A new market in long-term fixed rate mortgages?

14 Sep

At one end of the age spectrum, Britain has older people in need of social care.  At the other, younger people who want to own their own homes.  The best one can say of Ministers’ attempts to help both to date is that these are a work in progress.

The social care plan that will be voted on these evening will do nothing much to improve the provision or quality of care, whether delivered in one’s own home or elsewhere.  It may not deal even partly, let alone wholly, with the problem it aims to address – namely, having to sell the family home to help pay for care.

This is because it’s more than likely, when the new Health and Social Care Levy kicks in during 2023, that the money raised from it will flow to health – that’s to say the NHS, the capacity of which to consume resources is inexhaustible – rather than social care.

None the less, we raise half a cheer for the Government for potentially ensuring that some people at least will no longer have to sell their houses to help fund care costs.  Even if the proposals that have been announced so far won’t deliver the Conservative Manifesto commitment of ensuring that “nobody needing care should be forced to sell their home to pay for it“.

Since the levy will be a form of national insurance, it will largely be paid by younger people.  So the generation that can’t afford to own their own home will have even less disposable income than they did before.

Which takes us to Ministers’ housing plans.  The Health and Social Care Levy scheme has been drawn up at short notice, and the Government is rushing it through Parliament speedily.  Neither condition applies to the housing measures.

The Planning Bill pledged in the Queen’s Speech hasn’t come to the Commons or Lords yet – and no wonder, since its terms are essentially being negotiated between Ministers and Conservative backbenchers (plus senior councillors).  Pre-election, any prospect of loosening Green Belt restrictions was seen off.  Post-election, Tory MPs did for the housing algorithm.

It is reported that the Government will now abandon the zoning system it had planned, plus targets for housebuilding.  One take is that such a retreat would damage Ministers’ aspiration to see more homes built.  Another is that is would make little difference.

This is because housebuilding numbers have been increasing during recent years: in 2019/20, 243,770 homes were delivered – the highest annual number in over 30 years, and the seventh year in a row that the number of homes delivered rose.  Furthermore, the Government has already persuaded Parliament to back an expansion of permitted development rights.

Developers will be able add two storeys to existing buildings without planning permission, and turn premises into homes.  There is a push for street votes to expand properties – see Bob Blackman’s recent piece on this site – as an alternative to concreting land.

Whatever happens next, any Minister who sought to solve all of Britain’s housing problems by building more would be the ultimate one-club golfer, since more homes wouldn’t address the other factors in the mix: limited space, smaller families, high immigration, powerful developers, a long tradition of property rights, a complex planning system, curtailed post-crash lending and new Net Zero requirements.

And if boosting home ownership is an aim of policy – as it should be – what we wrote in the ConservativeHome Manifesto, the best part of ten years ago, still applies.

“No matter how fast we can make land and construction capacity available, the money markets can always move faster – pumping cheap credit into property investments. Any government move to undermine sensible planning protections only serves to set off the feeding frenzy.”

Ministers have tried to help younger people get in on the act through Help to Buy (launched by the Coalition) and the 95 per cent mortgage guarantee (unveiled in the last Budget by the Chancellor).

But home ownership has only drifted up marginally in recent years – to 65 per cent in 2018 compared to its 71 per cent high in 2003.  And when one turns to who owns what, it’s a tale of two generations: last year, only nine per cent of owners were aged between 25 and 34; a whopping great 36 per cent were 65 or older.

One of the clubs that the Government wants to see used is long-term fixed rate mortgages. “We will encourage a new market in long-term fixed rate mortgages which slash the cost of deposits,” that 2019 manifesto said.

It doesn’t follow that, because some of its other commitments haven’t been honoured (such as the pledge not to raise national insurance), this one won’t be delivered.  However, the keys to making it happen lie not so much in the Treasury as in the Bank of England, and the new requirements that it placed on getting a mortgage in the wake of the financial crash.

The Government’s interest in long-term fixed rate mortgages owes much to the Centre for Policy Studies, and in particular to the case put forward in a report for the think tank by Graham Edwards.

He argues that, because of the certainty that these mortgages offer, they don’t need to be stress-tested – and so can be offered with the 95 per cent loan to value rates that were the norm before the financial crisis.

What about the danger of negative equity?  The counter-case is that, while this is always present, there was a minimal increase in default rates in the wake of the crash.  What if wages grew more slowly than the mortgage costs?  Edwards’ answer is that “there is still a lot of scope for borrowers to absorb the increase in housing cost before they reach a point of financial stress”.

It will be claimed that the Conservatives are fixated by home ownership – just as, returning to social care, the Prime Minister is concentrated on people selling their homes to help pay for it.

In theory, it is open to the Government to stress one Tory viewpoint, that “there’s no such thing as a free lunch” to the exclusion of another, that “wealth should cascade down the generations”.  But in practice, Ministers can’t be indifferent to younger people’s desire to own their own homes, at least if they wants them to have a stake in the capitalist system that the Conservatives support.

Nor can it ignore the wish of older ones to pass on family homes – at least, if the Party’s experience in the 2017 election is anything to go by.

As we say, Ministers need to deploy different clubs if they are to negotiate the course of “building beautifully”: smaller developers, migration control, more supply, control on costs (including those emerging as a consequence of Net Zero).  But these won’t be enough to deliver higher home ownership, too.

For that, the Government will need to help rebalance the playing field between those who own property and those who don’t, which requires help from the Bank of England and the financial institutions.  Otherwise, younger people, bereft of alternatives, will have an growing interest in levelling-down, not levelling-up.  In other words, in a housing market crash.

Andrew Gimson’s PMQs sketch: This canine Prime Minister bounded all over Starmer

8 Sep

Boris Johnson behaved today with greater than usual irrepressibility. He was like a strong, shaggy, affectionate, over-grown young dog, who is never happier than when bounding into your lap, getting hair all over your clothes and sweeping the tea cups off the table with his tail.

This canine Prime Minister supposes everyone will be pleased to see him, and will be cheered by his clever tricks. He loves to jump into a muddy pond, jump straight out again and shake himself all over the nearest people on the bank, to the amusement of those who, slightly further away, manage to remain dry.

Who will teach this beast some manners? Who will train him to walk at heel?

A long line of decent and determined people, including Michael Howard, David Cameron and Theresa May, have attempted to discipline him.

Howard sacked him, Cameron told him to run off and become Mayor of London and May locked him up in the Foreign Office, but none of these solutions lasted.

This week, Sir Keir Starmer has been trying to teach Johnson that breaking the rules, or in this case the Conservative manifesto, simply will not do.

But this is quite a tricky message to get across, for it is an act that distresses Conservatives more than it upsets Labour voters, who may even be quite pleased.

Sir Keir asked whether the guarantee “that nobody needing care has to sell their home to pay for it” still stands.

Johnson didn’t get where he is today by allowing himself to be pinned down by a question like that. He declared with a tremendous air of conviction that the plan for health and social care removes the fear “faced by millions of people…that they would face the loss of their home, their possessions, their ability to pass on anything”.

And he carried the attack to Sir Keir: “What is he going to do tonight? Silence from mission control.”

No silence in the House of Commons: how good it is to hear some noise, some audience participation, after the tepid exchanges conducted via video screen during the pandemic.

The Speaker, Sir Lindsay Hoyle, intervened to restore order and issue a reminder: “I know the House has been away but it’s still Prime Minister’s Questions.”

In other words, Johnson should answer the questions, not ask them.

“His plan is to impose an unfair tax on working people,” Sir Keir said. “My plan is to ensure those with the broadest shoulders pay their fair share.”

Johnson wasn’t having that, and lobbed back some statistics approved by the Institute for Fiscal Studies: “The top 20 per cent of households by income will pay 40 times what the poorest 20 per cent pay.”

Sir Keir cited the sad case of Rosie and asked the jeering Tories, “What does the laughter say to Rosie?”

“I have every sympathy for Rosie,” Johnson replied, before launching into a riff about the inestimable benefits of “a strong and dynamic economy”, with Britain as “the fastest growing economy in the G7”, which it certainly wouldn’t be under Labour.

We found ourselves watching a contest between optimism and pessimism. Animal spirits took on puritanical prudence, and won.

Social care reform – and why we can’t simply tax our way to better public services

6 Sep

Congratulations to the Government.  That’s a sentence written less on ConservativeHome than you might imagine – and, when it comes to public service reform, scarcely at all.

For while the last Conservative Manifesto promised more nurses, GP appointments and police, it provided little explanation, if any, of how these new nurses would provide better care, doctors’ appointments would become quicker to book and extra police would catch more criminals.

And now that Dominic Cummings has left Downing Street, no reforming “hard rain” will drive down on the civil service.  Meanwhile, Tory backbenchers have left the government’s flagship housing plan holed below the waterline.

So it’s to Boris Johnson’s credit that he wants to overhaul social care, even if he hasn’t had a “prepared plan” for it since entering Downing Street, as he claimed at the time.  However, we fear that this is almost as far as the good news goes – because, of all the services in need of change, social care is among the most difficult to tackle.

Here’s why. For a start, many voters don’t understand the difference between how healthcare and social care is provided in in England and Wales.

Health care is funded free at the point of use but social care usually isn’t.  This confusion played a major part in the Conservative general election disaster of 2017.  Many voters hadn’t grasped that the value of their homes is taken into account for residential but not domiciliary care, and revolted when the Tory manifesto proposed to level the playing field.

The source of the muddle is doubtless what Tim Bale, in an agonising blog about the fate of his parents, rightly categorised as optimism bias: namely, the belief that disability and dementia, say, “won’t happen to you – I mean, what are the chances?”

Next comes the question of which problem the Government is trying to solve.  For not all social care goes on elderly people: half of the spending on it is consumed by working age adults.  Demand is rising; more people want social care but fewer are receiving it; council budgets have fared less well than the NHS’s, and local government is responsible for delivery.

And “there is a basic concern among the public about quality,” according to the Kings’ Fund, perhaps especially in care homes.  Then there’s the separate-though-related issue of selling one’s home to help meet the costs.

Penultimately in our list of problems, we turn to manifesto commitments.  The Tory manifesto not only promised more spending for public services; it also ruled out raising certain taxes to pay for it.  “We will not raise the rate of income tax, VAT or national insurance,” it said baldly.  Finally, there is the matter of intergenerational justice.

Questionmarks over trust and fairness haunt the Government’s plan, which is concentrated on the final social care issue that we raise above – selling the family home to help meet costs.  (There will also be a big rise in the means-testing threshold for care homes.)

That means a floor beneath and a ceiling above which no-one will pay.  The higher the floor is, the more poorer people will be protected.  The lower the ceiling is, the less richer ones will pay. So there is an obvious north/south trade-off, broadly speaking, between the interests of, say, Batley & Spen, and those of, for example, Chesham and Amersham over where the ceiling and floor are set.

The Government’s plans are still being finalised, but it seems to be planning to raise national insurance to fund its plan.  Younger and poorer people would thus fork out to meet costs more often incurred by older and richer ones.  This would be unfair – especially in a country in which the latter hold an effective monopoly on capital.  Not to mention a breach of the manifesto.

How might Ministers respond to this formidable list of objections to their plan?  They might say one shouldn’t make the best the enemy of the good, and that even if only one of the main social care problems can be solved, the effort will be worthwhile.

And add that, since their proposals are based on the Dilnot Report, they at least command a degree of consensus.  They would doubtless say that older people tend to vote Conservative, and that it’s bad politics to alienate one’s base.  If Johnson also announces that the triple lock will be abandoned this year, they will claim that he has presented a package that “strikes the right balance”.

The Government’s model is the then Labour Government’s tax rise of the early 2000s to fund higher NHS spending.  Tony Blair got away with it, and the Prime Minister will hope that he does too.

Maybe Tory MPs will vote through a national insurance rise if Johnson, with his majority of 83, puts it to Parliament with the support of his Chancellor.  Downing Street will hope that the prospect of a reshuffle will keep Ministers in order – and that Labour opposition to the NI rise will minimise the Tory revolt.

None the less, we warn the Government that the cat of Conservative tax rises has fewer than nine lives.  Tory MPs won’t indefinitely nod hikes through.

Nor is the Blair precedent encouraging.  His national insurance rise failed to deliver the improvements he wanted.  Hence his later decision to support Alan Milburn as Health Secretary in delivering market-based reform.  Above all, governments can’t expect to break manifesto promises made in one election, and have those it makes at the next taken seriously.

It may be that Johnson will dress up any national insurance rise to pay for social care as a special levy, thus enabling him to claim that he’s not in breach of the pledge he made two years ago – technically, anyway.

But doing so wouldn’t ease this site’s wider concern: that just as government can’t tax its way to a more prosperous economy, it can’t tax its way to better public services.  And that once Ministers start reaching for tax increases to solve a problem, the reflex can become automatic.

At the heart of social care reform for any Conservative Government, two fundamentals conflict.  The first is: there’s no such thing as a free lunch.  The second is: wealth must cascade down the generations.

In other words, someone must pay for social care – be it the user, the taxpayer, or someone else.  If so, wealth risks not so much cascading as trickling down, especially if the main form of saving, the family home, is sold off to meet social care bills.  At the one of the policy spectrum, Policy Exchange proposes rolling social care into the NHS, which would certainly require new taxpayer funding.

At the other end are a long succession of Tory plans for insurance-based schemes.  Peter Lilley’s set out a variant recently on this site, supporting a state-backed voluntary system.

There is no shortage of objections to such a plan – not least potential voter resistance to any Conservative health-related insurance scheme.  But if the aim of government is to protect homeowners from Bale’s “Russian roulette”, this type of proposal has merit.

It would be consistent with the Conservative manifesto, avoid tax rises and a backbench revolt, be generationally fairer, and represent evolutionary rather than revolutionary change, since no-one would be forced to join the scheme.  Instead, the Prime Minister is rushing in where angels, or at least politicians, have feared to tread.

He isn’t always associated with prizing courage over guile, or attempting today what can be put off until tomorrow.  Not for the first time, we’re learning something about Johnson that we didn’t know before.

Andrew Griffith: Unpick the triple lock – because it’s unfair for pensioners to gain from the misfortunes of others

24 Aug

The author is MP for Arundel, founder of the Campaign for Economic Growth, and the former Chief Operating Officer of Sky plc.

Would you keep £50 if you found it lying in the street? Most Britons say that they wouldn’t, and quite rightly. As a nation, researchers regularly find us in the very upper echelons of honesty.

No one would wish to profit from the unprecedented Covid pandemic. But that moral scruple is what lies at the heart of the debate about the so called ‘triple lock’ which currently gives recipients of the State Pension the higher of inflation, a guaranteed 2.5 per cent every year or annual growth in wages.

In an unexpected twist of fate, without an amendment to the current rule, today’s pensioners stand to benefit from the misfortunate of others. Not, to be clear, at their own instigation but as the result of the unique volatility in wages which fell sharply last year as millions, predominantly in the private sector, suffered from the shuttering of businesses and collapsing demand in many sectors.

In theory, election manifestos ought to come with an insurance-policy style page of disclaimers: “excludes acts of nuclear, chemical and biological warfare, large scale cyber terrorism or, as in this case, a global disease pandemic without precedent in modern times and which has left no country on the planet unscathed.”

Perhaps in future they will. But it would be sophistry to ignore the difficulties of the last eighteen months, and pretend that an event which saw cross-party support for Parliament invoking emergency powers didn’t happen. I don’t even believe that most pensioners would wish this.

Pensioner poverty for many is real – although, thanks to past increases in both the state pension and the pension credit, there are 200,000 fewer pensioners in poverty today than a decade ago. As a Member of Parliament, I know the burden felt by those on fixed incomes of annual council tax increases above inflation – ironically, often to put another log on the fire of funding someone else’s final-salary local government pension. But we should not conflate this longstanding issue with an indiscriminate, across the board increase on the back of a Covid19-induced distortion.

Unnoticed in the understandable focus on Afghanistan, last week the Office for National Statistics published wage growth for the three months to June of a record 8.8 per cent. Growth in July – the basis of any annual pensions uprating – is expected by some to be even higher. Demand for staff has been squeezed by the recovery for those businesses able to operate whilst the widely admired furlough continues to protect jobs elsewhere.

The result is a labour market that is so tight you can hear the rivets starting to pop. Using this statistical anomaly of a near double-digit rate of wage growth to increase pensions would, I believe, be wrong.

The Government has been bold and decisive in many of its measures during the pandemic, stepping outside the usual parameters. Similar logic and confidence should pertain to the approach to the April 2022 pension uprating. One example: applying the higher of the rate of inflation or 2.5 per cent would deliver a healthy increase of at least five per cent across the two years of the pandemic, protecting pensioners against the rising cost of living whilst shielding those of working age from what would be an unfair additional tax burden.

One of the positive aspects of the crisis was the collaborative way in which Parliament came together for the common good of the nation. In the summer heat of recent weeks, that has dissipated somewhat. As colleagues return to Westminster in the cooler air of the autumn, I hope that we can build consensus on what should not really be a subject of controversy but a sensible and pragmatic response to post pandemic management of the economy.

Labour’s claim that the Towns Fund is skewed for partisan advantage lacks credibility

5 Mar

The 2019 Conservative Manifesto promised to set up a Towns Fund. It pledged “a new deal for towns” adding:

“Our new Towns Fund will help communities make sure their towns are safe to walk in and a pleasure to be in. We want there to be things to do, great places to shop and eat and transport to be easy. Above all, we want the town’s future to be in the hands of the people who live there.”

It went on to give some details:

  • Regenerating towns. The Towns Fund will go to an initial 100 towns to improve their local economy – and they and only they will make the choice about what improvements their local area needs.
  • Thriving high streets. We will cut taxes for small retail businesses and for local music venues, pubs and cinemas.
  • Giving young people a future. As well as our investment in schools and technical education, we will invest £500 million in new youth clubs and services.
  • Safer streets, safer towns. A new Safer Streets Fund will invest in preventative measures like new CCTV or community wardens.
  • New civic infrastructure. We have announced the largest cultural capital programme in a century, of £250 million. This will support local libraries and regional museums. We will work with local universities to do more for the education, health and prosperity of their local areas.
  • Community ownership. We will establish a £150 million Community Ownership Fund to encourage local takeovers of civic organisations or community assets that are under threat – local football clubs, but also pubs or post offices. We will set up a fan-led review of football governance, which will include consideration of the Owners and Directors Test, and will work with fans and clubs towards introducing safe standing. And we will help communities that want to create ‘pocket parks’ and regenerate derelict areas.
  • Community spirit. Through the Cultural Investment Fund, outlined above, we will also support activities, traditions and events that bring communities together. We will support local and regional newspapers, as vital pillars of communities and local democracy, including by extending their business rates relief.”

So there can hardly be an objection, on democratic grounds, that this undertaking is being delivered. As well as the Towns Fund, with a £3.6 billion budget, we have the £4.8 billion Levelling Up Fund – to pay for infrastructure including regenerating town centre and high streets, upgrading local transport, and investing in cultural and heritage assets.

Nonetheless, there have been complaints that this has been applied in a partisan manner. Bids are locally led.  The Guardian reports that:

“40 of the 45 towns in the first tranche of towns fund spending were represented by Conservative MPs.”

A couple of points should be considered. Firstly, these bids are locally led. If a Labour-run local authority refuses to apply – or to make much effort with the application – that is not the Government’s fault.

Secondly, the Conservatives do have a large majority in Parliament. Yet Labour still dominate in the big cities – London, Birmingham, Liverpool, Manchester, Newcastle, Sheffield, Bradford, Leicester. By contrast, even during the Blair landslides, the villages and the farmers tended to stick with the Conservatives – the rural areas were still predominantly Conservative. Thus Labour MPs will tend to represent the constitiuencies sent city funding; Conservative MPs will usually represent the seats sent rural funding.

So the towns are the crucial places where elections are won or lost. That broad political point is well established – though there were some impressive results last time in the particular towns where the Conservative gained seats. The simple arithmetic that Labour got trounced overall, but still held large number of seats in the cities makes those figure from The Guardian rather less shocking than they might first appear.

The scandal would be if the application for funding to regenerate (or “level up”) a town had been rejected due to it having a Labour MP – while a rival bid was accepted due to it having a Conservative MP. (Or, a variation on the theme, a Ministerial seat favoured over that of a humble backbencher.) Such conspiracy theories are well established, but strike me as implausible. Apart from any ethical considerations, the Minister who instructed civil servants to skew the process in such a manner would be unlikely to get away with it. It would all cause a bit of a stink.

The problem is that criteria for local government finance are so complicated and impenetrable it makes such claims hard to disprove. There is nothing new in this. During the Thatcher/Major era it would be claimed that Wandsworth Council only managed to have such low rates / poll tax / Council Tax due to preferential funding from central Government. Of course, after 1997 and the Labour Government, Wandsworth continued to have a dramatically lower Council Tax than neighbouring Labour authorities.

This new fund is not about favouring one deprived town over another one. But it is about giving favourable treatment to all such places. That is not unreasonable. Our towns have been neglected. The EU’s structural funds were of little use to anyone beyond those administering them. But the European Regional Development Fund would be skewed to shiny prestige projects in city centres rather than the humbler, more practical needs of struggling towns. Not that cities have been forgotten about in other Government schemes. Liverpool is to become a freeport.

Of course, to say that the Towns Funds spending is likely to be more effective than EU regional aid is setting the bar rather low. But this arrangement does allow local priorities to be recognised. It is for the people of Darlington or Grimsby to decide which road needs to be improved. Not just for Grant Shapps, the Transport Secretary, and his officials to micromanage from the centre. Or for Gillian Keegan, the Skills Minister, to tell them what training programmes are needed, or for Oliver Dowden, the Culture Secretary, to instruct them as to which bits of their town’s heritage should be preserved.

A council leader from the Midlands told me:

“I do like the approach of allowing local decisions on what transport improvements should be a priority. We don’t need devolution – with extra layers of metro Mayors or whatever. We need decentralisation to the local government already in place.”

Therefore, the charges of political favouritism are unconvincing. There is also a reasonable case that if this money is to be spent, then local input should be genuine. Whether the broader approach will succeed is more contentious. Could it not be that state intervention is not the means to levelling up, but an obstruction? It always seems to be assumed that public spending is required for regeneration. Yet so much of the derelict land and buildings are owned by the local authority – or other branches of the public sector. Could these sites not be sold to developers to agree to transform them into beautiful homes and businesses? The price might vary according to location, and the condition the property was in. But surely it would be possible for such projects to be commercially viable, without huge subsidies. If that really is not the case, then the prospects of success would seem slim, regardless of how much public money is poured in.

A Brexit trade deal that takes back control

30 Dec

Brexit is indeed a film, a developing tale over time, not a photo – a state of affairs that will be the same in year ten as it was on day one.  So a question that arises about the trade deal which the UK and EU have agreed is whether that story is set to be what the 52 per cent voted for and the 48 per cent can live with.

Once in that referendum, a second time during the Conservative leadership election, and a third time in last year’s general election, Boris Johnson grasped that Brexit would happen in name only if Britain did not take back control – thus satisfying neither constituency.  The film would show no real change and the crowd would want its money back.

Or, as the Conservative Manifesto put it, echoing the Vote Leave slogan: “the future relationship will be one that allows us to take back control of our laws”.  It is not yet a week since the 1246-page agreement, plus five supporting documents, was published.  And MPs will have less than a day to consider the Bill that proposes to put the treaty arising from the agreement into domestic law.

So we are cautious about delivering a final verdict.  But it does seem that Boris Johnson, David Frost, Michael Gove, Oliver Lewis and the Government’s team truly have ensured that this deal indeed takes back control, because “the meanings of the provisions are autonomous under international law and do not reference EU law or jurisprudence of the European Court of Justice”.

“Nor does the Agreement provide a role for the ECJ (except for EU programmes which the UK chooses to opt into) and the EU approach of provisions having direct effect is excluded”.  Such is the verdict of the European Research Group’s Legal Advisory Committee.  This is the heart of the matter and also the heart of Brexit.

This site believes that our nation’s prosperity is not determined by tariff and non-tariff barriers elsewhere, but by the quality of our workforce, the condition of our schools, the competitiveness of our tax system, the quality of business, the state of our infrastructure and, above all, by a culture whose features include strong families, the rule of law, a sense of fairness and a flourishing civil society.

The economic case for Brexit has always been that it potentially allows for “levelling up” – that’s to say, an rebalanced economy based less on the greater South-East, finance, high immigration, an over-valued currency, and parts of the rest of country in near-permanent recession.  Leaving the EU excludes none of the factors that we list above, and which are indispensable to such a programme.

Nonetheless, this Agreement really does seem to recognise the primacy of politics above economics, both for the UK and the EU.  For the UK, that means escaping the ECJ, because without doing so we cannot take back control; for the EU, it means preserving the integrity of its Internal Market, which is part of its wider political framework.

As our columnist Stephen Booth put it on this site yesterday, there is a price to pay for both parties.  For the EU, it is losing one of its biggest contributors, and an important part of its whole.  For the UK, it is less easy access to the markets of EU member states.  The reason why we believed that a deal was on balance likely is that it seemed that this trade-off could be acceptable to both parties.

If a Soft Brexit is EEA membership, and a Hard Brexit is No Deal, this Agreement leans towards the latter end of the scale, whereas Theresa May’s Chequers plan was nearer the former.  As irony would have it, it was May, not Johnson, who in this case wanted to have her cake and eat it – in other words, both to leave the EU and stay close to the Internal Market.

But for all the new non-tariff barriers, there will be no tariff ones – at least, if the two parties can’t settle any future differences through the arbitration mechanisms.  That suits the UK well and the EU better, given its trade surplus in manufactures.  Remainer diehards will go on to say that we are an economic loser under this deal; leaver ones that we are not always political gainers – pointing to the fishing element.

However, those who declare Britain an economic loser are not necessarily right in the long-term, or always in the short.  For example, while the downside of not having a services deal as part of the Agreement will be more complicated access, the upside is not outsourcing regulation of those services to the EU – which that former Remainer, Mark Carney, warned against earlier this year.

Those who say that the fishing settlement will disappoint much of the fishing industry have a point.  Nonetheless, the adjustment period ends after five and a half years, and Britain is now an independent coastal state.  If voters really want a better deal on fish traded off for a worse one on, say, cars, they can always vote for parties who commit themselves to such a programme.

The deal covers co-operation as well as trade but, rather than probe all its strengths and weaknesses, we want instead to make a point not so much about this Agreement as the one that preceded it – the Prime Minister’s “oven-ready deal”: the Withdrawal Agreement.  The political problems with the Brexit settlement overall lie not as far as we can see with this trade deal but its predecessor.

For it was the Withdrawal Agreement which continued the journey which the Anglo-Irish Agreement began – that’s to say, putting a greater distance between Northern Ireland and the rest of the United Kingdom.  In a nutshell, Johnson’s version was better for Great Britain than May’s, but worse for Northern Ireland, and so problematic for the Union as a whole.

So while this Trade Agreement takes back control, the Withdrawal Agreement did not entirely do so, and there is the threat of leakage from ECJ jurisdiction in Northern Ireland to the rest of the United Kingdom.  But that is done and dusted, for better or worse.  The Withdrawal Agreement was the foundation of the Conservative Manifesto.  An election was won on it.  Tory MPs including the ERG voted for it.

The arrangements for Parliamentary scrutiny are so inadequate – the Commons will have only this morning to consider the Bill – that we can’t encourage anyone to vote for it: there may be gremlins in the text of the Treaty that have evaded even Bill Cash and his colleagues.  But the big picture really does appear to be one of a deal that does what it claims.

A slice of that 48 per cent will fight on for a cause that has lost.  But more of it has moved on.  And most of the 52 will be content, if not profoundly satisfied.  Part Two of Brexit is done and the film is rolling.  The odds seemed to be against Boris Johnson getting a Withdrawal Agreement settled, but he got one.  They were against him gaining a general election.  He did it, and won huge.

Once again, he has pulled it off.  Whatever you think of this new Agreement, that’s a personal coup.  He has managed the politics of the EU issue where Theresa May, David Cameron, John Major and even Margaret Thatcher failed.  Churchill walked with destiny.  Today, the Prime Minister, in his serio-comic way, is winking at it.

Amanda Milling: We’re delivering on our promises – and couldn’t do it without grassroots support

12 Dec

Amanda Milling is the Member of Parliament for Cannock Chase and co-Chairman of the Conservative Party.

This time last year Boris Johnson and the Conservative Party secured a momentous election win. It was a win that gave us the majority we needed to end the gridlock in Parliament and move the country forward.

The fact that millions of people put their faith in us, many in seats that had been historically Labour, has allowed this Conservative Government to get the country moving forward by delivering on the promises we were elected on last year.

We promised to get Brexit done, and we left the European Union on the 31st January. We promised to take back control of our borders, and last month we passed the Immigration Act, which will see the introduction of a fairer points-based system with people coming to the UK on the basis of what they have to offer, not where they come from.

We promised to put more money into our NHS, and in March we passed the NHS Funding Act which has provided the biggest-ever cash boost to our frontline NHS services with £33.9 billion a year by 2023/2024. We promised to deliver 50,000 more nurses, and in one year there are over 14,800 more and 6,250 more doctors. We promised to recruit 20,000 police officers and in one year we’ve recruited nearly 6,000. We promised to invest more in education so that young people across the country can have a better start in life. That’s why we’ve delivered a £14.4 billion funding boost for schools over the next three years.

We promised to level up across the country and we’re investing in the biggest ever infrastructure project to link our country by rail and road. Our Towns Fund is providing 101 towns throughout the UK with money to improve their areas increasing jobs and investment.

Even with the fight against Covid-19 – which has seen us put in place a £280 billion economic support package to support jobs and livelihoods, provide over 30,000 ventilators to our NHS, deliver billions of items of PPE, conduct over 40 million Covid tests, and become the first country in the world to roll out a vaccine – we have remained determined to deliver on the promises we made to you last year.

However, none of this would have been possible without the many hours so many of you, our dedicated supporters, activists and members, put into the General Election campaign. In the cold, dark and rain you trampled hundreds of thousands of miles delivering leaflets and knocking on doors to get the Conservative message out there. You spent hours on the telephone asking people to vote.

Without your efforts on the doorstep and the endless nights of telephone canvassing, we would not have defeated Jeremy Corbyn and the Labour Party.

It’s why today the Prime Minister and the Chancellor are hosting a virtual members event to say thank you for your support and mark this momentous occasion one year on.
This is the biggest grassroots fundraiser we’ve ever held and you will be able to ask Johnson and Rishi Sunak questions directly on everything from the election to getting Brexit done and the unprecedented year 2020 has been.

This time last year none of us could have predicted a 2020 like the one we’ve had, but in the face of adversity we stepped up to the challenge and put in place measures to protect the NHS, jobs, and livelihoods. And with the roll out of the vaccine this week there is light at the end of the tunnel.

Next year we have a bumper crop of elections with local, Police and Crime Commissioner, mayoral and elections in Wales and Scotland.

So I hope you’ve got your delivery bags and boots to the ready as we get back out on the campaign trail, abiding by the latest Covid guidelines, working to get Conservatives in charge of your local services and strengthening our union with more Conservative voices in power.

There’s no denying these elections will be tough but I have no doubt that your hard work on the campaign trail will help. Conservative councils, mayors, and PCCs have a proven track record of providing good local services, securing vital investment to boost jobs, and keeping communities safe.

The alternative is Labour wasting taxpayers money and playing politics for their own personal PR rather than working to deliver for the people they represent.

Last year showed that if we work together as one team we can achieve great things. I look forward to joining you as we get out delivering leaflets, following the guidance, and hit the phones to get even more Conservatives into public office.

Damian Green: Why a forced choice between a Brexity North and a Globalist South would be a false one – and damage our Party

16 Nov

Damian Green is Chair of the One Nation Caucus, a former First Secretary of State and is MP for Ashford.

2020 has brought many words to the forefront of our conversations: pandemic, lockdown, mask. Suddenly “reset” has become the latest addition to the thesaurus of 2020, as politicians and commentators ponder the future of the Government in the post-Dominic Cummings era. Is Boris Johnson about to head out in a new direction, or would any deviation from the path of 2019 be a politically unwise heresy?

We should start with the Prime Minister’s own favourite self-description. He always refers to himself as a One Nation Conservative. So I take it as a given that he wants to run a One Nation Government: one which seeks to unite, heal and provide opportunity for all. The interesting question is what does this mean for the coming decade, as the country seeks to recover from Covid-19 and make the best of Brexit.

The first change will need to be a simple change of tone. Crossing the road to pick a fight may be a rational strategy in the period of a campaign, especially one which you are not confident of winning, but it is a rotten way to run a government. There are absolutely battles that need to be fought and won, but any administration can only fight on so many fronts at once. If too many people are potential enemies to be denigrated and then crushed, then you rapidly run out of friends. Every government needs loyal friends.

This is a relatively easy reset. The deeper question is whether there also needs to be a significant change of substance. What will a One Nation Government concentrate on, and would that produce a more contented country, and therefore a platform for re-election in 2024?

The short answer is that the Government should re-read the manifesto on which it was elected, and concentrate its efforts on the big promises in it. Brexit has happened – so it should now move on very rapidly to making a reality of levelling up.

Every One Nation Conservative applauds the concept of giving particular help to parts of the country that have been left behind, but also thinks that there are national policies that allow us to do this without creating a competition between North and South.

Much better training and education, both for young people and older workers whose job skills have become obsolete, would benefit everyone, but would have particular effect in towns and cities where jobs have been harder to find.

In health policy, one lesson we have learned from Covid is that it is the co-morbidities that come from poverty and disadvantage that make people more likely to die. So meeting the manifesto commitment to increase healthy life expectancy by five years by 2035 can only be done through reducing health inequality. This in itself would be a One Nation priority, but its practical benefits would be most obvious in the Blue Wall seats.

I observe that there is a rearguard action from climate sceptics against this week’s environmental announcements from the Prime Minister. This takes the form of claiming that no one in the North cares about the environment, as they really want jobs and prosperity.

There are two answers to this. The first is that these policies contain vital measures to make sure that the jobs of the future come to this country rather than others. You can, as I do, want more power generated from wind, and want the people making wind turbines to do so in areas of the UK with traditional manufacturing skills. The second is that to assume that no one in the North cares about the future of the planet is patronising nonsense.

This attack on green policies that were also in the manifesto is a symptom of a wider misconception which is already beginning to spread: that the Conservative Party has to choose between the gritty Brexity immigration-sceptic North and the soft, affluent globalist South.

This is a counsel of despair, as it suggests that there is no way Conservatives can win a stable majority in the long term. More importantly it ignores the capacity of this Government to produce a raft of policies which unite large parts of the country. Strict immigration control (and indeed Brexit) are as popular in my Kent constituency as they are in Stoke, Wigan, or Darlington.

Crucially, though, so are policies which help people into jobs, which preserve a decent welfare system in a time of trouble, and which create the economic conditions that encourage the creation of new businesses. It is not northern or southern (or English, Welsh, Scottish or Irish) to want people to stand on their own and take their own decisions, while being entitled to help from society when they need it. This Conservative version of the welfare state is at the heart of modern One Nation thinking, and our longest period out of power was when Tony Blair and New Labour stole it.

Conservatism needs to be more than libertarianism, and more than small-statism. There are different traditions that come together in the Conservative Party, but what unites them is a respect for our country, out history and our institutions. We will never be “woke” because too much of what passes for progressive politics is transient and illiberal.

But if fighting a culture war from the right involves trashing our institutions, like Whitehall, the judiciary or the BBC, it is dangerously unconservative. A wise Conservative Government will always reform, but very rarely offer revolution. Above all, it should respect the rule of law.

A reset Government will double down on the many excellent promises it made the country last December, knowing that after the worst of Covid has passed it has three years to demonstrate to Conservative voters old and new some visible improvements in public services and communities. The One Nation Caucus is producing a series of policy papers to provide new ideas to help the Government on this course. Let’s hope the new word for 2021 is “recovery”.

Anthony Browne: Are we really going to pass a law that would devastate many of the world’s poorest people?

11 Oct

Anthony Browne MP is MP for South Cambridgeshire, and is Chairman of the All Party Parliamentary Group on the Environment.

Would you support a law that could ban imports of tea, coffee and bananas into the UK, devastating many of the world’s poorest economies – and people? Or that effectively bans food imports from developed nations which have a trade deal with us – but allows them from those that don’t?

No, I didn’t think so.

But that would be the impact of last week’s House of Lords well-intentioned but ill thought-out amendment to the Agriculture Bill, coming to the Commons tomorrow, which insists that agricultural imports under any trade deal would have to be produced to the UK’s environmental protection, animal welfare, food safety and plant health standards.

Making sure we don’t allow trade deals to undermine our environmental and animal welfare standards is an issue I passionately support, to the extent I made it the thrust of my maiden speech. I have been environment correspondent of two national newspapers, and am chair of the APPG on the Environment.

I have a rural constituency, and like most MPs, my inbox is flooded with demands – many prompted by Jamie Oliver’s campaigners – that I support this amendment. The Conservative Manifesto is also committed to ensuring trade deals don’t undermine our animal welfare, food safety and environmental standards. I know that the overwhelming majority of my colleagues support this aim.

The amendment sounds entirely reasonable, but its consequences could be utterly unreasonable. It is based on very solid principles which we can all support – but simply legislating for good principles rarely makes for good law.

Even its supporters should accept from the outset that this law is not a preservation of our current standards on imports, but a dramatic raising of them. It creates a potentially vast set of new conditions, which do not exist under any existing EU or UK agreement.

It would be extremely unlikely that trading partners would agree to all requirements; in some cases, it might not even be possible for them to do so. The EU is instinctively protectionist, but even it does not require that all imports have to precisely meet our environmental and animal welfare standards. Do campaigners think EU standards are unacceptably low?

We import bananas from many countries including the Dominican Republic, Belize and Cameroon. We import coffee from Indonesia, Ghana and Vietnam and black tea from Kenya. We do all this under existing (EU) rules.

But this amendment would require all these countries to have processes in place to show that they meet thousands of pages of UK domestic environmental and animal welfare legislation. The cost would be prohibitive and also unnecessary: I can tell you for free that they do not meet the carbon emission targets of the Climate Change Act that are now UK law. If we pass this amendment, pretty much all food imports would be banned from pretty much all developing countries if we signed a trade deal with them.

Developed nations can better afford to provide the evidence that they meet UK standards, but many of them are seriously inappropriate. Our geography and climate mean that we need strict legal controls on nitrate concentration in soils, which are inappropriate for other countries. We have laws (to protect nesting birds) on what time of year farmers are allowed to cut hedges, which would be completely wrong-headed to impose on producers with different eco-systems.

Campaigners would take cases to court to decide what imports are allowed. We were the first major economy in the world to legislate for Net Zero by 2050. Do we ban all agricultural imports from countries without those legal targets? There is a contradiction between us wanting to be world-leading on environmental standards, and then insisting we will only trade with those who have the same standards.

There is also the bizarre unintended consequence that the amendment only applies to trade where there is a free trade agreement. So we could import coffee from Vietnam if we have don’t have a trade agreement, but if we do have a trade agreement we would have to ban coffee imports. Our trade deals would become anti-trade deals.

Like the EU, we should be pragmatic. The detail is so complex, we can’t tie the hands of our trade negotiators with blunt legislation, but rather we should examine in detail whether we support what they are proposing.

That is why the government has agreed with campaigners to set up an independent Trade and Agriculture Commission to advise on how best the UK can seize new export opportunities, while ensuring animal welfare and environmental standards in food production are not undermined. I think there are strong arguments to make this commission permanent to scrutinise future trade deals. If you don’t trust the assurances of ministers, Parliament already has the power to reject any trade deal that it does not like.

Debate on this issue often ends up focused on the US’s chlorinated chicken. But there is already a UK law banning any product other than potable water from being used to decontaminate meat. Whatever is agreed in any trade deal, chlorinated chicken could only be sold in the UK if Parliament passes legislation allowing it. As Sir Humphrey would say: that would be very brave.

The overwhelming weight of political opinion is against us lowering our standards. We need to keep the same high standards on food and agriculture imports as we had in the EU. And that is exactly what the Government is doing.