David Willetts: A Conservative case for welfare spending as well as tax cuts to help working people

5 Jul

Lord Willetts is President of the Resolution Foundation. He is a former Minister for Universities and Science.

It is a key promise of modern market economies that they boost living standards – both for us during our working lives and also for our children who we hope will be better off than us. British capitalism is failing to deliver on this promise. Unless we can raise our game, both our economic model and our politics will face deep challenges.

New research just out from Resolution Foundation shows that the typical non-pensioner income grew by 12 per cent between 2004 and 2019 compared to the previous average of 40 per cent every 15 years since 1961. This shocking decline in economic growth per head and household incomes is a problem which afflicts other countries as well post the crash.

But we have it worse – and one of the most depressing ways in which our situation feels like a return to the 1970s is that dismal sense of relative economic decline. Now typical incomes are higher in France (10 per cent) Germany (19 per cent) and even Ireland (six per cent).

There is one clear overwhelming way of tackling this: increase GDP per head – which means increasing productivity. But although we may endorse that in theory, it is much harder to do in practice. Look at attitudes to reform of planning restrictions. Moreover, a long term growth agenda is not quite the whole story. The working of our labour market and our tax and benefits system matter too.

First, the good news. We continue to enjoy the benefits of a flexible labour market with a relatively high employment rate. One of the protections for household incomes has been the continuing increase in the number of women working. We are now at 75 per cent employment overall. America used to be the model of a high employment flexible economy but it is down to 70 per cent. We can do even better – getting to 80 per cent would be a good target. That means more to get older workers staying in work. And more help into work for people on disability benefits too.

The increase in the minimum wage has also helped. The sceptics – and I was one – were wrong to fear it would cost jobs. But we made another point too: that it could not on its own boost household income and reduce inequality because some low paid workers are in high income households. And there are low income households without an earner at all. Whereas in the past Labour over-claimed for the benefits of the minimum wage, now it is some Conservatives who love the idea that it can raise incomes without having to do anything about benefits. But that is to expect too much of the minimum wage.

It is also hard to tax cut our way to higher household incomes for people on low and middle incomes. One reason is that we have taken so many people out of income tax already – and now national insurance. As a result, average direct rates on low paid employees fell from 13 per cent in 2010 to four per cent in 2019.

They are now rising, but are still very low on any historical measure. I personally have always thought raising income tax allowances is over-rated. It is very expensive, as it is an increase in the tax allowance for everyone, and if the gains are recovered from higher earners it means a messy and very high marginal rate for then.

Moreover, if possible voters should have a real interest in how the Government is spending their money and paying income tax can boost that. (This was of course the old argument for the Poll Tax – so no wonder it has fallen out of favour.)

If there are limits to what can be done for living standards via regulating wages or cutting direct taxes, then benefits have a role to play. There are specific pressure points which need to be addressed. Incomes after housing costs are very low by European standards because rents are so high. And rents are so high because the price of houses is so high. That in turn is because of planning controls and quantitative easing. There could be better targeted help with the cost of childcare.

And, yes, getting rid of the triple lock is one of the ways to pay for this. The total effect of benefit policy changes on the incomes of working-age adults and children since 2010 has been an average loss of £375 per year compared with a boost to pensioner incomes of £510 per year. Shifting the balance of the welfare state like that is very hard to justify.

Is there a Tory case for a fair, balanced welfare state? I think there is.

The classic argument for the welfare state is that the Government is the biggest bearer of risk we have got: it bears the risks we face from sickness, retirement, or unemployment. It is the case made by Bismarck and Beveridge – neither of them socialists. Tories hoped that commercial insurance and friendly societies between them could discharge this role, but there are limits to what they can do – even the US ended up with Medicare and Social Security.

It is not an argument about equality. It is about insurance.

If we don’t have a social security system which protects us from some of these risks, we end up with expensive ad hoc measures in crises. A massive furlough package has now been succeeded by another massive package to help with the cost of energy. They were both bold moves by the Chancellor, but one reason he had to act so boldly was that the tools available in our existing welfare state were so limited.

There is a political argument too. A long term secret of Conservative success is the appeal to people in the middle realistically aspiring to some of the incomes and security enjoyed by the very affluent. There is a real danger if people in the middle instead see their circumstances and their families’ more like the sadly precarious lives of poor people. Then a very different Coalition starts taking shape and one which is much more threatening to Conservatives.

Of course in the long run it is growth and productivity that matters. But there are things we can do now as well to rebalance our welfare state to make it make it more fair and more effective.

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Henry Hill: America provides a timely reminder that law is no adequate substitute for politics

26 Jun

There is a tension at the heart of any system for the extra-political enforcement of ‘fundamental rights’. The system is set up to guard against future shifts in political opinion, yet require a widely-held consensus to operate legitimately which can be destroyed if they fail to track public opinion.

Witness the United States, a profoundly divided society with no common consensus on the nature or extent of the rights provided by their Constitution.

Thus rulings on issues such as free speech, firearms, or abortion, rather than safeguarding common values against the vagaries of the political moment, end up consistently representing a triumph of one part of the nation over the other.

(John Roberts, the Chief Justice, seems to have gone to great pains to try and avoid this, with the perceived legitimacy of the Court his primary concern. But accounts of his conduct, however sympathetic, reveal decisions that owe far more to political positioning than detached legal opinion.)

In the United Kingdom we have, for the most part, avoided this dynamic. Our abortion law, to pick the topic du jour, was settled by Parliament in 1967 and attracts no great public ire today, even as polls suggest voters opinions sometimes trend towards tougher restrictions.

But there are definitely echoes of it in the slow drum beat of anger about the expanding role of human rights law, and the clashes between politicians and our own Supreme Court (one of New Labour’s sad American affectations) in the last Parliament.

Likewise, one can trace the outline of American frustration with Roberts’ caution in the barbed criticism aimed at Lord Reed, the President of the Supreme Court, for adopting a different tack to that of Lady Hale when it comes to judicial review of government decisions. High-minded legal concerns about process seem often turn out to be straightforward political and moral debates about outcomes.

Such distortions are very common in debates over codified rights. For example, you will very often hear critics of the UK’s membership of the ECHR shouted down with cries of “But Winston Churchill signed it!”

This is deceptive on two counts. The more straightforward is that Churchill did not actually sign Britain up to the jurisdiction of a foreign court – that occurred under Harold Wilson.

And this leads to the second and more substantial, which is that membership of the ECHR does not simply entail acceptance of the broadly-worded principles in the Convention. One must instead sign up to a detailed and ever-expanding body of Strasbourg case law, handed down by judges over whom we exercise even less democratic control than do the benighted subjects of the US Constitution.

Viewed one way, it’s an example of a ‘motte and bailey’ argument, with lawyers and activists continually pushing outward the boundaries of Strasbourg’s jurisdiction – such as the decision that it now governs military operations overseas – whilst retreating behind the supremely unobjectionable ‘let’s not be Nazis’ founding document when challenged.

Although at least the Convention is a document explicitly drawn up and ratified, and from which the UK could withdraw, and the US Constitution does have formal pathways to amendment even if that nation is too divided to pursue them.

There is a school of thought in this country which holds that the judges should uphold ‘common law rights’ that sit outside and above the sovereignty of Parliament! In practice, this would mean that the balance of opinion in an ill-defined milieu of jurists and judges would supplant our political institutions as the most powerful force in the land.

Such would be perhaps the ultimate example of one of the most pernicious features of this whole phenomenon: the tendency to mask debates about what ought to be, which are inherently political and should be open to all in a democratic society, as technical debates about what is the case, which afford a privileged role to lawyers, academics, and other experts (as well as those with the cash to bring cases).

America again serves as a fine example. How much breath has been squandered arguing about what the wording of the Second Amendment might or might not mean, rather than on the actual question of what a sensible policy towards firearms policy is? To trying to find a ‘right to privacy’ in the constitution, rather than just making a case for sensible abortion law?

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Pieter Cleppe: The EU, Spain and arbitration – and why it should spare us lectures on the sanctity of international law

21 Jun

Pieter Cleppe is an EU policy analyst, based in Brussels, a research associate at various think tanks, and the editor-in-chief of BrusselsReport.eu.

With Boris Johnson having secured his job for now, attention returns to the ongoing tussles between the UK and the European Union – and Government has published plans to change the Protocol section of the Brexit deal. The goal is to make it easier for some goods to move between Britain and Northern Ireland. The EU is against this, as it claims this would break international law.

So what are the merits of these plans? And how unreasonable is the UK to tear up an international deal after having agreed it?

Yes, the UK signed up to checks in the Irish sea in return for avoiding a hard border on the island of Ireland, but the actual extent of the checks was never agreed. The understanding was that both sides would be reasonable and meet each other somewhere.

Surely this should not be so hard. If the EU is actually worried about goods sneaking into its Single Market – a fair concern – it ought to double down on checks in the ports of Rotterdam and Antwerp, the two big entry gates, not some back alley in Northern Ireland. According to the Mayor of Antwerp, both ports are “leaking like a sieve”.

The EU claims that its proposal amounts to minimising checks. However, what is often lost in this debate is that the EU has attached a stringent condition to ‘minimising checks’. It is demanding that, in return, the UK agrees to a Swiss-style deal on animal and plant standards, which would require the UK to continue to align its regulations with the EU’s.

As Daniel Hannan has argued, this, therefore, does not amount to a concession but to an extra demand, stating: “the real threat is this lamentable tendency in Brussels to think of the UK as a renegade province that needs to be brought to heel rather than as a strategic ally”.

This is really unfortunate, given that the EU could simply offer to minimise checks without making extra demands for regulatory alignment. Due to the standoff, the political situation in Northern Ireland is becoming even more complex than it already was. The Brexit deal did not provide each community in Northern Ireland with a veto, whereas this is one of the core pillars of the Good Friday Agreement to appease the situation. Perhaps one could argue in favour of this factor, but it doesn’t make it easier to sell the Brexit arrangement to the likes of the DUP.

In the end, the EU can drag the UK to court. Strangely, the EU’s own top court, the European Court of Justice, in Luxembourg, has been tasked to serve as the arbiter for differences resulting over anything to do with Northern Ireland. The UK now wants to water down the ECJ’s role. Perhaps the EU should take this request seriously, since having the top court of only one of the parties to serve as the arbiter may not be conducive to getting both parties to accept a fair resolution.

Indeed, the European Commission has already dragged the UK – the UK’s Supreme Court to be precise – before the ECJ, claiming that a February 2020 UK Supreme Court ruling in the “Micula” case – whereby Romania was ordered to pay compensation to investors who lost out on state subsidies – “breached the principle of sincere co-operation, and violated EU law”.

Clearly, the EU’s urge to respect international law does not seem to extend to cases where it is less convenient for the EU or certain member states. At the moment, the EU is also urging a D.C. federal court to overrule a €291 million arbitral award against Spain for having introduced drastic changes in 2013 to its financial support scheme for renewable energy installations, thereby changing the rules of the game for bona fide investors.

The award is one of many imposed on Spain, which is frantically resisting to pay its debt to companies like Nextera, Antin, Eiser or Greentech, having lost pretty much all of the many legal cases against it. Instead of simply compensating the investors, as it is ordered to do, the Spanish government legally challenges everything it is able to.

Overall, Spain has a pretty poor record of complying with arbitration rulings, whereby it finds itself in questionable company, together with the likes of Russia, Argentina and Venezuela. Last year, Spain even intervened in favour of Russia, in the Yukos case, encouraging them also not to pay. In 2011, when the lawsuit against Spain on the basis of the Energy Charter Treaty was launched, Spain was only the second Western European country to face a challenge. At that time, a person close to the groups bringing the case commented: “Spain is now in the same league as Kazakhstan and Azerbaijan when it comes to investor confidence.”

Today, however, in its quest to challenge arbitration, Spain is receiving back-up from the European Union. During its intervention for the American court, which needs to rule on an appeal against the arbitration judgement which Spain lost, the EU is not merely arguing that the private arbitration court would not have properly interpreted the law.

It goes as far to claim that the case should not have gone to arbitration in the first place, referring to the 2018 “Achmea” ruling by the European Court of Justice, which decided that intra-EU legal disputes should not be subject to arbitration.

The reason why arbitration is relevant here is due to the fact that the EU signed up to the multilateral Energy Charter Treaty back in the 1990s. A number of EU member states, including Spain, are now trying to renegotiate the international agreement and have even threatened to withdraw from it.

Perhaps for the future, the EU should spare us its lectures about international law, and focus on finding satisfying solutions on how to implement checks in the Irish Sea that are proportionate with the risk that this would become a back door into the single market. The UK’s proposal to merely check goods arriving into Northern Ireland from Great Britain that are not destined to remain in Northern Ireland is a more than reasonable contribution to squaring the circle.

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Adrian Lee: Witness – what a Cold War classic teaches us about totalitarianism and radicalisation

27 May

Adrian Lee is a Solicitor-Advocate in London, specialising in criminal defence, and was twice a Conservative Parliamentary Candidate.

Seventy years ago, in May 1952, an extraordinary memoir was published that would have a profound impact on the nascent American Conservative movement.

Unusually, the author, Whittaker Chambers, a one-time writer-editor for Time magazine, was a former member of the American Communist Party and a self-confessed Soviet spy.

The 808-page book, entitled Witness, became a bestseller, and was even serialised in the Saturday Evening Post, then America’s most widely circulated weekly magazine.

A cursory glance at the volume reveals the reason for its success: the quality of the writing. Susan Jacoby, author of Alger Hiss and the Battle for History, remarked that Witness was “written with such emotional conviction that it is hard to put down even today”.

Until 1948 few people had heard of Whittaker Chambers. In personality terms, he was not an impressive figure. Chambers, a burly and ponderous middle-aged man, possessed little charm and had no public speaking ability.

Arthur Schlesinger, a writer and historian commented in 1997 on a meeting that he had with Chambers in 1946:

“I was writing a piece on the American Communist Party for Life magazine, and someone told me I should talk with Whit Chambers. I found a squat, lugubrious, unprepossessing, taciturn man initially resistant to my questions and studiously uninformative in his answers.”

Later, Schlesinger succeeded in striking a rapport with him but at the end of their meeting, Chambers informed him that he had originally suspected that he was a communist and was on his guard. T.S. Matthews, Time’s managing editor, remarked of Chambers that there was “a suppressed air of melodrama about him.”

Chambers first entered the public’s conscience by accident. On 31st July 1948, a forty-year-old American, Elizabeth Bentley, answered a subpoena and appeared before the House Un-American Activities Committee (HUAC) to testify at a public hearing of her activities as a courier for Soviet spies.

Bentley, a middle-class woman with several academic degrees, had joined the Communist Party in March 1935 and had subsequently been engaged in espionage until 1945.

The years of stress had taken their toll and by the mid-Forties she was suffering from both alcoholism and depression. The worse her condition became, the more she feared that her Soviet paymasters would eventually dispose of her. Eventually, she defected and became an FBI informant.

At the HUAC hearing, Bentley (dubbed the “Red Spy Queen” by the press) mentioned Chambers’ name as a former Communist contact and a subpoena for his attendance followed.

Amongst the three Democrats and the three Republicans who attended the HUAC session on 3rd August 1948 was a young, first-term, Californian congressman, Richard M Nixon, who’s career progression would be forever linked in the public’s mind to the events about to unfold.

Ironically, Nixon was not initially impressed with Chambers a witness, describing him later in unflattering terms:

“His clothes were unpressed; his shirt collar was curled up over his jacket. He spoke in a rather bored monotone and seemed to be an indifferent if not a reluctant witness.”

Chambers began by reading from a pre-prepared statement which concluded dramatically: “I know that I am leaving the winning side for the losing side, but it is better to die on the losing side than to live under Communism.”

He then went onto describe what he called the “Ware Group”, an underground organisation of the American Communist Party formed in 1933.

Originally established as a Marxist study group, the Ware Group was aimed at recruiting the young graduate elite of the new Roosevelt Administration. Special advisors, senior staffers, lawyers and economists employed within the New Deal agencies were their targets.

This was a huge advancement, as previously the Communist Party had attracted mainly poor, working-class, Eastern European emigres. It was also highly lucrative for the Party, as members were instructed to make “exceptional money sacrifices” each month.

By 1934, it had grown to 75 members, divided into cells. Chambers became the leader of the Ware Group in 1935 and told HUAC that the principal aim of the group was to infiltrate America’s federal government and to place its members in positions of influence.

During the hearing on 3rd August, Chambers mentioned the names of several of the group’s most active participants. One name sent a ripple through the committee room: Alger Hiss.

Hiss was regarded widely as New Deal royalty and one of the most senior high-flyers in the Democratic administration. The 43-year-old graduate of both John Hopkins University and Harvard Law School had served variously at the Justice Department and the Agricultural Adjustment Administration, before transferring to the State Department in 1936.

In 1944 he was appointed as Director of the Office of Special Political Affairs and was responsible for drawing up plans for the new United Nations. In February 1945, Hiss attended the “Big Three” Yalta Conference as part of the American delegation.

(Infamously, Yalta determined the east-west partition of post-war Europe.)

Hiss went on to be Secretary-General of the United Nations Conference on International Organisation, which created the UN Charter. In 1946 he was appointed as President of the Carnegie Endowment for International Peace.

On 5th August, Hiss appeared before HUAC and denied ever being a Communist or having personally met Chambers. Democrats vocally supported Hiss and denounce his accuser.

Chambers returned to the committee on 17th August and in the presence of Hiss, repeated his allegations. Hiss threatened Chambers with a libel action should he repeat the allegations in public. Chambers duly obliged on a national radio programme and Hiss responded by filling a lawsuit.

On 17th November, Chambers responded by producing 65 pages of documents stolen from the State Department in 1938, typed on Hiss’s personal typewriter and a series of letters handwritten by Hiss. Experts confirmed Hiss’s handwriting and the typeface of his typewriter.

On 2nd December, Chambers handed over five rolls of 35mm film allegedly taken by Hiss of State Department documents. It was the beginning of the end for Hiss, who by this time had changed his account of events several times.

Because of a statute of limitations, Hiss could not be charged with espionage, however, the Grand Jury indicted him on two counts of perjury. The first trial ended in a hung jury, but on 21st January 1950, after re-trial, Hiss was convicted. He was subsequently given a five-year prison sentence.

Hiss maintained his innocence until his death at the age of 92 in 1996. Liberal America refused to accept the verdict and turned its venom against the ambitious Richard Nixon.

Following the collapse of the Soviet Union, intelligence emerged that pointed to Hiss being an agent for Soviet military intelligence (GRU) and operating under the codename “Ales”. Daniel Patrick Moynihan, a Democratic Senator, conceded: “Hiss was indeed a Soviet agent and appears to have been regarded by Moscow as its most important.”

Chambers’ memoir, Witness, is a book from a bygone era, but continues to provide insights that are relevant today.

Firstly, it explains how a person who had lost his religious faith replaced it with a utopian political creed. Secondly, it describes how totalitarian states seek to covertly subvert and undermine liberal democracies. Thirdly, the book reveals the process of awakening and de-radicalisation, as the ideology is exposed as a sham.

Finally, it stands as testament to the personal courage of an individual determined to speak the truth, despite facing the wrath of establishment opinion.

Whittaker Chambers became a conservative and a senior editor at National Review. He died in 1961 but was awarded the Presidential Medal of Freedom posthumously by President Reagan in 1984.

Penny Mordaunt: They said a US trade deal couldn’t be done. It can. We are doing it.

27 May

Penny Mordaunt is Minister of State for Trade Policy, and is MP for Portsmouth North.

Proper Conservatives are used to being shouted at by armchair lefties. Check the scenes below the line if you want a taste. Brexiteers are bigots. Conservatives are evil. Tory scum (ironic – given that the soft water areas of Yorkshire and Lancashire were where the Labour Party was so heavily defeated).

Still, we get used to it. They said we couldn’t revive the private sector during the Seventies. We did. They said we couldn’t retake the Falklands in the Eighties. We did. They said that the EU was an unstoppable enterprise in the Nineties. It wasn’t. They said we were finished as a party two decades ago. We weren’t. A decade ago they said Scottish independence was inevitable. It wasn’t.

We also get used to hearing how much more superior Labour would be in government, if only it had the chance. Perhaps it would intrude on the delusion to recall their track record? In 120 years of the Labour movement from Keir Hardie to the present day a Labour Leader has only been returned to office twice. We should be confident about what we stand for. We should remember that, more often than not, it is Conservatives that have been in tune with the British people. Part of the reason for that is our respect for those who step up and take responsibility, particularly those who create wealth and opportunity.

What comes from the liberal left is a unique combination of the deeply ignorant and the profoundly opinionated. It is half-baked certainty sitting on a thick base of groupthink. It’s the sort of certainty that can only come from over-educated under-achievers. People who have never done anything. Never created or built anything. People who don’t value others that do.

Since Brexit, it has become fashionable to say everything is an economic disaster. Well, that isn’t true either. We have record low unemployment and the country remains one of the largest recipient of foreign direct investment. Not despite Brexit. Because of it. Despite the challenges of the pandemic we are starting to realise the trading opportunities that come from our new freedoms.

The Left are at it again on the subject of a Free Trade Agreement with the US. They ignore that we have completed five rounds of negotiations at a federal level. They say of our state level efforts: “Individual states cannot sign trade agreements.”

They can. (California did so with Japan only in March this year in a deal to boost trade and tackle climate change. They say: “The Americans have sent us to the back of the queue.” They haven’t. Britain remains one of the largest foreign direct investors in America. They say: “US Federal officials just aren’t interested in UK all the time there are negotiations on the Northern Irish Protocol”.

Frankly, that’s irrelevant. Wherever I’ve been in the last year at the state and City level, I’ve been welcomed by open-minded, helpful and collaborative officials. They don’t care where I’m from. All they see is mutual opportunity. They say: “you should not just focus on the federal level.” In fact, 93 percent of all US economic growth will come from the metro areas. This makes Mayors as relevant as State Governors to nations and regions looking to forge partnerships and open up trade.

This week, we sign the first Memorandum of Understanding (MoU) with an American state, with almost half of the 50 Americans states to follow. The trailblazer states include: Indiana, Oklahoma, North and South Carolina. It is expected that Texas will be one of the first eight states to sign an MoU with the UK.

This first agreement, with Indiana, marks a milestone in UK’s trade with the US. It will help open the door to businesses looking to export or invest in the state. It will increase collaboration on clean tech to fuel sustainable economic growth. Above all else, it shows UK ‘state level strategy’ is securing results.

The MoU format creates a framework to remove barriers to trade and investment, paving the way for UK and local businesses to invest, export, expand and create jobs. The state of Indiana is an entrepreneurial powerhouse, offering UK firms significant opportunities in areas like renewable energy, advanced manufacturing and pharmaceuticals.

The UK is the seventh largest export market for Indiana, and the state buys $1.4 billion worth of goods from the UK. This agreement will accelerate and grow this even further. The agreement specifically will look to improve procurement processes and strengthen academic and research ties, enabling easier collaboration. It will support our professionals with provisions on diversity aligning with our levelling up agenda to ensure economic growth benefits all communities across the country.

It will help talented people from the UK and US to work in either country by clearing the way for their professional qualifications to be mutually recognised. We are focussing on four priority professions – architecture, engineering, legal services, audit and accountancy for mutual recognition of qualifications and processes.

The deepening of relationships at state level is leading to some interesting new opportunities. There are offers to swap officials in key government departments, so our respective teams can learn more about how we both operate. Agriculture Commissioners in the US and DEFRA officials have expressed an interest in participating. Some US states have offered to fund UK businesses and producers to visit the US and learn more about their market. In return, we are partnering up different parts of the UK with places we want to help level up in the UK. The whole process has created real momentum towards a federal deal too.

The state-level strategy is paying off and this is just the first of many agreements we’ll be signing in the future as we look to bolster our £200bn trading relationship with the US. Green trade will be at the heart of talks as both sides look to accelerate clean tech development, with a particular focus on electric cars and low emissions technology solutions. This agreement is just a beginning.

How has this happened? With flexibility, determination and imagination from our civil servants and economic staff. Despite the hammering that they get from media, our colleagues have worked wonders. With great ideas from organisations like the IEA focused on removing the barriers that bring people, ideas and capital together. With great business engagement and a determination from Government to deliver the opportunities Brexit promised.

Government can and is creating the infrastructure for enterprise. For many years business has been told to wait for government, for the rules to be established. It is time for business to assimilate a new enterprise culture. It is time we let it.

Peter Franklin: Don’t turn the Conservative Party into a cargo cult

23 May

Peter Franklin is an Associate Editor of UnHerd.

In the 1930s and 40s, the US military established military bases across the south Pacific. As a result remote island cultures, with little or no contact with the outside world, suddenly found themselves face-to-face with the might of twentieth century America. Though the islanders were in no position to understand the outsiders’ technology, for a brief moment they were able to share in its benefits. But then something terrible happened: the visitors went away again.

It may be that some of the islanders were happy to see the back of the Americans, but others were desperate for the visitors — and their hitherto unimaginable wealth — to return. Indeed, in some places that longing took on a religious aspect.

So-called cargo cults sprang up in numerous locations. Cult practices sometimes took the form of ritually re-enacting the mysterious things that the visitors got up to — like clearing landing strips in the jungle. In other cases, mock aircraft were created out of local materials and symbols like the Red Cross reproduced as objects of reverence. The hope was that such rites would somehow bring back what had been lost.

Cargo cults might seem ridiculous to us — and in fact the term itself has fallen out of academic favour for that very reason. However, we westerners would be foolish to assume that we’re not susceptible to the same kind of thinking. Instead of working through the challenges that face us in the here-and-now, it is often easier to re-enact scenes from an imagined heyday.

Of course, there’s nothing wrong with respecting the past and trying to learn from it. But equally we must be aware that our problems are constantly changing, and the solutions that we apply must change with them.

I’m worried that a discombobulated Conservative Party has forgotten this. Consider, for instance, our response to the return of inflation — and the criticism directed at the Bank of England for not getting on top of it. Clearly, we’ve got a major problem on our hands, but the idea that we can solve it by yanking up interest rates — because that’s what worked before — is pure cargo cultism.

The inflationary monster today is not the same beast that was slain in the 1980s. Nor does its origin lie in the last decade or so of very low interest rates, otherwise it would have shown itself years ago. Rather, the beast was born out of the extraordinary disruption to global supply chains caused by the pandemic and compounded by Putin’s war.

There was a furious reaction when the Governor of the Bank of England, Andrew Bailey, suggested that policymakers were helpless in the face of these inflationary pressures. Bailey could have chosen his words more carefully, but he’s a lot closer to the truth than those who believe that UK interest rates can control global commodity prices.

Other Conservatives see a lack of growth as a bigger problem than rocketing prices. In the long term, they’re probably right — but they’re wrong about the means by which they want to revive the economy: i.e. tax cuts. Again, we see a demand for the ritual re-enactment of policies from the Thatcher era; but the conditions that applied then don’t apply now.

We’re not perpetually on the wrong side of the Laffer Curve. Rather our number one economic problem is the chronic failure of British business to invest in productivity improvements — despite the incentives of lower Corporation Tax, cheap migrant labour and minimal borrowing costs. The Chancellor acknowledged this structural impediment in his Mais Lecture earlier this year, but even he felt the need to appease the tax cut fetishists in his ill-fated Spring Statement.

The ritual re-enactment of past triumphs isn’t limited to economic policy. The Conservative cargo cult is also attempting to resurrect the Right to Buy. To widespread groans, the Government has dusted off a policy to extend the Right so that housing association tenants can buy their homes too.

This is fine in principle, but the offer isn’t attractive without a hefty discount on the market value of the relevant properties— and who is going to pay for that? First proposed in 2015, the Government has already tried, and failed, to make this policy work. There’s no reason to suppose that a second attempt will be any more successful. One has to ask whether a serious effort will be made at all — or whether the announcement was just an excuse to conjure up the past.

However, I don’t want to give the impression that the conservative cargo cult is only about the 1980s. Thatcherite nostalgia is big part of it, but there are more recent triumphs to hark back to — not least, our miraculous escape from the clutches of the EU.

However, the problem with getting Brexit done is that you can’t do it again. Or can you? One fears that the main reason why the government has chosen this moment to unpick the Northern Ireland Protocol is that it needs a Brexity distraction. But if they think they can summon up the spirit of 2019, they’re badly mistaken. Brexit was about getting the EU out of our lives and allowing the UK to forge its own path. That means levelling-up and shaping and economy that works for everyone, not refighting old battles.

That’s why my heart sank when I read about Suella Braverman’s call to bring back the Conservative Party’s torch logo. Digging up this old totem really would be the ultimate cargo cult move. But anyone who thinks that dressing up in Margaret Thatcher’s clothes is going to stop Labour from taking back the Red Wall or the Liberal Democrats from making in-roads down South is deluding themselves.

If the Conservative Party really wants to honour its past, then, like Thatcher, it must fearlessly face-up to and tackle the problems of the present. If that means breaking new ground and attempting the previously impossible, then so be it. After all, our greatest duty to tradition is to take it forward into the future.

Ben Roback: Overturning Roe vs Wade could supercharge the Midterms – but to what effect?

18 May

Ben Roback is Vice President of Public Affairs at Sard Verbinnen & Co.

As if domestic politics in the United States needed another reason to become even more split along partisan lines, a leaked draft Supreme Court opinion rocketed the abortion debate towards the very top of the political agenda once again.

There is a very realistic possibility that the highest court in the land, with a 6-3 conservative majority, will overturn the 1973 ruling that legalised abortion across the United States.

The Politico leak, a deeply controversial story in its own right, revealed the Court’s view that the Roe v Wade judgement is “egregiously wrong”.

If the Court follows the draft opinion this summer, at least 26 states would be set to ban abortion entirely with 13 of those prepared with “trigger laws.”

The Supreme Court is considering a case which challenges the state of Mississippi’s ban on abortion after 15 weeks. Should the Court rule in favour of Mississippi, it will in effect end the constitutional right to an abortion and make abortion rights a decision for individual states once again.

Deep red Republican states have not waited for the Supreme Court to deliberate. States like Mississippi, Oklahoma, Texas, Idaho, and Arkansas have been advancing the pro-life agenda for years. It is a regular reminder for Democrats of the importance of down-ballot elections and gubernatorial races.

Consider two examples. First, Mississippi has a trigger law if Roe vs Wade is overturned. The law would ban all abortions except when continuing the pregnancy puts the person’s life at risk or if the pregnancy is the result of a rape in which a formal charge is filed with the police.

Second, Oklahoma, where Governor Kevin Stitt (R) signed a recent bill into law that bans abortion after six weeks: when cardiac activity can be detected by clinicians in the embryo, but typically before a woman knows she is pregnant.

Public opinion remains broadly against overturning Roe. According to an SSRS poll conducted following the Supreme Court leak, 66 per cent say it should not be completely struck down and 59 per cent would support Congress passing legislation to establish a nationwide right to abortion – an impossibility, based on the current political composition of Capitol Hill.

The potential to energise both sides ahead of the 2022 midterms

The key question is what impact the turbocharging of abortion as an election issue will have on the November elections, and especially the extent to which it boosts turnout.

Republicans are comfortable getting on the front foot and advocating pro-life policies. Democrats will fight tooth and nail to defend a woman’s right to choose and recognise its central importance to their voter base. All that points to an intensely motivated voter base on both sides.

Two polls published either side of the leak reveal the potential for a knock-on effect. The share of registered voters who say they are “extremely” or “very” enthusiastic about voting rose six points between the first poll and the second.

There was only a negligible difference across party lines: 43 per cent of Democrats are now “extremely” or “very” enthusiastic. That figure is 56 per centamongst Republicans.

Furthermore, 47 per cent of younger adults say they would feel “angry” if Roe was overturned, but only nine per centof that age category are “extremely enthusiastic” about voting this November.

Can Joe Biden and Democrats across the country convert the anger of young people into votes? If they can, it holds the key to having a transformational impact on the outcome of at least the more marginal races later this year.

Despite abortion access being one of the most politically entrenched issues in US politics, uniformity is not guaranteed among party lines.

Joe Manchin, the Democratic senator representing the red state of West Virginia, is on the record as describing himself as “pro-life and proud of it”. Susan Collins and Lisa Murkowski are two rare Republican abortion rights supporters in the Senate.

A Senate vote last week exposed the fissures in party unity; independent-minded senators cannot be simply lumped in with the view of their party.

The debate around abortion rights has brought protestors to the streets in front of the Supreme Court and state legislatures across the country. But whilst Roe vs Wade feels instrumental right now, it would be remiss to lose sight of the fact that the economy is the issue most likely to be a driving force for voters come November as petrol, food and energy prices all continue to rise.

On the economy, 46 per cent of adults say the Republican Party’s positions are more aligned with their own, compared with 31 per cent for the Democratic Party.

The Supreme Court’s decision on Roe vs Wade matters, but it is more likely to be the state of the US economy that has the biggest impact on the November midterms.

Garvan Walshe: Finland and Sweden’s NATO application shows how much Russia has already lost 

12 May

Garvan Walshe is a former National and International Security Policy Adviser to the Conservative Party.

Finland and Sweden applying to join NATO is more evidence that Vladimir Putin’s invasion of Ukraine has been a monstrous mistake. Moscow has maintained an effective veto on Swedish and Finnish membership since ether Cold War. Now, with Russian troops bogged down in the Donbas, Helsinki and Stockholm can join while Russia’s too busy to do much about it.

It also complicates Putin’s tactical situation.  NATO forces could soon be positioned to open a second front north of St Petersburg, limiting Russia’s ability to intimidate the Baltic States, and to broaden the directions from which Murmansk on the Arctic coast can be subject to counterattacks.

Instead of Finland defending a 830 mile border with Russia, Russia will now have to defend another 830 miles of border with NATO. The island of Gotland, from which the Baltic Sea can be controlled, will be a NATO, not just a Swedish, island.

But the most important difference is geopolitical. Look at the globe from the top, and list the countries across the Pole from Russia: the United States (through Alaska), Canada, Greenland, Iceland, the UK, Norway, Sweden and Finland. This arc sweeps down through the Baltic States, Poland and the other countries that escaped Soviet domination in 1989, to Ukraine. All except Ukraine are in NATO – and Ukraine is inflicting the biggest defeat of Russia since the Japanese in 1905.

Apart from the US and Canada, which must also pay attention to Chinese ambitions in the Pacific, all these states see resisting Russian aggression as their main defence policy task. 

This will remain the case until the Russian state comes to understand that its purpose should be to improve the lives of Russian people, and that this is hindered, not helped, by paranoid militarism. Yet that process won’t even begin until Putin leaves office, and could well be reversed, even if he’s followed by a liberalising successor. Both Tsar Alexander II’s and Boris Yeltsin’s openings were overturned.  

These first-line states, of which the UK, Poland and Ukraine are the main military powers, can expect to maintain decades of containment of Moscow. As well as strengthening their own cooperation, they need to keep the rest of the Western alliance involved. 

Even setting aside the risk of a second Trump administration, a United States that returns to isolationism, or is simply focused on China, would be unable to help mount a defence against Russian aggression in the way it has this time. Continental European powers such as France and Germany under less immediate threat to Russia need to be persuaded who their real friends are.

The German government is divided. While Annalena Baerbock, its Foreign Minister, has been steadfast in her support for Ukraine, Olaf Scholz appears to lack the courage of his convictions, and needs continually to be pushed to live up to the Zeitenwende he announced immediately after Russia invaded.

And as Emmanuel’s Macron’s speech on Monday showed, France still struggles to shrug off its reflex of seeking somehow to involve Russia in contributing to security in Europe. This thinking has long been obsolete: a democratic Germany inside the EU has long made a Russian balance to Prussia unnecessary, and Poland’s integration into the West made it unsustainable.

But winning the political battles in France and Germany (and maintaining Mario Draghi’s new pro-Ukrainian consensus in Italy) will take more concerted diplomatic effort. It’s been entertaining to watch the friendly rivalry by former European schoolmates as they compete for visits to Kyiv and videotaped addresses by Volodomyr Zelensky. Whether they are Anglo-Swedish NLAWs (anti-tank weapons), US Javelins, German Panzerfausts or French CAESAR howitzers, all contribute to Ukraine’s fight for freedom. This is not a race, but a collective effort in which all democracies should take part.  

Finland and Sweden’s entry into NATO, accompanied by British security guarantees for both countries until the NATO accession process is complete, is one such initiative. Denmark joining the EU’s defence policy (it currently has an opt out: a referendum is due on 1 June, and ‘join’ has a 20 point lead) is another.  The requirement is not necessarily unity of institutions, but unity of action, which must be pursued through NATO, EU initiatives and the British-led Joint Expeditionary force. 

Next winter, when inflation and high energy prices are due to bite, will prove critical. Russia will put every ounce of its political manipulation effort into splitting Germany, France and Italy from the front line states. It is an essential British interest that these efforts fail. 

Lasting peace in Europe will only come once Russia, like Germany has, abandons imperialist ambitions, reforms its militaristic culture, and retreats from all territory in other states that it has occupied. Putin’s defeat won’t be enough on its own to trigger the introspection and reconstruction that Russia needs. But it is a necessary step, and his inability to enforce Moscow’s ban on Finnish and Swedish NATO membership is evidence that he is starting to lose. 

John C Hulsman: Putin’s war casts a bright, cold light on a new geopolitical era

21 Apr

Dr John C Hulsman is the Founder and Managing Partner of John C Hulsman Enterprises, a global political risk firm. He is also a life member of the US Council on Foreign Relations.

Crises clarify, and none more so than the tragedy of war. Wars sometimes directly change the geopolitical trajectory of the world. But they always, as a bolt of lightning illuminating the darkness, make clear the geostrategic landscape around us.

In the present case of the Russian invasion of Ukraine, before the war the dim geostrategic outline of our new era was becoming clear.

The seminal global competition of the age was a bipolar conflict between the world’s only two superpowers, the only two countries with a genuine global reach: the United States and China.

However, infinitely complicating things, beneath this overarching contest a series of great powers (unlike in the 1945-1991 Cold War) had a good deal of strategic autonomy, having it in their power to either side with one of the superpowers or follow their own independent/neutralist path.

Before the fighting, great powers Japan, India, and the UK/Anglosphere firmly sided with the US while the EU veered between neutralism and its traditional ties with America, even as Russia oscillated between neutralism and a junior role alongside China.

But war, as ever, has scrambled things, as geopolitics – so often glacially slow – has moved along at a torrid pace where recently weeks have felt like decades.

Three changes in the global order

With the coming of the war, three decisive geopolitical trajectories have changed at the global great power level. The wobbling of both Russia and Europe has come to an end, definitively ending their collective flirtation with neutralism.

First, a vengeful, humiliated, cornered, and economically threatened Russia now has no choice but to definitively side with China, needing Beijing’s help to economically survive the overwhelming American-inspired global sanctions put in place against it, and the effective weaponization of the dollar.

As we recently wrote here, for Putin it is better to be China’s junior partner – Robin to Beijing’s Batman – than to be isolated as an international pariah. So, Russia has moved definitively into Beijing’s superpower camp.

Second, and at the same time, the EU, shockingly, has at last awoken from its generations-long strategic slumber. Pivotal Germany has, incredibly, committed to re-arm (along with Poland and Sweden) which, if carried out in the medium-term, gives the continent the combined military dimension it has sorely lacked since the 1950s.

After years of former Chancellor Angela Merkel’s disastrous, somnambulant energy policy, leaving Berlin utterly dependent on Russian natural gas, painfully a new EU-wide approach to energy—at last taking security of supply into account—is in the works, with natural gas from the US, Qatar and Norway diluting Russia’s stranglehold on a heretofore-oblivious Europe.

Finally, and profoundly, after Merkel’s ruinous flirtation with mercantilist isolationist neutralism, the new government of Olaf Scholz is firmly back into the Atlantic camp, in a way that was unthinkable, even just months ago. The West, with US, Japan, the Anglosphere, and the EU all onside, has a decisive edge over the revisionist autocracies of China and Russia.

For those of us who prefer to live in such a western-dominated order this is very good news, indeed.

And now the bad news

But there is more ambiguous, even ominous, news beneath this positive geopolitical headline. At the next layer down from the great powers, looking at regional power configurations across the globe, the West’s dominance is not the real story.

For while the West is united, the developing world is hedging over the Ukraine war, and its ultimate strategic orientation. Beguiling India – where Boris Johnson is making an official visit as we speak – is the canary in the coal mine, illustrating that all is not well.

Since the end of the Cold War, and with the subsequent rise of China, New Delhi has steadily drifted towards the American orbit. New Delhi’s strategic fears regarding the threat of Chinese adventurism were decisively confirmed when Beijing attacked India along their de facto border in the Himalayas in May 2020, a clear act of Chinese aggression.

Before Ukraine, due to their developing ties in the Indo-Pacific balancing against the common Chinese foe, India has been increasingly confidently seen as fitting snugly in the overall US-dominated, democratic great power camp.

But the subcontinent has a way of upending facile Western characterizations. Over the Ukraine War, New Delhi – despite a lot of American and European diplomatic pressure – has steadfastly clung to a policy of neutrality, refusing to castigate Russia for its obvious aggression.

Strikingly, India (unlike Japan, the EU, and the Anglosphere countries) has not quickly and reflexively jumped on Washington’s pro-Ukrainian bandwagon.

There are numerous interest-based reasons for this strategic divergence.

First, historically, India long sided with the USSR during the Cold War; support for Russia even after 1991 is a long-ingrained habit.

Second, Russia remains New Delhi’s largest source of weapons imports, even as the US, Israel and France have gained market share.

Third, an oil-hungry and energy-poor India has spotted the chance to obtain Russian oil and natural gas at bargain-basement prices, as the US and UK energy blockade of Moscow comes into effect, and the Kremlin looks to divert its overall energy supply from a suddenly hostile West.

These basic points of national interest were all present before the Russian invasion, but it took the crucible of war for the world to see that maybe India was not yet prepared to march in lock-step with the American-dominated world after all.

Worse, from a Western perspective, India is not alone in disdaining the American lead. Significant regional powers in the Middle East (including traditional US allies Saudi Arabia, and the UAE, as well as usual suspect Iran), and outliers North Korea, Venezuela, Cuba, and much of Africa, have studiously clung to a path of neutrality regarding the conflict. I

n fact, over Ukraine, it would be far more accurate to say that while at the great power level the West is presently dominant and that it is united around a pro-Ukrainian policy over the war, the rest of the developing world, epitomized by emerging great power India, are far from being in the Western camp.

The good news for the West then, is that it is surprisingly united as the new era dawns. The bad news is that the rest of the world has yet to follow its lead. Worse still, the developing world’s two great power champions, China and India, while increasingly hostile to one another, share an antipathy for merely going along with the West in our new era.

It will take realism, and a Bismarck, for the West to maintain its dominance in the decades ahead. But it can and must be done.

Ben Roback: Biden looks like he’s lost control, and Democrats will pay the price

20 Apr

War abroad. Economic pain and legislative stagnation at home. The White House can’t control it all, but voters are punishing the president for issues within and beyond his control.

In times of crisis, political leaders look for signs of optimism. For Joe Biden’s White House, they are few and far between, and the warning signals are flashing ahead of midterms in November and the presidential election in 2024.

Take a whistlestop tour around the world. The global economy is reeling from Russia’s invasion of Ukraine, sending wholesale energy prices and the cost of raw materials skyward. The World Bank has slashed its forecast for global growth in 2022 from 4.1 per cent to 3.2 per cent.

Supply chains that were already choking are now on the verge of collapse. Covid refuses to disappear, and its ongoing presence is exacerbated by flawed and failing “zero covid” strategies.

Voters might be minded to give the president a pass for global problems beyond his control. After all, the White House has only a limited capacity to shape a labyrinth of geopolitical affairs, just as Donald Trump could not have been fairly or squarely blamed for the outbreak of novel virus in a provincial Chinese market.

Should we therefore take the latest presidential approval ratings with a pinch of salt?

Four polls in the last week ranged from the low-30s to the low-40s for presidential approval rating. In the polls by Quinnipiac University, Hart and CBS News, Biden was lowest or tied for lowest presidential approval rating. He is now closely tracking Trump, who routinely broke new ground in presidential unpopularity.

Giving the President the benefit of the doubt would make sense if he was underperforming abroad but overperforming at home. Neither are true.

In the United States, inflation has hit a four-decade high, and the Federal Reserve is considering an aggressive pullback of the kind of support it injected into the economy during the pandemic. Goldman Sachs put the odds of a US recession at 15 per cent in the next 12 months.

Energy and petrol prices are both soaring, and opposition Republicans have waged an effective campaign that lays the blame at Biden’s door. Gun violence, to which we have all become depressingly accustomed, continues to rage without any sign of political intervention.

That is not to say Biden’s presidency has been a failure. But big promises made in the general election on societal changes like police reform and expanding voting rights have stalled furthering the notion that this is an administration that’s lost its way.

The legislative agenda gives deeper cause for concern

Democrats may try to convince themselves that legislative progress is being stalled in Washington and political oxygen sucked up by complex foreign affairs. Voters cn be forgiving of legislative inaction on the kind of societal changes on which Biden campaigned based on the deep-rooted unpopularity of a deeply divided Congress and largely inept political class in Washington.

“Not getting things done”, in this view, is a curse on all political houses.

But if the legislative agenda is a tide, then it is increasingly turning against Democrats. On three key policy areas, Republicans are dictating the direction of travel and setting the terms of the November midterms and 2024 presidential election.

Abortion access is under genuine threat from Republican state lawmakers and governors who are hell bent on using their local power to limit freedom of choice. It sets the tone for a nationwide discussion in the coming weeks on Roe v Wade when the United States Supreme Court rules on a controversial Mississippi law that directly challenges the landmark 1972 legislation.

On education, Republicans are successfully driving policy at the state level. Glenn Youngkin won the Virginia governorship by putting education policy and parental rights at the heart of his campaign.

Governor Ron DeSantis is trying to do the same in Florida through the “Don’t Say Gay” Bill. The Sunshine State has just rejected 41 per cent of new maths textbooks citing critical race theory as a principal reason.

Democrats continue to struggle to coalesce around a response and it looks increasingly like they are ceding the education and parental rights debate entirely.

On immigration, voters are weary of a porous southern border. Nine Democrats have now publicly expressed opposition to the White House’s current policy position to end the use of Title 42 authority to deny asylum claims at the US-Mexico border by next month.

Immigration is a ripe campaign topic for Republicans when Democrats are in opposition. The controversy surrounding Title 42 deeply endangers Democratic incumbents in states that could decide the Senate majority in November.

Warning lights flashing for November 2022 and 2024

Voters might give Biden a pass for the global context shaping domestic politics and economics, but there is no political excuse for failure on kitchen table issues like crime and the economy.

Safety on the streets and enough money for petrol in the tank and food in the shopping basket are simple to understand, not intricate foreign wars.  Fail to get on top of both and the Democrats will not only face wipe out in the November midterms, but they can also kiss the White House goodbye in 2024.

The President is posting record lows for his tenure and closely tracking Trump, his historically unpopular predecessor. Popularity is down amongst Hispanics, African Americans and young voters.

Covid is on the decline in the United States and the White House has an historic Supreme Court nomination on which to campaign. But if the current pattern continues, punishment for the Democrats in November 2022 and 2024 looks increasingly inevitable