A Sovereign Nation?

Parliament's authority is supreme over international laws - if we allow it to be.

Towering columns

On ConservativeHome, Henry Hill dismisses the idea that the Government’s proposed Rwanda bill could somehow be “unconstitutional”.

[Professor Mark] Elliott argues that whatever Parliament’s right to make law for the United Kingdom, such legislation has no bearing on this country’s international obligations. As such, the Bill would be “unlawful in international law even if domestic courts are forced by the Bill to turn a blind eye to that legal fact.”

It is true that Parliament cannot unilaterally change international law. But under our constitution it can legitimately legislate contrary to international law, and such statute is supreme within the UK’s legal order. That is why (contra Lewis Goodall) Parliament is expressly able to pass laws that do not comply with the Human Rights Act, and thus why prisoners can’t vote. As such, it is wrong to imply by appeal to “the rule of law” that attempting so to do is a breach of the UK’s constitution and norms. Per Lord Diplock, in his judgment on Salomon:

“If the terms of the legislation are clear and unambiguous, they must be given effect to, whether or not they carry out Her Majesty′s treaty obligations, for the sovereign power of the Queen in Parliament extends to breaking treaties…”

This is not to say that there aren’t risks to acting outside our international commitments. But those risks are diplomatic and political. The relationship of a sovereign state to international law is not like that of a citizen to the law of their country; that an international obligation is “binding” on the UK does not (and should not) grant it legal or moral equivalence with statute law.

On his Substack, Neil O’Brien says the move to abolish short prison sentences is flawed, as many serving short sentences are serious offenders.

People who are on prison sentences of less than a year are not in there for trivial offences but serious ones.  In today’s criminal justice system it is routine for people to get numerous community sentences and suspended sentences before finally getting a custodial sentence. To get locked up, even for less than a year, you have to have done something pretty serious.

Of those getting an immediate custodial sentence over the last 12 years about 17% involve violence against the person; 2% sexual offences; 2% robbery; 20% theft; 9% drug offences; 7% possession of weapons; and 9% public order offences.

…Anti-prison campaigners and parts of the judicial establishment have been lobbying against prison sentences of less than a year for decades - from the Halliday Report of 2001, to the plans announced in 2019 but later scrapped.

The government managed to boost capacity by 1,900 places between September 2022 and summer 2023. I don’t pretend to have a neat solution but things I would re-examine as alternatives include:

• What extra capacity we could get from rapid deployment cells (we need to do less than half of what we did over last winter to have the same effect as the ban).

• Anything further we could do to speed up the courts and reverse the growth of remand (which has sucked up 10 times more places than this ban will release).

• Anything further we could do to send more foreign offenders to their home country (removing 6% of them woudl do as much as the ban).

• Greater focus on super prolific offenders - to do more to cut crime for a given number of cells.

The previous attempt to abolish short prison sentences at the end of the May era was later overturned by Boris Johnson. I hope that once again we will have a rethink.

The authors of the Pimlico Journal dispel many of the myths concerning the economic benefits of mass migration.

It shouldn’t be necessary to say this, but the economy is not a vampiric god which needs constant deliveries of fresh human meat to shower its blessings upon us. Surprising numbers of seemingly intelligent people seem to believe otherwise, something that has long been diagnosed as the lump of labour fallacy. Immigration fans love the lump of labour fallacy half the time, as it shows that just because the demand for labour responds to the demand for goods, immigrant workers don’t (in aggregate, at least) ‘take jobs’ from natives, as their supply induces new demands.

But by the same logic, the absence of immigrant workers does not mean jobs would go undone — employers would instead adapt their plans, choosing to raise pay to attract native workers, or to invest in plant and machinery in place of workers. Employers don’t simply leave jobs unfilled permanently, even though there are no workers willing to take them; they respond, deciding between pay rises and increased investment, depending on the options available to them.²

…Arrow and Capron derided the claim of worker ‘shortage’ as no more than ‘a misunderstanding of economic theory… [and] an exaggeration of the empirical evidence’. They suggested that ‘rather than admit that they could not pay the higher wages necessary to keep help, many individuals found it more felicitous to speak of a “shortage”’. In a large economy — and Britain has 30 million people at work, after all — there will always be stresses in the competition for scarce resources, including for skilled workers. This is not a problem to be avoided; it is the inevitable consequence of a dynamic economy.

At Project Syndicate, Jacob Frenkel, Raghuram G. Rajan and Alex A. Weber argue that global economies need a “humble” approach towards central banking.

A key part of adopting a humble approach to central banking would require policymakers to return to fundamental, time-tested principles of macro- and monetary economics. In particular, policymakers must avoid overreliance on specific predictive models of inflation. Ideally, central banks should develop frameworks that achieve reasonable forecast results, regardless of the nature of the shock hitting the economy, and they should communicate the degree of uncertainty to the markets and the public. In doing so, they can preserve the option of shifting policy stances as circumstances change, rather than promising long periods of policy stasis based on problematic assumptions.

A humble approach would also require that central banks’ preserve future policy space. In this recent suboptimal policymaking cycle, we all witnessed leading central banks locking themselves into policy stances that constrained their ability to act swiftly via long-term policy commitments when the economic situation shifted suddenly, particularly when inflation reared its head. We believe central banks should tilt toward simpler and more transparent rules, rather than implementing drastic long-term discretionary measures that threaten to undermine their ability to act in the future.

Crucially, embracing the humble approach requires central banks to maintain their focus on the inflation anchor, typically set at 2%. All major central banks – the Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of England, and others – have converged on the 2% target. Now is not the time to question or lose sight of that objective. Suggesting doctrinal flexibility or raising inflation targets at a time of higher price growth and ongoing worries over long-term expectations is the wrong answer. Central banks must remain committed to preventing inflation from spiraling out of control, and their credible commitment to an inflation anchor is central to achieving that objective.

At Postliberal Order, Philip Pilkington draws parallels between the economic decline of the late Soviet Union and the West’s current experience of late liberalism.

But the shrinking pool of late liberalism’s ideological defenders will no doubt say that those of us who suspect there may be parallels are looking for patterns that are not there. We are lying on our backs and seeing what we think are grim faces in the clouds – but these faces are simply projections of our own dyspeptic mood, a mood soured by our contemptuous and wrong-headed rejection of the tenets of liberalism. Yet the emerging economic reality of late liberalism is becoming harder and harder to ignore. One of the benefits of liberalism, we are often told, is that it produces economic growth – it “makes the GDP line go up”, as the meme merchants say. But does it? As we move from 2023 into 2024, it is becoming increasingly unclear if liberalism can produce the goods – and by ‘goods’ we mean actual goods, actual economic output.

The canary in the coalmine here is Europe. Europe’s economic problems have been evident for some time. According to the IMF, between 1992 and 2007 the European economy grew by an average of around 2.1% per year. But since 2008 it has only grown at an annual rate of around 0.8% per year – the same number as the Soviet Union experienced in the late Brezhnev era. The IMF projects an average annual growth rate of 1.4% between 2023 and 2028. In truth, especially with the high energy prices driven by the mysterious exploding (passive voice) of the Nordstreampipeline, these projections look overly optimistic. But even then, they are still very low.

In the shorter term, the European economy is deteriorating at a rapid clip. The manufacturing sector has been in decline for months. Purchasing manager indices show that it has been contracting since early-2022. With recent readings as low as 43, the sector is contracting at a rate that is typically associated with a recession. Yet the European economy continues to stumble forward, like a zombie. This is unlikely to last the next 12-18 months, however, as the services sector is now starting to decline too. Until now, services were propping up the European economy but since August 2023 it too has started to contract. Meanwhile, the housing market looks like it is collapsing too, with prices starting to fall in August 2022. Falling house prices, driven by rising interest rates and a consequent decline in new mortgages, are driving down the construction sector with them. The European construction sector has been contracting since early-2022.

On his Substack, Sam Dumitriu argues that nuclear power is still essential for delivering energy security and decarbonisation.

So should we listen to the naysayers and give up on nuclear energy as a costly technology of the past? No, and there’s two good reasons why we should press on with nuclear power. The first is the firm, reliable baseload that nuclear power provides is vital to decarbonisation. Nuclear power plants generate at full capacity 92% of the time. This reliability can underpin and complement a majority renewable grid.

Secondly, as seen above, building new nuclear power isn’t as hard or costly everywhere. By looking abroad, we can find solutions for many of the high cost factors of nuclear power construction that plague the UK. We can learn lessons from South Korea’s fleet strategy, which will reduce nuclear construction costs. To fully implement these solutions we’ll need to update our planning system so that we can approve the construction of different reactors in the same fleet at the same time, rather than repeating many of the planning steps for each identical reactor.

That’s why we should be open to the new wave of technology which is on its way. Small Modular Reactors (SMRs) have the potential to bring down the cost of new nuclear power as its components can be produced on production lines in factories and then assembled on site. Rolls Royce estimates that each of their 470MW SMR will require roughly £2bn of capital investment, significantly less than the £32bn for Hinkley Point C. At £4.4m per MW, this is roughly in the middle of international standards. Last Energy, which produces a 20MW micro-SMR suitable for heavy energy users, such as chemical plants and data centres, already has a project order book in the UK. In theory, these can be privately financed and require no state subsidies.  But as it stands, they have no route to get their reactor design approved and to find a site to build it on.

But when it comes to giga-scale nuclear power, there’s some good news. Blackpink may have stolen the headlines during South Korea’s recent state visit, but somewhat under the radar Energy Secretary Claire Coutinho signed a new Clean Energy Partnership that touted co-operation on civil nuclear capabilities. Also that week, South Korea’s Kepco signed a memorandum of understanding with Mott MacDonald to explore the potential of building a giga-scale facility in the UK. High nuclear costs are not inevitable. If we can learn the lessons of other countries that have kept costs down, then Britain can still have a bright atom-powered future.

Wonky thinking

For Policy Exchange, James Vitali published The Property Owning Democracy. Vitali makes the case for the need to rejuvenate property owning capitalism.

Part of this dissatisfaction is undoubtedly down to economic growth. The UK’s trend growth rate since the turn of the century has been half what it was in the 1960s.5 As with other European countries, a vast gulf has opened up between the productive capacities of the United Kingdom and the United States. UK GDP growth since 2010 has been 47% slower than the US, and the average American earns a third more than the average Briton. Amazingly, Americans can stop working each year in September and still be richer than Britons working for the whole year.6 In large part, this has been driven by dismal improvements in labour productivity. Since the financial crash, Britain’s performance on this score has been the worst in the G7 except Italy’s. UK productivity is around 15% less than France and Germany, and 19% less than the United States. 7 As a result, real wages in Britain have not increased appreciably in two decades, and to pay for the increasing demand on public services, taxes on households and businesses have risen accordingly. The Office for Budget Responsibility estimates that the UK tax burden in 2027-28 will be higher than at any other point since the Second World War.

A stalled economy constrains the government when it comes to decisions on tax and spend, but equally importantly from the standpoint of popular capitalism, it has also meant that households have been marking time in terms of their personal finances. Low wage growth, cost of living pressures, high tax bills for earners – together, these have contrived a situation in which individuals are saving much less of their take-home pay and thus investing less too. Disappointing performance at the aggregate level has fostered a crisis of confidence in our economic model’s ability to generate prosperity and opportunity.

But this malaise is not just about the aggregate performance of capitalism. It is also about the fact that for an increasing number of people, it is not at all clear how capitalism improves their lives at an intimate, personal level. Capitalism is not popular, then, because we are failing to think more deeply about the ends we wish to pursue through economics, and to explain what it will mean for people. For most people in most walks of life, like economic growth is fairly intangible. How, for example, does an average household experience an extra 1% or 2% increase in annual GDP? What do they have to show for it? And if the answer to these latter questions is relatively obtuse, why would people fervently support a political agenda explicitly aimed at boosting the economy? Perhaps more pertinently, why would people buy into the difficult measures and trade-offs that would be required to actually deliver growth if the benefits to them as individuals or households are equivocal?

The Resolution Foundation published the Economy at 2030 Inquiry final report, Ending Stagnation: A New Economic Strategy for Britain. The report argues that Britain is now 15 years into a period of economic decline, with stalled growth and rising inequality forming a toxic combination.

The persistence of high income inequality comes despite the success of the National Minimum Wage in reducing hourly wage inequality. Its stubborn grip reflects the top (largely men) having pulled away from the middle, benefit cuts, lower earners working shorter hours and housing costs rising for poorer households.

Income and productivity gaps between places both matter, and in the UK both are high and persistent. Income per person in the richest local authority – Kensington and Chelsea (£52,500) – was 4.5 times that of the poorest – Nottingham (£11,700) – in 2019.

Meanwhile, 80 per cent of the income variation between areas we see today is explained by the differences back in 1997. Productivity disparities are larger still, with that between the leading city and their other large counterparts being greater than in peer countries such as France; London is 41 per cent more productive than Manchester whereas Paris is only 26 per cent more productive than Lyon.

The twin challenges that Britain faces – low growth and high inequality – are substantial issues on their own, but together they create a toxic combination. Slow growth is always a problem, but even more so when lower-income households lack financial resilience: over one-in-four adults went into the pandemic saying they would not be able to manage on their savings for a month if their income stopped. Inequality seems to matter more when the economic music stops: the share of the public citing poverty and inequality as one of the most important issues facing the country rose from 7 per cent in 2010 to 19 per cent pre-pandemic.

This toxic combination is a disaster for low-to-middle income Britain and younger generations. We might like to think of ourselves as a country on a par with the likes of France and Germany, but we need to recognise that, except for those at the top, this is simply no longer true when it comes to living standards.

Middle-income Brits are now 20 per cent poorer than their peers in Germany and 9 per cent poorer than those in France. Worse, low-income households in the UK are now around 27 per cent poorer than their French and German counterparts. It’s important to comprehend just how material these gaps are: the living standards of the lowest-income households in the UK are £4,300 lower than their French equivalents. Meanwhile the young have seen generational pay progress grind to a halt and those born in the early 1980s were almost half as likely as their parents’ generation to own their own home at 30. We cannot go on like this.

Book of the week

We Recommend Islam and the West by Bernard Lewis. The author explores the internal cultural dynamics behind Islamic fundamentalism, while examining the relationship between the Islamic and Western worlds.

For some years now, there has been a strong reaction in Muslim counties against these secularizing tondencies, expressed in a number of Islamic radical movements, loosely and inaccurately designated at the present as fundamentalist. Among these countries are Egypt, North Africa, and, to some extent, even Turkey. These movements share the objective of undoing the secularising reforms of the last century, abolishing the imported codes of law and the social customs that came with them, and returning to the holy law of Islam and the Islamic political order.

That is what Islamic fundamentalism is primarily about. In one country, Iran, these forces captured power. In several others they exercise growing influence. And a number of governments have begun to reintroduce sharia law, either from conviction or as a preemptive strike against the fundamentalist challenge. Even nationalism and patriotism, which, after some initial opposition from pious Muslims, had begun to be generally accepted, are now once again being questioned and even denounced as anti-Islamic. After a long period in which, for example, Arab nationalism was sacrosanct, it is now under attack. In some Arab countries defenders of what has now become the old-style, so-called secular nationalism are accusing the Islamic fundamentalists of dividing the Arab nation.

"You are dividing the Arab nation," they say, "and setting Muslim against Christian,” to which the fundamentalists reply that it is the nationalists who are divisive by setting Turk against Persian against Arab within the larger community and brotherhood of Islam and that this division is the greater and more heinous offense.

In the literature of the Muslim radicals and militants, the enemy is variously defined. Sometimes he is the Jew or Zionist the terms are more or less interchangeable; sometimes the Christian or missionary or crusader, again more or less interchangeable; sometimes the Western imperialist, nowadays redefined as the United States; occasionally- though not much of late- the Soviet Communist. The primary enemy and immediate object of attack among many of these groups are the native secularizers, those who have tried to weaken and modify the Islamic base of the state by introducing secular schools and universities, secular laws and courts, and thus excluding Islam, and so also the professional exponents of Islam, from two major areas which they had previously dominated, education and justice.

In these antisecularist writings, the arch enemy is often Kemal Atatürk, the first major secularist ruler in the Islamic world and the model for all others. Some fundamentalist writers even allege that he was neither a Turk nor a Muslim, but a crypto-Jew, who established the Turkish Republic to punish the Ottoman house for having refused to give Palestine to the Zionists.

The fundamentalist demonology includes characters as diverse as King Farug and Presidents Nasser and Sadat in Egypt, Hafiz al-Asad in Syria, Saddam Hussein in Iraq, the shah of Iran, and the kings of Arabia, all lumped together as the most insidious of enemies, the enemy from within who wears a Muslim face and bears a Muslim name and is therefore much deadlier than the open enemies from outside.

At the present time secularism is in a bad way in the Middle East. Of those Middle Eastern states that have written constitutions, only two have no established religion. One is Lebanon, once a shining example of religious tolerance and even coexistence, now a terrible warning of the consequences of their failure. The other, as already noted, is the Turkish Republic, where, while the general principle of separation is maintained, there has been some erosion in recent years, for example, in the reintroduction of religious education in the schools and the maintenance of the longstanding distinction between Turk and Turkish citizen. Turk means Muslim--perhaps an unbelieving or lapsed Muslim, but at least some kind of Muslim. Non-Muslims may be designated and treated as Turkish citi-zens, but are not called Turks. A similar, or rather parallel, distinction exists in Israel.

Of the remaining Middle Eastern countries, those that possess written constitutions all give some constitutional status to Islam, ranging from the Islamic republic of Iran, which gives religion a central position, to the rather minimal reference in the Syrian constitution, which says the laws of the state shall be inspired by the sharia. Of the states without written constitutions, Israel and the Kingdom of Saudi Arabia both accord a very considerable place to religion in the definition of identity and of loyalty.

If one may briefly compare the two, Saudi Arabia gives a greater place to the application of religious law; Israel, because of its unique electoral system, allows a far greater political role to the clergy through the parties which they influence or control.

I said a little earlier that historically speaking there are no lords spiritual for Muslims or, for that matter, for Jews, no political churchmen like Richelieu or Wolsey. The first statement, that there are no lords spiritual, is clearly no longer true, either for Jews or for Muslims. I wonder if it is still true, and if so, how long it will remain true, that there are no political ecclesiastics. There is of course the obvious example of Khomeini in Iran, though if one looks for a Christian parallel he was a Savonarola rather than a Richelieu. One may also see, if one looks nearer, other Muslim and Jewish men of religion who, forsaking traditional values, have become both political and ecclesiastical.

Secularism in the Christian world was an attempt to resolve the long and destructive struggle of church and state. Separation, adopted in the American and French revolutions and elsewhere after that, was designed to prevent two things: the use of religion by the state to reinforce and extend its authority and the use of the state power by the clergy to impose their doctrines and rules on others. This is a problem long seen as purely Christian, not relevant to Jews or Muslims. Looking at the contemporary Middle East, both Jewish and Muslim, one must ask whether this is still truc or whether Jews and Muslims may perhaps have caught a Christian disease and might therefore consider a Christian remedy.

Quick links

The Government introduced new legislation to disapply human rights law that may block the Rwanda migration plan.

…though the Immigration Minister resigned, saying the measures do not go far enough.

The cost of the Rwanda migration plan has doubled, with taxpayers paying Rwanda £100 million this year.

Voters support raising the skilled worker minimum salary threshold for immigration to £38,700 by 50% to 35%.

Former Supreme Court justice Lord Sumption told Andrew Marr that Britain does not need to be part of the ECHR to uphold human rights.

Out of the 1,180,000 arrivals in the UK last year, raising the skilled worker salary threshold to £38,700 would only have reduced numbers by 14,000.

The former OBR chief said Britain is too reliant on “fickle” foreign investors.

Bristol University has axed the national anthem from graduation ceremonies on the grounds that it is “offensive”.

England has drastically risen up the global education PISA rankings since 2009.

More voters would rather stay out of the EU than rejoin.

ISIS has claimed responsibility for bombing a Catholic Mass in the Philippines.

The former Schools Minister, Nick Gibb, said teachers are not paid enough.

There has been a 15% real terms fall in house prices since their mid-2022 peak.