David Gauke: Johnson’s health and social care plan. A betrayal of Conservative principles? No – because, at one level, there aren’t any.

13 Sep

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

The Government’s plan for increases in National Insurance (NI) contributions to fund higher health spending and increased health spending has provoked a furious response from some on the right.

It “sounded the death knell to Conservatism” and drove “a coach and horses not only through the Tory Party manifesto, but Toryism itself”  according to Camilla Tominey in the Daily Telegraph.  In the same paper, Allister Heath fumed “shame on Boris Johnson, and shame on the Conservative Party…they have disgraced themselves, lied to their voters, repudiated their principles and treated millions of their supporters with utter contempt” and that “an entire intellectual tradition now lies trashed”.

In the Times, Iain Martin declared that “at this rate, the Conservative Party might as well rename itself the Labour Party”  and in the Spectator, Fraser Nelson questioned whether the “Boris Johnson” definition of conservatism as “a protection racket, where the tools of the state are used to extract money from minimum-wage workers and pass it on to the better-off?”

Meanwhile, Dominic Cummings has argued that “if you think you’re ‘conservative’, and you give those speeches about ‘enterprise’ and ‘responsibility’, why would you support making many more dependent on state money and bureaucracy?”

It’s all jolly strong stuff. And there are elements of the criticisms with which I have sympathy. I share the scepticism about prioritising a tax-funded social care cap, in that those who will gain most are those who have the most (thanks to rising house prices) and that is the wrong priority for public money.

There is a need for risk-pooling, but I think Peter Lilley’s proposal on this site is worth close examination (I suggested something similar when in Government). I also dislike NI as the choice of tax because of the narrowness of its base – and the distortions that this causes – and the dishonesty of employers NICs (no, Prime Minister, it is not a tax on business: it is a tax on jobs and employees’ wages).

In fairness to the Government, raising taxes is difficult, NI is less unpopular than income tax (largely because much of the public misunderstand it) and, being cynical, it is not surprising that Ministers exploit that misunderstanding.

Having said all that, is it a fair criticism to state that Johnson’s Health and Social Care plan undermines everything for which the Conservative Party stands? For a number of reasons (some of which reflect better on the Party than others), I think not.

First, the Conservative Party has an honourable record of fiscal responsibility. When the public finances are in trouble, Conservative governments have been willing to raise taxes in order to put the public finances on a sound footing – not least Margaret Thatcher’s, when Geoffrey Howe raised taxes in 1979 and 1981. The advocates of Reaganomics always find this disappointing, but responsible Conservatives do not believe that lower taxes will pay for themselves (as they did not for Reagan).

In reality, even putting aside any new commitments on social care spending, the prospects for the public finances are not great. Not only do we face some immediate challenges (Covid catch up, net zero and levelling up), but demography and rising health expectations will mean a tax-funded healthcare system will require higher taxes.

Some on the Right will argue for further cuts in spending or an alternative health model, but the political feasibility of such an approach is highly dubious. If we are going to spend more (and we are), taxes will need to rise to pay for it.

Second, the idea that a Conservative government prioritising homeowners is a complete break from the past does not bear scrutiny. Look at the arguments that Thatcher made in resisting the removal of mortgage interest tax relief (although the Treasury rightly prevailed in the end), or the general dislike of inheritance tax from the wider Conservative world. The reaction to Theresa May’s social care policy in 2017 suggests that the instinct to ‘defend our people’ (and their inheritances) amongst Conservatives is a formidable one.

Third, complaints about the Conservative Party not being the party of business are (how can I put this?) a little rich from some quarters. Imposing higher taxes, whether on employment or profits, is not great for business – but making it substantially harder to trade with our largest trading partner is a bigger problem.

It is all very well complaining about the anti-business instincts of this Conservative government, but hard to do if you have been a cheerleader for anti-business policies or, for that matter, Boris “f*** business” Johnson. If your expectation is that the Conservative Party would automatically be on the pro-business side of the argument, you have not been paying much attention in recent years.

The reason why the Conservative Party moved in the direction of an anti-business Brexit is that was where the votes were. And this brings me to the fourth and most important observation about the Conservative Party.

It has one purpose: to be in power. At one level, it is not possible for it to repudiate its principles because it does not have any. This can give it a tremendous advantage in a democracy because the public, as a whole, does not have political principles either – opinions and political alignments shift over time.

The Conservatives have been protectionists and free traders, the party of Empire and the party that facilitated the retreat from Empire, Keynesians and monetarists, the party of price controls and wages policies and the party of market economics, the party of Europe and the party of Brexit. It never stays on the wrong side of public opinion for long.

What is happening to our politics at the moment is that party support is realigning along cultural lines and, as a consequence, much more along generational lines. This has worked to the advantage of the Conservatives, so it is no surprise that it pursues policies that prioritises health spending over lower taxes for people of working age.

Polling suggests that the new, Red Wall voters who switched to the Conservatives at the last election are notably more left-wing on economic issues than traditional Conservative voters who are, in turn, to the left of Conservative MPs. The decision was made to pursue those voters and, if the Conservative Party wants to keep them, it cannot risk the NHS collapsing under financial pressure – which means higher spending and, ultimately, higher taxes.

Johnson’s critics are right to think that this will not be the end of it. Last week’s package was supposed to be an answer to how we fund social care. The reality is that it was a package to boost spending on the NHS. As Damian Green has argued on ConHome, it is hard to see how resources will be taken out of the NHS and switched to social care in three years’ time – and that, at that point, some expensive social care commitments will come into effect.

here will another funding gap and, on the basis of last week’s revealed preference, a further increase in the Health and Social Care Levy. Those who see the purpose of the Conservative Party as delivering low taxes are right to be glum.

Ten questions for Johnson’s reshuffle

7 Sep

  • What does the Prime Minister do about economic policy?  His instinct is for government to spend a lot; Rishi Sunak’s is for it to spend less.  Boris Johnson would clearly be reckless to lose his second Chancellor in less than two years, and we don’t believe that he will try to move him. Furthermore, it isn’t at all clear who would play Anthony Barber to the Prime Minister’s Edward Heath.  But Sunak’s public pitch for loyalty over social care yesterday only confirmed the tensions between him and the Prime Minister. Johnson will be brooding over the future of the man who is favourite eventually to replace him.
  • Who runs Downing Street?  The Prime Minister frets about the unresponsiveness of the official machine.  He has lost Dominic Cummings.  He is installing a Delivery Unit.  He is beefing up his own political operation.  Does he take the radical option of creating a Prime Minister’s department?  Or the established one of relying on the Cabinet Office?  Either way, who does he put in charge?  Does he keep Michael Gove?  Move in Dominic Raab.  Or else send for Oliver Dowden – just as David Cameron’s former Deputy Chief of Staff is enjoying his own place in the sun in his own department (and perhaps eyeing Education)?
  • What about the Home Office and the Foreign Office?  Some in Number Ten share our panel’s lack of confidence in Priti Patel; Raab has been in place for almost two years.  Gove has been punted for both posts but, for all his talents, there is only one of him.  And if he moves out of the Cabinet Office, who will take the lead on Scotland?  Our bet for Foreign Secretary were the shuffle to come late would be Alok Sharma, now that he has globetrotting experience wearing his COP26 hat.  Will Johnson really promote the Cabinet League Table-topping Liz Truss, who he is bound to see as a potential rival?
  • Who does Johnson bring back and at what level?  John Whittingdale was brought back to support Dowden.  James Brokenshire was returned to help Patel.  When his illness worsened, another former Cabinet member, Damian Hinds, replaced him.  The message is: keep your nose clean, and there’s a way back.  But is the Prime Minister prepared to do the same at Cabinet level – summoning Liam Fox or Jeremy Hunt or Iain Duncan Smith or Geoffrey Cox or Robert Halfon or other members of the Alternative Cabinet?  For given the scale of the foreign and domestic policy challenges, there’s a lack of experience at the top.
  • Which women…?  The optics will be an inevitable feature of the shuffle, whenever it comes.  Johnson will want to increase the number of women at the top table.  Anne-Marie Trevelyan must be top of the list to return, but she only recently started her job as Energy Minister.  The Prime Minister will be keeping a watchful eye on the ambitious Penny Mordaunt.  Kemi Badenoch must be on any list for promotion, but is she ready to run a department?  Look out for Lucy Frazer, a potential future Justice Secretary; Chloe Smith if her health allows and, if media deployment is any guide, Helen Whateley. Will Tracey Crouch return?
  • …Ethnic minority members?… Nadhim Zahawi is being punted for co-Party Chairman, but he could also slot in at Education, where he has served as a junior Minister, or perhaps at Culture.  James Cleverly has been out of the domestic media eye at the Foreign Office and must be due to go back in it again.  Kwasi Kwarteng has only recently been appointed and will presumably stay where he is.  Lower down the ranks, Claire Courtino will go up sooner rather than later; then there is Ranil Jayawardena and, down in the Whips’ Office, Alan Mak.
  • …And Red Wallers…?  If promoting ethnic minority members is playing identity politics, so would be favouring white working class people.  MPs for the new Conservative northern and midlands seats aren’t necessarily working class – nor Red Wallers, strictly speaking – but they are yet another group that Johnson must consider.  Cabinet promotion from the 2019 intake would be drastic, and Johnson is more likely to turn to the trailblazers of 2017.  That might mean, say, Lee Rowley, the Tory Deputy Chairman, but the name most frequently raised is that of Simon Clarke, the former Business Minister.
  • P.S: what about appointment on merit?… Beware, Prime Minister, of the backlash from your average Conservative MP: male, white, and (in his view) overlooked because of political correctness.  “With one exception, those promoted in our intake have been women, ethnic minority members, or gay,” one 2019er complained to ConHome.  What about the Kit Malthouses and Edward Argars?  (The latter has had much to do as a Health Minister during the pandemic.)  Is there a quota on Old Etonians that keeps out Jesse Norman?  What about able backbenchers, such as Richard Fuller?
  • …And communicators?  The Government is short at the top of people who can get on the front foot on TV, if that’s quite the right way of putting it.  There’s Sunak, Gove, the Prime Minister himself, a more relaxed Grant Shapps, and Kwarteng.  And that’s about it.  Which is why Cleverly is due a return, and perhaps Brandon Lewis too.  He would fit in at Housing were Robert Jenrick to be moved, but on balance this is unlikely.  Jacob Rees-Mogg has been confined to the Commons as Leader of the House, and were he appointed Chief Secretary, he would be restricted to the Treasury.
  • What’s the least bad timing?  The infallible rule of reshuffles is that the anger of those sacked outweighs the gratitude of those promoted.  A shuffle this week would refresh the Cabinet before the conference season.  But one later would ease moving Raab, Ben Wallace or both: besides, it isn’t yet clear that Covid has run its course.  We assume when the shuffle comes Gavin Williamson will be moved, and at least two Cabinet members fired.  More, and Johnson will risk a “night of the long knives”.  Fewer, and what’s the point?  P.S: the promotion of the Johnsons’ old mucker Zac Goldsmith is a possibility.

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

6 Sep

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bella Wallersteiner: As a parliamentary staffer, I’m appalled by the double standards on who has to wear a mask

25 Jul

Bella Wallersteiner works as Senior Parliamentary Assistant for a Conservative MP.

After England moved to step four of the Government’s roadmap for lifting Covid restrictions, Lindsay Hoyle, the Speaker of the House of Commons, confirmed that face masks were no longer mandatory for Members of Parliament from July 19. Instead, MPs are being “encouraged” to wear face coverings while moving around the wider Parliamentary estate.

Unfortunately, the same discretionary freedom has not been afforded to parliamentary staff for whom mask-wearing remains compulsory. Unions have been quick to point out the unfair and divisive nature of one set of rules for MPs and another set of rules for people working in the engine room of our legislature.

Before the summer recess, a significant number of Conservative MPs celebrated “Freedom Day” by ditching face masks in the House of Commons for the final Prime Minister’s Questions. And who can blame them? Many of us are desperate to say good-riddance to masks, tear down the bossy and infantilising signs which remind us to practice good hygiene (like washing our hands), remove the pointless one-way systems (we all know how to maintain social distance after 16 months of practice) and dismantle the entire edifice which has given birth to a micro-industry of excuses for disruption “due to Covid”.

And, yes, I am aware that we have all been through a lot since the pandemic started, and need to respect personal choices as not everyone is ready to return to “normal”. If wearing a mask makes some people feel safer, then that is their right and I would not belittle “brainwashed sheeple” as some freedom crusaders have done.

My concern is that once again our legislators seem to think that it is acceptable to have one rule them, another for Parliamentary staffers who must continue to wear face coverings. Until now, the decision to wear a face covering has been a legal requirement, not a matter of personal choice.

All this changed when the Prime Minister told the public that they are no longer legally required to wear masks from July 19 (in spite of Professor Chris Whitty, Chief Medical Office for England, advising that masks should be worn as a “common courtesy”). A confusing miasma of different rules in different settings means that transport operators and some shops have decided to make face coverings mandatory which could bring them into conflict with equality legislation.

The Government has succeeded in making the face covering a daily battle ground between libertarians and those who believe that it is irresponsible to dispense with all protection at a time when nearly 50,000 people a day are testing positive for Coronavirus.

I have stopped wearing my mask in virtually every setting – but as a parliamentary staffer I will be required to carry on wearing one at work. This is just another example of how Covid “guidance” has broken down and become illogical. The Government needs to make up its mind – wearing a face mask should be either mandatory or discretionary, it cannot be both.

I drew attention to this contradiction on social media and Steve Baker, MP for High Wycombe, wrote to the Speaker about this blatant discrepancy in the rules. The Speaker confirmed the House of Commons’ position which is that the Speaker has “no power to prevent democratically elected members from coming on to the estate or in to the chamber when the House is sitting. As such, there is no meaningful way to enforce a requirement on members to wear a face covering.” Sadly, he would not be drawn on the issue of Parliamentary staff being required to wear face coverings at work. In solidarity with staffers, Baker will continue to wear a face mask around Parliament.

The next battleground in the fight for freedom and equality will be the so-called “vaccine passports” for domestic events. The Speaker has rejected the use of Covid passports for MPs around Parliament, but has made no mention of staffers. Vaccination passports will discriminate against people based on decisions they have freely made and threatens the foundations of our liberal society. I have been vaccinated against Covid-19, a personal choice, but I would never stigmatise anyone who is unable to be vaccinated to or chooses not to be vaccinated.

But rules are there to be interpreted in subjective ways as we saw when foreign VIPs were exempted from the burden of travel quarantine to attend the Euro 2020 finals. Who can forget the scenes from the G7 gathering in Cornwall where any pretence of following social distancing rules were dropped quicker than you can say “Build Back Better”.

Fortunately, there are MPs willing to stand up to this discrimination and unfairness. Rumours of a vaccine passport being a condition of entry for the annual Conservative Party Conference in Manchester in October have led to a number of Conservative MPs saying they will boycott the event. I have already confirmed publicly I will not attend conference if such discriminatory measures are in place.

The Government so far has presented the pandemic as an “all in it together” chapter of national solidarity. However, this has led to people being branded selfish for visiting family members living overseas or simply going abroad with their families for a summer break after 16 months of self-incarceration. This sort of intolerance is harming the UK’s reputation for nurturing a culture of individualism and self-regulation.

Ministers have enjoyed wide public support even from those horrified by a level of authoritarianism which has not been seen in this country since the time of Oliver Cromwell. It has been borne on the belief that it would be temporary and, once the vaccines were rolled out, dispensed with forever.

But now an “us vs them” dynamic has emerged which is threatening to upset public trust and Parliament is just a microcosm of this phenomenon.

Credibility and honesty will be critical in completing the immense effort we have all undertaken in response to this crisis. Dominic Cummings has shown us what happens to a government’s health message when those responsible for it fail to adhere to their own rules. We have stopped people from leaving their homes and seeing their dying loved ones in the name of being “all in this together”. The Government must restore confidence by pressing ahead with releasing all lockdown restrictions for everyone.

Freedom Day was supposed to be the moment when the country would be liberated from the tyranny of Covid. Instead, we are in danger of entering a two-tiered Orwellian society where “all animals are equal, but some are more equal than others.”

Andrew Gimson’s PMQs sketch: The Prisoner of Chequers sounds fine but does not look well

21 Jul

“Can you hear me, Mr Speaker?” the Prime Minister inquired after something went wrong with the transmission of his rather diffuse observations from Buckinghamshire. “Do you want me to repeat that answer again?”

“Just the end bit,” the Speaker, Sir Lindsay Hoyle, replied.

That was the right direction, but seemed not to reach Boris Johnson, who was addressing a camera in Chequers, and was not always audible in the Chamber, though we could hear him well enough on television.

He did not look well. His forehead, or what we could discern of it through his dishevelled hair, looked pink with undertones of yellowish bruising.

One might have been looking at a hostage, who was putting as brave a face as he could on his predicament. Self-isolation does not suit him.

But his voice was robust enough, as he repeated pretty much the whole of his answer.

Sir Keir Starmer, present in the Commons Chamber, asked another long-winded question, dragging in various bits of embarrassing material supplied by Dominic Cummings, and by ministers who have given contradictory advice about the current rules for dealing with the pandemic.

This was over-egging it. If only Sir Keir could have prevailed on himself to offer just one piece of embarrassing evidence, the determination of the Prisoner of Chequers to evade the question would have been more obvious.

Ian Blackford, for the SNP, following Cummings, accused the PM of wanting to sacrifice the over-80s.

Johnson replied that this was a gross mischaracterisation of the exchanges which had taken place.

A succession of backbenchers asked mostly local questions, about the hospital, the pub, the school, the railway, the canal, and Johnson in benevolent monarch mode offered a judicious word of encouragement to each of them.

This session, the last before the Summer Recess, lasted 50 minutes, which was 20 minutes longer than it should have done. Sir Lindsay’s request for “shortish questions and answers” had not been met, and after he observed that this was the 60th anniversary edition of PMQs, one could only reflect that it is just now like one of those Radio Four programmes which has become a shadow of its former self.

Johnson puts the case for more localism in England. Now he must deliver it.

19 Jul

The unconvincing plan for growth apart, and the aftermath of Coronavirus not withstanding, ConservativeHome identified three main areas of policy weakness in the Queen’s Speech: social care, the delivery of net zero and English localism.

The first two turn out to be connected to the last – as are the whole country’s future prospects for growth and recovery.  Why?  Because, as David Lidington put it recently

“Whether it’s delivering an industrial strategy, or high quality apprenticeships, or integrated transport or a joined-up plan to implement net-zero carbon, we are likely to get better and faster results, and to encourage innovation and experiment…

…if these things are done by the central government of the UK working in genuine partnership with elected devolved, local and regional leaders…

…who in turn are able both to use their convening power to rally business, education, cultural and third sector organisations and through their endorsement give additional democratic legitimacy to the plan”.

Boris Johnson began to correct that weakness in his speech last week, in which he sketched out what may be taken from the postponed devolution white paper and put into the coming levelling-up white paper.

The nub of the Prime Minister’s case was that the mayoral experiment is working for cities and their suburban hinterland, and that the towns and countryside could do with a bit of it.

“Local leaders now need to be given the tools to make things happen for their communities, and to do that we must now take a more flexible approach to devolution in England,” he said.

Which could mean “a directly elected mayor for individual counties”; or devolution “for a specific local purpose like a county or city coming together to improve local services like buses”.

Ideas on a postcard, please, to our recently-departed columnist, Neil O’Brien. Or, as Johnson put it, “come to Neil O Brien or to me with your vision for how you will level up, back business, attract more good jobs and improve your local services”.

Put like that, the Prime Minister’s case sounds lamentably underdeveloped, open to fresh thinking, or simply cautious, depending on how you look at it.  But he, Robert Jenrick and others will have to make the following decisions.

At the outset, whether or not to push for uniformity, or something very close to it.  Both of the main schemes that would ensure it are out: regional government and an English Parliament.

Labour tried to make the North East a start-up zone for regional government, and the project was duly trounced in a referendum – the event which gave politics early sight of James Frayne and Dominic Cummings.

An English Parliament would institutionalise potential conflict between a First Minister for England, who would run the bulk of the country, and a Prime Minister stripped of responsibility for nearly everything other than foreign affairs, defence and security policy.

Which returns us to the options on Johnson’s table.  He could sit back and wait for local leaders to come to him.  And the map of local government in England would continue to look much like the patchwork we see today.

There is a good case for this approach.  “A bit of local laissez-faire and free choice when it comes to English local governance might not be the worst outcome,” as Johnathan Werren wrote on this site.

The downside is that if that, with so many cooks preparing the broth, nothing much might be served up: experience suggests that county, district, town and parish councils don’t easily come to agreement.

Some senior Tory figures in local government, and elsewhere, are keen on unitarisation – some has already happened (as recently in Buckinghamshire); more is happening (as in North Yorkshire), and more may happen still.

But ConservativeHome finds no appetite near the top of government for an attempt to force amalgamation on unwilling Conservative-controlled authorities: the whips have enough trouble with agitated councillors and backbenchers, thank you very much.

Nonetheless, experience suggests that if the Government wants more local mayors, it will have to push for them – and, if local people are given a say in a referendum, they tend to push back.

Remember May 3, 2012: the day on which ten cities voted for or against new mayors.  Only one, Bristol, went for change.  Since then, some authorities, such as Hartlepool, have voted to abolish their elected mayors; others, like North Tyneside, have not.

There are further problems about political legitimacy.  The Tees Valley has a population of about 1.2 million people.  Kent has one of approximately 1.8 million.  It follows that if an elected mayor can work for it might for the other.

Government sources also named other well-populated counties, such as Lancashire and Warwickshire.  But would it be practicable to  bundle ones with smaller populations together under a single mayor?

One of the problems that is wrecking the police commissioner project is the sense that there is no real local ownership of whoever is elected to the post.  Might not enforced, multi-county, amalgamated mayoralities run the same risk?

But if, to use the Prime Minister’s own example, a county or city comes together “to improve local services like buses”, who or what is to take charge, if not a Mayor?

Mention of an actual service is a reminder not to put the cart, structure, before the horse, services.  The first question is what to make more local.  The second is how to do it.

Which takes us to the mayors in place already.  Consider Ben Houchen in Teesside.  He already controls education for people over 18.  Wouldn’t it make sense for this to be joined up to that provided to people over 16 – given the stress he places on skills?

Andy Street made the same case for the West Midlands in a recent column on this site.  Why not go further, and let Houchen, Street and some of the other mayors pilot more local control?

For example, they could retain a slice, say, of airport passenger duty, vehicle excise, and VAT.  Douglas Carswell and Daniel Hannan recommended the full devolution of the last in The Plan, opening the door to tax competition between local authorities.

Johnson said that counties could “take charge of levelling up local infrastructure like the bypass they desperately want to end congestion and pollution and to unlock new job or new bus routes plied by clean green buses because they get the chance to control the bus routes”.

“Or they can level up the skills of the people in their area because they know what local business needs.”  The Prime Minister was careful to add that “we need accountability”.

But the thrust of his case was there are fewer “irresponsible municipal socialist governments” and that “most of the big metro mayors know that private sector investment is crucial”.

Johnson has no experience of running a major domestic department.  His sole government experience at Cabinet level was in the Foreign Office.

Nonetheless, he has been mayor of the biggest city in the whole country, serving two terms.  He will need to draw on that experience as he decides which localist options to take.

One thing is certain – though it won’t be what anxious MPs and councillors want to hear.  If the mayoral experiment had needed existing councils’ and sitting councillors’ agreement to happen, it wouldn’t have happened.

So since the Prime Minister wants more localism, and rightly, he must ready himself for a row – to add to the one already raging about housing and planning.  One can’t serve up a muncipal omelette without breaking eggs.

Hancock must explain in person why he should stay. Not vanish behind a statement made on paper.

25 Jun

We know nothing at all about Ma Xiaomwe, and quite a bit about Matt Hancock.  But there’s at least one big difference between them.

Namely, that if China’s Health Minister has been up to anything dodgy in his department – refining evidence about the origin of Covid-19, for example – we can be sure that no video evidence of it will ever reach the media.

That revelatory footage about the Health Secretary reached our own is being treated as a by-product of the story which has produced an apology from him.

It shouldn’t be: if the Sun can track behind-doors activity in the Department of Health, by means of a security breach, then so can others.  Including Xiaomwe himself, perhaps..

But whether China’s Government should know more about what our Ministers are up to than we know about what theirs are up to is scarcely the point – at least, as far as the media, and most of the country, is concerned.

We have been here before.  A Minister has an affair; Mr Hancock, in this case.  And the game is afoot.  The media pack and the Opposition want a scalp, claim that there are issues of public interest – and pile on the pressure.

The Government responds by saying: “move along now; nothing to see here”.  Or did.  Earlier today, Grant Shapps, ambushed about photos of the Health Secretary embracing Gina Coladangelo, held the line by claiming that the matter is “entirely personal”.

By mid-day or so, Downing Street realised that this position wouldn’t hold.  So a statement was rushed out from the Health Secretary: “I accept that I breached the social distancing guidance in these circumstances. I have let people down and am very sorry.”

Boris Johnson will not want to let the press take Hancock’s scalp, for three reasons.  First, because it’s bad for the Government to lose a senior Minister.  And if Number Ten buckles before media pressure of this kind, the pack will come back for more – and soon.

Second, because he will not, repeat not, want to give the Health Secretary’s would-be nemesis, Dominic Cummings, a win.  And third, because the Prime Minister’s own attitude to rules is, as Peter Mandelson once said about getting rich, “intensely relaxed”.

Johnson’s attitude seems to be: voters don’t care much about either of them – as long as public money isn’t involved.  However, Downing Street seems quickly to have grasped that matters in this case aren’t quite so simple.

There are two main issues at stake here (assuming that Hancock is not in breach of the law).  The first is whether Coladangelo should have been appointed as a non-executive director of the department that Hancock himself heads.

There is no problem in itself with non-execs.  They are a hedge against departments policing themselves – providing expertise and perspectives that the civil service may not be able to offer.

Theodore Agnew at Justice and Education; John Nash at the latter department; Gisela Stuart at the Cabinet Office: all these have brought business or political or charitable experience to their work.

The boxes will have been ticked for Coladangelo’s appointment, and public interest in it will have been limited until now.  That has changed.

The second issue is not whether the Health Secretary has done anything wrong.  For by his own admission, he has.  Rather, it is whether or not a statement of apology, apparently issued at the behest of Number Ten, is good enough.

Many people will say that it isn’t.  That in itself isn’t surprising: Ministers don’t top the popularity charts.  But there is a vicious twist to feeling in this case, summed up in the familiar phrase: one law for them, another law for us.

Those who hold it will, most likely, see a collage of images before them, like the posters on a teenager’s wall.  These include: back-slapping politicians at the recent G7, special rules for foreign dignatories at the Euros, Cummings’ own drive to Barnard Castle.

In some cases, they will have had relatives and friends die, or fall seriously ill, during the pandemic (as the Prime Minister did himself).  Often, they won’t have seen loved ones for months.

They may have lost wages and jobs.  Or been unable to get an appointment in a doctor’s surgery.  Or been affected, directly or indirectly, by the great exam fiasco.  Some will be yearning to see family abroad, or to travel for a break.

The majority of all these will be supporters of the rules (and observers of most of them), but some will be opponents: critics of lockdown.  These include over a sixth of the Conservative Parliamentary Party, if the recent vote on shutdown was anything to go by.

Which is where, in raw political terms, there are special dangers for Hancock.  He has been the Cabinet’s main voice for lockdown in public, as well as an advocate for it in private – and is a target of their exasperation for that reason.

Greg Clark and Jeremy Hunt’s Parliamentary inquiry will cast light on what the Department of Health has done right as well as wrong during Covid.  But it is evident that vaccine success is a long way from being the whole story.

Hancock has been the Scapecock, as this site previously put it – under massive political and personal pressure.  The good he has sometimes done has been claimed by others; the bad others have done sometimes blamed on him.

But you don’t have to go the full Cummings about the Health Secretary to agree that he, like others in government, has questions to answer.

And that’s aside from the awkward question of his own statement, inevitable under the circumstances, after Neil Ferguson was found breaching lockdown rules with his lover: “I think the social distancing rules are very important and people should follow them.”

Hancock has also found himself, unsurprisingly, trapped by pesky questions about who should be having sex with whom under lockdown rules: so if the media doesn’t get him, the memes may instead.

“In every political career comes a moment when the politician discovers how well he treated people on the way up,” Nick Boles tweeted earlier.  “How many colleagues rush to his defence on air? How hard do journalists put the boot in?”

As we write, there is no rush of Hancock’s colleagues queuing up to defend him.  But nor have any yet broken cover to demand his resignation.  Until or unless they do, the Health Secretary will be safe enough in post, at least for the time being.

Tomorrow may bring a pause.  On Sunday, the papers will try to finish Hancock off with some new revelation.  The Prime Minister will be hoping that, by avoiding Cummings’ non-apology, enough has been done to appease those restive backbenchers.

Maybe the gambit will work and maybe it won’t.  But either way, the Health Secretary needs to get himself on those Sunday morning political programmes.  Better still would be Andrew Neil, if the latter’s holiday hasn’t yet started.

Viewers won’t previously have known who Coladangelo is.  Or about her appointment.  Now, they will want an explanation.  And to know why Hancock believes that an apology for breaking lockdown rules is good enough.

A brief statement doesn’t justify him staying in post.  It’s up to him now to do so in person.  Before he faces the Commons next week.

James Frayne: Why businesses act woke and what to do about it

22 Jun

James Frayne is Director of Public First and author of Meet the People, a guide to moving public opinion.

Those that lean right find can’t understand why businesses decide to pull advertising from mainstream news outlets such as GB News or the Daily Mail – nor why they seem so prone to trash conservative attitudes online.

Right-leaning voters wonder why businesses treat ordinary right-leaning people like dangerous lunatics, when many of their own customers must be aligned to such views.

And why they are so easily pressured from outside – particularly by manifestly ideological campaigns who exist to pursue political ends? As someone who spends most of my time in the commercial world, here are a few thoughts to try to bring some sense to these fundamental questions.

1. Marketing teams control firms’ reputations, not the board (and not public affairs teams). The single most important thing for right-leaning outsiders to understand is this: boards don’t control most of a firm’s political comment, even on the most sensitive cultural issues – indeed, particularly not on the most sensitive issues.

While they might reluctantly exert control when it hits the fan, boards generally stay out of politics, preferring to let marketing teams control political comment. Boards devolve in this way because they’re persuaded that political / cultural issues fall under “corporate purpose” or “brand positioning”; they are further persuaded marketing teams know best how to engage with the public, particularly online.

Public Affairs’ teams have a decisive say on day-to-day political or Parliamentary issues – where issues are discussed within a formal framework – but less so on those sensitive cultural conversations that might not have a clear beginning or end (such as identity, the environment, and so on).

2. Most marketing teams aren’t political and don’t know their customers’ politics. Problems for boards arise because marketing teams don’t come from a political background. While recruitment between political campaigns and corporate public affairs teams (who are usually very politically sophisticated) is common, it’s unheard of between political campaigns and marketing teams.

Most marketing teams know little of Governments’ departmental agenda, and very little about how complex political / cultural issues are likely to develop. The prospect of mistakes are therefore high.

Take Net Zero as an example: many businesses have thrown themselves into an outrageously fraught and complex debate with next to no understanding of how the issue is going to play out politically (many, many businesses are going to come a cropper on this issue in the next decade). Many marketing teams know little about their customers’ approach to politics either. They usually know everything about their customers’ finances, lifestyle and shopping habits but their research rarely extends into political values or ideology. Again, this means mistakes can happen.

3. Businesses mistake social media for public opinion. In politics, it’s become a cliche to note that social media opinion isn’t public opinion; in the corporate world, this isn’t even near to becoming a cliche; people treat the two are one and the same.

This means when businesses are exposed to political comment online, they assume it’s an accurate reflection of where their customers and the wider public stand.

This ought to be corrected by reading opinion research but, because most marketing teams aren’t across political numbers, they can’t discern between a fringe campaign and a national movement.

4. Most corporate executives lean left culturally. Most businesspeople aren’t personally very political; this is true of people on boards, as well as in the marketing teams. To the extent they are, as middle class graduates who tend to live or work in and around big cities, they tend to be “liberal” in the American sense of the term.

While most executives wouldn’t seek out a row with conservatives in their business life, their liberal leaning means they’re more likely to think culturally very left-wing opinion as ordinary, mainstream opinion. This again means that their compass can be unreliable when judging external commentary on outlets like GB News, or on various sensitive political and cultural issues.

5. Boards almost always want to avoid combat. During the very early days of the EU referendum campaign, under Dominic Cummings’ encouragement, Vote Leave was eye-wateringly aggressive – to the point of near-embarrassment – towards the CBI. Why? Because Cummings judged that the CBI was ultimately frightened of combat and it was worth Vote Leave looking a bit daft if the CBI got the message they should stay quiet-ish.

Similarly, most leading businesspeople want to avoid combat; they want to sell goods, make money and take a decent salary; they don’t want rows or political attention.

Usually, therefore, if / when boards do actually sign off a political decision that might be driven by the marketing team, they will do so for a quiet life – judging that such a path is the one of least resistance. This is why pushbacks often lead to U-turns – because businesses conclude that their chosen path wasn’t the quiet one at all. It means that pressure works.

6. Businesses aren’t generally enemies of the right, they’re just dysfunctional like everyone else. The hostile commentary on supposedly woke businesses is therefore mostly overdone.

Of course, some businesses generally have gone woke and are led so from the top. Most, however, bump up against the right because of structural and cultural failings internally.

They take anti-conservative positions because they aren’t able to think politics through properly. This is encouraging; it means there is usually a pathway for the centre-right to have a more constructive relationship.

7. Harsh counter-attacks work – but primarily from the mainstream. As we saw this week, harsh counter-attacks in the media and on social media make a big difference quickly. Many businesses correct course when exposed to reputational risk from the other side.

But while assertive online campaign movements to challenge hard-left boycott campaigns can be useful, right-leaning people should not rely on such movements to secure serious long-term change. What makes businesses reverse course is not being attacked from the right, or merely the fact of negative coverage in the media and online.

Rather, it’s being exposed to allegations – by people who are manifestly mainstream and powerful – of being outside the mainstream or being hostile to it. They hate to be considered on the ideological fringes. As such, by far the most persuasive and powerful course corrections are set via criticism from Government Ministers, MPs and activists and others from the “established order”. Aggressive third party campaigns can’t match this power.

8. Conservative MPs must lead the campaign on corporate wokedom. What does all this mean? Ultimately, that Conservative MPs should come together to challenge corporate wokedom where it appears.

They should not necessarily campaign via the official party – and ideally they should do so in conjunction with other MPs and mainstream voices – but they should do so in an organised fashion.

To businesspeople, while Conservative MPs aren’t their cup of tea, they know Conservative MPs manifestly speak for the English majority; they have the stamp of respectability by being elected officials; they are treated seriously and with some respect by the media; and they have reach and influence. Conservative MPs are the only ones that can really, consistently make businesses think.

Ryan Bourne: The tax hikes that could fall in the south. And tear the Tory coalition apart

22 Jun

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

Who’s going to pay for all this? Andrew Neil’s GB News interview of Rishi Sunak has changed the fiscal conversation. The Chancellor deflected the question by saying he couldn’t discuss tax policy outside of Parliamentary “fiscal events.” Convenient. But many commentators are “rolling the pitch” for higher taxes to fund all this higher government spending already – often devoid of context of today’s true burden.

Much debate starts with the ahistorical view that the UK is a “low tax” economy. Yet revenues from taxes are already forecast to exceed 34 percent of GDP every year from 2023/24 onwards—a threshold not breached in consecutive years since Hugh Gaitskell and Rab Butler were Chancellors in the early 1950s. The world wars don’t bode well for the longer-term legacy of an acute borrowing shock either. Ten years’ after World War One, the tax burden was 12.5 per cent of GDP higher than pre-war; ten years’ after WW2, it was 11.4 percent higher again.

The pandemic is shorter and less destructive than mass mobilisation wars. We also don’t need a second welfare state. But we do have an aging population and slower growth. With those pressures, any government unwilling to reform age-related entitlements and committed to major new state investments will need revenues eventually.

Internationally, many Western European countries tax their populations more heavily than us. The UK was just below the OECD average as a share of GDP in 2019. But UK taxes are already higher than in English-speaking developed economies: Australia, New Zealand, Ireland and the United States. The rises that Sunak has pre-announced would take us close to the levels of pre-pandemic Spain and Poland. Go a bit further, and we will have gone Germanic.

That, sadly, appears where we are headed. ConHome’s Editor explained yesterday that  “levelling up” need not mean just more tax-and-spend, but might be centred on the supply-side. He should tell CCHQ. The “levelling up” member survey recently used that banner to ask for views on more NHS spending, the “lifetime skills guarantee,” catch-up schools funding, infrastructure investment, the Towns Fund, and money for high-street regeneration. The direction of travel is clear: levelling up means more redistribution—hence why a strange coalition of fiscal conservatives and certain level-uppers want to whack up taxes on the old Tory base to shower the new.

This is where the politics of tax becomes interesting though. For the “progressives of all the parties” have talked so far as if “someone else will pay” for any largesse. Polly Toynbee says that UK voters want a Scandivanian welfare state with US-style tax rates. But it’s the redistributionists that are selling the Red Wall something for nothing. How about “asking for more” from the top one per cent, big tech companies, wealthy homeowners, tax-avoiding multinationals or other bogeymen, they say? Ordinary hard-working families will be spared for all the goodies.

As a new Institute for Fiscal Studies tax tool shows, however, the difference between the UK and the big governments of Western Europe is not lower taxes on the rich. No, broad-based social security contributions are higher in Europe. The evidence there suggests a more generous welfare state or higher permanent spatial redistribution requires tax rises “larger for the median worker than for one near the top of the distribution”. Good luck selling to your new blue-collar voters.

And so, thus far, an unwillingness for broader hikes, coupled with an uncertainty about the wisdom of burning the old base, has meant that the “tax debate” has been all smoke and mirrors. Efforts to raise revenues have been stealthy. The headline Corporation Tax rate is being raised again, with Sunak stating that it was “fair and necessary to ask businesses to contribute.” Of course, research shows the ultimate burden of profit taxes falls on workers, as well as shareholders – not the message the Chancellor would be keen to promote.

Income tax thresholds have similarly been frozen until 2026, and the 45p rate threshold has been kept at £150,000 since 2010. This will slowly lure more and more upper middle income families into higher tax nets. The problem is that spiralling spending demands quickly use up the options which voters don’t notice. Eventually you need other big sources of revenue, and that’s when the discussion usually re-centres on taxing savings income or pensions more heavily, or indeed hiking property taxes—despite the fact that the UK has the highest overall property tax burden in the OECD already.

Let’s leave aside the economics here. What do these policies all have in common? Well, the highest earners, the more expensive properties, and those with the highest savings are more likely to reside in the South East. The only Conservatives making the running on the “who is going to pay for it?” question so far, then, are those level-uppers who want to whack the South East to keep the goodies for the north flowing.

Yet not all are convinced. This is a growing Conservative faultline among MPs and the party’s voters. The Brexit coalition incorporated relatively affluent home counties’ areas and a working class elderly base nationwide. For some Westminster types, it simply makes sense to deliver for the new voters by squeezing the south.

Others, though, think the older working class Northerners don’t want Labour-lite, and that the best way to deliver for both would be targeted hawkishness on spending. For what it’s worth, Dominic Cummings told me: “the gvt wastes so much I’d rather save and not put up taxes.” He usually understands what these voters truly want, but would Johnson’s government slay any meaningful spending projects without him?

Tax policy, I suspect, will really test this Tory coalition. Hot housing markets in the South East have widened regional wealth inequality in the past 15 years, but after-housing-cost incomes have risen slower in London as people rent or service large mortgages. So many people feel squeezed, even before new tax bills come in. And massive geographic redistribution occurs already: London and the South East generate large public sector surpluses—averaging net public surpluses of £4,350 and £2,380 per person.

Now I’m not going to go all Mary Riddell and suggest last week’s by-election result already reflected a middle-class tax revolt. But if the mood music is for higher and higher spending in the North, and the conversation about paying for it focuses on raising property taxes, raiding pension pots, taxing savings, alongside stealthy income tax squeezes for the middle-classes, would it be surprising if voters in traditional Tory heartlands reassessed their allegiances? In a world of ever-rising spending and an unwillingness for broadening tax bases, there’s only so long the Chancellor can obfuscate on who will really pay.