Joe Shalam: Sunak must mount a three-pronged attack to skewer the loan sharks

22 Mar

Joe Shalam is Policy Director at the Centre for Social Justice.

Politics has always been a game of nicknames. One need only look at the number of ‘Captain Hindsight’ references in Hansard to see that – ten already this year.

At PMQs last month, Sir Keir Starmer trieds a new one, branding Rishi Sunak ‘the loan shark Chancellor’ after his £9.1bn cost-of-living announcement. Watching on a year into the first major study of illegal moneylending in England in a decade, I couldn’t help but wince.

At the Centre for Social Justice (CSJ) we have known for a while, informed through the whispers of our regional network of local poverty-fighting charities, about the debts owed by their clients to suspicious ‘friends’ or shadowy local figures.

Shrouded in taboo – and the complex emotions felt by borrowers in discovering that the person they had turned to was, in fact, not a friend at all – hidden debt of this kind can cause untold misery to individuals, families, and sometimes entire communities.

But the scale of the problem of illegal money lending today is far worse than we had previously imagined. In a new report published this week, Swimming with Sharks, the CSJ reveals that there could be up to 1.08 million people currently borrowing from an illegal lender (commonly known as loan sharks) in England. While by its very nature it is difficult to produce high confidence estimates of the scale of hidden debt, this is over 700,000 more people than those identified in the last official study.

Digging through the largest sample of known victims of illegal lending compiled to date, it becomes clear that the stereotypical image of muscle-bound brutes patrolling estates with baseball bates rarely matches the reality.

There is, in fact, a vast gradient of perpetrator – from ostensibly benign members of the community who lend ‘on the side’ while pestering their ‘customers’ into shouldering more debt, to loan sharks embedded in organised crime groups and drug gangs.

Yet listening to the stories of victims we have been struck by the sinister psychological methods of coercion brought upon them by lenders of all types, 55 per cent of whom borrowers tragically considered friends. Children given selection boxes at Christmas as a display of the lender’s control. Explicit photos held as ‘securities’. Threats to destroy marriages by informing unsuspecting spouses of their ‘nasty secret’.

All the while, lenders are employing new methods to reach vulnerable people 24 hours a day via social media, one convicted loan shark even paying an ‘influencer’ to entice victims.

It also becomes clear looking at the data of known victims that, while no one is safe from exploitation, it is overwhelmingly the most disadvantaged among us who are affected. Two thirds of victims were already indebted and earning below £20,000. Savings were absent for all but one in ten.

With 45 per cent of victims using the cash for everyday expenses and household bills, the combination of mounting pressures on household budgets, low financial resilience, and increasingly limited credit options is liable to produce a perfect storm in which people are driven towards exploitation.

This week the Chancellor will announce further measures to buffer the squeeze on living standards. Using the additional income tax revenue collected last year to lift the threshold for National Insurance would benefit many lower earners, although Universal Credit (UC) should also be employed to funnel additional financial support directly to those most in need.

The dynamism built into UC should be used to uprate benefits by inflation more responsively in-year (and in line with future energy bill spikes). Cutting the maximum UC debt deduction claimants can receive and remitting old tax credit debts (caused by errors made during the Brown era) would also help those on the lowest incomes through the turbulence.

Fiscal measures, however, will only take us so far. We must urgently renew the fight against illegal money lending, appreciating its complexity as a social and cultural, as well as an economic, phenomenon. The Government has already made welcome commitments to address economic crime, but we propose a three-pronged attack to ensure that tackling illegal lending is at the forefront of this agenda.

First, we need to clamp down hard on lenders. Achieving this will be largely determined by the scope of the key statutory authority, the Illegal Money Lending Team England, to identify victims and prosecute suspects. The team has shown it can deliver on a limited budget, but it must be equipped now to scale up operations given the context we are in. Simultaneously, the Government should also use the newly inked Online Safety Bill to address the new frontier for illegal lending: social media.

Second, we must better protect the most vulnerable through a generational national awareness campaign of both the dangers and support available, stretching every sinew of debt advisers, councils, police, housing providers and work coaches to bring hidden debt to the surface.

Finally, we must provide the alternative. The Government should strip away the red tape stuck in place from the 1970s and liberate credit unions to become bigger and bolder, reaching thousands more of those at risk. We must also raise underlying levels of financial resilience in Britain by increasing the uptake of the excellent but under-utilised Help to Save scheme introduced by the Economic Secretary to the Treasury, John Glen.

While banter in the House of Commons should always remain fair game, illegal lending cannot. We must see it for the very real threat and danger it represents to our communities.

And with illegal lenders licking their lips at the desperation set to accompany the emerging cost of living crisis, we must act now to help the thousands in England who are swimming with sharks.

A new market in long-term fixed rate mortgages?

14 Sep

At one end of the age spectrum, Britain has older people in need of social care.  At the other, younger people who want to own their own homes.  The best one can say of Ministers’ attempts to help both to date is that these are a work in progress.

The social care plan that will be voted on these evening will do nothing much to improve the provision or quality of care, whether delivered in one’s own home or elsewhere.  It may not deal even partly, let alone wholly, with the problem it aims to address – namely, having to sell the family home to help pay for care.

This is because it’s more than likely, when the new Health and Social Care Levy kicks in during 2023, that the money raised from it will flow to health – that’s to say the NHS, the capacity of which to consume resources is inexhaustible – rather than social care.

None the less, we raise half a cheer for the Government for potentially ensuring that some people at least will no longer have to sell their houses to help fund care costs.  Even if the proposals that have been announced so far won’t deliver the Conservative Manifesto commitment of ensuring that “nobody needing care should be forced to sell their home to pay for it“.

Since the levy will be a form of national insurance, it will largely be paid by younger people.  So the generation that can’t afford to own their own home will have even less disposable income than they did before.

Which takes us to Ministers’ housing plans.  The Health and Social Care Levy scheme has been drawn up at short notice, and the Government is rushing it through Parliament speedily.  Neither condition applies to the housing measures.

The Planning Bill pledged in the Queen’s Speech hasn’t come to the Commons or Lords yet – and no wonder, since its terms are essentially being negotiated between Ministers and Conservative backbenchers (plus senior councillors).  Pre-election, any prospect of loosening Green Belt restrictions was seen off.  Post-election, Tory MPs did for the housing algorithm.

It is reported that the Government will now abandon the zoning system it had planned, plus targets for housebuilding.  One take is that such a retreat would damage Ministers’ aspiration to see more homes built.  Another is that is would make little difference.

This is because housebuilding numbers have been increasing during recent years: in 2019/20, 243,770 homes were delivered – the highest annual number in over 30 years, and the seventh year in a row that the number of homes delivered rose.  Furthermore, the Government has already persuaded Parliament to back an expansion of permitted development rights.

Developers will be able add two storeys to existing buildings without planning permission, and turn premises into homes.  There is a push for street votes to expand properties – see Bob Blackman’s recent piece on this site – as an alternative to concreting land.

Whatever happens next, any Minister who sought to solve all of Britain’s housing problems by building more would be the ultimate one-club golfer, since more homes wouldn’t address the other factors in the mix: limited space, smaller families, high immigration, powerful developers, a long tradition of property rights, a complex planning system, curtailed post-crash lending and new Net Zero requirements.

And if boosting home ownership is an aim of policy – as it should be – what we wrote in the ConservativeHome Manifesto, the best part of ten years ago, still applies.

“No matter how fast we can make land and construction capacity available, the money markets can always move faster – pumping cheap credit into property investments. Any government move to undermine sensible planning protections only serves to set off the feeding frenzy.”

Ministers have tried to help younger people get in on the act through Help to Buy (launched by the Coalition) and the 95 per cent mortgage guarantee (unveiled in the last Budget by the Chancellor).

But home ownership has only drifted up marginally in recent years – to 65 per cent in 2018 compared to its 71 per cent high in 2003.  And when one turns to who owns what, it’s a tale of two generations: last year, only nine per cent of owners were aged between 25 and 34; a whopping great 36 per cent were 65 or older.

One of the clubs that the Government wants to see used is long-term fixed rate mortgages. “We will encourage a new market in long-term fixed rate mortgages which slash the cost of deposits,” that 2019 manifesto said.

It doesn’t follow that, because some of its other commitments haven’t been honoured (such as the pledge not to raise national insurance), this one won’t be delivered.  However, the keys to making it happen lie not so much in the Treasury as in the Bank of England, and the new requirements that it placed on getting a mortgage in the wake of the financial crash.

The Government’s interest in long-term fixed rate mortgages owes much to the Centre for Policy Studies, and in particular to the case put forward in a report for the think tank by Graham Edwards.

He argues that, because of the certainty that these mortgages offer, they don’t need to be stress-tested – and so can be offered with the 95 per cent loan to value rates that were the norm before the financial crisis.

What about the danger of negative equity?  The counter-case is that, while this is always present, there was a minimal increase in default rates in the wake of the crash.  What if wages grew more slowly than the mortgage costs?  Edwards’ answer is that “there is still a lot of scope for borrowers to absorb the increase in housing cost before they reach a point of financial stress”.

It will be claimed that the Conservatives are fixated by home ownership – just as, returning to social care, the Prime Minister is concentrated on people selling their homes to help pay for it.

In theory, it is open to the Government to stress one Tory viewpoint, that “there’s no such thing as a free lunch” to the exclusion of another, that “wealth should cascade down the generations”.  But in practice, Ministers can’t be indifferent to younger people’s desire to own their own homes, at least if they wants them to have a stake in the capitalist system that the Conservatives support.

Nor can it ignore the wish of older ones to pass on family homes – at least, if the Party’s experience in the 2017 election is anything to go by.

As we say, Ministers need to deploy different clubs if they are to negotiate the course of “building beautifully”: smaller developers, migration control, more supply, control on costs (including those emerging as a consequence of Net Zero).  But these won’t be enough to deliver higher home ownership, too.

For that, the Government will need to help rebalance the playing field between those who own property and those who don’t, which requires help from the Bank of England and the financial institutions.  Otherwise, younger people, bereft of alternatives, will have an growing interest in levelling-down, not levelling-up.  In other words, in a housing market crash.

Health and Social Care 3) Ryan Bourne: The battle for spending control and lower taxes appears to be lost

8 Sep

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

The Prime Minister sold his health and social care plan yesterday as one delivering “tough decisions” that previous governments have shirked. It certainly constituted major policy change, the scale of which is rarely seen outside of budgets. But Conservative MPs who study it carefully will realise it does not “sort” the social care issue in a meaningful sense.

Consequential reform required ascertaining what people want and need from social care, what barriers exist to delivering it, and then determining what taxpayers should provide. It needed to create better incentives for providers and councils to serve our needs, to consider the challenges of aging, weak productivity, aggressive minimum wage hikes, and poor quality care. It needed to acknowledge that most people want to live at home, not in a home. A durable framework meant avoiding social care going the NHS-route of becoming a political football.

The plan did not achieve those objectives. Instead, the Prime Minister, Chancellor, and Health Secretary agreed a proposal to breach their manifesto tax pledge, but in the service of providing funds to patch up our inadequate current model. The majority of money was flung, once again, at the NHS. The major social care innovation, in fact, was to pay more of some care receivers’ bills, by implementing the 2011 Dilnot Commission’s recommendation to protect inheritances from being as eaten up by care costs.

The vast majority of the initial £12 billion per year in spending would firefight the NHS’s backlog. Just £5.4 billion would go to social care over three years, of which £2.5 billion is for protecting inheritances (the costs of which will grow in time). Under this component, no individual would pay more than £86,000 in eligible lifetime social care costs. Those with assets below £100,000 will get means-tested assistance, and those with less than £20,000 will likewise have eligible costs financed. In essence, a major new age-related social insurance entitlement would be tacked on to a welfare state creaking in anticipation of a demographic tidal wave.

This would all be paid for, we are told, by a 2.5 per cent tax rise on employees (1.25 each on employee and employers’ NICs, both ultimately borne by workers). But, combined with a dividend tax rise and an equivalent levy on pensioners’ work income, these will be bundled up and spun off to become a brand new tax from 2023/24 – the so-called “health and social care levy.”

Why, then, will this plan not settle the issue?

Well, no plan failing to address productivity growth, ageing, minimum wage hikes, tailoring care to individual needs, or councils’ incentives to build more homes is going to provide a lasting settlement on social care. And this one explicitly avoids all that, saying “We expect demographic and unit cost pressures will be met through Council Tax, social care precept, and long-term efficiencies,” determined at the Spending Review. Already the sector is bemoaning that the non-Dilnot funding aspects don’t go far enough. In other words: expect more government spending and tax rise battles in the very near future.

In fact, there are plenty of reasons to expect that this plan’s approach will result in even more spending. Will the Government really allow NHS budgets to fall after backlogs are cleared to fund social care, or will this mean a permanent NHS baseline increase, with social care scrambling for funds later? To ask the question, I think, answers it.

It would be tempting for Tory MPs to consider that a problem for another day. At least this provides some relief, and gets the Daily Mail off your back, right? I’m not sure. Governments raising broad-based taxes to pump money in will create the expectation of improving social care quality. By making a big song and dance about “sorting” social care, in fact, the Conservatives will take ownership of its many failures, as James Frayne warns.

Then there’s the disappointment that will come once the contours of the “cap” become clear. Under Dilnot’s proposal (which I assume is the Government’s position too) you would still pay room and board costs throughout your care. As importantly: only the means-tested local authority rate would accumulate annually towards your ceiling.

In other words, if you want a nicer or more expensive care home, you’ll pay a top up that’s not counted eligible towards the cap, which you’d still continue paying even after the cap is reached. The practical consequence is wealth will still drain significantly for many, requiring either deferred home sales or people downgrading on their care.

This is what might, ultimately, undermine this plan politically, creating new demands for more subsidies in time. In a few years, it’s easy to imagine the Mail running stories about people still having to pay £150,000 on total care costs “despite Boris’s promise.’

In fact, there’s downside public finance risks across the board. Employee taxes are a shrinking relative tax base, while social care costs tend to be inflation-busting given weak productivity growth. Even before these inheritance subsidies, remember, social care costs were forecast to nearly double from 1.2 to 2.2 per cent GDP over the next 50 years due to aging.

In that regard, ask yourself: why might a government introduce a whole new earnings tax which, stood alone, gives the impression of having a very low rate? The answer: to create a new revenue stream which, with its fluffy connotations, makes it easier to raise taxes in future. Manifestos can return to pledging no income tax, NICs, or VAT rises again once the levy is in. In approving this tax, Tory MPs would therefore be facilitating a reform that will make the growth of government easier. They should reflect on who that helps most.

Much of the pre-announcement chatter was about their being more “progressive” ways to raise the funds. But this concedes too much—implying the spending is all good and welcome. Commentators who usually witter about distributional consequences are silent on the fact the cost cap benefits most those very wealthy care receivers, who live longer in care and have more assets to protect. While the desire to protect assets is netural, it’s not clear why protecting them is an imperative of Government policy. But that philosophical battle appears lost and will only result in spending going one way.

The real focus now is on the immediate consequences of tax-and-spend without reform. While Johnson might sell this plan as a grand solution, I suspect it will resolve little. In fact, the paradox is that the more the Prime Minister builds this up as “sorting” social care, the greater the political risks to the Government if quality doesn’t improve, the NHS eats all the money, or people realise the limited scope of the sop to inheritees.

Michael Goode: How to close the inspiration gap in schools between students’ ability and their outcomes

8 Aug

Michael Goode is a school governor and has been a young offenders mentor since 2017.

When school children are inspired and informed about the world of work they study harder, place a greater value on their subjects and are more engaged. This is especially true for underperforming students. Inspirational sessions with employers can also result in higher earning potentials and fewer young people becoming a NEET (not in education, employment or training).

Put simply, what children think they want to be when they grow up and how they reached those aspirations matters. Yet there is a serious inspiration gap between the schools doing an excellent job of expanding pupils’ horizons, through exposing them to a variety of careers, and those that are not.

Its scale is significant. When asking children what they want to do when they grow up, research in 2018 showed that about half expect to work in one of only ten jobs. Many of these (teachers, doctors, vets etc.) are typically grounded in a nineteenth or twentieth century view of the professions.

Research from 2020 also highlighted the disconnect between pupils aspirations and our economy, showing that over five times as many 17 and 18 year olds wanted to work in art, culture, entertainment and sport as there were jobs available. Nor are these career ambitions future-proofed, given that over 30 per cent of the jobs that UK teenagers want are at high risk of automation.

I have seen for myself what it is like to be on the wrong end of this inspiration gap. I went to a failing secondary school (now merged) where around 70 per cent of the students didn’t get their five A-Cs at GCSE. 

I was later told that I was the first person from that school to go to the University of Cambridge, which was shocking, given how bright so many of my classmates were. Looking back, I can see how little we had in terms of inspiration. We simply didn’t know what jobs were out there, what we could aim for, or how that would be affected by our grades.

At best, it was: “good grades will get you into a good university,” but there was no horizon beyond that point or alternative view of success. I remember discussing plans with classmates and hearing answers like “‘Ill work for my uncle so don’t need to study” or “I just want a family and will get a flat”.

Everyone is entitled to their own life plan but there was nothing to invite us to expand our horizons. We were all just left to reach our own conclusions. It sounds funny, but I remember thinking hard about what people would always need and settling on being a shoemaker.

Few of us become what we wanted to be at school (I’m not a shoemaker or an astronaut), but those initial aspirations shape our perception of what we can be and our appreciation of the value of education. And it is not hard to understand why survey after survey still show children having stereotyped and out of touch aspirations.

All this means that children on the wrong end of the inspiration gap are leaving school with limited or warped career expectations expectations which, crucially, have been built almost entirely outside of school.

Policy makers increasingly recognises this. One recent, substantial improvement is Ofsted’s inclusion of the Gatsby Benchmarks (tried and tested principles for expanding pupils’ horizons) in their inspection guidance.

Another is the establishment of the Careers and Enterprise Company, a national network designed to facilitate careers education and support schools.

But there is much more work to be done to ensure that career inspiration is at the heart of every child’s school experience. Especially because, as the Prince’s Trust has found, the disruption, uncertainty and misery of the last 16 months has affected young people’s aspirations.

The job to do now is to close this inspiration gap. The research shows that the best way to achieve this is to ensure all schools act early and often, showcasing different career paths and using these sessions to have broader conversations about jobs.

To do this we need to –

  • Make employee and career engagement an independent section in any Ofsted report;
  • Update Ofsted guidance to require schools to work with their Local Enterprise Partnership on employee engagement plans which are grounded in the area’s economy and future job needs;
  • Set out new guidance encouraging schools to use digital conferencing technology to connect with employers outside of their region;
  • Change Ofsted guidance to mandate termly opportunities for pupils to encounter the world of work, primarily through guest speakers and –
  • Update guidance to stress that inspiring employer engagement sessions must come before lessons around CV writing skills or training pathways.

None of this should add appreciable cost to the taxpayer, especially given the plethora of programmes out there designed to help pupils engage with different careers and industries.

The organisation Education and Employers has a fantastic program called Inspiring the Future and is leading the work in this field, while other initiatives focus on specific sectors: I volunteered for a program called Feeding Britain’s Future, which works to explain to students what careers exist in the food industry, while also providing general interview guidance and CV writing skills. One good side-effect of the lockdowns is that schools now have far more digital conferencing technology, which means volunteering takes less time and can reach pupils across geographical boundaries. There is plenty of goodwill and many programmes to tap into.

And for those of you thinking about volunteering, or perhaps with lingering doubts about the importance of this gap, I have seen for myself as a prison mentor how important inspiration is. Helping young offenders dream of a career on the outside, getting them fired up, and then building a plan to achieve that goal has been the most powerful tool in helping them feel that there is something tangible to roll their sleeves up and work for. What’s disheartening is that many certainly did not have this at school.

No young person should leave school, as my classmates did, without a good understanding of what jobs are out there and what they could do to get to them. Fantastic work has been done in this area, but an inspiration gap remains. That gap takes on a new importance, given how the past 16 months have disrupted education and dampened young peoples’ aspirations.

Let’s close this gap by connecting pupils to the world of work, expanding their horizons, and inspiring them to make the very best use of their time studying, confident that there is something to work for.

Richard Sloggett: There will be no levelling up for Britain if there’s no levelling up for health. Here’s a plan to deliver it.

14 Apr

Richard Sloggett is a former Special Advisor to the Secretary of State for Health and Social Care. He is the Founder and Programme Director of the Future Health Research Centre.

Covid-19 has had a devastating impact on the health and economy of our country, exposing our nation’s poor health and health inequalities, socially and geographically. The most deprived places have had double the Covid mortality rate of the least deprived.

Levelling up Health, a report for the All Party Parliamentary Group for Longevity projects, of which I’m a co-author, finds that there would have been 40,000 fewer deaths recorded if the national mortality rate had been as low as the least deprived places.

Poor health weakens our economic growth, nationally and locally. 1.2 million people aged between 50 and 64 are not working for health reasons. Health inequality between North and South costs £13bn a year in lost productivity.

In ‘building back better’ the Government rightly wants to promote economic growth.  But it is not credible to think you can ‘level up’ economically without improving health locally.

Before Covid arrived, we knew that health outcomes were subject to wild and unjust variations. People who live in the most deprived places in England get ill 19 years earlier on average than in the least deprived places. In the UK the lowest socio-economic group has 24 per cent fewer people in good health than in the richest. In New Zealand, Greece and France, the gap is only five to ten per cent between the lowest and highest socioeconomic groups.

Public health policy measures to tackle such problems are regularly pitched as divisive. Between those who dismiss any level of intervention as needless ‘nannying’; and those who want to completely transform the whole of society into a socialist state. It is the easiest type of media row to generate. It doesn’t help tackle the problem.

And the data shows we do have a problem. Life expectancy has stalled in the last decade, and Covid has set it back even further. Healthy life expectancy is also stuck. Analysis last year showed that it would take Government until after 2050 to deliver the improvement within the Conservative manifesto of five additional years of healthy life.

Leaving this to the state or individuals alone will not solve it.

The case for a new consensus

We need to now move on from this division. The All Parliamentary Party Group on Longevity is a cross party group of parliamentarians seeking to build a new consensus on this issue for action. This is not the first time this has been tried.

The New Labour Government published a White Paper in 1999, Saving Lives: Our Healthier Nation. The model pioneered a “new, modern approach to public health – an approach which refuses to accept that there is no role for anything other than individual improvement, or that only Government can do something.”

The results of this and subsequent interventions were seen in increases in the rate of life expectancy for both males and females until 2010. Such rises have gone into reverse since. The Coalition and subsequent Conservative Governments have failed to tackle the issue. The last major public health strategy was in 2010 and focused on a responsibility deal with business that was voluntary, full of holes and failed to deliver. The 2019 Prevention Green Paper still awaits a response.

It is time for Conservatives to accept that doing nothing, on grounds of personal freedom or choice or responsibility, is not an option.

All three Conservative Prime Ministers have gone on their own journey to realise this. All started out as sceptics of action on obesity, but switched to becoming converts. David Cameron created the sugar levy, Theresa May’s pushed ahead with a second chapter of measures, many of which still await implementation. Boris Johnson has had his own conversion to obesity action following his illness with Covid.

The opportunity of reform

The approach that will deliver post Covid will be one that uses both state measures and the work of communities, places, peoples and individuals.

As others in this series of articles have noted, the Government is looking to build a new public health system on the back of Covid 19. The decision to abolish Public Health England will see Ministers taking greater direct accountability for public health and working across Whitehall to embed health more in policy decision making.

Our APPG report ‘Levelling up Health’ calls for an ambitious plan to improve our nation’s health over the next decade. It includes action at four levels: central government, setting the goal, the plan, funding, regulation, and committing to action on high priority public health issues; regional and local action, by harnessing the power of communities, the NHS and local and regional government; the individual, by empowering and supporting people to lead healthier lives; and action by business to support healthy lifestyles and restrict harmful marketing practices.

Our report also calls for the establishment of a much needed health improvement fund.

The Fund would enable 60 places with the poorest health and the highest Covid death rates to access additional funding to support health improvement. The fund (which would sit alongside the existing public health grant) should be set for five years, worth an average of £10 million a year for each place, costing up to £600 million per year nationally. Access to continuing funds would be based on performance against agreed annual outcome targets and deliverables.

This framework across different layers of Government and society will be the basis for starting to level up our health.

Health is wealth

Despite its size and importance, the NHS only contributes some 20 per cent to people’s healthcare outcomes. But it dominates discussion on how to organise our healthcare policy; usually through ever greater demands for more resources. In adopting a longer term, population and public health view after the pandemic, we can start to change how we see healthcare and the roles and responsibilities of all of those involved with delivering it.

The pandemic has regularly pitched the economy and health on different sides of the policy response. This is a false choice. Improving health can support the economy, which in turn can deliver improvements in health and wellbeing. The UK’s healthcare sector is often overlooked as a large, regionally based employer with high growth potential, and there are some superb centres of research excellence across the regions from Newcastle, to Manchester, Leeds to Liverpool.

With our science, data and technology capability in the UK – as evidenced through the vaccine development process – now is the time for an ambitious programme for delivering health improvement that supports our economic and global leadership ambitions. Levelling up health should be a pandemic legacy for this Conservative Government.

Frank Young: Today’s Commons debates, why measuring relative poverty doesn’t work – and what Ministers should do instead

18 Jan

Frank Young is political director at the Centre for Social Justice

Today’s Opposition Day debates in the Commons on Universal Credit and free school meals would commit the Government to spending an additional £9 billion a year on Universal Credit: whatever the welfare plan, its costs are always huge.

The Government should be given credit for stepping in quickly at a time of crisis. It acted fast to provide an uplift for recipients of Universal Credit. Nonetheless, the debates will bring into painful focus the lack of a coherent approach to tackling poverty.

The absence of such a strategy has left ministers haplessly exposed, and gifted their opponents a moral high ground. A government in want of a thought-through approach to poverty is also a government that will find itself constantly accused of being uncaring – and vulnerable to excitable campaigns to expose this supposed malice.

It is always tempting to try and answer the question ‘how many people are poor’ by drawing a line in the sand. Some sophisticated attempts have been made to identify much deeper poverty, isolating groups of people from the ebbs and flows of average wealth. This absolutist approach takes us much closer to what most people would recognise as ‘poverty’.

At any rate, the David Cameron-era 2016 Work and Welfare Act is the closest the Government comes to having an official poverty measure. This Act compels the Government to publish a set of child poverty statistics based on a relative measure of 60 per cent of median incomes, and a more severe absolute measure of poverty based on the same measure from 2011 and adjusted for inflation. That 60 per cent figure is close to a religious creed among poverty campaigners. In consequence, they are able to say that each year roughly one in five of us are living in poverty.

There a plenty of voices from poverty charities and experts encouraging a different approach, arguing for a different poverty measure – or measuring relative poverty in a more detailed way.

Some charities call for the introduction of a minimum income measure, whereby an income of almost £37,000 for a family of four would be needed to avoid being considered poor. Others attempt to find a more sophisticated way of measuring the number of people who fall below a line – and those who persistently fall a long way below it.

Increasingly, poverty campaigners are calling absolute poverty “destitution”, as the word “poverty” itself becomes devalued. The Government itself seems as perplexed as everyone else, having published “experimental” poverty statistics a little more than a year ago, which are still based on a measure of poverty relative to average incomes.

But the reduction of poverty to a single, relative number distracts attention from a serious long-term approach by reducing the misery of poverty to a simple transactional approach to calm Twitter for a day. This is the realpolitik of poverty measurement. And at its worst, this “line-ist” approach leads to ministers focusing their efforts on moving people above an imagined line so they are no longer ‘poor’ – which does nothing to solve persistent problems.

Though low income is a useful proxy measure, it does not tell the full story of an individual’s situation. Often, living on a very low income is a symptom of deeper difficulties. There are five million illiterate adults in the UK, so the long-term answer to poverty for them is help to read and write. This kind of approach tackles the root causes of poverty, not just the symptoms.

It is more than four years since David Cameron came within a matter of days of announcing a Life Chances Strategy based on the lived reality of poverty and a route map out of it. Mandarins might want to go further back to find answers in a framework of social justice measures pioneered in the early days of the Coalition Government. These focused the government on outcomes that reduced family breakdown and dysfunction, improved recovery from addiction, provided help into work, and ensured that our education system helps children growing up in poor households.

There is plenty of support on the backbenches for an ambitious approach – such as the MPs who attend the Social Justice Caucus of Conservative MPs each week. The Social Justice Outcomes Framework was put together to give governments the right targets to tackle poverty. They are still available through a simple Google search, and should be updated and re-instated as the focus of a long-term government poverty strategy. If the Prime Minster is looking for such a plan, he could do worse than dust off some of the old hits and set to work with a grand plan to tackle the root causes of poverty.

Nick Maughan: To shut schools again would inflict further harm on a damaged generation of children.

18 Dec

Nick Maughan is an investor and philanthropist.

In a rapid escalation, four London borough councils have this week backed shutting schools early and switching to online learning. This follows the most disrupted year for education for generations, where children have collectively missed millions of hours of teaching. To shut our schools early again would be a grave mistake, harm the most deprived children and further set back a generation already facing a mountain to climb in a post-pandemic world.

Back in March, when the pandemic began in earnest, there was a case for closing schools. Our understanding of Covid 19 was limited and, had it turned out to have been more deadly amongst younger people than we now know to be the case, it would have been vindicated. However, our understanding of the disease today is greatly improved. There is no longer the justification for shutting schools that we had in March, especially given the lost education children have already experienced.

Speaking earlier this week, the Head of Ofsted, Amanda Spielman, said she believed that many children are “at least six months behind where they should be”. Spielman also pointed out the especially difficult situation of disabled and special needs children, who have struggled with the extra restrictions placed on them by the pandemic. These are the significant problems educational authorities and institutions are already having to deal with. These will be worsened by closing schools.

In many respects, we are fortunate that this tragic pandemic hit in 2020. Modern technology in the form of smartphones, tablets, high-speed internet and top-quality audio-visual equipment is standard. All this has been conducive to establishing an alternative form of schooling that has allowed education to continue in some form. In the 1970s, there simply would have been no education, schools would have closed and that would have been it. For some, learning has been able to continue, even if not in its ideal form.

However, the word ‘some’ is the operative one. Technology is emblematic of the divide between worse and better off pupils. In crude terms, the wealthier children have access to better computers, audio-visual equipment and online resources, in a way that the most deprived children do not. It therefore stands to reason that an early return to online learning, or a late return to school, is going to hit the worst-off children hardest.

In time, programmes could be established that see better provision of higher quality tech for the worst-off children. However, in the here and now it simply isn’t possible to make up for the added disruption to learning which shutting schools would mean. Parents, and most importantly the children themselves, have had enough anxiety and uncertainty to deal with in 2020, it would be especially cruel to add one final dose as the year ends.

In addition to the further educational setbacks shutting schools would entail, we would be adding further to the long-term mental health problems already caused by the pandemic. Children in particular, who have had confidence in their futures shaken, are especially vulnerable. We owe it to them to offer as much stability as possible, and that means keeping schools open.

There are many things that can be done to help the most vulnerable children come back from the educational setbacks this year has inflicted on them. Catch up classes, provision of better technology, incentives for former teachers to help provide more focused tuition for in-need kids. All these measures will be important to help bridge a widening attainment divide. However, none of them can be a sustainable, effective substitute for keeping schools open. That must be the priority above all else.

Daniel Hannan: It would be unfair to pupils in England to cancel exams next year

25 Nov

Daniel Hannan is a writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.

The cancellation of exams this year was bad news for all involved. It was unfair to those students who would have won high grades without an artificial boost. It was prejudicial to past and future cohorts. It was a nightmare for universities, which were presented with an administrative headache. It was a disaster for Ofqual, which failed to rise to its first serious challenge. And, of course, it was calamitous for Gavin Williamson, who got the blame.

Whether that blame was merited is beside the point (I argued on ConHome at the time that the exams débâcle was an example of ministers having “responsibility without power”, because voters blame them rather than the state agencies that they simultaneously demand be “free from political interference”). The fact is that we stumbled into a terrible situation, closing our schools despite children not normally contracting or passing on serious Covid symptoms, and then scrapping exams because it seemed the line of least resistance.

Now we know better. Yet – and I find my fingers trembling with incredulity as I type these words – we look like walking into the same mistake again, only this time without the excuse of having acted blindly. The Labour administration in Cardiff has cancelled GCSEs and A-levels for 2021. The SNP administration in Edinburgh has cancelled National 5 exams (which are very roughly equivalent to GCSEs) and says it will decide in February whether to go ahead with Highers.

In England, the stated position is still that all exams will go ahead, albeit a few weeks later to allow schools to make up for lost time. That line might yet hold. But it seems just as likely that, as has happened again and again during the epidemic, the devolved assemblies will push the Tories into a more extreme position than they want.

Various ideas are being floated that would allow Williamson to climb down while pretending to have kept his promise – some combination of exams and teacher assessment, for example, or full GCSEs going ahead only in core subjects such as English, maths and science. All these ideas should be resisted – for the sake of employers, the Conservative Party’s reputation and, above all, the students themselves.

It is notable that the strongest pressure for cancelling (or decaffeinating) public exams comes from people who were already against them before Covid. Progressive educationalists – what Michael Gove called the Blob – have always seen national exams as intolerably stressful.

It is true that exams can be stressful. It is true, too, that they can be blunt instruments. But no one has come up with a better way to gauge the abilities of students across the nation in a consistent way. Continuous assessment is not a uniform measure. Teachers would be, so to speak, marking their own homework (for once the metaphor seems apt).

We accept this logic for most other acquired skills. Music grades, a driving licence, a foreign language diploma – all require an externally invigilated exam. How could we not apply it to something as fundamental as the qualifications which will determine where students complete their education or what they say in their first job interview?

Of course, not everyone who is against holding exams next year wants them abolished forever. Some argue that it is simply unfair to go ahead given how many kids have had their educations disrupted – not just by the effective loss of much of last term, but by repeated interruptions in this one, as bubbles or even entire year-groups are sent home when a pupil tests positive.

That criticism begs the question. It surely cannot be right to send healthy children home because of a virus which poses next to no risk to young people. It would make more sense to withdraw potentially vulnerable members of staff and let children carry on as normal. We have not taken that route; but we can at least now offer priority vaccination to teachers and other staff who might be at risk, and let school life resume in full – plays, sports, no masks.

More seriously, though, who can doubt, in retrospect, that going ahead with this year’s exams would have given schools a much-needed sense of focus? We had plenty of space, and other countries managed.

Of all the things that 2020 has revealed, the most shocking is the vast distance between ambitious and unambitious schools. Good state schools (and most private schools) tried to run something close to a normal schedule, with online assemblies, music lessons, sports days, the works. Bad ones sent out desultory work sheets and, in some cases, refused to mark them. This was not a question of resources – a Zoom lesson costs nothing – but of motivation. By and large, the schools which were least willing to teach online last term have been the quickest to send kids home this term. And in many cases, the pupils being sent home are those who can least afford the disruption.

Cancelling exams, in other words, serves to widen the attainment gap. Some schools treat Covid as a challenge, others as an excuse. And, though there are good and honourable exceptions, the schools serving poorer communities are often in the second category. If exams are cancelled or curtailed, which schools are likeliest to take their foot off the accelerator? It won’t be Winchester or Westminster, will it?

I argued that this term should start in August, but that proved impossible because the interests of the producers were elevated above those of the consumers. We could, if lost time really is the objection to 2021’s exams going ahead, shorten the Easter holidays and pay teachers a bonus for the extra work. But, either way, we owe it to our teenagers to let them compete fairly for the qualifications that other year-groups acquired.

We keep saying that we will “put children first” but, so far during this lockdown, we have done nothing of the kind. They have suffered enough.

Jonathan Gullis: The blight of Covid gives us new reason to cut back school holidays

16 Nov

Jonathan Gullis is MP for Stoke-on-Trent North, and a member of the Education Select Committee. He was previously a secondary school teacher.

The Government has rightly decided to extend free school meals for the holidays, and give hard-pressed families reassurance that their kids will be fed this winter. But at a time when many kids are falling behind due to the pandemic and many families are struggling, we should go further.

It is time to cut school holidays, to give disadvantaged students time to catch up with their peers after long gaps in learning due to covid and to further ease the pressure on family finances. We could cut two weeks from the long summer break, and even shave a few days off at Christmas and Easter, to help children reclaim their futures.

As a former teacher, I know the problems that long holidays create for poorer families. Holiday learning loss contributes to widening attainment gaps between economically advantaged and disadvantaged students. Evidence gathered during the lockdown in April shows that pupils were doing on average two and a half hours of school work per day.

When broken down based on eligibility for free school meals a shocking gap can be observed. Around a quarter of pupils eligible for free school meals spent on average no time or under an hour on schooling compared with 18 per cent of those students not eligible.

The same survey found that roughly a fifth of free school meal pupils had no access to a computer at home, compared to seven per cent for other students. Another survey found that some pupils could return to school having made only 70 per cent progress compared to a normal year in reading and only 50 per cent in maths.

Another factor contributing to the attainment gap is the home environment, and specifically the involvement (or lack of) parents in a child’s educational development. Disadvantaged parents are less likely to support children because they may be in work, or lack the money to pay for tutoring, learning software or homework clubs.

These combined factors contribute to disadvantaged children falling behind their peers during long holiday breaks. Studies have found that only after seven weeks of teaching in the autumn do some children exceed the level of education they achieved prior to the summer.

And that’s before the impact on family finances. The average cost of holiday childcare in the UK is £133 per week. Between 2003 and 2015, nursery costs increased by 77 per cent while earnings have remained roughly the same. It is estimated that the loss of free school meals adds between £30 and £40 per week to parents’ outgoings during school holidays.

There is also evidence that long school holidays cause an increase in child poverty. Evidence from charities suggests that food bank use accelerates significantly among families during the long summer holidays as they struggle to feed their children every day. Every year, three million children are at risk of going hungry over the summer period every year.

Long periods out of school also have a knock on effect on children’s physical health. Evidence shows that children from more disadvantaged backgrounds suffered a greater loss of fitness following the summer holidays. The poorest quarter of kids see a drop in their fitness levels 18 times greater than the wealthiest 25 per cent over the summer.

There is wide variation the length of school holidays around the world. In some parts of Asia, including high performing countries like South Korea and Japan, students are only on summer holiday for four weeks, whereas in Italy and Portugal pupils are typically out of school for up to 13 weeks.

A number of academics have made the case for shorter summer holidays, including Professor Tina Hascher of the University of Bern, who has argued that four weeks of summer holiday should be enough to ensure pupils, teachers and parents are able to enjoy a degree of respite whilst mitigating the effects of the summer slide in learning.

When I was a teacher, I recognised the value of the summer break. It is an important time for students to rest and recover after a long academic year. But, I also know from experience the difficulty some students face when they start the year in September after a long summer of losing academic ground.

Lockdown has taught us the difficulties that come with long stints away from the classroom, with learning suffering, health suffering, families struggling financially and a widening attainment gap between well off and disadvantaged students.

This is why I am proposing that the Government introduce a shorter summer break of four weeks from Summer 2021, and consider reducing other holidays, including the upcoming Christmas break. These new weeks of learning should be used for structured activities and education in the term-time either side.

We cannot change the past. The time that has been lost has been lost. But we can make up for that lost time. Reducing the length of school holidays will help close this attainment gap, while reducing the burden on working families.

Damian Green: Why a forced choice between a Brexity North and a Globalist South would be a false one – and damage our Party

16 Nov

Damian Green is Chair of the One Nation Caucus, a former First Secretary of State and is MP for Ashford.

2020 has brought many words to the forefront of our conversations: pandemic, lockdown, mask. Suddenly “reset” has become the latest addition to the thesaurus of 2020, as politicians and commentators ponder the future of the Government in the post-Dominic Cummings era. Is Boris Johnson about to head out in a new direction, or would any deviation from the path of 2019 be a politically unwise heresy?

We should start with the Prime Minister’s own favourite self-description. He always refers to himself as a One Nation Conservative. So I take it as a given that he wants to run a One Nation Government: one which seeks to unite, heal and provide opportunity for all. The interesting question is what does this mean for the coming decade, as the country seeks to recover from Covid-19 and make the best of Brexit.

The first change will need to be a simple change of tone. Crossing the road to pick a fight may be a rational strategy in the period of a campaign, especially one which you are not confident of winning, but it is a rotten way to run a government. There are absolutely battles that need to be fought and won, but any administration can only fight on so many fronts at once. If too many people are potential enemies to be denigrated and then crushed, then you rapidly run out of friends. Every government needs loyal friends.

This is a relatively easy reset. The deeper question is whether there also needs to be a significant change of substance. What will a One Nation Government concentrate on, and would that produce a more contented country, and therefore a platform for re-election in 2024?

The short answer is that the Government should re-read the manifesto on which it was elected, and concentrate its efforts on the big promises in it. Brexit has happened – so it should now move on very rapidly to making a reality of levelling up.

Every One Nation Conservative applauds the concept of giving particular help to parts of the country that have been left behind, but also thinks that there are national policies that allow us to do this without creating a competition between North and South.

Much better training and education, both for young people and older workers whose job skills have become obsolete, would benefit everyone, but would have particular effect in towns and cities where jobs have been harder to find.

In health policy, one lesson we have learned from Covid is that it is the co-morbidities that come from poverty and disadvantage that make people more likely to die. So meeting the manifesto commitment to increase healthy life expectancy by five years by 2035 can only be done through reducing health inequality. This in itself would be a One Nation priority, but its practical benefits would be most obvious in the Blue Wall seats.

I observe that there is a rearguard action from climate sceptics against this week’s environmental announcements from the Prime Minister. This takes the form of claiming that no one in the North cares about the environment, as they really want jobs and prosperity.

There are two answers to this. The first is that these policies contain vital measures to make sure that the jobs of the future come to this country rather than others. You can, as I do, want more power generated from wind, and want the people making wind turbines to do so in areas of the UK with traditional manufacturing skills. The second is that to assume that no one in the North cares about the future of the planet is patronising nonsense.

This attack on green policies that were also in the manifesto is a symptom of a wider misconception which is already beginning to spread: that the Conservative Party has to choose between the gritty Brexity immigration-sceptic North and the soft, affluent globalist South.

This is a counsel of despair, as it suggests that there is no way Conservatives can win a stable majority in the long term. More importantly it ignores the capacity of this Government to produce a raft of policies which unite large parts of the country. Strict immigration control (and indeed Brexit) are as popular in my Kent constituency as they are in Stoke, Wigan, or Darlington.

Crucially, though, so are policies which help people into jobs, which preserve a decent welfare system in a time of trouble, and which create the economic conditions that encourage the creation of new businesses. It is not northern or southern (or English, Welsh, Scottish or Irish) to want people to stand on their own and take their own decisions, while being entitled to help from society when they need it. This Conservative version of the welfare state is at the heart of modern One Nation thinking, and our longest period out of power was when Tony Blair and New Labour stole it.

Conservatism needs to be more than libertarianism, and more than small-statism. There are different traditions that come together in the Conservative Party, but what unites them is a respect for our country, out history and our institutions. We will never be “woke” because too much of what passes for progressive politics is transient and illiberal.

But if fighting a culture war from the right involves trashing our institutions, like Whitehall, the judiciary or the BBC, it is dangerously unconservative. A wise Conservative Government will always reform, but very rarely offer revolution. Above all, it should respect the rule of law.

A reset Government will double down on the many excellent promises it made the country last December, knowing that after the worst of Covid has passed it has three years to demonstrate to Conservative voters old and new some visible improvements in public services and communities. The One Nation Caucus is producing a series of policy papers to provide new ideas to help the Government on this course. Let’s hope the new word for 2021 is “recovery”.