Sarah Ingham: People voted to take back control of Britain’s borders – the time is well overdue for some political will

26 Nov

Sarah Ingham is author of The Military Covenant: its impact on civil-military relations in Britain.

This weekend brings the First Sunday in Advent, the start of the liturgical year in the Christian calendar.

For most of us, it signals that other annual rite – the Countdown to Christmas. Shopping! Santa! Sleighbells in the snow! And endless lists: cards to be sent, presents to be given, food to be shopped for. It’s little wonder that those responsible for producing lunch or dinner on the 25th collapse into a Quality Street-Netflix coma on the sofa on Boxing Day.

‘The more the merrier’ is the plucky response to the arrival of unexpected guests. It is Christmas, after all. Time to eat, drink and be merry. There’s plenty of room around the table (‘budge up’) and the garden chairs can be brought in from the shed. Extra roast spuds mean no-one will notice any shortage of turkey, but if it looks like guests might go short, FHB.

Family Holds Back brings us to the vexed issue of immigration, dominating the headlines again with the tragedy in the Channel on Wednesday.

Although immigration is an area of public policy that affects each and every citizen, governments throughout this Elizabethan age have allowed it to become so seemingly intractable that they have frequently appeared to give up on it – or to make maladroit interventions such as the Hostile Environment strategy.

Never mind the 2005 ‘Are You Thinking What We’re Thinking?’ series of election campaign posters, what on earth were the Coalition thinking in 2012 when it signed off the Hostile Environment as a good idea? In 2018, this was blamed for the Windrush Scandal, which continues to cause misery for those affected and blight the reputation of Conservatives.

Further entangling immigration with the always sensitive issue of race is not the most sensible way of resolving a problem which frequently troubles so much of the electorate. This concern peaked in 2014 and stood at around 45 per cent in the months leading up to the June 2016 Referendum, according to IPSOS-MORI’s regular Issues Index poll. After the vote for Brexit, voters were no longer so bothered. As an issue worrying them, it plummeted to 10 per cent in late 2019, the lowest level since March 2001.

This contraction of concern suggests that, while the association between race and immigration looms large in the minds of policymakers – often to toxic effect – most voters are able to decouple the two issues.

Indeed, the electorate could well suspect that invoking racism has long been a convenient if cynical means by which politicians close down any debate on the immigration, perhaps in the forlorn hope that the problem will go away. This was reflected by Gordon Brown during his mask-slipping encounter on the 2010 campaign trail with ‘that bigoted woman’.

In voting to end free movement of people in the Brexit Referendum, voters showed the country of origin of those people was pretty irrelevant. Belgium or Brazil or Benin, who cares? To paraphrase the PM, they issued their instruction: they wanted Britain to take back control of our borders.

Earlier this month, YouGov reported that immigration is once again back among on the public’s agenda, with 73 per cent saying the Government is handling the issue badly. Ministers must brave opponents’ inevitable if hackneyed accusations of ‘dog whistle politics’ (ironically, itself a dog whistle for accusations of racism) and exert some political will.

Voters are alarmed, not just by the tens of thousands of migrants landing on Britain’s beaches in the past year, but by the latest terrorist attack in Liverpool on Remembrance Sunday. The suicide bomber, a failed asylum seeker, was able to game the deportation system for seven years, not least by faking conversion to Christianity. Adding to disquiet is what appears to be an act of hybrid war against the West: the recent weaponization of migration by Belarus, who encouraged migrants illegally to enter the EU via its borders with Poland and Lithuania.

In squaring up to confront immigration, ministers could do worse than re-read the 2019 General Election manifesto. Even the most hardened Corbynista could not object to a system that aimed to be ‘firm, fair and compassionate’. The current apparent free-for-all is grossly unfair to almost everyone apart from people smugglers, but especially to the 27 migrants who drowned off the French coast on Wednesday.

With net migration to the UK standing at 313,000 in the 12 months to March 2020, policymakers should be asking themselves whose quality of life worsens thanks to the current unplanned mess. Hint: it’s not, for example, the residents of Surrey’s ritziest gated communities, who can access private schools, private hospitals, private dentists, private doctors, private carers for their old age and private security guards. Former Prime Ministers with extensive property portfolios also escape the adverse impact of too many people chasing too few resources.

To permit such massive influxes from overseas without providing commensurate public services is have spent the past two decades expecting the vast majority of the British public, whatever their ethnic background, constantly to budge up. Successive governments have not bothered to get in the extra spuds; Family Holds Back seems to have been the overarching policy response – if one indeed exists.

The Conservative party is the party of immigrants, many living the British dream who make a positive contribution to the country. Despite missteps like the Hostile Environment, we are the party of hope, not hate.

The time is long overdue for a government with a near 80-seat majority and a Cabinet which includes Sunak, Patel, Javid, Zahawi and Raab, not to mention ministers Sharma, Badenoch, Cleverly and Kwarteng to take control of immigration

Simon Fell: The Government must resist calls to change its policy on fracking

15 Oct

Simon Fell is the MP for Barrow and Furness.

I welcomed the Government’s effective ban on fracking just before I was elected as the MP for Barrow and Furness two years ago.

I have always urged the Government to keep local safety and environmental concerns at the forefront of its decision-making when it comes to the extraction of shale gas.

Viewing the challenges caused by wholesale gas prices rocketing these past few weeks, I’m as sure as ever that fracking is not the solution and believe the Government should resist calls to change its policy.

Let’s not forget that the sole reason why the moratorium was put in place is because the Oil & Gas Authority – the independent regulator – found it was not possible to accurately predict the probability or magnitude of earthquakes linked to fracking.

In other words, fracking to extract shale gas just isn’t safe. This has been echoed multiple times recently by the Business Secretary, citing the “shaking walls” and “falling plates” after fracking in Lancashire.

It is also worth remembering that, shortly before the Government’s moratorium on fracking was announced, the companies involved were asking the Government for earthquake limits to be relaxed to make fracking more commercially viable.

So fracking fell at the first hurdle – safety. But there are others it would have to clear if we were to begin scaling it up.

The second hurdle is popularity, and the simple fact is that fracking is deeply unpopular. It drives down house prices, brings more heavy traffic which country roads can’t handle, and pollutes the natural environment. The views of local communities should come first, and they overwhelmingly oppose fracking.

This is a crucial point, because fracking is often depicted as an industry which would scale up in the Bowland-Hodder and Midland Valley areas (i.e. in the North of England and Scotland). But the Weald basin – which stretches across the bottom half of South-East England – would also be opened up to exploration if we were to change the current rules to suit the fracking industry.

It’s extremely doubtful that Conservative MPs and their voters in the South would stand for this. New Conservative heartlands in the North shouldn’t be expected to either.

In Barrow and Furness at least, this opposition certainly isn’t due to ‘energy NIMBYism’. I’ve joined countless other Conservative MPs in supporting more renewable and nuclear energy investment in our constituencies. That’s because, with clean energy, there’s much more public support and a much stronger business case.

Even if the Government were to ignore public opinion, face-down a Conservative backlash, relax our regulatory and planning frameworks, abandon a manifesto pledge, and undermine Net Zero, one of its core domestic and foreign policy agendas, there is still the issue that the economics of fracking do not add up.

First, what sense is there in pivoting towards unpopular, uncertain, unsafe fracking just as the clean energy revolution is gathering pace around the world?

Solar and wind enjoy strong public backing, including among Conservative voters, and are the cheapest new electricity sources available to us. The solutions to wind lulls or cloudy days exist – whether battery storage, interconnectors to Europe, or clean hydrogen. They just need scaling up.

Given the North West’s existing expertise and supply chains in nuclear energy, why would anyone call for investment to be diverted from new nuclear to shale gas extraction?

It’s very doubtful that the American shale gas boom in the late noughties is something that could ever be repeated in the UK. Even if we could overcome all the local democracy challenges that prevented fracking when the Government was committed to exploiting our shale gas reserves, shale gas would not be able to meet a meaningful share of UK gas demand over the next decade to have a meaningful impact on prices.

It’s also worth remembering the National Audit Office’s finding that, since gas is a globally traded commodity, UK gas prices inevitably reflect those in Europe. It would require an impossibly large influx of fracked gas to make a dent on European prices and therefore to cut British households’ gas bills.

During the next decade, more and more private investment will continue to surge in the direction of renewables, as has been the trend for a number of years. The opportunity costs would be staggering if the UK opted now to invest in a declining industry right as the global transition to clean energy picks up pace. The truth is that, even before you turn to the environmental damage it causes, fracking’s time has been and gone.

Fracking is a non-starter for a legion of reasons. The Business Secretary is right to reject calls to start this debate all over again when there are more important and urgent decisions to be made to tackle the challenges we face now. The only way to protect consumers from the price of natural gas is to invest in clean energy and energy efficiency as quickly as possible.

Ryan Bourne: Will the Government’s new High Potential Individual visa actually attract top global talent?

28 Jul

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

Advocates of free market policies could be forgiven for having a sense of despair right now. With the revival of industrial policy, a high and growing tax burden, mooted expansions in age-related spending, and nannying lifestyle and environmental agendas emanating from Downing Street, it’s easy to fear the direction of Conservative economics.

Among all the gloom, though, several winnable battles are emerging. Trade minister Liz Truss’s gusto in pursuing liberalising trade agreements appears ascendant against Tory protectionists. And just last week another Cabinet liberal showed aggression in pursuing an outward-facing policy generating plaudits in Washington DC. Kwasi Kwarteng’s BEIS laid down a marker towards liberalising high-skilled immigration to attract top global talent to the UK.

The Government’s Innovation Strategy, in which the policy is explained, still had bits of central planning on the movement of people. A dubiously named cross-departmental “Office for Talent” will apparently smooth the passageway to the UK for the very top scientists and innovators. Why the Government will be any better at identifying “potential” talent than selecting the industries of the future is an open question.

That said, the strategy would strip away obvious barriers to high-skilled people locating here. The centrepiece would be a new “High Potential Individual” visa route, which global graduates from “top” universities worldwide would be eligible to apply for. This route would require no job offer or sponsor.

Many have interpreted it as simply a new freedom for well-educated individuals to come here, work, or switch jobs as they please. In the U.S. it has certainly been read that way. Alongside the Hong Kong citizenship offer, the UK’s message of openness to top talent has not gone unnoticed.

Caleb Watney, Director of Innovation Policy at the Progressive Policy Institute in DC, tweeted “The UK is really getting aggressive about recruiting high-skill immigrants.” The text explaining the new visa was cheered by the US digital editor of The Economist, Bloomberg columnist Noah Smith, and hundreds of other Americans who suggested the US should copy it.

That’s because the economic evidence is clear-cut. High-skilled immigrants have been shown to increase the production of knowledge through patents, innovation, and entrepreneurship, without harming natives.

The flow of new ideas tends to be constrained by the supply of talented scientists, engineers, technicians, and innovative entrepreneurs. Fewer barriers to them moving here means more knowledge production, more productive new technologies, and so higher productivity growth—an Achilles heel for the UK economy in the past decade.

U.S. studies have found high-skilled migrants boost innovation. A percentage point increase in the population share of immigrant graduates was found by some economists to increase patents per capita by over 10 per cent. Other economists have estimated that a “1 percentage point increase in the foreign STEM share of a city’s total employment increased the wage growth of native college [university] educated labour by about 7-8 percentage points and the wage growth of non-college educated natives by 3-4 percentage points.”

Barriers to top scientists moving, in particular, have been shown to harm global knowledge production too, preventing people clustering where their research efforts are most effective. If the UK could make itself a haven for the globally talented, then, we would reap the rewards domestically, but also contribute to expanding the global knowledge frontier.

The question, then, is whether the visa route will truly be as liberal as some have implied. Within government, there appears some dispute on how open or prescriptive conditions should be as the details are thrashed out.

The Business Secretary shared a tweet last week that implied the policy was indeed an invitation for all top university graduates to freely move here. But I’ve been told that the Home Office sees the “top university graduate” requirement to be a necessary but not sufficient condition for a successful application. In other words, it wants other criteria to be attached—supporting previous indications that the number of High Potential Individual visas might even be capped, or at least combined with other bureaucratic criterion to assess a person’s “potential.”

The strategy’s text itself is ambiguous, on both what constitutes a top university and whether that alone is enough to qualify as “high potential” or is merely one prerequisite. Theresa May, of course, scrapped the final incarnation of the old “Highly Skilled Migrant programme” on the grounds that it was too broad in terms of eligibility for graduates, using the fact some beneficiaries from lesser institutions went on to take low-skilled jobs as evidence against the programme.

Given this visa route would discriminate by university, that “problem” would be mitigated against significantly. But the “top university” condition alone doesn’t appear enough to satisfy Home Office thinking. These people see high immigration numbers as bad per se, and want more conditions to increase the probability of applicant success. They dislike the idea of a visa route open to *anyone* meeting one high-bar condition, precisely because it is potentially open-ended.

True, graduating from a “top university” is no guarantor of talent or future success. But that cuts both ways. Mark Zuckerberg, Steve Jobs, Daniel Ek, and other top entrepreneurs didn’t graduate from a top university.

Research from 2016 showed that 25 per cent of self-made global billionaires were high school or university drop-outs. Covering these and other bases is presumably why the Government is proposing a “start-up route” for would-be employees of rapidly growing companies and a “revitalised” Innovator route, on top of the Global Business Mobility visa for worker transfers, and the Global Entrepreneur Programme too.

But a simple “top university graduate” condition would surely include most high-skilled talent, while remaining more acceptable to the constraint of public opinion. Indeed, if the UK is truly ambitious about being a high knowledge economy, it should be willing to take risks on high-skilled immigrants with uncertain potential in order to capture the great mavericks, rather than overly-circumscribing according to government judgements of potential.

Nobody pretends, of course, that the location decisions for global talent are just about visa policy. Personal tax rates are important for determining where top foreign inventors and scientists move to.

Having sufficient university places and a pathway for graduates remaining here is key too. U.S. evidence has found that immigrant business founders were “likely to start their companies in the state in which they were educated.” More migrants want to move to the U.S. than anywhere else. Ensuring an economically open environment, while treating people well when here, then, are needed complements to removing immigration barriers to compete for talent.

But with Brexit and the pandemic, the UK has a real opportunity to reset migration policy in a pro-growth direction. We should not sacrifice that opportunity on the altar of a May-ite lust for controlling outcomes.

Jonathan Werran: Why Oxford should be a focal point for post-pandemic and post-Brexit growth

17 Mar

Jonathan Werran is Chief Executive at Localis.

In recent weeks there has been a lively and engaging post-Budget debate on this website around the Government’s Plan for Growth and its recalibration of industrial policy, enlivened by telling contributions from Greg Clark and ConservativeHome’s own Paul Goodman.

The new business secretary, Kwasi Kwarteng has derided the ancien regime Industrial Strategy as “a pudding with no theme”. Indeed, Andy Haldane, Chair of the Industrial Strategy Council went on record as saying that while the policy had the right aspiration it never translated into a measurable delivery plan.

Since 2017 some £45 billion has been thrown into a staggering profusion of 142 Industrial Strategy policies, many of which were unfunded, went down civil service rabbit holes and “self-liquidated”. Like Bilbo Baggins, this amorphous policy pudding has been “sort of stretched, like butter scraped over too much bread”.

There is a lot to like in the aspirations of the “Plan for Growth” prospectus. The danger though is that without a rooted sense of place, all this good stuff from the centre simply doesn’t connect where it counts. It becomes like candy floss without the stick when applied regionally and locally. Only place – armed with local purpose and powers – can make the economic rationale for funding and investment cases cohere in a context and setting.

To support and buttress an economic recovery which is focused on innovation and a skills revolution, we should be calling for a greater emphasis on place and with it true localism, fiscal freedom and self-government. So in making the case for place to be at the heart of any central government plans for growth and levelling up, Localis is going to call upon Oxford as evidence for the prosecution. 

It’s the ideal place to start, as Boris Johnson’s articulation on the case for a Global Britain did yesterday, which took as its starting point the Prime Minister’s visit last September to the city’s Edward Jenner institute where he saw early proof of its efficacy. 

With unrivalled assets alongside the university, the city is our national poster boy for research and development. And, courtesy of the vaccine, an exemplar of translational research in action.

Oxford must and will, therefore, be a focal point for post-pandemic and post-Brexit growth as the beating heart and hub of the UK’s knowledge economy, as a coherent economic entity with an independent and unique strategic national offer. It contributes a tidy £6.75 billion in GVA to the national economy each year as a net contributor to Treasury coffers – not taking into consideration the knock-on effects of its activity, wider industrial assets and supply chains.

However, although Oxford is a compact and global city, it must be admitted that more could be done to strengthen the city’s contribution to the regional, national and international economy. Despite the prevailing image of the city “dreaming spires”, Oxford is the second most unequal city in the UK, with many long-term issues contributing to this disparity. Among these we can reckon earnings, housing, educational attainment, health outcomes and food poverty. Housing affordability is particularly stark – with a ratio of prices to earnings making it the least affordable city in the UK. 

Beyond the social, a multitude of economic factors are stifling Oxford from realising its potential as a city impact regionally and nationally. These include poor graduate retention, skills shortages for residents, crippling traffic congestion and a rail system caught in a bottleneck as well as the sluggish pace of delivering the infrastructure and housing.

So in short, there’s a case for levelling up Oxford in its own right. This is something that takes on greater regional and national importance now the Oxford-to-Cambridge Arc, on whose innovative potential so much hope for national economic renewal lies.

Oxford and its economic and innovation assets are central cogs to both to wider Oxfordshire and Arc ecosystems and their Covid-19 economic recovery. However, it has also been noted as being “an area constrained by inadequate infrastructure, a stressed and fragmented natural environment, [and] escalating housing costs”. These are all issues that hold it back from reaching its full economic and environmental potential.

How such a common purpose and ambition is to be maintained across tier-spanning local government partners, the local enterprise partnership OxLep and the Oxfordshire Growth Board and the Local Industrial Strategy and Economic Recovery Plan under “Plan for Growth” will be interesting, to say the least.

Whatever alphabet soup of new acronyms emerges, one thing for sure is that Oxford’s ability to invest in its own good growth would allow for wider benefit to be seen across the Arc, and crucially, make the city a better engine for growth within it.

With strong city-led governance, Oxford would be able punch way above its weight with its international peers and leverage its unique assets and particular strengths to recover stronger than before. Focusing these assets in the right direction would streamline the city’s local levelling up efforts to tackle transport and housing bottlenecks through delivering physical, digital and social infrastructure at pace alongside a long-term investment strategy.

There’s a fiscal devolution ask too. In order to grow at city level, Oxford would need the ability to raise local levies to fund its placemaking efforts. Both on businesses, in a manner similar to the provisions laid out in the Business Rates Supplement Act, and on residents, in a progressive manner using council tax bands as a guide.

In our report At the right level – a strategic case for city-led growth, innovation and renewal, Localis also calls for appropriate financing in the shape of a long-term £1 billion endowment fund for supporting good growth within the city. This would address the central issue of budgetary uncertainty and would form of a single long-term investment strategy for city-led growth and with it power to target investment in among other things digital, smart energy and transport infrastructure and skills.

Additionally, Oxford alongside other cities key to the Oxford-to-Cambridge Arc’s future growth, including Cambridge, and Milton Keynes need to have a clear voice within its governance, including direct representation on the proposed Arc Growth Body.

Since we can’t deliver levelling up, an industrial strategy, skills revolution and zero carbon from the centre, then the Plan for Growth must swiftly take on board and exploit the unmatched convening power of the local state – an entity which includes not just local government but also the research and development clusters, major public and private employers – to plan and deliver levelling up and recovery.

Taking Oxford as a starting point, the same need for muscular and effective localism applies to other towns and cities. Not just those in the area of the Arc such Cambridge, Peterborough, Swindon, Milton Keynes or Norwich but universally, from Ipswich to Somerset, from Staffordshire to Middlesbrough.

If the souffle of economic success is to rise on the basis of innovation and skills revolution, it needs a scaffold to keep it from collapsing. So let Kwarteng’s growth pudding have its theme, and let this theme be place – a dish confected from the finest locally-sourced growth ingredients. The proof will be in the pudding.

Sanjoy Sen: The Government and Stellantis. ‘Picking winners’ is rarely a popular concept among Tories but it’s often a reality.

8 Mar

Sanjoy Sen is a chemical engineer in North Sea oil. He contested Alyn & Deeside in the 2019 general election.

The Government has been in “productive” discussions with Vauxhall’s new owner, Stellantis, over the future of the Ellesmere Port Astra plant and its 1,000-strong workforce. 

Three options are on the table: plod on building petrol cars until the 2030 government ban, close the whole place down or re-invent it as a long-term electric vehicle hub. The last one is evidently the most attractive but Stellantis is clear that it comes subject to government support. But are the fate of the factory and the fate of the Vauxhall brand one and the same thing? 

What is Stellantis, anyway? 

Back in 2014, Italian auto-giant Fiat acquired America’s Chrysler. And in 2017, General Motors off-loaded its European division (Vauxhall-Opel) onto France’s PSA Group (Peugeot-Citroen). That whole lot, comprising some 14 mostly over-lapping, loss-making brands, came together as Stellantis in 2021. MBA students will be poring over the internal politics and corporate culture clashes for years to come.  

Worse still, Stellantis is wildly over-represented in Europe but is miles behind in Asia. And its mainstream brands are under pressure from all directions: prestige players (BMW, Mercedes-Benz) are rolling out compact competitors while low-cost manufacturers (Dacia, Skoda) are fast raising their game. Then there are the externalities facing all auto-makers, from anti-car city mayors to debt-laden Generation Z preferring Uber to ownership

Stellantis does have one ace up its sleeve, though. Governments worldwide fret over redundancies, both in terms of the economy and the ballot box fall-out. Little wonder CEO Carlos Tavares can do the rounds drumming up taxpayer support globally. 

Government to the rescue (as usual) 

Brexit critics have been quick to highlight the reassurances offered to Nissan and the support demanded by Stellantis. But state backing is hardly new in the car industry. Germany recently offered up a billion Euros to secure the new Tesla factory over its EU competitors (sorry, partners). France already holds a stake in Stellantis with Italy set to follow suit. Even the Americans aren’t averse to a bail-out, rescuing both Chrysler and GM after they filed for Chapter 11 bankruptcy in 2009. 

The UK, of course, has plenty of experience here. Successive governments backed everything from DeLorean to British Leyland before finally losing patience. Even Margaret Thatcher, not a noted market interventionist, incentivised Nissan to come to Sunderland, resulting in a huge success.  

Tavares describes the UK decision to bring forward the petrol car sale ban to 2030 as “brutal”. In reality, the shift to hybrids and “pure electric” is inevitable – but Stellantis brands have been slower to transition than their rivals. “Picking winners” is rarely a popular concept among Conservatives but it’s often a reality. Kwasi Kwarteng needs to be confident that the Stellantis electric plan for Ellesmere Port looks long-term credible before committing taxpayer money. 

What might become of the Vauxhall brand?  

While the future of the factory might be secured, the Vauxhall brand itself could be a different story. In these Thunbergian times, car manufacturers are frantically ditching a century of petrol-based brand awareness and creating all-new, futuristic identities.

The Stellantis portfolio needs urgent pruning with even Chrysler under threat. Although its market share has long been slipping, a ruthless axing of the Vauxhall name wouldn’t be go down well in the UK. But a well-planned transition into a modern electric identity isn’t just achievable – it’s downright essential for success.  

A decade ago, former owner GM had high hopes for their Volt hybrid; a typical suburbanite could re-charge on their driveway, enjoy an all-electric commute and forget any range anxiety thanks to the back-up petrol engine.

Instead, it became a textbook example of marketing failure. Badged as a dowdy Chevrolet, it proved too radical (and expensive) for traditional buyers – yet too old-fashioned (and conformist) for super-trendy early adapters. The Volt came over here as the Vauxhall Ampera and suffered a similar fate despite being crowned 2012 European Car of the Year. Forgive the pun but they just didn’t plug it properly. Sorry. 

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

10 Feb

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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