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Unity Howard: New sponsors. Targeted investment. Building talent. The next steps for school reform.

Unity Howard is Director of the New Schools Network.

According to Deltapoll, education was the third most important issue in the recent general election campaign. The manifesto commitments of the main parties focussed on funding rather than detailed specifics on policy areas: so what should we expect for education reform?

The Conservative Party won this election by targeting seats in areas that had not voted Tory before. As the Prime Minister said, these communities have “lent him their vote”. To keep them he must deliver real change – education must be central to that.

The New Schools Network has analysed the 41 seats in England which switched party to the Conservatives. Thirty-one are in local authorities that have a negative progress score at GCSE level, while only 10 exceeded the national average at end-of-primary testing.

We know that Brexit was at the heart of so many votes, but it was by no means the only factor. Indeed, I see it as merely part of a wider motive – a desperate plea for change from communities who know their local schools are not good enough, and who have placed their trust in the Conservatives to improve their lot.

We need a new vision for this next decade: one with a lifespan that exceeds just one parliamentary cycle. And if that vision is to resonate with those who voted Conservative for the first time, then it must centre on social mobility.

As a first step, the Government should initiate a new wave of sponsors for academy trusts, particularly in the Midlands and the North. We need businesses, charities, and other organisations who can bring their own expertise, and give back to the communities they serve.

For example, the FTSE 100 captains of industry should become school sponsors to play a hands-on role developing their next generation of employees in England. And we saw recently, a private donation to Winchester and Dulwich College, targeted at white working class boys, was turned down on equality concerns. The state sector is crying out for support– and will gladly be the recipient if private schools continue to turn their noses up.

Bringing outside expertise into schools was once central to the academies movement, as organisations like Dixons, the Co-op, the Merchant Venturers, and others sponsored local schools. That is a hallmark of responsible capitalism, but a new generation needs to step into the academy world, and needs to be given enough support to hit the ground running. At NSN, we are well placed to support them as we already do with new school applicants.

However, it is crucial that collaboration is at the heart of this – working with the existing school sector to create a settlement that works for everyone and that will outlast the parliamentary term. This includes allowing local authorities to open up their own multi-academy trusts, paving the way to full academisation.

Next, the Government needs to prioritise targeted investment in initiatives for the most left behind communities. This shouldn’t reinvent the wheel on new programmes, but rather leveraging better incentives to take on struggling schools, thus avoiding the spectre of ‘orphan’ schools with no willing sponsor. This includes more support for new academy trusts in underserved areas based on successful models in the rest of England.

Third, the Government must invest in building talent. Higher starting salaries are always welcome, but practical support is needed to develop the next generation of leaders to reach their full potential – help that goes way beyond just the National Professional Qualification for Headship.

Highly successful trusts should be allowed to replicate the KIPP Fisher Fellowship model in the US to identify and support new leaders. NSN has launched a CEO mentoring scheme but we cannot do this alone – we need Government intervention for every layer of school leadership and, crucially, funding.

Fourth, Onward research during the election found that further education (FE) is another pressing concern for new Tory voters. More funding for this sector is a good first step, but will not be enough of itself. That’s why the Government should use the free school model to bring much-needed innovation into this sector.

Finally, of course, the new Government needs to put its shoulder to the wheel again on the free school programme. New schools are a proven success, particularly in areas broadly untouched by other educational reforms. We must re-animate the original model, allowing charities, community organisations and groups of teachers and parents to establish their own school in the areas of the country which most need them.

The Conservatives started the revolution in education reform in schools, empowering communities to come together in areas otherwise abandoned. Instead of being content with their work to date, we need the new Government to take this even further.

Boris Johnson’s Conservatives showed that they can win the confidence of the country. Now is the time to prove they are worthy of that confidence by driving through the vital reforms that are desperately needed to ensure by 2024 every child can access a good school place in England.

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

By Ted Christie-Miller and Richard Howard: How to deliver net zero emissions by 2050 without damaging the economy

Ted Christie-Miller is a researcher at Onward. Richard is currently the Research Director at Aurora Energy Research. He was formerly the Director of Development and Head of the Energy and Environment Unit at Policy Exchange, prior to which he was the Chief Economist at the Crown Estate.

If Extinction Rebellion have anything to do with it, the final fortnight of this general election will be dominated by a single issue: climate change. From Sunday, activists will embark on twelve days of Christmas disruption to highlight the climate emergency before polling day – but they will be silent about what is required and how much it will cost.

This is because their central demand, to reach net zero emissions by 2025, sounds much better as protest than it does in practice. Research by the think tank Onward published this week reveals it would cost an absolute minimum of £200 billion a year to decarbonise the UK economy by 2025 – one and a half times the cost of the NHS – and £100 billion a year to get there by 2030.

Even if people were willing to pay higher taxes and prices, a 2025 target would be practically impossible to achieve. We would have to hire 270,000 extra plumbers, for example, to replace 22.8 million boilers in five years, and the global manufacturing capacity of electric vehicles would need to increase three-fold just to replace all the petrol and diesel cars on British roads (let alone those in other countries).

This is the uncomfortable truth facing the party leaders as they prepare for the Leaders’ Climate Debate on Channel 4 this evening. Parliament has rightly legislated to decarbonise the UK by 2050, but no political party has yet set out a practical plan to get there. Without it, the climate catastrophes that have punctuated this election- the flooding in venice, bushfires in Australia and floods in Yorkshire closer to home – will continue.

Thankfully, there are steps that we can take right now that will deliver net zero by 2050 without sacrificing the UK’s competitiveness, our fiscal balance or the budgets of low-income households in the process.

First, ministers should use market and behavioural incentives to drive lasting change. By abolishing VAT on domestic electricity and increasing it to 20 per cent on highly-emitting gas, whilst also removing the cost of renewable subsidies from consumer bills altogether, ministers could create market based incentives for people to switch to low carbon heating options such as electric heat pumps.

The £2 billion a year that taxpayers currently spend on Winter Fuel Payments is targeted at the age group now least likely to be in fuel poverty, the over-65s. Why not turn it into a capital grant of up to £4,400 per household, to upgrade the insulation and boilers of fuel poor households?

Second, we should be much more ambitious in our plans for the natural environment, to offset carbon emissions whilst boosting health and wellbeing. The Conservative manifesto pledged 30 million trees a year over a five year term, which although welcome, falls short of setting long term target. The Conservative pledged 30 million trees a year over a five year term, which although welcome, falls well short of what could be achieved. We should plant 1.4 billion trees by 2050, 20 times the current rate, by redirecting agricultural subsidies and encouraging low-cost forms of planting like wild-seeding.

Third, for too long the UK has lagged behind its competitors in Research and Development investment. It is such a vital tool for spurring innovation in the energy tech sector and we must therefore align our R&D spending to at least with the OECD average. This will allow technologies that are crucial to the UK’s zero-carbon mission such as hydrogen and carbon capture (usage) and storage to accelerate at the fast pace that we need.

Fourth, the UK has often struggled with competing government priorities, meaning the chips do not always fall in favour of decarbonisation. Often other departments win the battle, as we saw with the scrapping of zero carbon homes policy in 2015 after effective lobbying by the Ministry for Housing, Communities and Local Government. We need a Net Zero Secretariat, set up like the National Security Secretariat, which would support the newly announced Climate Change cabinet committee in research, coordination and implementation. This would align departmental objectives around the core goal of decarbonisation, factoring it in to all decision making.

Fifth, because the UK is responsible for just two per cent of global emissions we need to drive serious international action – as Britain has done in the past. Next year’s COP26 summit, hosted in the UK, should agree a global commitment on the phase-out of coal, as well as an agreement to introduce Border Carbon Adjustments to ensure decarbonisation does not damage competition in international markets.

That said, the UK is not blameless. Between 2013-2018, 96 per cent – £2.5 billion – of UK Export Finance’s energy budget was spent on fossil fuel projects. There is no point keeping the house tidy if you are making the world a mess, so we should once and for all end taxpayers money being used for fossil fuel projects abroad.

The UK has always blazed an international trail on decarbonisation, cutting emissions faster than any other developed country (by 44 per cent between 1990 and 2018) and brokering international agreements at the Gleneagles Summit and the Kyoto Treaty. It can do so again, but we must stick to a sensible target and devise a practical plan, so we set the best possible example on the world stage of how to go about decarbonisation our economy.

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

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.

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

Sunder Katwala: What Onward’s new report really tells us about the prospects of a post-liberal conservatism

Sunder Katwala is the Director of British Future.

“You know there are times, perhaps once every 30 years, when there is a sea-change in politics”, said Jim Callaghan, the last Prime Minister to be forced to the polls by losing a vote of no confidence, during that 1979 campaign. “It then does not matter what you say or do. There is a shift in what the public wants and what it approves of. I suspect there is now such a sea-change – and it is for Mrs Thatcher”.

Forty years on, the think-tank Onward detects another “sea change” in attitudes, away from freedom and towards security. The Onward report, ‘The Politics of Belonging’, targets libertarian “freedom fighters”, perhaps worrying that Boris Johnson’s liberal instincts may give them more of a hearing than Theresa May ever did.

Onward do present compelling evidence of broad public scepticism that the free market is working fairly. The public are sceptical about globalisation, about privatisation, what technology means for working life – and whether the rich have earned their rewards.

Leave out party brands and the reputations of political leaders, and public intuitions lean leftwards, across generations, social classes and referendum divides. Lecturing those who were born decades later about the Winter of Discontent will preach only to the converted; those who believe in the market are going to have to do rather more to engage with those who feel that opportunities to earn and own do not extend to them.

The findings on social attitudes are a mixed bag. Presented with a set of binary choices by the pollsters, people would prioritise “security” to “freedom” by two to one – but prefer “change” to “tradition” too (with the over-55s narrowly disagreeing), despite regarding the growth of cities as rather more a bad than good thing. Asked to attribute lower marriage rates to either a decline in family commitments or more personal choice, respondents chose the former, combined with a strikingly broad consensus across generations that gender equality has not gone nearly far enough yet.

The poll framing sometimes steers pretty hard: respondents unsurprisingly prefer “gradual change that preserves what matters” to “embracing radical change” (with no countervailing reason cited).

Frustratingly, the Onward report does nothing to try to stand up the central claim of a ‘sea change’ in attitudes, since it contains no information of whether or how any of these attitudes have changed over time. This snapshot poll of 2019 attitudes can offer eye-catching findings about what people think now and maybe some clues, in comparing views across generations, about the direction of travel.

But the Onward narrative depends heavily on an untested assumption that “freedom” would have trumped “security” had the public been asked that across the last few decades. That premise appears implausible.

Public attitudes can be cyclical – favouring more attention to inequality and public services when Margaret Thatcher was in power, before becoming more sceptical of taxation and redistribution under Tony Blair and Gordon Brown. The dramatic dip in the public salience of immigration since the 2016 referendum may reflect a similar “thermostatic” dynamic. What is almost certainly the case is that the British public in 2019 are as socially liberal as they have ever been, while having never been nearly so socially liberal as the political and professional classes.

Some attitudes shifted slowly. The death penalty may have been abolished in 1968, but three-quarters of people approved of it into in the last 1980s, before support finally dipped below 50 per cent in 2014. Attitudes to gay rights changed later and much faster: two-thirds of people feel same-sex relationships are “not wrong at all” but fewer than a quarter held that view when Tony Blair came to power. These social changes sometimes accelerate or mildly slow down, but the long-term sea-change towards these foundational liberties does appear irreversible.

Casting Thatcherism as a libertarian project leaves a lot out. The Iron Lady may have carried a copy of Hayek in her handbag, but she combined economic liberalism with a vigorous social conservatism, underestimating the tensions between these two strands of her project. British Conservatives no longer fight all of the cultural battles that she did. Legislating “section 28” against the pro-lesbian “loony left” has given way to declaring solidarity with those celebrating Pride.

The British right is also keen to disavow the ugly overt stoking of racial grievances that increasingly characterises Donald Trump’s Republican takeover – without yet fully unravelling the puzzle of why Tory suggestion that commitments to family and faith should appeal to socially conservative ethnic minority voters has often been received with mistrust.

If Trump’s populism offers an identity politics of grievance and resentment, a new politics of belonging on the British right might eschew an arid “bring backery” and attempt the more challenging task of a moderate, post-liberal communitarianism, now seeking conserve liberal advances against discrimination, while meeting the appetite for shared identity and integration in a liberal society. If the Onward report is structured around binary choices, the appetite for freedom has always depended on a foundation of security, as reflected in responses to both 9/11 and the financial crash of 2008.

The shadow of an imminent general election looms over this report. If two-year parliaments become the norm, longer-term relationship-building which might expand electoral coalitions in time risk becoming a deferrable luxury.

Few Conservatives anticipated the scale of generational polarisation which arose out of Brexit in 2017 – and Onward have been at the forefront of worrying about the long-term existential headache that this creates. Yet the party may find itself in a snap Brexit election pragmatically conceding the cities and the under-40s graduate vote to their opponents, this time at least.

This volatile political context puts a more foundational question to a politics of belonging. Is this mainly an instrumental exercise in party strategy and vote maximisation – or is there a broader social motive, which might seek to reduce the intensity of political polarisation too?

There is an appetite for a politics of belonging in a society as anxious about social fragmentation and division as Britain today – especially one which seeks to close the identity and contact gaps between the towns and the cities, across the generations, social classes, and ethnic and faith groups. Politicians across all parties recognise that by using the rhetoric of One Nation in polarising times – but may decide they need to fight and win one more campaign before embarking on the task of trying to bring people together again afterwards.

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

Chris Philp: Cut Stamp Duty – and unleash a new Home Ownership Revolution

Chris Philp is has served as PPS in the Treasury and MHCLG, and on the Treasury Select Committee. He is MP for Croydon South.

One of the signal achievements of the Thatcher Government was the home ownership revolution. Millions of people were able to buy their own home for the first time – through right-to-buy and a more dynamic housing market generally. Sadly, much of that good work has been undone in the years since.

Home ownership rates have fallen from a high of 71 per cent in 2005 down to 63 per cent today. The falls are especially acute amongst those in their 20s and 30s, where home ownership rates have almost halved since the early 1990s. No wonder we have trouble getting younger people to vote Conservative.

Home ownership is an inherently beneficial thing. Those who own their own home enjoy secure tenure and lower housing costs than those renting. Over the long term, it is financially better to own rather than rent – even if house prices do not rise faster than inflation. And owning a property gives people a real sense of a place they can call home. It is no surprise, then, that 86 per cent of the public aspire to own their homes. Given only 63 per cent actually do, around a quarter of our fellow citizens wish to own their own home but do not. We should help them.

Stamp duty is a major barrier to buying a home. It is a cash cost that cannot be mortgage-funded. Given that up-front cash costs are the biggest impediment to buying, this is serious. Stamp duty acts as a barrier for buyers of all kinds, which means housing stock is not freed up by downsizers and there are negative effects on labour mobility.

It should be a legitimate – and popular – objective of public policy to help prospective home buyers. In the last ten years, owner occupiers have been crowded out by financial investors and second home buyers, often from overseas, who have superior financial firepower. They currently make up around a quarter of all residential sales, and even more of new build sales. The Government has already recognised this by abolishing stamp duty for first time buyers purchasing properties under £300,000 and cut it by £5,000 for those buying at under £500,000.

We need to do more. As I and Guy Miscampbell set out in a new report for Onward, the Government should:

  • Abolish stamp duty entirely for all purchases of a main home under £500,000.
  • Halve current rates of stamp duty for purchases of a main home over £500,000.

This would abolish stamp duty for nine out of ten owner-occupiers and save a family buying an average priced London home £13,000, or half of a five per cent deposit. The cost of this policy is £3.3 billion. But it would help more people buy their first home, and make moving house – for a new job, to downsize or to upsize – much easier. For the most expensive properties, where stamp duty is currently charged at a marginal rate of 12 per cent, it is likely that transaction volumes are being suppressed. Halving stamp duty for those properties should result in a positive Laffer effect, due to an increase in transaction levels.

But any new policy should be fiscally responsible. To fund the £3.3 per year billion cost, I propose a number of smaller tax changes, where there is broad public support for taxation and a clear case for action:

  • Introduce a one per cent annual tax on the value of homes left empty for more than 6 months in a year, raising £645 million.
  • Increase the current three per cent stamp duty surcharge on second homes and investment properties to 5 per cent, raising £790 million.
  • Introduce a further three per cent stamp duty surcharge of non-UK resident buyers of residential property, raising £540 million.
  • Introduce an extra higher band of council tax at a £1,700 per year council tax premium for the 0.4 per cent most expensive properties, raising £173 million.
  • End all council tax reliefs for vacant and second home property, raising £75 million.
  • Create a new eight per cent (up from five per cent) stamp duty band for the portion of commercial property purchases over £1 million, raising £682 million.
  • Levy stamp duty on residential properties transferred by selling the company that owns them via transparent ownership rules (which would also help combat money laundering), raising £175 million.
    Double the Annual Taxation on Enveloped Dwellings, raising £140 million.

These measures taken together will help first time buyers, down sizers, upsizers and people moving home to help their job. It will tax overseas investors (usually from the far east) who are treating UK homes as a financial asset and crowding out first time buyers with their superior financial firepower.

Tilting the playing field back towards UK-resident first time buyers and owner-occupiers is the right thig to do. The new Government should use the coming autumn budget to do exactly that.

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

Mark Harper: Most people think it is right to reduce migration. We need a Sustainable Immigration Plan.

Mark Harper is a former Chief Whip, and is MP for the Forest of Dean.  He was Immigration Minister from 2012 to 2014.

One very clear message that the electorate continues to send to politicians is the importance of having a sensible migration policy that controls the levels of immigration into our country.  The topic featured prominently during yesterday evening’s leadership election debate between Jeremy Hunt and Boris Johnson.

The Conservative Party has spent nine years and three general elections pledging to bring net migration down to the tens of thousands, yet last year it stood at 253,000 a year. It is clear that some new thinking is required to make our migration policy more effective, and this involves moving beyond our current net migration target.

What was a powerful statement of intent in 2010 now stands as a visible statement of a target that we have never managed to hit. Back then, we reassured ourselves that the last time we were in government, in the 1990s, net migration averaged fewer than 50,000 and never exceeded 100,000 a year.

It was Labour, not the Conservatives, who oversaw a four-fold leap in net migration during their 13 year stint in government, helped along by Tony Blair’s unilateral decision to relinquish free movement controls in 2004. Moreover, because EU net inflows were minimal, a full 88 per cent of net migration was under direct government control.  Net migration in the tens of thousands was deliverable, but the target was not the way to achieve it.

Despite being maligned as too tough by the Left, the target has proved weak. It sits above different migration routes and therefore gives no indication of the government’s priorities between different skills, industries or types of migration. It has no teeth with Whitehall departments, allowing the merry-go-round of departmental and business special pleading to continue with no consideration of the trade-offs.

As a result, net migration adds a city the size of Newcastle upon Tyne to the population each year. If you add up cumulative net migration since 2010, a total of 1.4 million more people have come to the UK compared to if we had hit our net migration target every year. It is hardly surprising that a majority of every age group, ethnicity and both Remain and Leave voters support reducing immigration and three quarters of people think reducing immigration to the tens of thousands is the right thing to do.

That is why I support new proposals this morning from the thinktank Onward to replace the target with a long-term Sustainable Immigration Plan – published by the Home Office every year and presented to Parliament. This would force the Government to set out its own plans and forecasts for immigration, across different routes, skills and nationalities and make the trade-offs that are inherent in immigration policy.

But this plan needs teeth. That is why we should go one step further and create a new independent Office for Migration Responsibility – along the lines of the independent Office for Budget Responsibility – to enable Ministers to be held to account on the impact of their own immigration policies. This body would provide the information needed to enable Parliament to hold Ministers’ feet to the fire on their promises on immigration and bring an end to unattainable targets.

We must restore public confidence in immigration policy by not only setting out a well-structured and actionable plan to make sure politicians have the ability to decide which – and how many – people come into the country every year, but by being truly accountable for delivering on it.

For far too long the public have thought, and quite rightly too, that our politicians do not have their hands on the wheel when it comes to immigration policy. This has to change, and as we leave the EU we will regain the ability to shape a migration policy that can control immigration from wherever in the world it comes. I hope that our next Prime Minister – whoever that may be – will welcome this report and embrace these proposals into their government’s agenda.

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

Mark Harper: If the Conservative Party is not the party of sound money, then what on earth are we for?

Mark Harper is a former Chief Whip, and is MP for the Forest of Dean.

Recently, I made my first ‘appearance’ on BBC Radio 4’s Dead Ringers, where they said that the only interesting thing about me was being a Chartered Accountant.  Now, this may not make me Box Office – but at least I know how to balance the books.

As the Conservative leadership race has gone on, both candidates have increased the amount of taxpayers’ money they have spent. Between them, adding up estimates by the independent and respected Institute for Fiscal Studies (IFS), the two remaining candidates have already clocked up tax and spending promises of around £51 billion per year.

The recent BBC documentary series on Margaret Thatcher reminded me of a fundamental truth that she talked about at the 1983 Conservative Party Conference: ‘If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay—that “someone else” is you. There is no such thing as public money; there is only taxpayers’ money’.

And that truth is one of the reasons why I’m a Conservative. If the Conservative Party is not the Party of sound money, then what on earth are we for?

What do I mean by sound money?  There are two effective checks on state spending: it’s Government committing to live within its means, and ensuring people keep more of their own money.

In other words, reducing debt as a share of the economy, and reducing the tax burden.

Living within your means is clearly something that Labour doesn’t believe in – you only have to look at their policies. Take John McDonnell’s plan to nationalise the water industry in England for instance; according to the Social Market Foundation, that could cost as much as £90 billion and add five per cent to the national debt.  Lots of cost with no benefit to consumers or citizens.

When we came to power in 2010, taking over from Labour, the Government was borrowing £1 in every £4 we spent.  The budget deficit was just under ten per cent of the size of the economy, at £150 billion a year.  We had to make difficult decisions to get the public finances back under control and Labour opposed us every step of the way.

Despite Labour’s opposition, we have reduced the cash deficit to £42.9 billion—down by over 70 per cent —and the deficit as a proportion of the size of the economy is down by 75 per cent to 2.4 per cent.

We should remember, and stick to, our 2015 and 2017 Manifesto commitments to reduce national debt as a share of GDP.

The tax burden is at a 50 year high.  That’s not a comfortable place for a Conservative Government to be. As Conservatives, we want to reduce the tax burden over time to allow hard working people to keep more of their own money. Recent polling by the Onward think tank showed that the majority of people, both young and old, want to keep more of the money they earn.

We do not help people with the cost of living by putting their taxes up. Our focus should be on reducing taxes for lower and middle income earners. We should always remember that the purpose of taxes is only to raise what is necessary to pay for public services and things which only the state can do, such as defence and security.

As Conservatives, we should also recognise that there is a difference between rates of tax and how much revenue is raised from them.  Conservative chancellors from Nigel Lawson to George Osborne have recognised that cutting tax rates, reducing allowances and simplifying the tax system can lead to collecting more tax revenue. Lawson did this with income tax, Osborne with corporation tax.

There are always many pressures on public spending. We need to invest in social care, our schools and colleges, policing and the NHS.  One of the biggest challenges facing the new Prime Minister will be their approach to public spending and the need to set priorities.

A good policy to follow would be to go back to the pre-financial crash Conservative policy to share the proceeds of growth between tax cuts, spending increases and reducing debt. Each year we should look at the growth and tax forecasts made independently by the Office for Budget Responsibility (OBR), and the pressures on public services to reach a balanced approach.

These decisions need to be taken in a careful, thoughtful way using methods which already exist like a Comprehensive Spending Review and the annual Budget. The Government has already announced a Comprehensive Spending Review which will set out spending plans for the next few years, until just beyond the next General Election. It’s going to require some very tough decisions, to be made by the new Prime Minister and Cabinet.

It is perfectly reasonable for leadership candidates to set out their preferred direction of travel in specific areas of tax and spending, but the scale of those commitments should be determined by the new Prime Minister and Cabinet in a proper, balanced process.

The new Conservative Leader and Prime Minister has three tasks – deliver Brexit, govern as a Conservative, and beat Labour at the next general election. Key to defeating the Labour Party will be to win the argument on the economy. And winning the argument on the economy means winning the argument for lower taxes, for sensible levels of public spending (which involves making tough choices) and for reducing the burden of national debt.

As this leadership race comes to an end, we should not lose sight of the real finishing line – the next general election. We need to ensure that we finish this leadership contest in a better position to win it.

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Alan Mak 1) Alan Mak: Conservatism 4.0 – Adapting our Party for the Fourth Industrial Revolution is our greatest challenge

Alan Mak is MP for Havant and Founding Chairman of the All-Party Parliamentary Group on the Fourth Industrial Revolution.

Later this year, the international commission that oversees the official geological timechart will meet to debate and decide whether the world has entered a new epoch. The “Anthropocene”, named after the humans that have had such a profound influence on our planet would, for example, sit alongside the Upper Jurassic and Pleistocence (Ice Age) periods and represent the biggest turning point in history for over 500 million years.

Advocates for the Anthropocene say this new distinct era started in the 1950s, identifiable from the radioactive fallout from nuclear weapons tests, the appearance of fossilised plastics, the rise in carbon pollution from the global post-war economic boom, the pervasive use of concrete, and the rise of mechanised agriculture. Opponents feel none of these changes has been sufficiently impactful to merit a new phase in history – and the debate continues.

In contrast, the start of a new Fourth Industrial Revolution (4IR) in the late 2000s is not in dispute. My previous ConservativeHome series on this topic outlined the historical background and economic importance of the 4IR – the fourth phase of industrialisation after previous eras defined by steam, electricity and then the internet. This latest series of articles, which begins today, outlines its political implications, and argues in particular that adapting conservatism to the politics and society of a Britain radically re-shaped by the 4IR is our Party’s biggest challenge in the coming years – not Brexit.

Like many activists around the country, I spent time during the local election campaign knocking on doors and speaking to voters. I found an electorate keen to talk about a range of topics, not just Brexit: the economy, schools, defence, the NHS. Brexit is certainly the focal point of our national discourse for now, and while it will continue to be the fundamental, short-term issue our new Party Leader must deliver on, a moment will arrive very soon where the Party must pivot to the future – and look beyond Brexit.

As the leadership contest begins, our next Prime Minister, who will take us into a second decade in power, needs to turbo-charge our domestic policy agenda post-Brexit.

The next general election, whenever it comes, will be fought against a Labour Party that has coalesced around a hard-left agenda with clear messages on austerity, state-aid, taxation and the state ownership of utilities. Worryingly, these big state, anti-capitalist arguments have gained traction for the first time in 40 years. Just as Margaret Thatcher defeated Michael Foot’s hard left ideology in the 1980s, today’s Conservatives need to re-win the argument for free markets and stamp out Corbynista thinking before it takes hold.

The battlegrounds for the next election are being shaped by the new, disruptive technologies of the 4IR, sometimes visibly, sometimes not. The underlying forces shaping the contours of our new society and economy – the automation of jobs, the creation of new businesses, regional growth and decline, the skills base in each community – are all driven by new technology. As our lives become ever more digital, our country faces a series of unique challenges that only Conservative values can fully address.

Our Party has to adapt to this new landscape – and develop a new set of positive policies that allows us to deliver on the changed aspirations of voters in this new setting. From helping people secure the new jobs that the tech revolution will create to tackling the downsides of growth such as preventing environmental degradation, we need to develop Conservatism 4.0 – conservatism for the Fourth Industrial Revolution.

Previous Industrial Revolutions saw Conservative leaders grasp the opportunity to reshape our Party as the country changed. Robert Peel repealed the Corn Laws, heralding Britain’s rise as a champion of free trade, and  Thatcher drove forward reforms that enabled the City of London to renew itself and flourish through the “Big Bang” of technology. Our next Leader must consider how the Conservatives will remain relevant to a new generation of voters whose lives, workplaces and communities are being shaped by artificial intelligence, robotics, big data, drones and a new phase of globalisation.

We Conservatives must adapt to this rapidly-changing social and economic landscape, just as Thatcher and her predecessors did. These four guiding principles should shape the next leader Conservative Leader’s thinking.

1. No community can be left behind

Young people thinking of careers after leaving school or university are now entering workplaces in every sector shaped by artificial intelligence and automation.

Just take the supermarket industry, a sector that employs 1.1 million people in the UK and which faces radical change. Ocado, for instance, has developed a warehouse in Hampshire dubbed “the hive” that sees robots processing 3.5 million items every single week. Meanwhile in America, the first trials have begun of “Amazon Go” – checkout-free shops where consumers walk-out with whatever goods they like bypassing traditional tills or scanners. Instead, camera-based tracking technology identifies the shopper visually, and the goods bought, and charges their credit card automatically. There are no staff in the “shop” – a radical departure from the high street shop my parents ran which relied heavily on human labour (including mine).

What do these innovations mean for shop workers, and the millions of others who will likely be displaced in similar ways in other industries? Just as in previous Industrial Revolutions new jobs will certainly be created, from app designers to data scientists to robot maintenance workers. Past experience also suggests more jobs will probably be created than are lost as the economy grows. But our challenge is ensuring we equip workers with the right skills to fulfil their potential and secure these new jobs.

That means a renewed focus on STEM skills and a wider strategic long-term plan for skills in our country. I’ve previously set out my belief that we should introduce a Future Skills Review, a big picture analysis of the skills needed for our economy over the next five years – akin to the Comprehensive Spending Review or Strategic Defence Review.

Automation will inevitably impact different areas of the country disproportionally. So our next Prime Minister needs to prevent widening regional inequality. The impact of the decline of heavy industry, especially in the North, is still felt to this day in areas that have struggled to fully recover. As the Fourth Industrial Revolution accelerates, we need to help every community adjust and prosper, getting a fair share of the fruits of economic success. Leeds re-invented itself as a hub for digital innovation, whilst Sunderland is home to Nissan’s highly productive car plant. So a new Northern Technology Powerhouse would be especially welcome in the years ahead, ensuring that it isn’t just the “Golden Triangle” of Oxford, Cambridge and London that benefit from the 4IR.

2. Public services should be more productive, more digital and more accessible

The smartphone generation demands services that are available at their fingertips, whether that’s ordering a taxi or making a bank payment. The average smartphone user can choose from around 2 million apps to download – everything from games to social media.

Technology means life is moving faster, and people’s expectations of similarly fast-movement and responsiveness from their government are rising too. Voters want a Smart State, not Big Government. And because we Conservatives are in office, we are expected to use new technology to deliver better, more efficient public services.

Perhaps one of the least recognised achievements of the Government since 2010 has been the digital transformation of our public services. The UK is currently fourth in the UN e-government league, having delivered more than £2 billion in efficiency savings through digital transformation since 2014.

But we shouldn’t rest on our laurels. We must strive to deliver more efficient public services by fully-digitising them in line with consumer demand. A poll by POLITICO in swing election seats showed that our Party still trails in the core issues ranked as the most important outside of Brexit – crime, housing and health.

We need to consider how we can use artificial intelligence to solve crimes; automated construction techniques to build much-needed homes; online courses to improve further education; and how we deploy apps to transform the NHS into a paperless service, so patients have their test results and medical records on their phones.

As a Party we need to harness technology to improve the delivery of public services and offer better outcomes, recapturing the initiative from Labour politicians whose focus on nationalisation and uncosted (yet endless) spending commitments often drives the debate.

3. Technology can help us become more relevant to younger voters

The age divide in our politics is now well-documented, with a recent Onward report showing 49 per cent of Conservative voters are now over the age of 65.

Yet as separate polling for the Centre for Policy Studies found, young people are still more likely than the general population to think that the Government spends and taxes too much and are not inclined to back nationalisation.

Instead, they want more control over their lives, and that includes over the money they work hard to earn.
In the age of the Fourth Industrial Revolution, Conservatives need to deliver the same message of economic freedom that propelled Thatcherism to unprecedented electoral success. By embracing tech, and making Britain a global tech superpower, we will create more opportunities for young people to start their own business and have a stake in our society by owning capital and generating wealth for themselves and others.

Our next Leader must position Britain as low-tax, high-innovation, pro-tech economy. We must cut corporation tax to attract inward investment – Jeremy Hunt’s proposal to cut our rate to match Ireland’s 12.5 per cent rate is very welcome – and be pro-active in creating a regulatory environment that gives tech companies the freedom to innovate. We must not follow Labour’s example by trying ban Uber in London and Brighton. Platforms used by younger people should be smartly regulated, not shutdown.

We win back younger voters by proving that we are a Party that believes in the future – and that means embracing technology, and the benefits it brings to everyday life.

4. Green growth must be at the heart of Britain’s Fourth Industrial Revolution

The fossil fuels that powered previous industrial revolutions left a dirty legacy which we are only now coming to terms with as we take decisive action on climate change.

The 4IR will be the first industrial revolution that offers the tantalising prospect of clean growth, with renewable energy and the next generation of batteries potentially signalling the end for dirty fossil fuels.

Similarly, carbon capture and storage technology has the potential to limit CO2 in the atmosphere; blockchain to improve accountability across far-flung supply chains; “smart boats” to help fishermen manage their catch effectively; and biodegradable plastics to protect our oceans.

These are just a small number of the environmental technology breakthroughs that will soon become pervasive.

Britain should be an advocate on the world stage for green growth, helping us bolster our credentials at home as the Party of good environmental stewardship too. The current Government’s 25-Year Environment Plan and commitment to biodiversity has been one of our most popular policy areas since 2017. By committing to ensuring that this new industrial revolution leaves the planet cleaner we can turn green growth in the 4IR into a new source of electoral strength.

All four policy areas matter regardless of Brexit or our future relationship with the EU. The current Brexit debate has meant they are not getting the focus they deserve, but our next Leader should put these principles at the heart of our Party’s response to the Fourth Industrial Revolution.

By doing so, we can successful help our Party adapt to the new political and economic landscape that technology-driven change is creating, so voters continue to trust us to govern for generations to come.

This article is the first in a three-part series explaining why adapting to a society and economy shaped by technology is key.

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Neil O’Brien: How our new leader should use our fiscal firepower to promote Conservative values

Neil O’Brien is MP for Market Harborough and is a board member of Onward.

One of the first big decisions for our next leader will be how to play the Spending Review.

There are some massive decisions to make just weeks after the new Prime Minister arrives, and these choices should be at the heart of the current leadership election. The first is about how fast to reduce debt.

After nine years of difficult decisions, Government debt is forecast to fall from 83 per cent to 73 per cent GDP over the next five years. That means scope to cut tax and increase spending in a prudent way in the near term, while keeping debt as a share of GDP falling.

How should we use this fiscal firepower we’ve built up?  We should use it to promote Conservative values. The Spending Review should fund good public services. It should back business, but in a way that helps poor areas. It should help support family life, and help those on low incomes to earn more, and keep more of what they earn.

Let’s start with public services first.

Conservatives must be the party of law and order. We now have room to increase police numbers and fulfil pledges we made in opposition about increasing prison sentences. That requires investing in more prison places. But because the police and prison budgets are relatively small (£14 and £4 billion respectively, out of total spending of £840 billion), it wouldn’t cost much to invest in fighting crime.

School spending is at a record high, but pupil numbers are growing fast. After accounting for inflation, school funding per student is eight per cent below its peak in 2015.  We should take real spending per pupil back to its peak and keep it there. That would cost about £4.6bn extra a year by 2022-23. It would be a good investment, and shut down the scare stories put about by the hard left.

The second big thing we need to do is to get the economy moving.

We should learn from Ireland.  Between 1990 and 2017 Ireland grew its Gross National Income per capita from 25 per cent below the UK level to 45 per cent above it.

How did they overtake us? Relative to the size of its economy, Ireland attracted four times more inward investment than the UK.  Those new factories and offices have transformed productivity, putting rocket boosters under Irish wages. Ireland’s low rate of corporation tax, just 12.5%, has been a magnet for investment.

Since 2010 we’ve cut the UK Corporation Tax rate from 28 per cent to 19 per cent, and it’s scheduled to fall to 17 per cent in 2020. We should finish the job, and cut it to the Irish rate, showing that Britain is open for business.

But it would be no good having an economy that’s only strong in some areas, or for some people.

A report I have out today for the think tank Onward, Firing On All Cylinders, presents clear evidence that more balanced economies are richer overall. There are no large countries which have a more regionally imbalanced economy than the UK, and are also richer than the UK.

It’s not hard to understand why. In an unbalanced economy resources like land and infrastructure are overloaded in some places, but underused elsewhere. Because people (particularly lower skilled workers) don’t simply leave their homes in the face of local economic problems, having greater distances between unemployed workers and job opportunities creates problems, and high unemployment can lock in patterns of worklessness.

Politicians often talk about rebalancing the economy (particularly since the referendum) but policies to do so have often failed.
Labour’s approach didn’t work. Rather than moving a few back-office jobs in the public sector to poor areas, it’s the private sector we need to grow.

We should learn from the way that Margaret Thatcher used investment tax breaks to lure Nissan to invest in Sunderland, transforming not just wages locally, but a whole moribund industry.

My report finds Britain’s tax treatment of investment is the least generous of any G20 country, helping explain why investment and productivity in Britain are so much lower than competitors.

Fixed investment in Britain has been lower than the OECD average in every year but one since 1960, while rising countries like South Korea have nine times more robots per manufacturing worker than the UK, making them much more competitive.

But there’s a double whammy from a tax system hostile to investment: it’s particularly bad for poorer regions, because they are more reliant on manufacturing, which requires twice as much capital investment per worker as the rest of the economy. My report shows how Britain’s unusual tax system helps explain why Britain has de-industrialised more than any other G20 country since 1990, hitting poorer areas hardest.

While manufacturing accounted for around a quarter of productivity growth nationally since 1997, it provided 40-50 per cent of productivity growth in poorer regions like Wales, the West Midlands and North West.

As numerous business groups have argued, we should cut tax on investment. Plus we should go even further in cutting it in poorer regions, to attract inward investment there.

We should give the Department of International Trade a new mandate to drive inward investment to poorer places and also rebalance the government’s most growth-enhancing spending. At present the types of government spending with the greatest potential to spur growth are too concentrated on areas that are already successful.

Finally, the Spending Review must make sure working people feel the benefits of growth in their own pockets.

With the Income Tax Personal Allowance now at £12,500, compared to a National Insurance threshold around £8,600, raising the threshold for National Insurance would help more poor households than raising the Personal Allowance.

Families with children are twice as likely to be poor, because there are more mouths to feed, so helping working families with children on low incomes should be a high priority.

Until the 1970s we used to recognise children in the tax system, recognising that having children reduces your ability to pay tax.  It’s time to start doing so again, because Conservatives should support family life as well as hard work.

We should raise the National Insurance Primary Threshold to £13,000 for people with children. That would increase post-tax income by up to £1,100 for a two-earner couple.

And we shouldn’t stop there. Our other great tool to help low income workers is Universal Credit. We should cut tax further for the poorest working families by turning UC into “UC Plus”. That means dramatically increasing UC Work Allowances and creating a separate Work Allowance for second earners, meaning people keep more of what they earn.

UC Plus would increase incomes for working households by up to a further £4,300 for those who benefit most.

We should put the poorest at the front of the queue for tax cuts because we can see from our previous reforms that cutting tax for the lowest paid creates a double win: it increases incomes directly, but also encourages work and increases employment.

I believe strong economies are built on broad foundations: more geographically balanced economies are stronger overall; and economies where all groups see the benefits of growth have higher employment. In short, a strong economy is one that is firing on all cylinders.

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“Populism of left and right poses enormous risks to this country’s prosperity.” Gauke’s speech to Onward – full text

This is the full text of a speech delivered by David Gauke, the Secretary of State for Justice.

Thank you, Richard for hosting us and Will, for that introduction. And may I thank Onward for the opportunity to make this speech.

And I think I should begin by stating what this speech is not. It is not, predominantly, a speech about Brexit – although it certainly touches upon it.

It is not a leadership campaign speech, for two very good reasons. First, I do not believe that we should change the leadership of the Conservative Party until we have addressed the manner of our departure from the European Union. Second, when it comes to any future leadership election, my position is to resist the clamour to stand. I remain confident that my resistance will be greater than the clamour.

But it is a speech about the future of the Conservative Party. And, indeed, the future of British politics as a whole. It is a speech that sets out the choices of direction for my party, a choice that will define the Conservative Party – and British politics – for a generation.

I set out how the rise of populism, the fragmenting of traditional party loyalties and the impact of Brexit means that there is a case for the Conservative Party to become a more populist, anti-establishment, culturally conservative party. But I argue that such a choice would limit our electoral appeal and leave the UK badly placed to take advantage of the opportunities of the 21st century. In other words, this is a speech that argues for a Conservative Party to be a broad church and an advocate for mainstream values.

Ladies and gentlemen, we live in an era of extraordinary political turbulence.

Around the rest of the world, we have seen new, populist parties quickly finding themselves in government. In the US, we have seen someone who has never held public office elected as President.

One of our two great political parties is led by Jeremy Corbyn, someone who spent his first 32 years in Parliament on or beyond the fringes of British politics. And a new political party – the Brexit Party, led by someone who has stood unsuccessfully for Parliament seven times – is currently riding high in the opinion polls.

Policies and politicians that, not that long ago, could be dismissed as extreme, divisive or impractical are succeeding in winning large numbers of votes. Mainstream politicians (as that term has generally been understood for decades) are on the defensive.

We live in a period when the forces of populism are strong. Anti-establishment messages resonate. Whether of the left or of the right, whether Jeremy Corbyn or Nigel Farage, the politician that argues that much of the public has been let down by the ‘elite’ will strike a chord.

That ‘elite’ might be defined in cultural terms – the ‘liberal elite’, seen as putting the interests of migrants or international institutions ahead of the indigenous population. Or the ‘elite’ might be defined in economic terms – the ‘rich and powerful’, the ‘beneficiaries of neo-liberalism’, who put their interests ahead of the interests of wider society.

Either way, the populist politician of left or right will argue that his policies will diminish the power of the elite, redistributing it to their supporters.

There is no doubt that this populist mood contributed to Leave’s victory in 2016. That is not to say that all Leavers were populists or that all Leave arguments were populist arguments. They weren’t. But there is no doubt that the 2016 Leave campaign tapped into a sense of grievance that the elites were not listening to those who felt disenfranchised and that the referendum enabled those voters to ‘take back control’.

The emergence of populism raises two questions, in particular, which I will attempt to answer.

  • Why is this happening now?
  • How should mainstream politicians respond to it? Specifically, how should British Conservatives respond to it?

So, the first question: why now? Or perhaps it is worth asking, why not before?

There have always been plenty of people who think their interests are not best served by those in positions of power, angry about foreign competition or immigration, sympathetic to a strong man willing to break the rules. And, on many measures we were less liberal – attitudes to capital punishment, homosexuality and racism, for example – than we are today.

Yet, in the past, the voices of populism were marginalised. People voted for mainstream parties and the leadership of mainstream parties robustly resisted populism. There were a limited number of media outlets some of which certainly flirted with populism but were never fully captured by it.

The emergence of social media has enabled those with non-mainstream views to find the like-minded. The once marginalised find reassurance in digital echo chambers. The views of extremists can be disseminated to the susceptible as online communities where they won’t face challenge. It should concern us all that Tommy Robinson had nearly twice as many Facebook followers as the Prime Minister.

This has played out in a period of moderate increases in living standards. The financial crash and the ensuing Great Recession resulted in a collapse in trust for those in authority and a significant hit to real incomes. Our public finances were predicated on a level of growth that proved to be illusory. The adjustment – what some describe as the years of austerity – was made no less painful by the fact that it was both necessary and inevitable.

Add to that, we are living through a period of substantial structural change. The emergence of China as a major manufacturing power has, as a whole, been beneficial to Western countries as it has helped lower the cost of living. But those dispersed benefits don’t take away from the fact that there have been concentrated costs for those who worked in now uncompetitive industries.

A similar point can be made about new technology. Even without foreign competition, the number of manufacturing jobs would be falling as robots allow us to do more. This trend will only continue, except it won’t just be manufacturing jobs. That is not to say that employment will fall – I am optimistic that technology will mean different, more productive and interesting jobs, not fewer jobs. But it does mean disruption and insecurity.

There are many who argue that rising inequality is a driver for populism. I am a little cautious about this, at least in the context of the UK, simply for the reason that inequality (contrary to what nearly everyone thinks they know) is not, in fact, rising. As the IFS has pointed out, income inequality has remained pretty consistent since the 1990s and, since the Great Recession of the late 2000s, earnings growth has generally been greatest for lower earners.

Nonetheless, economic insecurity is clearly a contributing factor. But I would place greater weight on cultural insecurity – the fear that their culture is under threat and being marginalised. Parts of society not only feel economically disadvantaged but culturally disadvantaged.

In recent decades, we have seen dramatic changes in the nature of our society – changes which, I would argue, are overwhelmingly positive. Conservatives should welcome changes that have made society more open and diverse and have meant that life has become much better for women, gay people and ethnic minorities.

But elements of society look back to a period where their position in society was more secure and stable, their culture dominant and with an expectation that that culture would remain dominant throughout the life times of their children and grandchildren.

These concerns are too often dismissed and sneered at. For example, it is often said that older Leave supporters voted with no concern for the long term consequences for their grandchildren. On the contrary, what strikes me about many older Leave voters was that they were concerned that the country future generations will grow up in will be different – and, in their eyes, worse – than the one they grew up in. I don’t agree with that pessimistic outlook, but it is a sincere and well-motivated point of view.

This sense of a changed cultural orthodoxy is often felt strongest in those communities that have traditionally voted for centre left parties, parties that have, in recent decades, been perceived as being more focused on furthering the interests of disadvantaged minority groups rather than on the centre left’s previous principal objective – furthering the economic interests of the working class. The desire to protect the interests of vulnerable groups is entirely laudable but the change in priorities has been noticed by some of the centre left’s traditional supporters. Whether it is the Democrat-voting ex-steelworker in the Rust Belt, or the Labour-voting ex-miner in the East Midlands, they don’t feel that they are part of a privileged majority. At best, they feel invisible to the concerns of their traditional parties. At worst, they consider their traditional parties to be hostile to them.

This has led to a reaction. The perception is that the once dominant culture is under attack and, unless defended, will no longer be around for future generations.

The disenchantment of the traditional working class with the left clearly creates an opportunity for the right, as we have seen in the US. And it is argued by some that the Conservative Party needs to reinvent itself as a party that focuses on that part of the electorate – that the Conservative Party must become more of an insurgent, anti-establishment, anti-elite movement; determined to protect our nation’s cultural identity from cultural change and the challenges of globalisation. It is an approach that has worked electorally elsewhere and, it is argued, the evidence suggests that it can work here.

It is an argument that deserves to be taken seriously. It is true that there is an opportunity to appeal to voters who have not traditionally voted Conservative but feel ignored by the centre-left and repulsed by the resurgent hard left. And, of course, we should seek to attract non-traditional voters – particularly as our economic policies should be designed to benefit all parts of society.

It is also the case that the concerns of those who feel invisible must be recognised by mainstream parties. For example, a balanced approach to immigration – that recognises the benefits it has provided us but also accepts that uncontrolled immigration is unsustainable – is fair, reasonable and nothing of which to be ashamed. If mainstream parties do not address such concerns, it will leave the pitch clear for others.

But the case I want to make is that it essential for the sake of the country that the Conservative Party resists the temptation to become a populist party.

Populism would make us a poorer and a more divided nation. Ultimately, it won’t satisfy the voters who feel most disillusioned with the current political system. And it will result in the loss from the Conservative coalition of support of younger voters, more liberal-minded voters and pro-business voters.

If the Conservative Party becomes a populist party, it will drive away voters in metropolitan and suburban areas that will make the task of winning a Parliamentary majority all but impossible.

London, the Home Counties and the Oxford-to-Cambridge corridor have rapidly growing populations and have, for the most part, been fruitful areas for returning Conservative MPs. But we are already on the retreat in London. In the relatively tight general election of 1992, we achieved 45% of the vote in London and 48 seats. In the tight general election of 2017, we achieved just 33% of the vote and 21 seats.

As last week’s local elections demonstrated, we should not take our support for granted in the wider South East, especially if we are seen to be hostile to the values of liberal, university-educated, centrist voters.

However, this is not just about electoral calculation. The biggest problem with populist policies is that too often, they’re just plain wrong.

Let me begin with the economics. The vast majority of Conservatives look back with pride at how Mrs Thatcher’s governments turned round the British economy from being the sick man of Europe to being a dynamic, enterprising powerhouse.

She did so not by embracing populism but by confronting it. Whereas populism tends to seek to preserve existing jobs and industries, insulating an economy from foreign competition, the 1980s were a period when the government did not seek to prevent necessary structural changes. She took steps to make our economy more open through both unilateral and multilateral measures, foreign investment was encouraged, structural change embraced.

And whereas populism tends to be fiscally irresponsible – it is the politics of saying ‘yes’ and rarely of saying ‘no’ – the Thatcher governments’ fiscal approach was thoroughly conservative, ensuring that we sought to live within our means, tightly controlling public spending and even allowing the tax burden to rise when necessary to get the public finances under control.

A responsible government cannot agree to every spending proposal put in front of it. Nor can it afford to pursue every proposal for unfunded tax cuts. I am the first to argue the case for a competitive, pro-business tax system – I am very proud to be associated with our corporation tax reforms – but the idea that cutting taxes inevitably pays for itself is simply the right-wing equivalent of the magic money tree.

And whereas Mrs Thatcher’s Government was essentially pro-business, populism, in the end, becomes an anti-business movement. If populism involves standing up to powerful elites, populism of the right as well as the left will too often portray business – particularly disrupters and innovators – as creators of misery not creators of wealth.

That is not to say that Conservatives should never criticise business – there are legitimate arguments to make about the wider responsibilities of business – but if the Conservatives find themselves advocating policies widely considered to be economically damaging by business, we should not be surprised if this has a damaging impact on business investment and our long-term prosperity, as well as diminishing our electoral appeal.

For the Conservative Party to become a truly populist party would mean abandoning our beliefs in an open, dynamic, pro-business economy and in fiscal responsibility. Or to put it another way, it would involve shredding our economic credibility.

And there could not be a worse time to do so. When the Labour Party has adopted an economic agenda that, when implemented elsewhere, has invariably had catastrophic results, diminishing our own credibility and deserting the economic battlefield leaves our country at risk and throws away a huge electoral opportunity.

So, does this lead us to maintaining a more orthodox approach to economics, but emphasising an agenda of cultural conservatism, wholeheartedly addressing the concerns of those who feel left behind and invisible?

It would be an agenda based on tough immigration rules and taking on political correctness. It would be assertive and fearless in defence of traditional values and promise a return to a simpler, more innocent age.

But even if we avoid the temptations of economic populism, cultural populism takes us down a dangerous path. So, let’s turn to the non-economic arguments.

First, populism leads to a more divided society.

Populism is one of the reasons why our political debate becomes coarsened, language more extreme, civility dismissed as weakness.

And a political strategy that seeks to exploit a sense of cultural insecurity would exacerbate divisions within society and send a clear message to minority populations and liberal voters that the Conservative Party was not for them. It would leave us as a Party narrower and as a society angrier.  We need to de-escalate the culture wars, not inflame them.

If we base our appeal on the distance we create from the ‘liberal elite’ by emphasising cultural matters, what is to stop someone else coming along who might be less restrained, less subtle, more forthright in taking on liberal opinion?

If we validate a narrative that our country’s problems are caused by an out-of-touch liberal establishment, why won’t the most anti-establishment position become ascendant? What is to stop relatively mainstream Conservatives from being, if you’ll pardon the pun, trumped? Aping populism won’t defeat populism. It is a dangerous trajectory.

Second, populism undermines stability. Our political stability has been a great asset to this country but populism inevitably involves an attack on those institutions that have been essential to delivering that. In recent years, we have already seen too much of this. Our independent judiciary has been described as ‘enemies of the people’ and our non-partisan civil service has been roundly abused.

And, third, populism would undermine the United Kingdom. In the context of the United Kingdom, right-wing populism means English nationalism. Such English nationalism repels voters in other parts of the UK, is neglectful of the importance of the Union and, consequently, encourages separatist movements.

So, a properly populist approach would be economically wrong-headed, increase division in society, undermine our institutions – and the stability that they bring – and destabilise the integrity of the United Kingdom. In short, it is not where a responsible political party should be.

If our response is not to become a populist party, how do we respond? How does a mainstream centre-right party survive and prosper in an era of populism? How, ultimately, do we defeat populism?

This is not a speech designed to set out a policy agenda. Nor is this an issue that is fundamentally about policy but about tone, attitude and ambition. So here are seven points to bear in mind.

First, if we want to be a broad church, we should try to de-escalate the culture wars. That means recognising that, within the Conservative movement, there will be social conservatives and there will be social liberals. There always have been and, by and large, we have managed to rub along alright together. Historically, we have always found more to unite us than divide us.

Second, our politics needs to be more civil. Whether talking about fellow Conservatives or indeed decent people in politics as a whole, we should all try harder to speak in a more respectful way, not impugning motives without good reason, recognising that someone holding a different view doesn’t make them a bad person. Liberal democracy requires a level of tolerance and civility in our political debate which is increasingly absent. A coarsened political environment is an environment in which the populist politician can flourish.

Third, we won’t defeat populist ideas by sneering. People concerned about rapid changes in our culture and our economy are not ‘deplorables’, to use Hillary Clinton’s phrase. We might disagree with them, but they should be treated with more respect than has often been the case.

Fourth, the arguments for mainstream politics need to be presented as benefiting society as a whole, not about furthering the interests of one group over another. We should believe in One Nation Conservatism. Too often, populists argue that if a policy is good for one group it must be bad for another – that we are in a zero sum game.

A policy which encourages wealth creation is described as a handout to the rich at the expense of the poor. Or a policy which reduces racial discrimination favours ethnic minorities over the majority population. But life is not a zero sum game.

If people are encouraged to invest, to be entrepreneurial, to create wealth, the individual and society as a whole can benefit. And if barriers to advancement are removed, if opportunities are widened, the individual and society as a whole can benefit.

Fifth, we need to be open and straight-forward that many decisions are complex, that life involves trade-offs and that an easy, simple answer is often the wrong one. In response to the glib, easy answer, we shouldn’t be frightened to say that, “well, it’s a little bit more complicated than that”.

Those of us who are politicians should treat the public as adults and be prepared to set out that we may often face a range of imperfect choices, that most choices have costs as well as benefits. Over-simplifying issues – a tendency of the populist politician – only increases scepticism in our politics when claims turn out to be untrue. If we want to rebuild trust in our politics, we should strive harder to communicate the factors that influence any decision or policy.

Sixth, the Conservative Party has to win the economic debate. The economy should be at the heart of the centre right’s case to the electorate. A focus upon creating prosperity is an approach that more often unites rather than divides the Conservative Party and has a resonance with voters who know that their living standards would be put at risk by our opponents.

Populism of left and right poses enormous risks to this country’s prosperity. And, ultimately, those who would lose out from these economic failures would be those who already feel left behind.

We need to be confident in making the case for the market economy, for allowing business to create wealth, for being outward looking, for embracing technology. Our economic record in government since 2010 is something of which we should be proud – the deficit slashed, employment at record levels – given the mess we inherited.

And seventh, our message has to be aspirational and optimistic. We must be advocates for policies that benefit all parts of society, so that those who have voted Labour when it was anchored in mainstream values look again at us and see us as a party determined to protect and advance their interests. We should be driven by a desire to expand opportunity, to give more people a chance to have a good education, a good job, to own their own home and have access to world class public services.

In the course of this speech, I have merely touched on the issue of the era – Brexit. And I don’t intend to dwell on it. But I believe the approach I have set out should apply to how we address Brexit.

We should put the economy at the heart of how we deliver Brexit ensuring that we maintain strong trading relationships with our biggest trading market.

We should discourage a culture war over Brexit. We need to cool the temperature of the debate recognising that the divisions in society need to heal. We should make the case that honourable and decent people can hold strongly different views. And such views do not make them racists, on the one hand, or traitors, on the other. As a political party, we Conservatives also need to make it clear that we want to win the support of those that voted for either side in 2016.

Indeed, if we focused on gaining the support of just one side of the debate, there is a risk that this support would fall away when Brexit becomes a less significant issue.

It will happen, one day.

And we need to set out more clearly and openly the trade-offs and choices that lie ahead of us as we establish a new relationship with the 27 member states of the European Union. Reluctance by some participants in this debate to accept that some choices have costs has meant that the debate on our future relationship has been, too often, characterised by wishful thinking.

This wishful thinking – that, for example, we could have the exact same benefits as membership of the EU but with none of the obligations – has not survived the collision with reality. But it has left some voters bemused and angry that the simple Brexit they were promised by some has not been delivered. But over-promising, over-simplifying and failing to deliver will only encourage further disenchantment.

So let us approach Brexit as we should approach all issues. Seeking to build broad support, respectful of those arguing in good faith, open and honest about the consequences of the choices ahead of us, mindful of the economic impact – particularly on those most vulnerable in society – and taking a practical approach in order to find a constructive way forward.

Brexit is a test for the country. But it is a test for the Conservative Party. What sort of party should we be? Do we succumb to populist arguments that may win easy applause but, in the end, will leave the public disappointed? Do we have the courage and honesty to spell out the trade-offs, the risks as well as the opportunities?

More broadly, the Conservative Party will have to make a choice about its future. We could become a populist party, defined by one particular position on the Brexit debate, seeking to exploit anxiety and resentment about a fast-changing world. But such an approach would be inconsistent with the great traditions of Conservatism in the UK, would narrow our electoral appeal and take enormous great risks with our economic prosperity and the integrity of the United Kingdom.

The case I have set out today is that Conservativism should be broad, not narrow; open, not closed; forward-looking, not yearning for a mythical past. It should be based on an appeal to the common sense, pragmatic instincts of the majority. We should seek to unite, not divide. In short, One Nation Conservatism.

Pragmatic, practical, reasonable but determined. That is the character of the British people. That is the character of Conservatism at its best.

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