Philippa Stroud: So you wanted an impact assessment of the effects of lockdown, restrictions – and of Covid itself? Here it is.

18 Dec

Philippa Stroud is Chief Executive Officer of the Legatum Institute, and leads the Social Metrics Commission.

Covid-19 continues to dominate the headlines. The human consequences of the virus on individuals, families, and communities right across the UK is clear to see – in our health, our relationships, and our livelihoods. We must not forget that many families will be dreading the festive season without loved ones who have passed away during the pandemic.

But as politicians, health experts, economists, business leaders, and the public continue to debate what the rules should be around Christmas, we must also remember that the impacts of the pandemic go beyond the here and now. There are long-term implications for the nation’s health, economy, and wellbeing that we will be dealing with for many years to come. This is why it’s so important that we think carefully about the choices we are making in managing this dreadful virus.

While the rollout of the vaccine has begun, it will take many, many months for the population to achieve the level of immunity required for life to return to normal. Until then, it is vital that we have a consistent and transparent decision-making process and mature conversations about the balance between personal, societal, and governmental responsibility.

Policymakers constantly have to make difficult choices, but this year has been perhaps harder than most. The Government has had to decide how to balance the terrible consequences of lost lives in both the short- and long-term with wider damage to the livelihoods and wellbeing of the population, and has had to consider whether to introduce enforceable legislation or rely on guidance and public communication campaigns to drive behaviour change.

The Government has said that its approach is to continually review the evidence and seek the best health, scientific, and economic advice in order to pursue the best overall outcomes. We applaud this sentiment. However, delivering on it requires an in-depth and detailed analysis of the impacts on health, society, and the economy, so the various trade-offs required can be understood. It requires a holistic assessment of the likely consequences of different policy options, and a model that can factor in and respond to the inherent uncertainty of a pandemic.

There is currently no public evidence that such a tool exists and is being used by Government. This has left policymakers facing the unenviable task of weighing up many conflicting issues. But more concerningly, it has left the public feeling confused and uncertain. Our recent UK Prosperity Case Study revealed that, even before the coronavirus struck, public confidence in national government had been deteriorating and was among the lowest levels seen across the world. This is deeply concerning as good governance and decisive and effective leadership will be crucial to guide the UK through the pandemic and create a more prosperous society in the future.

The good news is that the Legatum Institute has this week published a methodology for a holistic impact assessment for Covid-19 policy choices, and demonstrated its application with a retrospective analysis of the 31st October decision to introduce the English national lockdown.

The assessment framework accounts for the direct and indirect physical and mental health effects, economic effects, education effects, and wider impacts of both the virus itself and people’s responses to it (whether through personal choice or enforced behaviour change). Based on publicly-available data and using the Treasury’s standard conversion factors, it evaluates both short and long-term impacts, and presents results in a way that allows the impacts across these different areas to be considered together.

We do not claim that our framework is a definitive judgment on whether the decisions taken since the start of the pandemic have been the right ones, nor can it provide the answers for the difficult decisions that will come next. But it does show that it is possible to deliver this sort of analysis, that it is possible to consider the wide range of impacts of different policy choices in a holistic and consistent way.

Our report shows how to assess the impact of Government action to limit the short-term deaths from the virus so far (which has undeniably reduced the number of people dying as a result of the virus), and compare it with the costs of this action – restrictions on mobility, work, and hospitality that have reduced people’s incomes and lowered employment, as well as the cancelled medical procedures, the social isolation that has led to a deterioration in mental health for many, and the likely long-term mortality impacts associated with economic crises and recessions.

The report also demonstrates the importance of differentiating the question of what level of mobility and mixing will lead to the lowest overall negative impact from the question of how to achieve that desired level – for instance using public information, guidance, or regulation. It also shows the necessity of conducting impact assessments at a local level, as the difference in underlying infection rates, demography, and employment patterns across the country mean that the appropriate level of mobility and mixing will be different in different areas.

We hope that the Government will urgently adopt and develop our proof of concept and use it to inform future policymaking with regards to Covid-19. Such an approach will provide invaluable information to policymakers as they consider what the rules should be as we move into Christmas and the New Year and how different areas can move into different tiers or out of restrictions altogether. This will put Government policymaking on a stronger footing and make it more likely that it can achieve the best overall outcomes for the UK.

But it will also provide a vital framework through which politicians can communicate with the public, allowing deeper and more honest conversations about the choices the country has already faced this year and will face in 2021. By sharing the evidence behind their decisions and being transparent about the choices being made, the Government can re-build public trust and allow the British people to do what they do best – make personal decisions that care for their families, communities, and country

The biggest decision has already been taken. We have left the EU. So let’s treat whatever comes next as an opportunity.

14 Dec

The EU is right.  If in future it changes its social laws and we don’t change ours; and if then it slaps tariffs on our exports, and raises non-tariff barriers too, this in no way lessens our sovereignty.  We do what we like.  The EU does what it likes.  Brexit is uncompromised.

Having cleared that up, on to present obscurities.  The texts of a possible treaty, which some claim is “95 per cent done”, haven’t been made public.

So few outside the negotiating room, and certainly neither this site nor its readers, are able to pronounce authoritatively on exactly who or what is preventing agreement – assuming that disagreement is real, a supposition we’re inclined to make – or why.  Or whether a deal will have been agreed by December 31, the real deadline.

Nonetheless, the general contours of the difference between the two sides of the table in this negotiation seem clear enough.

As far as can be seen, both accept a level playing field based on “non-regression” – in other words, that neither party should lower the social standard, as it were, that existed within both the UK and the EU on the day that Brexit took place.

But what happens if either side in future wish to raise that standard?  The EU wants “dynamic alignment”.  The UK does not.  And they disagree on whether the non-binding Political Declaration includes commitments to it.

The EU reportedly wanted arbitration in the event of either the UK or the EU raising its social standard in future.  It seems that the UK resisted this particular arbitration proposal, though other reports suggest that the Government is not opposed to arbitration per se – and indeed that a potential solution may now be taking shape.

At any rate, it is agreed that the EU then went further – proposing that it be entitled to respond unilaterally if it raised its own standard and the UK didn’t follow.  It is this change in approach that plunged the talks into their recent crisis, which has not been resolved as we write.

Did Emmanuel Macron raise the stakes, mindful of his own domestic elections – and convinced that the UK would crack under pressure?  Was Angela Merkel actually the key mover?

Was it the Government’s declared intention to break international law that made the difference, inflaming EU fears of the unpredictability and waywardness of Boris Johnson?  (And if so, why – given that the EU itself is, as Ambrose Evans-Pritchard has pointed out, a “serial abuser of international law”?)

Such are the most convincing explanations we have of how we got where we are on the crucial issue of a level playing field – leaving the other main ones: state aid and fishing policy.

Fear on both sides is clearly a key factor.  The EU sees itself as offering the UK unique quota-free, tariff free access to its Single Market, and worries that we will get the best of both worlds – privileged access and lower standards.

As Catherine Barnard pointed out on this site last week, this reflects a curious lack of confidence in the coherence and power of the Single Market.

Meanwhile, the UK would say in response that such an arrangement suits the EU just fine, since it runs a trade surplus with us, and is offering nothing on services.  And that the EU seems set on using its economic muscle to pressure us into becoming an imperial outpost rather than Global Britain.

This, by the way, suggests a point that runs in the opposite direction to Barnard’s.  If the UK is confident in its own trading future, why not simply take the hit from any EU reprisal measures, and use our new freedoms as we think fit?

Our answer is that the Government should not, repeat not, settle for accepting a proposal that is manifestly unfair – in other words, one that would give the EU the right first to change its social laws and then, were we not to follow suit, to decide for itself both the width, speed and depth of retaliatory measures.

Such would be the classic bad deal – and, as Theresa May’s original formulation rightly has it, No Deal is better than a bad deal. But we don’t suggest for a moment that the consequences would be an easy ride.

In the long-term, what shapes a country’s economic future is its tax system, its spending control, its regulatory framework, the quality of its workforce, its education system, its capacity for innovation, its openness to investment, its relationship between labour and capital – and so on.  Not tariff and non-tariff barriers.

In the short-term, we are not so sanguine about the consequences of disentangling the UK, in the event of No Deal, from an EU with which it has been merged for the best part of 50 years.

In other words, No Deal would present the likelihood of short-term pain (the interplay with Covid; shortages; lower investment; scraps over fishing; damaged co-operation on crime and terrorism) against that of long-term gain, if we get our economic framework right.

Nonetheless, No Deal also has the potential to cut both ways, as John Redwood suggests on this site this morning.  For example, a fall in the pound could more than make up for the effect of tariffs.

Much will depend, if it happens, on how agile Rishi Sunak and Alok Sharma are response.  Meanwhile, No Deal would hit our EU neighbours hard, too.  In particular, it would be a political and diplomatic defeat for Ireland, in the wake of its win in the Withdrawal Agreement over the land border.

In the first few days after No Deal, the Cabinet would rally round the Prime Minister; so would Conservative MPs; so, beyond a doubt, would ConHome’s panel of Party members.

The EU and, in particular, France would be blamed by the Tory press and many voters.  The effects wouldn’t simply spill over into fishing and the North Sea.  Potentially, they would menace the security co-operation of the only two substantial military powers in western Europe.

We are less sure of what would happen in week eleven than week one.  We would put money on the response of Tory members hardening, together with that of some Conservative MPs.

However, we wouldn’t slap down a bet on all the Cabinet behaving in the same way.  The institutional interests of the Treasury and BEIS are against No Deal.  Michael Gove will be exposed if it happens, as the Cabinet Minister responsible for the UK’s response.

Our sense it that there would soon be stories of splits between Cabinet “hawks” and “doves”.  And Tory MPs, many of unfamiliar with normal Parliamentary proceedings and unprepared for unpopular decisions – how would they respond?

That would ultimately depend on their constituents, the British people – and the clash between what David Goodhart has called the Anywheres, gainers from globalisation who identify with similar gainers abroad, and the Somewheres, who are less mobile, more rooted and have a stronger sense of national identity.

One point is certain. We have decided to quit the EU twice over.  First in the 2016 referendum.  Then in the election of almost a year ago.

So in the event of No Deal, there will be no going back.  No political party or movement of any significance is suggesting rejoining the EU (which would now take place on less favourable terms than before.)  Which means that the best way of dealing with No Deal, if it has to happen, is to treat it less as a problem than as an opportunity.

Howard Flight: Sunak’s Keynesian interventions are working. Here’s what the Treasury should consider next.

30 Nov

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

Western Governments continued “Keynesian” deficit spending in the 1950s/60s and 70s, long after western economies had recovered from the 1930s depression when they needed the economic stimulants. As a result, the unnecessary public spending caused inflation and damaged Keynes’ reputation.

We are, however, now back to a depression economy which needs the sort of deficit public spending Keynes advocated and implemented in the 1920s and 1930s depression. To give him credit, the Chancellor was quick to move to provide Keynesian stimulus to keep businesses and employees “alive”, as the pandemic hit.

The biggest area of deficit spending has been in the retail and related sectors: here are the largest number of jobs/employees and some 55 per cent of the economy.

I would hope the Treasury has researched which areas of expenditure have the largest spending multiplier effects. Logically, these should be the first areas in which to increase public spending.

In a different context, infrastructure spending is the second area in which to boost public spending. Such infrastructure spending has a good economic multiplier and also represents an investment for the future.

With an economic explosion of the size we have experienced this can also help provide the stimulus for major longer-term changes in capital and consumption spending.

Arguably the NHS could do with major changes of the management. There also needs to be a thorough review of our energy policies. Is it the right thing to do to for the future to accelerate the supply of offshore wind and solar power and to move to a majority of electric and hydrogen cars; or would such a major shift be risky in terms of being able to assure the supply of the new sources of needed energy?

We also need to investigate what changes in our economy are going to remain, versus where, in due course, we will broadly revert to previous patterns of behaviour. It does, however, look very probable that much more work will be done from home, reducing travel costs and travel times. This must have implications for the volume of road, rail and hotel facilities needed, which will likely reduce.

It should also mean pricewise that good quality/suburban residential properties will outperform city centres, pricewise; although it remains to be seen how much residential housing demand and prices will actually weaken in central London. Where people live will also affect where more or fewer schools are needed; the implication is less in city centres and more in country/suburban areas. Thorough and intelligent research is needed to expose such changes in behaviour consumption and habits, which are likely to stick, and the contrary.

We do not want to find ourselves building more schools where there is not an increase in pupil demand or increasing electricity power supplies where power demand is reducing.

I think it would be useful to draw up a “picture/inventory” forecasting how economies will look in the future versus how they were before the pandemic hit. As time passes the previous estimates of how economies will change can be compared with what happens.

Largely owing to the Chancellor’s timely Keynesian interventions the economy, and in particular, the state of individual’s economic affairs, have held up remarkably well. It will, however, only be time to turn down and then turn off the Keynesian spending taps when there is the evidence of major economic recovery actually occurring.

On the positive side there is the scope to implement changes to our economy and economic behaviour which support an increase in future economic growth rates.

A friend of mine produced an analysis a few years ago which showed that most of our economic output in terms of value depended on the work of some 18 per cent only of the population. Investigation of this sort of information need to be undertaken in earnest. The significant majority of the nation is under contributing to the economy’s performance. This needs to be addressed in earnest.

Henry Smith: The defence sector has a vital role to play in levelling up – but needs Treasury support

28 Nov

Henry Smith is the Member of Parliament for Crawley.

In Crawley, where the aerospace sector is a significant local employer, we have been hit hard by the impact of Covid-19. This will be an extremely challenging time for individuals and families in my constituency and we must look to replace those jobs quickly.

I believe that this recovery can, and should, be technology-led and that one of the Government departments with the biggest budgets – the Ministry of Defence – could be at the heart of it. With the Integrated Review due to report soon, it is important that the UK takes this opportunity to adapt to an environment where technology, science and data are at the centre of delivering our global ambitions.

I agree with Ben Wallace, the Defence Secretary, that investing in cyber, space, electronic warfare, AI, robotics and autonomy is vital for our future prosperity and security. These kinds of technologies will be critical in building not only national resilience for the UK but a resilient digitally enabled economy.

However, in order to make the Integrated Review effective and the long-term platform on which to build the nation’s security, it must be accompanied by a multi-year spending settlement.

I appreciate that Rishi Sunak needs to focus on the present. But in an industry where contracts are for tens of years and companies make decisions on R&D investment with a long-term view, the absence of a multi-year settlement adds to uncertainty, causes delays in programme decisions, and makes the UK less attractive to large defence companies for investment.

British national security cannot be separated from the strength of our onshore defence and technology base, which increasingly that includes cyber and digital. The ability to rapidly respond to changing threats or shifts in international dynamics is critical. By developing our industry at home, we are able to make decisions to prioritise our values and protect our security, as the Government rightly did with the Huawei/5G decision.

As we have seen throughout this pandemic, our economic and social lives have been shifted online and the importance of being able to have trust in the systems we use, – that our data is secure, that a website is legitimate – can scarcely be overstated. Given the importance of the digital economy, digital trust must now be considered a foundation for national security; we should consider an intrinsic aspect of our Critical National Infrastructure.

Having world leading capabilities that are created and developed in Britain can also support our trade ambitions and export strength. Export sales can help spread the costs of design and production, potentially bringing down the cost of capabilities for the Armed Forces and saving taxpayers’ money. The reputation of the British military is such that when they can be cited as a reference user it adds significant weight to an export campaign.

In order to maximise the UK-wide benefit, the Government must back our industry by choosing to place a high weighting on the positive economic and employment impacts for Britain when making contract decisions, particularly when taxpayer money has been invested in the development of key technologies.

Brexit represents a chance to level the playing field for our defence industry, having previously been hampered by EU competition laws that were interpreted differently across the different states. The Ministry of Defence must be serious about using criteria to make contract decisions that take into account the impact on British jobs. With a large budget and significant annual capital spending, the MoD can be a vital tool in supporting the economic resilience of the nation as well as our security in the more traditional terms. This is something we have seen in countries across the world as they respond to Covid-19 including the US, France, Germany, and Australia.

Like in Crawley, colleagues from many parts of the nation, from Broughton, Brough, and Barrow, will also know benefits of big manufacturers supporting both employment in their area and a national supply chain. By giving the MoD a multi-year settlement, the Government will be recognising the value that defence spending brings to the national and – crucially – local economies.

We must be thinking about the long-term future of our manufacturing towns, and the Government needs to demonstrate their commitment by giving industry the certainty it needs to level up the economy across our United Kingdom.

Amy Selman: How to be a campaigner and a governor – lessons from Johnson’s time as London’s mayor

16 Nov

Amy Selman was policy adviser to Boris Johnson when he was Mayor of London from 2010-2016.

Much was written about the personalities of the key players within Downing Street this week – and the consequent drama and intrigue captures the interest of the Westminster classes.

Less headline-grabbing are the methods of working which may also need a refresh in order to reassure Conservative MPs that the Prime Minister’s team is working for one of their ultimate goals – re-election in their constituencies.

It is too glib to say that campaigners can’t deliver in government. MPs know this because of the impressive record of many of their local council leaders, who tend to stay in office for longer, and run successful re-election campaigns.

In London as Mayor, Boris Johnson snapped up key local leaders, from Stephen Greenhalgh, Mike Freer and Theresa O’Neill (then leaders of Hammersmith & Fulham, Barnet and Bexley councils respectively), to replicate at the city level what they had done for their boroughs.

This team, managed first by Simon Milton as Chief of Staff, and then by Edward Lister, helped the Mayor run a united team of both civil servants and politicians. Some observations:

Gearing everything towards delivery – publish a traffic light system

The first is that the machinery of government can and wants to work for you, and the best way to consolidate that is through your manifesto.

Leaders are elected on a platform, and the civil service’s duty is to help execute it. A focus on delivering policies that voters chose is key to getting the machinery working. At City Hall, this was done by a diligent senior team who produced a monthly traffic light scoresheet for each 2012 manifesto commitment, and brought those in charge of implementing it to an Investment and Performance Board, with minutes that were almost wholly public.

This meant some difficult conversations both with heads of such agencies as Transport for London, and with the Deputy Mayors appointed to oversee them, but the process both integrated the teams and served as red flags when commitments were under threat.

The traffic light system was not always the favourite part of people’s work – more exciting, glamorous comms opportunities would capture daily headlines  – but the Chief of Staff and Permanent Secretary ensured that this core business had to be met first.

Adapt delivery for campaigning materials – so providing a record

The Board papers allowed the political team to extrapolate for London’s Conservative MPs achievements they could use in campaigning materials, such as those that CCHQ provided borough versions of newsletters.

Conservative MPs need regular red meat – material they can use to campaign on a record. Progress on manifesto commitments are the way to provide that, regardless of daily stories that blow hot and cold. Donors, too, want to see a scorecard that can reassuree them that core policies are being worked on.

Brand your successes.

Johnson’s team also instigated the appropriate branding for schemes – such as, at the insistence of Richard Blakeway, one of the Deputy Mayors, that all new part-funded Homes for London were attributed to the Mayor’s office as well as the private housebuilder.

There is a current debate about this practice in relation to UK Government schemes in Scotland.  It should be settled immediately: if taxpayer money is being spent in any part of the UK, the brand of Her Majesty’s Government must be displayed.

Adapt set pieces with bitesize briefings for MPs to use

Set pieces such as the Budget are another amalgamation of campaigning and governing. As Chancellor of the Exchequer, George Osborne was a master of this fusion, and would pass on long shopping lists from London to civil servant teams, which would then whittle it down to list concrete commitments.

One example is the Long-Term Economic Plan for London of 2015, which adapted the work of the independent London Finance Commission – triangulating between Whitehall, local enterprise partnerships and other regional demands that the then Government was facing to ensure a fair share of investment.

Bitesize briefings based on the LTEP ensured that the huge sums pledged by the Treasury could be translated into local schemes and MP campaigning wins – such as nine new housing zones and two new tube stations. Mayors and regional MP leaders have a huge role to play in similar processes, and should feel that they are working with others as one team all along.

Create a network of insiders at all Party ranks

As Mayor, one of Johnson’s most frequent requests was: ‘what’s happening?’

These were not idle queries” rather, he created a network of allies to help respond to whatever target audiences were talking about: advisers and senior civil servants on forensic London issues; Tory MPs on constituent postbag audits (along with the gossip from dining clubs and the terrace), local council activists on doorstep concerns.

Remember who put you there – so get out and about.

Machiavelli wrote that “he who becomes a prince through the favour of the people should always keep on good terms with them”.  Jonathan Powell’s twentieth century addition was “and if his popularity goes down, his party becomes restless”.

For a mayor known only by his first name, the key to keeping on good terms was to get out and about. In a non-Covid-19 world, I’m sure that we would have seen a Prime Minister Johnson out and about in high streets across the country.

The rotating local London People’s Question Times, as with David Cameron’s Cameron Directs, created a discipline of looking at how wider policies were improving specific areas.

Instead of talking about body-worn cameras or free school places in the abstract, we would have to produce the figures for a borough and explain the exact nature of their benefits.

This helped local campaigners, along with such activities as the boost of a star-power walk, opening of one of London’s 100 new Pocket Parks or regeneration flagships such as Battersea Power station. There was never any tension at the dual nature of these events, with political visits coupled to official events -and Ministers are itching to get back to this even in a virtual world.

Respect the Grid, but don’t expect it to deliver key messages to target audiences

City Hall straddles – without fully controlling – policy areas, agencies and delivery bodies. Whitehall of course has this writ far larger. So the temptation to try and centralise announcements is natural: but in London, it rarely worked seamlessly, and with the audiences the Mayor wanted.

The grid is really a tool for journalists and Westminster, not for voters. It is important, especially if a key audience is the Tory backbenches, who need a Minister for The Today Programme, Newsnight and social media. To get to the voters, a string of random announcements on a topic such as transport should be consolidated into key messages repeated – which meansresisting the need to feed the news cycle beast.

Use the authentic voice – no-one writes to connect like Johnson

The style and reach of Johnson’s Monday Daily Telegraph column did more to focus on priorities than set speeches in warehouses or hard-hatted engineering visits.

Not that it was always disciplined: we would often reassure Numbers 10 and 11 on a Sunday that he would publicly support a new NHS or tax initiative…only for Monday morning’s paper to be a musing on ski holidays or working habits

But the Mayor’s authentic voice though cut through to core voters. And it became clear that when other Ministers wrote diary columns – in the Spectator for the Tory faithful, or in Grazia for new audiences – these would get far more discussion than press release columns.

After a difficult period that no post-war Prime Minister has had to grapple with, a refocus on what the Conservative Party promised voters in 2019, and how each constituency will feel the benefits, would help the Government to regroup. Time to return both governing and the campaign to Tory ground.

Interview. Mel Stride – a damaged economy provides less for health and social care, “and that has a cost in lives”

6 Nov

Rishi Sunak yesterday refused Mel Stride’s third request for the Treasury’s analysis of the economic impacts of the pandemic.

Stride, who chairs the Treasury Select Committee, suggests in this interview that the Chancellor misunderstands what is being asked for.

Others, Stride adds, might draw the “unfortunate conclusion” that providing the information would be “unhelpful in the context of persuading Members of Parliament to support a lockdown”.

ConHome: “I want to take as our theme a quote from the Sage minutes of 21st September that you read out in the Commons on 21st October and referred to again in your question yesterday to Rishi Sunak:

“Policy makers will need to consider analysis of economic impacts and the associated harms alongside this epidemiological assessment. This work is underway under the auspices of the Chief Economist.”

“Now you’ve asked Rishi Sunak on three occasions to show you this analysis. What did you make of the answer he gave you in the Commons yesterday?”

Stride: “I can only imagine there’s a misunderstanding about what’s being asked for here.

“Because I think his response, which was really in line with his written response to me, was, well, we don’t produce official forecasts from the Treasury, that’s the job of the OBR and others, and these are the various forecasts which are out there – which of course are all in the public domain and we know about those.

“But that wasn’t actually what I was asking for.

“What I’m asking for is precisely the output relating to that section of the minutes of that Sage meeting on 21st September. If the minutes are accurate, there is work that has been going on at the Treasury, looking at the impacts of the lockdown measures, under the auspices of the Chief Economist [Clare Lombardelli].

“So we think, in terms of good decision-making, Parliament having access to all the information it needs to take these decisions, and the wider public, that that should be made public.”

ConHome: “You asked for something that Sage suggests exists. The letter gave you an answer to something you hadn’t really asked. It said it didn’t seek to disaggregate these economic outcomes, which it referred to in some detail, from their causes, whether they be lockdowns or other restrictions or the virus itself.

“What do you think is going on? You said a moment ago this seems to be a misunderstanding. What do you think is up? Has the Treasury just got the wrong end of the stick? Or is there some reason why it’s reluctant to engage in this way?”

Stride: “I think that’s a very good question. My feeling at the moment is that perhaps it’s got the wrong end of the stick.

“If it were not me answering this question, and I were to be a little more cynical about it, I might think, well, maybe this kind of information is unhelpful in the context of persuading Members of Parliament to support a lockdown.

“Because inevitably it’s likely to at the very least throw into sharper relief the kind of economic costs associated with these measures.

“And I’m not for a moment – I think this is very important for this interview – suggesting that.

“Let me put it this way. I think that would be an unfortunate conclusion that some might draw, and I think that’s unnecessary, because if we can clear up the misunderstanding we can see the information.”

ConHome: “Your committee wanted the information before the vote yesterday, and didn’t get it. With all that in mind, how did you feel about voting yesterday, and what’s your general view of the lockdown proposal?”

Stride: “OK. I don’t think we have enough information to make the best, most informed decision on this, and I don’t just point my finger at the lack of economic information, though there’s certainly a complete dearth of that, but equally at the health aspects of this.

“But at the end of the day you have to take a decision based on the information you have – you can’t just lament the fact that there’s a hole in it.

“You have to look at it, and it’s a matter of judgment. And my judgment, which was personally fairly finely balanced, so I supported it with a bit of a heavy heart, was that on this occasion I would trust that the Government’s judgment was more likely to be right than wrong.

“Now critical to all of this of course is what is the likely outcome in the counterfactual example of no lockdown, in terms of the over-running of the National Health Service.

“It seems to me that there are at least two strands within the health data that are problematic. One is some projections which I think have been to a degree debunked, like the projection of 4,000 deaths per day, which I think has been unhelpful.

“But the second thing, to be fair to the Government, is the very nature of responding to this pandemic, and the lags involved for example between infection, hospitalisation and ultimately sadly death, lead you to a situation where it’s very difficult to answer a number of the critical questions that you need to answer.

“Because you don’t actually have the data in real time. An example of that would be what is the average time that somebody infected with Covid spends in a bed within the NHS at the moment compared to the first wave?

“Now purely speculatively suppose that that figure is much lower than in the first wave, because you’ve got better treatments and we understand how to make people better faster.

“If it was, for the sake of argument, half the amount of time, that would be an effective doubling of the capacity of the National Health Service at a stroke in order to handle these particular problems.

“But we don’t know the answer to that critical question. And if we did, and it was half the time, we might be able to avoid the lockdown altogether, who knows.”

ConHome: “You’ve said it’s a misunderstanding. That’s a very charitable term. The Chancellor is a staggeringly acute and quick-in-the-uptake individual. Even if he were momentarily to misunderstand what you want, he wouldn’t misunderstand when you put the question to him again.”

Stride: “Of course he has a lot on his plate, and let’s hope that fairly shortly he has another look at it and perhaps we end up in a position where the information is made available.

“Or indeed it’s categorically stated that the information referred to in the Sage minute is not actually available, because it never existed.

“If it never existed, the question then becomes, given the magnitude of the decisions being taken around lockdown, why would you take a decision like that without that kind of information?

“So I think it’s difficult both ways, whether it exists or not, for the Treasury. But my hunch is that it does exist and we should have it.”

ConHome: “How significant do you think it is that a growing number of your colleagues – Theresa May, Graham Brady, Bob Neill, Nus Ghani and so forth – are calling for this analysis which you’ve been trying to extract from the Government?”

Stride: “Well I think that’s just reflective of two things. One is that the economy has been downplayed in the elements of the discussion so far.

“And secondly, through time it’s becoming more and more relatively underplayed, because the economic situation is getting that much tougher.

“So it’s more relevant today, when we looked at another £20 billion of support, and huge stress on the public finances going forward – we have a close look at this stuff, perhaps compared to on day one back in mid-March.

“And I think there’s one other important thing, which very few commentators have picked up on.

“It’s not just about what are the economic impacts of these measures, it’s about what are the consequential health impacts of those economic impacts.

“And there are at least two things that one thinks of here. One is that if you go into lockdown then you have an increase as we know in mental health problems, potentially suicides, and that needs to be quantified.

“And the second thing is that if you damage the economy, if you scar it, i.e. you end up with structural long-term contraction of the economy, you’re less able to fund the kind of health and social care services that we want to fund going forward, and that has a cost in lives.

“Now that’s not as dramatic as saying that next month we may be overrun in the NHS and there may be people very sick in NHS beds etcetera, but nonetheless it’s not something that can be avoided.

“And the problem is that not only is the economic analysis there in my opinion, but the consequent health analysis is not there either.

“We had a very interesting committee meeting that I organised about a week ago, where we looked at how you convert economic damage via something called the QALY, the Quality Adjusted Life Year, and tried to flesh out how you could make comparisons between economic damage – smaller economy, less public spending – and the consequence for lives.

“And that analysis can be done. It all sounds a bit esoteric, but at the end of the day, if you’re to take rational decisions about actions that are there primarily to save lives over the medium to long term, you can’t ignore those issues.

“Politically, of course, it’s very difficult to be entirely rational over the long term, because the immediate political expediencies tend to lead to shorter-term decision-making.”

ConHome: “What happens next to your committee’s inquiry into this whole question?”

Stride: “Well we will be publishing a report. We have called for the Government’s Chief Economic Adviser to appear before our committee next Wednesday.

“I’m hopeful that she will appear, alongside the Permanent Secretary to the Treasury, and we’ll be able to put further questions to her at that point.”

ConHome: “And how soon will we get your report? Because as you say there’s this great tension between immediate actions, including flinging a lot of liquidity into the economy, and the long term, when Keynes said we’re all dead, but some of us won’t be dead at least in the medium term.

“You might produce a perfect report which was far too late.”

Stride: “If it was a report it will vest within the ongoing inquiry we have into the economic impacts of coronavirus, and that probably wouldn’t be for some time.

“But we don’t need to rely on a report in order to get out the conclusions of a particular session.

“One of the things I’m acutely aware of, and I know the committee is, is just the point you’ve made, that everything is moving frighteningly quickly, and if you’re going to add value to the decision-making then you need to be as nimble as the Chancellor, if not even more nimble, in getting in and out with your commentary and your suggestions.”

ConHome: “Just following up what you said about the QALYs – isn’t there a natural reluctance of Government, and of MPs, to get into all this? Because it is extremely difficult to have a public debate about the value of a life lost to the coronavirus, to the value of a life that isn’t lost to it.

“It invites the charge of the Conservative Government, ‘the heartless Tories’, not putting enough value on some of the lives lost.”

Stride: “Well it depends. Politics as Bismarck said is the art of the possible. The QALY argument I think is the bridge between the economic and the effect on life and death and so on.

“It’s not a debate that we’re not already having. QALY is used by NICE in order to decide which drugs it will invest in and which it won’t.

“I don’t think you end up being heartless about anything. It’s a way of moving into a space where we look at the impacts of what’s happening far more holistically, and are therefore likely to take better decisions for the medium and longer term.”

ConHome: “What are the prospects for the economy, broadly speaking, do you think?”

Stride: “Not as good as they were a few months ago, unfortunately, because of the advent of the second lockdown and what appears to be a rather difficult second wave.

“Any idea of a V-shaped bounce back has completely gone, and it’s now a question of trying to avoid the W shape, and try to have a kind of Nike tick.

“One of the biggest elements to look at is going to be unemployment. To what degree can we avoid going back to where we were in the 1980s or worse?

“What the Government’s trying to do now is just to hold down that unemployment figure, in the expectation that a vaccine, better treatments and so on will be a game changer.”

ConHome: “Quite recently you were a very senior gamekeeper, Leader of the House, at the tail end of Theresa May’s Government. You’re now a very senior poacher, the Chair of a Select Committee, trying to get answers out of the Government. What’s the change like and are you enjoying this new role?”

Stride: “It feels quite liberating in many ways. It was a wonderful privilege to be Leader of the House of Commons, as it was to be Financial Secretary to the Treasury and Paymaster General and so on.

“But to be able to have the freedom now to try and be fair and balanced in our appraisal of what’s going on, I’ve been very complimentary of the Chancellor and the Treasury in many areas of what they’ve done, but to be able to point at things you really don’t think are right, and where you think you can add value, you can do that without restraint, and that’s been the most positive element I think of the experience for me.”

Gerald Howarth: To ensure post-Brexit success, the Government must bolster Britain’s military posture

29 Oct

Sir Gerald Howarth was the MP for Aldershot from 1997-2017, and Minister for International Security Strategy 2010-2012.

As a former Minister for International Security Strategy, I warmly welcomed a review intended to place defence and security within a foreign policy strategic context.

Entirely correctly, the Government has made clear that it wants post-Brexit Britain to play a key role on the world stage. That vision alone calls for a strong military posture because, like it or not, military strength tends to command influence.

It is that strong posture, built over centuries, which has enabled the UK to deploy soft power to significant effect. Loan service officers, joint exercises, training overseas military personnel and the Royal College for Defence Studies all help promote British influence, but our ability to deploy soft power is founded on our hard power – the nuclear deterrent, state-of-the-art kit, and, above all, superbly professional armed forces personnel who have distinguished themselves in recent battles from the Falklands to Afghanistan.

Indeed, the successful Falklands campaign overnight transformed the world’s perception of the UK from a nation in terminal postwar decline to one which once again commanded international respect and propelled Margaret Thatcher onto the world stage.

Increasing global tensions also dictate that we need to increase our defence capabilities – and certainly not cut them. Since the 2010 review in which I was involved, and which was Treasury-driven as a consequence of the £160 billion budget deficit we inherited, much has happened. Take just two examples: in 2014 Russia annexed the Crimea. It did so with complete impunity notwithstanding the 1994 Budapest Memorandum, signed by John Major, under which the US, UK and Russia agreed to respect Ukraine’s borders in return for that country destroying its nuclear arsenal.

In the South China Sea, the Chinese Communist Party has persistently annexed uninhabited atolls, ownership of which is disputed with other nearby nations, and turned them into military bases. Again, it has done so with complete impunity, so it is hardly surprising China has taken advantage of Western paralysis to impose draconian new laws in Hong Kong. Britain has a locus: following our withdrawal from East of Suez in the 1960s, the UK drew up the Five Powers Defence Arrangement with Australia, New Zealand, Singapore and Malaysia to safeguard the interests of the latter two.

Our failure to strengthen our defence posture poses the real risk of further instability worldwide.

Britain has an impressive defence industry which a Conservative government should be keen to nurture. For over a century the UK has been a world leader in aerospace and continue to hold that position today through companies like BAE Systems and Rolls-Royce but sustained by a broad and innovative SME sector. We are the second largest exporter of defence equipment, after the United States, which not only earns us annual revenues of around £15 billion but enables us to offer tangible support to our friends and allies.

“Buying off the shelf” in reality means buying from the US which is our closest military ally but a formidable competitor in the defence market which has in the past blocked UK military exports containing US components through its application of ITAR (International Trading in Armaments Regulations) restrictions.

As Labour Lord Drayson’s 2005 Defence Industrial Strategy stated, the loss of sovereign capability leads inevitably to loss of operational sovereignty, to which add the loss of those defence exports. The UK is an equity partner in the F-35 Joint Strike Fighter programme, yet the US continues to deny us access to the computer source codes.

Fortunately, the UK has recognised the danger. The Tempest aircraft programme, which is ITAR-free, will deliver a sixth generation optionally manned capability, exploiting new disruptive technologies essential to tomorrow’s battle-winning capability.

It is led by BAE Systems and Rolls-Royce, supported by Thales UK, Leonardo and missile manufacturer MBDA together with around 600 UK SMEs and institutions. It will generate valuable, new UK technology and employ tens of thousands of skilled people, many in the North of England and Scotland. It is a statement of national intent which also makes economic sense.

The special challenge today is how to maintain effective conventional forces (we cannot expose ourselves to the risk of being outmanoeuvred as a result of having neglected those forces) whilst also developing tomorrow’s technology. You do not win wars using old equipment so investing in future technology like cyber and AI is essential. Funding for defence research has endured a persistent decline in the last two decades; that must change.

[Through no fault of its own, apart from our excellent Defence Secretary Ben Wallace, this Government lacks senior ministers with knowledge of, or experience in, the military. This review must not be rushed and expert advice should be sought and heeded.]

Inevitably, Covid-19 has thrown government financial planning into chaos. Nevertheless, it would be folly, and damaging to the PM’s critical post-Brexit vision for the United Kingdom, if he fails to acknowledge the long-term requirements of Her Majesty’s Armed Forces.

Abandoning the three-year Comprehensive Spending Review will cause major problems for the MoD which manages an equipment programme stretching over several years. For example, the Tempest programme requires multi-year funding to maintain the confidence of our international partners that the UK remains committed to Tempest. It will also ensure the UK remains ahead of competitor programmes.

Conservatives hold that the first duty of government is defence of the Realm. Money has rightly been found to deal with the pandemic; it now needs to be found to ensure our national security and give credibility to that post-Brexit vision.

Gerald Howarth: To ensure post-Brexit success, the Government must bolster Britain’s military posture

29 Oct

Sir Gerald Howarth was the MP for Aldershot from 1997-2017, and Minister for International Security Strategy 2010-2012.

As a former Minister for International Security Strategy, I warmly welcomed a review intended to place defence and security within a foreign policy strategic context.

Entirely correctly, the Government has made clear that it wants post-Brexit Britain to play a key role on the world stage. That vision alone calls for a strong military posture because, like it or not, military strength tends to command influence.

It is that strong posture, built over centuries, which has enabled the UK to deploy soft power to significant effect. Loan service officers, joint exercises, training overseas military personnel and the Royal College for Defence Studies all help promote British influence, but our ability to deploy soft power is founded on our hard power – the nuclear deterrent, state-of-the-art kit, and, above all, superbly professional armed forces personnel who have distinguished themselves in recent battles from the Falklands to Afghanistan.

Indeed, the successful Falklands campaign overnight transformed the world’s perception of the UK from a nation in terminal postwar decline to one which once again commanded international respect and propelled Margaret Thatcher onto the world stage.

Increasing global tensions also dictate that we need to increase our defence capabilities – and certainly not cut them. Since the 2010 review in which I was involved, and which was Treasury-driven as a consequence of the £160 billion budget deficit we inherited, much has happened. Take just two examples: in 2014 Russia annexed the Crimea. It did so with complete impunity notwithstanding the 1994 Budapest Memorandum, signed by John Major, under which the US, UK and Russia agreed to respect Ukraine’s borders in return for that country destroying its nuclear arsenal.

In the South China Sea, the Chinese Communist Party has persistently annexed uninhabited atolls, ownership of which is disputed with other nearby nations, and turned them into military bases. Again, it has done so with complete impunity, so it is hardly surprising China has taken advantage of Western paralysis to impose draconian new laws in Hong Kong. Britain has a locus: following our withdrawal from East of Suez in the 1960s, the UK drew up the Five Powers Defence Arrangement with Australia, New Zealand, Singapore and Malaysia to safeguard the interests of the latter two.

Our failure to strengthen our defence posture poses the real risk of further instability worldwide.

Britain has an impressive defence industry which a Conservative government should be keen to nurture. For over a century the UK has been a world leader in aerospace and continue to hold that position today through companies like BAE Systems and Rolls-Royce but sustained by a broad and innovative SME sector. We are the second largest exporter of defence equipment, after the United States, which not only earns us annual revenues of around £15 billion but enables us to offer tangible support to our friends and allies.

“Buying off the shelf” in reality means buying from the US which is our closest military ally but a formidable competitor in the defence market which has in the past blocked UK military exports containing US components through its application of ITAR (International Trading in Armaments Regulations) restrictions.

As Labour Lord Drayson’s 2005 Defence Industrial Strategy stated, the loss of sovereign capability leads inevitably to loss of operational sovereignty, to which add the loss of those defence exports. The UK is an equity partner in the F-35 Joint Strike Fighter programme, yet the US continues to deny us access to the computer source codes.

Fortunately, the UK has recognised the danger. The Tempest aircraft programme, which is ITAR-free, will deliver a sixth generation optionally manned capability, exploiting new disruptive technologies essential to tomorrow’s battle-winning capability.

It is led by BAE Systems and Rolls-Royce, supported by Thales UK, Leonardo and missile manufacturer MBDA together with around 600 UK SMEs and institutions. It will generate valuable, new UK technology and employ tens of thousands of skilled people, many in the North of England and Scotland. It is a statement of national intent which also makes economic sense.

The special challenge today is how to maintain effective conventional forces (we cannot expose ourselves to the risk of being outmanoeuvred as a result of having neglected those forces) whilst also developing tomorrow’s technology. You do not win wars using old equipment so investing in future technology like cyber and AI is essential. Funding for defence research has endured a persistent decline in the last two decades; that must change.

[Through no fault of its own, apart from our excellent Defence Secretary Ben Wallace, this Government lacks senior ministers with knowledge of, or experience in, the military. This review must not be rushed and expert advice should be sought and heeded.]

Inevitably, Covid-19 has thrown government financial planning into chaos. Nevertheless, it would be folly, and damaging to the PM’s critical post-Brexit vision for the United Kingdom, if he fails to acknowledge the long-term requirements of Her Majesty’s Armed Forces.

Abandoning the three-year Comprehensive Spending Review will cause major problems for the MoD which manages an equipment programme stretching over several years. For example, the Tempest programme requires multi-year funding to maintain the confidence of our international partners that the UK remains committed to Tempest. It will also ensure the UK remains ahead of competitor programmes.

Conservatives hold that the first duty of government is defence of the Realm. Money has rightly been found to deal with the pandemic; it now needs to be found to ensure our national security and give credibility to that post-Brexit vision.

Graham Brady: The Government must account properly for the full cost of lockdowns, restrictions – and Covid-19 itself

27 Oct

Sir Graham Brady is Chairman of the 1922 Committee and is MP for Altrincham and Sale West.

From the start, combating the Covid-19 pandemic has required the Government to take some extraordinary measures. In March, the Prime Minister took the unprecedented step of imposing a full lockdown, backed by the full power of the Treasury, as Rishi Sunak pledged to do “whatever it takes” to support the economy.

That lockdown was supposed to be a one-off, an emergency intervention to prevent the NHS from being overwhelmed during the acute stage of the crisis.

It was a strategy intended to buy time. Time to dramatically increase Health Service capacity via the Nightingale hospitals, and time to develop the sort of track-and-trace infrastructure that would allow ministers to take a better targeted approach in future.

Yet as winter approaches – and with it the usual flu season and additional demands on the NHS – attempts to introduce restrictions on a regional basis have provoked a furious backlash from local government leaders. Now both they and the Opposition are calling for a second national lockdown – the so-called ‘circuit breaker’.

We should not get too distracted by the new name. It is extremely unlikely that new restrictions, if imposed, would only last for two or three weeks. It takes longer than that for the benefits of lockdown in controlling coronavirus to appear in the data. Are ministers likely to lift lockdown before it is seen to be working? Or the Opposition to support doing so? I think not, especially given that a two or three-week plan will take us deep into winter.

To properly debate the case for a second lockdown, we have to be honest about the fact that it will in all likelihood entail months of restrictions. And if a vaccine hasn’t arrived by the Spring – or if we haven’t got the necessary infrastructure to mass-manufacture and distribute a novel vaccine to the nation by then – this cycle will very likely extend into 2021 or even beyond.

But we also need to properly recognise the extraordinary toll that these measures are taking on the country. We were fortunate that during the initial lockdown the Chancellor was able to break out his ‘big bazooka’ on behalf of workers and businesses, but should never lose sight of the fact that intervention on that scale cannot be sustained indefinitely. Without it, the impact of lockdown on the economy will be severe.

This is one reason why ministers should not draw too much comfort from polls showing strong public support for lockdown. If the electorate is forced to bear the brunt of restrictions without that Treasury shield, the backlash will be swift. If you doubt it, just ask MPs or local government leaders from my own region, Greater Manchester.

Yet the cost of lockdown extends far beyond the public accounts. Suicide rates are up. People are missing out on life-saving operations and essential care. Millions are struggling with their mental health as restrictions cut them off from friends, family, and other support networks. Domestic violence is on the rise as women are trapped at home with violent partners.

All the while young people, who are amongst those least at risk from Covid-19, are paying a huge price. School has been disrupted, formative moments and milestones missed, and now many are confined to their dormitories at university. Does anyone honestly think that this is sustainable for a year, or more? The ‘lockdown raves’ we saw this summer will be just the start.

Journalists and campaigners have done good work highlighting these issues. But they are not being properly accounted for by policymakers. We have plenty of official statistics about the direct impact of Covid-19 (even if they are sometimes badly wrong). But precious few on the costs of fighting it.

It makes sense for the scientific advisers, whose task is advising the Government on combating coronavirus, to focus exclusively on it. But ministers do not have that luxury. They have a duty to take into account the best interests of the nation as a whole.

But they can’t do that without adequate data. So as we brace for what might be a long-haul fight against the pandemic, the Government must start accounting properly for the real costs of Covid-19. The Department of Health should compile and publish the statistics for excess deaths arising from reduced access to care. The Treasury should do the same for shuttered businesses and lost jobs.

Recent reports suggest that the Chancellor is prepared to take such action. It is very much to be hoped that he will, and that the Department of Heath will do likewise.

Having these figures to hand will not only help the Cabinet make key decisions, but may also lead to a more realistic understanding on the part of the public about what the real costs of the current strategy are.

The Government is rightly committed to trying to save as many people as possible. But a strategy which fixates on Covid patients, at the expense of letting other people fall between the cracks, does not do this.

Should the Treasury underwrite Drakeford’s assault on the Welsh economy?

24 Oct

One of the many unpleasant features of the latest breakdown in the ‘four-nation’ approach to combating Covid-19 is that the nation’s various governments have all taken the opportunity to flex their authoritarian streaks.

Setting aside the top-level debate about the efficacy of Tier Three, or a national ‘circuit-breaker’, politicians in London, Edinburgh, and Cardiff have all invoked the crisis to justify some bizarre restrictions.

In England, the Government imposed a 10pm curfew (without modelling the impact) in order to ‘send a message’, with the result that thousands of people all ended up piling out of the pubs – and into the supermarkets and onto public transport – at the same time. North of the border, meanwhile, the Scottish Government’s own lockdown includes a ban on the indoor sale of alcohol.

Yet none of this reaches the absurd heights we are now witnessing in Wales, where Mark Drakeford has decided not only to force all ‘non-essential’ businesses to close, but to prohibit the sale of ‘non-essential’ items in essential shops.

Cue bizarre pictures of supermarket staff wrapping shelves to ensure the public can’t get their hands on such trivialities as new bedding (as winter draws in), as retailers try their best to navigate the new rules.

This bizarre move isn’t even nominally about controlling the virus. The First Minister has apparently claimed that it is necessary in order to create ‘a level playing field’ between big supermarkets and smaller shops. It is an ideologically-motivated thumb on the economic scales – not a public health measure. That Welsh shoppers will simply switch to online shopping (some permanently) seems not to have occurred to him.

As such, it will only sharpen the debate around who is going to pick up the tab for one of the strictest lockdowns in Europe. Typically of the devolution ‘settlement’, the Welsh Government has the authority to shut down its economy but can’t pay for it, and the Treasury is rightly resistant to getting bounced into spending commitments over which it has no control.

The perception that Scottish and Welsh devocrats are enthusiasts for lockdown because they can tap into ‘English’ money is a potentially dangerous one both for the Government and the Union as it is. If that grows into a broader perception of subsidy not just for more generous welfare spending but actively terrible economic policy, it could grow more toxic still.

Some devocrats want the power to borrow, although unless you think Westminster would ever not bail out devolved administration that’s simply more of the same by a different way. Others have suggested that Scotland and Wales should be forced to pay for additional lockdown measures from their own taxation. A third option would be to make Treasury economic support conditional, and revive the UK Government’s legitimate role in the governance of the whole country. No British cash without British strings.