The DfE has thrown everything but the kitchen sink at school reopenings. But the perennial problem is communication.

25 Feb

With little over a week to go before schools reopen, Gavin Williamson has been busy trying to persuade all parties concerned that it’s safe to go back.

Yesterday at a Downing Street press conference, he outlined plans for schools in England. One of the Government’s biggest moves is a “pandemic package” of extra funding to help pupils catch up with all the learning they have missed during the course of 2020/21.

The Government will fund £700 million in total for England, with a £302 million Recovery Premium dedicated towards state and primary schools. This is designed to help schools support disadvantaged students in whatever way they think is best – whether that’s additional clubs and activities, or something else.

The other huge development is that A-Level and GCSE results in England this year will be decided by predicted grades (teachers deciding pupils’ exam results, based on a combination of mock exams, coursework and essays). More on that later.

As for safety, face masks will not be compulsory in schools, but “highly recommended”, and Nick Gibb, the education minister, said he hoped the majority of students would volunteer to have Coronavirus testing twice a week. Secondary schools and colleges are also allowed to stagger reopenings on March 8 to get testing in order.

The DfE has gone to huge efforts to try and get schools running again. It is trying to pre-empt every criticism that has been levelled at the Government during the pandemic, from schools not having enough tests to concerns about how far behind pupils are, which will be addressed with mass testing and after-school classes, respectively.

One of the toughest challenges for the Government has been deciding how to mark grades. It cannot win, whichever route it takes. When it used an algorithm over the summer – designed by Ofqual – to decide GCSEs and A Levels, this led to huge outrage about exam results. But predicted grades aren’t perfect either. When the Government switched to them after the Ofqual furore, it led to grade inflation (last year a total of 76 per cent of GCSE results were a grade 4 or above compared to 67.1 per cent in 2019).

Williamson said 2021’s predicted grades will be “fair to every student”, and Gibb promised “the best system possible to ensure there is consistency and fairness in how teachers submit grades for their students.” But you sense that it’ll be another troublesome summer for the Government.

Add to that it is already dealing with increasing calls to bump teachers up the vaccine queue. These will only grow after Germany announced it was doing this (even in spite of its terrible difficulties rolling out the vaccine, which make it no model to follow). 

Although the UK government’s scientific advisers have repeatedly spelled out the rationale for the vaccine order, it has been hard to compete with the likes of Tony Blair (who has also called for teacher prioritisation) and everyone else who has suddenly decided they’re an epidemiologist.

Overall, the Government’s biggest problem has always been communication. Up against a vocal opposition – that’s the teaching unions, not Labour – Williamson has struggled to make the case for keeping schools open (and it is a strong one).

As I wrote in November for ConservativeHome, one way the Government could have moved its plans forward is by using an independent taskforce in the way it did for vaccines (with Kate Bingham in charge). I also wrote that “it would be wrong to assume that the issue of closures has now been settled for good” – at a time when public attitudes to school reopenings actually improved.

Likewise, despite the speedy roll out of the vaccines and a palpable excitement about the Government’s roadmap to easing lockdown, one senses that the problems with school reopenings are far from over.

Chris Loder: Our rail industry is a sleeping giant when it comes to boosting international trade

24 Feb

Chris Loder is the Conservative MP for West Dorset.

As Brexit negotiations have concluded, the Government is working hard to both protect and expand British industry by creating a future of new opportunity through trade negotiations. When developing a new independent trade policy, it is crucial that we prioritise sectors in which we are global leaders and create the best framework possible to help them remain that way in a post-Brexit world.

Recently, I wrote about the importance of rail in the context of our fight back against Covid-19. Today, I am again banging the drum for the rail industry that I know and love; particularly because of its rather unknown status as a major exporter – but we need to change that.

The rail industry always takes up a lot of column inches in the British media. Debates rage about strikes, fares and leaves on the line. These are all issues that the British public experience directly and so it is no wonder that we all hear so much about them.

However, our rail sector is a major industry in its own right compared to the automotive or aerospace sectors; albeit on the verge of a major reform. Crucially, it is also an international success story, exporting £800 million a year in goods and services. The sector employs around 600,000 people (more than the entire workforce of Birmingham) and fuels jobs in the UK’s industrial heartlands; places like Crewe, Derby, Stockport and Doncaster. And it could do so much more for UK plc.

Key to protecting and enhancing the UK’s role as a major rail exporter is to make our market attractive and open for business. Rail should be included in any free trade deal post-Brexit; and I have already met with Graham Stuart, International Trade Minister. These deals should be signed with the purpose of making it as easy as possible for the UK to continue to export.

A recent survey by the Rail Supply Group showed that the UK rail sector’s priority markets are very much aligned with those of the Government – rail suppliers want to access markets like America, Australia and India, all of which are top priorities for agreeing Free Trade Agreements. The industry is also keen on ensuring reciprocal market access; and we should reject protectionism wherever it rears its head. If we are restricted from accessing another market because of protectionist procurement legalisation, as we have been within the EU, the Government needs to ensure these barriers are broken down for the benefit of all; and that is my mission here at the moment for the railway.

The potential of the rail industry in exporting abroad knows no bounds, and it says something about the growth of the industry that the Rail Sector Deal, agreed between industry and Government, has targeted a doubling of UK rail exports by 2025. This is very much achievable, with lots to play for as the global rail market is due to expand significantly over the coming years; with the recently released UNIFE World Rail Market Study predicting annual market growth of between one and 2.3 per cent until 2025, when an annual volume of approximately ER 240bn pa could be expected.

However, now more than ever, we need to show off what we can sell to our new trading partners. Support from Government, recognition of the exporting potential of the sector and schemes like the Department for International Trade’s Tradeshow Access Programme (TAP) are vital in helping fund small businesses in the rail industry to go to trade shows around the world and bring home contracts. As we leave the EU, it is vital that these sorts of schemes are maintained and supported more because Brexit means the UK becomes less prominent internationally. Now is when our presence on the world stage is needed most.

In September 2019 at the Conservative Party Conference, the rail industry leaders present did not appreciate the opportunities that Brexit offered. Senior executives were not at that time wanting to embrace the future. But we have now left the EU. We have countless trade deals in place and I have been making the case throughout Government to make sure rail features in these deals; and the industry would do well to also make the case.

The Railway Industry Association (RIA), the voice of the UK rail supply community, has made a number of key asks about what the industry needs from future trade deals in order to continue to soar. To summarise these in simple terms: rail needs to be included in trade deals; have tariff-free access to other markets wherever possible; and retain a great, highly skilled workforce with people from around the world able to come here if they fit the bill. If we can achieve this and combine it with a renewed drive to “sell, sell, sell” through our negotiations around the world; there is every opportunity for our rail industry to lead the world in our new, global Britain.

Andrew RT Davies: Wales. Here’s how we can extinguish the dangerous flame of separatism.

24 Feb

Andrew RT Davies is the leader of the Welsh Conservatives and Assembly Member for South Wales Central.

One of the many unfortunate, if unintended, consequences of the Blair devo-revolution has been to undermine the Union’s sense of “permanence” – both from an ideological and an institutional perspective.

Designed to see off the nationalist threat, devolution has merely shifted the political narrative into an endless cycle of debates around further powers, with little correlation emerging between the performance of devolved governments and the level of support for independence.

It’s scarcely been more fashionable among constitutional experts (and BBC journalists) to view separatism as inevitable, but I certainly don’t share the view that it’s a foregone conclusion. Far from it.

The patriotic fightback has started and, as the leader of the Welsh Conservatives, these are some of the steps I want to see us take to extinguish the dangerous flame of separatism.

Put ‘Project Fear’ on ice and champion the pride of Britain

As Unionists we can often be guilty of basing arguments in process or economics. All very valid, and all incredibly important, but we need to own the emotive, patriotic argument – remembering and learning the valuable lessons from the victorious Brexit campaign many of us were part of.

We need to put “Project Fear” on ice and champion the pride of Britain.

I’m a proud Welshman. Proud of a Wales that consistently punches above its weight on the sporting and cultural scene, and has been to the fore on the pandemic frontline in delivering the Oxford-AstraZeneca vaccine through Wrexham-based firm, Wockhardt.

But I’m also a proud Brit. Incredibly proud of our world-leading armed forces, our pharmaceutical industry, our rule of law and our enviable creative industries.

It’s the very best of our country and a symbol of the greatest union the world has ever seen – socially, culturally and economically. Why would we want to undermine and banish that great unity for division and separation?

But we shouldn’t rest on our laurels and the British state can do more. Why don’t our great institutions such as the Imperial War Museum, National Gallery, British Library project themselves into Wales? That footprint can and should be easily corrected. Let’s do it.

And yes, where appropriate let’s champion the economic benefits too. In Wales, we’ve benefited enormously through the various support schemes delivered during the pandemic by the Government, which have saved hundreds of thousands of Welsh jobs during the recent crisis, and are now saving thousands of lives with Britain’s hugely successful vaccination programme.

I’m a proud Welshman and proud Brit and make no apology for it, and that’s the turf I want to see us fight on. Let’s dictate the terms of engagement, and redouble our efforts to make the positive and patriotic case for Wales, Britain and the Union.

Minister of the Union and inter-governmental relations

There’s no greater champion of the UK than the Prime Minister, and he’s taken the duty head-on with responsibility as Minister for the Union, working alongside the three excellent secretaries of state.

One of the PM’s greatest strengths is on the campaign trail and while it was brilliant to welcome him to Wales last week, it’s a shame current restrictions prevent him from engaging more widely with the public on his agenda to level up all parts of the UK, which will be the cornerstone of securing the Union’s long-term future.

It’s been well briefed in the press that Lord Dunlop’s (as yet unpublished) report recommends the creation of a new cabinet position for the Union, and suggests that it should be elevated in line with the other great offices of state to help keep the UK intact.

Whether this is necessary is a call for the PM, and the PM alone, but one area I have long felt needs attention is inter-governmental relations within the UK.

It’s my personal view the Joint Ministerial Committee requires urgent reform/reprioritisation to improve collaboration and decision-making, particularly with Brexit and the significance of UK-wide frameworks.

The devolved leaders are mischievous at the best of times and their aims are not always aligned to ours, particularly Holyrood’s EU-flag-waver-in-chief.

But an overhaul is required to shower them with attention and keep them in check, particularly when they pretend they have responsibility for areas they do not.

Unleash the opportunities of Brexit

While it may seem counter-intuitive, particularly given the strength of feeling in Scotland on the issue, Brexit provides us with an opportunity to reaffirm the benefits of our Union, and to shift the focus onto a positive discussion around the country itself.

The UK’s new found agility has allowed us to save lives thanks to a dynamic procurement strategy and rapid rollout of Coronavirus vaccinations, in comparison to the European Union’s overly bureaucratic and beleaguered jabs programme. Team GB at its best!

But there are other tangible benefits to Brexit, with the automatic repatriation of a vast array of new powers to these shores, including the devolved nations.

We need to ensure the new Shared Prosperity Fund (SPF) delivers for our poorest communities – levelling up our country – and reaching people who were for so long ignored.

This is an exciting opportunity for the Conservative government to transform all four corners of our country, and a game-changing regeneration scheme would be a powerful cocktail to the politics of division, separation and hate.

Devolution should never have been about power-fanatics in Cardiff Bay, Holyrood or Stormont – it’s about local communities

The biggest failure of Welsh devolution has been the hoarding of power in Cardiff Bay with people in north Wales feeling as disconnected with the Senedd as they ever did with the EU.

Devolution was meant to bring power and decision-making closer to communities, and it’s not too late to ensure that’s the case, albeit the UK government will have to be the driving force.

It’s important UK government spending is effectively targeted and given the PM’s ambition for large-scale projects, I’d like to see the designation of “Union Highways” that would unblock Wales’s arterial routes on the M4, A40 and A55 and boost important cross-border growth.

Where devolved government fails, let’s help local authorities and the communities they serve.

No more referendums, no new constitutional chaos, but a sole focus on recovery

People in all corners of the country want to see politicians across the UK working in partnership to focus on defeating Coronavirus and the other challenges we face.

And whatever happens post-May, the UK government should stay strong. The Scottish referendum of 2014 was a once-in-a-generation vote, one which the separatists lost. End of.

The energy and resources of governments at Westminster, Cardiff Bay, Holyrood or Stormont should be focused on our post-pandemic recovery. Anything else would be unforgivable.

And as we emerge from this crisis, Conservative energies must be focused on improving everyday lives and rebuilding our economy, which will be the best antidote to the constitutional fanatics.

So let’s back Wales, back Britain and get on with the patriotic job of building back our country better than ever.

Jethro Elsden: Why, paradoxically, vaccine nationalism can help end the global pandemic early, not prolong it

22 Feb

Jethro Elsden is a Data Analyst and Researcher at the Centre for Policy Studies.

The early success of the UK in the vaccination rollout is obviously fantastic news, which will save many thousands of lives and bring with it a substantial economic dividend. However, there are growing calls for a fairer distribution of vaccines around the world and officials in the WHO have called for the UK to start sharing its vaccine supply.

Countries like the UK or US which have successfully secured early access to vaccine doses are accused of vaccine nationalism, supposedly hogging the supply of vaccines and preventing poorer nations getting access. But far from being a barrier to vaccinating the rest of the world and escaping the pandemic, vaccine nationalism has been key to developing and producing the jabs in record time, and the entire world will benefit because of it.

Of course, vaccine nationalism can be both good or bad depending on what we mean by it. For the purpose of simplicity here I suggest there are two types: one which is mostly good and will help to end the pandemic early. The other is mostly bad, which if pursued widely could prolong the crisis for many years.

The first involves competition between countries constrained by the rule of law – countries striking legal deals to pay and invest more, or offer data and help, to pharmaceutical firms in order to get doses early and be given dedicated supply. These countries benefit in the short term but the whole world benefits in the long term since development of vaccines gets expedited and supply ramps up more quickly. Countries such as the UK and the USA have, via the vaccine taskforce and Operation Warp Speed, practiced this first kind.

Via these schemes they have funded vaccine development to the tune of many billions of pounds and far more generously than the EU. While both the UK and USA have spent nearly £30 per capita on funding vaccine development, the EU has spent less than £5. The UK and USA’s funding has been instrumental in speeding up vaccine development and production, thus benefiting the whole world. At root of both schemes was a “selfish” desire to develop a vaccine and produce it at record speed in order to immunise the populations of the UK and US. The benefit for the rest of the world was of secondary importance.

Whereas the second sort involves countries competing by whatever means they can to get their hands-on vaccine doses, whether legal or not. These countries benefit in the short term but the whole world (including the countries which initially benefited) lose big time in the medium to long term. The EU has in recent weeks started to practice this second kind, with export controls and interference with private pharmaceutical firms, threatening to undermine global vaccine supply chains.

Luckily, they have pulled back from the brink but we almost ended up in the situation where the EU essentially stole some of the UK’s vaccine supply. This kind of vaccine nationalism is obviously disastrous; it undermines the private property rights and international supply chains which the pharmaceutical firms depend on to produce vaccines at scale. What firm would massively scale up production or rush to develop a new life-saving product if they could not be certain that their ability to sell the product will not be arbitrarily determined by bureaucrats.

While some have suggested that vaccine nationalism could cost up to $1.2 trillion per year, these estimates assume that in a world where access to the vaccine was equal and distribution was fair, the same progress in developing a vaccine, both in speed and scale, would have occurred.

This seems a rather pollyannaish assumption. It’s precisely because those countries “selfishly” invested in vaccines to cover their own populations that they were developed in record time and production is rapidly being scaled up. In time this will also ensure that poorer countries get access to vaccines in large numbers much earlier than in a realistic counterfactual where distribution was equal across the globe.

The key fact in the situation we are in is: It doesn’t matter very much whether we vaccinate fairly or unfairly. What really matters is how quickly we vaccinate everyone. This means maximising vaccine output as rapidly as possible. The pandemic won’t end until enough people around the world have gained immunity either via natural infection or vaccination in order to hit herd immunity – or at least have sufficient immunity so that severe disease will no longer overwhelm health services. The quickest way to get there is thus not to spread the vaccine supply out fairly, it is to increase supply as much as possible.

The spectre of variants emerging that evade immunity reinforce this point. We may need to vaccinate the world multiple times over the coming years and if we don’t have sufficient capacity to do so quickly then the pandemic could drag on for a long time. Countries like the UK and USA getting early access to tweaked versions of vaccines will undoubtedly be a good thing for the entire world if that means more money is invested in vaccine development and production, and the evidence from the first generation of vaccines which are now being distributed suggests this is exactly what will happen.

There are two main flaws with going for an internationally-coordinated fair distribution of vaccines. First, you end up with a big global free rider problem, with countries unwilling to invest if they can’t get early access to vaccines. The good sort of vaccine nationalism essentially solves this issue – countries like the UK and US invest more in development and production – or in the case of Israel pay far more than everyone else –  and thus gets early access to the vaccines, but in turn vaccines arrive earlier and production ramps up much more quickly which massively benefits the entire world.

Second, and not for the first time during the pandemic, the dynamic nature of markets is being underappreciated. Supply is not static – given an increase in effective demand markets will adjust and increase supply. We saw this in the spring in the initial stages of the crisis; when PPE was in serious short supply, much higher demand led to firms increasing production – and new firms entering the market. Very rapidly shortages disappeared and have not returned since. The same is true of the market for vaccines, there’s a big global shortage of supply at the moment, what we need is an increase in production not fair rationing of existing supply.

Of course, vaccine nationalism doesn’t mean you then can’t help poorer nations get access to vaccines further down the line once supply ramps up. The UK is already playing a key role in this regard, mobilising over $1 billion of funding for COVAX the international scheme to ensure poorer countries get access to vaccines, making it one of the most generous funders of the scheme.

It will be far more effective going down this route and giving poorer nations the money in which to join the global vaccine market, which will increase effective demand and in time feed through into increased supply. Rather than trying to ration vaccines even more than they already are in richer nations like the UK and USA and redistribute them around the world. All the latter will accomplish is to spread what little supply the world does have even more thinly without doing anything to increase supply.

John Macdonald: Are the Tories becoming the party of high taxes and picking industrial winners?

10 Feb

John Macdonald is the Head of Government Affairs at the Adam Smith Institute.

The idea that British state should pursue an “industrial strategy” was a key feature of the Mayite years. But it has received a substantial boost as a result of the pandemic. Last week, Business Minister Kwasi Kwarteng announced that, now free from EU state aid rules, Britain would design a more expansive homegrown subsidy scheme to support British industry. On this site last week George Freeman set out his stall and personal record in picking winners as a guide to his expected future success as head of the new Taskforce for Innovation and Growth through Regulatory Reform (TIGRR).

The latest ambitions for government involvement in industry claim that Britain needs to be both more self-sufficient and can achieve success by focusing on certain industries, like vaccines but also environmental technologies, agriculture, and digital. If only they’d realise businesses mostly want to be a bit more free from government in all areas.

Some of the focus has been on reducing red tape — like unscientific restrictions on genetically modified foods. This is extremely welcome: now Britain is out of the European Union the Government should be doing everything it can to make the UK a more welcoming place for innovation and entrepreneurship. Reducing both homegrown and EU-derived red tape is key to that mission.

On the other hand, the focus on allowing greater use of domestic subsidies to back certain industries is retrograde. There are no doubt a number of fields with huge potential, but it is folly to presume that politicians and bureaucrats have the necessary skills and knowledge to assess which technologies and specific companies have the most potential. If they did have those skills they would perhaps be in the private sector, making lots of money. Inevitably state subsidies will be given out more for political reasons than good economic reasons.

The recent case study of vaccines — in which the Government provided advance order purchases and subsidised manufacturing — is now being trotted out as a counter example of how the state can do good.

The Government has good reason to feel chipper about the vaccine. Kate Bingham’s prepayment for vaccines will ensure the country access to seven vaccines: the three mRNA vaccines (Pfizer, Moderna and Curevac), the Novavax vaccine that has been shown effective against the South African variant, the Astrazeneca vaccine, the Valneva vaccine and the single-shot Johnson & Johnson. We’ll have an oversupply of doses that will enable a shot of vaccine diplomacy to deliver immunity to friends and allies of our choosing.

But we should be extremely cautious about applying the lessons from a once-in-a-century pandemic to every day policymaking. Vaccine Taskforce chair Bingham was successful because she, rightly, had a very clear short term goal and a practically unlimited budget to purchase lots of different vaccines.

There is a clear and obvious difference between buying a product from a company, and extrapolating this one win in a pandemic full of state-failures to think ministers or Whitehall have any grand oversight of the direction an economy of millions of people should go next as we reopen.

The pre-purchase of vaccines from companies with strong pharmaceutical track records, including the front-runner which took no public money to develop their product, is no reason to conclude that the Government should take equity stakes, engage in secured or unsecured lending, grant giving, or underwriting debt positions of whole industries just because someone has decided they’re sexy.

Even less so when they’re subsidy blackholes or nascent industries when the creative destruction of our market system and extensive financial industry’s risk taking is best placed to deliver.

The Government claims that the new state aid scheme is not “intend to return to the 1970s approach of the Government trying to run the economy or bailing out unsustainable companies”, in which taxpayer money used to protect certain businesses and industries, usually with little success.

But of course the intention is never to pick losers. That doesn’t make it so. Just last year the Chancellor launched Project Birch, a scheme intended to offer loans to (and in some cases a government-ownership stake in) companies deemed too big to fail. This was in addition to all the other state transfers and loans on offer to companies to make sure they could survive the Covid storm.

Just a quick glance at the industries Freeman listed as bets he’d like to see back has hydrogen, biofuels, and supposed “superfoods”. There is a qualitative difference between handing cash to companies in sectors you want to be seen with at a photo-op, and removing red tape from others you think might flourish without. Reviewing GDPR, expanding CRISPR research in agriculture and removing the precautionary principle might well be worth legislative change but need to be sold on their own merits, not as part of a package of subsidy for unrelated industries that have lobbied their way to prominence.

Even the UK’s existing programmes to support supposedly innovative companies are not achieving much success. A National Audit Office (NAO) report last year found most business support spending lacked measurable objectives, making it impossible to know if they provided value for money. In the one case that evaluation was available, Innovate UK’s flagship Smart Scheme, there was no statistically significant performance improvement between companies that did and did not receive grants — meaning they are not achieving very much.

A productive, high-potential enterprise can currently borrow at extremely low rates without the good graces of the Government (and without exposing itself to political risk). If the state begins offering a wide range of subsidies, it will inevitably chase those enterprises that are less efficient (in an attempt to, say, level up), wasting taxpayer money, crowding out private sector investment and potentially pushing up interest rates. There is also evidence to suggest it could lead to the growth of “subsidy entrepreneurship”, in which firms waste time seeking state aid instead of creating value.

This would be undesirable in normal circumstances, but here could seriously hamstring the post-pandemic recovery and return to growth.

Time and time again, we have been shown that the state fails to pick winners, wasting people’s money in trying to do so. Removing obstacles to growth, forgoing rumoured tax hikes that could choke it off, and giving the private sector new regulatory space to take advantage of innovations is the only way to truly “level up” — rather than through the artifice of taking from the taxpayer to give to the corporation.

It is time for the Tories to choose. This is not the time for policy experimentation or a new model of capitalism, like some have brazenly claimed. Excessively directing the economy, and pursuing policies that are either unproven or debunked, risks prolonging the downturn. They would do well to disabuse themselves of cronyism and reclaim their mantle as the party of low tax and free trade. Leave the case for subsidies and state intervention to Her Majesty’s opposition.

John Stevenson: Property tax reform is key to levelling up the country and the Conservatives’ electoral chances

3 Feb

John Stevenson is the Conservative MP for Carlisle.

The 2019 general election was won and fought on a clear mantra of “getting Brexit done”. Now that we have left the European Union and as we eventually emerge from the pandemic, it is time for the Prime Minister to re-focus on his mission to level up the UK.

Let’s be in no doubt that the Conservative Party’s electoral chances in 2024 depend to a large extent on whether people across the UK, and especially in the “Red Wall”, feel and see the benefits of this agenda. This was always going to be the case, even before the outbreak of Coronavirus. The pandemic has simply underlined some of the economic and social issues that have existed in Britain for too long. As a result, the task of levelling up has become more urgent.

The first challenge to overcome is one of definition. Who can explain what levelling up actually means? I understand work is going on behind the scenes to do exactly this. This needs to happen at pace alongside a clear set of metrics which can track progress on measures to which people can relate, from local healthcare and educational outcomes to unemployment levels and spending power. By regularly assessing progress in each of these metrics, locally accountable political leaders can identify specific challenges that are relevant to their community and put in place relevant improvement plans.

Second, the public are going to want to see results. Alongside the progress tracker, the Government and local MPs are going to require specific examples which they can use on the doorstep to show that constituents, their families and their communities are better off as a result of voting Conservative.

Brexit and then Covid have limited the amount of time and resource the Government can spend on working up specific policies which can be delivered before the country next goes to the polls and which chime with the electorate. Major infrastructure programmes are needed but these are often projects that take years to initiate and have little traction at a community level until final completion. As the saying goes, all politics is local.

Of course, the state of the public finances is also a huge problem for the Government. Any change of policy has to therefore be assessed on whether it delivers against a clearly defined vision of levelling up, whether local people can see and feel the benefits in their everyday lives, and whether it is cost-neutral or (ideally) a revenue raiser for the Treasury.

This is why a fundamental reform of property taxation is so appealing and could form a key component of the Government’s efforts to level up the country. The current system is out of date, confusing, unpopular, unequal and most importantly unfair. The Chancellor has acknowledged the need to make the system fairer and property taxes would be the ideal place to start.

The two obvious examples which irritate people from every walk of life are council tax and stamp duty. Council tax is based on property values from 1991 – 30 years out of date. That means that someone living in a house worth £100,000 pays around five times more tax as a share of property value than someone living in a home worth £1 million. Just 29 per cent of the public believe that council tax is calculated fairly and only 26 per cent believe that their own bill is set at the correct level.

Council tax has failed to keep up with the substantial increase in property values, especially in London. This has deprived the Treasury and local councils of much needed revenue and meant that lower income households outside the capital are paying more as a proportion of their home’s actual value than they should be. This has a profound impact, through no fault of their own, on their disposable income.

Stamp duty is a property tax which is an attack on aspiration and ownership. By taxing property transactions, stamp duty discourages homeowners from moving – be it an older couple downsizing or a growing family upsizing – that would lead to more efficient use of the country’s housing stock. The fall in transactions ultimately results in fewer new homes being built because the market signals, to which housebuilders respond, are distorted. Rishi Sunak’s stamp duty holiday to date has mitigated this damage, and wholesale abolition would be an even more potent remedy.

A fairer system would be to completely abolish both council tax and stamp duty and replace them with a new property tax which reflects the current value of people’s homes. A proportional property tax if you will. By setting that tax rate at 0.48 per cent the campaign group, Fairer Share, has calculated that over three quarters of households would be instantly better off.

The average household would see an additional £435 a year in their back pocket, while in some areas of the country such as Bishop Auckland and Bolsover the average household could respectively be £900 and £750 better off each year. Importantly the revenue raised would be split between central government to redistribute across local authorities in the form of grants, and local authorities would take a proportion of the overall rate.

From a political perspective, 97 per cent of households located in the “red wall” seats in England that the Conservatives took from Labour at the last election, would be better off. Traditional Tory seats would also fare well from this policy. In the Chancellor’s own constituency of Richmond, Yorkshire, 92 per cent of households would be better off to the tune of £600 while in South Cambridgeshire the average household would save £350 each year.

Obviously, creating a fairer, more transparent, and up to date property tax system would also mean that some households would end up having to pay more every year to reflect the current price of their home. That is why it is important that any such policy protects these people, who through no fault of their own or indeed through their own renovation work, have benefited from their home increasing in value.

To that extent, Fairer Share is proposing a monthly £100 cap on the total increase any one household could pay which would disappear at point of sale. At the same time – and to help those who are cash poor but living in a high value property – the new tax could be deferred until there is a change of ownership meaning that they wouldn’t lose out financially from the policy.

Replacing council tax and stamp duty with a proportional property tax is the right thing to do for millions of people up and down the country. This reform would have an impact beyond the regional. Ten years of low interest rates have led to increasing asset prices making houses unaffordable for the young and potentially driving them into the arms of the opposition. A solution needs to be found to protect the votes of tomorrow.

Politicians are still chastened by the memory of the negative reaction to the bungled and unpopular poll tax. And since then, council tax and stamp duty have become so unpopular that politicians are anxious about even raising the topic.

But “politics” can no longer be the excuse for failing to implement meaningful property tax reform. The changing political landscape may well be the catalyst for reform. It is the right thing to do from a political perspective, demonstrating that fairness is at the heart of everything the Conservative Party stands for.

With the next election beginning to loom on the horizon, this is a policy which will work on the doorstep and become the perfect flagship policy for the Prime Minister’s vision of levelling up the country.

Mark Garnier: I have never voted against the Government before. But the proposed cut to foreign aid leaves me with no choice.

22 Jan

Mark Garnier is the Conservative MP for Wyre Forest.

In the decade that I have been a Member of Parliament, I have never voted against the Government. There have been times when I have been queasy about my party’s position, but politics is a team sport and a long game. One unpalatable policy is frequently part of a wider, worthwhile agenda. However, and with a heavy heart, I am closer now to breaking the loyalty habit of the last decade than ever before. And the cause of this anguish? The Government’s proposals to abandon our commitment to maintain aid spending at 0.7 per cent of GNI.

My colleagues and I were elected on a promise to uphold our aid commitment. Breaking my word to the electorate, or to the world’s poorest and most vulnerable people, is a very big deal. So it’s about political principle, but its also about what we wouldn’t be doing.

The cuts proposed amount to roughly a third of the aid budget. If applied across the board, it’d mean a third fewer children immunised each year, saving about 100,000 fewer lives; it’d mean nearly a million fewer children per year supported through education; and two million fewer people reached with emergency assistance in crisis.

The devastating impact that such a cut would have is a reminder of the phenomenal impact that our aid makes. As the world deals with a pandemic that is the biggest humanitarian crisis of my lifetime, and its myriad secondary impacts that hit the most vulnerable hardest, there couldn’t be a worse time to withdraw this support.

The Conservative-led government that took office when I was first elected to Parliament in 2010 was faced with a long list of difficult decisions in the aftermath of the financial crash. One of them was, in the words of Andrew Mitchell, Secretary of State for International Development at the time, not to “balance the books on the backs of the world’s poorest”, and not to cut aid.

Ten years on, another global crisis and another Conservative government has taken the opposite view. Yet this cut would do little to balance the books. In the bigger picture of government spending its but a drop in the ocean, but for the impact we can achieve in the toughest places in the world it’s a colossal difference.

I’m also concerned about what this move would say about the role the United Kingdom seeks to play in the world – our “Global Britain” agenda. We look to the Biden administration to re-engage the United States with the world and, newly out of the European Union, we seek to present ourselves as their partner of choice.

In May, Samantha Power, appointed by the incoming President to lead the US Agency for International Development, in evidence to the House of Commons’ Foreign Affairs Committee, said “Your development commitment speaks for itself really. The way in which that has been sustained over successive administrations speaks to a desire to change the world for the better”.

High praise for our Global Britain aspiration. Yet this will no longer be the case if the proposed cuts are carried through. Instead of seeing a country intent on changing the world for the better, our most important ally will see our country stepping back when it should be stepping up.

I don’t think I could reasonably be described as a habitual thorn in the Government’s side. I’m proud of what Conservative prime ministers have achieved over the last ten years, proud to have served as a minister and proud of the agenda that this Government has set out. But if it is intent on a U-turn on our party’s commitment to international development, then what choice will I have?

Peter Aldous: If the Government is to deliver on climate change, it needs better Parliamentary scrutiny of trade deals

19 Jan

Peter Aldous is the Conservative MP for Waveney.

With its departure from the European Union, the UK has the opportunity to develop its own trade policy for the first time in nearly 50 years, enabled through the Trade Bill returning to the Commons for ping-pong this week. Now that we have left the EU, we must put in place new arrangements for scrutinising trade deals to ensure our future ones carry public support and fully represent British interests.

Trade deals have changed radically since the Government last had competency in this area nearly 50 years ago, and modern deals are likely to have implications on almost all spheres of public policy. Indeed, over the last two years, debates on this Bill in Parliament have raised an expansive breadth of concerns – from protecting British food and animal welfare standards, to using trade and investment policy to achieve sustainable development goals, to securing workers’ rights across supply chains and safeguarding creative and cultural assets.

Of particular importance is the impact trade policy will have on the UK’s ambitious climate and environmental agenda. Climate change can only be tackled on a global level, and free trade agreements present opportunities for the UK to promote ambitious environmental standards abroad and strengthen its economic competitiveness through exports of low carbon goods and services.

This is significant as the UK’s low carbon economy is estimated to grow by 11 per cent every year to 2030, by which date the global market for low carbon goods will be worth more than £1 trillion a year. Trade measures can also play a role in preventing “offshoring” of emissions, by providing a level playing field to protect domestic industries innovating in the green economy and in doing so creating jobs across the country.

Alongside the opportunities, under current precedent trade deals also pose often unintended but acute risks to the ambitions of our climate and environmental agenda. These include UK environmental and climate standards being diluted by provisions to reduce regulatory barriers, the competitiveness of innovating British industries being undermined by lower standard imports, and a rise in the unsustainable use of natural resources/emissions in exporting countries.

To respond to this challenge, UK trade policy must set an ambitious precedent, which promotes a race to the top for environmental standards. Looking ahead, UK trade policy needs to be aligned and integrated with the most urgent climate- and environmental-related priorities: reaching its net zero emissions target by 2050, reversing the decline of its natural environment within a generation and supporting the competitiveness of UK businesses during this transition.

The need to obtain parliamentary approval would give negotiators an additional argument to support their objectives. Indeed, both US and EU negotiators utilise the requirement of Congress and EU Parliament respectively to vote on trade deals to underline their red lines. This strategy will not be accessible to UK negotiators if Parliament cannot reject the deal outright, as is currently the case. Additionally, lack of public trust in trade negotiations outcomes have contributed to the failure of major trade negotiations, including the US-EU trade deal (TTIP) – in part due to environmental concerns.

It is crucial that MPs have the opportunity to fully consider the wide ranging implications of the UK’s trade policy. The Trade Bill currently misses the opportunity to give Parliament the ability to fully consider the opportunities, risks and transition impacts that trade agreements can have on big businesses, SMEs, civil society and consumers. I therefore will be supporting the Purvis amendment on Parliamentary approval of trade agreements, and believe it is essential for ensuring future UK trade policy has sufficient democratic oversight.

Nick King: London is unlikely to have another “Big Bang” moment – but here’s how we can boost its potential post-Brexit

15 Jan

Nick King is a Research Fellow at the Centre for Policy Studies

When Rishi Sunak was recently asked whether the UKs departure from the European Union meant we should revisit the Big Bang Playbook for the City of London, what choice was there but to agree? After all, what self-respecting neo-Thatcherite Chancellor of the Exchequer could say anything else when such an enticing proposition is dangled in front of them by a newspaper editor (in this case, Andy Silvester, of CityAM)?

But the world were living in is not that of the mid-80s. The EU, for all its faults, does not have the equivalent of the Restrictive Practices Act which Nigel Lawson – another political hero of the Chancellors – worked so hard to overturn. The idea of another Big Bang moment, the kind of sudden, overnight liberation which occurred on October 27, 1986, is unlikely to materialise.

But that doesn’t mean that there isn’t huge scope to use Brexit to boost the City, and the British economy – especially if we learn the right lessons from those Thatcher-era reforms.

As well as sweeping away anachronistic, inefficient practices, the Big Bang served to introduce three vital new operating principles to the City of London, turning it from a relatively sleepy, parochial industry into a global powerhouse. Those principles remain as valid today as they were in the 1980s.

The first was to open the City up to the world. For generations, the institutions of the City had been highly clubbable places, populated mainly by members of the British establishment. The Big Bang introduced competition – and global competition at that – which led to drastic changes in attitude and performance. In time, that led to London becoming one of the important financial hubs in the world alongside New York, in either first or second place for insurance, investment banking, asset management, FX trading and more.

Some worry that leaving the EU risks this preeminence. Certainly, ever since the Brexit vote, it has been clear that Paris, Amsterdam and Frankfurt (among others) have had more than one eye on the opportunity to knock London off its perch. Fortunately, for all the reports of 100,000+ jobs going, the impacts thus far have been limited. As one industry player put it to me, not even the Germans want to go to Frankfurt.

But the ability to access, and deploy, capital across the continent is clearly vital, and jeopardised by the fact we have left the European Single Market without a deal on services. It certainly does not make sense for the City to be regulated by Europe: given the relative size of our financial services industries, that would be the tail wagging the dog. But the Chancellor and the Treasury need to negotiate a Memorandum of Understanding that allows us to continue to operate in, and cooperate with, the EU as soon as possible.

Yet we must also turn that challenge into an opportunity – to not just maintain but enhance the UKs status as a global centre for capital and financial services.

Our equity markets are already some of the deepest in the world. But we need to remain world-class and be able to finance the industries of tomorrow. The Listings Review, being undertaken by Lord Hill, is fully focused on achieving precisely that by making the regime more competitive.

Already it is estimated that the UK investment management industry manages some £10 trillion of assets. But again, we need to work harder to attract more capital from South America, the Middle East and South East Asia.

Attracting more capital – and talent – while continuing to build our reputation as a global centre for financial services should a central pillar of the Global Britain agenda.

The second principle from the Big Bang is proportionate regulation. Just as those reforms were predicated on, and driven by, regulation that works, we now need to make sure that our regulatory regime is one which supports rather than stifles our financial services industry – and which is tailored to our needs.

Coming out of the Single Market there are few voices clamouring for a bonfire of regulations in financial services. But at the same time, there is no point in sticking rigidly to a set of rules which dont necessarily work for us or our markets. Other authors on this site have, rightly, pointed to changes which should be made around the Alternative Investment Fund Managers Directive and the Markets in Financial Instruments Directive II. The collapse of the financial advice industry, in particular, has been entirely been driven by overzealous, anti-competitive regulation.

Another set of regulations we should put in the crosshairs are the Basel capital requirements, which can treat a small bank or a building society in the same way as a large investment bank – which also damages competition by making it much harder for the new challenger banks to compete. By taking a more proportionate approach, and freeing up domestic lenders’ capital, UK regulators can create a more competitive market and immediately unlock more funding for domestic priorities like sustainability, net zero and levelling up. It is also striking that Britain’s regulators rarely have a duty to consider the growth impacts of their decisions: as George Osborne once said, we do not want the financial services industry to have the stability of the graveyard.

Proportionate regulation is linked to the third pillar that drove the Big Bang’s success: our absolute reliance on innovation. The reforms of the Thatcher era brought in new players, new instruments and new ways of doing things. That same willingness to embrace innovation is imperative if we are to thrive in the future.

Today, despite our world-leading fintech industry, much of the pioneering innovation in financial services happens in Singapore, Shanghai and other Asian markets. Industry insiders claim that an abundance of caution prevailsat the FCA. For all the successes of its innovation “sandbox” (a concept some claim was forced on it by Osborne), it is still not doing enough to support innovation or to open up new markets. These are issues I have written about before but those in the fintech industry tell me FCA authorisation still takes too long.

The tone for the regulators is set by the Treasury, of course – and the Treasury needs to back innovation now like never before. It must ensure its regulators lose the “gold plating” mentality of old, which has put us at a competitive disadvantage, and use the Future Regulatory Framework Review to help us capture the global opportunities which abound.

The fundamentals of our financial services industry remain strong, as the Chancellor himself said, but they cannot be taken for granted. Despite the fact we are blessed in our language, timezone, history and rule of law, the forces of competition are ever stronger – on the continent and beyond. To maintain London and the UKs preeminent status will take hard work and determination.

And that, I would argue, is the most important lesson of the Big Bang. The new entrants, innovation and subsequent global success came about because we had a government that was ready to back the industry as required. It was a Government that recognised that financial services, the profit motive and shareholder interest were fundamental goods – and spoke out on their behalf.

We might not be in line for another Big Bang but to help us make the most of Brexit we need the Government to be pro-business, pro-City and to offer financial services enduring political support. If those principles are in the Chancellors “Big Bank Playbook”, then sign me up.

Andrew Rosindell: How close we came to waking up in the backstop

8 Jan

Andrew Rosindell is the MP for Romford.

How close we came to waking up on January 1 trapped in the backstop. That misery would have been quickly overtaken by the new national lockdown announced on Monday night. But this would in no way have diminished in the longer-term the ramifications of being trapped in a customs union with no way out.

To the true Brexiteers, the sensible outcome to the Brexit process was always a Canada-style free trade agreement which took back control of our laws, money, borders and waters, while still allowing both the UK and the EU to trade together as equal partners on mutually-beneficial terms.

Unfortunately the EU spent the next few years in a desperate and arrogant attempt to punish our nation for the Brexit vote. It tried to trap our nation in a customs union, demanded tens of billions in exit fees, demanded a continuing role for its courts in UK affairs and made blood-curdling threats of economic punishment.

In a way it showed self-awareness. Because it is only with threats and traps – much in the fashion of the Chinese Communist regime (with whom the EU is now engaging in a nauseating romance) – does EU membership become preferable to the freedom of being a sovereign, independent nation.

All told, the EU generally appeared aghast at the affirmations by the British people of their democratic right to decide their future. To me this demonstrated that the only way out was a completely clean break: to walk away, for good if necessary.

It is why I and my Spartan colleagues voted on three separate occasions against Theresa May’s Brexit deal. If we hadn’t held out against the pleas of our colleagues, from both the Remain and Brexit wings of the party, then we would have woken up on New Year’s Day trapped in the backstop. What should have been a moment of restored sovereignty would simply be a new future paralysed by the EU’s protectionist trading bloc.

The Prime Minister voted for that deal, at the third attempt. I believe he feared for Brexit if the deal wasn’t passed. Fortunately for him, the Spartans gave Brexit a chance. And once Boris was at the reigns he was always ready to walk away. He realised no deal really is better than a bad deal.

With this strategy he was able to bring before the House of Commons an agreement which facilitates free trade with zero quotas and tariffs, without the UK being part of the Single Market or Customs Union and with no control over us by the European Court of Justice.

It will give us the freedom to chart our own course. It will mean the establishment of freeports and new enterprise zones to turbocharge the regions. It means we can change our VAT policy, for example on home insulation products as my friend and colleague John Redwood has noted.

It means we can revitalise nationally important industries with targeted support, such as shipbuilding. It means we can sign free trade deals with our closest friends and allies in the Commonwealth, and improve economic ties with some of the fastest growing economies.

Liz Truss, the Secretary of State for International Trade, has already negotiated trade deals with 61 countries, including one deal, the UK-Japan FTA which goes beyond the existing EU-Japan agreement, particularly on data and digital matters. The backstop would have precluded much of this.

The new agreement with the EU is not perfect. There are flaws in the deal. The transition period for fisheries is too long, the Northern Ireland protocol threatens to divide our country and I am nervous of the separate deal on Gibraltar, given Spain’s record.

Finally, I was disappointed that our British Overseas Territories and Crown Dependencies did not seem to be fully included. I also share David Davis’s comments on this website, where he highlights how far ahead of the EU we are in many areas of regulation, particularly animal welfare, but also on energy and labour law. Any arbitration panel which rules on deviations from the “level playing field” must recognise that there is no “level playing field” at present. It is the EU undercutting the UK in many ways.

There are problems, then. However, I and my colleagues have come to the conclusion that this is still a good agreement: it restores our sovereignty, avoids temporary disruption of ‘no deal’ and avoids the acrimony which would define UK-EU relations going forward if no agreement had been reached.

There is nothing in the agreement which compromises our sovereignty in the manner of the backstop. Yet where there are flaws, there are fights still to be had. I have demonstrated that I am ready for these battles, as have my fellow Spartans.

For now, let’s celebrate the restoration of sovereignty to these islands and move onto the next challenge: getting the country vaccinated, lifting these Covid-19 restrictions, and revving up the UK economy for a new, better, more prosperous and, I hope, a more united decade.