Ryan Bourne: First, Covid-19 lockdowns. Next, climate change ones – rationed car use, no red meat. Coming soon to a country near you?

9 Dec

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

We are at the beginning of the end. Provided vaccines prove as efficacious as trial results indicate, and absent unobserved side effects, the rollout to vulnerable groups should reduce Covid-19 death risks substantially and rapidly.

Inoculations down through the priority list will then put us within reach of a herd immunity robust to ordinary behaviour. Life, it seems, could be “back to normal” by the spring or summer of next year.

I’ve never been a “V-shaper” Panglossian on the economy. You can’t switch economic life on and off without causing permanent damage. But there is nevertheless reason to be optimistic of a robust recovery next year. What is more uncertain are the longer-term consequences of this experience on our collective psyche and politics.

American economists Julian Kozlowski, Laura Veldkamp, and Venky Venkateswaran have warned of a depressive “scarring” effect, as we use the experience to revise our assumptions on the probabilities of major shocks. If we collectively infer that tail-end risks such as global pandemics are larger, then investments become less attractive.

Think alone about the willingness of entrepreneurs to go into the travel, hospitality or leisure industries after this. Then think of the effect of the risk of having to pivot to home working again, generalised across other sectors.

Alongside that are the impacts on the role of the state. Economic historian Robert Higgs’ work has highlighted how crises generate a ratchet of government power. Wars, depressions, and emergencies see powers centralised, before receding again.

But the state never quite falls back to the same size and scope as before. After the Coronavirus, we will see more taxpayer funds for virus-related public health, vaccination research, and the subsidisation of PPE production capacity. Government will also be met with demands to maintain Covid-level welfare benefits and industry-specific stimulus as a tool for future downturns, a la Eat Out to Help Out.

Lockdowns are the obvious area where these two effects could come together most damagingly. Highly crude shutdowns had a strong logic in Spring, given the high uncertainty about the prevalence and risks of the virus, and with Italy highlighting the dangers of overburdened hospitals.

More recent national measures reflect instead an ongoing policy failure to institute better control of Covid-19, but may nevertheless have passed a cost-benefit test given the arrival of vaccines (a case that the Government did not adequately prove).

Whatever your position on the desirability or consequences of lockdowns in this particular crisis, however, it’s clear that suspending economic and social liberties today brings with it the temptation for politicians to utilise such powers again – and for businesses and individuals to suspect that they could.

Given the way that politicians throw around terms such as “emergency” or “epidemic,” it is not an intellectual leap to imagine future leaders demanding similar measures for other ambitions. And therein lies a source of economic discontent—an incalculable drag or doubt for a generation.

Already, the economist Mariana Mazzucato has pitched the idea of “climate lockdowns,” should governments not deliver the green revolution she desires. In the service of mitigating the “climate emergency,” the “state would limit private-vehicle use, ban consumption of red meat, and impose energy-saving measures, while fossil-fuel companies would have to stop drilling.”

Of course, we can avoid all that, she says, if we are willing to “reorient our energy system around renewable energy” and “evict fossil-fuel interests and short-termism from business, finance, and politics”—the goals Mazzucato wants to achieve with her threats warning of what might be needed otherwise.

Now, it might seem far-fetched to imagine a world where one could face fines or jail time for driving too much, or eating steak frites. But before this year, one could have said the same about meeting four households on Christmas Day, or not eating at least a scotch egg with your pint.

Madeleine Grant worries about how the example of this pandemic might normalise health surveillance or screening for colds or flu. But it’s the everyday lifestyle regulations that have been truly novel – including the forced closure of certain businesses and the bans on gatherings. The threat of repeats predicated on the ends justifying the means is what we should be most attentive to.

To mitigate this temptation requires a reaffirmation of the legitimate justifications for government interventions. From an economic perspective, there is a defensible consequentialist claim that governments should act where huge, dangerous externalities result from collective action problems. Yet in doing so they have a duty to both prove the case and to account for these externalities in the least harmful way possible, only reaching for the most extreme measures when the consequences of inaction are grave or imminent.

The climate lockdowns idea is so pernicious not just because the imminent threat is absent. The reasoning presumes that governments should go beyond accounting for the externality, say through carbon taxes or emissions trading schemes, instead using the “emergency” to justify actively ignoring market conceptions of value, threatening vast restrictions on how you live your life unless the planners’ vision of the world is achieved. Mazzucato’s argument is not just about reducing CO2, in other words, but about using the threat of lockdowns to push for abandoning consumer-led markets entirely.

We have seen this type of thinking proliferate during this crisis. Last week, Jenny Kleeman wrote for the Guardian about lab-grown meat, which many see as a useful pathway to reducing the environmental impact of farming and the ethical concerns many have with meat consumption. Rather than embrace these innovations as a way to work with consumer preferences to reduce the impacts of meat eating, Kleeman simply declared it would be preferable if we “simply stopped eating meat, or ate it far less often.” Her inspiration? The sacrifices of the Coronavirus in showing the massive behavioural changes we are “able to make” in extremis.

As we exit this crisis, we must not forget that underpinning a healthy market economy is the idea of the sovereign consumer, who knows what he or she wants, and whose welfare is enhanced by acting on those preferences. The bar for curbing activities that bring us joy or happiness should be very high indeed. And to the extent that economic or social problems do require government interventions, they should work with the preferences of consumers, not treat them with contempt, lest the economic welfare costs spiral.

Lockdowns were a panic button reaction to an acute emergency. Their re-use was a signal of the government’s dismal failure to mitigate the virus in less costly ways. But we must quell talk of them becoming a model for solving future economic and social challenges, or else the expectation of them could itself be economically corrupting today.

James Frayne: Six ways of boosting local pride and identity

8 Dec

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

In an excellent recent blog, my colleague Andy Westwood of Manchester University called on the Government to pursue a local identity strategy.

In it, he wrote: “Buying or subsidising a hotel, pier or football club might not sit easily with notions of the role of government, nor a faith in competition rules. It goes against the grain of markets, state aid and traditional Conservative views of the state. There are lots of arguments about why we shouldn’t attempt such an approach. But if we really want to care about ‘place’ and identity then we should put these objections aside.”

He is right. Local identity should be a defining part of the Government’s “levelling up” agenda. While new investment in infrastructure and education and skills are ultimately what’s needed to improve post-industrial areas, local people will have to wait many years to reap the benefits of such policy decisions.

But the Government can do a lot in a short space of time to improve towns and cities by thinking about things through the prism of local identity. A key question should be: how do we make these towns nicer places to live? A simple question – but one which would drive different policy answers to simply asking how we deliver more jobs.

Here is what focus groups tell you people in post-industrial areas want to see. They say their towns and cities were thriving until the late 1990s, but have been in increasingly rapid decline ever since. Shops have closed on once-busy high streets, bustling markets are a distant memory, local businesses have moved out, once-great festivals have been downgraded or ceased altogether, community pubs have shut, low-level anti-social behaviour (like open drug use) has risen massively, attractive local focal points such as war memorials have been vandalised.

While the sense of malaise in these towns and cities is unmistakable, equally unmistakable is the sense of local pride people have for the places they live in. People are angry about the state of their towns because they love them. This is what the Government should be looking to tap into.

This can sound a bit vague and woolly, but it doesn’t have to be so. For a start, it’s important to acknowledge that England really is unusual in the intensity of very local identity. In a tiny country, small towns, often separated by just a few miles, think of themselves as being entirely different from their near-neighbours – and indeed they often sound completely different.

Think of the huge differences between, say, Mansfield and Rotherham. 25 miles apart and on paper quite similar, but people who consider themselves to be totally different; and remarkably, who sound totally different despite being separated by a car journey of half an hour.

Nor does renewing local identity all have to be a 30-year project. Some parts of such a project, to be clear, does: if you are going to make devolution work, revive major civic institutions and change the role of universities in their place – as well as build major infrastructure – you won’t see the results overnight. But there’s also a lot that can be done in four years, with tangible results. Here are some illustrative examples of things that a combination of national and local Government might do:

  • Keep the streets clean and safe. As well as generally increasing the visible police presence, pay for security guards to walk through the high street during the hours that the shops are open, and deploy others to walk through local parks.
  • Bring back the events. Everywhere I go, people have a local event – a carnival, a fireworks display, a special annual market – that used to bring people together and that disappeared in the last few years. The Government should help bring them back.
  • For that matter, there should be incentives to restore a local market day. Many towns still have the basic infrastructure – and certainly the space – to bring back the sorts of large markets that existed on Saturday mornings and which brought huge commerce to small towns. This basic infrastructure should be repaired or rebuilt.
  • Some transport takes decades to deliver, but regular, inexpensive buses don’t.
  • Invest in those institutions that are delivering leisure services to the local community. Long Eaton United is an example of a thriving local institution of the kind I’m thinking of. Its training facilities – partly grant-funded – are used to ensure that huge numbers of teams – for men, women, boys and girls – are all able to play. There are huge numbers of similar clubs across the country who could play a similarly important role locally.
  • Support libraries and local museums. Cultural infrastructure needs funding and supporting.

As we deliver the levelling up funds and the towns funds, plus the safer streets money, and all of the plethora of pots the government has (very sensibly) been putting into these kinds of efforts, government needs to make sure it doesn’t just go on long-term infrastructure like broadband, or local economic zones.

Important though these are, the Government needs to ensure they’re making a tangible and visible difference to towns. Without that, no one will give it permission to do longer term work – and, to be honest, this is what people care about most.

Nick King: Johnson’s Reset. The Government needs business if it’s to build back better.

22 Nov

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

Much has been written in the last week, on this site and beyond, about what a Government ‘reset’ might look like, following Dom Cummings and Lee Cain’s departure from Number 10. Broadly. those perspectives have focused on what might be termed ‘the three Ps’ of positioning, people and policy.

In terms of positioning it has been argued that Number 10 needs to take a less confrontational approach – whether that is towards the media, public institutions or, indeed, Conservative backbenchers.

On people, the part played by the indomitable Carrie Symonds and the increasing importance of Allegra Stratton has been acknowledged, but the search continues for the right Chief of Staff to promote and protect Boris Johnson’s own interests.

The issue of policy is perhaps the least clear cut, with competing views espoused as to whether or not the Government can be the party of Workington as well as the party of Notting Hill. My own view is it can and it must.

But there is a final P which needs to be thrown into the mix – not as a fourth horseman, but as a corollary of the three Ps – and that is the private sector.

The fact is that British business is at a low ebb right now, in terms of performance, confidence and its relationship with Government. Covid-19 is the most obvious explanatory factor for those first two issues – forcing millions of businesses up and down the country to close will take the wind out of their sails however generous the set of support packages provided. But introducing those measures only serves to make the job of working constructively with British business all the more important for government. On this task, it has been found wanting.

Across industries, sectors and different parts of the country, there has been consternation and confusion as different restrictions have been introduced, without any (published) economic analysis of the potential impacts or of the evidence base upon which these decisions have been made.

As we approach December 3rd, businesses remain in the dark about whether or not they might be able to reopen, despite the long lead times needed for various parts of the hospitality sector in particular (a sector whose import will perhaps never be as keenly felt as it will be in December 2020).

That businesses don’t feel like the Government supports them is hardly new news, however. Successive polls commissioned by my think tank, the Centre for Policy Studies, has shown that a clear majority of small businesses don’t think that the Government is on their side. Indeed, the Government’s own survey data shows that only a quarter of businesses think government understands business well enough to regulate it. But in the context of a national economic shutdown, this is simply not good enough.

This is not to say there aren’t people around Government who understand business, or who are keen to support it. Rishi Sunak, Alok Sharma, their political teams and Departments are obviously on businesses’ side, as is Ed Lister and Alex Hickman’s business relations team in Number 10. But the disregard of other influential figures towards business has meant that much of the private sector has failed to get a proper hearing throughout 2020.

The anticipated ‘reset’ is an opportunity for the Johnson administration to put that right. Which duly brings us back to our three Ps.

On positioning, the Government needs to be unapologetically pro-business, free enterprise and open markets. The Conservative Party must defend the role of enterprise and the private sector and be resolutely on the side of the millions of small business owners up and down the country. This is important ground both ideologically and politically – and ground which the Conservative Party is in danger of ceding if it isn’t more full-voiced in its support for business.

In terms of people, Andrew Griffith and Neil O’Brien’s recent appointments are welcome, and will help emphasise the role of business, but change is needed in Number 10 itself. A Chief of Staff with extensive private sector experience would be welcome but, failing that, an understanding and sympathetic attitude towards enterprise should be regarded as a sine qua non. Just as important is for Number 10 to have a strong and expert voice for business sitting within its policy unit. That there has not been a business policy function sitting within the policy unit since David Cameron was Prime Minister is extraordinary – the existing business relations team needs to be strengthened and given a proper policy role.

Which brings us onto the final P of policy, which is the most important of ‘the three Ps’. Positioning and people are all well and good, but fine words doth butter no parsnips, as they say – so Johnson needs to ensure his Government is putting business front and centre as he looks to build back better.

Post-pandemic, securing growth is the only game in town. Without that there is no hope of new jobs, greater opportunities or improved living standards – whether in Workington or Notting Hill. And none of this can be achieved without unleashing the awesome and dynamic power of the private sector.

An important starting point would be to curtail the steadily increasing regulatory burden on business. Each measure, taken on its own merits, seems important and its impact trivial to business. But the corrosive, drip-drip effect takes its toll and as growth flatlines and productivity stagnates, politicians stand with their hands on their hips, double teapoting, wondering why.

Take the recent HFSS (foods and drinks high in fat, sugar and salt) consultation for example – likely to cost British industry hundreds of millions of pounds. No doubt full of noble intent, but hardly what the economic doctor might order as we look to recover post-pandemic.

More worrying still are the suggestions that we will increase both the rates and the scope of business and enterprise taxes in 2022. This is no way to stimulate and incentivise the businesses who are our only way out of the economic morass in which we find ourselves. Rather than clipping its wings, the Government should provide the wind to help business soar.

Speaking of wind power, the vital role of the private sector was clear in the Prime Minister’s 10 point plan for a Green Industrial Revolution. But the truth is that few of his priorities can be achieved without the business community. Levelling up? It requires business investment and private sector jobs in the North and the Midlands. Net zero? Industry needs to transition and innovate our way towards it. Protect the Union? Champion our British businesses and demonstrate our reliance on the free flow of goods and access to important markets both north and south of the border. Global Britain? Remain open to inward investors and get more companies exporting.

Pfizer, BioNTech and other companies have all too ably demonstrated just why we need the private sector recently – it’s the key to solving so many of our problems. Which is why Boris Johnson needs to put it front and centre through his reset exercise.

A reformed Number Ten must get on the front foot with business relations and business policy. It needs to articulate a clear vision of our post-Brexit future, rooted in entrepreneurship, investing in success, focused on innovation, with a skilled workforce, trading with the world and built off the back of our brilliant SMEs. That’s a reset worth waiting for.

Ryan Bourne: A British overspill from America’s result. Why the debate on the right over economics will now intensify.

11 Nov

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

Donald Trump loyalists might not yet admit it, but their man was defeated handily in the U.S. Presidential election. A post-mortem will soon be undertaken within the Republican party, and with it a debate that has been bubbling since his primary victory in 2016 on both sides of the Atlantic: what economics should conservatives champion?

Ideally, that debate would be about what policies actually work to improve our lives or liberties. But winning elections is politicians’ raison d’être. So it’s little surprise that those representing major strands of Republican economic thought have conflicting economic narratives of the results already as to what is electorally desirable, a division made somewhat easier by the fact that “Trumpism” blended free-market policies with protectionism and interventionism, in turn offering something for everyone.

Free-market Republicans’ story goes like this: tax cuts and deregulation delivered by a Republican Senate and Presidency delivered robust pre-pandemic economic growth, low unemployment, and rising household incomes. So strong was that economy before Covid-19, that even after a deep pandemic-induced recession, 56 percent of surveyed voters nationwide said their family was still better off financially after four years of The Donald in the White House. Tellingly, Trump led Joe Biden in every battleground state on who voters trusted most to “manage” the economy.

Combine that evidence with the party’s unexpected electoral resilience in the Senate, and huge pick up of Cuban-American and Mexican-America votes in Florida and Texas, and it’s easy to conclude, as former Presidential candidate Mitt Romney has, that more free-market Republican economic policies are not unpopular.

In fact, polls suggest voters baulked at the socialist ideas aired in the Democratic primary, and were wary of even Joe Biden’s quite ambitious progressive agenda, particularly on decarbonisation. What lost Trump the election was, in this view, not his domestic economic policies then, but his personal conduct, handling of Covid-19, and, possibly, even downsides of his trade wars, the most obvious consequences of which were government welfare for Americans farmers and manufacturers struggling with inflated input costs.

The “national conservative” counter-blast provided by, for example, Samuel Hammond in the Guardian, says the exact opposite. The last two elections supposedly show the party’s future is to reach into working-class communities of all ethnicities. This opportunity, in part, came about from Trump’s willingness to challenge traditional Republican views on free trade and industrial policy, giving him a hearing with voters suffering the effects of market-led deindustrialisation. The party should build on that to become a true “workers’ party” by embracing a more interventionist abour market and manufacturing agenda, according to the Missouri and Florida senators, Josh Hawley and Marco Rubio.

This interpretation even posits that Republicans may have failed to win the Presidency because they did not sufficiently embrace the “good government can do” (to use a Theresa May phrase.) Hammond postulates, for example, that Biden was able to pick up white working-class votes in the Rust Belt by going further on nationalistic “Buy American” agendas and tax incentives for re-shoring manufacturing jobs than Republicans would ever opt for. A more serious policy agenda and a compassionate Republican frontman could therefore build a whole new electoral coalition on this type of platform that Trump opened the door to, if only the Republicans could move on from Reaganism and their commitment to free market ideas.

Now, on the facts, I (perhaps unsurprisingly) find the first narrative more compelling. Exit polling shows that, contra the national conservative view, Republican support still skewed towards those on higher incomes, not lower. If preferences for a more interventionist agenda, as opposed to, say, the culture war or Donald Trump’s personality, are the dominant explanation of vote patterns, it’s difficult to square that with Republican Senate candidates, most of whom are more free market on economics than Trump, outperforming the current President. Of course, in reality voters don’t vote according to policy preferences, so a monocausal link between economics and electoral outcomes is dodgy ground on both sides.

But at heart here is a debate that we’ve heard plenty of in the UK: how far does the political realignment we are seeing necessitate a change in conservatives’ economic ideas? The new “national conservatives” in the U.S. and modern “One Nation” Tories in the UK, such as Nick Timothy, want to throw-off any libertarian influence  with the latter even thinking the 2017 Tory manifesto an appropriate place to caricature the “libertarian right,” as if voters would read that document and take that signal as a cue to shift their vote.

Two things have frustrated me about these intra-conservative debates to date. The first is that the anti-market conservatives appear to just assume that the left is correct and that economic policy is class-based: that policies that are pro-the interests of the working class must necessarily be more interventionist than conservatives have previously considered acceptable.

I’ve written before about why that is not true and how market-led policies could deliver pro-poor outcomes. The U.S. results also show that the assumption is a sham in electoral terms: working class minorities in the south were frightened of Democratic industrial strategies when it meant cheap energy was set to be sacrificed and vast new regulation of a structurally sound labour market were proposed.

But my second frustration is deeper. Thus far thinkers such as Timothy and others in the U.S. have written extensively on why conservatives should move on from free market ideas in the abstract. They document social and economic phenomena that have moved in the wrong direction in the past three to four decades, and then link these to the Thatcher-Reagan revolutions and supposed commitments to “market fundamentalism”.

Yet anyone who has followed conservative policy closely since the 1990s would find it laughable to frame recent offerings as being influenced by an unabashed commitment to libertarian ideas. So this narrative is best understood as rolling the pitch for an even more interventionist conservative economics.

What we have had far less off yet is the specifics: what, exactly, do those such as Timothy want from policy instead of what we see today? National conservative thinkers have hid behind the shield of big picture views of what is electorally desirable to win in the Rust Belt or the Red Wall as a substitute for outlining what actually should be done, and providing evidence for why those proposals would in fact work where previous dalliances with industrial planning have failed.

One consequence of this messy Presidential election outcome and its failure to clearly repudiate Trumpism is that those debates will now be crucial in determining the future direction of the Republican party. And stateside narratives have a tendency to be imported into UK politics too.

“This Government stood between the people and the danger and we always will.” Sunak’s Conference speech – full text.

5 Oct

Rishi Sunak MP, Chancellor of the Exchequer, speaking today at Conservative Party Virtual Conference

“Being appointed Chancellor in February this year was an immense honour.

Even though my first conference speech as Chancellor isn’t quite how I expected it to be, it remains a privilege to talk to you today.

And I am here today because of so many different people. My family, whose love sustains me. My colleagues in Government and in Parliament, whose backing has never wavered. My association in Richmond, North Yorkshire, who placed their trust in me, and gave me their loyalty, support and this opportunity to serve. And my party, whose members, councillors and activists worked tirelessly to deliver a Conservative government in December last year.

Politics is a team sport, and there is always a multitude of hardworking people behind any effort. So, I want to thank my ministerial team; Steve, Jessie, John, Kemi, Theo, Claire and James. I also want to thank my predecessors: George, Phillip and Sajid.

It is only because of ten years of sound Conservative management of our economy that this government has been able to act with the pace and scale we have in responding to Coronavirus. And I want to thank the Prime Minister, for entrusting me with this job and whose friendship has been invaluable.

I’ve seen up close the burden the Prime Minister carries. We all know he has an ability to connect with people in a way few politicians manage. It is a special and rare quality. But what the commentators don’t see, the thing I see, is the concern and care he feels, every day, for the wellbeing of the people of our country.

Yes, it’s been difficult, challenges are part of the job, but on the big calls, in the big moments, Boris Johnson has got it right and we need that leadership. Because we are only part way through this crisis.

What began in March as a health emergency has grown and now reaches deep into our economy and society. Not only does it endanger lives, but jobs and education. It separates friends and family.

This government has never been blind to the difficult trade-offs and decisions coronavirus has forced upon on us. If we had, we never would have deployed one of the most comprehensive and generous packages of support in the world. But more than the measures themselves, it is the values behind them that I want to impress upon you.

Conservatives believe in the importance of community and belonging. We believe in personal responsibility and pragmatism. We believe in the nobility of work and free enterprise. And we believe in the unbreakable bond of union that unites the four nations of our United Kingdom.

Our values are old and true and have withstood tests of strife, of terror, and even war. They are timeless because they are a wisdom earned over generations. And they are universal, because they are rooted in the fundamental belief that individual freedom enables both the greatest achievement and the gentlest kindness.

People looked at us last December and saw this Conservative party. They saw a party whose values and priorities were aligned with those of the British people. They saw a party prepared to act at a scale commensurate with the challenges our country faces and they were not wrong.

The SELF-EMPLOYED SUPPORT SCHEME

EAT OUT TO HELP OUT

Our PLAN FOR JOBS

The JOB SUPPORT SCHEME

A VAT cut for the tourism and hospitality sectors

The PAY AS YOU GROW SCHEME

A STAMP DUTY holiday

A £2 billion GREEN HOMES GRANT programme

The £2 billion KICKSTART SCHEME

Nearly 1million BUSINESS GRANTS

A 12-month BUSINESS RATES HOLIDAY

£35bn of BOUNCE BACK LOANS to over 1million small businesses

Over 60,000 CORONAVIRUS BUSINESS INTERRUPTION LOANS

The FUTURE FUND TAX DEFERRALS

Support for our brilliant CHARITIES

Over £8 billion of extra funding to SUPPORT OUR MOST VULNERABLE

A SIX-MONTH MORTGAGE HOLIDAY

And yes, THE FURLOUGH SCHEME, a first of it’s kind intervention in UK political history, delivered at scale, devised in rapid time, that protected millions of British families at the most acute stage of this crisis.

I could go on… all these measures and more… delivered by a Conservative government as part of our plan to support jobs and livelihoods. And whilst we would not have wished for this burden, it has been for many, for the first time in their lives, a moment in which government ceased to be distant and abstract, but became real, and felt, and something of which people could be proud. Action met words.

This Conservative government stood between the people and the danger and we always will.

But we haven’t done it alone. You, the people, have been with us. Wherever I look, I see acts of decency and bravery.

Barbara and Richard Wilson in Cumbria who furloughed the staff from their butchers’ shop but topped up their wages, so they didn’t have any extra worries about bills.

Kevin Butler, who used the self-employed support scheme to help meet the cost of living whilst his partner worked so he could home school their daughter.

John, Norma and Richard King who run the Bull’s Head Inn in Shropshire, who did the right thing when we asked, made their pub Covid compliant, and re-opened using Eat Out to Help Out in August.

Thank you to all those business owners, large and small, who are making the right decisions for workers and customers.

We are now seeing our economy go through changes as a result of coronavirus that can’t be ignored.

I have always said I couldn’t protect every job or every business. No chancellor could. And even though I have said it, the pain of knowing it, only grows with each passing day.

So, I am committing myself to a single priority – to create, support and extend opportunity to as many people as I can. Because even if this moment is more difficult than any you have ever faced, even if it feels like there is no hope, I am telling you that there is, and that the overwhelming might of the British state will be placed at your service.

We will not let talent wither, or waste, we will help all who want it, find new opportunity and develop new skills.

Through more apprenticeships, more training and a lifetime skills guarantee.

Our Kickstart Scheme will help hundreds of thousands of young people into good quality work. And we will help small businesses adapt.

That’s why we have delivered Government backed loans, tax deferrals and tax cuts.

In a free market economy it is the entrepreneur, who is critical. And we will make it easier for those with the ambition and appetite to take risks and be bold, to do what they do best and create jobs and growth. And we will protect the public finances. Over the medium term getting our borrowing and debt back under control.

We have a sacred responsibility to future generations to leave the public finances strong, and through careful management of our economy, this Conservative government will always balance the books.

If instead we argue there is no limit on what we can spend, that we can simply borrow our way out of any hole, what is the point in us?

I have never pretended there is some easy cost-free answer.

Hard choices are everywhere.

I won’t stop trying to find ways to support people and businesses. I will always be pragmatic.

The Winter Economy Plan announced only two weeks ago is but the latest stage of our planned economic response.

I will keep listening, keep striving to be creative in response to the challenges our economy faces, and where I can, I will act. I will not give up, no matter how difficult it is.

The British people and British businesses won’t give up. I know this because of what I said at the beginning.

We share the same values. The Conservative party and the country. And these values are not devoid of meaning to people.

They are about protecting that which is meaningful to them. Their family, their home, their job, their ability to choose for themselves what is best for them and those they love.

To create second chances, to see potential met, and to extend the awesome power of opportunity to all who seek it. To answer questions of character with action not rhetoric. To put the people first, their hopes and their aspirations.

And above all, to be worthy of the great trust they have placed in us.”

Rachel Wolf: Net Zero risks upending our lives and livelihoods. Here’s why carbon pricing gives it a better chance of working well.

2 Oct

Rachel Wolf is a partner in Public First. She had co-charge of the 2019 Conservative Manifesto. She was an education and innovation adviser at Number 10 during David Cameron’s premiership and was founding director of the New Schools Network.

Worrying about the state of the environment in the middle of a pandemic might feel like rearranging the deckchairs on the Titanic. Will the public question the Government’s sense of priorities if ministers start talking about how to protect the environment in the midst of a health crisis and a long potential downturn?

Actually, no. This week marked the first substantial policy intervention of the Prime Minister in months – a long awaited change to the education system that will make it easier for adults to retrain, and support more technical education. The rationale was clear: now, more than ever, we need to make sure people are trained for their next job.

The same argument can be made for the environment. The hard lockdown and the gentle recovery reminded people of two things: that everyday life is better for everyone when roads are quieter and the air is cleaner; and that economic growth is always precarious. That means we need to focus on industries and technologies of the future that will help maintain jobs and living standards.

In short, precisely because of their Covid-19 experience, the public have seen the importance of a practical, commercially-minded environmentalism.  That is fortunate, because there are some major choices to be made, and we are unprepared for them.

The target of Net Zero emissions by 2050 was passed into legislation with little public notice – most people still haven’t heard the term. There was also remarkably little Westminster debate: all the leadership candidates in 2019 signed up to the policy, so scrutiny was absent. Then, of course, the pandemic halted the entire domestic policy agenda. For this reason, we are still waiting to understand exactly what ending a 200-year dependence on fossil fuels really entails.

In my view, carbon pricing must form a large part of the answer.

As someone on the centre-right, I have always simultaneously applauded the aims and had great fears about the execution of Net Zero.

First, I worry it might upend too much. Our economy and lives are built off copious amounts of affordable energy. It is the main reason we were able to escape the destitution of the past. A life unimaginable to even the elite in the eighteentj century is now accessible to nearly all.

Therefore, any successful programme to reduce emissions must understand that people will not go backwards. Policies must work within the grain of people’s lives – not rewire them. We cannot be against trade; or consumption; or travel.  We just need ways to achieve all three without catastrophic environmental effects.

Second, I worry the plans rely on an implausible level of omniscience and competence from governments. We cannot engineer economies. We do not know exactly what innovations to support. We are likely to end up with endless unforeseen consequences and costs. We can encourage and support technology and invention; but prescribing what it should look like in 50 years time? That’s implausible.

It is for both of these reasons that I have spent much of the last six months working for an independent commission on how carbon pricing might practically, and technically, work.

To put it simply, possibly too simply, a carbon price requires those who produce, distribute, or use fossil fuels – or who produce greenhouse gas emissions in other ways – to make a payment for every tonne of greenhouse gases that enters our atmosphere.

In principle, the arguments for a carbon price are fairly obvious. It works with the grain of the market. It doesn’t make grand regulatory predictions about what will work, what we should do, or how exactly people ought to change their behaviour. It just prices in the ‘bad’ – in this case, emissions.

In practice, too, it has been effective. Electricity is the only area we have had a consistent approach to carbon pricing in the UK, and that is why electricity is the area where we have driven down emissions the most.  But electricity represents only a minority of our carbon emissions, and we now need a clear approach to the rest of the economy.

Carbon pricing also provides two things that we now – badly – need.

First, revenue. In some countries, carbon pricing is completely revenue neutral, and the money is distributed back to households. This deals with the challenges of the environment without leaving people worse off. But in others, it is used to support general government objectives – like funding the health service (or reducing the deficit).

If the Government needs to raise money, doing it in a way that will win public support and support environmental aims, without burdening businesses excessively, is a sensible way to do it. The other way to use revenue is to support transitions to cleaner energy alternatives and new green jobs – incentivising people away from carbon emissions, while supporting innovation.

Second, it provides certainty. A lot of the money for net zero should come from private investment. A fixed, clear price gives them the confidence to spend.

We already have some carbon pricing in the UK tax system. Unfortunately, it lacks transparency, is far too complicated and is piled sequentially on top of electricity bills. It has the bizarre consequence of actively encouraging people to move from electricity to gas – the opposite of what we want if we care about carbon emissions. Neither consumers nor suppliers have a clear idea of who is paying what and why.

Carbon pricing is not a silver bullet. I have oversimplified the changes necessary to reach Net Zero, and in our commission report we outlined a list of complementary policies required for different sectors to reach it. They recognise that the cost of reaching Net Zero is likely to be different for electricity, heating, industry and agriculture, and that the technologies are less mature for some sectors than others. Nor can it be too high: the economy is fragile, and business must be able to recover and grow. But the basic human principles remain – if there is a price, people will change their behaviour, and human ingenuity will always outstrip governments’.

We have been submerged in environmental rhetoric for years. Now the UK, alongside other countries with similar commitments, is having to make some real choices. Often, understandable fear of a public backlash has held them back – our research suggests there’s a credible way of gaining public consent and achieving our environmental aims: by having a clear price, credible alternatives for people to switch to, and cushioning so that no one is too badly affected. That is both deliverable and desirable, and it should form the core of the UK’s net zero roadmap.

Conservatives can’t be neutral about culture

7 Sep

MPs are to be made to take unconscious bias training.  A former Prime Minister of Australia is targeted because he is a social conservative.  The British Library links changes to the way it will work to George Floyd’s murder in America.   Extinction Rebellion clip the wings of a free press.  Senior civil servants declare publicly for Black Lives Matter.

Boris Johnson’s Conservatives have a majority of 80.  But the Left’s long march through the institutions seems, if anything, to speed up.

And the Government either won’t do anything about it or doesn’t want to – or both.  What’s the point of a Tory Government, a stonking majority and Brexit itself if nothing changes?

That’s the case for the prosection from some on the Right.  Should Johnson and his Government be found guilty?

The first thing a fair-minded jury would do is mull the charge sheet above.  It would see at once that the incidents and developments above vary in important ways.  For example, the Executive does not control the Legislature.  So whether to conduct bias training or otherwise is a matter for MPs, not Ministers.

The second course it would take is to try to work out what government should and shouldn’t do.  To take another example, Ministerial control of police operations would be alien to the British model of policing by consent, and to a free society.

Third, it would ask those at the top of the Government what they have to say for themselves.  The answers ConservativeHome gets when it puts that question, off the record, is a mix of the following.

Downing Street has “limited bandwidth” – i.e: fewer people than it needs.  Changing the culture of government is like turning round a supertanker, but it can be done.  Look at the change of tone from the BBC’s new Director-General.  And there are victories as well as defeats: the corporation backed down over Last Night of the Proms and the Government didn’t over Abbott’s appointment.

But that’s not all that some of our sources will say when they’re being candid.  They say that the Prime Minister moves slowly not just for reasons of political calculation, but because he’s internally conflicted.  His upbringing, attitudes and reflexes are liberal as well as conservative.  So he moves cautiously – being slower out of traps to champion the singing of Rule Britannia, as it happens, than did Keir Starmer.

You, ladies and gentlemen of the conservative jury, will reach your own verdict – or, if you’re sensible, conclude that putting the Government on a trial after it has had less than a year in office is premature.  Nonetheless, here’s our provisional take.

Johnson is denounced by much of the Remain-flavoured Left as a British Trumpian Bannonite – a misreading which helps to explain why he keeps on winning.  He is right not to declare a culture war from Downing Street.  The British people aren’t in our view enthusiasts for wars of any kind.

But if you think about it for a moment, you’ll see that one of the reasons he doesn’t need to declare such a war is that is already being fought.  The noisiest and nastiest parts of it tend to be where race, sex and religion are contested.

Those in the front line aren’t necessarily conservatives, let alone Conservatives.  They include J.K.Rowling as well as Katherine Birbalsingh (who’s being interviewed live by Mark Wallace this week ; Germaine Greer as well as Nigel Biggar.

That they and others are in the hottest parts of the action may explain why, to large parts of the conservative movement, the real heroes of our time are private citizens rather than public ones.  Consider the case of Jordan Peterson.

Some will say that the Conservative Party, and the centre-right more broadly, is divided about this cultural struggle, citing such telltale signs as Matt Hancock deliberately declaring “Black Lives Matter” at a Government Coronavirus press conference, or Grant Shapps declaring that he’d check Abbott’s record before going for a drink with him.

We think this is an over-complication.  Sure, conservatives won’t always agree about culture any more than they will about economics.  That’s why, inter alia, the flavour of David Cameron’s Downing Street was different from that of Johnson’s.  Near the top, there were fewer northern accents, more women, and fewer “weirdos and misfits”.

But we suspect that if Tory MPs were surveyed, the following attitudes would be found.  Support for equality of opportunity, or as close as one can get to it, rather than equality of outcome.  Much less backing for abortion on demand than on the Labour benches.  Much more for the free market being a friend of the environment, not an enemy.  Caution on reforming the Gender Recognition Act.   Agreement that real diversity must include a diversity of viewpoints.  Disagreement that poor working-class white people have a race privilege.  Poll them and prove us wrong.

In other words, Conservative MPs are more likely to share the patriotic instincts of most voters than Labour ones.  If you doubt it, ask yourself why Starmer is so anxious to present as Labour a patriotic party; why he was quicker than Johnson in coming out for Rule Britannia, and whywe read – his team want to present him as a very British hero who led in prosecuting an Islamist bomb plot. That’s solid ground for the Prime Minister to have beneath him

So while these are early days, we say that just because a Tory Government can’t – and shouldn’t – do everything, there’s no reason why it shouldn’t do something.  For example, there is a Minister for the Civil Service.  He is no less senior a figure than the Prime Minister himself.

So it’s up to Johnson to ensure that senior civil servants don’t promote, in practice if not in theory, causes that are outside any reasonable reading of its code – such as Black Lives Matter which, on any impartial reading, is tainted by anti-white dogma.  (Which doesn’t for a moment preclude following-up on Theresa May’s observation that “if you’re black, you’re treated more harshly by the criminal justice system than if you’re white”.)

Cultural change isn’t driven by governments, and thank goodness for that.  Over time, those that have transformed human lives most are the products of human invention (railways; the pill; vaccines) or conviction (the Abrahamic religions; the Enlightenment; secular humanism – or, talking of black lives mattering, America’s civil war.

But though the role of government should be limited, it is real, and modern Britain will always be more than just a market with a flag on top.  Governments propose laws, present manifestos, fund public services, make arguments – just as Johnson’s pre-election one did for delivering Brexit. And, talking of Extinction Rebellion, set the framework for policing policy.

We’d like to see the Prime Minister speak more swiftly when what Neil O’Brien calls the New Puritans – i.e: the legions of the woke – try to silence their opponents.  And ensure that the Government keeps them out of what government does.  Were Cummings and co to reduce its size and scope, that task would become just a bit easier.

Alexandra Marsanu: Rather than being paralysed by the doom and gloom, we need to seize the new opportunities

7 Aug

Alexandra Marsanu is a Ward Chair at Holborn and St Pancras Conservatives and Deputy Chair for London at Conservative Young Women. She works professionally as a strategy consultant.

There is no doubt that the unprecedented health crisis will have a massive impact for the months and years to come. From heart-breaking loss of life to more than nine million workers on furlough to increasing waves of layoffs and business closures. The numbers show a grim story unfolding, and the economic one has only just begun.

That doesn’t mean however, that we should become completely paralysed by the doom and gloom. Yes, difficult times lie ahead. And yes, a pessimist or cautious take tends to catch the public mind much more easily than an enthusiastic, potentially reckless cheerleader. But as history has shown time and time again, you can always bet on Britain’s strength to survive and turn each challenge into an opportunity. And given the looming economic shifts, a re-think of how businesses are run and what skills are needed for the post-covid economy should start sooner rather than later.

The effects of covid-19 have certainly started laying out the breadcrumbs for the next waves of innovation. ‘Just-in-time’ production and global supply chains have proven vulnerable to disruption. Empty high-streets show an already struggling retail industry in need of massive transformation. Working from home has been more successful than expected as many office workers are reluctant to get back to the Pret sandwich diet or stand on a crowded tube.

A need for change on how we do things is slowly but surely emerging. Take manufacturing and supply chains. Could the flimsy global supply chains experienced in the past few months signify a need for bringing it back home? The shift to the services industry led to manufacturing accounting for just 8.7 per cent of economic output this year, down from 15 per cent in the 1990s. And given the allure of high-paying professional services or finance jobs, this is not surprising.

But as Elon Musk put it best “someone needs to do the real work”. If we don’t produce anything we don’t have anything and empty supermarket shelves and the PPE crisis back in March certainly proved that. A domestic production of basic necessities such as food, medicine and PPE, is not a bad thing to have in times of crisis. A need to speed up decarbonisation can be catalysed by investing in new technologies in such as energy storage, cheaper electric vehicles or small modular nuclear reactors. Automation, artificial intelligence and 3D printing can make advanced manufacturing attractive and help tackle the reshoring headwinds.

The success of remote working is another interesting trend to explore. Ghostly streets in Bank or Canary Wharf flag that Tramsport for London, lunch spots and office rents are in deep trouble. Without workers or tourists roaming the streets some may need to shut down for good. But while some ways of working may come back once a vaccine is ready, technology has proven that many don’t need to. Could this offer interesting opportunities in revitalising the dying high streets in small towns with the same fitness or eat-out facilities you may find in Central London? Or could this finally incentivise many more companies to not concentrate their offices in one location and move to a hub/co-working approach? A hybrid work from home model may be the future.

But given the uncertainty of the economic recovery, how can we know for sure what will change and what will stick? Nassim Taleb offers an intriguing thought in his book on the so-called black swan events:

“The reason free markets work is that they allow people to be lucky, thanks to aggressive trial and error.”

And why not take this approach?

Your typical entrepreneur seems to use this best. A new idea is tried out. The mistakes are learnt from. It is adapted. That tends to lead to better results than massive costly projects. New policies could be tested through small experiments and local community feedback. As jobs become more dispersed, a small town could try out a restructuring of its high street to become a place for entertainment and public services. Local community feedback can easily be gathered. And if it works others will quickly adopt it.

Further Education colleges and work placements can be another quick way to try out a job change and re-skill for the new economy. Instead of having millions of people compete for jobs which may no longer exist, short online courses could be used to learn new things. Digital skills can be learned and tested over a matter of weeks. Or different career paths can be tested out through re-training and short placements for career changers similar to Sunak’s Kick Start Scheme aimed at 16-24-year-olds.

The uncertainty may look numbing, but opportunities will become apparent once the crisis settles and habits change. Now is the time to tinker as much as possible with new ideas. As researchers work day and night to find a vaccine and the furlough scheme puts the breaks on an economic crash, we need to make sure that we don’t emerge unprepared on the other side.

FREE ConservativeHome Live event with Daniel Hannan on the future of freedom

8 Jul

Following our successful inaugural ConservativeHome Live event last month, I am delighted to announce that the second event in the series will feature Daniel Hannan – author, campaigner and ConservativeHome columnist.

Daniel and I will be discussing The Future of Freedom in front of a live Zoom audience at 7pm on Wednesday 15th July.

After months of lockdown restrictions, unprecedented extensions of the state into the market, and amid a rising tide of puritanical ‘woke’ censorship, what does the future hold for individual liberty, freedom of expression, and private enterprise? How can Conservatives reassert the values and principles of a free society?.

Thanks to the generosity of our sponsor, Thorncliffe, this online event will be completely free to view. Audience members will have the chance to put your questions to Daniel as part of what promises to be another lively and fascinating evening of discussion and debate.

Click here to register for your free tickets.