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Westlake Legal Group > House of Lords

Bob Seely: Saving Britain billions. Ideas for the contenders in this leadership contest.

Bob Seely is a member of the Foreign Affairs Select Committee, and is MP for the Isle of Wight.

Throughout this coming week, the candidates for the Conservative Party leadership launch their campaigns in earnest.

Whoever wins faces a massive challenge. Not only do we have to deliver Brexit – and until we do Britons won’t listen to us on anything else – but we also need to introduce a raft of domestic and foreign policies to renew us in office.

We badly need new ideas and new projects , some of which will need new cash. We also need to cut taxes. To help with the coming battle for ideas, and to support Liz Truss’ work on the spending review, here below are ideas to save between £50-100 billion. That figure doesn’t include the £39bn from a nodeal Brexit.

– – –

First, some basic facts. Government spending made up 38.5 per cent of GDP in 2017-2018. Departmental budgets set by spending review (DEL) amounted to £358.4 billion in 2017-2018, but the total departmental expenditure, including spending which is difficult to predict, manage or forecast (AME) was £812.9 billion in 2017-2018. Of that, £734.9bn was spent on services.

So where could we save money?

High speed rail

First, scrap the planned High Speed Rail link – HS2 – and save £50-100 billion. HS2 initially cost £33.4 billion, then rose to £42.6 billionIt is now costed at £56 billion. One government-commissioned estimate suggests it could total a breath-taking £403 million per mile. The Institute of Economic Affairs estimates the real cost to be £80 billion, and even that may be too little.

Terry Morgan, former chair of HS2 Ltd, told the Lords “everybody has their own guesstimate” of cost and “nobody knows, actually, the number”. Doug Thornton, HS2’s former Land and Property Director, has said the valuation of properties along the route was “enormously wrong”The National Audit Office found that the estimated net cost to acquire land and property for Phase One was £1,120 million in 2012 (2011 prices) ,but £4,316 million was budgeted at the 2015 spending review (2015 prices). Every honest review has considered it bad return for the taxpayer. The Lords’ respected Economic Affairs Committee has suggested delaying HS2. Let’s bite the bullet and bin this white elephant.

As with all the ideas here, the money could be better used by giving it back to taxpayers in the form of tax cuts, or supporting local and regional infrastructure projects to counter London’s domination of infrastructure spending, or to right the injustice faced by female pensioners – the so-called WASPI women. Alternatively, the next Conservative Government could pledge to ensure fibretopremises broadband nationwide to deliver near unlimited broadband speeds.

The farce of HS2 highlights a wider issue; UK public projects cost much more than in other countries – construction cost per mile of HS2 maybe as much as nine times that of its French equivalentMegaprojects run over-budget and over-time – time after time.

Cost overruns for the Channel Tunnel were 80 percent and for the National Health Service IT System up to 700 percent. The Scottish Parliament was estimated to cost between £10 and £40 million. It cost £414 million and was delivered three years late. An excellent study by the Taxpayers Alliance found that 57 per cent of over 300 public schemes overran by an average of 33.7 per centAnother study in 2009 found total net overrun on 240 projects was more than £19 billion. Even by Government standards, these are eye-watering sums. Running public projects to time and budget would allow us to slash taxes and still leave billions for education, policing or defence.

Overseas aid

Second, reallocate the 0.7 percent legally defined amount that the UK needs to spend on overseas aid. Many traditional Labour and Conservative voters alike are losing faith with this figure.

Why? Because we now spend more on overseas aid than we do on policing. To keep public support for overseas aid, which is important, and to integrate our overseas policy, we need to change the definition of aid to give us more flexibility in how we spend, as I outlined in a Henry Jackson Society study six months ago.

We should continue and even increase the basic lifesaving and humanitarian development aid that we are rightly proud of. But there are other elements of the £14.5 billion aid bill that we can re-allocate to provide much-needed support to the Foreign & Commonwealth Office(FCO), Ministry of Defence (MoD) and Department for International Trade (DIT). The DfID money should fund:

  • The BBC World Service TV and Radio, tasking it with becoming the global broadcaster of integrity to counter the propaganda output of authoritarian states such as Russia and China.
  • Minstry of Defence peacekeeping operation.
  • Some of the Department of International Trade’s work, especially where that trade represents a moral as well as economic good, such as providing new and greener technologies for developing nations.

Whilst the above doesn’t offer money back to the Treasury, ieffectively gives a spending boost of £85 million to the FCO, £269 million to our Armed Forces and tens of millions to our trade missionswithout having to raise taxes or borrowing. In addition, £254 million for the World Service that comes from the licence fee can be returned to taxpayers or reinvested in the service.

Health and social care

Third, integrate health and social care with local government. This has a potential for big efficiency savings, allowing money to frontline services rather than bureaucracy.

Attempts to make this idea work so far have floundered. The Better Care Fund was intended to save £511 million for departments and partners in the first year. It failedNevertheless, the idea is a valid, one and the council in my constituency of the Isle of Wight is hoping to win Government support to set up a pilot scheme.

In an increasingly complex world integration, be it in overseasspending, or public servicesintegration is key to efficiency and delivery. Artificial Intelligence, tele-medicine and better use of big data will support this, especially in more isolated communities such as the Island.

Cut corporation tax

Fourth, cut tax to raise more in revenue. The principle is a sound one – we cut top rate tax in the 1980s and dramatically increased the tax take.

Slash rates of corporation tax to 12.5 per cent.  Britain has been willing to give the fiscal firepower to “pull every lever we’ve got” a no-deal BrexitDown from 28 per cent in 2008, Corporation tax will soon be set at 17 per cent, the lowest in the G20 – yet receipts have never been higher at £56.2 billion. Lower corporation tax would increase the demand for labour, which in turn raises wages and increases consumption.

Winter fuel payments

Fitth, there are more difficult areas to cover. For example means test winter fuel payments would not be popular but could save £2 billion a year. Despite being estimated to cost £1,967 million in 2018/19, these were described by the Work and Pensions Committee (114.) as a “blunt instrument” which “gives a cash payment to many households do not need it”.

According to the Social Market Foundation, pensioners, who are by far the wealthiest age group in society, “are likely to save rather than spend the value of the windfall. It asked: “Why should older, wealthier pensioners receive more money than poorer, younger ones?”

An estimate for 2012-13 stated if payments were only made to those in receipt of pension credit, expenditure would only be £600 million in 2012-13 (to nearest £100 million). Surely it is better to spend the money on increasing the basic state pension, or increasing the amount that poorer pensioners receive, than giving it to those need is less.

Street and motorway lighting

Next, there are smaller but no less valuable schemes that we could champion. For example, do we need to keep streetlighting on overnight in rural areasThere’s no link between having lights off or dimmed and an increase in crime. Do motorways lights have to be on throughout the night? On the Isle of Wightwe can vary our lighting from a central point. That has the potential to save tens or hundreds of thousands of pounds per annum.

Roadside verges

Next, why don’t we cut roadside verges less. They represent a natural habitat for wildlife, but often the way they are cut today during flowering season kills wildflowers and replaces them with thick grass which need more cutting. There are parts of verges, in roundabouts, on curves, which will need very regular cutting, but if we adopted verge cutting to encourage wildflowers and pollinators such as bees, we would beautify roadsides AND save moneyDorset saved £93,000 by ‘greening’ their verge cutting, and Monmouthshire County Council estimates it has saved £35,000 annually from reducing verge mowing. For councils’ up and down the country, every little helps, especially if it has an environmental and quality of life benefit.

Legalising cannabis

Sixth, there are other potential tax streams which have not been examined. Should we examine legalising cannabis, for example, especially weaker strains of it, not only to raise tax but also for reasons linked to mental health and crime reduction.

Colorado, with a population of under six million, raised $247 million in 2017 alone from marijuana tax. One of the most comprehensive studies into legalisation estimates that between £397 million and £871 millio, could be raised annually. A US-style system here could generate up to £2.26 billion a year from tax and fees.

n addition, there is money saved. The Taxpayers Alliance estimates that by legalising cannabis, the UK could save at least £891.7 million a year in reduced spending by police, prisons, courts and the NHS through pain relief treatments. Do we need a Royal Commission on this subject? Should we be treating cannabis, especially in mild form, as yet another sin tax, like smoking and alcohol?

Doing things better

Seventh, we need to do simple things better. There are more prosaic aspects of best practice, such as procurement.

Procurement amounts to around one third of public spending in the UK. In 2016/2017, the UK public sector spent an estimated £355 billion with external suppliers. Efficiencies, such as buying common goods and services on behalf of the whole government, saved £255 million through the Crown Commercial Service and £879 million through specialist commercial expertise.

We need a systematic method of driving procurement best practise across all of Government, from paperclips to tanks, and supporting new, smaller entrants into a market dominated by bigger players who too often bid, take their cut and sub-contract.

Finally, by leaving the EU we will have more power over procurement, buying locally as far as free markets allow. Some organisations believe that EU regulation costs the UK as much as £33.3 billion per year, potentially moreBy taking a common sense attitude to regulation post Brexit, we could save Britain billions.

– – –

These ideas are just a start. Ensuring a Conservative Government after the next General Election requires two things. First, we must deliver on Brexit, second, we need to produce ideas and policies that renew in office.

This is a contribution to the debate. Let’s see what the candidates offer in the week ahead. I wish them well.

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

Dan Boucher: Is it time for a Leadsom Convention?

Dr Dan Boucher was the Conservative candidate in Swansea East at the 2017 General Election.

One of the remarkable things about the unwritten British constitution is the way in which parliamentarians willingly stop short of pressing home what would otherwise be a political advantage because of unwritten conventions. Why is it that legislators stoically abide by these codes even when it costs them? Perhaps the answer lies in their effect. Enabling us to rise above the need for the aggressive application of law, they impart a certain constitutional flexibility and freedom. To some this might seem rather quaint, but it arguably brings, or at least should bring, a sense of dignity to our arrangements.

One such convention is the Salisbury-Addison Convention which has obtained since 1945. Named after the Conservative and Labour leaders in the Lords, it established the principle that the unelected chamber should not block a Bill at Second or Third Reading which was introduced in order to honour a manifesto commitment made by the elected party of government.

This principle makes good sense. Notwithstanding the constraints on its power, the Conservative-dominated Lords could have pressed home its right to vote down the Attlee Government’s legislation. Rather than taking this path, however, Conservative peers proactively recognised a moral obligation to respect the ballot box and, rather than waiting to be forced by law to have this freedom fettered, chose to rise to this challenge by embracing what was effectively a principled self-restraint. It is this capacity for principled self-restraint that does not seek the pressing home of legal rights just because it is possible to do so, but effectively pauses to ask whether it is right to press home such rights, which has helped to enable our political institutions to evolve out of difficulty.

The vitality of the British constitutional tradition, which famously finds it strength in being an ongoing growth rather than a finished creation, expresses itself not only by upholding existing conventions but also in developing new conventions, recognising the need for new manifestations of self-restraint as our political system evolves. In this regard, the constitutional convention that was inaugurated by Lords Salisbury and Addison in the 1940s is relevant to our present predicament.

The current difficulty arises from the fact that we have a referendum result pointing in one direction and a parliamentary majority pointing in another. Some might respond to this by saying that, as a matter of law, Parliament has the final say. On this basis, from a technical legal point of view, referenda are always advisory. Having a referendum cannot change the fact that any new law to implement a referendum result must be made by Parliament as our law-making body, not by the people in a mass plebiscite.

This technical legal reality, however, has to be held in tension with the political reality that if you give the people a referendum, don’t like their advice and then try to ignore it or tell them they were wrong, you create a huge political problem. This difficulty is greatly compounded in the current context, because the pamphlet the government sent to every household ahead of the referendum said: ‘The referendum on Thursday, 23rd June is your chance to decide if we should remain in or leave the European Union.’ The sense then was not that the referendum was being held to ask the British people for their advice, but rather to ask them to decide whether or not we should remain in the EU.

Some might respond to this by pointing out that the failure to be clear that the referendum was only advisory does not change the fact that in the British constitutional tradition it could only ever be advisory. Whilst this apparently purist presentation of constitutional doctrine may sound compelling, the truth is that the sovereignty of Parliament does not present a fatal problem for our evolving and unwritten constitution.

There is already an important sense in which, thanks to the Salisbury-Addison Convention, one of the Houses of Parliament has willingly embraced a convention of self-restraint in response to the democratic imperative. Once one House has used its sovereignty to willingly embraced self-restraint in this way, it follows that the other  could embrace self-restraint for the same reason. The only difference here is that the nature of the democratic imperative is more compelling in relation to a referendum mandate than in relation to a manifesto mandate – and thus the case for self-restraint by the Commons is stronger.

The Lords embraced voluntary self-restraint because it accepted that the government party is elected by the people on the basis of their manifesto. This then gives its election manifesto democratic legitimacy, even though it is highly unlikely that the winning party will have been elected because all its policies were liked equally. As Philip Norton observes: ‘Though an elected government may claim a mandate for whatever programme was embodied in its election manifesto, it cannot demonstrate definitively overwhelming support for any one particular proposal’.

For instance, whilst the electorate returned Margaret Thatcher in 1987 with a majority of over 100, it is doubtful that everyone who voted Conservative was doing so because they wanted the poll tax. By contrast, because a referendum is concerned with a very specific issue (notwithstanding debates about what different words may mean), it is possible to demonstrate express support for a particular proposal – in this case leaving the European Union.

In the context of the enhanced democratic mandate attending a clear public vote on a specific issue, the logic that called the Lords to exercise self-restraint applies even more to the Commons. Crucially, this would not result in changing the fact that Parliament remains sovereign. Parliament would remain so. It would freely choose to use its sovereignty to pass appropriate legislation to respect the referendum result, courtesy of a new convention of self-restraint that would develop (like the Salisbury Convention) to deal with the tensions resulting from the fact that a majority of people voted to leave the EU in the referendum while a majority of MPs would rather remain.

Given that the Salisbury-Addison Convention was named after the Conservative and Labour Leaders in the Lords, perhaps the time has come for a Leadsom-Vaz Convention in the Commons? That would hopefully restore greater dignity to our arrangements, shutting the door on revoking article 50 and hopefully opening the door to a greater determination to really honour the referendum result.

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