David Green: A referendum in Northern Ireland is the way to break the Protocol logjam

20 May

David Green is a trustee of Civitas.

A referendum could overcome the stand-off over the Northern Ireland Protocol. Instead of ending the Protocol against the will of the EU, our Government should ask the EU to accept the results of a referendum.

Under article 18 of the Protocol there is provision for democratic consent to be tested by December 2024. If the date were brought forward, the current stalemate could be resolved.

These are the current battle lines. The British Government agreed to checks at the Irish Sea, but objects to the manner of their implementation, which has been too heavy handed, leading to considerable additional costs. It has threatened unilateral abandonment of the Protocol.

The EU wants to prevent goods entering its market without full compliance with EU regulations for fear of undercutting EU producers.

In most international disputes there are usually the real objectives of the parties and the public positions they adopt to appeal to public opinion. The EU’s public positioning relies on two arguments.

First, that ending the Northern Ireland Protocol would endanger peace because it would require border checks between Northern Ireland and the Republic. Second, that if the British Government ends the agreement it would be ‘breaking’ its treaty obligations.

These arguments have considerable force despite relying on untrue claims. First, the UK does not want a border and so does not endanger peace. Second, there is provision in the treaty to end the arrangement in the event of serious ‘economic, societal or environmental difficulties’. Enforcing article 16 would not, therefore, be ‘breaking’ an international agreement.

But the real problem is the lack of democratic consent for the Northern Ireland Protocol, and the only way to test consent in a situation like this, is by referendum.

A mere vote in the Northern Ireland Assembly would not have sufficient democratic legitimacy. The main parties largely want to gain advantage at the expense of rivals and a referendum avoids the distortions of partisan rivalry. In any event there may not be a functioning assembly to hold a vote.

The Protocol provides for democratic consent to be tested within four years of the end of the transition period, namely by the end of December 2024. The method of testing is solely under the control of the Government and, in a document dated October 2019, it chose to hold a vote in the Northern Ireland Assembly.

However, the Assembly has proved to be as destructive of democratic legitimacy as the Weimar republic, chiefly because stubborn minority parties can block improvements. A referendum cuts through partisan recalcitrance by giving power to the whole electorate.

In any event, the possibility that the Assembly would not be functioning was foreseen in the unilateral declaration of October 2019. Paragraph 5 provides for the Government to establish an alternative mechanism for testing consent, if the preferred option of an assembly vote is not possible. At present no such vote would be possible.

Under the unilateral declaration Parliament could define a referendum as the alternative mechanism. However, that would mean holding a vote between October and December 2024, which would be too long to wait while feelings are running so high.

Instead of allowing itself to be subject to false accusations of endangering peace and breaking international treaties, the British Government should call upon the EU to accept the result of a referendum before the end of 2022.

This would put the it on a higher moral plane than the EU. If the EU opposes an early referendum it will not only be preventing the people of Northern Ireland from expressing their view, it will also be blocking a way of overcoming the prevailing logjam.

It would have to show itself in its true colours, namely an anti-democratic conspiracy by a ruling elite to pursue its imperial objectives regardless of public opinion, as revealed by its response to the Irish referendum on the Lisbon Treaty in 2008.

A referendum is consistent with our tradition that the people are the ultimate sovereign, and furthermore it would be consistent with the 1998 Belfast Agreement.

The Northern Ireland Protocol stipulates that the method of ensuring democratic consent must be compatible with the 1998 Belfast Agreement. The agreement envisaged a referendum on a united Ireland and, consequently, a referendum on the Protocol would be well within its constitutional expectations.

The Government is allowing itself to be outmanoeuvred. A referendum promises a mutually beneficial solution without harming our reputation for always seeking the peaceful resolution of international disputes.

Victoria Atkins: Today, we launch our Turnaround scheme to stop young people offending and reoffending

20 May

Victoria Atkins is Minister of State at the Ministry of Justice.

This Government is determined to make our streets safer, from the recruitment of 20,000 more police officers, tougher sentences for sexual and violent criminals, our work to tackle violence against women and girls and investment in practical measures such as CCTV and street lighting. But we are not confining our efforts to catching criminals – we want to prevent harm from happening in the first place.

To do this, we must confront a difficult topic: offending by children and young people. The reality is that eight out of ten repeat offenders began their criminal careers as children. To deliver the reductions in crime we all want to see, we must tackle youth offending now.

There is no single route to youth offending. The Government’s Beating Crime Plan, however, highlights risk factors including school absence, poor mental health, substance misuse and domestic abuse which increase the chances of children becoming ensnared in criminality.

If we can break this cycle and prevent young people from getting mixed up in a life of crime, we can reduce the number of victims of crime, build safer communities and save the taxpayer £17 billion a year.

Today, we are launching our new £60 million “Turnaround” early intervention programme which will support up to 20,000 more children in England and Wales. It will help youth offending teams focus on children who are teetering on the edge of criminality, to prevent them from spiralling into a career of crime. We want young people in school learning English and maths, not on our streets causing damage, behaving anti-socially or even being dragged into gangs.

This is part of a hard-headed calculation to invest more in tackling youth offending nationally, providing £300 million over three years to youth offending teams to deliver local services well. This is an increase of nearly £100 million additional funding compared to 2021/22 levels and will allow local areas to deliver more and better interventions to make communities safer.

Good examples include the ‘Sports Barn’ in Blackpool, which I visited this week, where youth workers offer families and children a range of sports providing fun, healthy alternatives to hanging around streets causing problems. Another example is found in Buckinghamshire, where the council places youth offending staff and volunteers in schools to reach at-risk children directly, which is driving down exclusion rates and increasing the support accepted by young people to turn away from crime.

I spent nearly two decades working in the criminal courts before I was elected to Parliament. In fact, it was a 12 year old boy who I will call ‘Billy’ who proved, all too sadly, the necessity of this work. I turned up at court to represent him and he was alone – there was no grown up was there to support him as required by law.

When I asked him whether his parents were coming to court, he said “I’ve never known my dad and my mum will be flat-out drunk on the floor.” It was 9.30 in the morning. With a criminal conviction at the age of 12, and the difficulties he faced at home, his downward spiral into a life of crime could be predicted with depressing certainty.

The Turnaround scheme is the first Government scheme specifically for early intervention programmes, allowing local authorities to provide such schemes more consistently across the country now. This will end the so-called ‘postcode lottery’, so ensuring funding reaches areas who need it most to ensure location does not prevent a child like Billy receiving potentially life-changing – and crime reducing – interventions.

Whilst the driving factor behind the funding announcement today is to cut crime and protect the public, it also makes economic sense. The cost of not intervening early to prevent children following the wrong path often means they end up using costly services including police, children’s social care, courts and even prisons. Safer streets also provide businesses with confidence to invest and grow, improving job opportunities and local propensity. By tackling youth offending we can save the taxpayer billions a year.

The Turnaround scheme will develop on our wider youth work across the country which includes the Supporting Families programme we have boosted by £200 million and our ten-year, Youth Endowment Fund, which I developed and launched in my previous role as Minister for Safeguarding.

We are also investing an additional £2.3 billion into NHS mental health services by 2024, which will help around 345,000 more children get the support they need. Providing long-term catch-up support of almost £5 billion in our Education Recovery Plan, so every child can fulfil their potential and providing £300 million for our Start for Life offer which focuses on the first 1,001 critical days which sets the foundations for lifelong emotional and physical wellbeing.

As Prisons and Youth Justice Minister, my number one priority is cutting crime and protecting the public. Taking the right preventative action to stop vulnerable young people from falling into a life of crime is one of best ways to achieve this. This work will help young people to steer their lives away from crime and keep our streets safer, as part of our determination to level up and improve our neighbourhoods.

Brian Berry: Does the Levelling-Up and Regeneration Bill deliver for local house builders?

20 May

Brian Berry is the Chief Executive of the Federation of Master Builders. 

In the 1980s, 40 per cent of all new homes were delivered by small and micro housebuilders. Today, that figure is just 12 per cent.

Successive governments have failed to stem the tide of poorly implemented policy that has hacked away at the number of smaller housebuilders and threatened the delivery of high quality, locally sympathetic housing.

It’s against the test of reversing this worrying decline that the Government’s latest plans should be judged.

At the Federation of Master Builders (FMB), we have a proud history of supporting local tradespeople delivering quality builds for their communities against significant odds. From the London Blitz of 1941 to the recent Covid-19 pandemic, the FMB has been the recognised voice of small, local builders, and become the largest trade body in the British construction sector.

And while FMB members are resilient, the marked decline in the number of small local housebuilders is a definite concern if the Government is truly serious about delivering the number of new homes that this country needs and expects.

Did the Queen’s Speech deliver?

I had hoped to see a step change in the Queen’s Speech to boost the sector. Small, local housebuilders deliver local homes, for local people, using local trades. What industry better embodies levelling up?

If the Levelling-Up and Regeneration Bill is to truly deliver for communities, then it needs to bring on board the small and micro builders, as they are the ones that will deliver on the spirit of the Bill – homes fit for communities!

Unfortunately, the Levelling-up and Regeneration Bill isn’t the fully-fledged planning Bill many predicted.

It does, however, bring much needed simplification of the planning process for micro and SME builders, which is very welcome given that 61 per cent of FMB housebuilders cite planning as a barrier to delivering homes.

Moves to digitise the planning process, which will allow clarity on development status for builders and residents alike, is also a sensible way forward. Hopefully this will bring about greater transparency to the system.

After all, if we can track parcels, we all should be able to track planning applications.

Moves to shine a light on who owns land will also help small developers, 63 per cent of whom tell us a lack of available, suitable land is holding them back. Depending on the outcome of promised further engagement, consultations on reforming the Land Compensation Act, the new Infrastructure Levy, and environmental assessments could be transformative.

But they could also twist the knife further in terms of the viability of small developments. Small builders must have a seat at the table as these details are worked out.

It may be that more local engagement, when harnessed correctly, will help housebuilders. It could allow for fast-tracked planning permission for certain projects identified by the residents of a street, through so called ‘street votes’, which will boost the density of current housing stock and potentially deliver more homes. But we await detail on what these votes will truly mean.

However, greatly increased community engagement, focussing on design, material, and layout, has the potential to slow down and disrupt the viability of new homes.

Developments are complex issues, and the Government should be wary of potential unintended consequences. We’ve all been to town hall type meetings and observed the tendency for the loudest voice to win out over more balanced perspectives.

SME housebuilders already play their part in levelling up

SME housebuilders already sit at the heart of their communities, engaging with local people (their neighbours in many cases), delivering projects reflective of their local areas and building on underutilised land that larger developers wouldn’t touch.

The Government’s insistence that new homes should be high quality, more beautiful and part of the fabric of the local area is very welcome. But for many SMEs, and all FMB members, this is already their bread and butter.

The Levelling-up and Regeneration Bill, if properly executed and with plenty of engagement with SMEs, has the potential to be a turning point, because local housebuilders and levelling up go hand in hand.

It’s a positive for the industry that house building and levelling up fall under the same departmental remit. Levelling up is the perfect opportunity to address the problems that have over the last decade forced small housebuilders out of the housing market, namely the complexity of the planning system; access to finance; and availability of land.

SMEs also train the vast majority of apprentices, taking local talent and forging them into the next generation of tradespeople.

More SMEs delivering more quality homes will help bring down the cost of housing and make the dream of home ownership a reality of more people. At a time when we cannot escape cost of living pressures, supporting local builders makes economic sense.

Revitalising our high streets is another a key role that small housebuilders can play. There is significant untapped potential to create additional homes above shops, on or near the high street, which could help the regeneration of empty, dilapidated units.

So, where does the industry go from here?

We need to stop planning being a local lottery: all local authorities should be required to advertise small-site opportunities.

We must continue to support local government to better communicate with small builders, and to this end I’m hopeful that another rise in planning fees could support the introduction of SME liaison officers in more council areas.

National government must do that too, including on upcoming building regulation changes that will seek to make our builder not just better, but greener.

We must acknowledge the strain that delays in planning applications have on the finances and resources of small companies, and remove barriers where we can, not put additional ones in their way. We must note too it’s the smallest firms who have been hit the hardest by rises in the price of materials

Without the renaissance of the small builder, then we are wholly reliant on the major, corporate developers to help deliver our homes. And we know they will not reflect or benefit the local community in the same way; we’re just in for more cookie cutter housing developments.

We will have lost a proud industry and, I feel, failed a key driver of levelling up.

Adam Hawksbee: Oldham shows that local, concrete action is the most effective route to levelling up

19 May

Adam Hawksbee is Deputy Director and Head of Levelling Up at Onward

Levelling Up was always going to be difficult. But since the launch of the White Paper just over 100 days ago, things have gotten more challenging. The cost of living crisis is hitting parts of the Midlands and the North hard, given their greater vulnerability to energy prices. Hull and Wolverhampton have a rate of fuel poverty four times higher than Surrey Heath and Wokingham. And the war in Ukraine has (rightly) absorbed an enormous amount of Government time, including the Department for Levelling Up who lead the Homes for Ukraine programme.

In the face of all these pressures, it’s understandable that progress on Levelling Up has been limited. But that needs to change fast. An election is under two years away, and, while members of the public understand that regeneration won’t happen overnight, they want to see results. The conversation in Westminster often focuses on big national projects or major bits of infrastructure – but when voters think about Levelling Up, their focus is much more local.

As part of a new research programme Levelling Up In Practice, Onward have been spending time in communities around the country to understand their priorities. We started our work in Oldham, which Michael Gove singled out in his 2021 conference speech as a litmus test for whether Levelling Up has been a success. The town on the fringe of Manchester has had a few political earthquakes in recent years – with two successive council leaders losing their seats at the 2021 and 2022 local elections.

When we spoke to members of the public in Oldham about levelling up, their priorities were rooted in a sense of local history and identity. They immediately told us about the history of Tommyfield Market in the town centre, which used to be ‘buzzing’, but said that these days everybody drives to the new shopping centre in Rochdale. They talked about antisocial behaviour and how they didn’t feel safe getting into Manchester on the MetroLink, which only opened in 2014.

They painted a picture of boarded up shops and blighted buildings around the Spindles Shopping Centre – describing the area as ‘bleak’ and ‘getting greyer and grey’. And they told us that if you wanted to understand how things were going for them, you just needed to look at Oldham FC – who recently became the first Premier League club to be relegated from the English Football League.

It’s easy to be dismissive about this version of Levelling Up. Some have cynically argued that a focus on ‘hanging baskets’ won’t turn around areas of the country that have been suffering decline and reduced investment for decades.

But what that misses is the role of hope and aspiration in kickstarting regeneration. People in Oldham told us about the high street because it is symbolic. It reflects the fact that they felt forgotten and ignored, and believed that the people who were meant to be in charge – both on the local Council and in Westminster – don’t care.

Balancing these two versions of the agenda – Levelling Up fast and slow – is the trick that Ministers need to pull off. Taking small, concrete actions today to give communities hope that things start to change. And then delivering major changes to how government invests and supports economic growth over the long term.

Today we’ve published an interim report sharing some of our lessons from Oldham, and providing some actionable ideas for local leaders. Antisocial behaviour could be tackled by supporting more activities for young people, bringing together disparate services into youth hubs in neighbourhoods across the area. Greater use of repair notices by the council could improve the look and feel of the high street, in advance of the transformation of the shopping centre as part of the Towns Fund programme.

In advance of the Compulsory Rent Auction mechanism being introduced, Oldham could put all its vacant property owners on notice – telling them they’ll be forced to rent out their property the moment the Levelling Up and Regeneration Bill becomes law.

All this has to take place alongside serious economic transformation. The recently published Oldham Economic Review, led by Oldham College and supported by the University of Manchester and other local organisations, sets out clear-headed ideas for how to bring back growth and create new jobs. But members of the public were clear that they didn’t want their area to become a mini-Manchester. They viewed the skyscrapers in the city with suspicion.

The approaches we’ve recommended have one thing in common – they are rooted in the local, not the national. This has big benefits for Ministers. It doesn’t place additional strain on a Whitehall machine creaking under pressure. And it doesn’t take years to see results – members of the public could observe the green shoots of improvement in mere months.

But what it does require is a commitment to stay the course on Levelling Up, and remember the importance of regeneration to the new electoral coalition the Conservatives convened in 2019.

Rachel Wolf: We must learn from the New Schools Network, the charity that helped make education better

19 May

Rachel Wolf is a partner in Public First. She had co-charge of the 2019 Conservative Manifesto. She was an education and innovation adviser at Number 10 during David Cameron’s premiership and was founding director of the New Schools Network.

Last week, New Schools Network (NSN) – the charity I founded thirteen years ago – announced it will close. It achieved its central mission: to make the Free School programme happen, and successfully. Neither of these, as anyone who has worked in government will know, were guaranteed.

Through NSN, we (my own team, and my successors) delivered an immensely controversial policy, rapidly and against expectations, with successful outcomes: Free Schools are more likely to be rated Outstanding by Ofsted and are more popular with parents. Many of the top schools in the country exist because of its help; countless thousands of pupils are getting a better education because of those schools; and Free Schools like Michaela, or Reach Feltham, have changed the debate about what standard, and what kind, of education is possible.

Why was NSN successful? Because it was an obsessively focused, mission driven, non-governmental organisation. It applied some basic principles that should be used in Whitehall more generally (and, in my experience, almost never are). Others have written generously about NSN’s legacy. I want to focus on what I think policy makers should learn.

1. Speed. Before Free Schools, new schools took years and years to get off the ground. One former Cabinet Minister confidently predicted we’d get, at most, half a dozen open in a parliament. We knew that wasn’t an option: unless we got a decent number of schools open, the policy would be too easy to reverse, and each individual school would be the focus of huge national attacks by unions and other opponents. Critical mass was essential.

For the first year of NSN’s existence (before the 2010 election, and entirely funded by charitable donations) I spent most of my time identifying and cajoling groups who might want to found schools. They were inevitably nervous, and many of the teachers came under immense pressure and opposition. We tried to ensure they were ready to put in an application for a school, with demonstrable support from their community. It meant that by 18 months into the new parliament, over 80 schools were open, and almost 300 within a parliament.

2. Failure. The programme recognised the risk of the status quo rather than just the risk of change. Did all the schools work? No. But the ones that failed were closed much more quickly than is normally the case for schools, and the programme adapted fast.

3. Communication. We talked, endlessly, to the point of screaming boredom, about what was happening and why it was working – over local radio and broadcast. Our parent and teacher groups were featured in the national press. Why? Because we knew that was how you attracted more people to set up schools. New programmes need a sense of momentum.

4. Motivation. There were excellent civil servants who worked on the early Free School programme – as is often the case, the exciting ideas attracted many of the best people. But NSN was staffed by people who wanted Free Schools to happen, not who were dutifully implementing them. For that, you need a non-governmental (or at least not classically governmental) organisation.

5. Implementation. NSN was not a think tank. It was solely interested in the practical design and delivery of the programme. We created the application system for new schools, down to writing the questions on the forms, and asked people who had run similar programmes in other countries to check them. We held training sessions and conferences several times a year for those who wanted to found new schools – which helped them find like minded allies. It meant we were constantly in touch with people on the ground.

I wish I could see replicas of these ideas across the government, but I can’t. NSN was only possible because Free Schools were a priority for the government. The zeal for school reform has unquestionably disappeared. But there is a more general challenge – the energy and implementation capacity for public sector reform has faded since the Blair and early Cameron years. There is no shortage of ambitious targets, but an insufficient ability to make things happen fast or innovate. The vaccine taskforce was a rare blip of brilliance.

The same is true for Labour. A serious government in waiting should have its own social entrepreneurs and detailed ideas. What is the Labour NSN?

Can we do better? Yes. I will give one example. Michael Gove’s latest department is, as usual, a good bet. The Government appears semi-serious about levelling up, and he has entrepreneurial MPs like Danny Kruger and Neil O’Brien around him. Levelling up, like Free Schools, relies on communities acting and having the ability to do so. The Department also faces the most challenging headwind of all: time. Several years were wasted.

There is a perennial delusion in politics that an announcement, a piece of legislation, or even substantial funding, constitutes change. For the first few years, levelling up mostly consisted of random pots of money; it has been impossible to tell what any of it was achieving, and on what time scale. More recently, we have had serious and exciting policy proposals on planning and devolution; R&D; local pride; and skills.

They all rely on local action, and delivering them requires us to implement the lessons I set out above. What exactly is happening to the money? What is appearing, where? Which community groups are doing things, and why aren’t we interviewing them? Where is everyone?

It is easy to imagine an organisation, not exactly like NSN (different problems require different design) but with similar principles. It would probably require several local chapters with decision making power, and it would need to be focused on a small menu of improvements in each of those areas. It is also easy to imagine an NSN-type organisation focused on any number of other government challenges. While Covid, Ukraine, and the cost of living dominate headlines, they are not the focus of every department, every minister, or every official.

Despite the recent negative headlines, this is a government with an 80-seat majority, and an electoral imperative to deliver change. In these conditions, it should be possible to deliver tangible change – especially if everyone involved remembers the lessons we learnt in the early days of school reform and remembers why we all battle so hard to get into government in the first place.

Stephen Booth: The deteriorating politics of Northern Ireland has left the Government with no option other to act on the Protocol

19 May

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

The Northern Ireland Protocol once again threatens to derail the UK-EU relationship. After months of talks between London and Brussels failed to reach mutually acceptable solutions, the Government has reached the conclusion it has no alternative but to start the process of introducing domestic legislation to alter the Protocol.

Everyone, including the EU, recognises that the Protocol has caused major practical problems for traders and consumers in Northern Ireland wishing to access goods from Great Britain. The operation of grace periods and easements means that the Protocol has yet to be implemented in full, yet the Road Haulage Association estimates that the imposition of East-West checks has already added around 30 per cent to the cost of transporting goods.

Ultimately, it is the rapidly deteriorating political situation in Northern Ireland that has left the Government with no alternative but to act. There has been no functioning Executive since the DUP walked out in February. In May’s Stormont elections, every unionist party campaigned against the Protocol, and the DUP has refused to re-engage with the power-sharing institutions until it feels its concerns are being addressed.

Lord Trimble, who won the Nobel Peace Prize for his crucial role in forging the Good Friday Agreement, warned this week that the Protocol is directly threatening the cross-community consent upon which peace was built.

Therefore, as the Prime Minister noted in the Belfast Telegraph, the Government’s twin aims are to ensure the Protocol is altered to respect the balance of the Good Friday Agreement and to see power-sharing restored to Northern Ireland. The Government has stated that its preferred outcome remains a negotiated settlement with the EU, if this is possible.

The hurdles to an agreement remain high. In July, the UK put forward proposals to fundamentally rework aspects of the Protocol, and in October last yeae the European Commission set out its own package. The UK’s proposals call for parts of the text to be amended, a possibility envisaged under Article 13.8 of the Protocol via mutual agreement. However, the EU has insisted that it will not rewrite the Protocol text and that it is unwilling to change its negotiating mandate to permit this.

The Government notes that several of the EU’s proposals would in fact result in a worse outcome than the status quo under the grace periods. Marks & Spencer’s Chairman, Archie Norman, this week noted that under the EU’s proposals “every piece of butter in a sandwich has to have an EU vet certificate. So it’s highly bureaucratic and pretty pointless. There is no risk to safety. There’s no purpose to these checks.” While Marks & Spencer might be able to cope with the cost, smaller food businesses in Great Britain would have little choice but to cease trading with Northern Ireland.

Meanwhile, the Foreign Secretary’s statement to the Commons that the Government is bringing forward legislation in the coming weeks has yet to convince the DUP to re-engage with the Stormont institutions. The DUP leader’s in the Commons, Jeffrey Donaldson, said this week that his party would block the election of the Speaker to the Northern Ireland Assembly.

However, Donaldson cautiously welcomed Truss’ statement as “a significant move towards addressing the problems created by the Protocol and getting power-sharing, based upon a cross-community consensus up and running again.” He added that he hoped to see progress on the Bill “in order to deal with these matters in days and weeks, not months, and as the legislation progresses, we will take a graduated and cautious approach.” Similarly, the DUP’s Sammy Wilson said his party would judge the Government’s statement when they see a Bill “progressing”.

Given that the proposed Bill will take many months to reach the statute book, the fact that DUP figures have repeatedly mentioned a timeframe of weeks, not months to make their decisions about the Government’s resolve to act, there remains hope that the DUP may re-engage with Stormont while negotiations with the EU continue. This would allow important day-to-day matters in Northern Ireland to be addressed, and illustrate to Brussels the political imperative to reach a solution acceptable to unionists.

It was also notable that there was little Commons dissent from Truss’ statement from One Nation Conservative MPs, who might have been expected to raise serious objections to a unilateral approach to the Protocol. Indeed, Robert Buckland, a recently departed Lord Chancellor, noted that Article 1 of the Protocol is clear that the agreement is to be without prejudice to the Good Friday Agreement. “That means, surely, the Good Friday Agreement takes primacy over the Protocol,” he said. Damian Green welcomed the Government’s framing of the legislation as an insurance policy throughout negotiations with the EU, rather than an attempt to tear up the Protocol.

There has been much speculation about how the EU might react to the Government’s announcement and whether cross-retaliation might lead to a trade war. However, we still seem to be a long way from that point. Maros Sefcovic’s language in response was more assuaging than we have seen from Brussels in previous UK-EU rows. Perhaps European capitals are less united on an instant heavy-handed response than they might have been prior to the UK’s efforts in the Ukraine crisis. The EU “will need to respond with all measures at its disposal,” if the UK presses ahead with legislation, he said. However, he added, the Commission “stands ready to continue discussions”.

The UK has undoubtedly raised the stakes this week, but the real drama could yet play out over several more months. Fundamentally, if the EU isn’t prepared to reconsider its inflexibility, the UK is right to create new facts on the ground, primarily to uphold the Belfast/Good Friday Agreement and the principle of cross-community consent, but also to demonstrate that pragmatic solutions can operate without constituting a threat to the EU’s single market.

Ike Ijeh: We’re seeing a shift under Gove in housing policy from quantity to quality

19 May

Ike Ijeh is Head of Housing, Architecture & Urban Space at Policy Exchange.

There are very few national crises where there is a political incentive for them to be both solved and sustained – but housing, unfortunately is one. The reasons for wishing to solve the housing crisis are obvious: lack of housing supply and chronic unaffordability in London and the south east, oversupply and depressed construction activity in the North, a generation of young people locked out of the housing market, spiralling rents and mortgages claiming a disproportionate portion of household incomes and contracting consumer spending and all the damaging social and electoral consequences therein.

But providing housing can be also a deeply contentious and emotive issue, provoking complex and at times tribal feelings of rights, ownership and territory that prompt residents to react explosively when they perceive that housing, or at least the wrong kind of housing, is being imposed upon them against their will.

In seeking to minimise this upset, and fearful of being stung by the Chesham and Amersham-inspired electoral whiplash it can carry in its tail, generations of politicians have therefore shied away from providing the radical housing solutions that solving the crisis needs.

This is the Gordian knot which successive governments have not only failed to unravel, but has clung tighter with every missed housing target or rapidly replaced housing minister, (there have been eleven in the past twelve years).The stubborn endurance of the housing crisis tells its own story about the effectiveness of the government responses assembled to address it and various initiatives, such as Help to Buy and stamp duty amnesties, have come and go (or will soon go) without meaningfully denting the problem.

Since the start of the millennium, there has generally been one settled core strategy for solving the crisis, exponentially increasing the supply of new homes. But, very subtly, it seems that even this policy might be in quiet retreat.

This is just one of three key ways in which UK housing policy appears to be evolving. All of these are embedded within Michael Gove’s plucky BIDEN acronym – his belief that new housing needs to be Beautiful, be served by good Infrastructure, embrace local Democracy, enrich the Environment and enhance Neighbourhoods.

First, as previously mentioned, the Government appears to be withdrawing from headline housing targets and is focusing instead on the quality of homes being built. While Gove has not explicitly rescinded the Government’s commitment to build 300,000 homes a year, he has in recent weeks insisted that “arithmetic is important but so is beauty” and has vowed to clamp down on “developers of soulless dormitories” and prioritise “beautiful homes and communities” instead.

This, like the general BIDEN philosophy itself, is encouraging and the benefits of a more beautiful built environment are obvious. While a housing policy that targeted arithmetic as well as aesthetics would be welcome, neat Whitehall numeracy is not in itself the best measure of policy success and, sadly, no British government, not even the trailblazing housebuilders of Macmillan and Wilson during the 1950s and 60s, has ever been able to marry the twin paradigms of quality and quantity.

Moreover, even a decade ago the thought of a British secretary of state repeatedly opining about beauty would have been unthinkable, and it is a measure of the ministerial success of Policy Exchange’s Building Beautiful programme that both the concept and the ambition now slip so easily into Westminster vernacular.

The second policy evolution concerns democracy. It is now clear that government has set its ideological trajectory towards empowering local communities and encouraging residents to play a more active role in determining the future of their environments.

Nothing illustrates this more starkly than the shift in policy from the zoning designations proposed under Robert Jenrick to Street Votes, the Policy Exchange initiative that effectively enables residents to vote for their own street development plan, and which received its legislative initiation in both last week’s Queen’s Speech and Levelling Up and Regeneration Bill.

Street Votes by itself will not solve the housing crisis. But it will give residents a firmer stake in their community’s future, and help address the perennial public complaint that the current planning and consultation processes deny the public an adequate voice.

The third and final shift in housing policy is the most subtle of all, but could have a significant impact on the procedural workings of the housing sector in the short to medium term. Since taking office last September, Gove has shown himself to be extraordinarily interventionist when it comes to planning inquiries, certainly more so than his predecessor.

In just eight months since his appointment, Gove has called in at least four major schemes, Preston Mosque, Leeds Bradford Airport expansion, Luton Airport expansion and the Tesco Syon Lane development in west London. On top of this, he has frozen the proposed 72 Upper Ground and Marble Arch M&S store redevelopments in London pending call-in consideration and, in a stunning reversal of the expected result, found against the developer in the City of London’s notorious Tulip observation tower public inquiry.

Not all these developments are housing, but they are all intensely controversial and face fierce local opposition. These decisions show a Secretary of State willing to flex his ministerial muscles to scrutinise contentious proposals that, in many instances, contradict more traditional design principles.

Gove will not be secretary of state forever. But if he sets a precedent whereby central government more robustly intervenes to defend the interests of beauty and local democracy, then not only does this potentially empower the role of planning inspectors, but that Gordian knot may finally start to loosen.

Matthew Oakley: If global Britain is to succeed, we must stop the regulators hobbling Heathrow

18 May

Matthew Oakley is the Director of WPI Economics

Smart regulation is essential to Britain’s future growth prospects. If we want to level up the country, promote a more competitive economy, and protect consumers, then it is essential that our regulators are at the top of their game.

However, experience from recent years suggests that is not always the case. Across a range of sectors, regulators are making judgements that are detrimental to business investment, consumer choice and Britain’s global competitiveness.

For some, the detriment is caused by poor conceptual underpinning. For example, the premise that an effective market could be built by opening up the energy market and relying on customers voting with their feet has ultimately led to company failures and bail outs that we’re all now paying for.

Others are about distinct choices or approaches of the regulator. For example, the Prudential Regulation Authority, which oversees our financial services industry, is currently under pressure from the Treasury to reform the EU’s Solvency II laws. The fear is the regulator is too risk averse when it comes to the amount of capital British insurers should hold in reserve for a rainy day.

This cultural antipathy to growth and investment could prevent billions of pounds of long-term funding from British institutions being unlocked to the benefit for a whole host of projects in communities across the country, from new housing to renewable energy projects.

Most recently, WPI Economics published a report last week showing how the Civil Aviation Authority is putting the recovery and the Government’s efforts to promote Global Britain at risk.

The CAA is in charge of setting airport charges at Heathrow, Europe’s most expensive airport. This year, at the start of a new regulatory period, it has allowed charges to be raised by 56 per cent.

Most worryingly, this choice was made contrary to advice from independent research that it commissioned to inform the decision. It is now deciding whether to keep, or even increase, that rise over the next four years.

As with all regulatory matters, this is a complex issue and some will argue that the immediate costs to passengers may be relatively small compared to the cost of a ticket.

But the truth is that the long-term impacts could be significant.  The difference between the CAA’s proposal and those suggested by independent analysis amounts to some £5bn of extra charges on airlines over the period.

This matters. Post-Brexit success and Global Britain are reliant on airlines being able to open new routes to new markets and attract new skills, investors and businesses to the UK. This is only possible through the scale and connectivity made possible by the “hub airport” model run by airlines at Heathrow.

It is not feasible at any other British airport, and this makes Heathrow a vital asset for the UK’s global competitiveness.

Increasing charges by £5bn could undermine all of this. Any increase in passenger costs will mean fewer people choosing to connect through Heathrow (more than half of UK’s regional connecting passengers already do so through a non-UK hub airport).

Coupled with falling demand, increased charges will also make new and more marginal routes less viable, meaning that airlines will consolidate around existing profitable routes. Airline groups will also be incentivised to base more of their network at rival European and international hubs.

Both would mean fewer new routes to new markets from Heathrow and a loss of the connectivity we need to drive economic grow. In short, it would be a major blow to Global Britain.

So what can we do?

First, we need more and better oversight of our regulators. As Theresa Villiers wrote on this site earlier in the year, parliamentarians hold the key. Strengthening our select committee system, with more available data and evidence over the work of our regulators, will enable people to assess their performance in a more transparent way.

Strengthening parliament’s ability to hold regulators to account is essential, but unlikely to be enough if we are serious about economic recovery and future growth. That will mean direct action from  theGovernment.

Of course, independence of regulators is a core part of a strong economic system. But that doesn’t mean that the regulatory system should not be open to change. Where regulators are so obviously failing to meet their core objectives to current consumers and future consumers (through growth and competitiveness), government needs to step in.

For some, this could mean a revision of objectives to ensure the balance between consumer, economic and business objectives are balanced correctly. For others, more fundamental change should be considered.

In the case of Heathrow, it is not the regulators job to line the pockets of shareholders of a vital British asset. If the current operators cannot deliver without uneconomic increases of charges, perhaps it is time to open up competition and see whether someone else can.

Jonathon Holmes: The Government is wrong to u-turn on its obesity policy

18 May

Jonathon Holmes is a Policy Adviser with The King’s Fund.

Following decades of steady increases, the majority of adults in the UK are now overweight. Similarly, childhood obesity rates have been climbing for years, and most recent data shows a big increase during Covid-19.

Increasing rates of obesity are resulting in worse health, greater pressure on the NHS, and widening heath inequalities. Successive governments have failed to grasp the initiative on the growing obesity crisis. It was the Prime Minister’s near fatal brush with Covid-19 that reportedly made him resolve to tackle the issue and bring forward a flagship “Obesity Strategy” which included commitments to ban pre-watershed junk food advertisement and prevent retailers offering Buy One Get One Free deals (BOGOF) on unhealthy foods.

Despite the growing public health crisis, the government have now shelved these plans, citing the rising cost-of-living as justification to delay the policy.

Common sense might suggest that promotional deals like BOGOF will save consumers money and therefore ease the strain on household finances. However, the evidence shows the opposite to be true, BOGOF deals lead to increased consumption and increase overall spending by around 20 per cent. They do this by encouraging us to buy more than we initially intended.

What is more, the proposed ban on BOGOF deals was limited only to unhealthy foods with little nutritional value, like sweets, crisps or chocolate. These products are often positioned near supermarket check outs to maximise likelihood of impulse purchases and leverage so-called “pester-power” of young children.

This is not a fringe theory. Indeed, it was cited by the government as part of the rationale to introduce the policy. In 2020 the government described BOGOF deals as “not ‘good deals’ for our wallet or our health.”

Separately, it is very difficult to see how limiting pre-watershed junk food advertisement could contribute to the rising cost of living. This policy was aimed solely at limiting the promotion of unhealthy food to children. Dropping policies to tackle rising obesity rates is not an effective way of tackling the growing cost of living crisis. It will only be damaging to our health.

If ministers are serious about driving down obesity and tackling the cost of living crisis, they should consider some of the policies set out in the National Food Strategy. like expanding the Healthy Start Scheme which provides vouchers for low income families with young children and pregnant women to buy healthy food and vitamins.  Commissioned from the co-founder of the Leon restaurant chain, Henry Dimbleby, the strategy includes a raft of proposals to encourage healthy eating and a more sustainable food system but is currently gathering dust on a shelf in Whitehall.

Moreover, obesity rates are significantly higher in more deprived areas. A range of factors are driving this but put simply, the cost of maintaining a healthy diet and the prevalence of cheap junk food, means that healthy choices are harder to make if you are on a low income.

Following the government own healthy eating guidance, Eatwell Guide, costs nearly three times as much as the average household spends on food and non-alcoholic drinks. More deprived areas have more junk food outlets, meaning that, for those living there, the unhealthy choice is usually the easier or more convenient choice.

This then creates persistent and unfair health inequalities: people from more deprived areas living shorter lives in worse health compared to those in more affluent areas. This disparity means, for example, that men in Blackpool have a life-expectancy of 74, while in East Dorset men can expect to live to 83. As Sajid Javid argued recently, raising up the health outcomes of the least healthy to those of the most healthy is exactly what levelling up should achieve.

The costs to the NHS are eye-watering. NHS expenditure on treating obesity was £6.1 billion in 2014 and given current trends in obesity prevalence, will only grow. The King’s Fund’s own analysis shows that in the year before the pandemic there were over one million obesity related hospital admissions in England, an increase of 17 per cent on the previous year. Rates of obesity related hospital admission in the most deprived areas were more than twice the rate as the wealthiest.

Faced with this level of unfairness and mounting pressure on the NHS, doing nothing cannot be an option. The case for government intervention is clear and compelling, yet this government has shied away from decisive action – like all its recent predecessors.

Effectively tackling the obesity crisis will require a cross-government effort to address the broad range of social and economic factors that sit behind our spiralling obesity rates. The NHS also has a vital role to play. For example, primary care services are starting to trial new weight management interventions, and are working toward offering obese people more guidance and support to make healthy choices.

As a first step, re-thinking this latest u-turn should be a priority. The current obesity crisis was years in the making. Reversing this will not be a quick or easy job, but the worthwhile ones never are.

Liam Fox: The Bank of England raised interest rates too slowly. Now it must be wary of raising them too quickly.

18 May

The Rt Hon Dr Liam Fox MP is MP for North Somerset and a former Defence and International Trade Secretary. 

For many younger people in Britain, inflation is a new and startling experience, something they had previously only heard of in history books. For many of us, it was a formative personal and political force, one of the main reasons why many of us embraced Thatcherite Conservatism and its emphasis on “sound money.” Nothing undermines the stability of our economy, communities, and families more than inflation. It inevitably hits the poorest in society hardest and shifts money away from those who have saved for a rainy day. It is both a moral and economic hazard.

In the 1970s, I remember our family having to make cutbacks (including switching off the central heating we had only recently acquired) as inflation outstripped my father’s income. In the 1980s, I bought my first flat just as the Lawson boom hit. As a junior doctor, I soon found almost my entire income taken up by my mortgage as interest rates surged to 14.88% by the end of 1989.

Today, we are witnessing a return to global inflation, although at widely different levels. It is probably more accurate to say that we are witnessing two types of inflationary surges simultaneously. The first results from the supply disruptions that accompanied the Covid 19 pandemic with a mismatch of supply and demand in commodities and an interruption of global supply chains. The second is what we might describe as the monetary inflation that afflicts those countries whose central banks have allowed persistent increases in the amount of money relative to existing output.

As the pandemic took hold, central banks adopted policies of quantitative easing (QE) but at hugely differing rates. QE results in the purchase of large quantities of assets, such as government bonds, with the aim of supporting economic growth, lowering the cost of borrowing and boosting spending. Designed to have an anti-deflationary effect, too much can result in dangerously high inflation.

According to the Atlantic Council’s Global QE Tracker, in the United States the Fed began purchasing assets during the pandemic at an average rate of $120 billion per month. Since early 2020, these purchases have grown the Fed’s balance sheet by more than 114 percent.

In Britain, the Bank of England (BoE) put in place a QE program of support worth £895 billion to support the UK economy and financial market functioning. The bank’s asset purchases have increased the size of the balance sheet by more than 100 percent since the beginning of the pandemic.

The European Central Bank’s (ECB) pandemic emergency purchase program (PEPP) complements its Asset Purchase Programme (APP). Together, both QE programs have increased the size of the balance sheet by 88 percent since the start of the pandemic.

Meanwhile, in Asia, the Bank of Japan committed $874 billion to support the economy and the functioning of financial markets. These new asset purchases, together with the bank’s increased lending facilities, have increased the size of the balance sheet by a much smaller 17%. The latest inflation figures show the United States at 8.3%, the Eurozone at 7.5%, the UK 7%, and Japan 1.2%.

As the World Bank has noted, “The primary drivers of the inflation spike are not uniform across countries, particularly when comparing AEs and EMDEs. Diagnoses of “overheating,” prevalent in the US discourse, do not apply to many EMDEs, where fiscal and monetary stimulus in response to COVID-19 was limited… Inflation thus has become a global problem – or nearly so, with Asia so far immune.”

So, what about the British experience? Since 1997 the Bank of England has had operational independence for the conduct of monetary policy. The objectives of policy are set by the government while interest-rate decisions are the responsibility of the monetary policy committee. In November 1998, John Vickers, the Executive Director and Chief Economist at the Bank of England, set out the position with great clarity in a speech in Frankfurt.

He said “the paramount statutory duty of the MPC is the maintenance of price stability… The remit recognises that exogenous shocks and disturbances may cause inflation on occasions to deviate from the target, and that ‘attempts to keep inflation at the inflation target in these circumstances may cause undesirable volatility in output’. Most importantly, to me, is that he pointed out that “Subject to the paramount statutory duty of price stability, the MPC must support the Government’s economic policy, including its objectives for growth and employment.”

In other words, while the aims for employment and growth were important and laudable, they were required always to be secondary to the aim of price stability. How has this played out in recent times?

In a speech in November 2020, on the subject of climate change, Andrew Bailey, the Governor of the Bank of England said that: “We decided in the spring to prioritise preserving people’s jobs and livelihoods in this emergency, and as far as possible the businesses that provide employment and the life blood of the economy”. While this is understandable, and in line with the political priorities of the time, it is not putting monetary and price stability at the heart of the bank’s agenda.

In the same speech, the governor also said: “The financial system has supported the real economy in the crisis, as it must. We need that same ambition in our approach to climate change.” While we all support a concerted approach to climate change, there is a distinct feeling that those who should be protecting us from the debasement of our currency, the erosion of our earnings, and the devaluation of our savings have had their minds too much on a political rather than a monetary agenda.

The risk now is that having come late to the inflationary party – and consistently underestimated the nature and scale of the threat despite numerous warnings – the central bankers will overreact. With record amounts of assets on their balance sheets they may move quickly from quantitative easing to quantitative tightening.

While this will reduce the amount of money in the economy and counter inflation, the risk is that they will overcompensate, resulting in recession. This could produce further disruption in the developing economies with potential political disruption and the risk of debt default. This risk is exacerbated by the war in Ukraine and continued supply chain disruption.

No one believes that the policy decisions that need to be taken will be easy, but we deserve central banks who keep their focus on their day job, that of monetary stability.