Matt Kilcoyne: Streamlined lawmaking would make the UK a richer, safer, fairer and better place to work and live

9 Apr

Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.

We’re now over a year into the pandemic radically shifting the creation of legislation, from a long-winded process studded with Parliamentary scrutiny and debate to laws affecting so many now so often made on the fly.

Frankly if any Member of either House tells you that they know what each of 600 sets of regulations (plus primary legislation and 1014 Statutory Instruments (SIs) used to amend past legislation) does and how it has updated laws previously in place, including that of the 1833 St Helena Act, then they’re having you on. No one could understand or advise on what has happened in whole to the laws our Parliament makes, amends, and repeals.

Now a lot of the SIs that went on in Parliament, last year especially, were to do with converting the EU’s acquis into British law. These SIs were put in place to ensure the promise of Britain starting independence from a position of non-divergence was kept;

This past year could be seen as an exposé of what’s been happening more generally with our legal system for decades: Parliament dictated to by foreign bodies, impacted by devolved ones, and bypassed by executive order. No one could tell you what has occurred across all our laws and the tens of thousands of pages of additions. Yet ignorance of that law is no excuse, and it can cost dearly to not know.

Our Common Law system, uncatalogued laws with no search function, and the lack of understanding about case law specifics and Parliamentary reasoning all add to the cost of compliance for firms. In turn that adds up to lost innovation and productivity, lower wages, and fewer life chances. All told the cost of regulation was estimated by the National Audit Office to be over £100bn in 2017, and a large chunk is just checking you’re on the right side of the law.

But wait, wasn’t one of the reasons that we left the EU that we could look again at all the little laws and silly additions to our statute and start to rid us of these meddlesome interventions? Didn’t Boris Johnson in 2019 order a bonfire of red tape?

Well, yes and no. Johnson’s bonfire is as mal-quoted as his “f**k business” exclamation. The latter was a broadside at corporates pretending to speak for the whole market when they actually speak only and rightly in the interests of themselves and their shareholders.

Likewise, the ‘bonfire’ was actually an explicit attempt at introducing mercantilist procurement practices rather than having non-discrimination of bids by nationality – the vast majority of which have actually now been kept in place via the UK-EU Trade and Co-operation Agreement.

However there are some signs of life in the government’s plans for deregulation. Or as they’d rather call them, plans for better regulation.

Before alighting to lead preparations for COP, Alok Sharma set up a series of consultations and reforms across industries and sectors. Kwasi Kwarteng’s brush with the unions and the FT over an employment rights review put paid to any labour market shake-up, but all the rest continue.

Some of these were supposed to be of higher stakes than others — we’d all assumed the consultation on a new subsidy regime was bigger than the reform of audit, at least until a former Prime Minister’s relations to a certain financial services company started hitting the headlines.

Jacob Rees-Mogg has oversight of the vast bulk of Covid legislation because of the sunset clauses backbenchers forced the Cabinet to put in place on the emergency powers. I think it’s reasonable to trust the Leader of the House’s desire to return ancient liberties to modern Britons and so I suspect some simplification will be coming our way purely by the ticking of the clock.

The real big potential, though, is thought to be with Rishi Sunak’s Better Regulation Cabinet Committee, which has oversight across all departments and involves the likes of Kwarteng, Lord Frost, and Michael Gove all in one place.

Quite what is within scope is less certain than what isn’t. Anything ringfenced by the manifesto or which could go viral on social, such as environmental standards or labour standards, is out. But technically everything else is in, including how and what and when to diverge whole sectors from Europe, when to sandbox as the UK did successfully with fintech, and even the form and role of lawmaking at Westminster.

The Adam Smith Institute’s latest paper, Ignorantia Legis, tries to give the Chancellor some neat new ideas to ensure we get better laws, rather than just more of them.

The first thing is to stop the direction of travel towards more laws as a matter of course. A lot of this stems from process-driven regulation. This year the full cost of that way of thinking was laid bare with the precautionary principle and the vaccine in Europe. Expedited experiments where there is a clear cost-benefit case to do so would allow circumvention of onerous process-driven regulation, replacing it with clear result-driven approaches.

Higher risk, and higher personal responsibility and in ordinary times assigned liabilities, but with higher rewards. Moonshots if you will.

From moonshots to sunsets, so much of regulation is designed to stop the possibility of the very worst outcome happening. Often this is done where the potential for such an outcome is not known at first but becomes known over time. There are plenty of laws already on the statute relating to harming others, duplicating them time and again when new issues arise is unnecessary and often duplicates legislation.

To combat this, MPs should make more frequent use of sunset clauses when passing penalties and regulations, so that they can be routinely revisited and then set aside if and when the harms or moral panic they were designed to address have either been dealt with or failed to materialise.

Ministers will not win the war on wasteful legislation if they start looking for individual wins or headlines. They should instead commit to reducing lines of rules, pages of books, and issues contained within Acts. Doing so will cut the.bill the Government imposes to British businesses and each of us as citizens. That will make the UK a richer, safer, fairer and better place to work and live.

Jimmy McLoughlin: Let’s hear it for entrepreneurs creating the jobs of the future

17 Mar

Jimmy McLoughlin is a former adviser to Theresa May and Boris Johnson and is writing on the launch of second series of Jimmy’s Jobs of the Future – a top 20 Apple business podcast.

Transitioning careers is hard, really hard. I should know: I left Downing Street over a year ago, and despite being a business adviser specialising in entrepreneurship and technology, I have failed to transition careers. I have written extensively about that process here.

It is more difficult to work out the world than ever before. As a young person – or any person for that matter – it can be difficult to know where future careers are coming from and how you build relevant skills for the future. The World Economic Forum surveyed large global businesses last year, and 43 per cent said they were planning to reduce the size of their workforce. By 2025 they estimate that the computers and humans will do the same level of work.

This can seem daunting, but the job market has always evolved. The first caveman to train a hunting dog was probably accused of taking another caveman’s role, in the same way Luddites in Nottingham opposed machinery in the 19th Century.

The difference now though is the pace of change, and people can see it more. Supermarkets in the UK now employ more people than coal mining did in 1960. People can see that the traditional job of cashier and check out assistant disappears each time they go into a store. Amazon this month launched its first cashier-less store, and we can rapidly expect the same across the UK.

One of the hardest parts of my job in Number Ten was when the phone would ring at 7:45am with a FTSE Chair calling me to say they were just about to announce a large number of redundancies and wanted to let us know ahead of the markets opening. I would then deliver the bad news to the Prime Minister in the 8am meeting – after all, every job lost would mean a family and potentially an entire family impacted.

However, pre-coronavirus the employment statistics were continuing to go up. Where were all the new jobs being created?

It was a fair question, and I endeavoured to brief the Prime Minister on new entrepreneurs that were perhaps adding a dozen or so employees a week, it would not make headline news, but cumulatively they were making a big impact.

I thought I would try and democratise this information. That is why I launched a podcast, ‘Jimmy’s Jobs of the Future’, which interviews entrepreneurs about where they are creating the jobs of tomorrow and recreate the Prime Ministerial briefings.

It is hard to know where the world is going and how to future-proof yourself against the dramatic change that is coming. I think that entrepreneurs who are building fast-growing companies is a good place to start. We regularly hear tales of a retail corporate cutting hundreds, even thousands of jobs, which understandably makes
headline news. Little do we know about the fast growing scale-ups which are creating hundreds of jobs every day.

Before the pandemic we had witnessed a ‘jobs miracle’ over the last decade, but where are these jobs coming from? It’s down to the entrepreneurs who are starting around 1,000 companies a day and making incremental hires along the way. It’s not headline news, but is fascinating, and I want to help shine a light onto these people and tell us where they are going to take their companies in the next decade.

For example, we hear a lot about ‘a green recovery’ and ‘green jobs of the future’, what does this actually mean?

Well in our first interview we speak to Hayden Wood who founded Bulb, the renewable energy company, five years ago. It is now the fastest-growing private company in the UK and employs over 900 people. They’ve also become a modern-day export, launching in France and Texas recently. We ask him where he thinks the company will be growing in 3-5 years and what skills they are looking for – the answers are illuminating for anyone that wants to work in energy or a fast growing scale up.

For this series, we’ll be travelling across the UK meeting entrepreneurs who are creating dozens of jobs every month: Nigel Toon, who has built a billion-pound company in Bristol; and Graeme Malcolm, who is building a world leading quantum company in Glasgow. They need people with PhD-level skills such as software engineering and data
scientists, but they also need marketeers, copywriters, and international operation scalers.

Readers of ConservativeHome may know that my father was a coal miner from Cannock Chase and became Chairman of our party. People may describe that as social mobility in action. However, what does social mobility mean to the public? I think it is a rather odd Whitehall/think tank term that doesn’t hold much meaning in the Dog and Duck.

Sometimes in the technical policy arguments over furlough, it has been forgotten that work is far more than just a salary or financial reward: it provides a sense of purpose, of self-worth and camaraderie. When my aunt passed away two years ago, I was pleasantly surprised to see former colleagues from Asda turn up, but I was truly surprised by the fact former customers also came to the funeral. These are not points that can be factored into a Treasury spreadsheet.

I hope that this podcast can help a few people along the way and almost provide a mass form of mentoring from the best entrepreneurs in the business, opening up a network of career options that people had perhaps not previously considered before.

There has never been as many career choices out there. Whilst this is exciting, it is incredibly daunting, and the mass of information is overwhelming when you try to navigate it, the tools to source and disseminate information will be increasingly important. I hope that this podcast will help do that whilst inspiring people about the amazing jobs out there that innovators and entrepreneurs are creating.

You can listen to the podcast through Apple, Spotify and other networks here. You can sign up to receive further updates here.

Cristina Odone: How to help poorer mothers – and become a family-friendly government by doing so

11 Mar

Cristina Odone is Head of Family Policy at the Centre for Social Justice.

“They shouldn’t have children if they can’t afford them.”

I heard this familiar refrain often, when I was growing up, directed at lone mothers raising a brood of kids on welfare. Why should hard-working tax-payers shell out so someone could slob about the house in pyjamas and curlers, children at their feet?

That was America, in the 1970s. But a spirit not dissimilar is at work in twenty-first century Britain. The state sees no reason to help mothers who don’t work.

Yes, the Government, which offers up to 30 hours of free childcare for three and four-year-olds to families, will extend this to mothers who have been furloughed.

The policy has packed a less than powerful punch for low income families: at a recent extraordinary witness session of the Early Years Commission run jointly by the Centre for Social Justice and the Fabian Society, participants reported that because there “is no norm of pre-school offer” and the offer is too complicated, the share of childcare spending on low-income families has fallen by close to half, from 45 per cent to 27 per cent.

The aim was to promote female participation in the labour market. Successive governments from New Labour on have regarded this as a priority: more taxes raised, less benefits paid. It makes financial sense when you calculate that £16.7 million is lost every year in potential tax gains and benefits paid to mums who have not returned to work.

A tax system that treats us as single units seems equally sensible. We may be parenting the same children, but we regard ourselves as autonomous individuals, judged on our own merit.

This mindset suits many women. High-profile and professional, they regularly take to social media and the airwaves to hail free childcare for liberating women, and limit their asks to equal pay for equal work, flexi-time at the office, more part time opportunities – and maybe a creche at work.

These women have a well-paid career – or a wealthy partner or spouse. They can afford to spend the first years of their children’s lives off work, or to hire a nanny or au pair. They will still multi-task crazily, taking on maternal and professional tasks. They will still bridle at the glass ceiling that persists across almost every industry. But they can afford a family.

Slide down the earnings ladder to the woman for whom work amounts to a job, not a high-flying career. How can she afford to raise a family? She would love to stay home to care for her children, provide a role model for them, share with them her own parents’ values and traditions. She senses what neuroscience confirms: that those first 1001 days from conception are key in a child’s development. And even later on, schools may offer a great deal – but until they are 14, a child spends 84 per cent of their time at home.

This working mother loses out on every front. After tax, her spouse’s income is not enough for the family to survive on, so she must work too. Neither partner can afford to work part time: anything less than what they earn now would spell penury. She can’t do overtime, though, without worrying about leaving her children vulnerable to gang-recruitment or child sexual exploitation.

The couple work all hours just to break even, and arrive home stressed and exhausted. Money worries and job uncertainty (McKinsey reports that women’s jobs are 1.8 times more vulnerable during the pandemic than men’s) rock the relationship. The family risks breakdown – with all the damage that this entails.

It need not be this way.

The Treasury could transform this mother’s fate by adopting a simple, tried and tested, approach: tax parents on their combined income, and offer them tax credits for each child. With this one move, the Chancellor would recognise the value of the family, and the important role parents play in forming the next generation.

Championing this fiscal model is a high-profile mother – the Miriam Cates, the recently-elected MP for Penistone and Stockbridge. Cates is socialising the idea at Westminster – and getting traction among women both sides of the House.

The present system, Cates points out, ignores total household income and parental responsibilities. A woman on £30,000 a year will pay the same amount of tax and national insurance, regardless of whether she is living on her own, without children, or is a lone parent with three dependent children.

Cates was inspired by the way the German tax system takes into account the significant costs, in terms of time as well as money, of raising children. By taxing couples on their combined income, Germany promotes rather than penalises single earner families. In this country the opposite is true – so that a one earner couple with two children in the UK pays nine times the taxes that their counterpart in Germany will pay. The child tax credit – in Germany, this is £2500 – further contributes to a more family-friendly fiscal system.

For Cates, representing a Red Wall constituency, this is a key part of any levelling up agenda: why should raising children become an elitist pursuit? She has a point: a government willing to subsidise restaurants and pubs can surely subsidise children, too.

Being seen as a family-friendly government would prove popular – and not only among the socially conservative Red Wall voters. A recent CSJ survey found that 88 per cent of parents and 82 per cent of adults thought that more should be done to help parents who wish to stay at home and bring up their children in the early years.

The benefits of incentivising one-earner families extend well beyond the home. The present system, which steers everyone into paid work, undermines the other kind of work – the unpaid, altruistic volunteering that has proved key to the country’s resilience during the pandemic. Mothers are not the only ones who have, or should, volunteer; but again and again, they ran the PTA, helped with the church bazaar, offered to shop for the octogenarian neighbour. Help them to be in a position to raise their children and they will be in a position to help the rest of us too.

The Chancellor should stop treating us as atomised individuals, freed of any relational moorings. Families cannot be ignored, nor should they be punished. They could even, dare I say it, be encouraged.

Barney Campbell: The case for a new national service scheme – driven by incentives, not compulsion

8 Mar

Barney Campbell is on the approved candidates list having previously stood in Easington in the 2017 election. He is the author of ‘Rain’, a novel about the war in Afghanistan.

Moving on from the Budget, the next big document to have ink spilt over its fallout is the forthcoming Integrated Defence Review.

As ever with Defence Reviews, this one will see the following: cuts in personnel levels; investment in new technologies; usage of the words ‘agile’ and ‘lean’ as euphemisms for ‘depleted’; the MoD get a kicking from the old and bold; and almost zero attention from a public who, while they hold servicemen and women in high regard, neither know nor care very much about defence policy at the best of times, let alone while navigating the reverse slope of a pandemic.

The Government will take criticism of it on the chin; few voters pick defence as their hill to die on.

Where the Review should make a bold move is in trying to bridge the increasing gulf between the military and the rest of society, and by doing so strengthen both. The means of doing this is a new kind of national service, one focused not on a push from government but by the pull of the private sector post-service.

The concept of national service as we know it from the twentieth century is long dead. Firstly, and most obviously, we inhabit an entirely different world to the Forties and Fifties, when there was such extraordinary turmoil that the nascent Cold War and the retreat from Empire demanded that we maintained forces around the globe in a variety of commitments that simply don’t exist now.

Secondly, the greatest argument against enforced conscription has always been that the military doesn’t want unwilling recruits, far preferring the volunteer spirit: ‘better one volunteer than ten pressed men’, as the saying has it. But what about encouraging people to be volunteers?

Service in the Armed Forces produces an undisputed good for society, not only from the period of that service but also after it has taken place, putting back into civil society people steeped in socially invaluable principles. These include selfless commitment; discipline; teamwork; respect for others; and knowledge that a person’s background matters not a bit in comparison to their drive and desire to get on.

One of the subsidiary problems created by a smaller military, aside from the actual weakening of the country’s means to defend itself, is that the rest of society understands it less, being less exposed to those people who are in it.

For those leaving service, civilian employers’ understanding of how their hard-won and valuable skills might be transferable is reduced. This in turn threatens to create the prospect of the post-military jobs landscape being so unpromising it actively deters people from joining in the first place, not only depriving the country of their service but also, as above, the extremely valuable post-service benefits they can bring to society.

There are good initiatives in existence, such as the Defence Employer Recognition Scheme that employers sign up to that encourages them to engage ex-servicemen and women and builds awareness of the benefits that the veteran community can provide them. Currently the scheme has 355 ‘Gold’ employers (mostly large organisations), 986 ‘Silver’ and 3,170 ‘Bronze’ (mostly smaller employers). The recent introduction of the Veterans Railcard is also a generous addition that expresses the gratitude of government to those who have served.

But what is needed is more radical than that. To help to integrate Defence into society at large, military service should be made attractive not just to those who wish to serve but to their future civilian employers too. It should be done in a way that does not compromise the volunteer spirit but rather encourages it when it might otherwise falter.

I propose that any employer who engages a veteran should be excused paying National Insurance Contributions (NICs) on that employee for the length of time that that individual spent in the military. By doing so you bridge the gap between the military and civil society, keep the military an attractive place to spend part of your career, and help to keep the steady flow of military values and standards into society.

My personal wish, for what it is worth, is far greater than the aspirations of this already ambitious policy. Once such a scheme has been rolled out and had its concept proved it should be expanded so that anyone at all who is on the public sector payroll finds themselves the beneficiary of the same scheme. Spend two years working for the NHS, five as a teacher, one working for your local council? Your immediate future private sector employer is excused that same period of paying NICs on you when you start work for them. Will it happen? Probably not. But worth thinking about.

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

1 Mar

Fight Fitness Guru, Consett, Co. Durham

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tackling unemployment might finally show us what sort of Conservative the Prime Minister really is

23 Feb

As the Prime Minister set out his roadmap out of lockdown in the House of Commons yesterday, there was for the first time a real sense that the nation might actually be on the path back to the distant, half-remembered state of ‘normal life’.

But today’s unemployment figures are a sobering reminder of the serious challenges the Government will face even when, deo volente, we have finally brought Covid-19 under control. According to the BBC:

“The Office for National Statistics said 1.74 million people were unemployed in the October to December period, up 454,000 from the same quarter in 2019. The figures show 726,000 fewer people are currently in payrolled employment than before the start of the pandemic. Almost three-fifths of this fall, 425,000, has come from those aged under-25.”

The figure for young people should be especially concerning. Voters in that age group are already deeply reluctant to vote Conservative, and have made huge sacrifices to protect older citizens during the pandemic. If ministers allow a joyous unlocking for some voters to be simply a transition to further economic hardship for others, they risk alienating an entire generation.

Fortunately, the ONS also reports that there are ‘tentative signs’ that the employment market is stabilising. But decisive action will be needed. We have previously explored what it might be, and looked at the measures already covered in the Plan for Jobs. Centre-right think-tanks such as the Centre for Policy Studies have also published their own proposals in reports such as After the Virus and A Northern Big Bang.

The Budget will therefore be illuminating because it might start to give us a firmer idea of what ‘Johnsonist’ economic policy might look like. Freed from the exigencies of the pandemic, the Prime Minister will have to start making more obviously ideological decisions than he has to date. Will he rely on traditional Tory measures, as the CPS would doubtless prefer? Or will he seek inspiration from John Maynard Keynes, as Jacob Rees-Mogg advises in our latest Moggcast?

A man with Johnson’s sense of history will know that his legacy may depend on getting it right. Memories of the Conservatives’ hard-nosed attitude towards unemployment in the 1980s (however justified) helped to lock the Party out of many of the ‘Red Wall’ seats he captured in 2019. Voters will be swift to punish, and slow to forgive, a perceived relapse to being the ‘same old Tories’.

Andy Street: I haven’t raised a mayoral tax during my term, and commit to not doing so if I’m re-elected

23 Feb

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

As we await next week’s Budget from the Chancellor, here in the West Midlands we’ve just considered our own local financial plans for the next year. Approved by the West Midlands Combined Authority (WMCA), it is a budget of more than £900 million – funding infrastructure, regeneration and job training schemes that can support our post-Covid-19 recovery.

After such a difficult twelve months, and with significant challenges ahead, this year’s financial plan for the region stands out in terms of its ambition and breadth, delivering on my core commitments of new jobs, better transport and more homes.

But our plans aren’t just about big spending to kick-start the economy, they’re about public funds working hand-in-hand with private sector investment. This is about delivering investment into projects that are based on solid business cases.

In this column, I want to tell you about how we intend to spend that investment and also explain how, as Mayor, I believe it’s vital that I set a financial example to ask only for money when it is needed – and ensure it is used properly.

So what’s in the region’s budget? For a start, there is £142 million towards skills and training – to support people as they adapt to the new world we face and get high-quality, stable jobs in the industries of the future.

Despite the pandemic, we have already made a good start on the 20-year transport plan that I unveiled 12 months ago, and this budget includes a further £363 million towards delivering our ever-expanding Metro lines, reopened railway stations and better, greener buses.

Then there is ‘brownfield first’, our ground-breaking policy of reclaiming derelict industrial sites for development. Our budget includes £116 million towards maintaining our progress in making ‘brownfield first’ a reality, not a slogan – regenerating communities and easing the pressure on our Green Belt.

Plus, of course, millions have been allocated to other big regional investments we have secured, for a whole raft of projects that are generating jobs and sustaining livelihoods now – projects such as the Commonwealth Games, Coventry City of Culture, the rollout of 5G technology and many more.

All told, since becoming Mayor four years ago, we have brought in £3 billion of new Government funding, a figure rising every day, and topped up with millions more given to our councils, and supported by us as a regional body.

When the pandemic struck, the West Midlands economy was motoring, with record employment, record housebuilding and the strongest growth anywhere outside of London. Government support played a huge part in that success, but I believe that our ability as a region to put together compelling business cases has been crucial to winning that investment. Now, as we plot our recovery post-pandemic, this approach will be more important than ever.

It’s not surprising that I do things differently as Mayor, when you consider that I came to the role from a business background, rather than via the world of politics. My business experiences have certainly informed how I tackle the role, in terms of setting strategy, building a team, ensuring delivery and understanding that the UK’s regions are in a competitive race.

However, in financial terms, my 30 years at John Lewis have meant I build a budget based on business deals, not political decisions. Every penny we have brought into the region has been won through coherent business arguments, project by project, and working hard to make the case with Government.

Throughout my time as Mayor, I have worked with Ministers to secure the funding we need from across Government. I haven’t done this through megaphone diplomacy, or seeking out TV cameras to make demands, but through approaching each project as a business deal – and making sure we land as many as possible. Naturally, this approach also knits well with the business world, leading to big private sector investments which drive our economy forward.

There could have been another way. When it was established in 2017, the office of the Mayor was given considerable powers – powers I have often argued should be extended, for example to decentralise decision-making from London, or to give regions more ability to direct how money is spent locally.

However, there is one significant area where I have not used the powers on offer to me. During my time in office, I have not used the ability available to the Mayor to introduce a precept – an additional Mayoral tax.

In the last four years I have never used this power to tax the people of the West Midlands and, where we have borrowed, it has been to push forward projects – and never at a rate which means citizens end up with a precept.

Our model of retaining local business rates has also helped balance the books, by ensuring we benefit from the fruits of our strong economic growth, paying in part for the work of the WMCA.

I could have got our region into heavy debt to make my transport plan happen, or raised extra taxes to press ahead with Brownfield First. As a person with a business background, and someone who believes good housekeeping, this hasn’t been my way. Areas served by Labour mayors levy a precept. This has not happened here.

As households across the region face the hardships caused by Coronavirus, I’m proud to say that this year we have once again balanced our books and delivered a budget that hasn’t cost local people a penny in extra tax from their Mayor.

It is an approach I want to continue. After four years of no extra tax due to the Mayor’s office, I am planning to do the same again if I am fortunate enough to continue in this job – that’s zero tax again for another three years. I do not intend to introduce a precept.

I consider it a great privilege to be the Mayor of the region where I grew up, the place that made me what I am. I passionately believe that the office of Mayor should exist to the benefit of local people, not to their cost. By continuing to approach this job in a business-like way, I am confident I can continue to bring real money into their region, without taking it out of their pockets.

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

8 Feb

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Howard Flight: Priority spending should go towards training the next generation

1 Feb

Lord Flight is Chairman of Flight & Partners Recovery Fund, and is a former Shadow Chief Secretary to the Treasury.

I submit that the most important territory to address when managing exposure to the pandemic is to ensure that the next generation is trained for worthwhile employment.

I question whether our reformed apprenticeship system is currently either achieving this or in the present context capable of achieving this. It is here that ongoing government management and funding are needed to finance and manage apprentices through their training courses.

My Livery company, the Carpenters, has for over a 100 years managed the Building Crafts College set up by Sir Banister Flight Fletcher. It has a leading reputation for the quality of its training. It has again just been closed due to the lockdown, although it is managing to continue with online teaching. Here I suggest pupils and staff might be empowered to hold their own vote on whether or not to stay open, with full protective clothing and gear provided. I could see an argument for government involvement in offering and financing apprenticeships.

Last August the Government set up a new online telephone support service for apprentices who have lost their jobs during the Covid-19 outbreak. The redundancy support service for apprentices should ensure they can access local and national services providing financial and other support to help them find a new job when they need this. Apprentices can also search and apply for other available apprenticeship opportunities across the country. I hope these support services are continuing during the lockdown.

Also, employers, large and small, have being encouraged to take advantage of generous new cash incentives designed to create more high-quality apprenticeship opportunities, so more people and especially the young can kick start a successful career. As part of the Government’s plan for jobs employers have being offered £2,000 for each new apprenticeship aged under 25 which they hire and £1,500 for each apprentice hired aged 25 or over up to January 31. This includes taking on an apprentice who has been made redundant.

For apprentices I submit government help and support should go further than this. It would be particularly positive if the Government could provide the finance for an apprenticeship and run a service placing young people seeking an apprenticeship – both those who have been made redundant and those new to the apprenticeship market.

The Government has been taking steps through its Plan for Jobs to both support and protect support jobs and to create jobs with a clear focus on ensuring people have the right skills to get into work. This includes creating more high-quality apprenticeship opportunities to help get our economy moving. The Redundancy Support Service for Apprentices should make sure those who have lost their jobs can get the help and support they need to get back on the path to a new career. These have now been damaged by the third lockdown.

Employers who have apprenticeship opportunities and who are willing to take on a redundant apprentice have also been encouraged to sign up to the new service and to advertise their vacancies. Apprentices who are looking for new opportunities can then see what is on offer.

The cash incentives for employers are in addition to the £1,000 payment for new 16-18 year old apprentices and those aged under 25 with an education, health and care plan. To support particularly young people affected by Covid-19, the Government introduced a portfolio of support covering £111 million cash boost to triple the number of traineeships available across England – the largest ever expansion of apprenticeships. The Government recognises we need to ensure more 16 to 24 year olds can get the skills and the experience they need to enter the world of work.

David Thomas: Five policies to help school pupils catch up after the Covid crisis

28 Jan

David Thomas is the headteacher of a secondary school in Norwich, and was awarded an OBE in 2020 for founding Oak National Academy – an online school to support children during the Covid-19 pandemic.

It is vital that our schools re-open as soon as possible. In many ways, however, re-opening is the easy bit. What we do to catch children up once they are back in school is much harder.

The majority of schools have done an excellent job at trying to keep children’s futures on track. But no matter how hard they may have worked, months of learning online is no substitute for months in the classroom. It is going to take more than goodwill to cancel out the impact of the pandemic on our children’s futures.

We should be using this period of school closure to think ahead and prepare to catch our children up when schools re-open. Here are some of the things the Government should be considering.

Triple the scale of the National Tutoring Programme

We know that one-to-one or small-group tutoring helps pupils catch up on their learning. The Government’s expanded ambition to provide tutoring to 450,000 school pupils is a good one – but we could go even further.

There are 1.5 million UK undergraduate students in UK universities. If every undergraduate tutored one school pupil then we’d have tripled the number of children being tutored in our schools. Government should launch tenders to coordinate this effort now. Students could also be paid through a combination of cash and loan forgiveness, which would reduce the present cost to the Treasury.

Provide a Mental Health Support Team for every school

Many of our schoolchildren will have spent months living in confined housing without being able to socialise with their peers. They will have suffered bereavements and seen their parents fear for their jobs. They will have missed out on many of the formative experiences of adolescence. This can’t help but have an impact, and it’s one we need to minimise.

In 2019 the Government launched a plan to have Mental Health Support Teams covering every school in the country by 2023. Each of these teams supports around twenty schools by training their staff and supporting them with cases. This can’t wait until 2023. We should aim for September 2021 instead.

Keep children learning next year, even when they can’t be in school

Our children have already fallen behind. They can’t afford to lose any time next school year. In a normal year children lose many days from minor illness, for example by staying off school for 48 hours after a stomach bug. Each one of these days counts.

A silver lining of this crisis is that schools have put in place the infrastructure to mean that being at home doesn’t have to mean missing learning. Schools have been providing remote learning to self-isolating children since September.

Government should support schools to make this a permanent feature of our education system. If a child is well enough to sit in front of a computer then they should be able to learn.

Fund schools to provide early support to vulnerable families

Many families are already in a vulnerable position because of the pandemic, and many more will come to light as the crisis ends. There will be redundancies that have been so far staved off by furlough; health conditions exacerbated by lockdowns; and domestic violence that only becomes apparent in a return to normality. Social services will struggle with the volume of referrals, and they need to be able to concentrate on the most acute cases.

Schools will often be the first to spot these issues, and already have families’ trust. They should be funded to provide support to families who need help, so that those families don’t later reach a crisis.

Get every unemployed school and college leaver a Kickstart placement

We know that there is a critical window of time when a young person finishes school or college. If they find employment in this period then they are likely to remain in the workforce for life. If they don’t, then their chances of lifelong unemployment begin to grow.

This summer a new cohort of young people will hit the labour market. Their education will have been disrupted, and they will need support to find stable employment. Kickstart is an excellent scheme where government pays the costs for employers to offer young people a six-month work placement. We should aim to match every young person to a Kickstart placement if they are not employed within three months of leaving education.

Our children’s lives don’t have to be determined by this pandemic. We can catch up lost ground. Yes, doing so will cost money and time. But it will cost a lot less than having a generation grow up without the knowledge and skills to keep our economy and society strong.