Richard Holden: We shouldn’t try to win a spending arms race with Labour in this Budget – which we would lose anyway

1 Mar

Fight Fitness Guru, Consett, Co. Durham

During the last fortnight, the white wasteland of frozen fields has given way to the flora of spring in County Durham.  The thaw in the land of the Prince Bishops is being met with a broader feeling in the towns and villages that spring is on the way.  With 20,000,000 vaccinations done and accelerating, as well as the Prime Minister’s roadmap providing clarity for the future, there is a real feeling that the tide is turning.

This week’s Budget must be another step along that road.  However, with so many competing concerns it will be a difficult balance to strike.  To get it right, it’s going to be essential to zoom out and look to where we want to be in a few years’ time.

Our economy has taken a pounding because of Covid-19.  Three hundred billion pounds in extra spending and support, paying people’s wages through furlough and supporting jobs and businesses has been provided.

Three hundred billion pounds extra: that is wartime levels of additional expenditure. For context, it is more than twice the size of the NHS budget annually. It’s an extra £4,500 for every man woman and child in the UK, or about £12,000 for every income-taxpayer in extra spending: money that’s had to be borrowed.

The support has been colossal and necessary. It has protected businesses and jobs and crucially will enable our economy to bounce back as quickly as it can. But this backing wouldn’t have been possible if the Government hadn’t taken the necessary decisions to keep spending under control during the last few years.

Colloquially, this point is made frequently by my constituents, along the lines of: “I’m glad it was you lot in and not Labour. If they’d been in ,God knows what would have happened.”

Which takes me to the political.  One of the biggest gateways to so-called “Blue Wall” voters switching from Labour to Conservative was Jeremy Corbyn. But this wasn’t just because of the terrorist sympathising and antisemitism. Or Keir Starmer’s policy of betraying democracy over Brexit. It was also because of Labour’s economic credibility.

People stopped listening to Labour’s promises when they became increasingly outlandish.  Remember them? Free broadband for all, give WASPI women £30,000 each, cancel student debt and make university education taxpayer-funded. The list went on – all with no plan to pay for it: it was fantasy economics that lacked basic credibility.

This is where we Conservatives now need to be careful, and why Rishi Sunak needs to tread a fine line. We cannot, nor should we wish to, win an arms race with Labour over who can spend more taxpayers’ cash.

We’ve not spent the long, hard yards of the last decade, undoing the catastrophic position Labour left in 2010, to let that credibility go. The reason we’ve been able to support the country through the global pandemic is because we’d had credible spending plans for the last decade. The reason Labour couldn’t win in 2010 is because Labour believed its own hubris about having ‘abolished boom and bust’ and, to nab a much-loved phrase from George Osborne, “failed to fix the roof while the sun was shining.” And the result was the famous note from Liam Byrne, then Chief Secretary to the Treasury: “there is no money left.”

Given such an analysis of where we are, then: what’s next? The budget must focus on three things:

  • Recovery. Allowing the country, especially our hardest hit sectors to bounce back from Covid – and in doing so avoid a massive spike in unemployment.  This week, I led 68 Conservative backbenchers in writing to the Chancellor about support for pubs (massive employers of young people) via keeping beer duty down. It’s vital that he also allows our high streets breathing space regarding business rates. And for families in constituencies like mine, where for so many a car is essential, fuel duty rises, which Conservatives have found hard against for a decade, need to be avoided.
  • Delivery. Keep building towards our key manifesto commitments on public services: more police, more nurses, crucial infrastructure and deliver on the levelling up promise that was made.
  • Credibility. Long-term economic stability with borrowing under control to allow us to keep our debt – and crucially our debt interest payments – under control.  We can’t just hope that interest rates stay this low forever: they won’t. Only a balanced plan will allow the Government the space to deliver on the first two objectives of recovery and delivery.

It’s a tall order, and the Chancellor needs to be clear, honest, and fair in what he spells out. Those who’ve profited during the pandemic and those with the broadest shoulders should take the lion’s share of slack as we now deal with the consequences of it.

As for Keir “Goldilocks” Starmer – naturally, nothing will be ‘just right’.  But he won’t come up with any other real proposals, either. He’s opposed to anything that will raise revenue, but Labour MPs will doubtless demand more spending.  The party is all over the place, with a front bench hopelessly out of its depth, and a broader one so divided as to the way forward that it’s hardly a surprise Sir Keir is unable to get them to agree on anything but to abstain.

So Labour’s economic credibility will remain in tatters. We need ours to remain strong.

This spring in North West Durham and across the “blue wall”, let’s ensure that the growth we see is built to last. Unsustainable borrowing might be Labour’s answer, but it can’t be ours. Without doubt, at some point, winter will come again.

And when it does, we’ll need to respond to it from a position of strength with flexibility – as we have this time.  The electorate will not forgive us is we don’t ensure long-term credibility. Without it we put both a sustainable recovery from the global Coronavirus pandemic and delivery of our manifesto in jeopardy.

Perhaps the simplest way of putting it on the Budget is: it’s all about economic credibility, stupid. Because come 2024, it certainly will be.

The Universal Credit Uplift. Easy in, but not easy out.

8 Feb

We can’t speak for other enthusiasts for the free market economy – including Allister Heath, our columnist Ryan Bourne, and John Redwood – who urged unprecedented state intervention when the pandemic broke.  (As we did: the economy was undergoing the equivalent of a heart attack, and needed emergency surgery urgently.)

But we believe that they also knew well that, when it comes to the expansion of government, it’s easy in, but not easy out.  Of which the Universal Credit uplift is providing a classic illustration.

The Benefits Uprating Order is being considered in the Commons this week, but a decision on the uplift’s future has been postponed.  Ministers are telling Conservative MPs that “a decision regarding its future will be made in due course…it is only right that we wait for more clarity on the national economic and social picture before assessing the best way to support low-income families moving forward”.

On the one hand, that is not a principle that has been applied to other benefits.  On the other, Universal Credit, though paid to some people who don’t as well as to some who do, is becoming the main employment-related benefit.

In the summer of 2019, 33 per cent of those receiving Universal Credit were in employment, and 41 per cent were in the Searching for Work conditionality regime.  That snapshot from before the arrival of Covid-19 gives a sense of what the payment does and where it was going.

But pandemic has exploded figures like those.  At the start of the pandemic, about three million people were claiming it; now, that figure has all but doubled.  Unemployment has already hit five per cent, or 1.7 million people.

However, this uncertainty isn’t the main reason for the delayed decision on uprating.  The driver of the pause is an institutional clash between the Treasury, the guardian of the public finances, and the Department of Work and Pensions, the steward of what goverments used to call the social security system.

Rishi Sunak has floated one-off payments to keep down costs to the taxpayer (or such has been the briefing); Therese Coffey has said that these are not her “preferred approach” (no briefing here: she said so publicly last week to the Work and Pensions Select Committee).

She can point to Universal Credit as one of the government’s pandemic success stories – the main one, arguably, before the vaccines came along.  As Iain Duncan Smith wrote on this site, “on the old system, these claimants would have to be processed physically ,and the queues and chaos at job centres would have dwarfed anything we have seen so far, as well as increasing infection rates”.

It can be argued that the payment does not target our poorest people.  Philippa Stroud, formerly Duncan Smith’s adviser when he was Work and Pensions Secretary, has put that case.

“The Government could decide to focus on those who are moving in and out of poverty and close to the labour market (the top seven million). That is in effect what the £20 uplift has done in Universal Credit. Or, it could decide to focus energy and resources on those in deep poverty – those who are 50 per cent below the poverty line (bottom 4.5 million),” she wrote on ConservativeHome.

“This is the most vulnerable group and where I would put my energy and effort at a time of national crisis.”  However, the poorest are not necessarily those who have been hit hardest by Covid.

Stroud is now at the Legatum Institute, and a recent report from the think tank found that “poverty has reduced among some groups…this is because many non-working families have seen their benefits increase, meaning that they are less likely to be in poverty than would have been the case in the absence of the Covid-19 pandemic.”

The story of the Coronavirus continues and all judgements must be provisional.  But our take on the virus so far is that manual workers, younger people, women, and a section of the self-employed have been disproportionately affected in economic terms.

A substantial slice of these are the battlers, strivers and just-about managings of electoral legend.  And the number of them on Universal Credit has soared – as we have seen.  They will be well represented in the Red Wall and other former Labour seats in England’s provinces in which the Conservatives did so startling well at the last election.

The debate that Stroud wants about anti-poverty policy is made harder, she argues, by the absence of an offical measure of poverty – abolished in 2016.

“We are allowing others to create a narrative for us, and in the absence of an agreed poverty measure and subsequent strategy, we always will,” she says.  She champions a new measure from the Social Metrics Commission which she has helped to drive; the Centre for Social Justice disagrees, arguing for a focus on outcomes that reduce family breakdown, addiction, worklessness and poor schools instead.

We wrote yesterday that if Boris Johnson wants to take healthcare policy left (which Ministers are denying), Parliament will probably let him do so.  It may be a different matter with the Universal Credit decision.

Our sense is that Conservative backbenchers, as so often, will be driven by their constituents’ immediate needs, first and foremost.  Maybe there is some one-off compromise – the Prime Minister’s reflex will be to hunt for one – that involves some new scheme, such as that floated by the Centre for Policy Studies.

But it is hard to see how the Government can avoid running the uplift for another year: the alternative of doing so for a few months, which would do little if anything to abate the political pressure on Ministers, doesn’t look appealing.

We end where we began.  Once benefit payments have been raised, it is difficult to cut them.  The conventional means of establishing control is either to freeze their value, or replace them altogether – while getting more people into work.  That’s part of the recent story of benefits, through Peter Lilley’s reform of incapacity benefit under John Major to the Employment Support Allowance of the Labour years.

So much for the short term.  What about the medium?  Is the divided backbench reaction to Marcus Rashford’s campaigning the shape of things to come, with Tory MPs taking a less stringent view of welfare than during the years of much higher employment?

Ryan Bourne: A reassuringly conservative speech from Starmer’s Shadow Chancellor. The Tories will need to up their game.

20 Jan

Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.

Just in case the Conservatives hadn’t got the message: Labour under Keir Starmer is a very different beast to the party under Jeremy Corbyn.

Dueing the past fortnight, the Labour leader has parked his tanks on conservative lawns, talking first of Labour as “the party of the family,” then setting out a foreign policy vision of the UK as a “bridge between the U.S. and Europe.” Annelise Dodd’s Mais Lecture on economics was perhaps more striking still in the break of tone and type of criticisms made of Conservative policy compared with the last leadership.

Gone were the unhinged attacks on “neoliberalism” that characterised Corbynite bloviating. The fault-finding was specific and targeted. Dodds acknowledged the difficulties any government would face in a pandemic. Her surgical critique was that the UK’s Covid-19 outcomes were worsened by government foot-dragging on tightening lockdown restrictions, and Treasury attempts to fine-tune the balance between economic and public health.

Specifically, she claimed that its mixed-messaging on financial support to businesses, first delivering it and then threatening to withdraw it based on firms’ “viability,” created needless uncertainty. With the vaccines hopefully soon ending the pandemic, she argued that supporting firms until reopening was now more prudent than letting the chips fall when furlough ends in Spring. On the balance of costs and benefits, most economists would probably now agree.

There was little Corbyn-like wailing about past “austerity” either. Dodds’ criticisms of the last decade of government fiscal policy were restrained, and more plausible for it. She claimed that some spending cuts may have adversely impacted the pandemic response; that 16 fiscal targets coming and going since 2010 has created instability; that there should be more focus on the long-term public finances rather than the short-term; and that rapid deficit reduction coming out of the pandemic (including tax hikes, as Rishi Sunak reportedly wants) would be economically destructive. All these criticisms, individually, would not be surprising in ConservativeHome op-eds.

Yes, Labour still wants a bigger state than the Conservatives. Yet unlike many on the Left, Dodds appears under no illusions that running up debt is riskless or a free-lunch. “…it would be an irresponsible economic policymaker who planned on the assumption that low interest rates will continue indefinitely,” she said, while musing about a longer-term inflation risk. Her new “fiscal framework,” focused on planning to balance day-to-day spending and tax revenue, would be based on the recommendations of the Institute for Fiscal Studies.

Now none of this is particularly exciting. The speech was littered with boilerplate progressive assertions and the usual touching faith in the power of government. But it’s telling that Dodds actively shirked the opportunity to announce some glitzy new retail offer to grab newspaper headlines. There was no promise even of a Labour government “creating” high-wage jobs, or “transforming” the economy.

Instead, the speech was quintessentially small-c conservative. Labour, we were told, would protect the independence of the Bank of England, be “responsible” with the public finances, embrace free trade, protect businesses from Covid failure, focus policy on thorny structural problems rather than chasing day-to-day media coverage, and deliver “value for public money” from government spending.

Indeed, peer through the mundane parts of the speech, and you see a rhetorical critique of the current government that wouldn’t have looked out of place coming from Conservatives a decade ago. Dodds’ subtle message was that government decisions on infrastructure and procurement contracts were often determined more by short-term, pork-barrel political considerations than sound economic judgment, bringing with them at least a whiff of crony capitalism.

The speech highlighted waste and mismanagement through Covid-19, for example, including on the test-and-trace programme and the purchase of faulty antibody tests. Any errors are more forgivable in a pandemic when there were potentially huge returns on such investments and time is of the essence.

But those types of criticisms will likely amplify with Conservatives’ newfound penchant for large regional infrastructure projects (prone to massive cost overruns) and place-based revival packages (prone to political cronyism). Again, the argument that Conservative economic decisions are politically-motivated and wasteful is a very different attack than the more ideological opposition from Corbyn and McDonnell.

None of this is to say that all of Dodds’ analysis is coherent or correct. The theme of the speech was “resilience” – that is, how the pandemic shows the need for an economy robust to future shocks. Mercifully, Labour has not jumped on the bandwagon of saying the pandemic proves we need the government to actively re-shore a whole bunch of medical manufacturing production—the braindead, yet widespread “fight the last war” recommendation of those unable to conceive of shocks originating here. Yet there was still a bit of a “this crisis proves much of what I’ve always believed to be true” about her analysis.

Dodds suggested, for example, that a lack of savings among the poor, job insecurity among gig economy workers, and “socio-economic inequality” all help explain Britain’s poor Covid-19 outcomes. Perhaps on the margins those factors did make things worse. But the overwhelming reason why the UK has performed badly so far relative to countries such as South Korea, Taiwan, Australia, and New Zealand, is surely little to do with the labour market or macroeconomic policy, and almost entirely explained, to the extent that policy can actually explain things, by public health decisions at various times.

It is within Labour’s comfort zone to say reducing inequality and strengthening workers’ rights would have mitigated the costs of this pandemic. It would have been braver for them to expose failures in government bodies: say, Public Health England, whose centralisation of testing proved a disaster; or the NHS, with its systemic rationing reducing the incentive for spare capacity; or government scientists, who downplayed the early need for tough measures and told people mask wearing was unnecessary. If they really want “resilience,” they would surely explore the future case for deregulation in medical innovation. Earlier human challenge vaccine trials, for example, could have sped up delivery or a working vaccine, negating much of the last year’s pain.

Such a broad evaluation was perhaps always too much to hope for. But this speech proved that Labour is developing a more refined critique of the Conservatives. This is not the sort of emotional “blood on their hands” or anti-capitalist screeching we saw from Corbyn’s Labour.

Instead it is a crisp focus on the need for decisiveness, competence, and propriety in delivering effective government. The upgrade in opposition may well, in time, sharpen government decision-making. But a party with half-baked plans to rebalance the economy through massive infrastructure projects and shifting around government departments, led by a Prime Minister known for making late calls, may find such criticisms difficult to shake off.

Responding to Rashford

15 Jan

We argued yesterday that those losing out most during this pandemic are not those at the bottom of the poverty ladder, but those on the next rung up.  These include a mass of the “just-about-managing”.

Since policy options are necessarily limited, whoever is in goverment, and demand trade-offs between different interests, it isn’t hard to see what the consequences will be when the pandemic abates – and are already.

In sum, the Government can’t avoid making choices that most help those who remain the poorest, or else those who have recently become poorer.

At the moment, it is unsure which to do.  Explaining why this is so also explains why it is on the back foot against Marcus Rashford’s campaigning, and suggests a means of it getting back on the front foot.

New Labour’s original child poverty target in government was to reduce the number of children living in households with less than 60 per cent of median equivalised income.

This measure can have perverse outcomes: for example, if the average income goes up, but the incomes of people lower down the income scale stay as they were, then poverty will be officially recorded as having increased.

“Such a definition means there are more people in “poverty” now than in the 1970s despite decades of material progress,” our columnist, Neil O’Brien, argued in back in 2012 when he was heading up Policy Exchange.

He believed that Labour was conflating fighting poverty with boosting equality, and he was right. In 2015, that target was duly abolished.

Iain Duncan Smith, then Work and Pensions Secretary, wanted to replace it with a new measure – one that would, for example, assess whether poorer children were getting an improved education which would boost their life chances.

But there was none available at the time, so the Government settled for a new duty to report levels of educational attainment, worklessness and addiction.

Which brings us to his former Special Adviser, Philippa Stroud – now Chief Executive of the Legatum Institute, whose work underpinned our piece yesterday, and illustrates the choices that Boris Johnson must now make.

She believes that the Social Metrics Commission (SMC), which she helped to form after leaving government, has cracked the problem and found a definition that will work.

Were the Government to take it up, it would at least be clear what is trying to do when trying to help reduce poverty – which, as matters stand, it doesn’t.

This leaves it vulnerable to every lobby and interest group with its own definition, own campaign and own demand, which may once again seek to blur the difference between tackling poverty and equality.

Stroud has conceded on this site that some “will be nervous about a new measure of poverty, even one that has gained consensus across the political spectrum”.

That Ministers are apprehensive about giving their opponents a stick to beat them with explains the delay in taking up the SMC measure by developing experimental statistics.

But although they are damned if they do, they are also damned if they don’t – as we have seen.  Rashford is moving on from free school meals, and is now tweeting about the forthcoming Universal Credit uplift decision.

Stroud pointed out that maintaining the uplift would assist those on the first rung up of the poverty ladder rather than those at the very bottom.

That might well be the right action to take – but is it where the Government wants to concentrate its anti-poverty efforts?  What are the trade-offs?

Where else might the money go instead?  For example, could it be used exclusively to help to get people into work rather than to assist some people who are already in it?

It’s true that if Ministers have a settled direction in which to steer their ship, those on board will inevitably complain about it.  And the Treasury will want to muddle along.

But if they don’t, the passengers will effectively take control – shouting a mass of conflicting instructions, which those Ministers will then ignore, contradict and surrender to in conflicting measure (if Number Ten doesn’t do it for them).

This is bad for the Government, bad for the Conservative Party – and, above all, bad for those at the bottom end of the ladder, wherever they are situated on it.  Stroud’s advice should be taken without further delay.

Frank Young: We’re sleepwalking into a crisis if we don’t vaccinate against poverty, too

9 Dec

Frank Young is Political Director at the Centre for Social Justice.

It wasn’t all that long ago that Conservative Prime Ministers were waging “an all-out assault on poverty”, or standing on the steps of Downing Street making solemn promises to make “social reform” the top priority for government.

These were Conservative Prime Ministers. This wasn’t just rhetorical flourish – the sort of thing a politician might say to give the impression of being a caring sort of person there was real focus on tackling poverty in the depths of Whitehall. It is little known outside of the civil service, but had David Cameron stayed in office for one week more in 2016, he would have announced his ‘life chances strategy’ – a plan to tackle poverty which was on the grid, ready to be rolled out. Turn back the clock to the start of a decade, and the Coalition Government introduced a framework for tackling persistent poverty. It’s still there if you do a Google search.

Recent polling conducted by Survation on behalf of the Centre for Social Justice unmasks the true scale of the poverty precipice that we’re looking over as 2020 comes to an end. This work, quizzing over a thousand households on the lowest incomes found that more than one in three are afraid of losing their job in coming months; nearly as many have been unable to pay a bill, one in five are going hungry and one in six fear being made homeless. A quarter of these families have less than £350 saved up when crisis hits. This is the sort of analysis that should get ministers scrambling for a proper plan to tackle poverty.

Support for the Conservative Party from low income voters appears to be ebbing away. Labour now enjoys twice as much support among this group than the Conservative Party. In 2019 the Labour still had a lead, but the gap was much smaller. The low-income households we polled make up one in six voters, more than enough to swing the seats that decide elections.

Only three in ten low income voters think the Conservative Party is concerned about supporting people on low incomes, against over a half who said the same thing about the Labour Party. In crude political terms, the path to victory in 2024 requires a poverty plan. There’s no realistic chance of ‘levelling up’ if we don’t address the social impact of disadvantage alongside economic revival. If we can have an ‘industrial strategy’ – then we can surely have a social equivalent too.

The true reality of poverty will be hard to escape as we recover from the Covid-19 epidemic and a plan of action is needed now more than at any point in recent history. Last week, we discovered that Government mandarins were circulating secret Armageddon documents, detailing the true impact of lockdown and coronavirus related restrictions on British business.

It shouldn’t surprise us that such a document exists, or the detail into which it delves. It is the job of government and the role of Parliament to extract it from ministers for full public scrutiny. What should surprise us is that there is no social equivalent. Where is the detailed analysis of the social impact of closing down the economy (and the answer is not in recent Government documents cribbed from the Office for National Statistics)?

It’s always easy to criticise and turn politics into Christmas panto. When it was needed, the Chancellor stepped in quickly with bags full of borrowed cash to prevent an unemployment catastrophe and extra cash for welfare claims. His furlough plans came with a Rishi Sunak logo but, once support is lifted, we will need to think about a long term solution to match the short term reaction. This means more than simply transferring money through welfare cheques.

A grand plan needs go back to the ‘root causes’ of poverty much loved of previous Conservative Prime Ministers. That means putting a focus on reducing family breakdown and dysfunction, recovery from addiction, ensuring unemployment doesn’t drift into long term worklessness and ensuring our education system helps children growing up in poor households escape poverty in adulthood.

There’s no reason why the Conservative Party can’t scoop up plenty of support in parts of the country where money is tight, and the need for the state to step in the greatest. Immunisation with a vaccine is only part of the job in 2021. The lesson of the last year is poorer communities are much more vulnerable to the next virus or health emergency. If we can plan for the economy to take off when the virus is behind us, we should plan to reduce poverty too. There is nothing socially just about a bankrupt country, but it takes more than a roaring economy to really push down on people living in miserable conditions.

Richard Holden: This first Johnson year demanded tough short-term decisions. The coming second will demand tough long-term ones.

7 Dec

Richard Holden is MP for North West Durham.

The Sarnie Salon, Consett

A week may be a long time in politics, but a year is an eternity. Another truth is that it is very rare that situations arise in politics that have never been encountered before.

But the best-laid plans of twelve months that were expected to be dominated by Britain getting out of the European Union, and starting to level up the country – so delivering on two of the major promises of the election – have been more than overshadowed by the borderless forces of nature.

In North West Durham, with the fells iced with snow, I was thinking about other times when occurrences on the other side of the globe had dealt out a thrashing to well-laid plans.

In 1815, a volcano in Indonesia exploded. Mount Tambora was reduced by five thousands feet in height, as the mountain was blown into the incalculable pieces and up into the earth’s atmosphere in the greatest explosion in a thousand years.

1816 became known as the ‘year without a summer.’ Crops failed, the largest famine in the nineteenth century ripped through the world, and hundreds of thousands died as conspiracy theories abounded.

While today we know more about why and how external shocks happen – facts that won’t stop some of those conspiracy theorists – this doesn’t alter the impact of such events . No-one can doubt that the global Coronavirus pandemic has hit every aspect of our lives, and that its aftershocks will be felt for many years to come.

The disaster that we witnessed in Southern Europe of football stadiums being used as mortuaries and hospitals being overwhelmed has been averted here. The measures that have been taken to avoid that scenario have come at a huge financial cost, as taxpayers’ money has been used to support employees and employers, since businesses were forced to close in the interest of public health to the tune of hundreds of billions of pounds. The other costs, in terms of impacts on education, physical and mental health are not yet fully quantifiable, but will be significant, too.

In the early nineteenth century there was no understanding of what had happened among either the people or the Government. The price of food went, no-one knew why – and there was suspected conspiracy, which led to rioting in the cities. In the countryside, people didn’t know why the sun wasn’t shining. That, by contrast, we know the causes of the problem we’re facing is very helpful – and the recent announcement of vaccines also gives us an end point.

For the overwhelming majority of my constituents, because they have a panoply of facts on hand, the pandemic isn’t political. What they want to see if politicians of allsides working to get out of it.

For our political opponents, their attempts at politicising it are probably the reason that, despite the economic impact, poll ratings are holding up for the Government. Rather than a government-in-waiting, Labour are seen as an opposition that leaves people wanting. In the last year nothing could be clearer than the seeming inability of the new Labour leader to deal decisively with Jeremy Corbyn and Labour’s anti-semitism problems. It is quite clear that the opposition is hopelessly divided.

For Labour, their situation a year in is compounded by what looks like the Keir v. Jeremy show. I don’t believe that if I walked down the main drag in Crook, Consett or anywhere else in my constituency I could find a single person who could name a member of the Shadow Cabinet and their job title.

For a new MP, the overwhelming international issue of Coronavirus has provided some practical difficulties on the ground, but it has really bound me to the community. Having championed our local pubs and hospitality sector, there is nothing worse than seeing it closed. Seeing the excellent work of our community hospitals and their renewed purpose during Coronavirus has helped get my campaign for a new community hospital to replace it over the line as one of the new 40 that our Prime Minister promised at the election.

It has also shown what strong and wonderful people there are out there in our towns and villages, putting themselves our for others. Remembrance in County Durham matters and, recently, I nominated two people locally for the Prime Minister’s ‘Points of Light’ awards who had raised funds for it: Vera, who has been supporting the Royal British Legion for decades and has earned the sobriquet “Mrs Poppy” for raising over £1 million for the appeal, and Venita, on behalf of a team of over 50 local volunteers, who created thousands of poppies as a memorial to over 200 men of Weardale killed in the World Wars. Nothing drives me on in campaigning for North West Durham more than meeting people who are giving their all for our community every day.

While this year may have been overshadowed by the pandemic, we can now very much see the light at the end of the tunnel. The ruin it has wrought will last, though. Our communities will remember the response that we now make.

So the call to ‘Build Back Better’ will need to prove more than a catchphrase for the electors of North West Durham in 2024. The new community hospital, awaited for decades, is very welcome, as is the funding for a feasibility study into a new public transport link from Consett to the Tyne. But underpinning all of that will be good jobs, a sound economy and public finances that can afford to pay for the levelling up agenda. That economic development needs to be self-sustaining locally as far as possible to be sustainable.

The first year has been tough. The second year will involve real decisions about the long-term and will cast in steel the signs for the future. Crucially, the towns of the North East, left behind for generations by Labour, will need to see their Conservative MPs forging a path to a future that enables them with good jobs, better services, a growing economy and sound public finances to support it. The groundwork is down to the individual MPs, but the direction of the centre will be critical.

David Gauke: How the Conservatives are morphing from a party of power to a party of protest

5 Dec

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.

Harold Wilson sought to make the Labour Party the natural party of Government, but failed. Years later, Tony Blair sought to fulfil the same ambition and – with the three successive general election victories – came closer to success.

Yet just over eight years after he stood down, the Labour Party elected Jeremy Corbyn as its leader. As Blair pointed out about himself, he had been ‘the person in power taking difficult decisions’ whose face was ‘on the placard’ whereas ‘Jeremy is the guy with the placard, he’s the guy holding it. One’s the politics of power and the other’s the politics of protest.’

Labour has never quite escaped the politics of protest. In part, this is a product of its history. The Labour Party was formed to represent the interests of trade unions and their members. It exists to represent one section of society, not to govern all of society.

There is also a question of temperament. As a party of the Left, it has tended to attract dreamers and idealists who value ideological purity and the clean conscience available to those who do not have to take responsibility. It has always been a party for the placard-holders.

The Conservative Party, in contrast, exists for the purpose of being in power. One way or another, it has been in office for 67 of the last 100 years and, as such, can claim to be the natural party of government. It is a party capable of obtaining and retaining power but also a party changed by the experience of power.

Its reputation as the party of government has helped it reassure small ‘c’ conservative voters; the greater Ministerial experience attained by Conservative politicians has given the party greater credibility in contrast to its opponents; a track record in Government also demonstrates a willingness to make tough decisions – such as the economic reforms of the 1980s or 2010s – which helps win the public’s respect, if not its affection.

There are disadvantages, too. The Conservative Party has been seen as not just the party of government ,but the party of the establishment. When social mores change, it can look outdated and the defenders of privilege, as it did in the 1940s, ‘60s and ‘90s. And given that to govern is to choose, some of its choices will displease. Policy decisions involve trade-offs, sometimes very difficult ones. In government, one cannot escape that.

There are certain attributes necessary for a party to acquire and retain a reputation as natural party of government. Of course, it has to obtain power. But it must also demonstrate and value administrative competence; it must be able to live in the world as it is, not as it would like it to be; it must be willing to take tough decisions on the basis of a realistic understanding of the consequences; it must recognise that what brings immediate popularity does not always translate into long term electoral success; it must apply its principles in a manner that appreciates the practical implications in changing circumstances. Fundamentally, it should be a party that feels much more comfortable – in Tony Blair’s phrase – with the politics of power, not the politics of protest.

How comfortable is the Conservative Party now with the politics of power? It is tempting to answer this question by focusing on Boris Johnson. He was elected as leader of the party not on the basis of his record as a successful administrator (most Conservative MPs, including many who voted for him, would have said that his Ministerial record was the least distinguished of all the contenders), but as the candidate who could marginalise Nigel Farage and reunite the Leave coalition.

This proved to be a correct assessment, at least for the moment. But Johnson’s approach to Brexit has long been to ignore the hard questions – the trade-offs between sovereignty and market access or the Northern Ireland border – with a ‘have your cake and eat it’ optimism and mutually contradictory promises.

At the time of writing, he is in the uncomfortable position of having to make a choice on a deal that will mean, either way, at least some of his promises are broken. If, after months of hesitation, he goes for a deal – and I hope he does – he will face the fury of sovereignty purists who have never come to terms with the reality that free trade deals necessarily involve some constraints on what a country can do.

The Prime Minister also faces a challenge to his authority on Covid-19. The crisis has been testing for him, and he has looked ill-suited to the challenge. But his relative caution on restrictions reflects the realities in front of him. It suggests that he has looked at the evidence and concluded that if you go too far in loosening restrictions, the virus very quickly spreads. This would not only cause many deaths but also damage the economy because of voluntary changes in behaviour. It is hard to imagine any of his predecessors reaching a different conclusion in the circumstances. In this sense, Johnson is acting like a conventional Prime Minister.

Conservative MPs, however, are not giving him the benefit of the doubt. In some cases, there are legitimate constituency concerns but in other cases, the laudable desire to protect individual liberty has resulted in a willingness to engage in wishful thinking.

Some have fallen for a succession of optimistic but wrong predictions – ‘the virus is burning itself’, ‘the new cases are just false positives’, ‘higher cases won’t necessarily mean higher deaths’, ‘lockdowns do not work’ – that get discredited before moving on to the next argument.

This is partly ideological. It is also partly about the changing nature of being an MP. Members of Parliament are increasingly seen as local champions first and foremost. They are more inclined to organise themselves into ‘Research Groups’ that act as parties within parties, content to define themselves by contrasting themselves against the Government rather than as being part of the Government.

It is less about being part of a team that seeks to govern the country but more about representing particular viewpoint or constituency. It is less about solving problem; more about taking a stand. It is a change in attitude that makes it harder to accept compromise, to recognise trade-offs, to temper principle with practicality. We have seen this for years in the context of our relationship with Europe; we have seen it increasingly in recent months in the context of Covid restrictions. I suspect we may more of this when it comes to tackling the public finances.

The Conservative Party has become less disciplined and more comfortable with the politics of protest. In some respects, Boris Johnson is a natural leader for such a party – a columnist and controversialist; an insurgent rather than an administrator – but it would be wrong to ascribe the change in the party to him. He is a symptom not the cause, reflecting changing attitudes amongst MPs, party members and many of its supporters. It may still have an appetite to be in office, but the Conservative Party no longer has the temperament of a natural party of government.

Robert Halfon: The political parties are stuck in the Dark Ages

2 Dec

Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.

If I were a chief executive or chair of a major political party in Britain, I would have this book, Footsoldiers: Political Party Membership in the 21st Century by Tim Bale, Monica Poletti and Paul Webb, pride of place on my desk – and I would also send a copy to every local constituency party association chair in the country.

This book tells you more about the demographics of party members, and the reasons why they join – and quit – than anything you will hear from the usual commentators. Each chapter not only goes through the qualitative information, but has reams of data and surveys to evidence the claims.

Footsoldiers confounds a few stereotypes, too. For example, the average age of a member of the Conservative Party is 57 (not in the late 60s as is often reported). Moreover, the Labour Party’s average membership age is 54 – just a few years away from that of the Tories – and yet, it is only the Conservatives that are always described as having an aged member base. Interestingly, we learn that 77 percent of Labour Party members are middle class – a fact that may surprise those who imagine the party as a mass, working class, political movement.

What Bale, Poletti and Webb also show, in a really thoughtful way, is why people join political parties. Motivations to join comprises purposive incentives, material incentives and solidarity incentives. As I understand it, a person may choose to join a political party for ideological reasons, for a sense of belonging and/or a belief that, either they will benefit from their membership, or from their chosen political party running the country.

The authors also go a long way to reason the recent revival of membership which had, until recently, gone through a significant decline. As Footsoldiers explains, this trend can be put down to members thinking that they would have greater democratic say over decision-making and over the leadership, by selecting a new leader, for instance.

I’ve always thought that the surviving political parties are stuck in the Dark Ages. They operate like enormous, 1970s’ main-frame computers, whilst most people have moved to the individuality of mobile phones and apps.

Although central to joining will be ideological reasons, too often parties let their members down by not providing value for money, in terms of their membership, and by a lack of opportunity to make real decisions, such as the selection of parliamentary candidates, in debates at party conferences or in voting for the party’s executive boards. Only two-fifths of members feel that their membership has lived up to their expectations and one-third would like more say over the democratic processes.

If parties are to be brought into the twenty-first century and retain their membership (and there is an important chapter on why members quit), not only should their supporters be involved at every level of decision-making, in every reach of the party, but so, too, should they receive beneficial services to ensure that their investment is worthwhile.

Political parties could be, in essence, like a modern trade union. So, if, for example, a person were to join the Conservative Party, first, they would have meaningful votes at Party Conference; second, they would have a say in the selection of senior representatives on the party board; but, third, like a trade union, they would receive significant returns and benefits.

Party membership could offer discounts on the cost of living. For example, members could be looked after with personal insurance schemes should they need them. Why not automatically give every new Conservative Party member a “fuel card” upon enrolment, to give them a helping hand with petrol prices? Or, how about granting every new young Conservative a free bus or train pass, entitling them to discounted travel for one year?

This is very different to offering someone a “Nandos”-type loyalty card which anyone can get for a variety of retail and food outlets. We need to take substantive action to ensure that people really feel they are making an ideological difference, that their opinions matter and help shape policy, whilst offering services that make a material difference to their lives.

Footsoldiers also touches on the issue as to why members leave. Often, the party’s administration is so poor that a significant amount of memberships (one in seven of leavers) simply lapse, as members forget to renew. An important point is made that this is entirely solvable, were political parties to spend as much money on the recruitment and retention of members, as they currently do on investment into the “air war” and research.

Herein lies the problem; in recent times, members are all too often seen as the icing on the cake, rather than the cake itself. If political parties are to survive and flourish, this outlook has to change; and a first step on that path would be to understand what is really going on with party membership, and to read this book.

Neil O’Brien: Tomorrow’s Covid vote. We must stick to the plan – and stick together.

30 Nov

Neil O’Brien is co-Chair of the Conservative Party’s Policy Board, and is MP for Harborough.

I can’t believe they’ve gone. One, a local businessman. Not much older than me. Full of plans, things to do, a business to build. The other, a party supporter. Retired, but larger than life, and full of fun. Coronavirus got them both before their time. There were tens of thousands like them this year.

Tomorrow night, we face a choice about how we handle the final months of this pandemic. We still have a lot of winter and spring to get through until mass vaccination, the time when the NHS comes under most strain. And we must avoid a third set of national restrictions.

If we start from rules strong enough to keep driving down transmission of the virus, we can relax later. In contrast, going in the other direction will test the patience of voters.

Nor do we want to grind along with infection rates stable but not falling. We want infections coming down decisively, so we can loosen up. With the vaccine so close, people dying unnecessarily in the final months of the pandemic would be tragic.

And though polls show strong support for the measures we’ve taken, it would be much better to head towards the finishing line with good news about infections and restrictions falling.

Every MP wants to make sure restrictions in their area are as limited as possible. As infections fall, we’ll have regular reviews. But overall, we have to stick together, and stick to the plan. With Labour and the SNP not voting against, the new Government’s new regulations will pass. But we should remember the electorate brutally punishes divided parties.

Of course, there are a lot of legitimate debates about policy. Some ask whether restrictions do more harm than good. It’s a reasonable question, but I think sometimes the arguments are put back to front.

For example, during the second wave here in Leicestershire, the numbers hospitalised shot up, rising above the level we saw in the spring peak.

But after the national restrictions came in, the infection rate turned round, and started falling. Hospitalisation rates turned round too. That meant that while non-urgent procedures were postponed, the measures we took came just in time to allow life-and-death services like cancer treatment to keep running throughout.

If we’d waited or done nothing, those services would have been forced to shut. Restrictions saved not just coronavirus deaths, but other patients too.

It’s wrong to assume current restrictions are having the same effects as the emergency measures in spring. And some claims are wrong: it’s said suicides have shot up, but the best data suggests that’s not true.

People ask what the economic cost is of restrictive measures. The difficulty here is knowing what the counterfactual should be. For example, if we’d let the virus rip in spring, pretty much all MPs acknowledge that the NHS would have been overwhelmed.

With TV news showing people dying in hospital car parks across the land, how many people would still have been heading down to the pub? Or out to work? Any estimate is guesswork.

We can see that countries like Sweden which went for looser policies had a bigger hit to their economy than their neighbours, as well as much worse health outcomes. So it isn’t obvious that there has been a trade off between the economy and controlling the virus.

Sweden has had ten times the death rate of their Scandinavian neighbours, with a dramatic second wave and 397 Covid deaths in the past nine days. “Sweden’s strategy has proven to be a dramatic failure,” says Lena Einhorn, a Swedish virologist. The country’s Prime Minister recently made a rare televised address, and has been forced to introduced a “rule of eight” on gatherings plus locally tiered restrictions.

And Sweden is far less densely populated than the UK, with more people living alone than any other country, two massive advantages. So what has proved merely disastrous in Sweden, was arguably never even really an option for us. So what’s the counterfactual?

Some arguments are over. Media pundits pushed the idea that we had hit “herd immunity”, and that rising cases were just “false positives”.  They’re still peddling these ideas, but we can now see how badly they got it wrong.

In June Toby Young wrote: “there will be no second spike – not now, and not in the autumn”. He claimed 91 per cent of cases were “false positives”: claims repeated by some MPs. In reality, according to the Office for National Statistics, true number is microscopic.

Alistair Haimes, a Covid-sceptic, wrote in August that “it’s over”; and in September that there was “no second wave.”

Leading Covid-sceptic Michael Yeadon wrote that thanks to “prior imminuty”: “the pandemic is effectively over.”

Sunetra Gupta, a lead author of the “Great Barrington Declaration”, promised in May that “the epidemic has largely come and is on its way out in this country” … “due to the build-up of immunity”.

In August, Karol Sikora, another Great Barrington leader, said “The gloom and doomsters are predicting another wave of it. Where’s that going to come from? I just don’t believe it.”

With over 2,800 now dying a week with the virus, we can see these rosy theories were catastrophically wrong. Other myths pushed by the media include the idea that flu has “disappeared”, or that Coronavirus is just displacing it. That’s simply not true.

Others say the victims are “dying with” the virus, not “dying of” the virus. But the Office for National Statistics looked at the data, based on doctors’ assessments, and found: “of 50,335 deaths between 1 March and 30 June… 46,736 had Covid-19 assigned as the underlying cause of death.” That’s 93 per cent.

The argument I most dislike is that the victims of the virus were all old or would have died anyway. It’s true older people are more at risk. True that many people who died had other conditions. But a study by academics at the University of Glasgow suggested people typically had over a decade to live based on their age and prior conditions.

A decade is worth a lot. For my parents, the last decade involved the wedding of one son; the birth of two grandchildren; two others becoming young men; adventures exploring Europe and hiking with my sister; learning French and how to drive a canal boat; amazing summer flowers in their little garden; charity work, friends – and being here for everyone who loves them; like my daughter (four).

An angry man emailed the other day to say I was obsessed with “saving granny”. Well, I want to live in a culture where we value older people, not belittle their worth or regard them as an inconvenience. A culture that would kick the old and ill into touch on grounds of efficiency would be a profoundly ill culture.

We’re close to the end of this thing now. Let’s not fall near the finish line. No-one wanted to have to bring in these tiered restrictions. But they are more tailored than countries like France, where all restaurants everywhere are shut till next year, and all bars are shut with no date to reopen.

Yes, we must keep supporting those for whom this year has meant hardship. But there’s been more than seventy thousand excess deaths linked to the coronavirus here since mid-March. If you read out all those people’s names one after another, it would take you more than four months.

We have to see the bigger picture. We have to finish the job, and beat this killer virus.

Anand Menon and Matt Bevington: Will Johnson really be able to level up?

30 Nov

Professor Anand Menon is Director of UK in a Changing Europe, and Matt Bevington is Public Policy Analyst, UK in a Changing Europe.

The best laid plans of mice and men. Less than a year after his decisive election victory, already thrown off course by the pandemic, the Prime Minister has had to hit the reset button. His Chief Adviser is out of the door, and Red Wall Conservative MPs are worried that the government’s flagship domestic agenda – levelling up – might be on the way out too.

When he announced his candidacy for the leadership of the Conservative Party, Boris Johnson declared”: “if we are to unite our country and unite our society, then we must fight now, for those who feel left behind.” Subsequently, levelling up has become a central rhetorical theme of his Government. But can it deliver concrete results by the time of the next election? And if not, will there be a political price to pay for unmet expectations?

Levelling up is a compelling phrase, but its meaning is at best fuzzy. In his first speech as Prime Minister, Johnson referred to levelling up wages, productivity, investment and opportunity. He also pledged to answer “the plea of the forgotten people and the left behind towns”. But can all this really be addressed in a single Parliament, let alone one knocked off course by Covid-19?

number of studies make the point that the UK is among the most geographically unequal countries in the developed world, and the Institute for Fiscal Studies reckons that levelling up is a job that will take years or even decades.

Moreover, any plans to reroute substantial amounts of Government money have been thrown up in the air by the Coronavirus. The Spending Review was delayed, and the sheer scale of public debt will act as a break on any government largesse. Meanwhile, new infrastructure projects, which would take years to complete anyway, have yet to be announced.

Then there is a new problem created by Covid: unemployment. This too will affect regional inequalities. According to the IFSLondoners are the most likely to be able to do their jobs from home and therefore face least disruption. The Government doesn’t just need to address unemployment, but try to mitigate its uneven geographical impacts.

And let’s not forget the challenge that, pre-Covid, was the most vexing to the British economy: productivity. Differences in productivity across the UK are at the heart of geographical disparities. It is a complex and difficult question for which there needs to be a Government-wide strategy. Any lasting effort to level up the country has to major on it.

Finally, there is the ongoing impact of austerity. Many of the places identified in the government’s Towns Fund were those worst affected by austerity. Places like Oldham and Rochdale – already some of the most deprived local authorities in the country – saw government spending cuts of 30-40 per cent between 2010 and 2017.

So the task is herculean from the start. And we haven’t yet mentioned the elephant in the room: Brexit. With or without a deal, the economic impact of leaving the European Union will be substantial, and forecasts suggest it will be greatest in precisely those parts of the country most in need of ‘levelling up’.

Thiemo Fetzer, for instance, has found that the costs of Brexit are likely to be more concentrated in local authority areas that have relatively low educational attainment – in other words, that it will exacerbate existing inequalities.

Despite all this, levelling-up as a political project may not necessarily be doomed to failure. For one thing, we should not underestimate the importance of political attention. A Government that appears committed to addressing regional inequality sends a powerful message.

As Deborah Mattinson has found from her work in the Red Wall seats, many voters felt they had been both left behind and taken for granted under successive Labour governments. It may be that the simple fact of having a government that talks about prioritising their concerns makes a difference.

That said, the Government has hardly made a positive start. Its handling of the pandemic has led to accusations that it is one rule for the South and another for the North. Large parts of the north of England were asked to lockdown when Covid raged in the south in the spring, but not vice versa in the autumn.

Perhaps more damaging was the tussle with Andy Burnham. The Government refused an additional £5 million for businesses in his patch, and then made the scheme instantly more generous when London moved into Level Two. And when the whole country locked down, the cherries aligned and the Treasury one-armed bandit spewed out cash.

Be this as it may, there are signs that this might change. The Blue Collar Conservatives and Northern Research Group have given a new public face to the levelling up agenda. And the Conservatives have announced plans to open a second, northern headquarters, in Leeds. The aim, as with their continuing talk of the Northern Powerhouse, is to send a clear signal that the they are there to stay.

Moreover our research with low-income voters in some of these areas revealed that many are not expecting miracles. They simply want better local services. The issues they identify are often pretty basic: reliable bin collections, well-maintained green spaces, and litter-free town centres.

Reversing some of the hollowing out of local government due to austerity would go a long way to addressing these issues, and might well be much more effective (and far less expensive) than large infrastructure projects.

In order to genuinely address the problems besetting those areas in desperate need of a new economic settlement, the government urgently needs to put more flesh on the bones of its levelling up agenda. And for levelling up to be really effective, successive governments must commit to achieving it. But to win the political battle, it may be enough – just – for Johnson to show that he has listened and started to act.