Stephen Booth: Brexit is a process, not an event. So it’s far too early to judge whether it’s working.

16 Jun

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

Next week will see another Brexit anniversary as we reach six years since the 2016 referendum. Meanwhile, the UK-EU Trade and Cooperation Agreement (TCA), which marked the beginning of the UK’s new relationship with the EU has been in place for nearly 18 months. No doubt we will be debating the merits and consequences of Brexit for many years to come, but what can be said at this point?

Much of the Brexit debate has focused on trade and the economy, and the deteriorating economic situation has prompted some commentators to lay the blame squarely at the door of Brexit. However, it is almost impossible to disentangle any Brexit effect from the much larger economic shock resulting from the pandemic, and now the war in Ukraine, which have taken a heavy toll on the global economy.

Due to the volatility caused by these global events, it is difficult to make short-term comparisons across economies. However, according to OECD figures, the UK economy exceeded its pre-pandemic (Quarter Four, 2019) level of GDP for the first time in the first quarter of 2022, by 0.7 per cent. I

By contrast, German and Italian GDP was still below pre-pandemic levels (by 1.0 per cent and 0.4 per cent respectively) in the first quarter of 2022. And while UK inflation is at the high end compared to other economies, the Netherlands and Poland are both experiencing higher levels, illustrating that the UK is not a particular European outlier.

Given the degree of change to the UK’s trading arrangements, it would be a surprise if Brexit had no impact. At the time of the Spring Statement, the Office for Budgetary Responsibility noted that UK trade had not recovered as quickly as other advanced economies and that the trade intensity of the UK economy had fallen as a result. However, looking beyond the headline figures presents a complicated picture, not easily explained by Brexit alone.

The biggest contributors to the UK’s decrease in trade intensity are from a decline in imports of goods and services from the EU, even though the barriers to trade have overwhelmingly been erected on the EU side of the border (the UK has delayed imposing checks on EU goods entering the UK).

Equally, UK exports of goods to the EU have recovered more strongly than UK exports to non-EU countries. The reorientation of supply chains may have played a role in this. However, much of the global demand for goods was generated by US consumers, and the UK is not a major exporter of the products (computers and electrical equipment) that the US imported over this period.

Finally, the UK’s export mix is more dominated by services than its competitors. The pandemic has had far-reaching consequences for trade in services and, paradoxically, again it is imports rather than exports of services to the EU that have seen the biggest falls since the pandemic. This evidence would suggest that greater barriers to exporting to the EU seem to be playing only a limited role in the UK’s disappointing post-pandemic trade performance. This shouldn’t be cause for celebration, but it is important to diagnose the problem properly.

On the question of immigration, which dominated political debate prior to the referendum, it is notable that the UK has remained open to global talent and skills. The tight labour market is primarily to do with older UK workers exiting the market rather than the loss of EU workers, the vast majority of which have been replaced from outside the EU under the UK’s liberalised visa system.

Net migration to the UK was estimated by the Office of National Statistics to be 239,000 in the year ending June 2021 and work-related immigration to the UK has recovered strongly in the wake of the pandemic. There were 277,069 work-related visas granted in the year ending March 2022 (including dependants). This was a 129 per cent increase on the year ending March 2021 and is 50 per cent higher than in the year ending March 2020.

It is also clear that despite continuing high numbers of arrivals, public attitudes on immigration have softened significantly now that the UK is able to devise its own policy without the strictures of EU freedom of movement. According to Ipsos-Mori, the proportion of people wanting to see immigration reduced has fallen from around 65 per cent in 2015 to 42 per cent in 2022. The share saying immigration levels should stay the same or be increased has risen to 50 per cent from around 30 per cent. Those dissatisfied with the Government’s handling of immigration are largely concerned with illegal Channel crossings.

Meanwhile, there was a fear that Brexit would consign the UK to geopolitical irrelevance on the global stage. However, the UK entered into the new AUKUS security partnership with the US and Australia and it has played a leading role in the international effort to support Ukraine.

The crisis with Russia has not united the EU behind a common foreign policy to the exclusion of Britain. As I noted in a previous column, Emmanuel Macron’s drive for EU “strategic autonomy” on foreign and security policy has been severely undermined, probably fatally, by the fact that many in Northern and Eastern Europe have concluded that the US and the UK are more reliable partners in this field than France and Germany.

This is not to suggest that Brexit has been plain sailing or that the UK does not face significant difficulties. Clearly, the row between London and Brussels over the Northern Ireland Protocol has the potential to escalate and fundamentally destabilise the UK-EU relationship yet again. The domestic economic and political challenges of increasing productivity, improving economic performance across the entire country, and reforming public services pre-date Brexit.

Some Brexiteers are impatient for greater divergence from the EU. Some Remainers will continue to see Brexit as the root of every problem. However, Brexit is a process rather than an event and the experience of the past six years should demonstrate that the UK’s decision to leave the EU does not in of and itself mean it is on the road to success or failure.

The post Stephen Booth: Brexit is a process, not an event. So it’s far too early to judge whether it’s working. first appeared on Conservative Home.

James Bethell: The Government should drop the ban on asylum seekers working

22 Mar

Lord Bethell was Minister for Innovation at the Department of Health and Social Care during the pandemic.

The plight of Ukrainian refugees breaks my heart. There’s a strong feeling that they should be welcomed to Britain and given a safe-haven to rebuild their lives. I applaud the Government for moving quickly to make that happen. I have started the process to welcome my Ukrainian friend and her daughters to our home so she can live safely and restart her business in the UK. I hope we can make a difference to their lives.

The Ukrainian refugee crisis puts a vivid spotlight on the way we treat other asylum-seekers. Very few in the asylum system pass the government’s strict criteria for a work permit, which rules that unless you have been waiting more than 12 months and your profession is on the highly restrictive shortage occupation list, you must remain jobless.

To repeat, we have a Conservative government that effectively bans people from work, that stops them from improving their lot through their own individual hard work and effort.

Nothing could be more deeply un-Conservative. Utterly central to our beliefs is that the right to work is a basic human right. Margaret Thatcher put it very emphatically in her first speech to the Conservative Party Conference (1975),

” A man’s right to work as he will, to spend what he earns, to own property, to have the State as servant and not as master; these are the British inheritance. They are the essence of a free economy. And on that freedom all our others depend.”

She was right to see the right to work was a moral question, not an administrative authorisation to be decided by bureaucracies. She saw it on the same level as the unalienable constitutional rights listed in by the Founding Fathers of the United States of America, “life, liberty and the pursuit”. These rights, they argued, have been given to all humans by their Creator, and governments are created to protect.

I agree with Margaret Thatcher.

She is right that one of the unifying beliefs that unites the various traditions of Conservative thinking is that that the role of the state is to help people into work, not to stand in their way.

Around half of asylum-seekers are make successful applications, and we want those people to become integrated members of British society, standing on their own two feet and contributing to the national prosperity.

And for the other half, they will move on, either to return to their homeland or to make a home elsewhere, and we would like to think that their time in the UK had left them with a positive impression. Emasculating both groups by denying them the right to work during their application period will not encourage them to become responsible members of society, quite the opposite.

Instead of following core Conservative principles, the Government seeks to hold on to this ridiculous rule which was introduced by a Labour Government in 2002. Instead of encouraging people to take responsibility for their lives and benefiting from their hard work, we demand that people perfectly capable and willing to work must instead sit on their hands and depend on state benefits, letting their skills go to waste, keeping them isolated from their local communities, and harming their chances of building a successful new life for themselves in which they contribute to the UK.

Whether or not people succeed with their asylum claim, while they are here waiting, they should be working, for the good of themselves and society. We have got the moral imperative the wrong way round. Protecting refugees does not mean locking them up or restricting their right to work.

Change would be popular among voters. YouGov Polling commissioned by the Lift the Ban coalition shows that more than 80 per cent of the public think that asylum seekers should be given the right to work while they wait. It’s not a great surprise that the public, who voted for a Conservative Government, support a policy that follows Conservative values.

Home in on individual constituencies and the results of the polling are more interesting still. Whether it’s a Blue Wall seat, a Red Wall seat, a Cabinet Seat, the Home Secretary’s seat or even the Prime Minister’s seat, most people think asylum seekers should be allowed to work.

And businesses want change as well. In polling carried out by Survation, 60 per cent said they supported asylum seekers working. As Conservatives we are the party of business, and we must make sure that this is loud and clear.

By denying people seeking asylum the right to work we are also depriving businesses of much-needed labour.

It won’t have escaped anyone’s attention that the UK has a huge labour shortage problem. According to the ONS figures release in February there were 1.3 million job vacancies in the period November to January, another record.

That’s thousands of businesses up and down the country who are keen to build back better post Covid and see the UK take back control as Brexit allows us to do. Instead, they are being hamstrung by red tape that has somehow become Conservative policy to keep in place rather than consign to the policy bin.

As well as individual prosperity and national prosperity, we must also remind ourselves we are the party of fiscal responsibility and small government.

Stopping asylum seekers from working leaves taxpayers to foot the unnecessary bill, not just for the benefits paid out to people in the asylum system, but for all the lost income from tax and national insurance receipts.

The latest round of Immigration statistics shows the number of people waiting more than six months for a decision on their asylum claim at 62,000 – estimates suggest that this costs the Government more than £200 million a year.

We should not be frittering away that sort of money, especially as we must pay for all the state spending during the pandemic. When people from Ukraine enter our asylum system they, like other refugees who have been waiting months and years for a decision on their claim, will want to work. And we have decided that we will let them.

As Conservatives, we must extend this principle to others who find themselves stuck in limbo through no fault of their own.

Robin Hodgson: It’s time to have a grown up conversation about population growth and housing need

25 Oct

Lord Hodgson is a Conservative peer and author of the new Civitas paper, ‘Britain’s Demographic Challenge‘.

Population growth and housing need are inextricably linked. It’s time to be honest about this.

Some Conservative commentators have voiced their dismay at the prospect of controversial planning reforms being watered down.

They say that the Conservatives are the party of the home owner and champions of home ownership, so the more home owners there are in the country, the better the party’s long-term prospects. And home ownership is increasingly the preserve of the rich.

But as the philosopher Michael Oakeshott said “to be conservative is to prefer the familiar to the unknown”.

Conservatives, by definition, want to conserve, whether it be tradition, culture, institutions or the countryside. And it is increasingly the case, no more so in the area of housebuilding, that the policies of ‘progress’ and those of conserving are irreconcilable. Too often those voters in the latter camp are overlooked despite the fact they are evidently numerous and increasingly activist. Of course, today’s new homeowners are tomorrow’s NIMBYs.

The widening gap between house prices and incomes cannot be explained by a single factor, but population growth is self-evidently a major contributor, yet it never features in the debate.

If our population grows by a net 350,000 a year – the level of recent years – we are going to have to build 150,000 houses every year. As long as the population continues to rise, the building will never stop.

We also know that millions of people are deeply unhappy about this especially in areas which will effectively be urbanised by housing developments. Enduring settlements and communities are a key driver of happiness and standard of life, and changing them too rapidly will always be incredibly unpopular.

It is naïve to suppose that, if the ONS projections prove accurate, and we have to build two cities the size of Manchester by 2040, there will not have to be some hard choices to be made and/or unintended consequences to be faced. So what is to be done?

It must be time to have a grown up conversation about population growth which is a huge driver of housing need. In this discussion, we have to be honest with the electorate that there are trade offs in this debate that will need first to be explained and then accepted. For example, accepting the implications on absolute economic growth if population falls, and if it rises the inevitable need to build on green spaces.

What about our wildlife and ecological diversity, our national food security – at present we only grow 50 per cent of our food – and the provision of water – the Environment Agency says that we will run short of water in the South East of England by 2035.

No less important, what does this all mean for our climate change treaty commitments? Shortly the UK will host the world’s biggest climate conference where governments including the UK’s will opine on net zero targets and conservation. Yet population will scarcely be mentioned.

As David Attenborough said “all of our environmental problems become easier to solve with fewer people, and harder – and ultimately impossible – to solve with more people”. This is true in the UK where our sustainability ambitions should be considering population growth to be credible.

Yet successive governments have been unwilling to undertake a strategic review of all these trade-offs preferring instead to believe that “it will be all right on the night”. It won’t be.

Amongst the general public there is concern about what this means for themselves, their children, their grandchildren, their communities, their way of life. That is why opinion polls reveal that about two thirds of our population believe that the country is overcrowded and that governments need to reflect this in their policy making.

Of course governments cannot have total control over population changes, but it’s possible to have some and to be seen to be taking the electorate’s views seriously.

The answer must be to establish an Office for Demographic Change – along the lines of the Office for Budget Responsibility (OBR) – to undertake long-term independent strategic, transparent, evidence based analyses of what lies ahead. This would result in a more considered, balanced cross-government approach; it would also reassure the general public that their concerns were being listened to and addressed.

I am due to submit a private members bill to the House of Lords early next year to create such a body. I hope colleagues from all sides of the House will support me in this endeavour, but particularly my fellow Conservatives – whose party was created to preserve things in the name of a more stable and more cohesive society.

In recent years the western democratic model has produced governments that seem incapable of addressing the big, structural challenges. And the gap between the Government and the people remains as big as ever on fundamentally important issues like housing.

The head in the sand approach has brought us to where we are today and, as Einstein said, insanity is doing the same thing over and over and expecting different results. The country wants this issue to be gripped and it’s time the Government acted.

Emily Carver: This September, unions cannot be allowed to sabotage and obstruct children’s education again

1 Sep

Emily Carver is Media Manager at the Institute of Economic Affairs.

The beginning of a new academic year is always an exciting time. Even more so this September, following months of stay-at-home mandates, Zoom lessons and cancelled sports, music and social events. It will come as a relief to many parents and pupils that a full reopening of schools is just around the corner.

Despite the progress of the vaccination roll-out, however, a significant – and vocal – minority of people still harbour anxieties over the imminent return. The potential for cases to rise among unvaccinated children, for the virus to spread to teachers, and the perceived threat of long Covid are among the oft-repeated arguments for schools to keep social distancing measures in place.

The point is less whether these concerns are justified (and my reading of the data is that they are unfounded), but rather the possibility that coordinated pushback from teaching unions or headteachers alone will be enough to scupper the Education Secretary’s plans to get schools back to normal.

The Government appears to be taking that threat seriously, and has launched a “back to school and college” campaign to reassure teachers, parents and pupils that schools are indeed safe environments. The PR drive, which began last week, includes social and digital advertising as well as wider engagement with the teaching profession.

The message from the Department for Education and the Department for Health is not to throw all caution to the wind. While the policy of bubbles – which saw entire classes of pupils sent home as a result of one positive case – has been scrapped.

Regular testing will continue, and children as young as 12 years old will actively be encouraged to get vaccinated (there has even been talk of vaccinations going ahead without parental consent). The door has been left wide open for a return to mask wearing for pupils in the event of “an increase in cases” – which seems inevitable.

The vast majority of parents want children back in a routine. In July, the Office for National Statistics found that almost nine in 10 adults (89 per cent) with children of school age said they were likely to send their children back to school this September. They’ve seen the destruction wreaked by months of disruption, are aware of the risks, and have come down on the side of schooling and social activities.

Perhaps the remaining 11 per cent are still excessively terrified of Coronavirus. Or perhaps they’ve been influenced by the obstructive, fear-mongering usual suspects for whom the importance of education comes far below the opportunity to contradict this government.

This week alone Nick Brook of the National Association of Head Teachers has accused the Government of being “naïve” and claimed that further disruption will be “inevitable”.

Mary Bousted, joint general secretary of the National Education Union, who back in May was overheard referring to children as “mucky germ spreaders”, has suggested the Government should follow Scotland’s lead in maintaining restrictions. Bousted declared that the alternative was “hundreds of schools” being forced to reintroduce tougher Covid measures, including bubbles, “within weeks”.

This was no great surprise from those who trade in the language of fear and thinly-veiled threats. It’s becoming increasingly difficult to believe these groups have children’s best interests in mind. Pupils in England lost 58 per cent of their classroom time – the equivalent of 110 days of learning – between March last year and this April alone.

Researchers at Oxford University found that the policy of bubbles, which saw more than one million pupils in England out of lessons in just one week in July, were no more effective in preventing transmission of the virus than regular testing. Record numbers of children are being prescribed antidepressants after studies suggested that missed schooling may be behind higher rates of mental distress.

Though children are, thankfully, less likely to experience severe symptoms from Covid-19, they have been collateral damage in the Government’s battle to limit its spread. While it may be in the interests of union bosses and some teachers to maintain a safety-at-all-costs strategy, it certainly isn’t for the millions of pupils who will discover their education sits pretty far down the priority list – and the most deprived will continue to be hit the hardest. The very same children the unions claim to care about most.

This last point is important. We know that the pandemic has already hit reverse to the Government’s levelling up agenda when it comes to educational disparities. As a government-commissioned report found earlier this year, pupils in some parts of northern England were losing twice as much learning over the same periods as those in London.

While the unions may respond to this simply with calls for more investment in catch-up efforts (the Government has already announced over £3 billion) or claims that Tory cuts are to blame, they continue to push for the very restrictions that have led us to this situation – with little to no real scientific justification or sense of proportionality to the threat that children and teachers do or do not face.

On the media round yesterday morning, Robert Halfon, Chair of the Parliamentary Education Select Committee, said that schools need to go back, that children need to be kept in school and that government needs to enforce this across the board. Refreshing rhetoric – but how confident can we be that schools will stick to government guidance after it seemingly allowed the unions to sabotage and obstruct education throughout the pandemic?

All may not be lost. It has been reported that “tiger headmistress” Katharine Birbalsingh, founder of the high-achieving Michaela Community School in North London, is in the running to become the new boss of the social mobility commission, the Government body in charge of helping improve the life chances of disadvantaged children.

Seeking advice from experts like Birbalsingh, who have shown their ability to raise standards in deprived catchment areas, is certainly a step in the right direction if we are to catch up students who have lost out over the last year and a half.

Let’s hope the Government can capture some of her no-nonsense, common-sense spirit when it comes to the unions, stop pandering to their excessive demands, and finally allow school children the education they deserve.

Emily Carver: The war on drugs has failed. Will this government have the guts to change tack?

18 Aug

Emily Carver is Media Manager at the Institute of Economic Affairs.

One feature of the media’s coverage of the pandemic that many of us will be pleased to see the back of were the daily reminders of the Covid death count. For many months, switching on the television or picking up a newspaper meant being barraged with distressing figures of those who had sadly passed away from the virus.

While the presentation of this data may have been understandable at the peak, the tallies gave little context to the thousands of people who sadly die every year from other causes, and contributed to our obsession with this one disease over all else.

Now, with the worst of the pandemic behind us, the scale and breadth of the nation’s broader health crisis is becoming apparent. Besides the millions waiting for routine and life-saving NHS treatment, one crisis that is becoming ever more acute is the scale of drug-related hospital admissions and deaths in this country.

The ONS revealed last week that there were 4,651 drug-related deaths in England and Wales last year alone – the highest tally since records began in 1993 and 3.8 per cent higher than in 2019. The number of deaths may have been exacerbated by the pandemic, but they are by no means an anomaly; drug deaths have risen year on year for the past eight years, each leaving a trail of destruction in its wake.

The data make for a sobering read; it is a tragedy that thousands of people are dying prematurely in this way. But what is a true national scandal, is the stubborn unwillingness of successive governments to change tack.

That the war on drugs has failed is indisputable. By nearly every conceivable metric it has been an unmitigated disaster. Despite decades of “cracking down”, drug use continues to rise, drug-related crimes account for a third of the prison population, county lines gangs remain rampant and drug-related violence shows no signs of abating.

A new strategy is set to be announced in the autumn, with the aim of once again cracking down on illegal drug use, this time among the middle classes. In a new PR campaign, users will be told that they are helping fuel Britain’s epidemic of violent crime and gang warfare – as well as exploitation and corruption around the world – all in a bid to change the “perceived acceptability” of taking drugs.

Of course, it is true that too few recreational users give a second thought to the violent reality of the drugs trade, and it would be no bad thing if more of us refrained from drug use, not least for the sake of our own health.

But this latest PR drive looks to be characteristic of a government paralysed by a lack of policy direction. This may be a relatively cheap intervention, but it will likely be a waste of money nonetheless, that will sadly do little, if anything, to prevent a black market that is fuelling organised crime and misery in this country.

What’s more, Boris Johnson and his Cabinet’s involvement in the campaign will only serve to bring fresh media attention to their own personal experiences of drugs – of course, Johnson is known to have dabbled in a little cocaine and marijuana in his younger years. Again, opening himself up to accusations of hypocrisy and “one rule for them, another for us”.

In terms of law enforcement, the drive will be supported by a fresh crackdown on recreational use. Priti Patel has reportedly told senior police officers to “name and shame” middle-class drug users and to make examples of business owners and wealthy users.

There have been numerous political interventions over the years, consultations, papers published, and debates held in parliament, attempting to change the way we handle this problem. But these have been largely fruitless.

William Hague made his own change of heart clear in The Times this week. After years of backing a “tough” law and order approach, he is now advocating that we take lessons from Portugal, a country which has gone down the decriminalisation route, choosing to treat drug use as a health issue rather than a criminal issue.

It is curious how on this issue there is such a lack of will at the heart of government to debate the potential for change, despite growing evidence that the war on drugs is failing. As with so many areas, the Government is ostensibly trapped by status quo bias, unable to look beyond the same type of interventions that have clearly failed to resolve the problem, and arguably exacerbated the problem.

Interestingly, the mood among the public is shifting on drugs. Earlier this year, 52 per cent of Britons said they would support the legalisation of cannabis, compared to 32 per cent who opposed it. Whether this translates to support for decriminalisation of other drugs is less certain – indeed cannabis has been all but decriminalised by stealth – but it may encourage a more open-minded discussion of the way we currently do things.

When it comes to different areas of policy, we must not shy away from learning from international best practice – whether it be our health service or education system. Continuing a tried and failed strategy would be a mistake. And one which will ultimately cost lives.

Ryan Bourne: Furlough might have averted mass layoffs. But the Government’s next challenge is the reallocation economy.

11 Aug

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

What is the biggest challenge currently facing the UK’s jobs market? Not “mass unemployment,” as was feared as Covid-19 ravaged and lockdowns closed businesses last year. No, the concern today – according to the Governor of the Bank of England – is labour shortages.

Last Thursday, Andrew Bailey said, “The challenge of avoiding a steep rise in unemployment has been replaced by that of ensuring a flow of labour into jobs. I want to emphasise that this is a crucial challenge.” This is acknowledgement of one of the pains of what I call the “reallocation economy.”

In spring 2020, the furlough scheme was designed to avert mass layoffs and protect job relationships until things reopened. The idea was that government social insurance to pay wages would help firms “bridge” through a temporary shutdown, allowing them to retain workers and so protecting the productive capacity of the economy. Last spring, as many as 8.9 million jobs had wages subsidised by the taxpayer at the peak.

The Chancellor, and most pundits, will say it worked, albeit lasting longer than expected. Official unemployment peaked just 5.2 per cent last year, against 14.8 per cent in the United States. Now, with furlough winding down, just 1.1 to 1.6 million are left on the scheme, and with almost half of these on “flexible furloughs.”

Though many of these subsidised jobs may be non-viable as support ends, the Treasury will look at the huge 862,000 vacancies in the country and think: we have avoided a jobs disaster and now have a clear glidepath back to full employment.

So what’s the problem? Well, you can’t just “pause” an economy for a year in a world of ever-changing preferences, demands, and technologies. Research already showed larger job changes between sectors and occupations up until January than seen in the Great Recession.

It seems likely Covid-19 will have lasting effects on our preferences, where and how we want to work, and where we are able to travel too. As our lives re-normalise, this and a bounceback in service industries will see many workers temporarily finding themselves in the “wrong” jobs given new trends, or in the wrong places, and or with the wrong skills.

The result of this will be an extended period of teething problems as labour markets adjust to these new realities. There’s always substantial churn in jobs anyway, as workers and activities are reallocated over time. But this change is likely to be far more dramatic given the partial freeze of much of the economy. Rigidities in wages and an unwillingness to move risk creating temporary shortages and wage and price volatility along the way.

To be sure, this seems a better problem than mass unemployment. But Bailey is right: it’s a headwind to growth. Reallocation is a process, and often a slow one. Businesses have to attract and train new workers. Workers have to search for roles. People or firms have to move locations. And companies have to decide whether to risk taking on permanent new employees or undertaking new investments. All this limits the productive capacity of the economy.

The U.S. experienced some of these challenges with its earlier reopening. Leisure and hospitality saw particularly severe shortages of available workers through summer, due to ongoing worries about Covid-19, generous government benefits to the unemployed, and people reassessing their work ambitions.

Average hourly wages surged in these sectors and are still 10 per cent up on February 2020 as labour supply failed to meet growing demand. Businesses paid big signing-on bonuses and raised wages to entice workers to them, but that hasn’t always been enough to fulfil consumer needs: some restaurants couldn’t profitably open every day.

There’s suggestive evidence of similar difficulties in the UK. A British Chamber of Commerce survey for Q2 found that as a growing number of businesses sought to hire again, 70 per cent were having difficulties finding staff, with figures as high as 82 per cent and 76 per cent in construction and hotels and catering.

ONS data for June shows 102,000 vacancies in accommodation and food services–its highest ever recorded level. Pubs and restaurants had to pay temporary workers much higher wages and bonuses to get staff in June. The number of vacancies is surging too in arts, entertainment and recreation and real estate.

Many other factors will contribute to this reallocation challenge than just reopening services though. Surveys show the pandemic has led to a broader “rethinking” by the public about their work roles–perhaps unsurprising given the disruption we’ve seen.

An Aviva poll found 60 per cent of workers say they intend to “learn new skills, gain qualifications or change their career” due to the pandemic. It’s been well-documented that large numbers of young people have opted for extended stints in higher education too. Only a fraction of all this will need to occur for large shifts in local and sector labour supplies.

Other workers are willing to stay with employers, but demanding “let me work from home or I’ll quit.” Nick Bloom’s research suggests a modal desire from office workers for two to three days home working per week. As businesses experiment, some workers will not be happy with their arrangements and move on, while companies must decide whether to adjust to these preferences by widening the geographical net on remote hiring.

Any permanent shift in where work occurs as things crystallise will have sharp consequences for the spatial location of city’s service industries, such as eateries, entertainment, and bars, as well as reductions in demand for inner-city office cleaning, security, and delivery. The process of these support and service workers finding new roles, moving, and re-training will take time too.

Now when politicians hear the word “economic challenge,” their instinct is to dream up a policy to “deal with it.” And after over a year of subsidising jobs, it will be tempting for the Chancellor and Prime Minister to consider incentives, nudges, and public statements to try to force a return to the economy of February 2020, or else to devise new laws to entrench what workers want (see the new demands for a “right” to flexible working).

But beyond removing furlough and other policies that delay reallocation, the Government has no special insight about what’s best for the long-term. How to get the right workers to the right places will only be “addressed” by the experimentation and coordination that comes from market activity, and the reaction to the signals of profitability, wages, and prices.

Though relief helped avert mass layoffs, we will see a hangover as the economy adjusts to new realities. Not because “relief” was or is inadequate, but because the crisis has disrupted so much.

Georgia L. Gilholy: The Government has no business coercing my generation into getting the vaccine

27 Jul

Georgia L. Gilholy is a Young Voices UK contributor.

Despite what David Icke and Kate Shemirani might have shrieked in Trafalgar Square on Saturday, Covid-19 is very much a real disease.

It has been responsible for many thousands of deaths across the world, and thus the UK’s speedy vaccine scheme, now capable of inoculating almost every age group, is a good thing.

Of course, it makes sense that the elderly and those with health conditions that make them especially vulnerable to the disease are sensible to take the vaccine. Likewise, anyone who sees fit should be able to choose to access it, including young people. I myself have taken the first dose, admittedly for the purposes of convenience rather than concern for my health, as I will likely be required to travel internationally either for work or because I would very much like to see a close friend of mine who lives abroad.

However, it makes zero sense to blackmail young, healthy people – who have less chance of dying from the disease than from a surprise accident – into taking the vaccine, or risk being barred from attending university and any other indoor public place worth the effort of leaving one’s front door for. 

If the Government is willing to essentially deprive young people of their freedoms for the sake of “protecting” them from an infinitesimal chance of death, why not deprive them of their liberty if they do not have jabs for various other diseases, many of which are much more dangerous? Why not require breathalyser tests before driving?

It is up to the individual whether they are injected with a certain medicine, and it is not the Government that is absolutely unjustified in forcing inoculation against a largely low-risk disease. If the vaccine is effective, it is unlikely that a segment of healthy, unvaccinated individuals risk the rest of the population through passing on the disease, or indirectly by overwhelming health services.

This kind of Government overreach is likely to increase rather than mitigate so-called vaccine hesitancy, especially in the case of groups highly unlikely to suffer adversely from the virus. Threatening young people to “take the vaccine or else!” sets the groundwork for reducing confidence in the Government’s rationale, and thus emboldens the “this is all just a conspiracy to inject us with 5G” crowd.

People must be persuaded by arguments, and not by un-personing the unvaccinated via a Chinese-style social credit system of vaccination passports, and tracking our behaviour through digital identity cards. If people are offered a vaccine that they see as necessary, especially if it is free, they will take it. It is as simple as that. 

While far too many people are ambivalent about such measures, or even see them as an understandable way of improving public health, they are a danger to society. The reality is that once the precedent has been set for such life-altering invasions into our privacy, there is generally no going back, and such systems are obviously ripe for far more sinister purposes than handing out free vouchers because we bought a salad instead of a pizza.

This is not about improving lives. It is about control. If the Government was really concerned with what is “best” for young people, and thus the future of society as a whole, it would perhaps focus on the fact that we are already in the grip of a mental health crisis that has reaped devastating impacts on the young.

80,226 more children and young people were referred to Children and Young People’s Mental Health Services between April and December last year, up by 28 per cent in 2019, to 372,438. According to the Office for National Statistics, almost one in 14 people aged 16 or over in Great Britain report being lonely, up 40 per cent since spring 2020. 

Our priority should be getting all of us, especially young people out and about, regardless of whether they have been vaccinated or not. Blackmailing us to get jabbed or stay inside as we already have done for the best part of two years, is surely more dangerous than us wandering around unvaccinated.

Aamer Sarfraz: Security guards aren’t getting the recognition or rights they deserve. It’s time politicians changed that.

20 Jul

Lord Sarfraz is a Conservative member of the House of Lords and a Member of the Science and Technology Committee.

There are 370,000 licensed security professionals in this country, more than double the combined manpower of the British Army, Royal Navy, Royal Marines and Royal Air Force. They include security guards, door supervisors, and CCTV operators.

These men and women are at the front line in our banks, supermarkets, nightclubs and sporting events. Sadly, little attention is paid to their welfare.

The job of a security guard is very challenging.  A study by the University of Portsmouth found that 50 per cent of security guards face abuse once a week, and 40 per cent show symptoms of PTSD. Security guards work long hours, usually standing, with little opportunity for career progression. It is unsurprising the sector has high staff turnover.

Security guards are not employees of the establishments at which they are deployed. As contractors, they do not share in employee benefits, such as insurance or health care. Many are hired by small security firms, who offer no benefits at all. 

Critically, security guards don’t usually receive the hourly wages billed by security firms on their behalf. As an example, a security firm may charge a client £15 per hour, but most security guards earn close to the £8.91 minimum wage, with the difference kept by contractors and sub-contractors. The top five security firms in the UK have combined revenues in excess of £1.5 billion.

During the pandemic, security guards served diligently, like many frontline workers. The ONS published data in March 2020, stating that security guards faced the highest risk of death from Covid-19, more than any other occupation. We rightly clapped for carers, but security guards get virtually zero recognition.

The UK security sector is growing at six per cent annually, and given work conditions, there will no doubt be a shortage of staff in this sector. Unlike Uber drivers, security guards don’t benefit from “surge pricing” when demand is high.

Security guards invest in their own training and licensing – none of this is paid for by their employers. Training covers criminal and civil law, report writing, maintaining evidence, crime scene investigation, drugs, first aid and CPR, communication skills, firefighting, managing vulnerable people, conflict management, and use of force. All of this content, akin to a mini MBA, is delivered in less than one week.  

Once a prospective security guard completes their training, they have three years to apply for a security license, which is in turn valid for another three years. As such, a security guard could go six years with no refresher training.

A select group of security professionals, door supervisors, participate in a “physical training” module, in which they learn how to restrain people and manage rowdy crowds. This training is delivered in one day, with no simulations or exercises thereafter. The vast majority of security guards are offered no physical training whatsoever. Yet we expect them to manage a football mob better suited for riot police.

The Security Industry Association (SIA), established under the Private Security Industry Act 2001, is responsible for regulating the security industry in the UK. Today, I am tabling a written question in the House of Lords asking the Home Office what their strategy is to protect the mental and physical wellbeing of security guards. Security guards keep our families safe every day, and we owe it to them to recognise their work.

John Redwood: The UK’s reliance on cheap labour to fill occupational shortages has always been wrong – and a barrier to innovation

23 Jun

Sir John Redwood is MP for Wokingham, and is a former Secretary of State for Wales.

The airwaves are alight with the demands of anti-Brexit MPs and commentators to let more economic migrants into the UK to take low paid jobs in hospitality, care, agriculture and other sectors that got used to a steady stream of eastern European migrants to carry out the less skilled work.

We are told of shortages of people to pick crops, serve in cafes and clean care homes. At least it provides a welcome refutation of all those anti-Brexit forecasts of mass unemployment we used to get.

One of my main motivations coming into politics was to promote prosperity and wider ownership for the many. I have always sought to propose and support policies which would help more people find better paid work and to acquire a home and savings of their own. I do not like the cheap labour model.

I have also recognised that we cannot simply legislate for everyone to be better paid. Each person who wants higher pay has to go on a personal journey, acquiring skills, experience, qualifications that justify the higher income. Every company and government department has to go on a journey to help promote higher productivity to provide the higher pay people rightly aspire to.

One of the crucial debates in the referendum was the debate about free movement and low pay, with Brexiteers saying they wished to cut the flow of people accepting low pay from abroad, to help raise pay here at home and promote more people already legally here into better paid jobs.

Just inviting in hundreds of thousands of people from lower income countries in the EU is not a good model for them or us. Many of them live in poor conditions and sacrifice to send cash back to their wider families. They may not be able to go on a journey themselves to something better. It may work for the farm or business by keeping labour costs down, but only at the expense of pushing the true cost more onto taxpayers.

Low paid employees may well qualify for benefit top ups for housing, council tax and general living costs which the state pays for. Each new person arriving needs GP and hospital provision in case of illness or accident. They need school places if they bring a family with them. They need a range of other public services from transport and roads to policing and refuse collection.

The country has had to play catch up in many of these areas given the large numbers of people who have joined us in recent years. The EU once suggested a figure of €250,000 was needed for first year set up costs for a new arrival. The biggest cost is of course the provision of housing where the state plays a big role for those on low incomes. The need to build so many more homes creates unwelcome political tensions in communities facing concrete over the greenfields.

It’s not as if we have been short of newcomers in recent years. According to the ONS 715,000 people arrived in the UK for stay of more than one year in the year to March 2020, 312,000 more than the numbers leaving. They all needed homes, and many needed jobs or other income assistance. The UK is trying to catch up with demands for everything from roadspace to school places and from homes to GP appointments.

There is also in practice a cost to the businesses that specialise in low pay and a loss to the wider development of the economy. If a business has easy access to low paid labour it will put off looking at ways at automating or providing more computer or machine support to employees to raise their productivity. If farms find cheap pickers they do not provide the same support and demand for smart picking aids or machines.

We live in a period of digital turbulence, when artificial intelligence, robotics and digital processing of data and messages are transforming so much. Harnessing more of these ideas could both power greater technological development and associated businesses here in the UK and could boost productivity and therefore potential wages in the businesses they serve.

The UK and the EU has spent the last two decades leaving much of the digital and robotic revolution to the USA. It is time to catch up. Successful harnessing of it will spawn more new large companies and offer the chance of higher pay from higher productivity.

Matthew Greenwood: Community spirit, particularly among the young, has renewed during the last year. We must harness it.

15 Jun

Matthew Greenwood is an Intern at Onward.

Belonging starts locally. That’s what I learnt growing up as I was hurried off to local clubs and Scout huts as part of my mother’s bid to help me make friends and build valuable life skills. Years of mapwork might not have made me a pioneering geographer, but it did imbue me with a love of the outdoors and the community around me.

Yet today too many of my generation are busy packing their bags when the opportunities to broaden our horizons in the community around us are innumerable. But there is cause for relief. The last year has renewed our community spirit. As we emerge from a weary year of lockdowns, now is the time to lock in that spirit by fostering civic service at home.

Here at Onward, we’ve been investigating the state of our social fabric and the findings of our report, Repairing our Social Fabric, should give us pause. Young people increasingly feel they don’t belong. Only 51 per cent of 16-24 year olds say that they feel like they belong to their local neighbourhood compared to over 77 per cent of over 75s. Why do young people not feel like they belong often in the neighbourhoods they were born and grew up in?

Trust also runs low among young people. Only a third of people aged 16-24 years old thought they could trust “many people” in their neighbourhood, and, once again, numbers are higher in older people. We therefore find ourselves facing double jeopardy; low trust and low belonging spells trouble because if young people don’t feel part of their community, why would they ever stay or support it?

Given these findings, it should come as no surprise that young people are increasingly less likely to be a member of a community group. Among 20-29 year olds, group membership has fallen by 17 percentage points between 1993 and 2020 and volunteering, whether formal or informal, has dropped by 10 per cent since 2012.

Taken together, these statistics should give us cause for concern. While we do not know the cause of this decline, they suggest that young people are increasingly disconnected from the rest of society. I would hypothesise that low trust, limited feelings of belonging and decreasing group membership are self-perpetuating and therefore something must be done to break out of this cycle lest our social fabric continue to fray.

Coronavirus has had a mixed impact. A year of lockdowns has pushed up the number of people who feel lonely. ONS figures show those aged 16-24 are the most likely to report “often” or “always” feeling lonely. However, it would be a mistake not to acknowledge the overwhelming community spirit that has been created. When polled by J.L Partners, nearly three fifths of young people claimed they felt more connected to their local community than they did the month before and almost the same amount said they trusted their neighbours to support them through the crisis.

Crucially, 85 per cent of those who now feel they are better connected to their community indicated that they would take some form of local action to support others around them. This is good news because it means we have a once in a generation opportunity to harness this untapped potential for the benefit of the community.

But as we open up, let’s not forget that we shouldn’t want absolutely everything to go back to normal because that means a return to the fraying of our social fabric. Rather, now is the time to lock in the benefits of community that we’ve realised throughout the crisis, mend our social fabric and give young people the vital skills they need for the future, be that in employment or more generally.

Past generations have benefited from local clubs and opportunities in the community and young people can do so again today. Building on the success of the Kickstart scheme, the Government could consider a number of options.

One option would be to review how the National Citizen Service engages young people in civic action. Is there more we could do to build this infrastructure as we recover from Coronavirus? Thankfully NCS is already thinking in these terms. Another option would be to work with local and national civic organisations to expand opportunities in every community, potentially funded through the Government’s Kickstart scheme. This could take the form of a Year to Serve, a proposal put forward by Onward in January.

Finally, the Government might consider using its catch up plan for education to instil civic values. Many multi-academy trusts, such as Inspiration Trust, already offer enrichment opportunities over a longer school day and within existing budgets. Other organisations like The Challenger Trust also offer extracurricular activities in partnership with schools. These suggestions are just a small contribution towards locking in our renewed community spirit for future generations.

Onward will be hosting a webinar on how civic society can help us build back better after coronavirus and give young people a brighter future on Friday June 18 at 11am. Sign up here.