Conservatives must be the force for change
Rishi Sunak continues to build his case for breaking from consensus politics
Towering columns
In a joint article for The Times, Prime Minister Rishi Sunak and Italian Premier Giorgia Meloni call upon European partners to take urgent joint action to prevent unsafe crossings in the Mediterranean and the Channel.
Our determination to tackle this issue is already delivering results. It has sparked a change in the debate and created momentum across Europe. Countries across our continent are recognising that the current approach is not working. They’re realising that we need closer co-operation and tougher measures to crack down on the people smugglers.
That’s why, acting together with partners in Europe and the wider region, we are open to discussing agreements aimed at stopping people departing in the first place. Italy’s Rome Process on development and migration will be crucial in promoting partnerships across the Middle East and north Africa. We must smash the smuggling gangs and we welcome Von der Leyen’s recent ten-point plan which included initiatives to do so. And we must strengthen our ability to co-ordinate enforcement operations and share intelligence. The UK’s migration partnerships with countries like Albania and France are already delivering, and the UK is actively pursuing bilateral initiatives with key partners like Belgium, Turkey, and the EU border agency Frontex.
But we need to go much further — including at the summit on Thursday of the European Political Community, under Spain’s leadership. We discussed how best to fight organised immigration crime with our colleagues and counterparts from across Europe. Criminal groups are deploying new tactics to avoid interception, so we need a step change in our response, particularly to smash their supply chains. And at a meeting, which we co-chaired, of key European countries affected by this issue and the European Commission, leaders committed to take action to support one another to tackle the challenges of illegal migration.
For UnHerd, Ayaan Hirsi Ali says the ECHR’s refusal to allow solutions to the migrant crisis is only enabling human trafficking.
It is hard to exaggerate the intensity of despair felt by those who reside in failed and failing states ravaged by conflict, poverty, natural disasters and the disorder that accompanies political corruption. Consider the tragedies that unfolded this month in Morocco and Libya; the never-ending civil strife in the Congo and Eritrea; the breakdown of Syria; the regression of Afghanistan into Taliban rule. Every man, woman and child who risks their lives to escape the place they call home deserves all the support and sanctuary they can get. It is pointless to wrangle about whether the despair driving people out of their homes is, as stated in the Convention, caused by political persecution or social discrimination or even a bleak economic outlook. There is nothing progressive about that.
Yet none of this is an excuse for ignoring the very concrete problems raised by mass immigration. The most obvious is one of scale: the sheer volume of people determined to flee their homelands and relocate permanently to Europe and America. The figure of 780 million people mentioned by Braverman may even be on the small side: surely reason enough to doubt the usefulness of the Convention.
The net effect has been to increase human suffering by empowering networks of people smugglers who con vulnerable populations into paying them thousands of pounds. Far from being empowered by reaching the promised land, too many migrants find themselves dehumanised even further. Consider the scenes in Lampedusa this month, where more than 2,000 migrants arrived by dinghy in a single day; or the streets of southern Europe, where starving migrants beg for food. If this is the utopia built by the ECHR and the Convention, is it one worth maintaining?
For ConservativeHome, William Atkinson says the growing tax burden is driven mainly by structural forces and high borrowing costs, and that attempts to cut tax without reducing spending are doomed to fail.
Taxes are high, in the immediate term, because of the spike in borrowing costs. The cost of servicing our debt quadrupled last year as yields on government bonds soared. The national debt has reached £2.5 trillion, and servicing that costs £110 billion a year – more than a tenth of public spending, and more than anything else but the NHS and welfare. Hence why Hunt said, at the same event as mentioned above, that “talking about tax cuts this autumn is slightly academic”.
Indeed, pressures on the public finances might be pushing towards tax increases, rather than cuts. As interest rates have risen, so too has the cost of servicing our liabilities, especially as a higher-than-average share of UK debt is index-linked. Unfortunately, UK 30-year bond yields reached their highest level since 1998 on Wednesday, as investors increasingly agree that high inflation will mean central banks keeping interest rates higher for longer.
If the situation deteriorates – watch Allister Heath cheerily warning of “a new financial crisis” as high rates crunch balance sheets across the world – then further tax rises may become unavoidable. That’s leaving beside the general trend towards higher taxes encouraged by an aging and more demanding population, anemic growth, and a system of government procurement and delivery that remains a dumpster fire.
If taxes do have to rise then Berry, Truss, and co will face an obvious choice: do the remarkable and vote down their own Chancellor’s finance bill, or quietly climb down in the face of market pressure. The latter may seem tragically familiar; the former would be the fiscal equivalent of Peter Cruddas calling for Tory donors to give up on their own party.
In the Financial Times, Robert Shrimsley argues that Labour cannot be the party of change and that Sir Keir Starmer has not given the electorate any reason to vote for him.
Pulling disillusioned voters back into the Tory column is essential, but a core vote strategy will not be enough. And this perhaps is the clue to what Team Sunak really sees as the central election issue. The country appears to have decided it no longer wants the Tories. What it has not yet concluded is that it wants the alternative. For all the focus on the cost of living, the NHS or immigration, the pivotal and as yet unsettled question will be the voters’ view of Starmer.
Sunak’s framing of the debate is that his is the party of common sense, one that stands against Labour ideologues peddling social and environmental policies that normal households cannot afford and do not support. Conservatives will prey on voters’ doubts over Starmer and his many shifts in position. Their attack line — that the Labour leader will say whatever is necessary to win — has demonstrable power.
Starmer’s personality and political instincts will be placed at the centre of debate and ferociously tested. Once the election comes, Conservative strategists will push for multiple TV debates in the belief they can expose their rival. After 13 years, the Tories cannot really be the change party, so their real message is about Labour. It warns: be careful of the change you seek.
For The Telegraph, Miriam Cates outlines the benefits to children that come from being raised in two-parent households, and that hostility to more family support is an elitist prejudice.
Children who grow up living with both parents are more likely to fare well on every level including educational outcomes, future income and mental health. From an economic perspective, family breakdown costs the UK over £50bn a year. It drives income inequality – half of single parent families live in relative poverty – and puts pressure on housing, the NHS and schools.
Given the overwhelming evidence for the social and economic benefits of marriage, it is striking that the political class does so little to extol its virtues. The elites themselves seem fully aware of the advantages of marriage with 83% of high-income couples being married compared to just 55% of low-income couples. It seems the political class, keen to polish their liberal credentials by denigrating the importance of marriage, do not practise what they preach.
What is it about marriage that makes relationships so much more likely to last? Perhaps it provides the line in the sand that requires partners to discuss and resolve the “big issues” such as money and children. Perhaps it’s the public nature of the commitment that directly invites family and friends to support the relationship. But whatever the reasons, the evidence is indisputable: marriage often protects children from the harmful effects of family breakdown.
It is not for politicians to tell individuals how to live their lives. There are many instances where parental separation is inevitable, even preferable. But it is the role of government to create the conditions that enable families to flourish.
At CapX, former Health minister Lord Bethell praises the Prime Minister’s new smoking ban. Conservatives are rightly cautious about the nanny state but must recognise the shared responsibilities that exist in society.
We all cherish financial security. But British taxpayers bear a heavy cost for the freedom of a minority to smoke themselves into health problems. In 2023, there will be 43,000 new preventable cases of lung cancer, with tobacco responsible for nine out of ten cases. The cost of each lung cancer case is approximately £630,000, a burden too great for taxpayers to bear. Smoking contributes to workforce absences, affecting businesses like Gatwick Airport, which had to shut down due to staff shortages.
I had ideological sympathy for Mark Littlewood of the Institute for Economic Affairs, a champion of liberty, when he declared that “The war on tobacco should be declared over.” However, thirteen years later, six million smokers remain in the UK. Smoking’s cost in 2023 will exceed £70 billion, surpassing tobacco industry taxes. Small-state Conservatives should acknowledge that a rising tax burden and declining workforce productivity make Britain less competitive.
The NHS receives more funding while waiting lists grow longer because a quarter of the population suffers from chronic diseases, often related to smoking or obesity. A quarter of cancer cases are directly attributed to smoking. Doubling the NHS’s size, as predicted by some models, to protect the interests of tobacco, junk food, and gambling industries is unsustainable. Small-state Conservatives cannot oppose smoking regulations when inaction leads to soaring healthcare costs and tax increases to fund a larger NHS workforce.
Wonky thinking
Miriam Cates MP and Nick Fletcher MP published The New Conservatives Tax Plan for Families and Small Businesses. They propose “low hanging fruit” the Chancellor can target when cutting taxes. This includes raising the VAT threshold to £250,000, reversing the IR35 reforms, and abolishing the High Income Child Benefit Charge.
One of the most damaging cliff-edges for families is the High Income Child Benefit Charge (HICBC). Households where one earner has an income above £50,000 become subject to the HICBC, which effectively withdraws Child Benefit from the family. The detrimental impact of this increases with the number of children in the household, with effective marginal tax increases for higher rate taxpayers of 13 percent for families with one child, 21 percent for families with two children, and an additional 8 percent for each further child. The HICBC creates an unusual and undesirable hump in marginal tax rates for hardworking families.
Current rates of Child Benefit are £24 per week for the first child, and £15.90 for subsequent children. The HICBC was introduced in 2013 to taper this support away from higher earners. It reduces the amount of Child Benefit by 1 percent for every £100 earned above £50,000, tapering entitlement to nil when earnings hit £60,000. To add to the unfairness, dual earner couples aren’t affected if they each earn below £50,000, even if their combined income exceeds £60,000. Indeed, dual income couples can earn £100,000 before they face any Child Benefit withdrawal at all. Child Benefit exists to help families with the additional costs of raising children, but the HICBC results in some families with one earner being less well off than a couple with the same income.
George Osborne claimed that HICBC would only affect the ‘top 15% of earners’ but in reality it now applies to many households in the lower half of the income distribution. As the threshold has been frozen since its introduction, an increasing number of families have been hit by this charge – impacting ordinary working families who are struggling to make ends meet. Initially, it impacted around 13 percent of families with children (1 million), but it now impacts 26 percent of families (2 million).17 By 2025/26, 31 percent of families are estimated to be hit by this charge. Wage inflation is leading to many more families crossing the threshold due to a nominal increase in salary, despite price inflation limiting the benefits felt by pay rises.
The HICBC fails to ensure that those with the broadest shoulders pay their fair share, as it only ever impacts families with children rather than other high income taxpayers. As Fran Bennett, Associate Fellow at the Department of Social Policy and Intervention, University of Oxford, submitted to the Treasury Select Committee’s call for evidence on cliff-edges in the tax and benefits system, “Child Benefit is our only fiscal instrument to bring about horizontal and life-course redistribution related to having children – i.e. it recognizes that those with children incur additional costs whatever their income”. To negate this aim by imposing a higher marginal tax rate on only those with children stands out as an injustice in our tax system.
The Institute for Fiscal Studies has released the new report Full expensing and the corporation tax base by Stuart Adam and Helen Miller. Their findings show that the long-term costs of full expensing are significantly lower than official statistics say. The authors recommend that full expensing be made permanent to help give certainty to businesses and support reform of the corporation tax base.
The temporary nature of the full-expensing policy is a problem. The UK needs an investment-friendly tax system for the long term, not just for the next three years. The increased generosity of capital allowances will boost business investment in the short run, but essentially by changing the timing of investment rather than its overall level. There is no good reason to distort the timing of investment at this point in time. And even the short-run impact will be limited because some large investments cannot be arranged quickly enough to be carried out within three years. The Office for Budget Responsibility (OBR) predicts that the long-run impact of the policy on the UK’s capital stock will be zero. Said differently, the policy will only have a meaningful positive impact if it is made permanent.
Making the current full-expensing policy permanent, rather than letting it expire in April 2026, would come with trade-offs. On the one hand, it would provide a simple, neutral and robust treatment of equity-financed investment in ordinary plant and machinery on a permanent basis and this would be valuable. On the other hand, the current policy is limited to (certain types of) plant and machinery, and to companies but not unincorporated businesses, meaning there would be a greater distortion to some asset choices (e.g. plant and machinery versus buildings) and across legal forms. In addition, the more generous capital allowances also interact with the treatment of financing costs to increase the subsidy for many debt-financed investments. That is not a good thing. What matters is not only how much firms invest overall, but what they invest in. Economic growth is not well served by subsidising unproductive investments that would be unviable in the absence of tax. It is difficult to weigh up the economic trade-offs involved in making the current full-expensing policy permanent. In addition, there are political economy considerations: would permanent full expensing of main-rate plant and machinery for companies make further reform more likely (e.g. by marking a clear direction of travel towards a different system) or less likely (e.g. because takeaways related to the treatment of debt finance may be harder in isolation than if accompanied by the giveaway of full expensing)? Our view is that, on balance, making the current full-expensing policy permanent would be preferable to letting the temporary measure expire, but this is a finely balanced judgement and others could reasonably take a different view. We would have much more confidence that making the full-expensing policy permanent was part of a move towards a well-designed tax base if the government had set out a plan for corporation tax.
Ideally, the full-expensing policy would be made permanent as part of broader reforms that include extending full expensing to all investment and changing the tax treatment of debt finance.
Book of the week
We recommend Israelophobia by Jake Wallis Simons. Simons is an award-winning journalist who examines the development of antisemitism, combining a modern hatred for Israel with ancient prejudices against Jews. More balanced debate around Israel is required to tackle the spread of Israelophobia.
A dislike for Israel has become a core part of a suite of views held by the progressives who set the tenor of much of our culture. These ‘luxury beliefs’, which relate to fashionable issues like race, transgenderism, decolonisation and slavery, are used as a way of signalling social status as class differences flatten, the American academic Professor Elizabeth Currid-Halkett has suggested. This blend of patrician liberalism, globalism and old-fashioned socialism often comes with the kind of focus on race that is normally seen only on the far right.
As one of these social signifiers, the Israel–Palestinian conflict receives disproportionate attention. It’s not just about human suffering. In 2022, about 180 Palestinian combatants and civilians lost their lives, compared to 120,000 Ukrainians and three thousand Yemenis killed or injured in the same period. Yet between January and April 2023, the Twitter account of human rights NGO Amnesty UK – a progressive redoubt – posted no tweets at all about Yemen, two about the war in Ukraine, six about Taliban oppression in Afghanistan, seven about the brutal crackdowns in Iran, and twenty-six about Israeli ‘apartheid’ and other supposed crimes.
The pipeline to this milieu often begins at university, where anti-Israel orthodoxy is spread by both academics and students. On campus, fighting the bogeyman of the Jewish state has become the most desirable of causes, unmoved by the facts or a sense of proportion, a central plank in this new progressive credo. At universities in Britain, the United States and elsewhere, Jewish students and Israeli speakers are regularly bullied. In 2021, viral footage showed the Israeli Ambassador to Britain hurrying from the London School of Economics, pursued by a baying mob. Tellingly, among the activist groups that agitated against her visit was ‘Decolonising LSE’. On the other side of the Atlantic, students at the University of Michigan marched through the campus in January 2023 chanting ‘Intifada, intifada, long live the intifada’, and ‘there’s only one solution: intifada revolution’. The two intifadas were periods of bloodshed that claimed large numbers of lives in the real world, six thousand miles away from the comfort of the University of Michigan.
In the 1960s, fewer than half of British academics were left-wing; by the 2019 election, 10 per cent supported the right, while 80 per cent voted for the left. The trend has been even more dramatic in the United States, where left-wing academics now outnumber those on the right by ten or fifteen to one, particularly in the humanities. Nearly 40 per cent of the best liberal arts colleges have no Republicans at all, or a negligible number. A 2021 study of Britain, the United States and Canada found that ‘a significant portion of academics discriminate against conservatives in hiring, promotion, grants and publications’ and ‘right-leaning academics experience a high level of institutional authoritarianism and peer pressure’. Since 2015, there has been a dramatic rise in the number of American academics – including the celebrated, left-leaning Jewish psychologist Steven Pinker – who have been targeted after making remarks that do not conform to the exacting standards of progressivism. Anti-Israel prejudice has become one of those standards.
Quick links
At the Conservative Party Conference Prime Minister Rishi Sunak scrapped the extension of HS2 and promised to fund Network North instead…
…and announced the introduction of a New Zealand-style smoking ban and a new Advanced British Standard to replace A-Levels and T-Levels…
…but the Conservatives did not gain a bounce in the polls while Labour enjoys a 21-point lead.
Science and Technology Secretary Michelle Donelan pledged a review into how sex and gender data is gathered.
Health Secretary Steve Barclay moved to open a consultation on updating the NHS constitution to protect the rights of women.
The Chancellor said Civil Service equality, diversity and inclusion (EDI) spending will be reviewed and new rules will tackle the debanking of people on political grounds.
Scottish Labour won a landslide victory in the Rutherglen by-election with a 20.4% swing away from the SNP.
Polling found +56% net agreement with the Home Secretary’s statement that “Uncontrolled and illegal migration is an existential challenge for the political and cultural institutions of the West”.
Immigration is one of the most important issues for 66% of Conservative voters.
The UK is close to striking a deal with the EU agency Frontex to put people smuggling on the same level as organised crime and terrorism.
Hate crime offences are down by 5% according to Home Office statistics.
Birmingham police pulled out of a religious conference following exposure by GB News of controversial remarks about the Taliban and Israel by speakers.
Sir Keir Starmer has ruled out holding an Irish Unity referendum should he become Prime Minister.
A tighter labour market following Brexit and the pandemic has led to the joint-fastest growth in regular pay, excluding bonuses, since 2001.
Andrew Bailey, Bank of England Governor, said Brexit has “actually created opportunities”.
Should Ukraine join the EU, most members would become net contributors due to a £161 billion commitment over seven years.
Polling showed that 53% of people are in favour of forcing owners to neuter their American XL Bully dogs and keep them on leash and muzzled in public.
In an interview with The Sunday Times, Business Secretary Kemi Badenoch said “If we bankrupt ourselves trying to get there, we won’t achieve net zero.”