Paul Maynard: The pandemic has left many people with serious health and financial problems

21 Jul

Paul Maynard is MP for Blackpool North and Cleveleys, and Chair of the Financial Shield Learning Network

The tremendous effort to vaccinate the UK population has meant that we are now on the verge of ending the lockdown. For most of us that will come as a great relief.

The pandemic has disrupted all our lives. But we must be aware the pandemic has had very unequal impacts too. The downturn has been one of the most uneven on record, and many people now find themselves in serious debt and financial distress, through no fault of their own.

I know in my own constituency that many individuals, families, and businesses working in hospitality and tourism, events and the arts, have been knocked back very hard. Long before the pandemic, I fought for a ‘Breathing Space’ scheme to provide people seeking debt advice with protection from enforcement action.

I was delighted to see this scheme come into force in May this year, although the 60-day protection that it currently provides could yet need to be extended further if people who have lost their jobs because of the pandemic, struggle to regain work.

There is a proven link between a person’s financial health and their wellbeing. Without sufficient support, the pressure to repay debts can lead to physical and mental health problems which subsequently constrain employability. A longer ‘Breathing Space’ would undoubtedly help, should the economic rebound we are all hoping to see, fail to come through as quickly as we would like.

But even a longer ‘Breathing Space’ would not be enough for many people with both long-term health conditions and debts. Many of these were struggling prior to the pandemic, and many more are struggling now. Protection from debt enforcement needs to be accompanied by support with their health conditions too.

That is why I’m so pleased to have recently been asked to chair the Financial Shield Learning Network. Funded by Impact on Urban Health, the Financial Shield project is currently being trialled in South London, but it could prove to be of national importance. It is bringing together creditors, health, and advice agencies, to improve outcomes for working aged people who have, or are at risk of, long-term health conditions, and who are experiencing financial problems.

The project is highly innovative. Creditors, including the local councils and housing associations, are sharing information about areas of Lambeth and Southwark where there are concentrations of accounts in arrears. This information is then passed to participating GP practices, who search their patient lists and identify people living in those areas, who have long-term health problems.

The GP then proactively text messages these patients and offers to refer them for help with both their finances and, through social prescribing teams, with non-clinical support, to help them better manage their condition.

On the financial support side, people get help from the project’s new ‘Back on Track’ workers to claim benefits, or to obtain grants for essential items. Whilst, from the participating creditors, enforcement activity is suspended pending a repayment plan being worked out. Councils and housing associations also liaise with each other, rather than compete for repayments.

On the health support side, people get access to a huge range of ‘social prescribing’ activities to help boost their mental and physical health, and hopefully improve their prospects of future employment.

This is the UK’s first model of social prescribing to include debt advice and bring together creditors with healthcare providers. If this scheme could be rolled out to other cities and towns where there are large populations of people with both financial and long-term health problems, it could benefit huge numbers of people across the country.

Early analysis indicates there are sixty-four local authority areas in England alone where the Financial Shield approach may be particularly beneficial, including my own constituency.

As Minister for Legal Support, I immediately saw how transformative social prescribing could be in resolving the complex web of financial, health and legal problems the most vulnerable face. This initiative helps deliver that agenda.

It also goes with the grain of current Government thinking. In England, the NHS Long Term Plan includes an ambition for every one of its 1,250 Primary Care Networks to be able to recruit at least one social prescribing link worker. By ensuring they work effectively with creditors and money advice agencies, as well as by providing support with health conditions, I hope we can better support those who now need our help more than ever before.

Darren Caplan: If you want a Global Britain, don’t turn off the TAP to the UK’s SME rail exporters

21 Jul

Darren Caplan is Chief Executive of the Railway Industry Association (RIA). This is a sponsored post by the RIA.

Rail: an industrial sector important to UK plc

When it comes to the UK’s railways, most people think of commuter journeys to work or intercity trains to visit friends or family around the country.

Few think of it as a burgeoning industry in its own rights, supporting more than £36 billion in economic growth and 600,000 jobs, operating, maintaining, renewing, refurbishing and enhancing trains and railway infrastructure. For every £1 spent on UK rail, £2.20 is generated in the wider economy, meaning rail not just a nationally significant sector in its own right, but is also important to UK plc more widely.

During the Coronavirus pandemic, rail was essential in getting key workers and goods around the country; and at one point last year, railway work accounted for 25 per cent of all UK construction, at a time when many sectors had to virtually shut down through no fault of their own.

As the country opens up in the coming weeks and months, UK rail will be an essential part of the Government’s plans to “build back better”.

The role rail exports can play with the right support

One way rail can support economic recovery is in its role boosting international trade. It is rarely mentioned compared to other transport modes, but rail is actually an important major export, comparable to the automotive or aerospace industries, with some £800 million in goods and services sold across the world each year.

With one of the oldest, safest, and yet most intensively used railways in the Europe, UK rail professionals are highly regarded across the globe, with a varied range of products and services sold across several continents.

When it comes to the Government’s priorities for Free Trade Agreements, there is an opportunity for rail to play a much greater role. An exports survey last year, commissioned by the cross industry-government body Rail Supply Group, and conducted by the Railway Industry Association (RIA), found that priority markets for UK rail suppliers align clearly with those of the Government.

For example, Australia, the US, India and Canada, were all in the Top 10 priority exports markets where companies believe their railway sector goods or services have potential to be exported with assistance from the rail industry and Government.

The recent Australia FTA was great news for the rail sector. From steel production in the Humber to innovative manufacturing in Shoreham, from train production in Goole to project design experts in London, there are myriad rail companies already working in Australia. Many more are excited to develop greater trade with our partners “Down Under”, particularly with the opportunities provided by the reduction in tariffs.

Turning off the TAP will have a major impact on UK SME’s looking to export

Yet, as the Government negotiates FTAs with various countries, there does need to be continued support too for the rail industry. A few weeks ago, RIA, the national trade body for UK rail businesses, was told that the Department for International Trade’s (DIT) “Tradeshow Access Programme” (TAP) – which provides small grants to SMEs looking to exhibit at overseas trade fairs – was closing down, with very little notice to the rail (or any other) sector.

While small in amount, these grants are pivotal for introducing smaller businesses to the world of exports – in rail, around 194 grants were given to businesses since 2016. Each grant is valued at just £1,500 to £2,500, and they are also used to support not just rail but many other industries, like fashion and manufacturing.

Analysis shows that these small grants add real value to UK plc’s exporting efforts. According to Export Partners UK – a group of some 50 trade bodies who work to support exporters overseas – for every £1 invested by HM Treasury in the TAP scheme, at least £40 comes back to UK plc.

A cost-benefit analysis of TAP by London Economics estimated that the total benefit of the programme in 2007/2008 amounted to £57.1 million. Given the programme costs of £11.2 million, the estimated benefit-cost ratio is 5:1. What is more, TAP was rated the best DIT service in the Government’s own Client Quality Survey 2018/2019, published recently in July 2020.

For the rail sector, TAP has been invaluable. One rail exporter reported a 1,200 per cent growth in its business following an exhibition it visited after receiving a TAP grant in March 2020. Another said they had seen £50 million in revenue generated in the Middle East, with the TAP grants contributing directly. Several companies have told RIA they would not have attended certain exhibitions without the support TAP provided.

Message to the Government: please reinstate the TAP (or something like it) as soon as possible

We and our members at RIA are not sure why the TAP scheme – so small in cost but significant in terms of impact – has been curtailed. We do know, however, that this move will have a detrimental impact on the ability of UK business to deliver the Government’s vision of a “Global Britain” and to achieve the Government’s aim of boosting exports to 35 per cent of GDP. In rail, it will make the target set out in the Government’s own Rail Sector Deal – of doubling exports to £1.6 billon by 2025 – even harder to achieve.

We welcome the support the DIT has up until now given rail exports, and the Government’s pursuit of trade deals abroad. But to unleash the full potential of exporters, in rail and other industries, in the future we continue to need this small package of support from Government. The TAP scheme should be reinstated or replaced by something similar. By doing so, it will enable UK rail to truly help the Government achieve its vision of a “Global Britain”, and ultimately support even more jobs and investment as we seek to “build back better” post Coronavirus.

Emily Carver: The Government’s plan to make exams easier will be devastating for this country’s education system

21 Jul

Emily Carver is Media Manager at the Institute of Economic Affairs

In the midst of the media frenzy around vaccinations passports, the “pingdemic” and the long-awaited “Freedom Day” (which turned out to be no such thing), one story that has hasn’t received nearly enough scrutiny is what’s going on in our schools.

We all know that students have faced significant disruption over the past 16 months. On-off school closures, months of virtual-only learning, plus the farce that has become the “Covid bubble” scheme, have plunged many schools into crisis territory. It was reported yesterday that last Thursday there were over a million pupils off school, including 774,000 as a result of children being told to self-isolate. Some schools have been forced to close altogether.

It’s hard to overstate the impact this level of lost learning will have on children, yet the Government has consistently failed to put children first over the course of the pandemic, while the unions have warned against – and continue to stubbornly oppose – any easing of restrictions. Now, with the summer holidays fast approaching, pressure is mounting on the Government to find ways to claw back some of what has been lost.

It is regrettable that schools were ever forced to close, but there have since been some sensible recommendations made, including funding for extra tuition, and catch-up classes for those who have fallen behind. Predictably, when offered an extra £1.5 billion for such measures, the response from union officials was one of outrage at what they deemed to be a derisory sum.

Of course, it’s likely no amount of money will be enough to fix the level of damage that Covid restrictions have reaped on schools – there is no way of going back in time. But the Government’s education recovery commissioner has also proposed practical changes that will cost far less, including longer school days and changing the structure of the school year – both common-sense ideas that an IEA paper advocated earlier this year.

These suggestions were met with equal pushback, with teaching unions straight out of the traps to claim a 30-minute extension of the school day would do “more harm than good”. This, despite the fact longer school days have been shown to help disadvantaged pupils the most.

You would have thought – or naively hoped – that those dedicated to representing teachers, would rally around measures to help pupils. Instead, they’ve pushed for the strictest interpretation of Covid measures every step of the way, acting as a thorn in the Conservative government’s side. ‘Twas ever thus, I suppose.

However, there is one area where the unions have got on board with the Government: plans to make exams easier next summer. Proposals published by the Department for Education and Ofqual, which aim to address schooling disruption by “reducing pressure” on students and “freeing up teaching time” essentially amount to making examinations easier to pass.

They will do this by narrowing the scope of the curriculum that will be subject to examination and giving teachers the greenlight to tell students in advance what specific topics will be covered in their GCSE and A-Level exams.

Sure, shrewd students have always analysed past papers to discern which topics are most likely to reappear in their exam. But this effort to make exams easier will do nothing but create a false illusion of success. This may serve the short-term interests of teachers, students, parents and the Government, who will benefit from a perception that educational achievement has remained stable, but the longer-term consequences of this are deeply concerning.

Some may argue that this is little different from shifting the grade boundaries to reflect the relative difficulty of the paper, as happens every year. However, the consequences of manipulating results by limiting the scope of the exams themselves are of far more troubling consequence.

Gavin Williamson, the Education Secretary, said it is “right that next summer’s arrangements take into account the disruption young people have faced over the past 18 months”. But isn’t this a case of shutting the stable door after the horse has bolted? Should we not assess pupils as rigorously as normal years? Only then can we understand the impact of Covid on educational outcomes. It seems the Government and some teaching representatives would rather sweep our problems under the carpet to save face.

In the next few years, we may find that we have large numbers of pupils leaving school without any real, in-depth knowledge of their subject. The knock-on effect on universities will be significant. School will send students off to university, knowing full well they have gaping holes in their understanding of what should, in normal times, be the basics. Will students spend the whole first year of their tuition catching up to A-Level standard? Will there be a need to extend the duration of the degree? Will universities now have to dumb down degrees to make up for lost time?

The impact on young people, the economy and wider society, of manipulating students’ achievements will store up big problems for the future, not least setting them up for deep disappointment when they realise their qualifications are worth less than those taken in previous years. Employers will also know full well that GCSEs and A Levels taken during the Covid years aren’t of the usual standard.

It is widely recognised that New Labour’s educational reforms made exams less rigorous. Some on the left still continue to dispute this for ideological reasons, but for anyone like me who has seen an O-Level French paper and a GCSE French paper side by side, there is no doubt.

It is understandable that the Government would want to ease the pressure on students during a pandemic, but if these planned changes to exams go ahead next summer, they may well take far longer to reverse. Why would it be in the interests of the unions, teachers or some parents to make exams harder once again?

It would be devastating for this country’s education system if, after Michael Gove spent so much time and energy attempting to reverse the legacy of the Blair years, Covid caused standards to slip once again.

Making it easier for students to pass their exams won’t reduce educational disparities in this country; grade inflation will encourage children to have a false sense of confidence in their own academic ability, and the buck will be passed to universities and their future employers.

Pressure must be put on the Government to restore exams to pre-pandemic standards as soon as possible, for the benefit of students, dedicated teachers and the wider economy.

Alex Morton: We need to boost our brownfield developments. But that doesn’t mean a zero greenfield approach.

21 Jul

Alex Morton is Head of Policy at the Centre for Policy Studies, and is a former Number Ten Policy Unit Member.

You don’t need to live in a town or city to know that Covid has had a shattering impact on their commercial spaces. Offices and shopping centres that once buzzed with activity have been shut down for months on end. Even once we are past the pandemic and pingdemic, it is still not clear how much activity will return.

This represents a profound challenge to the Government’s plan to build back better. Even before the pandemic, many of our high streets had started to look like ghost towns. And the problem is worst in those areas that are most electorally important to the Conservatives: as I point out in a new report for the Centre for Policy Studies think tank, there was a clear correlation between higher rates of retail vacancy and the number of new seats the Tories won in each region in 2019.

If the Government is to revive high streets, a clear and bold approach is necessary – and if that revival is to be in full swing by the next election, it needs to start now.

The Government has already made it significantly easier to convert unused commercial space to residential. This would not only bring new life to commercial spaces, but help tackle the housing crisis. Our new report, Reshaping Spaces, calculates that even before Covid-19 there was space for at least 500,000 homes from recycling surplus retail space into homes and flats.

This is a likely underestimate, since in the wake of the pandemic there will be an opportunity to regenerate entire commercial centres (often at higher density), and since as home working and hybrid working increase, there may be surplus office space that can also be converted (although it is too soon to know if this is true).

Reshaping Spaces makes a series of recommendations to make it easier to regenerate commercial centres. For example, we argue that business rates are no longer fit for purpose and are damaging commercial centres. At the very least, Government should reform the incentives to hold onto vacant commercial space: currently the business rates retention system penalises councils for recycling buildings more than keeping them vacant.

But arguably the most important recommendation is that, as the first step in the new local plans, all councils should put a commercial needs assessment in place by 2022, assessing levels and location of commercial space. Councils should receive additional funding to pay for this, and see a small incentive payment made when this is completed. Where the local council does not do this, Government should step in and complete it, working with local employers and landlords to create such a plan.

Thus by the time of the next election, probably in 2023, every area would have a plan for its commercial centres – the high streets and business districts, the retail parks and out of town office hubs. People could see that there was a plan and action underway following on from it. But, crucially, councils would be able to use this assessment as the foundation of the wider local plan: in essence, the first step would be to reassess the level of brownfield land available, before moving on to the green.

The political advantages of this approach are obvious. There is nothing more frustrating than brownfield sites remaining unused with no plan of action in place, whilst new homes on greenfield are pushed through on appeal. This is partly why the CPS has called for planning permissions to be turned into delivery contracts, so that permissions are actually built out (see here) – something many SME house builders have welcomed.

But there is also a political danger. One of the more seductive myths in the housing debate is that there is enough brownfield land available to satisfy our housing needs.

It is true that there are things that can and should be done to reduce the amount of greenfield development that is needed and to boost home ownership without building more.

As we have pointed out at the Centre for Policy Studies, it is a scandal that, in the decade after the financial crisis, buy-to-let landlords essentially snapped up all of the extra housing stock that was built. Rebalancing the housing stock in favour of owner-occupation should be a crucial priority for Government – hence our proposal for long-term fixed rate mortgages for first-time buyers (see this excellent report), which was taken up in the 2019 Conservative manifesto. The Government could still go further, perhaps by introducing a CGT cut for landlords who sell up.

We also recently published a briefing note that showed how net immigration has a significant impact on the level of new homes needed, particularly in London and the surrounding area. The South and London see high levels of international immigration, indeed without international immigration London’s population would have fallen by 700,000 in the past decade, which in turn would start to relieve pressure on the wider south as fewer people are pushed out by London’s high housing costs. (see here and here).

However, even if immigration falls, there will still need to be greenfield development in England. Even in the South, only 40 per cent of household growth is due to net immigration.

As the planning debates return later this year, there will once again be those who argue that we can do without greenfield development, that high housing costs (particularly in the South) are just caused by low interest rates. They will argue supply has no impact because this is convenient politically.

One of the key misunderstandings is when people argue because there are 23 million households, whether you build an extra 100,000 or 300,000 homes a year makes no difference to overall housing costs – in either case it is just one per cent of the total housing stock and so a negligible increase in supply.

But it is not just total households that matter in terms of house prices. It is the total number of transactions in terms of homes bought and sold. So you should not measure new build homes against total households but against annual transactions. In recent years, transactions ran at around one million to 1.2 million a year (see link).

Assuming a market of one million sales, the difference between 100,000 homes a year and 300,000 homes a year, or 200,000 homes, is an increase in supply of 20 per cent relative to the same demand. Even 1.2 million sales give an increase of around 16 per cent in supply. So an increase in new builds does help to hold down house prices, all other things being equal, and will have a reasonable impact on prices. This is why supply matters and planning reform matters.

A “brownfield first” approach is very different from a “zero greenfield” approach. It is about actually developing on brownfield rather than just rejecting greenfield development. People will accept some greenfield development if measures to minimise it are in place, not if greenfield is seen as the first call.

Government needs to listen on planning reform – yes. It needs to be flexible – yes. The Housing Minister and No 10 are doing their best to do so. But neither Conservative MPs nor conservatives or liberals more widely should fool themselves – a brownfield first policy is both feasible and desirable. But a “zero greenfield” policy is not.

Will Starmer give vaccine passports a free pass?

20 Jul

“What is the question to which vaccine passports are the answer?” we asked in April.  After all, one can be double vaccinated and still carry the virus.  So providing evidence of the first as one enters a nightclub is no guarantee of not spreading the second.

The only convincing answer is: to raise vaccination rates.  But as ConHome put it then, “such a system would arguably be forced medication – which remains illegal for physical conditions, and might therefore run up against our international obligations, not least under the European Convention of Human Rights”.

Which is why we thought Ministers would be more likely to plump for requiring clubs to demand evidence that entrants are Covid-free – perhaps including lateral flow tests at the door.  Though such a scheme would have brought with it a mass of logistical and organisational problems.

So the Government has gone instead for a policy that won’t stop the spread of the virus altogether, is ethically dicey, and which will leaves it open to potential legal challenge.  Their motive is shown by the timing: Ministers aren’t requiring these passports be used immediately.

The reason?  Partly because the scheme isn’t oven-ready, as Boris Johnson would put it, but partly because although 87 per cent of the population has had a single dose of the vaccuum, only 67 per cent has had two doses.

The nightmare for the Government features young people (who make up a big slice of the unvaccinated) being turned away from nightclubs not because they’ve refused to have even a single dose of the vaccine…but because they’ve indeed had one, but haven’t had the chance to have two.

It would be grotesquely unjust for Ministers, on the one hand, to demand two doses as a condition of entry but, on the other, not ensure that both doses have actually been offered.  Hence the delay until the end of September until passports are demanded – by which time more vaccinations will have been rolled out and more young people persuaded to take them.  Or so the Government hopes.

Perhaps the special NHS app will be cheat-proof and work flawlessly (though confidence in the system as a whole won’t have been boosted by reports of people who use the present one being “pinged through walls”).

Maybe clubbers will simply sign up to be vaccinated and go with the flow.  Perhaps claims of a “racist system”, with more black people than white excluded from events, will fall on deaf ears – and those of an “anti-youth system” will do so too.

It could be that ECHR Article Eight privacy rights, GDPR and the Data Protection Act don’t come into play.  And after all, the public as a whole supports restrictions.  Ministers would then be able to roll out the passports for other venues without mass opposition: in theatres, sporting venues, cinemas, pubs – any venue covered by the three Cs: “closed spaces, crowded places and close-contact settings”.

But even if voters go one way, MPs may go the other.  There will be a Commons vote on the plan in one form or another, and Conservative MPs are very restive about restrictions already.

On the same recent day that 24 Tory backbenchers voted against the 0.7 per cent aid reduction, amidst a mass of publicity, 31 opposed a set of Coronavirus rules.  Forty-nine voted against regulations more broadly last month.

That’s enough to defeat the Government if the opposition piles in too.  And Johnson is not in a great place with his backbenchers: add to those Conservative MPs who tend to rebel over Covid those who believe that Downing Street has no grip, and you soon reach a number larger than 49, especially since the two groups overlap.

The weekend’s chaos over whether or not the Prime Minister and Chancellor would self-isolate has been well and truly clocked by backbenchers.  Vaccine passports will add fuel to the fire, since they first seemed to be on, then were off (“we are not looking at a vaccine passport for our domestic economy, Nadhim Zahawi said in February)…and are now on again.

With the Covid Recovery Group arguing that requiring vaccine passports means creeping ID cards, Keir Starmer will be able to weigh the risk of getting on the wrong side of public opinion against the opportunity to defeat the Government.

Perhaps Johnson’s real plan is first to up vaccination rates among young people and then withdrawn the passport scheme. If not, the Labour leader will come under pressure from the party’s MPs to abandon his lawyerly caution and go in for the kill.

Raghib Ali: Freedom Day – why not unlocking now means delaying indefinitely

19 Jul

Dr Raghib Ali is a Clinical Epidemiologist at the University of Cambridge and an Honorary Consultant in Acute Medicine at the Oxford University Hospitals NHS Trust.

With ‘Freedom day’ finally upon us, the government once again finds itself under fire from both sides – being simultaneously accused of unethical recklessness/a ‘let it rip’ strategy by some and excessive caution/a ‘zero Covid’ strategy by others.

Both accusations are wide off the mark for the reasons I outline below. There are sound scientific reasons to proceed with step four now – but with caution – and the Government needs to get the messaging right on this to maintain public confidence and maximise the benefits of step four while minimising its harms, and to ensure that we avoid a return to restrictions later in the year.

Aside from a small but vocal minority, most scientists accept that ‘Zero Covid’ is impossible and that Covid-19 will become an endemic disease, that we will have to learn to live with it, and that there must be a time when we will lift all restrictions. The only question really is when?

Because the Delta variant is so transmissible, and vaccines are not a hundred percent effective in reducing transmission, it’s likely to be impossible to reach herd immunity – whereby eventually everyone will become immune – either through infection or vaccination.

(Of course, the higher the proportion that are immune, the harder it is for the virus to spread – and so the UK is in a much better position than other countries with over 90 per cent of adults having antibodies due to a combination of extremely high levels of vaccine uptake in older age groups and natural infections in under 40s.)

An exit wave is therefore inevitable and every country will have one when they finally lift restrictions – including Australia and New Zealand. No country will be able to keep its borders closed forever.

The size of this wave is determined by the number of people who are not immune from vaccination or natural infection. And, once everyone who wants to take the vaccine has been offered it, that’s not going to be reduced significantly by waiting (particularly as the JCVI has not yet recommended vaccines for children). In short, future infections, hospital admissions and deaths are no longer being prevented, just postponed.

And although we are not quite there, the potential benefit of delay is now marginal – in contrast to the situation four weeks ago, when I backed a delay. All those at high risk of hospitalisation and death (i.e. over-40s) have had the opportunity to get both doses (and all adults, one dose) which is why a delay doesn’t reduce hospital admissions and death. Even for infections, the second dose in 18-40 year olds is unlikely to make as much difference as vaccine effectiveness is double that of over-40s for the delta variant.

(This may be due to a better immune response in younger people and also because this age group are most likely to have been previously infected and so their first dose acts more like a second dose.)

And there are some clear advantages of proceeding with step four now, with school holidays reducing the number of contacts and seasonal factors reducing viral transmission. It is better to have the exit wave when the most vulnerable have the highest levels of protection, as they do now. The value of booster doses is still unproven and uptake is uncertain so our defences from vaccination are now likely to be as strong as they will ever be.

As the CMO outlined last week, the modelling shows that all dates lead to similar outcomes for infections, hospital admissions, and deaths. Some models even show outcomes could be worse if step four is delayed to the Autumn due to seasonal factors and the NHS being under even greater pressure from other respiratory viruses including influenza (which is likely to be much worse this year due to people having less pre-existing immunity as there was almost no flu last year.)

The impact of Covid-19 on the NHS is of course something I am well aware of and we are undoubtedly under great pressure now (June was the busiest month ever for emergency departments) with high levels of sickness. But this pressure will not decrease in the coming months and may get worse – and so again, a delay does not help.

‘Long Covid’ is also a valid and important concern and vaccination does reduce it as it reduces infection. However, even if a delay could be shown to significantly reduce the burden of long Covid (which is uncertain) that still needs to be weighed against the health harms which would arise from ongoing restrictions, be that worsening mental health or unemployment.

The final concern relates to new mutations arising due to high prevalence of infection in a partially vaccinated population. But again once you have reached the vaccination uptake ceiling, this will happen whenever step four is taken.

So those who want to continue with restrictions should be honest with the public: that not opening now means delaying indefinitely.

Given all the above, some are understandably asking why caution and continued guidance are still required?

The main consistent finding shown by the various SAGE models showed that if everyone returned to their pre-pandemic behavior/number of contacts quickly (within one month) this could lead to very significant pressure on the NHS approaching that of the first wave (when it would again be difficult to maintain all services causing significant indirect health harm to all other patients and increasing waiting lists further). The peak is much smaller, however, if this happens over three months. This doesn’t reduce overall admissions but spaces them out – i.e. we are back to ‘flattening the peak.’

This is clearly not a zero Covid strategy, but is aiming to be a ‘flu strategy’. This makes sense now given the infection fatality ratio of Covid with our levels of vaccination is similar to flu, and society has been willing to accept that restrictions are not required for flu.

The key remaining uncertainties are the number of contacts people will return to (and how quickly) and the exact levels of vaccine effectiveness. If both of those are ‘worse’ than expected, it is possible that the NHS will come under such great pressure that restrictions will need to be re-introduced.

And that is why it is essential that viral spread is kept under some control through good public health messaging on the need to continue to follow the guidance and why the test, trace and isolate system is still needed (about a third of those who self-isolate go on to develop Covid-19 symptoms) for now while we work our way through this exit wave and cases start falling again.

In many ways,  this approach is similar to the plan I outlined last year when I thought vaccines may be years away and I advocated for mainly voluntary measures and a focus on personal responsibility, as this would lead to more sustainable compliance (especially with indoor household mixing and self-isolation) while reducing other health harms.

Since then, we have seen that people can be trusted to take personal responsibility for themselves and others and will choose the responsible course of action (e.g. over Christmas when contacts didn’t increase overall and polls now show that a large majority of people will continue to wear masks.) And as with previous waves, there are also already signs (from Google mobility / shopping data and so on) that people are changing their behaviour as cases increase.

Finally, it is important to stress that Covid is far from over and that while today is an important and necessary step towards freedom, with freedom comes the responsibility to continue to be considerate and protect others for all of our benefit.

David Gauke: There are signs that the Treasury is winning. And that more tax rises are coming.

19 Jul

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

When asked about the proposal by Henry Dimbleby that a new Salt and Sugar Reformulation Tax should be introduced, the Prime Minister responded by saying that he is ‘not attracted to extra taxes on hard working people’.

At one level, this is what one might expect him to say, given his reluctance to be the bearer of bad news. But some have taken this to be not just a holding response to the publication of the National Food Strategy, but a firm determination to hold the line against tax rises. If so, there may be problems ahead.

It was only a few months ago that Rishi Sunak delivered a tax-raising Budget, with the freezing of allowances and thresholds in the personal tax system, plus a hefty increase in the rate of Corporation Tax (which, in the end, will be paid by people because all taxes are). These increases may well be sufficient to meet the Chancellor’s fiscal rules ,but only if he maintains the current spending plans.

This looks unlikely. To take just three examples, the cost of Covid catch-up, social care reform and net zero could easily cost £10 billion a year a piece. Add to that the cost of levelling up, plus the risks that debt interest payments could increase significantly, the Chancellor’s target of current expenditure being paid for by current revenue and debt falling as a proportion of GDP looks precarious.

It would be fair to say that the cause of spending control has been strengthened in recent days. The Government saw off attempts to block the cut in overseas aid more comfortably than expected, with Sunak very heavily involved in talking round potential rebels.

The temporary uplift in Universal Credit is looking like it will indeed be temporary (although this is likely to store up problems, I suspect) and the Chancellor has – to all intents and purposes – ruled out a huge increase in the state pension, which would happen if the triple lock was applied in the normal manner. On the latter point, this is entirely sensible and has been met with little opposition.

A month ago, there were complaints from the Treasury that the Prime Minister was going around making unfunded spending commitments but Boris Johnson appears to have been reined in. Big promises on climate change seem to have been deferred to the autumn, and a supposedly big speech on levelling up involved a spending commitment of just £50 milliom. Whereas most observers considered the Coventry address to be one of the least impressive set-piece Prime Ministerial speeches ever delivered, the Treasury would have considered it a triumph.

An announcement on social care reform is imminent, but this does look like it may be properly funded by additional taxes, suggesting that ‘not attracted to extra taxes’ does not mean ‘no extra taxes’ after all. It is reported that it is the Chancellor who is sceptical about the proposed policy, although I suspect this is driven by Treasury doubts about pursuing a Dilnot-style cap on social care costs (which benefits those with the largest estates most), rather than by an objection to the principle that new spending commitments have to be paid for.

For the first time in a while, the cause of fiscal conservatism – ensuring that public finances are sustainable – is gaining the upper hand. There are two reasons for this.

First, the Chesham & Amersham by-election has caused some nervousness. The fear within Government is that high spending is all very well, but a section of the Conservative voting electorate will draw the conclusion that they are the ones who will have to pay for it. It was striking that the Prime Minister spent much of his levelling-up speech saying that he does not want to make rich places poorer, which may come as a disappointment to parts of the Red Wall, but is clearly designed to reassure the South East.

The second reason why a more cautious approach to the public finances might be pursued is the apparent return of inflation. This may be transitory as we return to some kind of normality, and adjust to Brexit frictions and labour shortages, but it may not be. If it results in higher interest rates, the costs for the exchequer in funding our debt could rise very quickly – as the Office for Budget Responsibility has pointed out. An increase in interest rates of one per cent would add £21 billion to our debt interest bill. If our fiscal policy is considered to lack credibility, our problems could be worse.

There remains, however, the question of how the Conservative Party maintains the support of the new supporters it gained in 2019, whose views on tax and spend are much closer to those of the Labour Party than the traditional Conservatives. On spending on public services in general ,plus investment in their localities, they will want to see evidence of delivery.

Boris Johnson will be given the benefit of the doubt and, I suspect, be able to retain most of the Red Wall at the next general election but the pressure to spend money – not least from Red Wall MPs – will be considerable. The Treasury has won a few battles of late, but with a Prime Minister prone to change direction like a shopping trolley (as one prominent Westminster pundit likes to put it), he may be on the other side of the aisle before long.

There is also another reason for raising taxes, as well as funding public services. Tax can be used as a lever to change behaviour. The Prime Minister has declared that he is on a mission to reduce obesity, and it is hard to see how this could be done without using tax to change behaviour.

Ultimately, this may not mean consumers paying much of a price because producers reformulate their products (as happened with the Soft Drink Industry Levy) in order to prevent consumers facing higher prices. It was an effective way of using the price mechanism to achieve a Government objective, but it did mean legislating for a new tax.

A similar argument can be made for using taxes to help achieve net zero. If we want people to consume less carbon, the most efficient way to do this is to ensure that the cost of carbon is incorporated into the price of products by using a carbon tax. (By the way, those of us who value markets as a means of allocating resources should be instinctively more sympathetic to meeting environmental objectives by using the price mechanism where possible, rather than through regulation which can be cumbersome and ill-targeted.)

In both cases, tax increases, as a behavioural stick, may be required. They are also likely to be regressive, which may mean compensating mechanisms of some description which – in turn – will need to be paid for.

All of this means that extra taxes on hard working people may be necessary to deliver sound public finances and to meet other Government objectives, however unattractive the Prime Minister considers them to be.