Respecting boundaries

UK risk aversion; low-skilled immigration; stopping the boats; Quran "blasphemy" fallout; universities in decline; tackling regional inequality; the rules we live by; HS2 woes

We think conservatives need to talk more and get better at sharing ideas. So here we share the best newspaper columns, policy reports and books that will stimulate thinking and promote new ways of doing things.

The Conservative Reader is published every Friday lunchtime, so please do look out for it. And expect plenty of content about the things we think make conservatism such a compelling body of thought: identity and belonging, community and commitment, market economics, national resilience and good government.

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Best wishes, Nick and Gavin

Towering columns

In The Times William Hague contrasts Britain - struggling to fund its future growth - with America, which is awash with investment:

There are two major reforms [we need] … The first is to recognise that Dominic Cummings was right — yes, him — when he argued that the Treasury is not equipped [to be fast or radical], that its “business case” process might be suitable for assessing road projects but “as applied to science and technology it is very damaging”. The micro-management of science by generalist officials is counterproductive. If you are trying to make nuclear fusion work, you might get nowhere for many years. You might fail completely. Or you might rescue the entire planet. You are not going to succeed if you are audited as if you are building a hospital car park. Longer spending cycles and expert review are needed, with processes designed for research and away from Treasury control.

The second vital reform is to incentivise a dramatic consolidation of UK pension funds. The chancellor’s “Edinburgh reforms” and the changes to the EU directive known as Solvency II have raised hopes of freeing up more capital to invest in new businesses. But the vast British pension industry is very fragmented and has become so risk-averse that the UK has become, in the words of one expert, “the only major economy where local pension funds have in effect abandoned investment in domestic companies”. We should all hold our hands up, over successive governments, to adding new regulations or tax penalties to those funds. But no ministers ever intended that we would be down to only 4 per cent of our pension assets invested in UK equities, from half 20 years ago.

In an interview for the Financial Times, economist Alan Manning questions the value of low-skilled mass immigration:

Fundamentally, in the sectors that are reporting shortages, those shortages exist not because there aren’t people in the UK who can do those jobs, it’s because they don’t want to do those jobs. And for different reasons and in different ways, those jobs are just not appealing to people.

If we had a firm that says, ‘I’m struggling to sell my product’, we’d be inclined to say, ‘Well, perhaps your product is priced wrongly. Or it’s not a very good product.’ But somehow when employers complain that ‘nobody wants to take my jobs’, they expect us to say, ‘Oh well, we’ll provide you with some workers who will do it under the terms and conditions you view as appropriate’.

And there may be reasons why sometimes you say, well, okay, this sector just can’t compete for workers in the open labour market, but we think this sector is really important, so we’re going to give them a dedicated ringfenced supply of workers — migrant workers, almost certainly. But just be very clear that that’s what you’re doing. You will cause that sector to become totally dependent on that source of labour.

The challenge of unchecked illegal immigration is fundamental for Conservatives - and something liberals have no answer to - says Peter Franklin on UnHerd.

[The Home Secretary’s] liberal critics are ignoring the underlying point, which is that the number of people who want to come to the UK — whether as asylum seekers or economic migrants — exceeds our capacity to assimilate them.

Net immigration to this country already runs at hundreds of thousands of people a year.  It is entirely implausible that a further liberalisation of our immigration laws wouldn’t result in a substantial increase. ‘Reasonable’ liberals usually concede that there are limits — but they are reluctant to specify where those limits lie and how they are to be enforced if the small boats still come. 

Even more importantly, liberalism — whether it leans to the Right or the Left — cannot give a coherent account of why a nation has the moral right to remain itself, or at least to manage the pace at which it changes. Though liberals might make a case in terms of practicality, they cannot make a principled case.

In The Times, Tomiwa Owolade says we must act now to stop Islamists implementing de facto blasphemy laws here in Britain:

This boy has been failed by the police and the school — institutions that are meant to protect him. His head teacher had the opportunity to proclaim that the feelings of a religious minority should not override a vulnerable child’s safety; he could have expressed the conviction that a multicultural society cannot be free if it abides by blasphemy taboos. Instead, he too caved in, speaking of the steps taken “to reinforce the values and behaviour we expect from every member of this school community to ensure that all religions are respected”.

…The values of pluralism and freedom of expression that act as a bulwark against blasphemy codes need to be fully embodied rather than solely enshrined by legislation. Once we as a civil society start to cave in, proclaiming that we don’t have blasphemy laws soon becomes hollow. When a British school in 2023 fails to protect a vulnerable boy from a medieval-style witch-hunt, the grim picture is clear.

But this should never stop us from affirming what is genuinely offensive in all of this — not the images of the prophet Muhammad but the fact that people can be abused, threatened and killed for showing pictures; not the dropping of a Quran but the violent threats against the boy who dropped it.

Universities are being turned from centres of learning into soulless corporations, says Adrian Pabst in the New Statesman:

British higher education has overreached. As the author David Goodhart has shown, five years after graduating more than one third of graduates are in non-graduate jobs. Meanwhile, the graduate pay premium is declining sharply at the same time as many jobs are shutting out those without academic qualifications.

Too many universities are failing both graduates and non-graduates alike. They have flooded the labour market with graduates who lack a command of basic English. “People do not know how to write,” the historian David Abulafia said a few years ago. “Command of grammar, punctuation and spelling is atrocious.” He was describing undergraduates at Cambridge.

To reverse the decay of the academy, we need to raise academic standards. That requires re-intellectualising academic subjects, especially by challenging the relativism that is corroding the humanities, but also the positivism pervading the natural and social sciences. There is work to be done to fill the shortage of graduates in Stem subjects – science, technology, engineering and maths. Over time universities should concentrate on excellence in certain core subjects rather than mediocrity across the board.

Wonky thinking

Our recommended policy read this week comes from none other than Ed Balls, who with Anna Stansbury and Dan Turner has produced an academic paper on Britain’s regional economic divides. In Tackling the UK’s regional economic inequality: Binding constraints and avenues for policy intervention, they argue that:

Our analyses … challenge a number of common arguments about the UK’s regional economic inequality problem. We find little evidence consistent with the hypotheses (i) that low shares of university graduates remain the primary constraint on growth for the UK’s regions; (ii) that there is a generalised issue with access to finance for firms outside the South East; or (iii) that low or falling regional migration rates are to blame for the persistence of the UK’s regional economic inequalities. Instead, we find evidence consistent with (i) a specific relative shortage of STEM degrees; (ii) binding transport infrastructure constraints within major non-London conurbations; (iii) a failure of public innovation policy to support clusters beyond the South East, in particular through the regional distribution of public support for Research and Development (R&D); and (iv) missed opportunities for higher internal mobility due to London’s overheating housing market. We also find some suggestive evidence consistent with constraints on access to early-stage equity financing for high-growth-potential SMEs in some of the UK’s regions, particularly the North West…

Arguments in [the contemporary policy] debate tend to fall into three camps – boosting the inputs for neoclassical growth (education, infrastructure, access to finance); boosting government’s role in endogenous growth (R&D, coordination of economic activity, new industrial policy), or boosting internal migration. Our analysis suggests that each of these views has merits. Yet our analysis also makes clear that, outside education policy, which has seen very large boosts to education and skills, the large-scale, systematic, and consistent policy action necessary for any of these has not taken place in the UK in recent decades. In a world of uncertainty about the true dominant underlying economic model, and in the absence of silver bullet evidence for any single binding constraint on productivity growth in lagging regions, policymakers seeking to tackle regional economic inequality would therefore do well to seek to simultaneously alleviate each of the constraints we have identified: increasing attainment in specific skills which are in short supply in certain regions, particularly STEM; increasing transport investment across the UK outside London and the South East, with a priority on highly congested urban areas with potential to benefit from agglomeration economies; increasing government R&D expenditure outside London and the South East, in areas which are or have the potential to become clusters of excellence in particular fields; and increasing efforts to reduce housing costs and increase housing availability in London and the greater South East.

Book of the week

In Rules: A Short History of What We Live By, Lorraine Daston examines the rules by which we live: the algorithms that calculate and measure, the laws that govern, and the models that teach. Daston considers when rules work and when they do not and introduces us to the concept of thick (flexible) rules, and thin (rigid) rules:

Rules can be either thick or thin in their formulation, flexible or rigid in their application, and general or specific in their domains… Rules understood as models tend to be thick in formulation and flexible in application. A thick rule is upholstered with examples, caveats, observations, and exceptions. It is a rule that anticipates wide variations in circumstances and therefore requires nimble adaptation. Thick rules incorporate at least hints of this variability in their very formulation. In contrast, rules understood as algorithms tend to be thinly formulated and rigidly applied, though they too can sometimes thicken. An algorithm need not be brief, but it is seldom designed to deal with unusual or simply diverse cases. Because thin rules implicitly assume a predictable, stable world in which all possibilities can be foreseen, they do not invite the exercise of discretion…

Wherever pockets of predictability and uniformity emerge, thick rules can be slimmed
down into thin rules; flexible rules (as all thick rules must be) can stiffen into rigid ones… No rule is so thin or rigid to eliminate the need for discretion altogether, not even computer algorithms. But in an artificially stabilized world, the margin of discretion can be and has been significantly narrowed. Enormous efforts of technical know-how, political will, and cultural imagination must be invested to create and sustain such islands of ruliness. The lazy abbreviation “modernity” embraces a vast array of globe-spanning projects that have standardized everything from weights to time zones, clothing sizes to airport designs. International bureaus and regulatory bodies, their headquarters often discreetly located in the cities of small, neutral countries, oversee the largely invisible machinery that delivers the post or monitors epidemics or inspects nuclear reactors worldwide. They enforce the background rules that make thin rules possible.

But this machinery is neither perfect nor invulnerable nor even truly global. It reaches only as far as human will and foresight extend. Miscalculation and misfortune - in the form of an epidemic, a nuclear reactor accident, a wildfire - can still wreak havoc in the world’s most thoroughly modern cities. When the background conditions for thin, rigid rules suddenly collapse, thick, flexible rules return, no matter what the epoch. Even in calmer times, thick rules persist wherever variability is either inevitable or desirable - for example, in individualized medicine or in teaching. While it is true that thin rules have proliferated in many domains since the eighteenth century, many thick rules have crept in through the back door, dragging discretion along with them. Bureaucratic rules followed to the letter are so cumbersome as to amount to a form of strike: “work to rule”. Legions of lawyers and accountants have sprung up to interpret the cut-and-dried rules of the tax code. Computer algorithms, the thinnest rules of all, require an anonymous army of human monitors to correct their oversights and excesses on social media platforms. Behind every thin rule is a thick rule cleaning up after it.

Quick links

Rishi Sunak is in Paris for the first UK-France summit in 5 years.

The economy is still flatlining.

2.472 million working days were lost between June and December 2022.

Stopping the boats is now the second biggest priority for Tory voters.

83% of Tory voters support the key measures in the Illegal Migration Bill.

Figures confirm homeowners largely vote Tory, and renters mostly vote Labour.

Germany plans an industrial electricity tariff to undercut American and Chinese competitors.

Kemi Badenoch is to introduce new measures to support British steel.

UK spending on science R&D has been underestimated, but is still too low.

There is speculation that Jeremy Hunt will use the Budget to replace the super-deduction with new tax breaks to encourage investment.

The Transport Secretary confirmed the Birmingham-Crewe leg of HS2 will be delayed to help the Treasury hit its debt-to-GDP target.

The Migration Advisory Committee has recommended the further liberalisation of visa rules to fill labour market gaps.