David Burrowes: It’s time to really make work pay for low-income families

Cripplingly high effective marginal tax rates, and other imbalances, are skewing the tax system against the things we care about.

David Burrowes is the former MP for Enfield Southgate and Executive Director of the Manifesto to Strengthen Families, which is supported by over 60 MPs.

Political attention is no doubt elsewhere this week, but sadly for eight years of a Conservative-led Government family life has been largely ignored in the tax system. So much so, in fact, that low income families are being trapped in poverty.

This may come as a surprise, given a core tenet of Conservative policy during these years has been to make work pay. Since we got back into power in 2010, there has been a jobs creation miracle: there are now more jobs than ever before, and unemployment is at record low levels. Of course that has benefited families and now record numbers of children live in households who work.

But this is only one side of the coin. It’s no good creating thousands of new jobs if people don’t then feel the benefit of more money at the end of the month.

This issue of making work pay for low-income families prompted me to chair a panel of MPs – Fiona Bruce, Heidi Allen, and Chris Green – who conducted an inquiry in November and led to our report being published this week.

We found that work simply does not pay for many families in the bottom half of the income distribution. The UK’s unusually high effective marginal tax rates (EMTR) have stripped families of the incentive to work more hours or get a better paid job. EMTR is the amount of money someone loses from every additional pound they would earn above their current salary in tax, national insurance and lost benefits.

The UK is an outlier – it treats low-income families in the tax system worse than any other country in the developed world. The EMTR rate for a one-earner married couple with two children on 75 per cent average wage is the highest of all OECD countries and more than twice as high as the EU (22) average. If all these other countries can avoid the same astonishingly high EMTRs we have here, then clearly the problem is avoidable.

Research by the Tax and the Family shows that the EMTR for a single-earner family on £21,000 with three children, paying income tax and national insurance and entitled to tax credits, housing, and council tax benefit, is an eye-watering 96 per cent. This means for every extra £1 they earn, they keep only 4p. Under Universal Credit, this figure will fall slightly, but it will still likely be an 80 per cent rate.

All family types suffer under this current situation. It doesn’t matter whether you are a single parent, single-earner couple, or a dual-earner couple. One in three of all in-work families are likely to be facing high EMTRs. But it’s not just the very low paid who are affected. For example, a single income family with three children paying rent of £157 a week has in 2018/19 an EMTR of 96 per cent. This does not drop to 32 per cent until your income reaches £40,776 and where housing costs are greater, the 96 per cent rate reaches even higher. This means it is almost impossible for some families to escape poverty.

It was striking that during the inquiry, both Tax and the Family and the Iain Duncan Smith made mention of the fact that Lord Lawson, the Conservative Chancellor of the Exchequer who introduced a system of independent taxation, has gone on record to state that the option of joint taxation was implicit in his original proposals for independent taxation and was his preferred choice.

The case for tax reform to give more support for families is being made from across our Conservative political family. Last November the Centre for Policy Studies, in its report ‘Make Work Pay’, acknowledged that “the British tax system is, by international standards, rather ungenerous towards families”. The CPS report concludes that transferable allowances “recognise the fact that what matters most to people is often the family finances – not just their personal situation. From a moral standpoint, it seems right that the tax system should acknowledge this in some way”.

Earlier this month 21 Conservative MPs, who straddle the economic and social left and right of the Party, united to support an amendment to the Finance Bill, calling on the Chancellor to conduct a review to consider how family responsibility can be better recognised in the tax system and the high EMTRs mitigated. The Speaker chose not to select this amendment so, undeterred, a debate on the issue has been secured in Parliament today.

So we find ourselves in a situation which, for Conservatives, is completely contradictory. First, our eye-wateringly high EMTRs are anti-aspirational. We don’t recognise family responsibilities, which means families in poverty pay thousands in income tax but then have to be supported by inflated benefits, with our cripplingly high EMTRs kicking in when these benefits are withdrawn. This completely suffocates aspiration.

Secondly, it is illogical and philosophically incoherent. We celebrate families and the fact that the family is the bedrock of society, but we almost entirely ignore families in the tax system (apart from a token married couples allowance). At the moment, we tax families as if they are individuals even while we sustain a benefits system which views members of the family as a family. We send out a curious message in the tax system that if you are dependent on the State we recognise family responsibility, but if you are in work we don’t.

Thirdly, it is anti-choice. The best systems of independent taxation allow couples the choice of whether they want to be taxed independently or jointly. In the UK, families simply do not have that choice. The state has in effect decided that independence is the ultimate priority and this has been decided to the detriment of family life.

Fourthly, this arrangement is judgemental. It means that any family where the second earner is either not in work or earning less than their personal allowance will end up financially penalised for this arrangement. As IDS said during the inquiry, we are judgemental about couples who choose for only one spouse to work. To some extent, we are telling stay-at-home parents not to bother and to make grandparents or other carers provide the childcare.

It is clear the current status quo is unsustainable. If the Government are serious about making work pay then it must get real about what is happening in low income families, which means engaging with the issue of our absurdly high EMTRs. Rather than making it easy for families to aspire to increase their incomes, UK fiscal arrangements are effectively suffocating social mobility and trapping families in poverty.

The Conservative Party is at it’s best when it is a party of social mobility, social justice and the family. Unless the Government allocates family responsibility more equally between the benefits system and tax system in order to bring our effective marginal rates down, it will have fallen short.

Dan Watkins: Six reasons why the Conservatives deserved to win that no confidence vote yesterday

It’s not hard to find reasons to be frustrated with the Government, but we are still delivering for the British people.

Dan Watkins was a three-time Conservative Parliamentary Candidate in Tooting and now campaigns with Kent Conservatives.

Everything is dominated by Brexit at present, but behind the scenes the Government is still continuing to deliver the Conservative’s domestic policies, much to the benefit of the British people. So here are six reasons why the country should be positive that the Government survived the vote of no confidence.

Tackling the Deficit

We should never forget that when we came to power in 2010, the Government couldn’t afford to pay for its public services and was building up a colossal amount of debt which future generations would have to pay. Years of spending restraint, combined with healthy growth of the economy, mean that Britain’s deficit is less that a fifth of what it was and debt as a share of the economy is coming down every year.
While we remain in power, the public finances stay in balance, reducing debt and allowing us to spend less on interest and more on public services.

Improving School Standards

Through the past eight years we have been reforming teaching, boosting Academies and opening Free Schools. We know these reforms are working because school standards are getting better and better, as measured by Ofsted, as well as international league tables, which we are steadily climbing. This year will see more Free Schools open and more Academies created, ensuring more children go to outstanding schools and receive a world-class education.

Boosting NHS Funding

The NHS is a huge organisation with a huge budget. As the population gets older, the demands upon it increase and the only way we can continue to fund its expansion is by growing the economy and investing those extra tax receipts into it. We have just detailed our Long Term NHS Plan, but it requires an extra £20 billion pa and this is only possible to find if we keep growing the economy. Another Labour-led recession would stop this extra funding dead in its tracks.

Creating an Enterprise Economy

From the moment we took office in 2010, the Conservatives have been making Britain the most business-friendly economy in the world. We have made it easier to start a company and to employ staff, cut business taxes and invested in research and development to support our high growth sectors such as creative, life sciences, automotive and more. Britain has been assessed by Forbes as the best country in the world to start a business. Every year we remain in Government is another year when Jeremy Corbyn’s Labour can’t undo our good work.

Protecting the Environment

Less heralded than other areas perhaps, but the results of our policies in energy and the environment have yielded excellent results. Renewal energy has expanded dramatically, carbon emissions have been slashed, plastic pollution is being tackled with radical action, and animals at home and abroad have won new protections. Michael Gove and DEFRA have more initiatives underway this year which will ensure that we continue to lead the international community on animal welfare and cleaning the environment.

Helping People into Work

Work is the bedrock of living a fulfilling life and this Government has done more than any other to give more people the opportunity to work. While welfare reforms have ensured that work always pays, the National Living Wage ensures that work pays even more.
Record numbers of people have been lifted out of the lowest paid work and the evidence shows that policies like Universal Credit help many more long-term unemployed into jobs. We need to have fully rolled out and bedded-in these initiatives before Labour get to power, so that it is much harder for them to reverse them.

At the present time, it’s not hard to find reasons to be frustrated with the Government, and indeed Parliament more generally, but when we’re out on the doorsteps campaigning, let’s be clear that the Conservatives are still delivering for the British people.

“No-one voted for Brexit to become poorer.” Really? We vote to deny ourselves money all the time.

Security, cohesion, integration, solidarity: all are intangible. But we pay – literally – to gain them. Why single out self-government?

Philip Hammond may have coined the phrase – an appropriate use of the term, in this case.  “No-one voted to become poorer or less secure,” he told the Conservative Party Conference in 2016, less than six months after the Brexit referendum vote.  As others have taken those words up, the last three have tended to drop off it.  But was he right?

Obviously, even as senior a Minister as the Chancellor cannot have read the minds of all 17 million plus of those who backed Leave – the largest number of people who have ever voted for anything in a British poll.  But let us leave the point there, and turn to his own department’s forecasts.  The Treasury’s median long-term estimate is that a WTO-based outcome would reduce cumulative growth over 15 years from about 25 per cent to about 17 per cent.  In other words, GDP would, under this scenario, be eight per cent lower than it would otherwise be.  It would rise more slowly, not fall.

So even the Treasury, the high temple of Remain, doesn’t expect us to become poorer – but rather, less rich than we would otherwise be.  You may counter that this lost growth would mean lost wages and tax receipts, lower spending and higher tax.  Or that some short-term forecasts do suggest that we will become poorer this year in the event of No Deal.  (The CBI is pushing a very-worst-case scenario today.)

We could come back by pouring cold water on all such forecasts, starting with George Osborne’s referendum campaign projections of an “immediate” recession, half a million more people unemployed, and house prices 18 per cent lower than they would otherwise have been.  Instead, the economy grew, unemployment fell and house prices rose.  But rather than vanish into a statistical snowstorm, we ask our readers to view Hammond’s statement from a different angle – two angles, to be precise.

The first is from the Left.  Trident costs the taxpayer roughly £2 billion a year.  That money could instead be spent on tax cuts or public services.  Very many on the Left (and some on the Right) argue that it should be.  They say that we don’t use Trident, wouldn’t ever use it, shouldn’t ever use it.  The cash should go instead on schools or hospitals or benefits or childcare.

Next, mull an argument from the Right.  Overseas aid comes at a price of about £14 billion annually.  Again, that money could be spent on public services or tax cuts – or, the Right being the Right, on debt repayment.  A lot of people on it – and a sprinkling on the Left – hold that development aid is wasted or stolen and perverts incentives and is subject to the law of unintended consequences.

Now stand back from the fray, and ponder a stubborn fact.  Voters consistently back Trident and aid.  No, that’s not quite right.  Rather, put it this way: voters consistently return governments committed to both.  Then turn to another subject to illustrate the same point.

Pro-migration campaigners argue that it makes us richer – both overall and per head.  Others dispute that claim.  Let’s assume for the sake of the argument that those campaigners are right.  Even if every single voter could be persuaded of this, there is reason to doubt that all of them would come round to wanting higher rather than lower migration.  Very many would believe that there would still be costs in some places to higher immigration – in terms, for example, of pressure on housing.  And then there is the i-word: integration.

At which point, it is worth standing back from Hammond’s statement, and asking not whether he was right or wrong, but what he actually meant – or implied.  Who is the “no-one” in question?  Who are those to whom he glancingly refers?  Obviously, the British people.  But that’s a term which invites further thought.

In one sense, the British people is a single entity; in another, it is lots of groups of people, breaking down in turn into families and individuals.  Many of them help to pay for others.  Older people tend not to use schools, but they help to fund them.  Younger people use the NHS less than older ones, but they help to pay for it.  Londoners, some say, subsidise the rest of the UK.  And so on and so forth.

Readers will see where all this is going.  At each election, we vote to “make ourselves poorer”, in the sense of becoming less rich than we otherwise would be.  We plump for Trident because we worry about our security (to reprise the Chancellor’s word); or for lower migration because we think it will mean more cohesion, or for overseas aid because of solidarity with those who suffer. We vote to fund public services we don’t use and parts of the country we don’t live in.  Security, cohesion, solidarity: these are intangibles.  They can’t be touched or smelled or tasted – seen or heard.  They may lead to material gains, but they are not material themselves.  None comes with a price tag, but all have value.

Let’s end by illustrating the point.  John Hume was fond of quoting his anti-sectarian father, who used to say: “you can’t eat a flag”.  True – and anyone who has tried to do so has presumably been disappointed.  But the reverse also applies.  No-one, we suspect, has ever sung: “I vow to thee, my breakfast.”  Those intangibles – such as self-government, to cite another – matter.  From one point of view, the desire for the last is a form of solidarity or even for, to use a more EU-ish word, subsidiarity.

You can properly reply that self-government and patriotism aren’t the same thing, or even that they don’t overlap at all.  So be it.  What you can’t do, this site believes, is claim that Brexit alone, uniquely, exceptionally, will make us less rich than we otherwise would be (if it does so at all).  By commission, by omission, in the ballot booth and out of it, we opt to do this all the time – almost without noticing.

Rebecca Lowe: Why the taxpayer should fund space exploration

There is a fundamental human need and desire to know more about the universe, to engage with it, to play our part and explore and achieve.

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

Revelling in things that are non-quantifiably, hard-to-explain, valuable for their own sake is one of the great features of being human. For me, one of these things is an interest in space. Rockets, stars, impossible questions about infinity — you name it, I’m a sucker for it. Sure, there are great practical reasons to learn about all this. But space is also just, well, exciting and wonderful and frightening and beautiful — all of those slightly embarrassing, overly emotional words — in itself. One of my favourite childhood memories is looking at the stars with my dad; I rarely do so these days without thinking about and missing him. He loved the idea and reality of space even more than me.

Like most of us, though, I don’t make enough time for my less pragmatic interests. I’m never going to be an astronaut or an astronomer, so I don’t prioritise reading or thinking about their domain. Having disbanded my usual priorities over the Christmas break, however, I read the Canadian astronaut Chris Hadfield’s excellent 2013 book about his three missions in space and what he’s learnt from them. It convinced me that space exploration can be used as an exemplar point for many standard arguments within the realm of politics and policy. (Or, yes, maybe I just want to prolong the holidays and think about this stuff some more.)

Hadfield spends a great deal of the book — both explicitly and implicitly — justifying the existence of the Canadian space programme. Its enterprises are, unsurprisingly, vastly costly to the taxpayer. He does a great job: emphasising the educational benefits, defence and geopolitical gains, advances brought to medical science thanks to astronauts’ experimentation, and so much more. The man is a (space)walking example of why space travel is important. But that doesn’t necessarily mean that taxpayers should fund it, does it? At the least, it doesn’t tell us anything about the extent to which they should.

This leads to a crucial yet overlooked problem. We don’t spend enough time truly justifying taxpayer expense. Governments don’t. Policy-thinkers don’t. Sure, people do sums, and make clever arguments. But, too often, we’re left dependent on idealised aggregate answers, such as estimates of the welfare-maximising level of government spending as a proportion of GDP, and the like. The personal tax burden here is at its highest for decades, yet we rarely hear an acceptance of that truth, never mind concerns about it. And without that acceptance and those concerns, we can’t get down to the important work of determining what should indeed be paid for by the taxpayer — and how this changes over time.

There are two main reasons why things might genuinely need to be funded in this way. The first is that they are essential — or justifiably desirable — yet might not otherwise come about. This is usually termed along the lines of a ‘public good’ argument: we won’t each voluntarily choose to pay for a proper nationwide road system, so the state had better tax people and set it up for them, and so on. It’s probably the case that too many things are lumped into this reasoning, but it surely stands regarding some necessities. The second reason is that these are things that the state (read taxpayer) ’should’ fund, for other reasons aside from (or on top of) necessity of provision, often on the grounds of principle. These are much trickier, and include examples ranging from “education is tainted by the profit motive”, to “we can’t trust our national security to a motley band of foreign mercenaries”.

Space travel is almost always funded by the taxpayer — certainly outside of America — and the usual ‘argument’ given is that it has to be: that it wouldn’t happen otherwise. This argument depends on two assumptions: that space travel has to (or should) happen, and that there is no other solution than state funding. For now, let’s give the first assumption the benefit of the doubt. Hadfield et al make a convincing case, not least in terms of the twenty first-century space-race context. If a drone can stop an airport, just imagine what an enemy country could do with modern space power. The proponents of ’space diplomacy’ are currently seeking to counter the rise of ‘space militarism’ — this is not a battle we can realistically ignore.

But to what extent should this be funded through general taxation? Space X and Virgin Galactic are becoming household names, and many other private space companies are making leaps and bounds. These leaps are nowhere near Neil Armstrong’s yet, however. Sure, the private sector is driving the UK’s capacities in this area: Gabriel Elefteriu, a space-policy expert, points out that the UK’s ‘domestic space champions include Inmarsat, one the of world’s largest satellite operators, and Surrey Satellite Technology Ltd (SSTL), the world’s leading small-satellite manufacturer’. But the truth is that nobody’s getting to the moon without vast amounts of state support, and even the most successful private space companies tend to depend on state grants, and have the incentive of big (American) government contracts. The recent Lunar X Prize competition proved quite how expensive participating in the field is — this neat MIT article explains that the un-won $20 million prize was ‘actually relatively little money: to have any chance at winning, teams found, they needed much more’.

Yes, as private companies succeed, more investors will come to join the brave early adopters. Yes, we should thank the rich people who advance science for all of us by blowing their money on their far-off dreams of joining Branson or Musk in space. Yes, competition will drive up standards and push down costs. But, for now, it’s hard not to accept that space travel is dependent on the Government committing our hard-earned cash.

The best arguments for this emphasise our need to be protected through advances in defence capabilities, ranging from military to medical technology. But they also respond to that fundamental interest — that human need and desire — to know more about the universe, to engage with it, to play our part and explore and achieve. To value knowledge in itself, and our world for what it is. If we agree to take part in organised society, and therefore recognise that the state has a role to play in our lives, then it seems as if space exploration is a good that the state can enable, for the benefit of all mankind. Of course, the level of spending on this still needs to be justified, and we must continue to keep assessing its relative importance. But there’s something about space that just won’t go away.

Howard Flight: Finding taxpayers better value for money

What is needed is professional, third party review and analysis of expenditure, department by department, cutting out duplication and waste.

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

Political Parties should be, and usually are, known for what they believe in; voters can, therefore, reasonably expect governments to focus on their Party’s territories of conviction and objectives. For the Conservative Party, these territories have comprised of supporting the national interest; creating a meritocracy and equality of opportunity; sustaining a homeowning democracy; backing free markets and lower taxation, and supporting businesses and especially small business. I add to this a less obvious objective, but crucial to achieving the other objectives: achieving good value from the taxes raised.

I suspect the Party’s reputation for the above objectives is holding up better than the media would expect; but there is clearly work to be done in housing to unblock supply, allowing markets to then achieve prices which are affordable to buyers.

A Conservative Government has also allowed increases in taxation – currently representing 34.6 per cent of GDP compared with 30 per cent in the 1990’s, when we are supposed to be the Party of lower taxation.

Between 2000 and 2004, I was Shadow Chief Secretary to the Treasury. I was then asked to organise a major review of how taxes were spent and the extent to which citizens were getting poor or good value for their taxes. I was able to organise some 50 senior professionals to undertake analysis of public expenditure in each of the ministerial departments and in local government. We ended up with a total figure for potential tax saving through measures to improve taxpayer value of around £80 billion per annum.

Over the last nine years, the Government has done a reasonably good job in constraining public spending in some areas and particularly in local government; but in the other non-constrained areas, of which the NHS is the giant, spending has again escalated.

What is needed is professional, third party review and analysis of expenditure, department by department, cutting out duplication and waste. One of the worst cases of waste which could have been avoided was the £18 billion write off for the failed NHS Systems Programme, which failed for the simple reason of not building up needs and programmes from existing grass root activities, but rather trying unsuccessfully to impose a programme from above.

Inevitably, some of the value-achieving decisions have to be political: what is the Government doing which would be better if it weren’t done? A significant amount of the increase in public spending of recent years has also resulted from government getting involved in areas that arguably it never should.

It is also unfortunate that the positive achievements of taxpayer value over the last decade have been tarred with the mistaken concept of painful austerity. We should be talking more about taxpayer value, and explain that it is in the interest of citizens both to get good value for the taxes they have to pay, and potentially lower taxes as the result of better spending efficiencies.

Will Tanner and Guy Miscampbell: A graduate tax cut would put money back in the pockets of young people

The costs could be offset by encouraging a tenth of students away from low-value university and towards higher-value technical education.

Will Tanner is Director of Onward and Guy Miscampbell is Senior Research Fellow at Onward.

It was a false promise but a powerful one. At the 2017 election, Jeremy Corbyn won over a generation of younger voters partly by promising to cancel their student loans. The result was a 35 point lead for Labour amongst 18-24 year olds and a 29 point lead amongst 25-34s. It was the Conservatives worst result amongst younger voters in decades.

The Government’s response to this “youthquake” – an independent review of post-18 education funding, led by Philip Augur – will report next month. But if rumours of its recommendations are true, it will do little to win over a generation of young people who believe that the system is stacked against them. The idea floated in several newspapers of a simple cut in tuition fees to £6,500 is unlikely to make much difference – benefiting only future students and still leaving graduates with high repayment costs as they save for a home, while reducing funding for Britain’s best universities.

The reality is young people are right to think the higher education system doesn’t work for them. Today’s students face some of the highest marginal tax rates in Britain when repayment rates are taken into account. We abolished tax rates of over 50 per cent for people earning over £150,000, but higher rate graduates pay 51 per cent, while those earning above £25,000 facing marginal tax rates of 41 per cent. It is no wonder younger generations are finding it harder to save to get onto the property ladder – leaving them with less wealth and lower rates of property ownership than previous generations, as well as worse pensions.

The standard response to that graduates earn more so it is fair they pay back at a significant rate. But this is only partially true, as Onward’s research shows today. It is true many courses deliver a major earnings premium: a male graduate from LSE can expect to earn, on average £63,220 five years after graduating. But many courses deliver no such premium. In fact, in 40 per cent of graduates studied subjects where their median earnings were so low that after five years they would not reach the £25,000 threshold where they start paying back their loans.

A decade after graduation, one in ten graduates will be earning less than £25,000, according to their course earnings potential, and the most popular subject group, Creative Arts, will deliver an average salary of just £23,200 for the 125,000 students currently studying it. The net result of these weak earnings is that up to a quarter of students are currently studying courses that are not worthwhile for the taxpayer, and a fifth will be no better off than if they had chosen a non-university route, such as an apprenticeship.

For two decades, politicians have been trying to get as many young people to go to university as possible, because they believed that a degree would always deliver higher wages. This was a false promise, with significant implications for the taxpayer. Low graduate wages mean that 83 per cent of student loans will never be paid off in full, leaving a £28 billion hit to the deficit when they are written off in 30 years’ time.

The answer, clearly, is not just to abolish or reduce tuition fees, both of which would only help those who graduate in the future, and could reduce university places as seen in Scotland. Nor is it to introduce a straight graduate tax, which would leave most people paying roughly the same. A better answer, as set out in our report, would be to introduce a graduate tax cut to put money back in the pockets of young people, paid for by reducing the number of wasteful courses that harm graduates’ prospects and cost taxpayers billions.

A graduate “tax cashback” of 50 pence in every pound of loan repayments would halve the monthly repayments of around 2 million graduates currently paying back on their loans. Unlike the alternatives, it would benefit all graduates repaying their loans, now and in the future, and put money help them save for a deposit or contribute to their pension. As we show, the costs could be offset by encouraging a tenth of students away from low-value university and towards higher-value technical education, which have higher earnings despite years of underinvestment.

If the Conservatives are to become a serious force amongst younger voters again, as they were during the 1980s and early 1990s, they must embrace reforms that side with young consumers and young taxpayers – ensuring students are not being ripped off and helping graduates to keep more of their earnings. A tax cut and a crackdown on low value courses would be a good start.

James Frayne: Might the UK see its own Yellow Vest uprising?

Let us hope not. It’s unlikely, but not completely impossible. The Government must battle four trends to reduce the risk.

James Frayne is Director of Public First and author of Meet the People, a guide to moving public opinion.

We should hope not – violent protest is the last thing we want to see – but could there be the equivalent of a Yellow Vest uprising in the UK? An aggressive, popular campaign against higher taxes, poor services and declining living standards? The closest reasonably recent parallel here was the fuel protests of 2000. But could we see something broader, like we’ve seen in France?

It’s generally a mistake to think you can translate one country’s political, economic and social culture to your own. British people have thankfully (usually) shunned direct, highly confrontational protests; and French politics and government administration are very different. But the Yellow Vest movement is interesting because the issues raised and the language used are similar to those that have been used by protest campaigns here in the last 20 years.

In France, working class and lower middle class people have come together to complain about rising taxes, especially fuel taxes, apparently out of touch elites making decisions that hit them hard in the pocket, and the decline of universal public services. People are right to point out there is no coherent political ideology behind the movement (although, perhaps it would be more accurate to say it doesn’t look coherent to those that think of politics on a classic left-right continuum). But the issues raised are not dissimilar to those that have been raised by fuel protesters, early UKIP campaigners, independent Mayors, and, of course the TaxPayers’ Alliance.

So, could the Yellow Vests arrive here? With the organising power of the internet available to all, you can never say for sure, but it seems unlikely for the foreseeable future. This is for two main reasons. Firstly, most of the working class and lower middle class are only now approaching their upper limits on tax. Many have been saying they’d be happy to pay more tax if they knew it would be ringfenced for the NHS, for example. And, consequently, the polls suggest they supported the Government’s announcement for £20 billion in new spending.

The second reason is that they know that this Government is keeping Jeremy Corbyn out of power. They know, therefore, that this Government is keeping taxes relatively lower than they would otherwise be – and they also (for now at least) doubt Corbyn’s ability to run public services effectively. They still doubt his leadership abilities and his general competence. It’s hard to generate anger against a sitting Government when you know the financial alternative would likely be worse.

But we’re not a million miles away. For such a movement to become viable, four trends would need to continue. The first is that there would need to be a big increase in irritation with spending on unreformed services. While the public gave the Government’s higher NHS spending their support, a giant caveat was attached. This was the clear warning that it had better work and that the NHS had better sort waste and mismanagement out. In focus groups on this issue around the time of the announcement, people were expressing their deep concern about NHS waste. If this spending does appear to go to waste, a backlash is possible.

The second trend is for Government to continue to charge people for services they once considered theirs “by right”. The anger directed at the Conservative Party at the last election over social care is an example of this phenomenon. People hate being made to pay for things that were previously “free”. For Londoners, the introduction of the new Ultra Low Emission Zone might fall into this category. Although it’s a Labour policy, it remains to be seen whether the Government will take some of the blame for “not stopping it”.

Thirdly, the cost of living would need to continue to rise – with significant, visible rises apparently marking a change, rather than a continued gentle increase. One thing the Government will be keeping an eye on is a possible increase in heating bills in early Spring. This might see an uptick and would irritate massively, particularly against the backdrop of a cold winter.

The fourth trend is for a continued disaffection with the political class. This has been developing for two decades now and it bubbles up to the surface occasionally. If a big chunk of the public – and the majority of working class voters – think that politicians have betrayed them on Brexit, they are likely to be much more open to direct protest than they were in the past. Even if we end up leaving the EU in a way that is acceptable to these Leave voters, it’s not impossible they will have concluded that it all happened despite the best efforts of much of the political class.

It’s a reasonable bet that political activists in the UK will try to artificially create a Yellow Vest movement here; it wouldn’t be a shock to see them appear, literally, on a small scale soon. But several things will have to happen before we see a mass movement. As you can see, it’s possible that we will be in such a place at some point. We should hope that the Government takes action to avert such a movement ever gaining ground.

Iain Dale: Brady, not only keeper of the letters, but a dark horse leadership candidate

Plus: Cox, another possible. Plus 15 names in total. Women for May. And: I will make sure the Treasury backtracks on the loan charge scandal.

Iain Dale is an LBC presenter, a commentator with CNN and the author/editor of over 30 books.

On Tuesday, Steve Baker led a Commons debate on the loan charge scandal. Although it was held in Westminster Hall, it was extremely well attended, with MPs from all parties giving John Glen, the Treasury Minister tasked with responding to the debate, a right going-over.

I wasn’t there, but am told that he looked rather shaken at the vehemence of some of the contributions. For those who don’t know about the loan charge controversy, HMRC is trying to claim 20 years of back taxes from people who legitimately took advantage of a tax scheme that reduced their tax liabilities.

These are not rich people; they are independent contractors. It emerged this week that Philip Hammond has had to apologise for the evidence he gave to the Treasury Select Committee in which he called such schemes ‘illegal tax evasion’. Since the schemes were endorsed by HMRC, they certainly couldn’t be described in this way. Indeed, not only were they endorsed by HMRC, but we found out this week that it was paying contractors itself using these schemes! Hypocritical, much.

I have no problem with the Treasury stopping these arrangements, but to go after people for 20 years of back taxes is just outrageous and contrary to all the rules of natural justice. They’re causing huge amounts of human misery, bankruptcies, family break-ups and even two suicides.

I have no doubt that they will have to backtrack on this, and admit that they’ve got it wrong. Indeed, I intend to make sure of it. It’s just a matter of when.

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If Theresa May is actually ever knocked off her perch, it is rumoured that up to 15 candidates might put their names forward to succeed her.

Most of their candidacies would be utterly self-delusional, of course, but one name which hasn’t yet done the rounds very much is that of the keeper of the 48 letters (or fewer) himself – Sir Graham Brady. He’s trusted across the party, he’s a Brexiteer of the non-foaming-at-the mouth-variety, he’s the right age… I could go on.

Elected in 1997 he would be popular with the older guard and, as Chairman of the 1922 Executive Committee, he’s also liked and respected by new MPs.

I hate to use the phrase ‘compromise candidate’, but it wouldn’t be the first time someone had come through the middle as everyone’s second choice. His main drawback is his relative lack of visibility in the voluntary party, I suppose.

I first met Graham back in the early 1990s when he was working at the Centre for Policy Studies. He then joined the transport-based public affairs consultancy that I was co-owner of. I came to know him well enough to be able to say repeatedly on the radio over the past week or two that if there’s anyone the Conservatives can trust to maintain the rules of the party over the leadership, it’s Graham. And I mean it.

– – – – – – – – – –

I wonder if the betting markets are taking bets on the number of Tory MPs who will throw their hat into the ring when the time comes. I reckon there are at least a dozen who have made it known they would consider running, or are expected to stand. Here’s my list so far…

  • Geoffrey Cox
  • David Davis
  • George Freeman
  • Michael Gove
  • Jeremy Hunt
  • Sajid Javid
  • Boris Johnson
  • Philip Lee
  • Penny Mordaunt
  • Amber Rudd
  • Tom Tugendhat

I saw one article claim that, if Michael Gove doesn’t stand, Nick Boles might while, according to one of my sources, Caroline Nokes, the Immigration Minister, might also take a punt. Given her record in the post so far, I’d say this would be a ‘courageous’ move on her part.

– – – – – – – – – –

One statistic leapt out at me from the recent spate of polls. It was the fact that  Labour’s six point lead among female voters has recently been transformed into a five point Tory lead.

I think there is a general feeling out there among so-called ‘normal’ voters that Theresa May is doing her best and that the beastly men are being unfair to her.  The rights and wrongs of the Brexit deal don’t really concern ordinary voters, but the optics do.

Women may not always be the greatest supporters of female politicians, but if they feel that a fellow woman is being bullied or unfairly treated, then the wagons begin to circle. That’s what’s happening here.

– – – – – – – – – –

A lot of attention has been paid to Cox over the last six weeks, since he sprang into our collective consciousness at the Birmingham conference, where he introduced the Prime Minister with a barnstorming rallying cry.

He’s now said to harbour some leadership ambitions himself. A bit as with Graham Brady, it’s not impossible to see the stars aligning. But attention should also be paid to his deputy, Robert Buckland, the Solicitor-General.

He’s increasingly rolled out to defend a sticky wicket in the media by Number Ten, and does a bloody good job at it. He’s also got a very well-developed sense of humour

I imagine he rather enjoys his current job, but in the next reshuffle I hope he gets a Minister of State post in which he can prove whether he’s got Cabinet potential. I rather think the answer will be yes.

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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