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Westlake Legal Group > State Spending

David Gauke: Whatever briefings from Downing Street may claim, an election fought on a No Deal platform would be disastrous

David Gauke is a former Lord Chancellor and Justice Secretary, and is MP for South West Hertfordshire.

How much has the Conservative Party changed? To what extent has it moved from being a mainstream, centre-right party containing a broad range of views to being a party overwhelmingly focused on delivering an uncompromising Brexit?

It is a question I have asked myself a lot in recent months. Having fought off a deselection attempt because I opposed a No Deal Brexit, and having lost the Conservative whip because I continued to oppose a No Deal Brexit, it is hard to escape the conclusion that quite a lot of Conservatives disapprove of people who oppose a No Deal Brexit. Has the debate become so rancorous and intolerant that there is no longer a place for the likes of me in the Conservative Party?

The answer to that question is uncertain, but I took some encouragement from the Manchester Party conference.
I admit to attending with some trepidation. My position on Brexit is evidently a minority one within the Party. I have not sought to hide my criticisms of the substance and tone of the Government’s approach to Brexit. And I have not ruled out standing in my constituency as an independent if the whip is not returned. If ever I was going to get a hard time from Party activists, now would be the time.

And yet, at fringe event after fringe event, Party members were courteous and polite. Andrew Gimson generously wrote up my appearance at the ConservativeHome event, but a similar report could have been written for those I did with the Daily Telegraph and the Spectator. Don’t get me wrong: I am not claiming that I won the audiences over to my position – the occasional eye-roll, sigh and shake of the head was detectable – but nor was there anything like the hostility one might expect if, for example, you ever read the comments below one of my ConHome articles.

In truth, the Conservative Party felt – in those fringe meetings, at least – very similar to the party of which I have been a member for 29 years. Sensible, practical, well-meaning and decent.

I also take some encouragement from the apparent, new-found enthusiasm within the Government to reach a deal on Brexit. In previous columns, I have argued that seeking a deal and being willing to compromise is the right approach. That view would appear to be in the ascendant at the time of writing.

Until recently, an alternative approach appeared to be prevailing which seemed determined to crash us out on  October 31 at any cost. I have previously acknowledged the electoral case for this strategy, but in terms of the outcome for the country, it is thoroughly irresponsible. As such, it is also a huge departure from the modern traditions of the Conservative Party.

Let me give seven examples of principles that most Conservatives would support. I would happily sign up to each and every one of them but I struggle to reconcile them with those pursuing a No Deal Brexit at any cost.

  • We believe that living standards can only be raised and public services properly funded if you have a strong economy.

It is the argument that we have to fight at every election when our opponents make great promises but we respond by pointing out that we have to create the wealth in the first place if we properly want to fund the NHS, for example. Yet the overwhelming economic consensus is that No Deal Brexit would result in a sharp contraction in GDP. And before anyone rushes to claim that this is all a re-run of 2016’s ‘Project Fear’, remember our economy is 2.5-3 per cent smaller than it would have been had Remain won.

  • We believe in free trade.

Open markets benefit both our exporters but also our consumers. This has not always been the Conservative position but, thankfully, it has been for some time. And I know that there are plenty of Brexiteers who are sincere free traders and think that Brexit provides great new opportunities for bringing down trade barriers.

Unfortunately, it is simply not true. The Government’s analysis shows the benefit of getting trade deals with all the English-speaking nations and the major emerging economies will be just 0.2 to 0.6 per cent of GDP whereas the loss of access to European markets of a Canada-style free trade agreement (let alone a no deal Brexit) will be 4 to 7 per cent of GDP. The net effect of a No Deal Brexit or even a Canada style FTA will be to make our economy less open and more protectionist.

  • We believe in fiscal responsibility.

This was the battleground of British politics from 2009 to 2015 when we made the case for getting the deficit down. The contraction of the British economy will inevitably result in deteriorating public finances. Add to that a political strategy which focuses on winning the support of traditional Labour voters which has meant that we are almost certainly already breaking our fiscal rules.  Remember when we criticised Labour for more borrowing and more debt?

  • We don’t believe that the Government should bail-out unviable industries or businesses.

As a statement, this sounds like a bit of a throw-back to the 1980s when Margaret Thatcher weaned the country off supporting lame-duck businesses. But what do we think would happen when businesses no longer became viable because of the impact of No Deal? The pressure to provide support ‘in order to deal with the temporary disruption’ will be immense. The Government has already prepared for this with Operation Kingfisher but removing that support will be very difficult politically. There is a risk that our economy will become much more corporatist than any time since the 1970s.

  • We believe in our national institutions – Parliament, the monarchy and the independent judiciary.

This should go without saying but when Number Ten briefs that the next election will be people versus Parliament, that the Prime Minister will ‘dare the Queen to sack him’, that the judiciary is biased and that the Government will not comply with the law, we don’t sound very conservative (to put it mildly).

  • We believe in national security and ensuring that we do all we can to protect our citizens from terrorism.

And yet a ‘source in No 10’ says we will withhold security co-operation from those countries that fail to block an extension. Meanwhile, the former head of MI6 says that our security depends upon co-operation with the EU and that leaving without a deal means we will have to ‘start again with a blank sheet of paper’. In addition, it is hard to see how any ‘no deal’ outcome doesn’t destabilise the Good Friday Agreement one way or another. The Prime Minister, it is reported, is increasingly concerned about the risk of an upsurge in terrorist activities by dissident republican groups.

  • We believe in the United Kingdom.

It is obvious that Brexit is placing a strain on the union. A No Deal Brexit would be likely to result in a border poll in Northern Ireland, especially with Stormont not sitting and some form of direct rule being necessary. As for Scotland, the chaos of a No Deal Brexit provides plenty of ammunition for the separatists.

Not every Conservative voter will agree with every single one of those principles, or my criticisms of a No Deal Brexit. But a Conservative Party that fights a general election with No Deal at its heart must know that it will be pursuing an approach that is such a radical departure from the traditions of the Conservative Party and that it is vulnerable to losing the support of millions of our longstanding supporters.

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 

Ryan Bourne: In America, public spending conservatism is being lost. It could happen in Britain.

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

Austerity is over. Theresa May told us so after the 2017 election, and again at the Conservative Party Conference last year. Philip Hammond tried restraining her from a blitz of high-profile spending announcements. Yet Team Johnson has now picked up the baton anyway. Today’s spending review from Sajid Javid will reportedly confirm significant money injections for schools, hospitals and the police. The Prime Minister said Monday it will be “the most ambitious spending round for more than a decade.”

Restraining government spending was always said to be a temporary deficit repair tool, of course. Those “tough choices,” added to net tax hikes, have helped bring down the budget deficit to just 1.3 per cent of GDP, from a gargantuan 9.9 per cent in 2010. Once near-balance, a spending squeeze was never envisaged to continue year after year. Despite Nick Timothy’s fear of libertarians under the bed, no recent Conservative leader has been ideologically committed to shrink the size and scope of government. Absent “thinking the unthinkable,” one eventually must release the spending grip given voter demands for high-quality services.

And yet…the zeal with which the Tories have turned heel on their spending narrative is surprising. Whatever one’s view on the efficacy or composition of “cuts”, they were central to the party’s offer through 2016, including the 2015 election win. Balancing the books was said to be about unburdening the next generation from dumping more debt on top of the iceberg associated with an ageing population. Any intergenerational justice message has now gone the way of the Titanic.

For the Government is not promising gradual targeted spending increases in these areas – a natural uplift from a reset baseline after years of restraint. No, proposed hikes in education funding would virtually reverse any real schools’ spending cuts over the past decade. May’s extra money for the NHS is a big step-change too. The spending review is celebrated as the “biggest, most generous spending review since the height of Tony Blair’s New Labour,” no less – a far cry from denouncing that era’s profligacy. In one swoop, the Treasury has undercut its long-held opposition to raising borrowing and junked the idea that public service reform trumps showering public services with money.

Javid attempts to thread the needle by arguing that more spending is still consistent with keeping the debt-to-GDP ratio on a shallow downward path. That maybe true. But a stated goal of policy was always to balance the books overall, even if George Osborne and David Cameron continually pushed back the deadline. A former Treasury fiscal policy director now says that borrowing will in fact start rising again, and soon be above two per cent of GDP. Manageable, yes – but a clear change in direction.

The public discourse effects of this reversal should worry fiscal conservatives. Cameron and Osborne’s consistent messaging helped entrench two crucial contours in discussions about government spending. First, that there was no free lunch (every Labour proposal for years was met with the question “how will you pay for it?”) Second, that what you did with the money (the organisation of public services) was as important as spending levels. After years of Tony Blair’s money throwing, the public were receptive to such apparently grown-up thinking. Now, both those claims-cum-restraints that ensnared Labour have been removed.

If large, real increases in education funding are synonymous with better schools, as Tories imply, Labour can coherently ask “why did you cut real funding beforehand?” Such corrective spending hikes look an admission of a past mistake. Doubly so if funded through borrowing that was previously considered intolerable.

Couching this as “an end to austerity” brings similar peril. These particular decisions don’t imply “we are going to return to affordable spending increases consistent with a low deficit.” If large spending hikes for education are seen as reversing austerity, then obvious questions arise: what about local authority funding? Prisons? Criminal justice? Have these not suffered more from the pain you admit was damaging?

Of course, Brexit is the important context here. It is sucking oxygen from normal economic debates – one reason why the logjam needs to be broken. A slowing economy, induced in part by uncertainty, means an obsessive near-term public finance focus is probably unwise. The very process of extrication requires budget flexibility, not least because the underlying public finances could look very different when future trade relations crystallise.

But all this would be a case for relaxing or suspending fiscal targets through the choppy Brexit seas, not bold new announcements.

No, it’s difficult not to conclude there’s not something bigger happening here. Much of the party has embraced a simplistic “left behind” narrative of the Brexit vote – that it was a cry for investment in public services. They are egged on by former government advisors, armed with polling, who see an opportunity to steer the party towards a “bigger government” vision for the party they’ve always spoiled for.

Academic evidence in fact shows new Brexit voters affiliating with the Tories quickly adopt traditional Tory views on other issues. There’s no need to pander. Yet when you see John Redwood railing against austerity, you realise how strong this view about the changing party voter base has set.

Whether Johnson shares that interpretation is less clear. Perhaps he sees funding boosts now in three major non-Brexit policy areas as short-term deck clearing before an election. Polling strength from these “good news stories” might even firm up pressure on the EU and rebel MPs on his central task. If it helps finally deliver Brexit, many of us will accept fiscal jam tomorrow.

I want to believe this, but the noises aren’t encouraging. And living in the US, where Republicans have gone from a Tea Party anti-spending force to delivering unprecedented deficits for peacetime, in just a decade, I’ve observed just how easily spending conservatism is lost.

Here, it started with big spending increases on priorities too. Republicans cut taxes, yes, but huge cash increases for defence were delivered, greased by money for some Democrat priorities. Once that dam opened though, the money poured. July’s budget deal threw off the last vestiges of spending caps delivered by the Tea Party Congress. Promises of Republican spending restraint in Donald Trump’s potential second term ring as hollow as claims he’s using tariffs as a path to freer trade.

Here’s the worrying consequence. As US conservatives have learned to love deficits, or at least use them, the left’s spending demands have only gotten more extreme. With constraints stripped away, Democratic Presidential candidates feel liberated to propose mammoth programmes and spending hikes – the Green New Deal, a jobs guarantee, universal childcare and more. When asked how the country can afford this, they point out to the red ink spilled for Republican priorities. There is no answer.

UK Conservatives are far from the Republican point of no return on spending, as yet. But the mood music has changed dramatically. America shows that when conservatives abandon spending constraint, they legitimise the left’s spending wild demands, to taxpayers’ detriment.

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

Ryan Bourne: In America, public spending conservatism is being lost. It could happen in Britain.

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

Austerity is over. Theresa May told us so after the 2017 election, and again at the Conservative Party Conference last year. Philip Hammond tried restraining her from a blitz of high-profile spending announcements. Yet Team Johnson has now picked up the baton anyway. Today’s spending review from Sajid Javid will reportedly confirm significant money injections for schools, hospitals and the police. The Prime Minister said Monday it will be “the most ambitious spending round for more than a decade.”

Restraining government spending was always said to be a temporary deficit repair tool, of course. Those “tough choices,” added to net tax hikes, have helped bring down the budget deficit to just 1.3 per cent of GDP, from a gargantuan 9.9 per cent in 2010. Once near-balance, a spending squeeze was never envisaged to continue year after year. Despite Nick Timothy’s fear of libertarians under the bed, no recent Conservative leader has been ideologically committed to shrink the size and scope of government. Absent “thinking the unthinkable,” one eventually must release the spending grip given voter demands for high-quality services.

And yet…the zeal with which the Tories have turned heel on their spending narrative is surprising. Whatever one’s view on the efficacy or composition of “cuts”, they were central to the party’s offer through 2016, including the 2015 election win. Balancing the books was said to be about unburdening the next generation from dumping more debt on top of the iceberg associated with an ageing population. Any intergenerational justice message has now gone the way of the Titanic.

For the Government is not promising gradual targeted spending increases in these areas – a natural uplift from a reset baseline after years of restraint. No, proposed hikes in education funding would virtually reverse any real schools’ spending cuts over the past decade. May’s extra money for the NHS is a big step-change too. The spending review is celebrated as the “biggest, most generous spending review since the height of Tony Blair’s New Labour,” no less – a far cry from denouncing that era’s profligacy. In one swoop, the Treasury has undercut its long-held opposition to raising borrowing and junked the idea that public service reform trumps showering public services with money.

Javid attempts to thread the needle by arguing that more spending is still consistent with keeping the debt-to-GDP ratio on a shallow downward path. That maybe true. But a stated goal of policy was always to balance the books overall, even if George Osborne and David Cameron continually pushed back the deadline. A former Treasury fiscal policy director now says that borrowing will in fact start rising again, and soon be above two per cent of GDP. Manageable, yes – but a clear change in direction.

The public discourse effects of this reversal should worry fiscal conservatives. Cameron and Osborne’s consistent messaging helped entrench two crucial contours in discussions about government spending. First, that there was no free lunch (every Labour proposal for years was met with the question “how will you pay for it?”) Second, that what you did with the money (the organisation of public services) was as important as spending levels. After years of Tony Blair’s money throwing, the public were receptive to such apparently grown-up thinking. Now, both those claims-cum-restraints that ensnared Labour have been removed.

If large, real increases in education funding are synonymous with better schools, as Tories imply, Labour can coherently ask “why did you cut real funding beforehand?” Such corrective spending hikes look an admission of a past mistake. Doubly so if funded through borrowing that was previously considered intolerable.

Couching this as “an end to austerity” brings similar peril. These particular decisions don’t imply “we are going to return to affordable spending increases consistent with a low deficit.” If large spending hikes for education are seen as reversing austerity, then obvious questions arise: what about local authority funding? Prisons? Criminal justice? Have these not suffered more from the pain you admit was damaging?

Of course, Brexit is the important context here. It is sucking oxygen from normal economic debates – one reason why the logjam needs to be broken. A slowing economy, induced in part by uncertainty, means an obsessive near-term public finance focus is probably unwise. The very process of extrication requires budget flexibility, not least because the underlying public finances could look very different when future trade relations crystallise.

But all this would be a case for relaxing or suspending fiscal targets through the choppy Brexit seas, not bold new announcements.

No, it’s difficult not to conclude there’s not something bigger happening here. Much of the party has embraced a simplistic “left behind” narrative of the Brexit vote – that it was a cry for investment in public services. They are egged on by former government advisors, armed with polling, who see an opportunity to steer the party towards a “bigger government” vision for the party they’ve always spoiled for.

Academic evidence in fact shows new Brexit voters affiliating with the Tories quickly adopt traditional Tory views on other issues. There’s no need to pander. Yet when you see John Redwood railing against austerity, you realise how strong this view about the changing party voter base has set.

Whether Johnson shares that interpretation is less clear. Perhaps he sees funding boosts now in three major non-Brexit policy areas as short-term deck clearing before an election. Polling strength from these “good news stories” might even firm up pressure on the EU and rebel MPs on his central task. If it helps finally deliver Brexit, many of us will accept fiscal jam tomorrow.

I want to believe this, but the noises aren’t encouraging. And living in the US, where Republicans have gone from a Tea Party anti-spending force to delivering unprecedented deficits for peacetime, in just a decade, I’ve observed just how easily spending conservatism is lost.

Here, it started with big spending increases on priorities too. Republicans cut taxes, yes, but huge cash increases for defence were delivered, greased by money for some Democrat priorities. Once that dam opened though, the money poured. July’s budget deal threw off the last vestiges of spending caps delivered by the Tea Party Congress. Promises of Republican spending restraint in Donald Trump’s potential second term ring as hollow as claims he’s using tariffs as a path to freer trade.

Here’s the worrying consequence. As US conservatives have learned to love deficits, or at least use them, the left’s spending demands have only gotten more extreme. With constraints stripped away, Democratic Presidential candidates feel liberated to propose mammoth programmes and spending hikes – the Green New Deal, a jobs guarantee, universal childcare and more. When asked how the country can afford this, they point out to the red ink spilled for Republican priorities. There is no answer.

UK Conservatives are far from the Republican point of no return on spending, as yet. But the mood music has changed dramatically. America shows that when conservatives abandon spending constraint, they legitimise the left’s spending wild demands, to taxpayers’ detriment.

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

So we’ve had NHS, policing and immigration plans from Johnson. Stand ready for a schools spending pledge.

So Boris Johnson has pledged 10,000 new police officers, as well as a raft of tougher-sounding anti-crime policies, an Australian-style points-based immigration system (not to mention the relaxion of migration rules for scientists), and £1.8 billion for the NHS.  It isn’t hard to see where he will go next, and soon.

The remaining element of Dominic Cummings’s favourite set of policies – tax cuts for lower-paid workers – may have to wait for a publicity push, because these would need legislation, and the Government has no working majority.  Though the Prime Minister could try them on the Commons anyway, daring Labour to vote them down, as part of an Emergency Budget in October (if there is one).

What is likely to come sooner is a Government commitment to spend at least £5,000 on every secondary school pupil.  ConservativeHome understands that this announcement is written into this summer’s campaigning grid.  But we need no special briefing to work this out for ourselves in any event – and nor does anyone else.  For why peer into the crystal of Downing Street announcements when one can read the book: i.e: Johnson’s Daily Telegraph columns?

For it was in one of these, back during the Conservative leadership election, that he pledged “significantly to improve the level of per pupil funding so that thousands of schools get much more per pupil – and to protect that funding in real terms”.  The £5000 figure was briefed out separarely.  This promise was one of the two main big ticket spending items of his campaign, the other being that undertaking to raise police spending.

“It is simply not sustainable that funding per pupil should be £6800 in parts of London and £4200 in some other parts of the country,” the former Mayor of the capital wrote.  Just as the NHS spending announcement was framed by a visit to hospitals in Lincolnshire and Nottinghamshire, expect any school spending news to be projected by a trip to schools in Leave-voting provincial England: all part of the push to squeeze the Brexit Party.

If that column is any guide, don’t be surprised to see a maths, science and IT element too – which would also be very Cummings – as well as a stress on “giving real parity of esteem to vocational training and apprenticeships”.  There is evidence that these are popular all-round, but especially among older voters.  Gavin Williamson is bound to have a supporting role, just as Priti Patel has had with the weekend’s law and order initiatives, but Johnson will lead.

Like his other spending promises, Johnson’s school pledge may not be deliverable in the event of a No Deal Brexit, and there are inevitably questions anyway about timescale anyway.  But if you want to know what more will be in his campaigning package, look no further.

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

“To literally feel terror”

Boris Johnson wants, specifically, to frighten Labour off a no confidence vote and, more broadly, to intimidate the anti-No Deal Brexit Commons coalition before the Commons returns in September.  That means demonstrating that voters are backing him.  That requires improving opinion poll ratings.  And that, in turn, means an August blizzard – yes, such a thing is possible – of policy announcements to prove that his new government “is on your side”.

So to Dominic Cummings’s trinity of an Australian-style points-based immigration system, more NHS spending and tax cuts for lower paid workers we must now add action on law and order.  The new Prime Minister promised 20,000 more police during his Conservative leadership election campaign.  To that we must now add 10,000 new prison places and greater use of stop and search powers – both of which are announced today.

Or rather we would do, if Johnson had a durable majority, and were the future more clear.  The money to fund those new prison places may not be available in the event of No Deal: it may be needed for other measures.  And sweeping changes to sentencing would require leglislation, which the Government is in position to present to Parliament.

None the less, the Downing Street bully pulpit has its uses, and if the Prime Minister want wider stop and search powers to be available, he is in a position to get his way – for as long as he’s in place, anyway.  Today’s push should help.  As Matt Singh writes, there has already been “a substantial Boris bounce”.  It has largely come off the back of Brexit Party supporters, and this latest initiative is aimed at them (as well as Labour working class voters).

So too was the appointment of Priti Patel as Home Secretary.  ConservativeHome is told that there was a collective intake of breath in Downing Street when she said recently that she wants criminals “to literally feel terror”.  Number Ten need not have worried about how that view would go down.  There is “overwhelming support” for it among the public, according to YouGov.

If Johnson somehow survives the autumn without a general election, or wins one with a majority, a further question will arises about all these spending plans – namely, whether or not they’re consistent with the traditional centre-right commitment to fiscal stability.  The Prime Minister could be forgiven for thinking, given the probability of an autumn poll and the uncertainty of any result, that this would be a nice problem to have.

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

John Penrose: The conventional wisdom about this leadership election is wrong. Hunt’s spending plans are neither unaffordable nor irresponsible.

John Penrose is MP for Weston-super-Mare and a Northern Ireland Office Minister.

If you listen to the sober-sided, serious economists at the Institute for Fiscal Studies, or to the Chancellor Philip Hammond himself, you’d think the Conservative leadership election is a horrible bidding war of doolally spending promises from Jeremy Hunt and Boris Johnson. Has the party of sound money lost its soul? Betrayed its heritage? Are Margaret Thatcher and Milton Friedman spinning in their graves as leadership contenders try to out-Corbyn each other with unaffordable spending promises?

Well no, not really. I can’t speak for Boris Johnson but, as someone who’s been involved in a lot of Jeremy Hunt’s policy development work, that’s not what we’re doing at all.

Let’s start with the charge that, if it was right to introduce austerity in 2010, we should do the same for Brexit in 2019. Otherwise we aren’t being consistent.

But the problem in 2019 isn’t the same as 2010. Brexit isn’t the banking crisis, thank goodness. And if the problem is different, the answers should be too.

By 2010, Gordon Brown was trying to keep the economy going with huge increases in public spending, paid for with ballooning debt. Something like one pound in every four the Government spent had to be borrowed, to be repaid by taxpayers later. If we’d carried on like that, pretty soon the country’s credit card would have been snipped up and the bailiffs would have been knocking at the door. So we simply had to throttle back, to stop spending money we hadn’t got.

But today is different. Public spending isn’t ballooning and borrowing is under control. We’re living within our means, and there’s even headroom for a bit more spending if we’re careful. We’ve come a long way, and it hasn’t been easy. You can understand why Hammond doesn’t want the next Prime Minister to blow it.

What are today’s problems, if they’re different from 2010? The biggest is that some – although certainly not all – firms are putting off growth-creating investments until after the Brexit fog has cleared. And that no-one knows whether our trade with the EU will be easy or awful once we’ve left.

So it makes sense to spend a bit of money to promote economic growth. Post-Brexit Britain needs a stronger, more dynamic, more energetic, turbocharged economy, so we’re prepared for the challenges of life outside the EU. And Jeremy Hunt’s plans to cut corporation tax to 12 and a half per cent, increase investment allowances and exempt small high street firms from business rates would do exactly that. They would spark economic renewal and investment in UKplc, making us more resilient in economic shocks and recessions, and more productive and efficient so we can grow faster too.

In other words, it’s OK to use different answers in 2019 than in 2010. But what about the charge that we’re making the same mistake as Brown, by spending and borrowing unaffordably?

Hunt is on pretty firm ground here, because he agrees we’ve got to keep the national debt falling relative to the size of our economy. That means borrowing can’t balloon, and we’ll always be able to repay our debts. And his business career helps here too, because his plans to turbocharge post-Brexit Britain’s economy would mean we’d be investing to grow. They’re sensible investments in our economic future, not pale copies of unworkable, hard-left Corbynomic plans.

Nor is he expecting to do everything at once. We’d need to raise defence spending progressively over five years, for example, to allow time to plan. Otherwise you’d simply waste money on the wrong things.

The same goes for fixing illiteracy. That will take ten years, building on the huge progress over the last decade that has seen more pupils being taught in good or outstanding schools than ever before.

And some of the plans would only be temporary, too. The pledge to help farmers adjust to a post-Brexit world has to be a hard-headed, short term plan to help re-equip machinery, buildings and breeding for new global markets, for example. Not a woolly, open-ended subsidy.

The plans have got to be about changing things, so we’re ready for a new world. Not expensively preserving the way they were before we voted to leave. Transformation and preparation, not status quo. But, for Hunt’s proposals at least, they are sound, practical, affordable ideas. And, most important of all, they’re thoroughly Conservative too.

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

Johnson’s August 3) Delivering campaign pledges – in so far as he can without a durable majority

It is now overwhelmingly likely that Boris Johnson will be the next Conservative Party leader and become Prime Minister.

He may well face a no confidence vote in September, and the Brexit extension expires at the end of October in any event.

So he and his new team will have to hit the ground running in August. We continue our series on what he should do during that month and late July before the Commons is due to return on September 3.

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According to our weekly updated list, Boris Johnson has made some 25 policy pledges during the Conservative leadership election.  In the probable event of a general election in the autumn, he won’t be able to deliver on many of them.  And he will soon have a working majority of only three in any event.

Which surely rules out a Special Budget in September.  It would have to contain more provisions for No Deal, and wrapping them up in this way would only encourage MPs to vote them down.  He would do better to try any that he needs on the Commons piecemeal.

MPs would also vote down any tax cuts “for the rich” – a category who they would collectively argue includes those who pay the higher rate of income tax, the threshold of which Johnson has promised to raise.

It would be impossible in effect to cut income tax rates in time for a snap election anyway, though the Commons might nod through a rise in the national insurance threshold for lower paid workers, another of his pledges.

But just because Johnson can’t do everything – or even anything much that requires a Bill – doesn’t mean that he can only do nothing.

Governments have greater discretion on spending than tax.  So, for example, he could start to deliver on increasing funding per pupil in secondary schools and raising police numbers.  That would come in handy with an autumn election looming.

The latter move would go hand in hand with a battle with Chief Constables and others over the best use of new resources.  Voters want to see more police on the streets and more use of stop and search.  Johnson’s new Home Secretary should pile in.

And while he will have little legislative room for manoeuvre, he will be able to propose some relatively uncontentious Bills for September – settling the status, for example, of EU citizens.

Then there are measures that he could announce the new Government will not proceed with, as well as those that he wants to proceed with.  Theresa May is providing a growing list of the former.

Not to put too fine a point on it, he should take an axe to parts of her legacy programme – including, as Henry Hill has argued, the hostage to fortune that is the proposed Office for Tackling Injustices.

He will also want to show a direction of travel on some major policy issues.  We do not believe that refusing to commit to a reduction in immigration is sustainable.  As a starting-point to establishing control, he could do a lot worse than take up the Onward proposals floated on this site yesterday by Mark Harper.

There is a limited amount that the new Government will be able to do a in single month – not least when the new Prime Minister is bound to be out of London for parts of it, Parliament isn’t sitting, there is a new Brexit policy to get into shape, and the threat of a no confidence vote in September.

What Johnson can do is form a team, shape a Cabinet – of which more later – begin the Brexit negotiation’s new phase, and show what his priorities are: police, schools and infrastructure, with a particular stress when it comes to the latter on the Midlands and the North.

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

Iain Mansfield: Brexit by October 31. Stop using the Left’s language. And stand for skilled workers. Essentials for our next Prime Minister

Iain Mansfield is a former senior civil servant, winner of the Institute of Economic Affairs Brexit prize and a Conservative councillor candidate. He writes in a personal capacity.

Our next Prime Minister will take office at the most challenging time since the 1970s. Not only is there Brexit – an issue of fundamental national importance, that has destroyed the last two Prime Ministers and poses an existential challenge to the future of the Conservative Party – but the old political assumptions are changing. Across the West, traditional voter coalitions are shifting, as citizens reject centrist compromises. Flatlining productivity, unaffordable houses and millions of voters feeling abandoned, either culturally or economically, are just some of the challenges they will face.

Many of those who voted for David Cameron in 2010 are lost to the party, alienated by Brexit. In Britain today, age and education level are better predictors of a person’s vote than class. To win a general election, our next Prime Minister must forge a new coalition of voters that unites the traditional Tory shires with the left-behind Leave voters in the Midlands and North. Even more importantly, they must deliver authentic right-wing policies that address the causes of ordinary working people’s dissatisfaction. People want change and, if the Conservative Party does not deliver it, they are likely to seek answers in the flawed blandishments of Jeremy Corbyn’s socialism.

In that context, there are three essentials that our next Prime Minister must prioritise for the good of the people, the nation and the party:

  • Leave the EU by 31 October, on WTO terms if needed.
  • Openly champion conservative values rather than speaking the language of the left.
  • Reposition the party as the natural home of the skilled working and lower middle classes.

Leave the EU by 31 October, on WTO terms if needed

Not only is delivering on the outcome of the referendum a democratic imperative, it is vital for the continued existence of the party. Recent polling shows that, if we have not left the EU, the Conservatives are likely to suffer devastating losses in a general election; these figures could be even worse if large numbers of members, councillors or even entire associations defect to the Brexit Party. Many members have held on over the last few months purely out of hope that the next Prime Minister would deliver where May failed: another betrayal in October would see these members permanently lost.

Leaving with a deal is preferable, if some changes to the backstop can be agreed and Parliament will pass it. If not, as I have argued previously on this site, we have nothing to fear from No Deal. Preparations for such should be put into top gear on the first day in office. The Prime Minister must make clear that they will under no circumstances ask for an extension; and that they are, if needed, prepared to systematically veto any measure put forward by the EU on regular business if the UK is for some reason kept in. While every effort should be made to secure a deal, if it cannot be reached, Parliament must be faced with the simple choice of permitting a WTO exit or voting no confidence in the Prime Minister – a gamble, admittedly, but one that is preferable to another disastrous extension.

Openly champion conservative values rather than speaking the language of the left

In recent years too many Conservative politicians have allowed our opponents to define the playing field. We cannot beat the socialists by adopting the language and assumptions of socialism. Our next Prime Minister must stop feeding the narrative of identity, grievance and division, with its assumption that an individual’s potential is defined by their characteristics, that so-called ‘burning injustices’ are solely the responsibility of the state to address, and that the government always no best.

Changing the narrative will be a long endeavour. The systematic appointment of those with conservative values into key ministerially appointed positions; an authentically right-wing approach to policy making in Whitehall; and the withdrawal of state funding from the network of organisations that maintain the left’s grip on the policy narrative are essential. But over and above this, the Prime Minister must be willing to personally stand up and champion individual liberties and freedoms; to condemn progressive authoritarianism and to be visibly proud of Britain, our culture and the rich global heritage of our citizens.

Reposition the party as the natural home of the skilled working and lower middle classes

Young, metropolitan graduates may once have been natural Conservatives, but no longer. There is little hope of reversing this in the immediate aftermath of Brexit. Instead of squandering our effort here, our new Prime Minister should instead make the party the natural home of the skilled working and lower middle classes, particularly in the midlands and north.

Such voters have a natural affinity to the traditional conservative values of low tax and individual liberty, but also greatly value and rely day-to-day onn strong public services. This places the Conservatives in a difficult position after a decade of austerity: Labour made hay campaigning on cuts to police numbers and falls in per pupil spending in 2017. But how to fund significant increases in core services without raising taxes or alienating core Conservative voters, such as via the disastrous proposals on social care in the 2017 manifesto?

To find the funding the next Prime Minister must be bold enough to slay the progressive sacred cows that soak up billions annually in public funding. Three immediately spring to mind:

With the additional £15 billion plus a year, the Prime Minister could at a stroke increase police funding by 25 per cent (£3 billion), boost school funding per pupil by 20 per cent (£8 billion) and increase spending on social care by 20 per cent (£4 billion). And then split the proceeds of further growth between public services and tax cuts.

As well as this, we should champion the interests of the high street, enterprise and small businesses and oppose crony corporatism. Multinational companies that make use of aggressive tax avoidance, abuse their market position or actively work against UK sovereignty should not enjoy government grants, procurement or time in No. 10. Fundamentally, our next Prime Minister should spend more time listening to the Federation of Small Businesses and less time listening to the CBI.

Conclusion

As members, we have two candidates set before us. Both are able politicians and tested leaders who represent the best the Parliamentary party has to offer. As we assess who should be not just our next leader, but our Prime Minister, we should do so against their ability to deliver these vital elements.

Both have committed to delivering Brexit by October 31 – but which one has the ability, the genuine will and the courage to do so by any means necessary? Both are true-blue Conservatives – but which one will truly champion our values, taking the battle to our adversaries with the eloquence and conviction of a Thatcher or a Churchill? Both recognise the importance of reaching out to new voters – but which one can devise and push through the policies needed to unite the Tory shires with the Leave voters of the north? Consider carefully and cast your vote.

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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