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Westlake Legal Group > Posts tagged "George Osborne"

Alex Morton: We need a Help to Build plan to save building new homes from collapse

Alex Morton is Head of Policy at the Centre for Policy Studies, and a former Special Adviser on housing to the then Prime Minister, David Cameron.

The Government is considering planning reform to drive housebuilding, so as to support home ownership and economic growth. This could be a key part of recovering from the Covid-19 crisis. It will be complex to deliver – ensuring that infrastructure is provided before new homes; that the welcome push by Robert Jenrick and others to improve new build design and quality works, as well as striking a balance between meeting housing need and listening to local views.

More importantly, change will take time. The first planning permissions delivered under any reforms aren’t likely to come through before late 2021, or nearly 18 months from now. This is a problem, because house building is facing imminent collapse.

Many sectors are in difficulty. But the housebuilding sector is different. Not just because of how quickly activity evaporates, but how long it takes to return. The housebuilding sector is very pro-cyclical. It tends to be hit hard by recessions – and the recession that seems likely to follow Covid-19 will not be an exception. Between 2007 and 2009, housing starts fell by 54 per cent. It took six years for the bottom of the market to be reached in terms of new build completions.

After both the early 1990s and the late 2000s recessions, it took over a decade to get close to previous peaks in terms of housing supply – despite, in the second case, planning reforms to get the UK building being introduced under George Osborne. The damage to supply chains, labour supply and the pipeline of land in the system takes a long time to fix.

The supply of homes is linked to the sales rates of new build homes, and the ability of the housebuilders to mark-up land from purchase as land with permission to sale as part of a finished home. In a downturn, when transactions fall and first-time buyers hold off from purchasing, there is a smaller market to sell into. On top of this, as house prices fall, the price of land falls – first reducing, then eliminating, the profit per home (since the land has already been bought at a higher price).

In a new report today published by the Centre for Policy Studies, Help to Build, we estimate that given the likely fall in the number of transactions and new first time buyers, as well as a shrinkage in the number of affordable Section 106 homes (which are largely paid for via a slice of the costs of other developments), housing supply is likely to fall by close to 80,000 homes this year and likely next – even with a fairly strong recovery and limited house price falls.

Some readers might think that the sector should welcome a shake-up, given the perennial complaints about the outsize profits of some housebuilders and issues around the quality of new builds. But it is always the small and medium sized housebuilders, and the small contractors who work in their supply chains, who suffer most – not the big players.

Britain’s larger housebuilders, having been through recessions before, have created a model that allows them to reduce output and wait for the storm to blow over. For example, they tend to limit their capital investment (e.g. in modern offsite construction) and the number of staff they employ directly, with only around one in five of those working on a large housebuilder site working directly for the firm.

In fact, data shows clearly that recessions and their aftermath tend to intensify the power of the large housebuilders and reduce the size of the rest of the sector.

This is why we are asking the Government to deliver, as a matter of urgency, a temporary stimulus package we call ‘Help to Build’. This would allow housebuilders to access grants up to a maximum of £25,000 (capped at a percentage of the ultimate value of the home, e.g. 15 per cent) for each new build property. This would be available to all housebuilders who signed up, delivered upon completion of a sale.

This incentive could be used to help potential buyers with a deposit, to support part-exchange purchases, or to convert the home into an affordable home for either rent or sale if a bulk-purchaser could be found. The only real restriction would be it could not support buy-to-let purchases.

With a goal of support averaging out at £20,000 per unit, you could cap the Government’s exposure at £3 billion – thereby supporting construction of 150,000 homes in the next year.

The crucial thing is that, in return for using this scheme to support sales, the housebuilder would agree to build homes based on a substantial percentage of their recent performance (e.g. 75 per cent). So if they built a thousand homes every six months over the last eighteen months, they would have to build 750 for each of the next six months. If they failed to comply with this across the board building out, they would have to pay the money back, with a small penalty.

This scheme effectively channels demand to new build supply. Housebuilders will simply sit tight and wait for the market to recover, even if that means laying off staff and collapsing supply chains. By using the Help to Build grant as an incentive – for example, offering people a substantial proportion of their deposit – those who are looking to buy would be more likely to buy a new build, enabling new build supply to continue.

Unlike other stimulus schemes, this must be strictly time-limited. If kept in the long run, this subsidy would go to push up land prices, meaning there would be no money left to incentivise the sale. But if swiftly instituted now, it should limit the likely collapse in housebuilding and lay the grounds for a strong recovery, stopping massive harm to SME housebuilders and those working in supply chains.

Unless Government acts, the evidence of the past is that it will take most of the 2020s just to get back to where we were in 2019 – and many who lose jobs in housebuilding or the supply chain may never return, making it even harder to meet our housing goals. Meanwhile the sector will be even more dominated by a handful of large housebuilders. In other words, not so much creative destruction as just lasting destruction.

In the last recession, we got things wrong. The Government prioritised propping up prices across the £7.4 trillion residential market, while housing supply fell very sharply and then remained low for a long time. This time, we need to prioritise supply – which in turn should help preserve the SME sector and the jobs within it.

Arguing for Government intervention and stimulus is not our usual habit at the Centre for Policy Studies. Indeed, we will be working on a suite of other reforms to liberalise the housing industry: to convert commercial to residential space, drive thoughtful planning reform, and stamp duty cuts to drive up transactions. But right now, we need Help to Build.

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

Interview with Chris Patten: We must stand up to the Communists in Beijing who hate freedom in Hong Kong

Chinese people love freedom, but the Chinese Communists hate it. Chris Patten, who served from 1992-97 as the last Governor of Hong Kong, argues in this interview that we must therefore stand up to the latter, who have become worse under the dictatorship of Xi Jinping:

“Hong Kong represents all the things that they hate. And it’s interesting that it’s not outsiders who got millions to march last year, in a protest against the destruction of the firewall between the rule of law in Hong Kong and what passes for Communist law on the mainland. 

“The idea that nowadays we have the ability to do that – we can barely organise a traffic jam in Kent, let alone a million people on the streets of Hong Kong. 

“They just can’t face the fact that Chinese people – look at Taiwan as well – love freedom, love a government that is accountable to some extent, love due process and the rule of law, love all those things as much as anybody else, so human rights really, really are universally valid.”

Patten adds that the Leninists who run the show in Beijing benefit from the help of “useful idiots” who “always make an excuse for China whatever it does”.

He thinks George Osborne made a serious error in 2015 by hailing a new “golden age” in Sino-British relations:

“I’m not sure what we have to show for this golden age except a Chinese ambassador in London who blags and bullies at every opportunity.”

From 1979-92, when he lost his seat to the Liberal Democrats, Patten was MP for Bath, serving from November 1990 as Conservative Party Chairman under John Major.

At the end of this interview, he expresses “a degree of contempt” for recent developments in the party:

“That the Conservative Party should turn itself into an organisation which whips up sentiment against Parliament, or those who are regarded as the elite, is a complete contradiction of what the Conservative Party has normally stood for.

“It’s turning the Conservative Party not into the party of Burke but into the party of Robespierre.”

ConHome: “When did you begin to think China was a menace?”

Patten: “Looking at the telegram sent by Sir Alan Donald [British ambassador in Beijing] on 5th June 1989 describing what had happened in Tiananmen Square, I recalled thinking at the time how much those events, that massacre, reflected the absolute determination of part of the leadership of the Communist Party to stay in power, even if it meant getting part of the army to shoot their own people.

“So I was never under any illusions when I went to Hong Kong as to why people in Hong Kong were nervous about the future.

“But while it made me determined to do what we could within the terms of the Joint Declaration and the Basic Law to try to secure Hong Kong’s freedoms, I also began the period after 1997 not without hope.

“By and large, for the first 12 or 13 years it didn’t go too badly. I think what changed everything was the arrival of Xi Jinping, who was chosen I think partly because of what they thought was an attempted coup by Bo Xilai.

“And he reflected also a sense that things were starting to drift and the party was in danger of losing control.

“And really ever since he came in in 2012, 2013, the Communist leadership have cracked down everywhere, on dissidents, in Xinjiang with probably well over a million people locked up in what are in effect concentration camps, breaking their word in the South China Sea with the militarisation of atolls and bases, and behaviour towards Hong Kong.

“And I think a document which everyone should be aware of, and it’s had I think too little attention from people when looking at China, is a document called in a rather Orwellian way Communiqué Number Nine, sent out in 2013, not long after Xi Jinping became dictator, to warn the party and the government against the devils of liberal democracy.

“Anybody who says ‘We don’t want a cold war with China, we don’t want to regard China as an enemy’, I understand that sentiment, but the trouble is that China regards us an an enemy.

“China regards all the things we stand for as hostile to the continuance in power of the Chinese Communist regime. It’s not the people of China that are the problem. It’s Xi Jinping and his apparatchiks.

“So I think ever since 2013 I’ve become more nervous and I’ve said so.

“And I think what’s happened recently, the way in which the Xi Jinping dictatorship has taken advantage of the fact that the rest of the world is understandably obsessed with fighting the Coronavirus – which of course has got so much worse because of the initial cover-up by China – in order to flex their muscles, whether in relation to Taiwan, or fishing vessels in the South China Sea, and to try to turn the screws on Hong Kong.

“Hong Kong represents all the things that they hate. And it’s interesting that it’s not outsiders who got millions to march last year, in a protest against the destruction of the firewall between the rule of law in Hong Kong and what passes for Communist law on the mainland.

“The idea that nowadays we have the ability to do that – we can barely organise a traffic jam in Kent, let alone a million people on the streets of Hong Kong.

“They just can’t face the fact that Chinese people – look at Taiwan as well – love freedom, love a government that is accountable to some extent, love due process and the rule of law, love all those things as much as anybody else, so human rights really, really are universally valid.”

ConHome: “Given that things started going wrong in 2013, where does that leave George Osborne with his idea in 2015 of ‘a golden age’ in Sino-British relations?”

Patten: “Well it’s a golden age for Chinese bullying, that’s for sure. Look, there is no question that even though we have to have, with others, a much tougher approach to China, I don’t believe we would ever try to cut off all relationships with China.

“But there’s a difference between that and getting all sort of mushy and romantic and soft-headed about what China stands for.

“Why have the Germans now perfectly understandably got really nervous about predatory investment by China? In for example the robotics industry. Could a British or a German firm take over a robotics firm in China? Of course not.

“So George, who is otherwise a perfectly rational human being, George is persuaded during that visit to go to Urumqi, to go to Xinjiang.

“How much British trade is there in Urumqi? He went to Urumqi in order to please the Chinese, so that they could continue with the fiction that they were looking after Uighur Muslims.

“We were promised, as a result of this golden age, a huge amount of investment in the Northern Powerhouse, a billion in Sheffield for example. The last leader of Sheffield Council said last year, ‘Where did it go?’ It was like candyfloss. It never appeared.

“So I’m not sure what we have to show for this golden age except a Chinese ambassador in London who blags and bullies at every opportunity.”

ConHome: “Where does it come from, the Chinese regime’s contempt for human rights, the gross maltreatment which you’ve already referred to of the Uighurs, many other cases. Is it Leninist Communism or is it some other factor?”

Patten: “I think it’s Leninist Communism. After all, you can’t say it’s a cultural factor. Taiwan is a Chinese community, Hong Kong is a Chinese community, and in both of those people believe passionately in freedom.

“What you’ve got is Leninism complete with what I think Lenin called useful idiots.”

ConHome: “Who are the useful idiots?”

Patten: “People who can always make an excuse for China whatever it does. If the PLA [People’s Liberation Army] were marching up Colchester High Street someone would say that’s quite close to China so maybe we should understand they’ve just adjusted the border a bit.”

ConHome: “Apropos that, on the Huawei deal, GCHQ and so on were saying it’s all right.”

Patten: “Well can I just say one thing about our security services. I think they’re pretty good on their China, I think they’re fairly clear-headed.

“I don’t mean by that they’re hostile to China. I’m not hostile to China. I’m just very wary about this Chinese Communist regime.

“I think China is a fantastic civilisation. I’ve read huge amounts of Chinese history. One of the greatest novelists today is a Chinese, Ma Jian, who lives in London, and his book Beijing Coma  is one of the great works of the last part of the last century.

“I’m very, very positive about China, but I’m very, very negative about the Chinese Communist Party.”

ConHome: “And what should the British Government be doing now?”

Patten: “What I think the British Government should be doing now is pretty well what Tom Tugendhat and a group of Conservatives right across the board, and people from other parties, have been doing.

“Because it’s very important that it’s not just a Conservative Party issue. I think we should be looking at our relationship with China in every sector.

“Trade, education, investment, security, and seeing where they bend the rules, where we need to be absolutely clear about supply chains, about the independence of strategic industries, and act accordingly.

“But we need to do it across the board and we then need to discuss with our colleagues and friends where we can match things with them.

“For example, at the moment we allow friends and allies to be picked off. When the Australians asked for a full and open inquiry into where the Coronavirus arose and how it could then best be fought by knowing more about its origins, when they suggested that and the Chinese responded by saying ‘Huh!  We won’t buy your beef, we won’t buy your barley any more if you do that’, we should have made a fuss about it.”

ConHome: “Could we end on British politics. Is it conceivable that we could ever join the European Union?”

Patten: “I slightly doubt it. My children’s generation think we will. But it may be a rather different European Union, and would need to be as things move on.

“At the moment what concerns me about this is two things. First of all, I accept that we’re leaving the European Union, I mean we plainly are.

“I don’t like it, I think it’s shooting ourselves in both feet, but we’re doing it.

“But I want us to do it in the most sensible way for Britain, and I think the refusal to accept an extension so we can negotiate a better deal is another of those triumphs, which is so deeply unconservative, of ideology over reason and political good sense.

“And it’s infused of course as well with something which I regard with a degree of contempt. That the Conservative Party should turn itself into an organisation which whips up sentiment against Parliament, or those who are regarded as the elite, is a complete contradiction of what the Conservative Party has normally stood for.

“It’s turning the Conservative Party not into the party of Burke but into the party of Robespierre.”

ConHome: “Oh God! And what role does the present Prime Minister play in this?”

Patten: “Well I’m not sure that he does play a role in it. But inevitably, you whip up public against Parliament, public against experts, and then when you’re the elite, you behave worse than the elite did before. Which is I think where the Prime Minister’s principal adviser comes in.”

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

Iain Dale: The EU’s insipid response to China’s Hong Kong aggression. Another reason to be glad we’re leaving.

Iain Dale presents the evening show on LBC Radio and the For the Many podcast with Jacqui Smith.

I’m pleased to see the Government’s response to what’s going on in Hong Kong ramping up a tad. It needed to.

The Chinese government must be held to account for its actions, and to rip up an internationally binding treaty, as it is doing – well, it doesn’t get much more serious than that in the field of international diplomacy.

The ‘one country, two systems’ agreement has 27 years to run. For China arbitrarily to declare that it can do as it likes, and impose whatever law it likes, is not the act of a friendly country.

In the real world, there is little we can do to stop China in its tracks, but we can hold it to account for its actions in a number of ways.

We now start the process of re-evaluating our entire relationship with China. That doesn’t mean the breaking of all diplomatic and economic relations, but it does mean that we call an end to the mistaken ‘golden age’ relationship advocated by David Cameron and George Osborne.

Their almost craven attitude to the Chinese partly has got us into this situation. So keen were they to attract Chinese investment in our economy – and, outrageously, in our national infrastructure – that the Chinese had (and to an extent have) us over a barrel.

Boris Johnson’s instinct was not to go ahead with the Huawei deal, but in the end he felt that he had no choice. I hope and expect that decision to be reversed by the end of the year.

China is flexing its muscles in a number of areas, when, given what has happened on Coronavirus, you might have thought that it might have reined itself in a little.

Not a bit of it. It’s increased its bellicose language regarding Taiwan, and there are worrying signs that it is ramping up its conflict with India over the disputed Himalayan border.

Dominic Raab is absolutely right to say that democracies need to be united in standing up to Chinese aggression, whether with regard to Hong Kong or elsewhere.

He was also right to call out the EU on its insipid response to what’s going on in Hong Kong. It refused to join the UK, US, Canada and Australia in sending a joint communique. Yet another reason to be glad we’re out of the wretched organisation.

– – – – – – – – – –

The Foreign Secretary has also had a tricky this week following the killing of George Floyd in Minneapolis.

Both he and the Prime Minister have rightly condemned what happened, but of course there have been calls on them to denounce Donald Trump for his response.

Instead of trying to bring the nation together, the President has added fuel to the flames. Instead of seeking to build national unity, he’s seemingly deliberately chosen to encourage division and hatred.

However, to expect the Prime Minister or Foreign Secretary to directly condemn him goes against all the natural rules of international diplomacy. America is our oldest ally, and will continue to be a key partner in the post Brexit world.

Our leaders can call for calm, but to call out Trump in an aggressive and condemnatory way is something that would make the heart feel good, but a long-term headache would ensue. In the real world of international diplomacy it is usually wise to let the head rule the heart.

As a columnist and diarist, I don’t have to do that, and have absolutely no hesitation in calling Donald Trump out for his racism, hatred, divisiveness, misogyny, incompetence, narcissism and general awfulness. I feel better for that.

– – – – – – – – – –

You can’t keep a good man down. How lovely it was to see the ‘People’s Gardiner’ back in the headlines this week.

Sacked by Keir Starmer from the Shadow Cabinet in April, ‘Whispering’ Barry Gardiner has been absent from our TV screens for far too long.

What a pity, though, that he broke his media duck by breaking all social distancing rules by ‘taking a knee’ at the crowded Black Lives Matter protest in Whitehall.

In the most #virtuesignallingtastic way possible, he thought he’d be seen as a hero by the massed protesters, but instead was forced into a humiliating apology the next day.

His Brent constituents have yet to deliver their verdict. Still, at least he didn’t attend the massive overnight street party that took place earlier this week in the constituency of his Brent neighbour, Dawn Butler. What is it that people don’t get about the continuing need for social distancing?

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

Owen Paterson: The Coalition was formed ten years ago today. I served in Cameron’s first Cabinet – and we can take heart in its achievements.

Owen Paterson was Secretary of State for Northern Ireland in David Cameron’s first Cabinet. He is MP for North Shropshire.

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

Stephen Booth: Why Trans-Pacific Partnership membership can bolster the UK’s relationship with the US

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

The UK is seeking to reshape its global role just as the world itself is changing as a result of the Coronavirus pandemic.

We are still grappling with the short-term effects, but the long-term implications are likely to be profound.

As noted elsewhere on this site, the new normal is likely to be very abnormal indeed.

In the post-war period, as the importance of the Commonwealth declined, UK foreign policy was often at risk of falling between the two stools of Washington and Brussels.

Both will always be key relationships for Britain, but the 21st Century – one of greater global prosperity, connectivity and a new technological revolution – promises greater opportunities to diversify the UK’s political and economic partnerships and take part in new coalitions.

In the post-Covid-19 world, the essential objective of Global Britain remains to forge a role that recognises the importance of our relationships with the United States and the European Union, but which isn’t solely dependent on either.

The current crisis highlights the nature of the challenge and may in some ways exacerbate it, as several trends already underway become starker.

Most notably, the crisis has underlined China’s emergence on the global stage and appears to be amplifying US-China great power rivalry.

It is not simply the origination of the disease and China’s equivocation in alerting the international community to it that has correctly prompted scrutiny.

The extent to which China drives global trade and economic growth is clear for all to see. It now accounts for around 17 per cent of global GDP, compared to only four per cent at the time of the SARS episode in 2003.

Then China accounted for less than four per cent of global tourist spending compared to just under 20 per cent at present, according to JP Morgan research.

The Higher Education Statistics Agency’s breakdown of students shows that over a third of non-EU students studying in UK universities are now Chinese.

In 2015, George Osborne pronounced a “golden era” of Sino-British relations.

However, there is no choice but for UK policy to be much more hard-nosed in future.

At a recent Policy Exchange webinar, Lord Hague, former Foreign Secretary, advocated a “two pillar” approach of seeking to avoid strategic dependency on Beijing, while accepting that China’s co-operation would be required to solve global problems.

The extent to which UK policy will be influenced by Washington remains to be seen, but the Huawei dispute is not the first time, and is unlikely to be the last, that US policymakers will express a view on UK engagement with China.

Logically, as the English Channel widens, Brexit points to closer cooperation and convergence with the US.

The US relationship is already indispensable to the UK, particularly in the fields of security and defence, and successfully concluding a UK-US trade deal would provide an important economic and geopolitical boost to Global Britain.

However, it is also the case that President Trump has vacated the US’ traditional global role at a time when the West could do with some leadership.

Just as the Remain campaign found it difficult to make the case for a continued political alliance with the EU, there is also a risk that advocates of a much closer US relationship take British public opinion for granted.

As previously, the UK relationship with the US will need to be tempered with others.

Some will argue that rising political and economic nationalism at the expense of the multilateral system illustrates the folly of Brexit.

However, the crisis has revealed that the EU is ill-suited to global leadership in a world where the nation state is reasserting itself as the essential unit of governance.

Brussels’ preoccupation has been to uphold solidarity within the bloc, rather than to promote it globally.

Equally, the EU remains a superpower on our continent.

We have yet to determine the precise nature of our future relationship but it is in our interests for it to remain functional, if not warm.

To the extent that the EU engages in protectionism, we are shortly going to be on the other side of the fence.

Moreover, the EU’s ongoing quest for “strategic autonomy” in foreign affairs begs the question of autonomy from whom? The only answer can be the US.

The UK may need to make an even stronger European case for Atlanticism from the outside, mobilising allies, particularly in Eastern Europe, to do so.

Meanwhile, the crisis has illustrated the vulnerability of long and fragmented global supply chains and the need for greater national resilience.

In some cases, such as the supply of protective medical equipment, strategic stockpiling will be part of the solution.

But the UK is not big enough on its own to sustain autarky, even if it was desirable.

These challenges also serve to highlight potential ways forward.

The UK retains considerable assets and willing partners in forging its new role. We, alongside a host of other medium and small-sized powers, share an interest in securing a diversity of supply.

This means maintaining and reforming the rules-based international system, rather than see it upended or diminished.

Helping to broker a new and sustainable settlement between the West and China will be difficult but preferable to an escalation in the US-China conflict.

As Liz Truss, the UK Trade Secretary, recently argued, with her counterparts from Australia, New Zealand and Singapore, the case for the UK’s membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been strengthened.

Japan, its biggest member, views the grouping as a means of engaging with China from a position of greater strength and, unlike the EU, the CPTPP does not aspire towards ever closer union.

It is already a club with major economic, and potentially geopolitical, significance. UK membership would enhance both of these properties.

The UK’s Integrated Review of Security, Defence, Development and Foreign policy has understandably been paused as attention is directed towards the Government’s immediate crisis response.

When it resumes once some of the dust has settled, it is important that the UK reflects on the full range of tools at its disposal in the new world we find ourselves in. It was curious that trade was not explicitly included in the original remit of the review.

The crisis has illustrated that, whether we wish it or not, trade and foreign policy are inextricably linked.

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

Frederick Shepherd: The virus brings with it another invisible enemy. A mental health crisis.

Frederick Shepherd is a former Parliamentary researcher.

The Government’s ‘total’ response to the coronavirus and the severity of the measures it has introduced has resulted in the greatest scale of public awareness of a news story since the Second World War.

Severe choices have been foisted upon us which permeate into our homes, our work and our relationships, forcing a response. A knock-on mental health crisis seems certain – likely to be large and already begun.

Building on the Government’s announcement of a £5 million grant to be used by the charity sector to support the general public, the NHS launched its mental health helpline for staff battling on the frontline last week. Both have come in response to a surge in NHS, police and third sector ‘cases’ of what practitioners haved called, “symptoms consistent with clinical diagnoses of mental health conditions”.

Further still, there has been a marked increase in the number of suicides since the pandemic began. Of course one of the difficulties in knowing precisely what is happening on the ground is the lag time in collecting any form of meaningful data. Due to social distancing measures, fewer formal diagnoses can be made and, even were matters otherwise, it would take months to analyse them.

That patients are unable to have face to face consultations and therapy is also a concern. A backlog of patients at GP’s surgeries, Community Mental Health Teams (CMHT) and ‘Improving Access to Psychological Therapies’ (IAPT) services – the NHS’s talking therapies service – will inevitably follow. Apart from adding pressure to the NHS, this backlog will exacerbate the symptoms of individuals and worsen patient outcomes.

The implications for a patient’s mental health often extend beyond their presentation of acute symptoms, too. Mental health conditions such as depression and anxiety, for example, are known for their tendency to resurface, with sufferers relapsing long after going into remission from their their first episode.

A greater problem than the immediate pressures on the NHS and the fear and bereavement associated with the virus itself, however, is the likelihood of a deep and protracted global recession. Job losses, debt, domestic abuse, and the lack of meaningful routines point toward a longer-term mental health pandemic. According to research by the University of Oxford and the London School of Hygiene & Tropical medicine, the 2008 recession was linked with over 10,000 suicides across Europe and North America between 2008 and 2010.

The research team analysed suicide data from the World Health Organisation covering 24 EU countries and two North American countries which observed that the downward trend in suicide rates in the EU reversed when the economic crisis began in 2007, rising by 6.5 per cent by 2009 and remaining at the higher level through to 2011. In Canada, suicides rose by 4.5 per cent between 2007 and 2010, while in the USA, the rate increased by 4.8% over the same period.

As would be expected, the implications extended more widely too. The prescription rates for antidepressants, beta-blockers, benzodiazepines, antipsychotics and mood stabilizers rose markedly too. In the UK, a rise of 11 per cent in antidepressant prescribing between 2003 and 2007 went up to 19 per cent between 2007 and 2010. The above figures were described as ‘conservative’ estimates by the authors.

Yet the Oxford research also showed that there are things the Government can do to prevent this. The study suggests that nations that invest in active labour market programs reduce the risk of suicide, with the authors estimating that for each US$100 spent per capita on programmes offering such assistance for the unemployed, the risk of suicide reduced by 0.4 per cent.

The authors highlight, for example, that Sweden, between 1991 and 1992, and Finland, between 1990 and 1993, both experienced rises in unemployment, yet at the same time as the rate of suicide decreased. In the most recent recession, suicide rates remained stable in Sweden and Finland, while the rate declined in Austria, despite rising unemployment.

A critical question for policy and psychiatric practice is whether mental health and suicide rises are inevitable. The study showed that rising rates have not been observed everywhere so, while recessions will continue to hurt, they don’t always cause self-harm. A range of interventions, from return to work programmes through to antidepressant prescriptions, can reduce risk during future economic downturns.

The Government’s departure from the George Osborne economic model and an increased focus on public spending would indicates a greater appreciation of the role of services to a well-functioning society. Such thinking is likely to indicate a greater willingness to spend in this area of policy. Whether it will be able to commit to doing so on a large scale after the pandemic is another question, but it must do what it can, and fast. A focus on divising programmes is tantamount only to the speed at which something must be implemented. Lives will depend on it.

The Government’s measures to date aren’t short-term precautions for a situation that’s likely to disappear. As with their approach to the virus, their interventions are timed, acting as a first line of defence in an effort to contain the spread of a pandemic they know will grow and develop.

When a drop in the curve of the virus is seen and restrictions are lifted, the concern for the nations public’s health mustn’t be endangered by a blinkered pursuit of economic growth and balancing the books. Investment in mental health and wellness has risen considerably under previous Conservative Governments, and will need to rise more than ever.

The Government has risen to the challenge in response to the public health crisis presented by COVID-19 so far; it must continue to do so if we are to defeat the next invisible enemy.

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John Redwood: Lessons for managing civil service obstruction from the Thatcher years. And my role as head of her Policy Unit.

Sir John Redwood is MP for Wokingham, and is a former Secretary of State for Wales.

Recent tensions between Ministers and civil servants have surfaced. The stories reveal Ministerial impatience that reforms promised in the election are not being pursued with vigour and energy by officials who seem to want to slow them or overwhelm them with objections. Pro-Brexit Ministers are understandably suspicious of the intents of the civil service at large, after the strong defence of the status quo that the civil service helped David Cameron and George Osborne mount during the EU referendum.

It seemed that the civil service came close to losing its reputation for neutrality by enthusiastic and inaccurate  forecasts and reports heralding big trouble were the public to vote to leave. This was followed by a long period of generating endless difficulties and obstacles to simply leaving, even after it was official Government policy to implement the wishes of the majority in the vote. There were no published papers or civil service leaks about all the opportunities Brexit would bring.

I have often been asked how I helped Margaret Thatcher get through a radical programme of change and reform during the 1980s when I advised her first from outside government, and then as her Chief Policy Adviser inside 10 Downing Street.

I have been reluctant to say much about that period as I am rooted in the present and passionate about the future, and am not ready to write up my reflections from the past. It is, however, possible to  present some conclusions as to how we managed democratic decision-making, and how we secured implementation of policies in that tempestuous era that are relevant to where we now are.

There were plenty ofYes Minister routines and scripts to live through then as now. I recall that when I first took over the Policy Unit the rest of the civil service decided to starve us of their papers to make our jobs difficult. I responded by telling them in that case I would still be submitting our view of how the Prime Minister should proceed on each subject heading on the agenda regardless of their advice, and would compete against their unseen proposition.

They decided wisely that this would not be a good idea and could lose them more of their battles with the Prime Minister than they wished. They turned instead to sending us huge quantities of paper which overwhelmed us. I told them that was as bad as sending us nothing. What we needed to see was their advice on matters that warranted the Prime Minister’s time, and particularly matters where she needed to decide or get the Cabinet to decide.

I also pointed out that we had work to do putting manifesto and political priorities into the form of policies that could be implemented.  We were happy to share our memos on these matters with them. The civil service then decided to co-operate, and we saw the papers we needed to see, and recommended the departmental or Cabinet Office answer when it made sense.

The Policy Unit had ten members. We covered every Government subject apart from non-EU foreign affairs, where the PM had a separate adviser in Number 10. I supervised all briefs going to the Prime Minister, but each specialist usually signed their own work and had some access to the Prime Minister for themselves to keep them involved and committed to her. It included two career civil servants and three secondees from business.

I met the Prime Minister once a week for a one to one review of the agenda for half an hour and usually saw her daily at meetings when she was working in London.  I could attend most of the meetings in the diary if I wished. I asked all my colleagues to  be polite and co-operative with the wider civil service, but to give them clear steers on what the Prime Minister’s view was and what Number 10 was out to achieve whether they liked that view or not. We never wished the Government to operate outside the normal rules of procedure or to be cavalier with the law.

I was also very conscious that we needed to help her foster better relations with her Cabinet colleagues. I persuaded the Prime Minister to follow a no shocks policy where possible. We invited in leading Cabinet members for one to one meetings when they could tell the Prime Minister what they were doing and what help they needed, and she could tell them what her priorities were and what she was looking for from their department. Margaret had a tendency to take criticisms or embarrassing facts about a department which we might supply and use them with gusto against a  Minister in wider meetings, which made me increasingly careful about whether and how I offered such information.

The big items on the agenda that often required counter-cultural actions by the civil service were privatisation and government reform. Many civil servants did not like the idea of transferring some 10 per cent of national output from the hands of the state into private hands through share and business sales in the privatisation programme. There was strong Labour Party and trade union resistance, as there was to council house sales, which informed efforts to slow the process down.

We were made to take through separate legislation for each privatisation sale rather than putting through enabling legislation for the whole programme. Council house sales were tied up by various rules over sales proceeds and discounts. We managed the process by securing the buy-in of the chairmen of the nationalised Industries, who saw how it would solve their capital scarcity and modernisation problems.

I got the Prime Minister to set up a special department for privatisation within the Treasury and make John Moore the first Minister in charge ot it. He and I then set out a programme for Cabinet consideration, and he recruited a group of volunteer Treasury officials who were good and keen on the topic to get it under way. Cabinet buy-in was secured by explaining the whole future programme to them and encouraging individual Ministers and departments to bid for early slots for sales.

When it came to central government, we decided to make a bigger distinction between policy work and the administration of policy. The actual work of mending and managing the roads or  administering grants could be done by an agency or executive quango. A senior civil servant or external chairman could take charge, be set targets, and report back as necessary. Failure to deliver would be mismanagement – not a direct failing of the Minister.

Policy work and work close to Ministers would be under the traditional rules where advisers advised and Ministers decided. Ministers were responsible, and managed the presentation of the Department’s case. In some cases, such as the Property Services Agency responsible for various building task and maintenance, it was possible to go on from agency status to privatise the agency and give the public sector more choice for property work.

Results from this reform were mixed. In some cases, it added to quality and efficiency by concentrating attention on what before had often been Cinderella parts of a department. In other cases, good leadership was not found and little changed. The civil service tried to water down the impact of managing to stated and clear targets by multiplying the number of such targets to the point where they were meaningless.

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

Reshuffle 3) Chris White: It isn’t just Ministers who get fired. A third of SpAds are set to lose their jobs.

Chris White is Managing Director of Newington Communications. He was Special Adviser to Patrick McLoughlin, when the latter served as Chief Whip, as well as to Andrew Lansley and William Hague when each served as Leader of the House.

This reshuffle was the first opportunity for the Prime Minister to shape the Ministerial team that he wants in Government.  These new ministers, from the Cabinet down will be crucial in delivering the ‘levelling-up’ agenda – from pushing legislation through Parliament, to communicating the Government’s plan on the airwaves.

Evolution

It has been interesting to watch the reshuffle evolve during the weeks after the election.

Initially, it was about machinery of government changes – there was to be a new super-department where Business would be folded in with Trade, with Energy and Climate Change splitting off, and International Development combined with the Foreign Office.  Of these, only a mild version of the last has materialised, with four DfID Ministers double-hatting with the FCO.

Why the change? It’s difficult to say, but the Prime Minister is most powerful when he uses his patronage. Cutting the number of Cabinet positions, and departments, loses seats at the table. Combining departments also distracts from delivery – when Energ and Climate Change was folded into the Business Department back in 2016, it took several months for civil servants to stop working in separate buildings and work out the reporting structure, seriously affecting efficiency.

Performance…and loyalty

Despite attempts to stop leaks, this administration is just as prone to them as those which have come before it. There have been briefings from the centre, and counter-briefings from Ministers and advisers, each trying to set the agenda and highlight those who have been performing, or not.

How you measure performance is an art form rather than a science. The Whips will assess the performance of MPs and Ministers in the Chamber, get feedback from constituencies and colleagues, and feed this into the centre.

Those close to the Prime Minister will then assess this information, and place their own judgements on this.  Whilst he ultimately makes the decision, the Chief Whip and a number of senior advisers all have their input.

But it is not just ministerial performance, or perhaps competence, that’s an issue. Take Julian Smith, who only weeks ago got the Northern Ireland Assembly restarted in what was a surprise to all, and who has received tributes from across the political spectrum in Belfast and in Dublin.

Arguably, this performance should have saved him, but it was his perceived disloyalty that confirmed his demise. Smith purportedly threated to resign over Brexit in the autumn of last year, and this is a sin that has not been forgiven.

Others have been loyal, but not necessarily particularly competent at their job, and it’s clearly been the view that it’s time to put some new faces around the table in an attempt to inject some dynamism into these first, crucial months of the new Government.

The Conservatives have a once in a generation opportunity to solidify support in constituencies that only 15 years ago had Labour majorities well north of 10,000: this time cannot be wasted.

Who’s in control?

One of the surprises of the day was the unplanned (or planned?) sacking of the Chancellor. Ordered to fire his six special advisors, Sajid Javid honourably refused, instead falling on his sword.

Prime Ministers have long suffered challenging relationships with the occupants of No.11, with honourable exceptions such as David Cameron and George Osborne. Javid certainly had his run-ins with Dominic Cummings and others in Number 10, holding the traditionally tighter Treasury line on public spending, while Number Ten now wants to loosen the purse strings.

Ultimately, though, this is about control, and Number 10 wants much greater control over the levers of Government. There will now be a joint special adviser unit between it and Number 11 overseeing economic policy – arguably a good idea which should overcome the traditional tensions, especially when the new Chancellor and the Prime Minister trust each other.

Other advisors have also found themselves in the firing line – Peter Cardwell, the Justice Secretary’s media SpAd has been sacked, even though Robert Buckland stayed. Last week, Cummings jokingly told the Friday SpAds meeting that he would ‘see half of you next week’. This week we see advisers being removed from post, a third of them losing their jobs, and Number Ten tightening its grip.

Control can be seized, but can it be sustained? Government produces huge quantities of paperwork, Bills and advice. Number Ten simply cannot be everywhere at once, however much it tries. Too tight a grip removes initiative and the ability for departmental ministers to get on with the job, with everything having to go through the centre, which then becomes a log-jam.  Such a setup is not sustainable in the long-run.

Continuity

Reshuffles happen to provide a sense of renewal, to bring in new talent and boot out the underperforming. Yet they have their downsides as well. There will be some bruised personalities on the backbenches who will need careful managing by the whips over the next few months, and I hear Mark Spencer is already on the job.

One final point worth mentioning is regarding continuity. Sometimes, it works well – George Eustice has been a DEFRA Minister for nearly seven years on and off, and is now promoted to Secretary of State. He knows his brief inside out, and will be effective from day one.

Yet with the sacking of Esther McVey, there have now been ten Housing Ministers in ten years. Equally with Julian Smith going, there have now been four Northern Ireland Secretaries in five years.

We’ve yet to see what happens in the junior ranks, but there must be a greater balance between Ministers becoming effective through time served and understanding the brief, and the need to bring in new talent.

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

Reshuffle 3) Chris White: It isn’t just Ministers who get fired. A third of SpAds are set to lose their jobs.

Chris White is Managing Director of Newington Communications. He was Special Adviser to Patrick McLoughlin, when the latter served as Chief Whip, as well as to Andrew Lansley and William Hague when each served as Leader of the House.

This reshuffle was the first opportunity for the Prime Minister to shape the Ministerial team that he wants in Government.  These new ministers, from the Cabinet down will be crucial in delivering the ‘levelling-up’ agenda – from pushing legislation through Parliament, to communicating the Government’s plan on the airwaves.

Evolution

It has been interesting to watch the reshuffle evolve during the weeks after the election.

Initially, it was about machinery of government changes – there was to be a new super-department where Business would be folded in with Trade, with Energy and Climate Change splitting off, and International Development combined with the Foreign Office.  Of these, only a mild version of the last has materialised, with four DfID Ministers double-hatting with the FCO.

Why the change? It’s difficult to say, but the Prime Minister is most powerful when he uses his patronage. Cutting the number of Cabinet positions, and departments, loses seats at the table. Combining departments also distracts from delivery – when Energ and Climate Change was folded into the Business Department back in 2016, it took several months for civil servants to stop working in separate buildings and work out the reporting structure, seriously affecting efficiency.

Performance…and loyalty

Despite attempts to stop leaks, this administration is just as prone to them as those which have come before it. There have been briefings from the centre, and counter-briefings from Ministers and advisers, each trying to set the agenda and highlight those who have been performing, or not.

How you measure performance is an art form rather than a science. The Whips will assess the performance of MPs and Ministers in the Chamber, get feedback from constituencies and colleagues, and feed this into the centre.

Those close to the Prime Minister will then assess this information, and place their own judgements on this.  Whilst he ultimately makes the decision, the Chief Whip and a number of senior advisers all have their input.

But it is not just ministerial performance, or perhaps competence, that’s an issue. Take Julian Smith, who only weeks ago got the Northern Ireland Assembly restarted in what was a surprise to all, and who has received tributes from across the political spectrum in Belfast and in Dublin.

Arguably, this performance should have saved him, but it was his perceived disloyalty that confirmed his demise. Smith purportedly threated to resign over Brexit in the autumn of last year, and this is a sin that has not been forgiven.

Others have been loyal, but not necessarily particularly competent at their job, and it’s clearly been the view that it’s time to put some new faces around the table in an attempt to inject some dynamism into these first, crucial months of the new Government.

The Conservatives have a once in a generation opportunity to solidify support in constituencies that only 15 years ago had Labour majorities well north of 10,000: this time cannot be wasted.

Who’s in control?

One of the surprises of the day was the unplanned (or planned?) sacking of the Chancellor. Ordered to fire his six special advisors, Sajid Javid honourably refused, instead falling on his sword.

Prime Ministers have long suffered challenging relationships with the occupants of No.11, with honourable exceptions such as David Cameron and George Osborne. Javid certainly had his run-ins with Dominic Cummings and others in Number 10, holding the traditionally tighter Treasury line on public spending, while Number Ten now wants to loosen the purse strings.

Ultimately, though, this is about control, and Number 10 wants much greater control over the levers of Government. There will now be a joint special adviser unit between it and Number 11 overseeing economic policy – arguably a good idea which should overcome the traditional tensions, especially when the new Chancellor and the Prime Minister trust each other.

Other advisors have also found themselves in the firing line – Peter Cardwell, the Justice Secretary’s media SpAd has been sacked, even though Robert Buckland stayed. Last week, Cummings jokingly told the Friday SpAds meeting that he would ‘see half of you next week’. This week we see advisers being removed from post, a third of them losing their jobs, and Number Ten tightening its grip.

Control can be seized, but can it be sustained? Government produces huge quantities of paperwork, Bills and advice. Number Ten simply cannot be everywhere at once, however much it tries. Too tight a grip removes initiative and the ability for departmental ministers to get on with the job, with everything having to go through the centre, which then becomes a log-jam.  Such a setup is not sustainable in the long-run.

Continuity

Reshuffles happen to provide a sense of renewal, to bring in new talent and boot out the underperforming. Yet they have their downsides as well. There will be some bruised personalities on the backbenches who will need careful managing by the whips over the next few months, and I hear Mark Spencer is already on the job.

One final point worth mentioning is regarding continuity. Sometimes, it works well – George Eustice has been a DEFRA Minister for nearly seven years on and off, and is now promoted to Secretary of State. He knows his brief inside out, and will be effective from day one.

Yet with the sacking of Esther McVey, there have now been ten Housing Ministers in ten years. Equally with Julian Smith going, there have now been four Northern Ireland Secretaries in five years.

We’ve yet to see what happens in the junior ranks, but there must be a greater balance between Ministers becoming effective through time served and understanding the brief, and the need to bring in new talent.

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

Tom McPhail: Successive governments have dodged tough choices on pension tax reform for too long

Tom McPhail is head of policy at Hargreaves Lansdown.

Not for the first time, the prospect of an impending budget has prompted an outbreak of speculation around the possibility of pension tax reform. This is not to say the speculation is unfounded: this is the first time in around 15 years a government has the opportunity and the means to undertake meaningful reform of what has become a bloated and inefficient system, riddled with inconsistencies and inefficiency. The Chancellor should announce in the Budget a consultation to review the options available and then press on with reform as quickly as possible.

Many of the myriad problems with the system are the result of previous governments’ unwillingness to make tough choices. I’ve set out here a brief summary of the reasons why change is needed, why I think now is the moment to do it, and what the options for reform might look like.

The Conservative Party manifesto had already identified two specific problems which need addressing; the Tapered Annual Allowance, which has been landing high-paid workers, including key high-paid public sector employees such as doctors with punitive tax bills; and the net pay tax relief administration system adopted by some employers, which results in lower paid employees missing out altogether on their free government-funded tax relief top up to their pension.

The Pensions Policy Institute estimates that around 64 per cent of pension tax relief is enjoyed by the 17 per cent of the population paying higher or top rate income tax. It is hard to regard this as socially equitable; to give the least support to the most needy individuals and to give the most support to the wealthiest few.

This approach only makes sense when viewed through the logic of deferred taxation, whereby tax relief is granted now to avoiding taxing money paid into a pension until the ultimate withdrawal of that money in retirement, when income tax is then levied on the withdrawals.

When viewed as an incentive to save, though, tax relief clearly makes no sense to most people. Research by the pension scheme B&CE in 2015 showed that of people actually in a pension, 74 per cent either didn’t know how tax relief worked or weren’t even aware it existed. The Government is spending tens of billions of pounds a year (roughly £30 billion to £50 billion, depending on how you want to measure it), on a scheme which is largely unappreciated by the population.

Other problems are mounting up. The Lifetime Allowance, the cap applied to limit the overall amount that can be saved in a pension without extra tax charges kicking in, now acts as a penalty on those who have saved prudently or invested wisely. It cannot be right to penalise savers just because their investments have performed well.

Conversely, on death, pension funds pass on largely tax free, thereby creating a gaping hole through which tax revenues can leak.

Retirement saving among the self-employed is alarmingly low, with just 31 per cent currently actively saving in a pension.

The Money Purchase Annual Allowance cuts the maximum amount you can pay into your pension, from £40,000 a year down to just £4,000, once you choose to draw income from your pension. This would be fine if everyone stopped work in their 60s and stayed retired.

But they don’t; in fact the concept of ‘retirement’ is becoming redundant. Increasing numbers of people pass through a transitional process of tapping into their pension savings in their 50s, whilst managing an ebb and flow transition into retirement and not becoming fully economically inactive until their 70s. Currently this happens largely by choice, increasingly in the future it will be by necessity.

Into this muddled environment has arrived a Conservative government with a very different agenda from the one that reviewed pension taxation in 2015. Then, the review initiated by George Osborne ran aground on the rocks of opposition from the right-wing press and from a pensions industry that couldn’t see beyond its short-term interests.

Now, the world is very different. Auto-enrolment has transformed retirement saving, bringing ten million new savers into the fold and their employers are on the hook to pay for it, whether they want to or not. The 2015 Pension Freedoms which revolutionised the choices available for retirement income withdrawal also now demand people make more decisions. The challenge is no longer about getting people into pensions, it is about persuading them to engage with their savings and to save more.

Meanwhile, we have a Conservative government with a very different focus compared to the past. It recognises the need to address the interests of voters in those ‘Red Wall’ seats in the Midlands and North. Voters who in the main are not higher earners, who aren’t much interested in the principles of deferred taxation but who would know a good deal if it was presented to them. The challenge is to craft a good deal out of the existing system.

Unfortunately, you can’t touch pensions policy without upsetting someone. Any redistribution will mean losers as well as winners. Given the real winners today are the high earners (but not the very high earners, who have largely given up already and left the field), and members of final salary schemes, this is where opposition is likely to come from.

Employers are also likely to find themselves being asked to pay a little more; whilst employer pension contributions are still very generous in pockets of the economy, largely a legacy of the final salary system, for most of the ten million new joiners in the auto-enrolment system, employer contributions are around the statutory minimum of three per cent of pay.

So what changes could we see? To simply scrap higher rate tax relief would be an act of fiscal hooliganism; it would punish the high earners and severely undermine such self-employed retirement saving as does still exist, whilst doing nothing for lower earners. Subtler options include moving away from tax relief altogether, either in favour of a flat rate top up, or a combination of more generous employer contributions, combined with higher Treasury top-ups applied selectively. We think it is possible to create a new system where, in effect, every £1 paid into a pension by an individual would be doubled, either by their employer, or by the government.

Other aspects of the system potentially up for grabs include: imposing Employer’s National Insurance on their contributions, worth over £11 billion a year; introducing a death tax on pension funds; scrapping tax relief on workplace employee pension contributions (after all, why give tax relief if employers are doubling your money anyway?); or reducing the tax free lump sum at retirement, which would seriously undermine confidence in the system for the future.

Given the complexity of the system, the first step should be to open a consultation for review.

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