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Westlake Legal Group > employment

Sponsored Post: Simon McVicker: Why the UK’s five million freelancers are key for the Conservatives this election

Simon McVicker, Director of Policy and External Affairs at IPSE (the Association of Independent Professionals and the Self-Employed).

This election is about Brexit. That’s what everyone is saying: there’s a deal on the table, and this election is for the country to decide on that deal. But that must not be the sole focus.

Behind all the Brexit noise, there is still a country and an economy to run. There are still millions of businesses across the UK looking from party to party to decide who will represent their interests, and who will run the economy best.

At their forefront are the UK’s five million self-employed. For a majority, the Conservatives must win the support of the country’s small businesses and self-employed.

Freelancers and the self-employed are vital to the economy. Not only do they contribute £305 billion to it every year; they also bring flexibility and productivity to businesses across the country. That should be reason enough for the Conservatives, the party of business and responsible economics, to support the interests of the self-employed. But it is also worth remembering that they are five million votes up for grabs.

To win those votes, the Conservatives must commit to policies that will genuinely support the self-employed – particularly when it comes to taxing their business.

Fundamentally, the current UK tax system simply does not work for the self-employed. It is an outdated system built with just two groups in mind: employees and employers. Now, it is struggling to keep up with modern kinds of working like self-employment.

Instead of redesigning the tax system to incorporate modern ways of working, governments over the last 20 years have tried to tinker with it. Rather than grasping the root of the problem, they have made it worse with cumbersome and damaging policies like IR35 and the hugely controversial “Loan Charge”.

Not only do these add to the already nightmarish complexity of self-employed taxes: they unjustly penalise freelancers, one of the most dynamic and productive groups in our workforce. If the Conservatives want to secure freelance votes, they must commit to turn this around. They must halt these hugely damaging policies and pledge to redesign the tax system based on employees, employers and the self-employed.

Nor is it just our outdated tax system freelancers are struggling with: there is also poor payment culture. Shockingly, IPSE research shows the average freelancer spends 20 days a year chasing clients who have not paid them on time. Worse, nearly half (43 per cent) have done work their clients have failed to pay them for. This is unacceptable.

To win the support of the self-employed, the Conservatives must pledge to turn this around. They must commit to giving more powers to the Small Business Commissioner (a post they must also fill again as quickly as possible), including fining the worst offenders.

This election, the Conservatives can make a profound difference to the self-employed, and in doing so, win the support of this five million-strong sector. It is time they stood up proudly as the party of all business: from big corporations to the small businesses and freelancers that are the beating heart of our economy.

IPSE (the Association of Independent Professionals and the Self-Employed) have developed a manifesto for the self-employed, with recommendations for how parties can secure freelancers’ #5millionvotes. It includes ways to support them across everything from the tax system to pensions and parental rights. Read it here.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Ryan Bourne: Thatcher and Cameron made us happier

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

Perhaps David Cameron had better foresight than he’s given credit for. At a Google conference in 2006, the then leader of the opposition declared “It’s time we admitted that there’s more to life than money, and it’s time we focused not just on GDP, but on GWB – general well-being.” With the financial crash ravaging the public finances through 2010 and conventional economic indicators in the doldrums, he risked opprobrium by tasking the Office for National Statistics (ONS) to measure wellbeing for the first time.

Well, his desire to be judged on such metrics now looks incredibly prescient. Never mind sluggish GDP growth throughout and after his premiership. Forget the polarisation of Brexit. The ONS’s latest wellbeing stats, released last week, show that the British people are significantly happier and more satisfied than back in 2011.

It really is remarkable. Every self-reported measure of wellbeing has improved near continuously in the past eight years. Asked on a 1-10 scale whether they are satisfied with their lives (0 being “not at all” to 10 “completely”), the public’s mean score has risen from 7.11 to 7.42, with the proportion answering 7 or above rising from 76 percent to 82 percent. This isn’t some anomaly either. How worthwhile we perceive our lives and self-reported happiness have been ever rising too, on average. Anxiety, meanwhile, has fallen, albeit having levelled out recently. If Cameron had convinced us of wellbeing’s central importance, we’d now be celebrating his wonderful legacy.

As it happens, of course, this “good news” got about as much coverage last week as a positive Brexit business story. Remainer demands for a new Brexit impact assessment show that pounds and pence are still king in UK politics (at least until there’s an EU regulation the same Remainers want us to follow). We free-marketeers were fearful, when subjective happiness metrics were introduced, that they’d become active targets of policy. We needn’t have worried. Political leftists’ attachment to them proved skin deep, falling away as soon as they suggested Britain was not hell on earth under the Tories.

But was classical liberals’ fear of such metrics misguided? Perhaps. Consider a new paper from researchers at the University of Warwick. Reviewing eight million publications digitized through Google Books, the study aims to construct longer-run indices of wellbeing from 1820 through to 2009. Its findings are even more jarring than the ONS stats.

Here’s how their index is put together. Use of positive words in published books, such as “cheerful,” “happy,” and “joyful,” are considered proxies for better subjective wellbeing. Negative words such as “sad” or “miserable,” are tallied up as measuring worse wellbeing. In short, the academics assume that in a happier world, more “happy words” would be written in published tomes.

Now, I was sceptical of that methodology. But they check their results against life satisfaction data over recent decades from Eurobarometer and the UN, finding strong correlations in the numbers. Emotive positive/negative language does appear to proxy well for self-reported wellbeing since the 1970s, when both sets of data are available. Having satisfied themselves of the methodology, the retrospective application to earlier periods produces fascinating results.

Wellbeing was consistently high in the UK in the 19th century, fell around the time of World War One, before then recovering. Unsurprisingly, it plunged again during World War Two, before rebounding to a lower peak. But the post-war phase is most striking, splitting clear into two obvious periods. From the 1950s to 1980 there was a sustained fall in wellbeing. After 1980, there was a dramatic rebound, fitting with Eurobarometer data showing a sustained improvement in life satisfaction in the UK over the past 40 years. Britain’s life satisfaction index since 1950 is therefore distinctly V-shaped.

What might explain this dramatic inflection circa 1980? Social trends would surely be a slower burner. People had been getting better off between 1950 and 1980 too, so this is about more than rising wealth. No, there’s one rather obvious explanation fitting the time trend: the UK’s abandonment of its quasi-socialist economic model and embrace of Thatcherism.

Such a thesis is supported by the fact the US experienced a near identical V-trend in its index centred around the launch of Reaganism. Germany, in contrast, saw wellbeing completely flatline from the 1950s onwards. Neoliberalism’s birth, it seems, facilitated sustained rises in wellbeing.

These findings dunk all over accepted truths. Claims from the Spirit Levellers that inequality and marketisation made us miserable are dismissed. If anything, the exact opposite appears true: the post-war period saw socialist equality beget misery. Life satisfaction rose with inequality through the 1980s and continued to rise once inequality settled at a higher level.

Nor can GDP or the labour market adequately explain the trends. Rising GDP per capita, other things given, would be expected to improve life satisfaction, and Britain’s economy did perform well relative to other countries after 1980. But growth was stronger in previous decades, when life satisfaction was falling. Wellbeing does not appear to have fallen after the financial crash either. Sure, tightening labour markets might explain some of the rise in wellbeing since 2011, but Britain had very high unemployment in the 1980s, just as life satisfaction took off.

No, the absence of clear outcomes-based economic explanations suggests that my friend Terence Kealey may be right. What might explain the reversal from 1980 is simply that we Anglo-Saxons value our economic freedom, above and beyond its GDP or employment impact. Economic liberty makes us happier.

The post-war period saw high tax rates, capital controls, Keynesian demand management, nationalisations, price and income controls, and high inflation. Afterwards we shifted towards freer trade and migration, lower taxes, lighter touch regulation, and free movements of capital. Of course, we’re not near libertopia; if anything the Thatcher and Reagan revolutions proved a brake on a longer-term government juggernaut. But there was a paradigm shift on economic freedom. We Brits, and our American cousins, found it deeply satisfying.

For a libertarian, this isn’t surprising. Our worldview is centred on the belief that individuals know best how to live their lives to improve wellbeing. Thatcher, of course, claimed her economic liberalisation agenda was in tune with the true instincts of the British people. All this suggests she may well have been right.

David Cameron had no such ideological inclinations. In fact, he probably advocated happiness metrics, in part, to distance himself from the supposed economics-obsessed “libertarian” wing of his party. How ironic then that the sorts of wellbeing measures he championed took off when classical liberals turned the tide on socialism, and strengthened through the “age of austerity.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Neil O’Brien: How we can win support from younger voters – and turn our present strength into an enduring majority

Neil O’Brien is MP for Harborough.

It’s time to look to the future. Brexit isn’t quite over yet, but the Prime Minister has landed a great deal, and he has got off to a fantastic start, with a blistering series of popular announcements on the police, schools and hospitals. We’ve soared in the polls, while Corbyn deflates like a sad balloon

But let’s not stop now. Let’s work to turn our present strength into an enduring majority. In particular, let’s think about how we do better among younger voters.

In elections between 1950 and 2010, the Conservatives were on average eight per cent behind Labour among younger voters, but nine per cent ahead among older voters. But in the last election, we are were 35 points behind among the young (18 to 24-year-olds) and 36 points ahead among over-65s.

For me, the most concerning thing wasn’t being behind among the very young, but being behind among everyone under age 47. That meant we were behind among people with jobs, kids, bills… responsibilities – all things which tended to make people Conservative during previous years.

Doing better among younger voters isn’t about gimmicks: it’s about having answers to the big issues facing young people and young families.

Some of this is about action on issues younger voters care about. For example, we have a great record on the environment. We have the lowest emissions since 1888, and are one of the first countries in the world to set deadlines to end coal use, to go to all electric cars and net zero emissions.

But a lot of it is about doing things that will benefit young people directly.

Let’s start with housing. Declining homeownership explains a big chunk of the age gap in voting that has opened up. Looking at middle income people aged 25-34, the home ownership rate fell from two thirds in 1996, to just a quarter by 2016.

I’ve written elsewhere about the long term action we need on both supply and demand to drive up home ownership: building upwards and regenerating brownfield sites in our cities; rebalancing the economy to spread growth beyond the south east; getting away from the kind of piecemeal, tacked-on development in our towns and villages which maximises opposition to new housing; and making sure developers pay for the cost of the new infrastructure that’s needed with new housing.

But it’s also about building the tax reforms we’ve made since 2015. Those rebalancing tax reforms have led to the first sustained period for some time in which we have seen growth in home ownership, not just growth in the private rented sector.

But a plan to fix the housing problem over the coming decades isn’t enough. As well as a long-term solution, we need to provide immediate help. Many young people feel they’re on a cruel treadmill, unable to save because they are paying high rents. There are many who could afford a repayment mortgage (in fact it would be cheaper than renting), but they can’t save up for a deposit. So let’s create deposit loans: like Help to Buy, the government would take a repayable stake. But unlike Help to Buy, the purchaser would not have to provide a deposit up front.

There are a further group of people who might be able to save up a deposit over time, if only their existing rental costs were lower. They are the sorts of people who would have been helped by council housing in earlier generations – but (perversely) wouldn’t get it today, precisely because they’re working, so don’t qualify.

We could fund the creation of a huge number of cheap rented homes for young working people by transferring the remaining local authority housing stock into charitable housing associations, unlocking huge value.

Another part of our offer to younger people has to be about the cost of education. We have to be bold, not tinker.

Let’s cut the cost of going to university in half. And let’s pay for it by driving down the number of low value, mickey mouse courses which aren’t good value, either for students or the taxpayer. At present, one in ten graduates isn’t earning enough to pay back a single penny of their loan even ten years after graduation. And thanks to the LEO dataset, we now have a good idea of which courses they are, at which universities.

We need to build up technical education and apprenticeships. In Germany 20 per cent of the workforce has a higher technical qualification, but in Britain it’s just four per cent, while we rely heavily on importing electricians, plumbers, technicians and engineers from the rest of the world.

Tony Blair set a target for 50 per cent young people to go to university, but no such target for technical education.
We spend six times more per person on university students than technical students. We should become the champions for the 50 per cent who choose not to go to university too. We are introducing the new T levels, have brought in the Apprenticeship Levy, and are driving up number of Higher Apprenticeships. But there is much more to do.

But if we are serious about winning over younger voters we also need to talk about the pressures of life with a young family. Childcare costs are a huge worry for many.

Successive governments have built up a rather a confusing array of policies: the 15 and 30 free hours offers, Tax Free Childcare, the Childcare Element of Universal Credit, not to mention other benefits for children like Child Benefit and Child Tax Credit. Each has complex rules on eligibility and requires a certain amount of bureaucracy to claim.

We could be incremental, and refine and build on existing policies. For example, one frustration with using the 30 free hours for working families is that it only covers 38 weeks a year, following school terms. So how much you pay yo-yos up and down wildly each month. We could make it year-round, so it is more generous and predictable.

Or we could think more radically. As Conservatives we think people are best placed to make their own decisions. For example, when two police women were prosecuted for looking after each others’ children in 2009, conservatives saw it was an example of socialist meddling gone mad.

One way to simplify this alphabet soup of complex policies would be to bring back the tax allowances for children which Labour abolished in the 1970s. Tax allowances for children existed between 1909 and 1977, and gave a higher personal allowance for people with children, on the conservative principle that you should be able to provide for your own family before you pay tax. Rather than taking money off people, and then getting them to jump through hoops to claim it back, we could go back to just leaving it with people in the first place.

There are lots of other things we could do. But as we move into the post-Brexit era, it’s time to look to the future.
Let’s make sure that in our next manifesto, we think big for younger people.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Peter Ainsworth: Universities, rather than government, should lend to their students

Peter Ainsworth is the Managing Director of EM Applications and is the author of Universities challenged: funding higher education through a free-market ‘graduate tax’.

James Frayne astutely explains that once Brexit has occurred a major plank of the Conservative Party’s appeal to working-class voters falls away and it “needs to do a lot more for working class voters – and very fast.”

Perhaps anticipating this requirement, the Institute of Economic Affairs ran a competition over the summer to identify a policy proposal that would provide opportunity for all. The winning entry, announced last Thursday, could well be the proposition the post-Brexit Conservative Party needs as it distributes state largesse from the privileged and remain-voting university-educated to the broader population.

“EdEGG”, as the policy proposal was named, aka The Education, Enterprise and Giving-back Grant, is an innovative policy which, without costing the government a penny in additional expenditure, provides a nest egg of opportunity at age 18.

By re-arranging the flows of money into higher education so that universities, rather than the government, lend to their students, and receive income-related repayments from them, the taxpayer is saved the £10.6bn that is currently lost on student loans. Combined with the £2.7bn generated through the Apprenticeship Levy and sharing equally and fairly between all 18-year olds there is enough to provide each of them with a £20,000 credit. This can be used towards: (i) further education or training, (ii) the launch of a new business or (iii) voluntary activities. The money does not have to be used at age 18. It is a Lifetime Opportunity Credit, offering financial support at many different stages of life.

Rob Owen OBE, Chief Executive of the St Giles Trust, which helps people facing severe disadvantage to find jobs, says: “Many of our clients feel they have no stake in society. They don’t have a bank of Mum and Dad and have no access to even small pots of money to pay for training courses – especially pragmatic skills.”

Ironically, while St Giles’ clients receive little support, those children who attend university, coming predominantly from wealthier backgrounds, do benefit from significant state aid in the form of the subsidisation of their student loan. EdEGG’s re-distribution of this subsidy addresses a root cause of inequality and provides the same help for all, regardless of region or social background.

Under EdEGG, universities and other post-18 providers can set their own fee levels but must share the risk faced by the student, relying in part on post-graduation income-related payments in order to survive and prosper. With this alignment of interests, institutions will ensure that what is being taught is useful, they will re-design courses to make the most effective use of time on campus and provide “after-sales-support” to un- or under-employed graduates. Arts and Humanities courses will thrive as they develop the creativity needed in the robot age. The NHS will benefit from more doctors being trained as the limit on the number of medical students, a consequence of the government bearing the cost, can be lifted. The institutions will benefit from less red tape and a government guarantee on loans made to them.

EdEGG funds may also be used to help launch a business by providing the necessary initial capital. To give every start-up the best chance of success, EdEGG funds are only released after a bank has agreed to lend it at least an equal amount. As the bank will be at risk it will have a powerful incentive only to approve propositions that have merit.

Alternatively, EdEGG will help finance the creation of a Community Interest Company (CIC), to provide services – which could be a youth, elderly, music or theatre group – that benefit local people. To confirm that a CIC has popular support, and that the community is willing to share in the risk of the venture, a total of £1,000 must be raised from 100 local citizens.

Finally, any EdEGG credit that is unused by age 55 will be paid to that person’s pension plan, subject to them confirming that they have carried out voluntary work that benefited others equal in hours to the EdEGG credit divided by the minimum wage.

At launch, EdEGG will create a wave of optimism among the 18-year olds who receive the £20,000 credit. Over the medium-term it will make a university education always worthwhile – any career hiccups and the institution will be in touch, keen to help. Many more people will be able to afford vocational training, there will be a jump in new business start-ups and a leap in the formation of community-enhancing projects.

In the long-term it is a game-changer, transforming the mojo of the country as each new generation has opportunities opened to them.

Using free-market principles to achieve a progressive end at nil cost to the Exchequer, EdEGG is not merely feasible, it is politically compelling. By requiring universities to share in the risk their students take and freeing them from much red-tape, it directs help to the voting constituencies the Conservative Party needs to win over – the young and Frayne’s non-university-educated “working class”.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

James Frayne: To win working-class voters, Conservatives must start talking tax

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

This coming election’s most important coherent block of swing voters live in provincial England. They’re mostly older and female, they’re mostly working class (C2/D), and they’re highly eurosceptic.

Other groups matter too, of course – such as the mostly Southern, suburban professionals – but they’re smaller in number. Things might change but, painful as it is for some to accept, this election will primarily be decided by the provincial English. This working-class group is emphatically not locked down for the Conservatives.

The Conservatives’ last campaign – with its threat to penalise careful, thrifty pensioners with massive social care costs, and implicit threats of general tax rises – prevented the Conservatives carrying working-class voters in what should have been a landslide.

Lessons have been learned and the announcements made by the Prime Minister and crafted by Vote Leave alumni to date have been crafted tailored to this group. The coming manifesto will be better targeted too.

Much of the manifesto writes itself, with obvious demands for action on Brexit, public services, and crime. But there’s an area slowly creeping onto the agenda in the same way crime did a year ago: tax. Long dismissed as an issue of limited electoral potency, things are slowly but definitely changing. In crafting an economic policy for working-class and lower-middle-class swing voters, the Conservatives need a set of attractive policies on tax.

What should these policies look like? Over the summer, I ran a detailed opinion research exercise for the TaxPayers’ Alliance to probe working class attitudes to prospective tax policies. Combining a 4,000 nat-rep poll with half-a-dozen focus groups of swing voters in seats with heavy working-class representation – Walsall, Stoke North, and Bristol North West – we tested a long list of options the political parties might realistically announce for the next election.

(While all polls date fast in the current environment, by polling at the high point of the Brexit Party’s prominence and the low-point of the Conservatives’ recent polling performance, we can at least gauge the softness of Conservative pledged support and therefore the number of their voters who are essentially swing voters in this block).

You can read the full tables and judge for yourself here. However, two main things stand out. Firstly, most importantly: working-class voters want a system that looks to them much fairer than the current system. Secondly, and more surprisingly: they want government to help businesses – mainly start-ups and local businesses, but businesses generally – because they’re worried about the state of the economy.

This second lesson contradicts popular wisdom in Westminster. Both require more explanation. Given a list of prospective tax cuts, working class voters have a clear view of who should be the primary recipients of help via tax cuts, and who should take on more of the financial burden through tax rises.

For example, we found support for: a reduction in the basic rate of tax; higher tax thresholds so people are not dragged into higher bands by rising inflation; an increase in the threshold at which stamp duty kicks in; and National Insurance rebates for those that don’t claim Jobseekers Allowance for five years.

On the other hand, we also found support for: a higher rate of tax on top earners; and higher taxes on second homes. Working class voters don’t just want a system that benefits “people like them” (although they do want that), they want a system that supports those that need it – and in their eyes deserves it.

This research showed not only that working-class voters are supportive of business tax cuts, but they’re also much more supportive of business tax cuts than middle-class professional voters. They have a bias towards supporting tax cuts for new businesses (for start-ups), for small businesses, and for local businesses. For example, they strongly favour start-ups paying no corporation tax (often a heavy burden) for their first three years of operation, and tax cuts for small businesses and the self-employed. But they favour generally pro-business tax cuts too: they favour a reduction in employers’ PAYE contribution, and a general cut in corporation tax too.

The focus groups help us to understand why this might be. Fundamentally, it’s because working-class voters are much more concerned about their jobs – generally, but specifically in the context of Brexit – and they see more clearly what their communities would look like with fewer jobs.

In places like Stoke, for example, where the potteries went a while ago, all that’s really left, in local people’s eyes, are distribution centres, warehouses, and call centres. Politicians and left-wing activists sneer at these sorts of jobs, but local people don’t and local people fear that higher taxes will drive businesses away and leave them with nothing.

Working class support for business has been a real phenomenon for a while now – certainly since the referendum – and I have been arguing here for a while these arguments about voters thinking “capitalism is broken” are miles off. I fear that – like the ideas the public want everything in optimistic Obama-esque language, or that every policy should be designed to help the very poorest – this has captured Conservative politicians’ minds.

Conservatives need to un-learn this “lesson”. Working-class voters want to hear policies that will help their employers, not that those that might drive them away.

Tax isn’t a tier-one issue yet, but it’s going up in the public’s mind – and particularly amongst working class voters. They are, after all, people that have not had a pay rise in a long time and who struggle with rising costs. They are also people that live side-by-side with those they think don’t work hard, and who live comfortable lives on welfare. And they are people that fear what a weaker economy might mean for their long-term financial health.

For all these reasons, tax will become an issue that politicians have to start talking about soon.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Nick de Bois: Conservatives must not fall into Labour’s trap on the four-day week

Nick de Bois is the former MP for Enfield North. He was a member of the Government’s Serious Crime Task Force until his appointment as Chief of Staff to Dominic Raab at DExEU. He is the author of Confessions of a Recovering MP.

A traditional conservative response to Labours promise to introduce a 4-day week would be to rubbish it as unworkable, and fraught with difficulties, particularly for small business.

In short, essentially a classic left wing intervention to implement unrealistic costs on the enterprise economy in a clumsy attempt to win worker votes. After all, four days’ work for five days’ pay – what’s not to like?

However, before Conservatives rush to dismiss this latest policy announcement as economic madness, it’s worth noting Labour’s pitch is not just an economic one. It is also an appeal to a fast-changing work ethic in employees that employers up and down the country will recognise.

But first, the economic case for the four-day week deserves examining. On one point that both left and right will agree is that UK productivity is woeful, and John McDonnell argues a reduced working week will solve that problem.

Productivity has indeed basically flatlined since 2007, and the UK remains way behind our fellow group of the worlds seven leading economies – the G7. This in part explains why wage growth is poor, despite welcome recent improvements.

It means profitability of ‘UK plc’ is less than it should be, and that our workforce is broadly under-achieving – although this should not be confused with being lazy, as so many political and media commentators imply.

The upside to this grim summary is that by improving productivity we are presented with a win-win for government, business and employees.

For example, according to the 2017 Stoddart Review a one per cent productivity gain would represent, across the economy, an additional £20 billion national output. Translated further, that would represent a reduction in annual deficit of £8 billion (it currently at £17 billion) and add another £250 a year to an average pay packet, whilst companies’ profits could increase by £3.5 billion.

The key question for McDonnell’s approach is: would a widespread, top-down imposition of a four-day working week deliver that increase in productivity? In short, the answer is almost certainly no.

This is because it cannot and will not work on a uniform basis across all businesses and workforces, and the strain on the public sector would be huge. The evidence clearly supports that contention.

Advocates of the reduced week often point to the success of Perpetual Guardian in New Zealand. They manage over £200bn of assets, and the CEO argues that the policy has improved staff wellbeing and dramatically improved productivity.

But at the other end of the scale earlier this year the Wellcome Trust rowed back on its plans to implement a four-day working week, announced to much fanfare in April. They gave the not-unreasonable explanation that it became evident to them that work could have become harder for employees in back-office and support functions, such as IT, finance, and human resources. Two large organisations, two very different responses.

Even less ambitious programs for reducing the number of working hour have met huge difficulties. An example is Gothenburg’s municipal local government, which trialled a six-hour working day (reduced from eight). They did see significant wellbeing advantages in healthcare workers, but recognised employers would struggle to meet the costs of reducing working hours yet maintaining a 24/7 healthcare provision.

“Could we do this for the entire municipality? The answer is no, it will be too expensive,” said Daniel Bernmar, the Left Party councillor responsible for running Gothenburg’s elderly care in 2017. Imagine the financial challenge of introducing a four-day working week into our biggest employer: the NHS.

Labour’s proposal mandating a four-day working week through a complex series of measures simply won’t be right for every business or organisation, as the Wellcome Trust and others have found. It is a recipe either for chaos or for a massive climbdown should the Opposition ever come to power.

What should the Conservative response be? Both business leaders and employees are not stupid and will recognise the sop to employees Labour are making for what it is, an election bribe. But equally, when Labour talk about building a society where we don’t “live to work, but work to live” it will strike a chord with millions of people.

Therein lies the answer as to how Conservatives should respond to today’s Labour announcement: advocate a progressive and light-touch regulatory approach to flexible working that goes way beyond the current focus on maternity and paternity rights.

It may be politically attractive to focus on rights for parents, and we have done some great work from which to build on. Yet it is plainly inadequate to stop championing flexible working there and Conservatives, not Labour, should be filling the policy vacuum on the issue.

Such a move makes both economic and political sense. It is striking, for example, that flexible working is presently pretty much the preserve of white-collar workers.

Conservatives would do well to recognise that the relatively untapped benefits, both for employees and national productivity, of the blue-collar worker being able to enjoy flexible working are substantial and politically attractive. As workforce management consultants Quinx identified in their report “Powering the Power House“:

“If a greater proportion of UK employers took steps to address barriers to the recruitment, retention and productivity of workers in manual and elementary service roles in the as yet relatively conservative Blue Collar workplace, estimates show up to 7.6bn of productivity growth”.

That’s quite a contribution to the productivity gap Britain faces.

Both attitudes and the compotion of the workforce have changed dramatically in the last decade, and whilst some employers have been slow to recognise this political parties have been even slower. It is time for Conservatives to take action.

As Karen Mattison from leading employment specialists Timewise noted after the publication of their 2018 employee survey:

“The fact that flexible working has been seen as a women’s issue has not done women or businesses any favours. Today’s new research shows once and for all, that flexible working is a preferred way of working for both men and women at all stages of their working lives.”

Most strikingly the Timewise employee survey also noted, and many employers will recognise:

“Today’s workforce not only want flexible working they expect it. It’s time for businesses to get smarter and use flexibility as a tool to attract and keep the best people. Those who lag behind in adapting how they hire, will risk losing out on millions of skilled workers.”

Government, take note.

Labour’s crude, authoritarian approach to flexible working, with its focus on a four-day week, may be politically attractive to some. But it runs the risk of introducing a simple left-right divide on that single issue, and we fall into Labour’s trap if our response is to dismiss it out of hand.

A Conservative response can be more nuanced and more practical if we become advocates for progressive, flexible employment practices. There is an audience ready and waiting to respond positively to this message, should we chose to offer it.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Damian Green: Labour’s dishonest attack on us this week will only work if we narrow our appeal

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

The cover of Labour’s Conference Guide this year is full of the usual upbeat (and of course impractical) promises: “More doctors and nurses”, “Free bus passes”, “Reduced class sizes”. You only have to turn the page to find what they really want to talk about-a distortion of what today’s Conservative is about.

The Welcome to Conference message contains a familiar dishonest litany. “The impact of almost ten years of Tory austerity is clear; in work poverty, Universal Credit, NHS Funding Cuts, regional inequality, and acts of malice like scrapping free TV licenses”……”We need a Government that will work for the common good, not just to reward the rich.”

Of course it’s unfair propaganda. The new element is that Corbyn’s Labour seeks constantly to make this attack personal. They want to create an atmosphere where every individual Tory must by definition be cruel and unfeeling, as well as rich and posh. From the “Never kissed a Tory” badges to Labour MPs saying they could never be friendly with Tory colleagues, the Labour attack is a calculated part of modern culture wars. The aim is not just short-term political advantage, but a long-term wish to make individuals who espouse Conservative values seem unfit for decent society. The more this attack succeeds, the more difficult it is for us to attract new supporters, particularly young supporters. So we have to refute it strongly and effectively.

As ever, the most effective argument follows the rule “show, don’t tell”. Throughout its history, the Conservative Party has been at the forefront of social reforms which have helped the poor and disadvantaged, flatly disproving the Labour thesis. Paul Goodman is writing a series of articles on ConHome this week showing this repeated phenomenon.

Modern history is equally full of evidence of this vital strain of Conservatism which seeks to bind society together by ensuring that no one is left behind. Some of the most neglected communities in the country in the early 1980s, from East London to Liverpool, have been utterly transformed by the practical energy displayed by Michael Heseltine. Where there was once dereliction and despair, there is now prosperity and hope, thanks to Conservative Governments.

The Environment is another issue where lazy or malevolent commentators assume the left must have the best tunes. In fact, the first prominent British politician to realise its central importance was Margaret Thatcher. Bringing the story more up to date, David Cameron was equally seized of its importance (at least in his younger, more idealistic days). We still remember the huskies. The current Conservative Government will certainly continue this honourable tradition, and we should all publicly proclaim it. Vote Blue Go Green should be a slogan for the ages.

We should also be relentless in pointing out how the children of poorer households have benefitted from Conservative education reforms over recent years. All of this was outweighed by the anger of teachers at the last general election over spending levels during the period of austerity, so it is very important that the extra spending that will be made in schools in the coming years is accompanied by a continuing commitment to reform. For example, Michael Gove’s Free Schools are a great innovation which would certainly be killed by a Labour Government.

Equally, for all of its teething problems we can be proud of Universal Credit. The best argument for how it is helping benefit recipients is the historically low level of unemployment. The fact that it is always better to work, and always better to work longer hours, is the biggest single change in the benefit system since Beveridge, and it is good news for those on benefits as well as for the general health of society. Work is always the best long-term route out of poverty, and we should happy to argue with the Left on this point.

So we are able to show numerous examples where practical Conservative policies are hard-headed but not remotely hard-hearted. By contrast, they are helping people who have no advantages make the most of themselves and share in rising prosperity. Now we have moved out of the period of austerity this is an easier argument to make, so we can be more aggressive in calling out Labour’s attempts to demonise all of us.

At the same time, we must be vigilant in not giving Labour the chance to claim that the moderate Conservative tradition is in danger. This is not the article in which to discuss in detail the removal of the Whip from some of my colleagues, but it is absolutely the place to remind us all that the One Nation tradition is a central part of conservatism, and its underlying insight that the Conservative duty is to bind society together is more important than ever in these troubled times.

The biggest task for any Conservative is to convince a dubious electorate that properly regulated capitalism is the best system both for creating wealth and for spreading it fairly. We will need the maximum number of supporters, and the full breadth of all Conservative traditions to make this argument with force. At a time when Labour is determined to convince the non-political majority that Conservatives are basically evil, it is more important than ever that we demonstrate on a daily basis that we are the normal, decent majority in this country.

Even in the short term we should remember that the Liberal Democrats attract some normally Conservative voters in the same way that the Brexit Party does. We need to be careful on both our flanks. A strategy of delivering Brexit and simultaneously demonstrating that we can improve public services to the benefit of everyone is not just the best approach for the coming election, but the most convincing way of dismissing the Labour smear about our underlying motives.

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Ryan Bourne: To help grow prosperity, let’s focus on people and not places – such as towns

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

Stian Westlake describes it as the “Strange Death of Tory Economic Thinking”. Conservatives have ceased telling an economic story about why they should govern, and how. Sure, there’s still the odd infrastructure announcement, or tax change. But, since Theresa May became leader, the governing party has shirked articulating a grand economic narrative for its actions.

This is striking and problematic. From Macmillan to Thatcherism to deficit reduction, the party’s success has coincided with having clear economic agendas, gaining credibility for taking tough decisions in delivering a shared goal. But, arguably, deficit reduction masked a secular decline in interest in economics. David Cameron and George Osborne, remember, wanted to move on to social and environmental issues until the financial crisis and its aftermath slapped them in the face.

Now, with the deficit down, economics is in the back seat. Fiscal events are low key and economic advisors back room. To the extent the dismal science is discussed, it’s as a means to other ends, or a genuflect to “Karaoke Thatcherism.”

In short, I think Westlake is right: the Tories do not have an economic story and, post-Brexit, it would be desirable if they did. So we should thank both him and Sam Bowman (formerly of the Adam Smith Institute), who have attempted to fill the vacuum. In a rich and interesting new paper, the pair set out to diagnose our key economic ailments and develop a Conservative-friendly narrative and policy platform to ameliorate them, even suggesting reform of the Right’s institutions and think-tanks in pursuit of the goals.

Such an effort deserves to be taken seriously, though not everyone will agree with their starting premises. It is assumed, for example, that Conservatives believe in markets and want to maintain fiscal discipline, which bridles against recent musings from Onward or thinkers such as David Skelton.

But, again, the key economic problem they identify is incontrovertible: poor economic growth. Weak productivity improvements since the crash have been both politically and economically toxic, lowering wages, investment returns, and necessitating more austerity to get the public finances in structural order. And the nature of modern innovation, arising from clusters and intangible assets, means that growth that is experienced isn’t always broadly shared.

Their agenda’s aim then is to achieve both concurrently: maximize the potential of the economy by taking policy steps on planning, tax policy, infrastructure, and devolution, to increase investment levels, allow successful cities and towns to grow, and to connect “left behind” places to local growth spots through good infrastructure. None of their ideas are crazy. Indeed, I would support the vast majority of them.

And yet, something bothered me about their narrative. In line with the current zeitgeist, they too discuss “places” and their potential, as if towns and cities are autonomous beings. My fear is this focus – shared by those who want to regenerate “left behind” areas – creates unrealistic expectations about what policies can achieve in a way that undermines a pro-market agenda. Importantly, it warps what we should really care about: “left behind” people, not left behind places.

A people-centred narrative recognises that just as firms fail in the face of changing consumer demands and global trends, so high streets, towns, cities, and even regions will shrink too. As Tim Leunig once said, coastal
and river cities that developed and thrived in a heavy manufacturing, maritime nineteenth century world might not be best placed to flourish in a service sector era of air and rail.

A true pro-market policy agenda would admit -and that’s ok. Or at least, it should be, provided we understand that raising growth and sharing prosperity requires adaptation, not regeneration. That means removing barriers for people either to move to new opportunities or have control to adapt their situations to ever-changing circumstances. This might sound Tebbit-like (“get on your bike”), but really it’s just saying policy must work with market signals, not against them.

Today though, interventions actively work in a sort of one-two-three punch against inclusive growth and adjustment. First, we constrain the growth of flourishing cities. Tight land use planning laws around London, Oxford, and Cambridge contribute to very high rents and house prices, and prevent these places benefiting from growing to obtain thicker agglomeration effects.

This contributes to the “left behind” scandal, but not in the way people imagine. When rents and house prices are higher in London and the South East and we subsidse home ownership or council housing elsewhere, it’s low productivity workers from poor regions that find it most difficult to move given housing cost differentials. As a result, they get locked into poorer cities and towns that would otherwise shrink further. That’s why Burnley, Hull and Stoke are the most egalitarian cities in the country, whereas prosperous London, Cambridge and Oxford are the most unequal, even as inequality between regions has intensified.

Having restricted people’s mobility through bad housing policy, we then impose one-size-fits-all solutions and subsidies which dampen market signals further. National minimum wages, fiscal transfers, national pay bargaining, and more, might be designed to alleviate hardship, but they deter poorer regions from attracting new businesses and industries by trading on their market cost advantages. Then, to top that off, we compound the problem further by centralising tax and spending powers, preventing localities from prioritising their spending and revenue streams to their own economic needs.

Now, as it happens, Bowman and Westlake’s policy agenda is perfectly compatible with assisting  “people” rather than “places,” precisely because it’s market-based. They advocate planning liberalisation, a flexible right to buy, and stamp duty, all of which would improve labour mobility. They prioritise infrastructure spending based on benefit-cost ratios, making investments more profitable with sensible tax changes, and devolving more transport power to regions and localities. All, again, will help facilitate areas adapting to changed economic conditions, rather than reviving Labour’s failed top-down regeneration attempts.

But pitching this as a city and town agenda still risks creating the false impression that the net gains from “creative destruction” nevertheless can be achieved without the destruction, and that all places can thrive in the right policy environment.

One can understand why they framed it in this way. Their aim is to persuade the party and its MPs of their platform. Anti-market commentators would call them fatalistic and “abandoning” places if they acknowledged the downside, as if facilitating more free choice amounts to design.

Successful past Tory economic narratives, though, willingly acknowledged hard truths. Deficit reduction entailed tough choices to curb spending. Thatcherism entailed making the case for letting inefficient industries fail. If a new Tory vision is serious about raising productivity growth and spreading opportunity for people, it will have to confront the inevitable market-based adaptation for some places.

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Neil O’Brien: Corbynomics – and why it means that your house, business and savings don’t really belong to you,

Neil O’Brien is MP for Market Harborough.

What is Corbynomics? It goes without saying that it’s a much more extreme economic programme than Labour have ever had before. And that government will spend, tax and borrow more. But Labour have a lot more damaging, half-baked and dangerous ideas.

No-one is thinking about them at the moment, but the scary thing is that within weeks these ideas could be affecting your house, your pension and your job.

For me, the most frustrating thing is that Labour have identified various important issues, but their proposed “solutions” would make matters worse. Let’s look at a couple of examples.

Seizing 10 per cent of all large companies’ shares

Lots of people, including me, worry that current corporate structures create pressures that make managers behave in a short-termist way, squeezing investment to hit short term profit targets and dragging down productivity growth. I’m concerned that publicly quoted firms are beholden to increasingly transient shareholders, interested in immediate returns. They certainly invest far less than privately owned firms who can take a longer-term view.

But my answer to this would be to change the tax treatment of investment, and increase capital allowances so that there’s no disincentive to invest.

Labour’s answer, in contrast, is to forcibly transfer 10 per cent of all companies shares to create a sort of employee-ownership-at-gunpoint.

This is a terrible idea, which would make investment into the UK dry up overnight. After all, if government can steal ten per cent of your shares, what’s to stop them coming back for the rest? Labour protest that the shares are not being stolen – just given to the workers. But that’s a lie, as they also propose that a Labour-run Treasury would take the great majority of the dividends that those shares attract. At the moment, these are owned by savings and pension funds – so the money is ultimately coming out of your pocket.

The total value of the shares stolen by government would be around £300 billion, according to the Financial Times. For comparison, raising the basic rate of tax by one per cent raises £4.5 billion a year, so you can see what a vast tax grab this would be.

Forcing people to sell their properties at a price set by government, and control rents

There are major issues about the balance of rented and owner-occupied property in Britain. We had a long period when the number of properties being moved into the rent-to-buy sector was outstripping the number built, meaning owner occupation fell dramatically. Between 1996 and 2016, the home ownership rate among middle income people aged 25-34 fell from 65 per cent to 27 per cent.

However, in 2015 the Conservative Government reformed the tax treatment of rent to buy and second homes, and in the years since we have seen homeownership rebounding upwards, with both ownership and the rented sector growing in a more balanced way. There are lots more things we could do to grow home ownership.

Corbynista Labour doesn’t really believe in home ownership. They are nostalgic for the world of the 1970s, where around two thirds of households in places like Islington lived in social housing. But they know ownership is popular.
So they have announced the “private sector right to buy”. This will give private tenants the right to make their landlords sell their properties to them at a discount.

In an interview last week, John McDonnell made it clear that government would set the price: “You’d want to establish what is a reasonable price, you can establish that and then that becomes the right to buy,” he said. “You (the government) set the criteria. I don’t think it’s complicated.”

It’s not complicated. But it is deeply unfair. It would be a retrospective raid on people’s assets. People, including some who are not so rich, have invested in property under certain rules, and would have their savings ripped off them, while other people who invested their money in other things would not. This is arbitrary and unreasonable and would I’m sure be challenged in the courts.

Labour would also set rental prices, promising in a recent document that “There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower).”

This is unworkable or will lead to under investment in rented properties. Why spend lots doing up a flat if you can’t charge more for an improved property? We would quickly be heading back to the 1970s, when there wasn’t enough rented accommodation to go round, and conditions were squalid because of rent controls.

Sectoral wage bargaining

With the National Living Wage, the Conservatives have introduced one of the highest minimum wages in the world. For the lowest paid, the National Living Wage plus the cuts in taxes for lower paid people mean that they take home £4,500 more than they did under the last Labour Government – while employment has soared to a record high. We should be really proud of our record.

However, the National Living Wage is still set by an independent body, and as percentage of average pay in the market, so there is a sensible link to what businesses can afford without sacking people.

In contrast, under Labour politicians would just set rates directly. Labour have also pledged to “roll out sectoral collective bargaining”. Labour said it would “fix the going rate” in each industry and “set fair conditions” for the sector. This would represent an end to the system whereby unions negotiate company by company and, instead, give them power effectively to set national standards on pay and conditions. A new government unit would work with unions to bring firms into line.

This means that if politicians or trade unions decide your business is part of a particular “sector” (a pretty subjective question) then you would be in line for a change in wages which your business might simply be unable to afford. The scope for union bullying and endless court cases and demarcation disputes is obvious. In the car industry, wages are high, so a sectoral wage would be high. If I make plastic bits for the car industry but also other industries, is my business in or out of the automotive sector?

Rebecca Long Bailey has also said that “Labour will also legislate to reduce pay inequality by introducing an Excessive Pay Levy on companies with staff on very high pay.” There is no detail on what the rules will be, but the idea of having wages directly controlled by Jeremy Corbyn is likely to deter inward investment.

What do these ideas have in common?

When New Labour left office, a million people had been thrown on the dole, we’d had the deepest recession since the second world war and government was borrowing more than at any time in our whole peacetime history. In the final year alone, they borrowed £7,900 for every family in Britain.

And that was New Labour. Imaging what the country would look like after Corbyn and McDonnell.

Where Corbyn’s ideas really differ from previous Labour leaders is that he doesn’t really believe in the rule of law. Your house, your business, your savings: all these things don’t really belong to you, in Corbyn’s eyes: you have them only as long as the government suffers you to have them, and they can be retrospectively taken away if he sees fit. In the week Robert Mugabe died, we’ve seen underlined just how important the rule of law is. But under Corbynomics, it would be the first casualty.

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