Rebecca Lowe: We must not let the state crowd out private virtue

Insisting that our needs are met by the government reduces neigbours to numbers and diminishes our scope for good citizenship.

Rebecca Lowe is Director of FREER—a new initiative promoting economic and social liberalism, based at the IEA, where she is a Research Fellow. She is also an Assistant Editor of ConservativeHome.

I’m going to devote this column to two things I read on Twitter that annoyed me this week. I know we’re not supposed to let such things get to us — but that just seems completely out of touch with reality.

The first thing that annoyed me was a statement made by Manchester City Council, as a series of interlinked tweets (a ‘thread’, as it’s called). Now, I’ll avoid any jokey comments here about there being a lack of precedent for such organisations using social media particularly effectively, because, well, one of the tweets was really just unbelievably brutal.

Its claim was simple: that none of us should give food and drink to homeless people. The reasoning behind this claim was that doing so reduces the incentive for such people to seek official state help.

Now, there are various ways to engage with such a claim. The calm, collected way involves searching out data, and there’s a place for such an approach. However, that approach also completely misses the key point.

This is a point about basic decency. About humanity. Even if it were the case that, on some aggregate measure of addressing total need, the ‘right’ thing to do was always to ignore people’s evident pressing need for sustenance, that cannot be the best — or indeed, truly right — way of assessing this situation. Aggregate measures and end-point calculations cannot be all we care about.

Not only does such an approach fail terribly the crying woman you see outside the tube station at midnight, who ravenously devours the McDonald’s burger and sugar doughnut you buy her because no other food shops are open. It also erodes our instinct to help her. It drives away humanity, and crowds out virtue. It stops us wanting to do the right thing.

The increased burden on the state – to do all, and be all – decreases our choices by putting extreme demands on our income for tax money, and reduces our opportunities to be good citizens, and full members of a shared community. To be human. And it decreases the people we want to help – the people who need us – by taking them out of it all together. By making them a number, rather than a fellow citizen. By counting them out on some greater aggregate score, ignoring that midnight moment of need. I get endlessly frustrated by consequentialist reasoning, but I’ve rarely been angrier that when I read that tweet.

The second thing that annoyed me this week also relates to a lack of awareness around costs when considering ways to help people. And again, the costs here are not just financial. This time it was a tweet – or several tweets – in response to the news that a Premier League football club was attempting to address ‘period poverty’ (when women can’t afford adequate sanitary protection to meet their menstrual needs), by providing free sanitary products in the women’s lavatories on match days.

Unsurprisingly, some people responded to this news by claiming it was hardly the women who could afford to go to first-class football matches who needed such gifts the most. Now, it was neither the misunderstanding that ‘most equals only’, nor the football club’s generosity, that got to me.

Rather, it was the sadly inevitable chorus of subsequent tweets claiming that because women don’t choose to have periods – because their need is not simply a preference – that sanitary products should always be provided to them for free.

First, of course, is the obvious point that no such product is ever ‘free’ (not least because down that path lies slavery, since we’re playing emotive, here), so presumably they mean ‘paid for by the taxpayer’. But, more importantly, this points up a crucial misunderstanding, all too commonly propagated by those who should know better.

Just because you need something – something you didn’t choose to need, or something perhaps even you have a right to – doesn’t necessarily mean you shouldn’t have to pay for it. This is not only because our needs – even our most pressing needs – and the needs of those near to and far from us, are so various that they necessitate prioritisation. (I need food. You need shelter. She needs her slow-growing cancer removed. He needs to know about the ways in which he might be exploited on the internet.)

But it is also because if all of that prioritisation is completely taken away from us, ourselves, then we lose out. Our society loses out. Sure, we might agree that some of these things should indeed be provided by the state in some cases – and no doubt we do agree about that, in perpetuity, on certain basic issues. And on other cases, we deliberate again and again, and adapt and adapt, and then think again, responding to changing times and resources, and more.

But to leave all of that – to leave the question of all of all of our needs, always – to the state and to taxpayers’ expense would clearly be completely infeasible in terms of cost, as well as inevitably unfair, and much more. It would take away something human. It would take away our ability to have a say. Our right as members of a society to do that.

We’d all end up driving Trabants and eating fourth-rate hamburgers – the lucky ones among us, anyway. And we’d also end up with little virtue, and much lost humanity.

Tony Blair: Democrats must do a lot of ‘soul searching’

The former British prime minister said there was still a lot of support for Donald Trump’s policies.

LISBON — Tony Blair warned Democrats they have a lot of “soul searching” to do if they want to win back the White House in the 2020 U.S. presidential election.

Speaking to POLITICO at a technology conference in the Portuguese capital Wednesday, the former U.K. prime minister said the U.S. midterm results, which saw the Democrats regain control of the House of Representatives but the Republicans strengthen their position in the U.S. Senate, showed there was continued nationwide support for many of President Donald Trump’s policies.

“Democrats really need to do some soul searching if they want to win in 2020,” Blair said. “If you’re going to deal with the Trump question, you have to deal with the underlying problems.”

The former leader of the British Labour party, who surged to power in 1997 by steering his party to the political center-ground after 18 years in opposition and led the country for the next decade before his popularity crashed following the invasion of Iraq, remains a vocal defender of his pragmatic approach to politics. A long-time advocate of a strong transatlantic partnership, Blair developed close relations with former President Bill Clinton in the 1990s and later with George W Bush. He backed Hillary Clinton in the race against Trump for the presidency in 2016.

Blair also reiterated his belief that the U.K. would be unlikely to secure a Brexit deal which could be supported by the country’s voters, as well as European Union countries. He also said Prime Minister Theresa May’s strategy in dealing with Brussels had been, at times, “monumentally incompetent.”

“If you don’t think that Brexit is a good thing, lead the campaign against it” — Former British Prime Minister Tony Blair

“My experience is that if people want to do a deal, they’ll find a way,” he said. But “logic tells me there isn’t a deal that can be done.”

British and European officials continue to hammer out a potential deal, with some hoping an agreement can be completed by the end of November. Blair has repeatedly pushed for a second referendum, though he questioned whether Jeremy Corbyn, the current Labour leader, was willing to throw his support behind the anti-Brexit campaign.

“If you don’t think that Brexit is a good thing, lead the campaign against it,” Blair said. “Give leadership to the country.”

Amid a growing global pushback against large tech companies like Google and Facebook, Blair called for greater coordination between European and American officials on how to police tech giants, in part to offset the rise of Chinese firms like Alibaba and Tencent.

London has been flexing its muscles in the sector, including fining Facebook £500,000 for its failure to protect people’s data in the Cambridge Analytica scandal. U.K. officials have also proposed a new digital tax on the local revenues generated by the likes of Google, Amazon and Facebook, though Blair called such proposals “small fry.”

“It’s a symbolic gesture that it’s an issue that should be dealt with, not a worked-out plan,” Blair said.


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Andrew Jones: We are the party of business – and actions always speak louder than words

The Government has enacted a broad range of measures to help companies large and small grow, create jobs, and boost their local economies.

Andrew Jones is the Member of Parliament for Harrogate & Knaresborough and Conservative Vice-Chair for Business Engagement.

John McDonnell has repeatedly declared his aim in life to be “fomenting the overthrow of capitalism”, a system that has ensured 200 years of economic growth for our country and left millions better off – not just in the UK but across the globe – by promoting business, entrepreneurship, and personal responsibility.

In contrast, the Conservative Party is proud to champion businesses and entrepreneurs and proactively engage with business people. Because we believe that the country can only succeed when it works in partnership with business.

The Prime Minister is committed to ensuring that, post-Brexit, Britain will be even more pro-business than ever before. That is why today she has launched five new business advisory councils, made up of pioneering leaders from a diverse range sectors, who will advise her on maximising the opportunities for business in the UK after we leave the EU.

It is an initiative from business, for business. They will make sure the Government hears directly from those who are creating new jobs and economic growth, helping us guarantee that the United Kingdom remains one of the most dynamic and business-friendly economies in the world.

Ever since she became Prime Minister, Theresa May has been active in promoting the UK as open to business. Like me, she believes that when it comes to business, actions always speak louder than words.

That’s why, earlier this year, the Prime Minister led a trade delegation on a trip to three key African markets: Kenya, Nigeria, and South Africa. It’s why, in August, she travelled with a large, multi-sector business delegation in order to strengthen the established links between the UK and China, which is expected to be one of the UK’s largest foreign investors by 2020.

It’s why, at the United Nations General Assembly in September, she made clear: this Conservative Government is dedicated to harnessing the enormous power of business as a partner in tackling some of the greatest social and economic challenges of our time.

That’s a message she repeated loudly and clearly in her speech to the Conservative Party Conference last month:

“Offering someone a job – creating opportunity for other people – is one of the most socially-responsible things you can do. It is an act of public service as noble as any other. To everyone who has done it – we are all in your debt. So, we in this party, we in this hall, we say thank you.

“And to all businesses – large and small – you may have heard that there is a four-letter word to describe what we Conservatives want to do to you. It has a single syllable. It is of Anglo-Saxon derivation. It ends in the letter ‘K’.

“Back business. Back them to create jobs and build prosperity. Back them to drive innovation and improve lives. Back them with the lowest Corporation Tax in the G20. Britain, under my Conservative Government, is open for business.”

A key plank of the Conservative Government’s commitment to business are the foundations we are laying through our modern Industrial Strategy – enabling businesses in every part of the country to create good jobs and bolster the earning power of people right across the UK. We have listened to business leaders, entrepreneurs, and start-ups – and have taken action to create the business environment that is most beneficial for them.

The Conservatives have always been the party of business: our philosophy centres on spreading opportunity and a belief in the power of enterprise and entrepreneurship as the means to harness talent and improve lives. As the Prime Minister says, we want to see people go as far in life as their talents and hard work can take them.

We believe that business and commerce are the cornerstones of every successful economy, and are the embodiment of our principles and values. We understand that it is business which drives wealth and innovation.

In his Autumn Budget Philip Hammond, the Chancellor, set out the Government’s plans to ensure we remain the best possible partner for businesses both large and small. As part of the new package of measures to support small- and medium-sized companies, the Government has committed an extra £30 million to ‘Be the Business’ – an initiative that will foster closer links between large corporations and smaller companies, to promote an environment of mutual support and allow bigger companies to mentor smaller ones so that they are able to realise their full potential and develop their management and leadership skills.

Jeremy Corbyn and McDonnell’s Labour Party will never understand that local businesses form the backbone of our communities – that they create jobs and pay the taxes which support our schools and hospitals. While this Conservative Government is supporting our high streets by cutting business rates by a third for two years – saving the shops we visit every day up to £8,000 each year – Labour openly call business the ‘enemy’ and advocate for extortionate taxes that will stop businesses up and down the country being able to create jobs, hire workers, and contribute to a thriving local economy.

The Chancellor also underlined in the Budget the way in which we are backing established firms and supporting start-ups as they grow by committing to a five-fold increase in the annual investment allowance for firms, taking it to £1 million. Not only are we helping all businesses, large and small, with their investments, we have also committed to supporting them with their costs by delivering the lowest corporation tax rate in the G20.

We are the party and government of business, because business is the embodiment of Conservative values; of enterprise, of freedom, of stability and of community. And the Prime Minister’s new business advisory councils will ensure that we continue to work closely together with industry to shape our economy and make the UK one of the most attractive countries in the world for those wanting to establish and grow a business.

Howard Flight: The best part of a week on, we can see that last week’s Budget was a popular one

The Chancellor has been fortunate that the public finances have improved substantially at a particularly convenient time.

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

Philip Hammond has been fortunate that the public finances have improved substantially at a particularly convenient time. Economic growth has been revised up next year to 1.6 per cent; employment has been revised up, with 800,000 more jobs than forecast in 2023; wages will rise above inflation for the next five years.

The borrowing target has been met three years early, with the deficit now down to 1.9 per cent of GDP. The debt target has also been met three years early at a peak of 85 per cent of GDP. Borrowing is £11.6 billion lower than forecast at 1.2 per cent of GDP. This has improved significantly the scope of what the Budget can seek to address.

Overall public spending will increase by 1.2 per cent per annum, between 0.2 per cent and 0.4 per cent less than forecast growth. The improved tax yields have enabled the Prime Minister’s NHS commitment to be fully funded.

The Chancellor presented a pragmatic “micro” Budget, seeking to address virtually all of the issues which came up as needing attention. Yet perhaps its most important ingredient was a significant cut in taxation for the majority next April – increasing the personal allowance to £12,500 and the higher rate to £50,000 a year.

Local Authorities are getting an extra £1 billion of funding and business rates for retailers with rateable values below £51,000, will be cut by a third for two years. A further £1.7 billion each year will be provided to benefit working families on Universal Credit with the work allowance – the amount families can earn before losing credits – being increased by £1000 per annum.

A new two per cent digital services tax to insure that large digital firms pay a “fair share” of tax, is expected to raise £400 million per annum. Schools will get a further 400 million this year and defence will get a further £1 billion this year and next. There is also £160 million for counter-terror police. The national living wage will increase by nearly five per cent to £8.21. The national productivity investment fund will be increased to £37 billion and will be extended to 2024. Large roads will get £28.8 billion for 2020-25, and even potholes will get £420 million! PFI will be abolished, leaving a bill for £200 billion to be honoured.

There was a range of extra funding largely for small business – extending the annual investment allowance to £1 million; extending the start-up loans programme for 10,000 entrepreneurs; delivering the lowest corporation tax rate in the G20; keeping three million small businesses out of VAT; reducing the cost of taking on apprentices by halving the co-investment rate for non-levy payers; £121 million to support cutting-edge digital manufacturing; £78 million to fund electric motor innovations; £315 million in quantum technologies and £50 million for new Turing Fellowships.

Measures to help more people into home ownership include abolishing stamp duty retrospectively for first time buyers of all shared ownership properties of up to £500,000; an additional £500 million for the housing infrastructure fund; committing over £7.2 billion to a new help to buy equity loan scheme to support 110,000 new home buyers and the abolition of the housing revenue account cap controlling local authority borrowing for house building.

There are measures for those keen on the environment and more money for the Transforming Cities fund. Remarkably, the Chancellor has addressed virtually all the issues of concern to citizens and, as a result, I think, the best part of a week on, that this has proved to be a very popular Budget. The one important reform it has not addressed is the confiscatory rates of stamp duty on larger properties in London and the South East. This had led to a freezing up of the market – bad for revenues and for economic mobility.

Tom Clougherty: Make Work Pay. A new agenda from the CPS for fairer taxes – including an end to pernicious marginal rates.

If one of a couple claiming the marriage allowance becomes a higher rate taxpayer, there is a 23,800 per cent effective marginal tax rate on the penny that pushes them over the threshold.

Tom Clougherty is Head of Tax at the Centre for Policy Studies.

We often hear that the political tide has turned since the financial crisis, and that the British public are in the mood for higher taxes and bigger government. Yet a new YouGov poll for the Centre for Policy Studies (CPS) paints a rather different picture. We find that only 17 per cent think people in the UK pay too little tax. What’s more, only 21 percent think that the official top rate of tax – 45p on incomes over £150,000 – is too low.

Another striking finding came from asking people to choose between different aims for the tax system. Twenty-three per cent said the goal should be to raise as much money as possible for public services; a quarter said redistribution from rich to poor was the key. But the most popular option by a clear margin, with 35 per cent support, was “to provide people with the strongest incentives to work”.

None of this suggests much of a mandate for hard-left government. On the other hand, it does suggest that the central theme of my new report for the Centre for Policy Studies – Make Work Pay: A New Agenda for Fairer Taxes – is one that resonates with the public.

Here’s the context: we all know that Britain is experiencing a “jobs miracle”; that employment is at a record high, while unemployment is at an historic low. We’re also all aware that wage growth has been sluggish (at best) since the financial crisis, while the cost of living has rocketed up people’s list of concerns.

The goal of my research for the CPS was therefore to come up with ways of putting more money in people’s pockets – but not by going down the usual route of government handouts or heavy-handed market intervention. Instead, the focus would be on making work pay – first by ensuring that everyone could earn a basic minimum before they had to pay any tax at all; and then by ensuring that they always got to keep at least 51p of every additional £1 they earned.

Clearly, the Government has already made great strides on that first point with its policy of raising the personal allowance. But we too often forget that millions of those supposedly “taken out of tax” are still paying National Insurance – a second income tax in everything but name. I suggest it’s time to right that wrong by establishing a new “universal working income” – a combined £12,000 threshold for income tax and National Insurance, which would allow people to earn £1,000 a month completely tax free.

This would be significantly more generous than the government’s current plan – to raise the personal allowance to £12,500 next year, while only lifting the National Insurance threshold in line with inflation. Compared with the current tax system, the universal working income would give anyone earning more than £12,000 an extra £459 a year of spending power. But it would also cut taxes for the 2.4 million people who currently only pay National Insurance – helping to make work pay for those on the lowest incomes.

I realise that my second point – that people should never lose more than 49p of the next pound they earn in tax – might not sound like much. After all, even if you factor in National Insurance, the headline top rate of tax in the UK is “only” 47 percent.

Yet in reality, this principle – which I call “the work guarantee” – is violated at numerous pinch points in the tax system. The effective marginal tax rate on earnings between £100,000 and £123,700 is 62 per cent, thanks to the withdrawal of the personal allowance. Someone with three children and £50,000 of income will face an effective rate of 67 per cent on the next pound they earn, as a result of the high income child benefit charge. And a couple claiming the marriage allowance face losing hundreds of pounds if one of them becomes a higher rate taxpayer – as things stand, there’s a 23,800 per cent effective marginal tax rate on the penny that pushes them over the threshold.

Fortunately, there are simple – and relatively inexpensive – solutions to all these problems: the marriage allowance could be replaced by a more generous “family responsibility allowance” aimed at married couples with young children or other care responsibilities; the high-income child benefit charge could be levied at a much lower rate; and the withdrawal of the personal allowance could simply be abolished, with the 45p threshold lowered from £150,000 to £100,000 (and then linked to inflation) to minimise any revenue loss.

But we can’t talk about making work pay without also thinking about those trying to make the transition from welfare into work. After all, those at the bottom of the income distribution – who may pay tax on their earnings while also having their benefits withdrawn – often see less reward for their labour than anyone else. And while Universal Credit certainly represents a big improvement on the legacy benefits system, it doesn’t fully solve this problem: someone subject to income tax, National Insurance, and the Universal Credit taper will still face an effective marginal tax rate of 75 percent. That can hardly be described as making work pay.

To ensure that the benefits system does not take away what the tax system gives, my report therefore also advocates bold action on Universal Credit, suggesting that the taper – the rate at which benefits are withdrawn against each pound of post-tax earnings over any work allowance – should be cut from 63p to 50p. This would give a huge boost to the lowest earners, while also giving them a strong incentive to increase their hours and make progress in the workplace.

This may, I suppose, sound a bit like a policy wish list – and an expensive one at that. All told, the reforms outlined in my report would cost up to £13.5 billion, with the lion’s share going to raise the National Insurance threshold and cut the Universal Credit taper rate. (The cost could be covered by a move to ISA-style pension tax relief, reforms to National Insurance, and a range of other savings that will be detailed in full in a forthcoming CPS report.)

But while it’s true that each of the proposals I’ve outlined here would be a good thing in its own right, taken together they add up to something much bigger – to a new approach to tax and welfare reform organised around a single, universal principle: that government should do everything in its power to ensure that work always pays.

The polling we carried out as part of my research makes clear that this agenda would be popular: 76 per cent of those polled supported the idea of the universal working income (against 9 percent opposed), while 61 percent backed the work guarantee (against 18 percent who disagreed).

Ultimately, though, making work pay is about much more than political popularity: it’s about a fairer deal for middle-class families; it’s about people being able to work harder and longer without the taxman punishing them for it; and it’s about letting the poorest workers keep more of their hard-earned cash. It is – as Lord Saatchi wrote in the foreword to my report – about giving people more control over their finances and over their lives. And that is surely an appropriate goal for any Conservative Government to pursue.