Iain Dale: The EU has no interest in Northern Ireland’s future prosperity. It just sees it as a mechanism to exert its power.

5 Mar

Iain Dale presents the evening show on LBC Radio and the For the Many podcast with Jacqui Smith.

Most budgets are curate’s eggs. Good in parts. This one was no different.

Politically, it was a triumph for Brand Rishi. It was well delivered. His post-Budget press conference was slick and smooth. He comes across as a transparently nice and competent individual. That’s because he is.

But was it a budget with a narrative? Was it a “reset” budget? Was it a transformational budget? No, it was not.

It is possible to argue that it couldn’t be anything else than be a budget for the short term, given we have no idea where we will be this time next year, but even if you accept that argument, it disappointed on a number of levels.

The super-deduction measure was innovative and will have a massive event on investment over the next two years. And then it ends. It’s too short term, and should have surely been tapered.

Did corporation tax really need to be increased in one go by six per cent in two years’ time? Wouldn’t a gradual approach have been better, even if you accept it needed to rise. Which I do not.

It’s a tax rise which will inevitably make this country less likely to attract the levels of foreign inward investment in the long term. You can’t argue one day that lowering business taxes is a good thing and makes us more competitive, and then argue that by putting up corporation tax by a quarter still means that we are just as competitive.

Leaving the EU certainly gave some companies pause for thought about locating here, or increasing their presence here. We are lucky that most decided to go ahead anyway, but we do not need to give any company an excuse not to do so.

We may still have the fifth lowest rate of corporation tax among G20 countries, and yes, as Sunak argues, our rate will still be lower than in American, Canada, France, Germany and Italy.

But I’m afraid that argument cuts little ice in a world where the last thing the British government needs to do is do anything to put off businesses considering building a presence here.

Having said all that, two snap opinion polls show that the public approve the Budget with only 11 or 12 per cent disapproving. So from a political point of view, it was job done for the Chancellor. But I still wonder whether a bit more long term, “reset” thinking was needed and that both Sunak and the Government might come to regret that it was largely absent.

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If the pandemic hadn’t happened, surely this Budget would have been all about the post Brexit economy. Brexit wasn’t mentioned directly once in the Chancellor’s speech, although towards the end we heard a few oblique references.

What we needed was a pathway to the future, not just over the next couple of years, but over the next couple of decades. We needed a vision.

Businesspeople needed to be reassured about the future of our trading patterns, not just with the rest of the world, but with the EU. Too many businesses seem to be finding that the so-called “free trade agreement” with the EU is nothing of the sort. The inevitable bureaucratic teething problems in trading with EU countries are still there, two months on.

OK, there are no queues at Dover, but the attitude of (particularly, but not exclusively) of French customs officials leaves something to be desired. I hear time and time again reports that countries deal perfectly happily and efficiently with the US, China or even Russia, yet find it that deliveries to European customers are being returned to them by couriers with no explanation and on multiple occasions. They feel powerless to do anything about it.

And don’t get me started on the Northern Ireland protocol, whose only effect so far as I can see has been to effectively annexe Northern Ireland to the EU. Just as Martin Selmayr threatened.

The EU has no interest in Northern Ireland’s future prosperity. It just sees it as a mechanism to exert its power. It is a constitutional outrage that British companies are not free to trade without restriction to all parts of the sovereign United Kingdom. The checks that are now being demanded by the EU are so disproportionate as to be totally unreasonable. The British government bent over backwards to make a compromise to meet EU concerns that the Single Market could be compromised, but its goodwill has been exploited at every turn.

At some point this has to stop, and the unilateral extension of the grace period is the inevitable consequence of EU inflexibility. It is not, as the Irish government unhelpfully says, a breach of international law. What it is, is a sign that Britain’s patience with the EU on this issue is about to expire.

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I’ve been watching a new documentary on how Donald Trump won the 2016 presidential election called The Accidental President.

It’s made by the British film maker James Fletcher, who is now based in New York. Fletcher will be familiar to many for his work filming David Cameron for the WebCameron project back in the day.

It’s a fascinating account of Trump’s rise to the presidency. There was no narration, no voiceover, just 90 minutes of original campaign footage together with lots of testimony from political commentators, eye witnesses and vox pops.

The most powerful moment was when commentators were asked to name Trump’s campaign slogan. They all trotted out “Make America Great Again”. They were then asked for Hillary Clinton’s campaign slogan. None of them could recall it, bar one, who recalled it was “Stronger Together”. He then followed it up with “whatever that means”.

If proof were needed that political slogans can be all powerful, then we now have it.

Iain Dale: Teaching unions are loud but wrong on vaccines. Besides, what about those without powerful public advocates?

26 Feb

Iain Dale presents the evening show on LBC Radio and the For the Many podcast with Jacqui Smith.

The Coronavirus pandemic has shown how true the maxim is that those who shout the loudest get the most attention.

Take teachers, for example.

And before I go on, I should say that originally I was going to be a teacher (of German, since you ask) and I have the highest regard for the teaching profession.

However, the very thought that teachers should be vaccinated ahead of other groups is for the birds.

There is no evidence that teachers are more likely to either contract or die of Coronavirus than anyone else.

Indeed, the league table of occupations with the most Coronavirus deaths put teachers almost at the bottom.

But the teachers unions have a very loud voice and they used it to persuade the Labour Party to press the Government to put teachers at the top of the next round of vaccinations.

It would have been easy to give in, but they didn’t. And quite right too.

This week the Joint Committee for Vaccination and Immunisation (JCVI) declared that teachers were no more at risk than other people.

What about those who don’t have powerful public advocates – refuse collectors, people who work in funeral parlours, taxi drivers (who top the death list), bus drivers? I could go on.

The JCVI is absolutely right to say that once the 1-9 groups are complete, the rollout should continue to be largely based on age bands.

– – – – – – – – –

Clickbait headline of the week has to go to Pink News, which came up with this gem: “Horny thief steals £600 of sex toys – including a vegan bondage kit”.

The mind boggles. I mean, a leather gimp mask made out of Quorn? Whatever next.

I’m afraid clickbait headlines are not just the province of tabloids. I’ve noticed even The Times has started to get down dirty in the hope of attracting more hits.

This week a headline tried to persuade us that prisoners (at least they didn’t call them “lags”) were going to queue jump and get the vaccine ahead of teachers and police officers.

What a shame the words underneath the headline said nothing of the sort.

Headline writers have a job to do, but that job is not to exaggerate the truth or reality.

– – – – – – – – –

All attention is now turning towards Rishi Sunak’s budget on Wednesday.

In some ways this could be seen as the most important budget for a generation.

It will set the tone for the next decade of rebuilding our economy.

It cannot be business as usual and has to show a huge degree of imagination and understanding of what is needed to recreate an enterprise economy.

Everything must be geared to encouraging economic activity and new business startups. Tinkering with the odd tax rate here and there won’t be enough.

It is also an important day for the Chancellor personally. His popularity ratings are rightfully very high, but this budget will define him for a lot of us.

Has he got what it takes, or will this it all be a bit of a damp squib with decisions delayed and a sense of “meh-ness” pervading the country?

We all accept that debts have to be repaid. But now is not the time to start putting up taxes.

It is rumoured he is thinking of increasing corporation tax.

For a party which traditionally can’t see a tax without wanting to put it up, it is supremely ironic that Labour has declared it would be against a rise, however minimal, in corporation tax.

But it’s a good bit of opposition politics, however opportunistic it is.

To put up corporation or any business tax at the moment would be a complete slap in the face for those businesses who, just as they see a degree of normality (and hopefully profitability) to return, they are told the first thing they will have to do is pay more tax.

There are plenty of people who have done well out of the pandemic, the most obvious being Amazon. It’s fair enough to think of ways of finding new ways of taxing them, but however that is done, it’s important to ensure that it’s not the paying consumer who is hit.

I’d like to see a national insurance holiday for a year for any new business startup. As I said last week, I’d like to see IR35 and the loan charge abolished. This war against the self employed has to stop.

But most of all I want to see a truly radical budget speech.

We are about to find out of what metal Sunak is made.

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I hope you’ve all got your popcorn ready for Alex Salmond’s appearance before a committee of the Scottish Parliament this lunchtime.

It promises to be quite an event.

I don’t profess to be an expert on the internal affairs of the SNP, but I have a feeling that an implosion is imminent.

And at last the English media has woken up to what could well become one of the biggest political stories of the year.

If the worst were to happen (for the SNP, I mean) and Nicola Sturgeon was to be forced out of office, it’s difficult to see who the ready replacement is.

Succession planning was something Salmond did well. He groomed Sturgeon for the job, and few could say with a straight face that she has made a hash of it (although if you work in Scottish education, or parts of the Scottish NHS you might contest that assertion).

She, however, has failed to do that. There is no natural successor.

And that’s a real concern, both for the SNP and for Scotland more generally.

Paul Howell and Heather Wheeler: Full HS2 is critical to our election commitment to rebalance the economy

16 Feb

Paul Howell is the MP for Sedgefield and Heather Wheeler is the MP for South Derbyshire.

After our landslide election victory last year, the Prime Minister made a promise to unite the country and level-up our nations and regions. The jobs-first approach and once in a generation levels of public investment in infrastructure announced by the Chancellor in his spending review set our party on course to deliver on these promises, despite the challenges presented by the pandemic.

The Chancellor has invested in supporting businesses and individuals throughout the pandemic – at massive cost to the Exchequer. But now that the vaccine is being rapidly rolled out across the country, we need to start thinking seriously about the economic recovery. We feel strongly that we need to invest in infrastructure and that in particular, investing in new rail lines, upgrades and new train fleets is one of the best ways to do so.

As Members of Parliament representing constituencies in the Midlands and the North East, we are pleased to see reform of the Treasury’s Green Book rules to unlock future public investment for our regions. Too often in the past, a rigid interpretation of the rules has led to spending in London and the South East, with areas such as ours being overlooked. The reforms under consideration have the potential to turn the situation on its head – essential if we are going to achieve our goals of levelling up.

The publication of the National Infrastructure Strategy is also welcome, as is the unequivocal support it provides for High Speed 2 – our flagship national transport project.

When the Government gave HS2 the go-ahead it recognised that it will deliver vital connectivity, cut journey times and boost capacity. We are aware of the current calls to cancel the project outright given the impact of Coronavirus. However, as Andrew Stephenson recently said, to do so would “send a terrible signal out globally about the UK intending to build back better from Covid-19.”

With over half of the Phase 1 budget for the line from London to Birmingham already spent or contracted to, such calls are frankly nonsensical, and would lead to the loss of 13,000 jobs directly employed by HS2 and tens of thousands more in the supply chain.

Construction is well underway across the route, and British businesses are benefiting, such as County Durham based Cleveland Bridge, a world-leading steel engineering company. It produced twenty-four massive steel girders that form part of the first of HS2’s new modular bridges, recently installed over the A446 in Solihull in just 45 minutes.

Instead, we must continue with this once in a generation investment into UK plc. HS2 will serve as a much-needed catalyst for economic change across many of the cities and towns that are now Conservative constituencies. Many of these areas have seen positive change over recent years but such is the scale of the economic challenge that our levelling-up agenda must double down on investments such as these to drive economic growth and opportunity. This is made all the more important in light of the ongoing battle to contain Covid-19 across the UK, but particularly in our Blue Wall areas.

And to counter those who say the impact of home working and changes to commuting, or the future widespread introduction of autonomous vehicles means that we should no longer invest in rail, we say that is wrong. Demand for rail travel rose year on year since privatisation in 1995 – and pre-pandemic was predicted to go on rising – and we see no reason for this to change in the longer term. HS2 is intended to have an operating life of 120 years; it is right that we are thinking long term and investing in high-speed rail, just as virtually every advanced economy in the world is doing.

Try telling people in Japan, Germany, South Korea, China, Turkey and elsewhere that such investment is a waste of money and you will get an incredulous response. With many more countries now developing national and international high-speed rail networks, we have the opportunity in the UK to establish a world leading capability and export new trains, equipment and expertise to the likes of India, Australia, Scandinavia and many more. This opportunity is too often overlooked, but it has huge potential.

Making sure the British public gets the best bang for their buck from our flagship national transport project and that it truly delivers for the whole country will be vital. Anything less would be a missed opportunity. That is why HS2’s Phase 2b, Midlands Engine Rail, Northern Powerhouse Rail, and our plans to reverse Beeching’s cuts must also get the green light from the Integrated Rail Plan, which we are eagerly awaiting. Furthermore, investing in rail, and shifting people away from car and domestic air travel, is critical to achieving the Government’s net zero targets.

The opportunity from this unprecedented public investment is not just about new tracks, wires, bridges and tunnels – important though they are. We represent areas with rich and unrivalled heritage of train building, with two major rolling stock factories (Bombardier Transportation in Derby and Hitachi Rail in Newton Aycliffe) directly employing thousands of our constituents and supporting many thousands more jobs in their British supply chains.

After too many years of decline, when we saw British train building virtually extinguished, train building is back.

We now have two established UK factories employing highly skilled workers who are producing new trains that improve the journeys of British passengers. Were they to secure the order for the new fleet of very high-speed trains it would secure jobs and investment in regions outside HS2’s Phase 1 route, thereby spreading the programme’s benefits more evenly across the country to regions like the East Midlands and the North East. More broadly, it would enhance and protect vital existing investment in rail manufacturing at a time when the pandemic has created uncertainty across the rail sector.

We cannot waste the opportunity that our Government’s high-speed rail investment plans presents. Using it to level-up the economic fortunes of the areas we represent will make good on the Prime Minister’s promise to first time Tory voters at the last election – to unite our country and re-balance our economy. It is time to build back better.

Miles Briggs: The pandemic has hit betting shops hard. The Gambling Review must do nothing to hamper their recovery.

11 Feb

Miles Briggs is a Conservative MSP for Lothian and Chair of the Scottish Parliament’s Cross-Party Group on Horse Racing and Bloodstock Industry. This is a sponsored post by the Betting & Gaming Council.

The impact of the Covid-19 pandemic and subsequent lockdowns on our high streets is already obvious. Shuttered premises are commonplace in town centres across the UK, and the recovery of the economy will be long and hard.

It is vital, therefore, that governments in London and Edinburgh do nothing to make things more difficult than they already are.

As the Chair of the Scottish Parliament’s Cross-Party Group on Horse Racing and Bloodstock Industry, I am acutely aware of what the pandemic has meant for our betting shops – and the knock-on effect for horseracing, which relies so heavily on the funding they generate for the sport.

With shops closed for large parts of 2020 and no immediate prospect of them reopening, bookmakers – particularly the independent sector – are understandably worried about what the future holds for them and their loyal staff.

The additional £40 million funding from the UK government to help the industry through the pandemic was very welcome. However, the impact of Covid-19 on the sector is significant and the future is uncertain.

All of this is taking place at the same time as the UK government’s review of the 2005 Gambling Act. I very much welcome the review and, with all the pressures and upheaval we have witnessed over the last year, it was encouraging to hear ministers say that the review must strike the right balance between protecting the vulnerable and not spoiling the enjoyment of the overwhelming majority who enjoy a flutter perfectly safely.

As a report last week by PwC showed, the unlicensed and unsafe black market will be the main beneficiaries if ministers get changes to regulation wrong and inadvertently drive ordinary punters in their direction.

Bluntly, the financial viability of sports like racing, darts, rugby league, snooker and much of football – which rely heavily on the support they receive from the regulated industry – is on the line.

I recently visited Midlothian-based bookmaker Scotbet’s Slateford Road shop in Edinburgh and met with management and staff to hear first-hand about the impact the Covid restrictions have had on the company and the wider industry.

In recent years we have seen the decline in the number of independent betting shops. The pandemic has sadly hit them especially hard, given their limited opportunities to adapt and develop online services. Scotbet is a good example of what has happened to high street bookmakers, with its shop numbers falling from a peak of 75 to just 30 today.

Across the UK, there are now 6,750 betting shops, a fall of around 1,600 in the past two years – denying local authorities around £15 million in lost business rates. Over the same period, the number of people they employ has also reduced by nearly 10,000, taking with them the income tax and national insurance they paid to the Treasury.

When you consider that the entire regulated industry – covering betting shops, casinos, bingo and online – contributes some £3.2 billion in taxes to the Treasury, it’s clear that anything that further impacts negatively on this should be avoided at all costs – especially as the Chancellor tries to repair the damage done to the public finances by Covid-19.

Local betting shops are also vital community hubs and are at the vanguard of attempts to promote safer gambling. Staff are trained to spot the signs of someone getting into trouble, and are able to direct customers towards the help they need.

The business challenges arising from the pandemic are significant and will take time to recover from – for all those, like me, who value horse racing across the UK, it is vital that we look to the future sustainability of the sector.

More recently, the Jockey Club has warned of a £60 million shortfall in its revenue if strict new affordability checks being considered by the Gambling Commission are introduced. These proposed changes have the potential to prevent millions of regular punters from placing a bet if the stake is deemed to be unaffordable.

Increased checks can be a good thing if they are targeted at vulnerable customers – but we should be wary of anything that risks driving mainstream customers to the unregulated black market, where there are none of the protections and safer gambling measures which are put in place by licensed operators.

The betting industry contributes around £350 million a year to racing through the levy, media rights and sponsorship, so any measures that affect the viability of betting will inevitably have a negative impact on the entire sport.

I sincerely hope that racing in Scotland – and across the UK – can bounce back stronger in the months and years ahead. A healthy racing industry is not just important for many local jobs, but also the supply chains it supports in places like Ayr, Hamilton, Kelso, Musselburgh, and Perth.

Thanks to the wonders of modern science and our amazing NHS, we are finally turning the corner on the pandemic. It would be a tragedy if well-meaning politicians inadvertently introduced changes which compounded the economic damage already done by Covid-19.

Andy Street: 15 years on, we can finally heal the scars of MG Rover’s collapse

1 Dec

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

The battle to protect our economy from Coronavirus has brought comparisons with previous downturns, re-examining past recessions and reminding us of the impact felt when major industrial players have collapsed.

The levels of borrowing outlined last week by Rishi Sunak are testament to the unprecedented efforts being made by Government to draw on past experiences and protect jobs as we face a new kind of recession.

Here in the West Midlands, there remain acres upon acres of former industrial land which remind us of previous slumps. With government backing, we are now reclaiming these eyesores to provide new homes and job opportunities.

And as we face this latest challenge, I am hopeful that we will finally heal one of the biggest, and most painful, of these scars. Longbridge, in Birmingham, offers an opportunity to use this economic crisis to erase the results of an infamous economic shockwave.

Completing the regeneration of Longbridge would be a powerful example of Conservative policy actively “levelling up” the economy. For 15 years, local people have waited to see this site fully reclaimed. Let’s show them that after three years under a Conservative mayor, and with a new Conservative MP in place, we are ready to deliver it.

For anyone whose roots are in the West Midlands, car making holds a special place in our hearts. As someone brought up in Northfield, just up the road from the famous Longbridge car plant, I am also very conscious of the past of our car industry. Home of “the Austin”, Longbridge at its 1960s zenith was one of the world’s biggest car factories, employing tens of thousands of people producing ground-breaking vehicles like the Mini.

Then, of course, came the painful decline through the disastrous British Leyland years and beyond. The causes of that decline are still the cause of much debate, but no-one can argue about the individual and collective pain that each job loss brought.

This culminated 15 years ago in the collapse of MG Rover, with the loss of the remaining 6,000 jobs. It remains one of the darkest days in the history of Birmingham and the West Midlands.

Psychologically, the closure dented the confidence of a region with a proud automotive pedigree. Economically, MG Rover’s collapse impacted on the thousands of people who worked for the firm and the massive supply chain that supported it.

Physically, when MG Rover shut its gates for the last time it left behind a vast industrial site that reminded us of the closure.

Since then, much of the site has been redeveloped. Developer St Modwen has shown real ambition and vision, effectively building a new town centre on part of site, which also boasts a fantastic college. Aquapak, a firm at the cutting edge of recycled polymers, recently welcomed Alok Sharma to their premises on the new business park there.

The old MG Rover site is being reshaped by a sustainable mix of businesses and housing redevelopment, including state-of-the-art senior living. Yet every time I pass Longbridge, I look across to the parts that remain empty and think about what it once meant for local jobs.

Now I’m determined to complete the regeneration of Longbridge, reclaiming a site that once represented one of our region’s most established industries, by applying one of our newest.

In the last year I have been joined by fellow Brummie Gary Sambrook, the Conservative MP for the area, in this ambition. He has been working with developer St. Modwen to get MG Rover’s “West Works” site redeveloped, and once again generating opportunity for local people.

Together we are promoting Longbridge’s strong business case to be a critical site for Government support through the Urban Transformation Fund. That’s why I submitted Longbridge to Government as one of our region’s top funding bids and it is why Sambrook passionately pitched it to the Chancellor last week in the Commons debate on the Spending Review.

To put it simply, this derelict site – which has been levelled for years – could provide a quite profound and tangible example of “levelling up” in action, and illustrate the West Midlands ability to bounce back from adversity.

That ability is also reflected in the land reclamation technology being pioneered here, which up until the pandemic hit, was cleaning up derelict eyesores like Longbridge and helping us build new homes at record numbers, through our “brownfield first” policy.

The exciting investment in the National Brownfield Institute at Wolverhampton will cement our position as a national leader in remediation and construction technology.

It is fitting that this example of West Midlands 21st Century innovation can be put to use to “level up” Longbridge, given its links to our industrial heritage.

Of course, there is another reason why the fate of the remaining Longbridge site would resonate so much now. The automotive industry is facing huge challenges. The sector is going through a revolution, illustrated by the Government’s ambitious decision to stop the production of petrol and diesel cars in 2030.

Longbridge stood as a reminder of what happens when we fail to invest in our automotive sector. The promise of £500 million in the Spending Review, to back electric battery technology and production shows the resolve not let this happen again. That’s why the Gigafactory that is so critical to our automotive future must be built in the West Midlands.

Longbridge may, sadly, never produce another car – but the site can produce quality new jobs for local people. With a new Gigafactory, we can recharge the automotive industry 15 years after MG Rover’s collapse.

By backing the regeneration of Longbridge, while investing in the West Midland’s automotive future, the Government can not only accelerate its ambitions to “level up” the economy – it can also drive home a profound message about our ability as a nation to bounce back.

Joel Gladwin: International rivals are catching up on the UK’s fintech success. Here’s how we can defend our crown.

27 Nov

Joel Gladwin is Head of Policy at the Coalition for a Digital Economy (Coadec).

Our fintech sector is a great British success story. Investment into UK fintech companies is at record highs, accounting for over a third of all investment into the sector in Europe. Last year, London had more people working in fintech and a greater number of venture capital investment deals than any other city in the world.

Companies like Monzo, Starling, Revolut and TransferWise are all less than 10 years old but they have matured into global brands in their own right. They have also grown into formidable rivals for customers and their cash, putting pressure on the rest of the financial services sector to step outside its comfort zone, innovate rapidly and embrace a fail-fast, customer-centric culture.

Our historic strength in financial services, combined with forward-thinking regulators in the Financial Conduct Authority (FCA) and pro-competition policy in the form of open banking, have all contributed to establishing London as the fintech capital of the world.

But that is enough backslapping for now.

Not only are our international rivals catching up when it comes to the volume of fintech deals, they are also drawing up plans to open up more financial – as well as non-financial – data for their fintechs to access and innovate. These plans go well beyond the limited scope of our own open banking regime. The key to defending our fintech crown will be building on this momentum.

Thankfully, the Government is already starting to think seriously about what comes next, with the Treasury and the FCA embarking upon a number of reviews this year including on payments regulations, open finance and the broader UK fintech sector.

Moving beyond open banking to open finance is the next logical step for our fintech sector’s growth and development. It will open up the savings, credit, mortgages and pensions sectors for innovation – and, ultimately, bring consumers more choice, convenience, and ease when it comes to managing their finances.

In its latest Digital Finance Strategy the EU has committed to establishing an open finance framework by 2024. As someone who was involved in the lobbying battles of getting PSD2 over the line – the EU regulation that made open banking possible – I know full well that this is an extremely ambitious target by European standards.

After all, the bureaucratic wranglings of Brussels led PSD2 to be an extremely lengthy project. It spanned five years (2013 to 2018), one directive, eight guidelines, six technical standards and seven opinions. And it has still not been delivered in parts of Europe to this very day. The UK’s approach towards a functional open finance ecosystem can now be quicker, leaner and more agile.

By returning to our principles based approach to regulation, rather than overly prescriptive technical standards, and enabling the market of AP specialists to get on and build the connections for open finance from below, new research by The Coalition for a Digital Economy (Coadec) suggests that it would be possible to unlock the benefits of open in two years.

This isn’t a novel idea either. It has been the approach taken by the Australian Government which has introduced arguably the most expansive open data regulatory initiative in the world.

The Australian Consumer Data Right (CDR) will give consumers the right to access not only their financial data but also utility and telecom data by 2021, even though they started on their journey two years later than us. A market-led, principles-based regulatory framework will allow the UK to deliver open finance much quicker than our near neighbours.

The Chancellor has also made it clear that he will “review our regulatory framework on financial services” and that “not being inside the EU more generally gives us a chance to do things differently.” One area that desperately needs the Treasury’s attention is the innovation-killing, anti-competitive, EU regulation that forces customers to re-authenticate third party access with their bank every 90 days – known as Secure Customer Authentication (SCA).

Imagine having to send your accountant, bookkeeper or financial adviser a new letter of authority every 90 days just so they can continue to work on your behalf. The chances of forgetting to do so would be high – potentially missing filing deadlines, payroll or important insights on your financial health. But this is precisely the situation that customers of accountancy software and financial adviser platforms face.

As a result, fintechs are forced to endure customer attrition rates between 13 per cent and 65 per cent according to industry data, rates which are not viable for any business at either end of the spectrum. This is made even worse by this process being managed by the very same banks for which open banking measures were introduced to provide competition. There is little incentive for them to get this right.

These barriers have thwarted open banking’s potential to add $1.4 billion to the UK’s GDP on an annual basis, according to analysis from the Centre for Economics & Business Research. It is vital that we address them.

The UK’s regulatory influence on the global stage will endure. Informal channels, networks and knowledge communities have always played a critical role in shaping the content and application of policy frameworks, especially in areas where technological progress necessitates new approaches such as fintech. By moving quickly to embrace an open finance environment, and correcting the deficiencies within existing European regulation, the UK can continue to lead on fintech.

Ed Vaizey: Ending tax-free shopping for international visitors would be disastrous for the British economy

19 Oct

Lord Vaizey of Didcot is a Conservative Life peer who has sat under this title in the Lords since 10 September 2020. Prior to joining the Lords, he sat in the Commons as an MP, and was first elected in 2005.

I bow to no one in my admiration for Rishi Sunak.  Taking up the toughest of jobs at the toughest of times, he has played a blinder. Job Support Scheme, Bounce Back Loans, Eat Out to Help Out. Even though I’m not an MP any more, I know from talking to my former constituents how much this help has been needed and welcomed.

But with the Government having to make so many decisions so quickly, it’s unlikely everyone will be bang on the money. Even in normal times (remember those?) we occasionally saw unintended consequences.

I’m afraid to say that the Treasury decision to end tax-free shopping for international visitors at the end of December is one of those decisions. At the moment, visitors can reclaim the VAT on stuff they buy here. From January, this will be stopped.

I can see why the Treasury thought it was a clever wheeze. They think it will only affect a small group of very wealthy people. If it hits anywhere, it will hit Bond Street and Bicester village – not exactly marginal vote territory.

But there’s a problem. These wealthy visitors don’t just shop – they eat out, they go to museums and the theatre, stay in hotels. They also travel outside London, visiting places like York and the Lake District.

Also, the posh stuff they buy is often actually made here. Yes folks, those Burberry suits are made in Yorkshire. And those French Chanel jumpers are actually made in Scotland. Which is why we are now in the weird position of the SNP Finance Minister calling out a Tory Chancellor for not backing British business.

The Treasury assumptions, which I have seen, act as if the vast majority of visitors will still come, so the Treasury will make a net gain from them paying VAT. But why should they when we will be the only country in Europe not offering VAT-free shopping?

As a result of this decision, they are likely to go to Paris, Milan or any other European city instead of London. In fact, a recent poll of these visitors showed that if the UK ends tax-free shopping 93 per cent would not buy goods here and 60 per cent wouldn’t even bother visiting post the pandemic. Maybe that’s why the French are giving them a nudge by lowering their VAT free threshold the day after the Treasury took the decision.

It doesn’t take many visitors to change their plans. 13 per cent of all-tax free shoppers account for 44 per cent of all tax-free sales. All it takes is for a small proportion of high-spending international tourists to go elsewhere before the impact is felt. The end result is an increase in job losses.

Retailers, hoteliers and airport chiefs from all over the country have warned that scrapping tax-free shopping for international tourists has put 70,000 jobs in jeopardy. The decision is a big blow to the regions. Tax-free shopping supports 1,800 jobs in Edinburgh and 1,200 jobs in Manchester alone, and the money spent in London stores helps high streets throughout the UK.

Most flights from the UK’s regional airports are to and from Europe. Stores in Birmingham and Manchester had hoped to double sales to EU visitors on the understanding that tax-free shopping would be extended to EU countries once we’d left the bloc. Now the likes of Selfridges and Marks & Spencer are warning the impact it will have on jobs across the country instead. This is not what those workers voted for.

If allowed to go ahead, the decision to end tax-free shopping for international visitors will put Global Britain at a competitive disadvantage and result in thousands of jobs losses. I hope our pragmatic Chancellor will think again.

Richard Ritchie: The climate crisis – and this pandemic – have made the case for a carbon tax stronger than ever before

15 Oct

Richard Ritchie is the author of a recent history of a secretive group of Conservative MPs called The Progress Trust (Without Hindsight: A History of the Progress Trust 1943-2005). He is Enoch Powell’s archivist and is a former Conservative Parliamentary Candidate. He was BP’s director of UK Political Affairs.

There is something in the air, and it’s not just carbon or virus emissions. Earlier this month, ConservativeHome carried a piece by Rachel Wolf, championing carbon pricing – that is the polite way of describing some form of carbon tax. Then, the influential economist Dieter Helm published in September a new book, Net Zero: How We Stop Causing Climate Change, which explains in detail the rationale behind a carbon tax. And from The Times, we’ve learnt that the Chancellor is considering such a tax for his next, Covid-19 budget.

It’s not a new idea. When I worked for BP and climate change first entered the political agenda – before, the main worry was that oil would run out and become too expensive – thoughts on how to price carbon were already in circulation. The oil and gas industry saw some merit in the concept, but favoured emissions trading over a tax, correctly identifying this as a less expensive, Europe-inspired fudge. Now, the combination of a pandemic and climate crisis gives the idea of a carbon tax real traction.

The political implications are important. Climate change and Covid-19 have much in common. Both require us to “follow the science”, although in neither case is the science unanimous. Both are manna from heaven for those who wish to “shut-down” the economy, and limit personal freedom. Both provide excuses for expanding the state. And in both cases, the cure can prove worse than the disease.

There can be little doubt that, so far, global policies to reduce carbon emissions have failed. This won’t worry those who are sceptical of the causes of climate change. But if one believes a failure to act now is to bequeath a catastrophe to future generations, then those on the “right” should be as concerned as those on the “left”.

Where we differ will be on the remedies. So far, “left-of-centre” remedies have generally been the norm. The Kyoto Protocol in 2007 and the Paris Agreement in 2015 have been little more than an opportunity for governments and lobbyists to parade their compassion. Whatever Trump’s motives may be surrounding climate change, his analysis of the Paris Agreement is basically sound. Some of course think its failure is due to inadequate targets; but their targets would make the economic consequences of Covid-19 seem trivial in comparison.

So the question is whether there is a policy which would reduce carbon emissions effectively, in an economically rational way. This is surely one reason why Rishi Sunak is attracted by the idea of a carbon tax as a means of reducing carbon consumption.

In Dieter Helm’s view, the word “consumption” is pivotal. It is no good concentrating solely on industrial emissions, as these won’t necessarily have any global effect – it simply drives emissions abroad, frequently to China. But a carbon tax which crucially incorporated a carbon border tax on imports would, by targeting attention on everyone’s personal carbon footprint, incentivise many things which probably make sense in themselves anyway.

There will be many Conservatives who will argue that all taxes do harm, and that the introduction of a “new” tax is incompatible with Tory beliefs. But unless one is totally sceptical of the science, and dismissive of the need to balance the books, there is much to be said for taxing “bads” rather than “goods”.

Of course it is open to many objections. For example, does the Treasury regard a carbon tax as an emergency measure to raise revenue, or a longstanding instrument to influence behaviour? If it is to serve its purpose, it will eventually yield less revenue.

Equally, if applied in the wrong way, it could merely make this country less competitive. Without care, it could prove regressive. Indeed, if the Paris riots over fuel duty are any guide, it could also prove politically impossible.

Then, for it to work, there must be alternatives for consumers to choose from. Not many will choose an electric car, for example, if there is no guarantee that it can be charged along the journey. (Although mention of electric cars also serves as a reminder that not everything is at it seems – an electric car takes twice as much carbon to produce than a conventional one. A carbon tax would sort that out too).

On the other hand, if properly devised a carbon tax has the capacity both to raise government revenue and to reduce carbon emissions, and even to incentivise other countries to follow suit. Matters to be decided include how the carbon price is fixed and at what level it should be introduced. Should it be levied on consumption or production? Does the tax provide sufficient time for consumers to adjust?

This is the political danger. Carbon taxes could come to the rescue of a cash-strapped Chancellor, because they hold out the prospect of raising new revenue without breaking a manifesto commitment not to raise existing taxes. But if the carbon tax is set too high at the outset, it will be counter-productive. If the Treasury is following Helm’s advice, “the trick is to start low, but credibly signal that the price is going to go up as high as is necessary to achieve the (carbon reduction) target.”

There is no painless way of reducing carbon emissions. Those on the “left” will embrace a policy which involves “picking winners”, nationalisation, subsidies, exemptions, regulation and illiberal compliance. A lobbyist’s paradise. The alternative is to incentivise new technologies, create new markets and provide practical signals to consumers. This is the purpose of a carbon tax. It will never be “popular” because the costs of transforming the networks, communications and transport of this country to facilitate lower carbon emissions are enormous.

But compared with the alternatives, a carbon tax is at least rational and addresses all the major sources of carbon emissions, namely agriculture, transport and electricity. Moreover, it produces a new source of government revenue at a time when it is desperately needed.

Any new tax is depressing to a free market Tory. But climate change, like pandemics, raises issues which are more important than economics. If it is a whole load of nonsense to claim that today’s climate change is man-made, then we are free to carry on as we are.

But if not, Tories have an obligation to advocate alternative solutions to those of the socialist “greens”. The market is the best way of allocating scare resources effectively. But in a time of war, the market cannot tell us how much to spend on butter or guns. That is a political choice, and it is the nature of the choice presented by climate change, if most scientists are to be believed. On so many levels and for so many reasons, it is hardly surprising if Sunak is pondering one.

Caroline Nokes: Spare a thought for women. Male ministers have forgotten we exist in their lockdown easing plans.

30 Jun

Caroline Nokes is Member of Parliament for Romsey and Southampton North. 

Covid-19 has taught us many things about the importance of physical and mental wellbeing. We discovered (if we actually needed to be told) that your chances of recovery were greatly improved by being physically fit and in the normal weight range for your height.

We found out that mental resilience was important to cope with long periods of relative isolation, and social contact carried out mainly by Zoom. We were told very firmly that an hour of exercise should be part of our daily routine, and pretty much the only way to escape the house legitimately.

But for women in particular the importance of wellbeing seems to have gone well and truly out of the window as lockdown is relaxed.

Why oh why have we seen the urge to get football back, support for golf and fishing, but a lack of recognition that individual pilates studios can operate in a safe socially-distanced way, rigorously cleaned between clients?

Barbers have been allowed to return from July 4 because guess what – men with hair need it cut. They tend not to think of a pedicure before they brave a pair of sandals, although perhaps the world would be a better place if they did. Dare I say the great gender divide is writ large through all this?

Before anyone gets excited that women enjoy football and men do pilates can we please just look at the stats? Football audiences are (according to 2016 statistics) 67 per cent male and don’t even get me started on the failure of the leading proponents of restarting football to mention the women’s game.

Pilates and yoga (yes I know they are not the same thing) have a client base that is predominantly women and in the region of 80 per cent of yoga instructors are women. These are female-led businesses, employing women, supporting the physical and mental wellbeing of women, and still they are given no clue as to when the end of lockdown will be in sight.

Could it be that the decisions are still being driven by men, for men, ignoring the voices of women round the Cabinet table, precious few of them though there are? I have hassled ministers on this subject, and they tell me they have been pressing the point that relaxation has looked more pro-men than women, but it looks like the message isn’t getting through.

I will declare an interest. Since I first adopted Grapefruit Sparkle as a suitably inoffensive nail colour for an election campaign in 2015, I have been a Shellac addict. The three weekly trip to Unique Nails is one of life’s little pleasures, an hour out, sitting with constituents, chatting, laughing, drinking tea.

It is good for the soul, a chance to recharge and chill out. And for many of the customers it is their chance to not have to bend to get their toenails trimmed, it is a boost to their mood, that can last for a full three weeks until it is time for a change.

And it is a fairly harmless change to go from Waterpark to Tartan Punk in an hour. Natural nails have done very little for my mood since a nice chap from Goldman Sachs told me: “you could go far if only you opted for a neutral nail, perhaps a nice peach.”

At school I was described as a “non-participant” in sport – I hated it, and it has taken decades to find the activities I can tolerate to keep my weight partially under control. Walking the dog is a great way, but nothing is as effective as the individual work-out rooms in a personal training studio – where it is perfectly possible for those of us who do not like to be seen in lycra to exercise in isolation and then have the place cleaned for the next victim.

I am not suggesting it is only women who do not like to exercise in vast gyms, there are men with similar phobias, but what I cannot get over is the lack of recognition that a one-to-one session in a studio is not the same as toddling off to your local treadmill factory.

The Pilates studio owners of Romsey and Southampton North are deeply frustrated at the apparent inability to draw the distinction between their carefully controlled environments and much larger facilities where, to be blunt, there is a lot of sweat in the atmosphere.

I know I get criticised for being obsessed about women – it goes hand in hand with the job description – but I cannot help but feel this relaxation has forgotten we exist. Or just assumed that women will be happy to stay home and do the childcare and home schooling, because the sectors they work in are last to be let out of lockdown, while their husbands go back to work, resume their lives and celebrate by having a pint with their mates.

(And yes I do know women drink beer too, but there is a gender pint gap, with only one in six women drinking beer each week compared to half of men.)

Crucially, women want their careers back and they want their children in school or nursery. Of course home working has been great for some, but much harder if you are also juggling childcare and impossible if your work requires you to be physically present, like in retail, hairdressing, hospitality.

These are sectors where employees are largely women, and which are now opening up while childcare providers are still struggling to open fully – with reduced numbers due to social distancing requirements. It is a massive problem, which I worry has still not been fully recognised or addressed.

Perhaps if the PM needed to sort the childcare, get his nails done and his legs waxed it might be different. But it does seem that the Health Secretary, the Chancellor, the Business Secretary and the Secretary of State for Sport and Culture, who all have a very obvious thing in common, have overlooked the need to help their female constituents get out of lockdown on a par with their male ones.

Am I going to have to turn up to work with hairy legs to persuade them that women’s wellbeing matters?