homes to be built in places being vacated by shops, such as high streets.”

Resolution Foundation – Torsten Bell, Chief Executive, said:

“Today’s Budget in-all-but-name was a £30 billion top up to a pandemic response that is approaching 10 per cent of GDP and will push borrowing to around £350 billion this year.

“The focus on jobs and some, but not all, hard-hit sectors was very welcome. Kickstart jobs for young people represents a tried and tested policy, but the new Job Retention Bonus is poorly targeted at those jobs that are most at risk of being lost.

“The Chancellor is right to focus VAT cuts on food, accommodation and attractions. However, the lack of support for face-to-face retail means significant challenges for Britain’s High Streets. The innovative meal deal voucher scheme is far too small scale to make a significant difference.

 “The Chancellor, having previously announced huge measures to protect household incomes, has now set out much more normal demand support for the next phase of this crisis. That might be sufficient if the UK sees the V-shaped recovery we all hope fora. But given that this economic crisis is likely to be with us until a vaccine is found, he should expect to be returning with further measures to support the economy in the Autumn.”

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.