The Conservative Reader

Bought-up Britain; falling gas prices; going nuclear; MPs v members; young men in crisis; Windsors at war; regional inequality; gender recognition in Scotland; new class war; science superpower.

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.

You can find more about what we think on Twitter here and here.

Best wishes, Nick and Gavin

Towering columns

Roger Bootle says foreign rivals have bought up Britain, leaving us weak and exposed:

As recently as the beginning of 1987, we had a net surplus of overseas assets amounting to some 20pc of GDP. But since 1997 our net international asset position has been persistently negative. In 2021, it stood at minus 18pc. Some other countries are much larger net debtors. The United States’ net asset position is minus 80pc of GDP. Within Europe, Spain’s is minus 68pc and France’s minus 30pc. The identity of the large net international creditors will probably not surprise you – Japan at 72pc of GDP, Germany at 67pc, and the Netherlands at 88pc…

Does this international asset position matter? Although it is rarely talked about, it does. It is a component of the wealth of the country’s citizens and it contributes to how living standards will develop over time. The fact that we are a significant net debtor means that unless we are peculiarly clever in our overseas investments, or take extra risks, there will be a persistent net outflow of interest payments and dividends abroad. For any given level of national output, this reduces the amount of resources available for domestic use. Interest payments on gilts held by foreigners are just a component of this. And if our net international asset position worsens, it is the equivalent of negative net investment. This might not matter if investment in the domestic economy was strong. But investment in the UK economy is pathetically weak.

What is the solution? Last year the UK’s current account deficit was probably about 5.5pc of GDP. This year it is likely to be about 4.5pc. This needn’t be a problem in and of itself. With a floating exchange rate, the days of “balance of payments” crises are over. But the persistent deficit is a reflection of an unbalanced economy and a profound economic weakness.

Ambrose Evans-Pritchard claims Putin’s gas weapon has been spiked - so our fiscal hole is not as deep as feared:

European and British gas prices have fallen by almost 80pc since the panic buying in August. The benchmark TTF contract dropped below €70 per megawatt hour last week and is back to the levels just before the invasion of Ukraine. Futures prices have fallen pari passu for next winter as well, and for the winter after that. The market is no longer pricing in a protracted supply crisis caused by the cut-off in Russian gas. The world has adapted remarkably well to Vladimir Putin’s energy war. Remember those Gothic predictions by energy consultants, outbidding each other with warnings that average household energy bills in the UK would rise as high as £7,700 by April unless there was a price cap? 

The claims were reported by the British and foreign media almost as established facts rather than a snapshot of the gas futures curve taken at a moment of extreme market stress, and subject to global and geopolitical variables that no consultant could possibly predict. These claims were never more than a tail-risk. Analysts have since been slashing their forecasts. The April figure is likely to be less than half of earlier fears. The new consensus view is that it will then drop to between £2,700 and £2,800, which is below the £3,000 Government’s expected cap from April onwards. “The energy price guarantee is getting cheaper by the day,” said Elizabeth Martins from HSBC.

Last year’s episode of breathless extrapolation has had serious consequences. It alarmed millions of people and fed the national mood of simmering discontent. It bounced the Truss-Kwarteng government into an indiscriminate and over-generous energy subsidy for rich and poor alike, contributing to the fiscal debacle that unfolded in September. What is less understood is that it also set the assumptions used by the Office for Budget Responsibility in its economic forecasts and therefore shaped the parameters of fiscal policy. The OBR pencilled in a gas price through 2023 and early 2024 that is more than double the implied cost now suggested by the futures market over the same period. 

Thomas Fazi insists that the West needs nuclear power:

There is a silver lining to the energy crisis. Recent months have marked a dramatic recovery for the prospects of nuclear energy across the developed world. Last year, Boris Johnson launched an ambitious plan to build eight new reactors and 16 next-generation small modular reactors (SMRs), in order to triple domestic nuclear capacity to 24 gigawatts by 2050 — 25% of the UK’s projected electricity demand. Currently, the UK’s ageing nuclear fleet makes up around 15% of the country’s energy generation, but the remaining five power plants are set to be shut down by the middle of the next decade. More recently, Rishi Sunak and Emmanuel Macron pledged “ambitious cooperation” in the field of nuclear energy. That’s quite a turnaround for Macron, who during his first term planned to reduce France’s dependence on nuclear energy, which accounts for around 70% of the country’s electricity-generating capacity...

But the sector’s future in these countries remains unclear, beset as it is by myriad challenges, including insufficient government support, over-burdensome regulation and lukewarm public perception. In the UK, for instance, despite Sunak’s support for the new nuclear strategy inaugurated by Johnson, a funding deal for the first fleet of new reactors is not expected to materialise for at least another 12 months, amid a row over the cost of Britain’s wider nuclear ambitions. At present, only one plant, Hinkley Point C, is under construction. Similar problems plague nuclear buildup projects in other Western countries. As of mid-2022, more than 40 of the 53 new reactors under construction were in Asia or Russia, and only four countries — China, India, Russia and South Korea — have construction ongoing at more than one site.

This ambivalent approach to nuclear energy — a zero-emission clean energy source — is all the more astonishing given our elites’ almost monomaniacal obsession for Net Zero emission targets. The reason nuclear energy is largely absent from the decarbonisation debate is that the latter is based on a falsehood: that we can generate all the world’s energy needs from renewable sources — primarily wind and solar power. This has become a mantra for much of the climate movement, but it’s a delusion.

Danny Finkelstein says a new Tory grassroots organisation could be as dangerous as Momentum was to Labour:

The Conservative Democratic Organisation promotes some unremarkable ideas. A party policy conference to be held in a more affordable location, for instance. And better arrangements for the accountability of party officers carrying out party tasks. But its overall ambition is much greater and more worrying than that. The aim of the CDO is to reduce the role of MPs in the selection of the party leader — already, in my view, too small — and to allow local associations much greater freedom in selection and, crucially, deselection of MPs.

The political objective is to make MPs mere delegates of the party membership and to tie them to leadership and policies determined outside parliament. Just as once was the case with Tony Benn, the political thinking that underpins this is the idea that MPs are an elite while the party members represent the voice of “real” people. This is an astonishing doctrine. Such thinking would have been completely alien to the Primrose League and is alien, too, to Conservative tradition. Confusing party democracy with democracy for everyone is a classic error. And it is incompatible with a parliament in which conscience and judgment is exercised. Members of parliament must be accountable to all their voters and be good representatives of them. The CDO seems to be suggesting, and would certainly in practice ensure, that where the views of the party and their consciences diverge, they would be required to please the party.

Madeline Grant says young men are in crisis, and nobody seems to care:

Young boys no longer enjoy many of the traditional milestones of development; with fewer fathers living at home, fewer jobs that can sustain a family. In the 1960s, my grandad could support a wife and two children on a bank clerk’s salary. Today, alarming numbers of young men cannot even exist independently; 27 per cent of men still live with their parents at age 27, compared to only 13 per cent of women. Contemporary culture has alarmingly little to say about these developments. Questions about men’s changing function in society are most often answered with guff about “making men happier with traditionally feminine roles”…

Instead, we need more focus on the contentment associated with love and family; and positive aspects of masculinity – risk-taking, gallantry, duty – to highlight alongside the relentlessly negative. We need better role models, such as the rugby star Courtney Lawes who has championed the institution of marriage, or the footballer Bukayo Saka, who often speaks about the importance of his Christian faith. And, of course, the brave young men who are being put to death in Iran every day, fighting for their sisters. One thing is clear; we can no longer ignore the chaotic gulf at the heart of so many young men’s lives. When “serious” people retreat from these conversations, grifters and charlatans will fill the void.

Andrew Marr argues that Prince Harry has damaged the monarchy and left the King with an unresolved challenge:

Harry’s broadsides alone will not end the British monarchy. But they certainly weaken and damage it; and if the royals don’t respond, or do so intemperately, the damage will be deep. What does that mean? Less public support, particularly among younger Britons; less readiness to pay up; more shrivel. Genuine monarchists feel an attack on the monarchy as a personal, intimate affront, one that hurts more when it comes from a wealthy, self-important, narcissistic American liberal culture, which already overshadows Britain. The tabloid press understands this, which is why it has been attacking Harry so vigorously. The octopus may do wicked things, but the octopus has its values.

As for the rest of us, some may feel that the nostalgia and the glory that the monarchy brings are worth the snobbery, social conservatism and deference. Others will say, “No, we’re a country which needs a modernisation shock; we need to move on from British exceptionalism, and the end of the monarchy may be part of that.” (As readers may have noticed, I am ambiguous but feel myself sliding in that direction.) At any rate, in the long struggle between natural Cavaliers and natural Cromwellians, what Harry has done wrenches the dial. For him, naturally, it’s about him. And it is. And it isn’t.

Wonky thinking

The McKinsey Global Institute has produced research depicting the world’s population, life expectancy, and GDP per capita from 2000 to 2019 across more than 40,000 microregions:

The concentration of global economic activity looks very different under a microregional lens. Half of the additional GDP generated from 2000 to 2019 came out of 3,600 microregions from our total of 40,000 as ranked by the increase in GDP per square kilometer. While this economic growth was concentrated, it was geographically dispersed. These 3,600 microregions were scattered across 130 countries yet cover just 0.9 percent of the world’s land mass—collectively the size of South Africa. Twenty-seven percent of the global population lived in them in 2019, totalling two billion people…

We live in a world of increasing overlap. Some 194 Chinese prefectures, home to 228 million people, and 14 Indian regions, home to 4 million people, were in the ninth and tenth deciles of GDP per capita by 2019. In the United States, 2,600 counties, home to 311 million people, were at this level of economic prosperity. This means 500 counties, home to 18 million people, were in the eighth decile of GDP per capita or below. Bao'an, a district of Shenzen, for instance, had comparable GDP per capita to Queens, New York, in 2019. Inhabitants of Karaikal in the Union Territory of Puducherry in India, lived on average with a GDP per capita equivalent to that in Pasco, Florida. Several districts in Beijing had GDP per capita similar to Baldwin, Alabama. In 2000, such overlap was much smaller. The world meeting on the same curve is a relatively new phenomenon. The extent of this overlap is visible only in pixelated view. In 2000, Karaikal’s GDP per capita was about 50 percent less than that of Pasco, while Bao'an’s and Beijing’s GDP per capita were a third of that in Queens and Baldwin County, respectively…

Uneven economic prosperity and growth is the reality within many countries… country averages, while useful indicators of overarching economic progress, obscure differences in microregional realities. To test this claim more systematically, we regressed five-year moving average annual growth rates at the microregional level on annual growth at the country level, which helps us estimate the explanatory power of country-level growth. The bottom line: a country’s GDP per capita growth rate can explain only 20 percent of the variation in the microregional growth rates in that country.

A Policy Exchange report by Michael Foran argues that by introducing gender self-identification for those born or resident in Scotland, the SNP’s Gender Recognition Reform Bill will fundamentally change the operation of equality law across the UK:

This is a very significant change to the operation of the Equality Act in Scotland. The Equality Act is reserved to Westminster and so the Scottish Parliament is not permitted to change its operation in Scotland. However, the implications of this Bill are potentially much wider than even this. If this Bill does what it claims to do and changes the criteria for obtaining a UK Gender Recognition Certificate in Scotland and for those born in Scotland, then those certificates will be valid across the UK. This will mean that the changes set out above will not be confined to Scotland; the operation of the Equality Act in the rest of the UK will also be modified. Although only those resident or born in Scotland will be permitted to change their legal sex via statutory declaration, this Bill will have implications for the operation of equality law throughout the UK. If a Gender Recognition Certificate changes sex for all purposes, those possessing Scottish Gender Recognition Certificates who travel to England, Wales or Northern Ireland will have to be legally recognised in their acquired sex, including 16-18-year-olds. This will be open to all those born in Scotland, wherever they live in the UK, and anyone who is ordinarily resident in the UK, including students. Ordinary residence need not be permanent and so it is possible that people may cross the border into Scotland from elsewhere in the UK, temporarily reside there until they become ordinarily resident, and then return to elsewhere in the UK once they have obtained a Gender Recognition Certificate…

…The UK government is within its legal rights to make a section 35 order prohibiting the Bill from gaining royal assent in its current form. There is a separate question concerning whether or not the UK government believes this course of action to be prudent or desirable. The decision to make a section 35 order will require the government to assess the political consequences of both action and inaction in response to the passing of this Bill. If the UK government does choose to make an order, it will then be open to the Scottish government to reintroduce the Bill into the Scottish Parliament sufficiently revised such that it does not modify the law relating to reserved matters. This will place an effective pause on the introduction of the Bill and allow time for both governments to constructively negotiate about changes to the Bill that will clarify its precise legal implications and address any additional concerns relating to its impact on UK wide equality law.

Book of the week

Our recommended book this week is The New Class War: Saving Democracy from the Metropolitan Elite, by Michael Lind, who argues that the mid-20th Century class compromises between business and labour are breaking down, leading to social conflict:

For democratic pluralists, free and fair elections are a necessary but not sufficient condition for genuine democracy. A country run by an aristocracy or oligarchy is a democracy in name only, even if citizens are free to vote for competing aristocratic or oligarchic factions. According to democratic pluralism, electoral democracy in the political realm, narrowly defined, must be accompanied by power-sharing arrangements among classes and subcultures in the realms of the economy and the culture. These power-sharing institutions, like tripartite labor-business-government wage-setting institutions, need not resemble one-person, one-vote political democracy. But there must be social checks and balances in addition to political checks and balances. And decisions should be based as much as possible on hard-won and lasting consensus among negotiating parties, classes and creeds, not on fluctuating numerical majorities.

The democratic pluralist version of democracy necessarily puts great emphasis on national sovereignty - external sovereignty, not internal sovereignty. All of the various schools of thought that inform the democratic pluralist tradition - English pluralists, French solidarists, Catholic corporatists, and New Deal defenders of countervailing power in the broker state - reject the eighteenth-century idea of unlimited popular sovereignty shared by the American and French revolutions. For democratic pluralists, the state - usually a nation state, but sometimes a multinational state or independent city-state - is not a mass of individuals to whom a general will can be attributed, but a community made up of smaller communities.

But while democratic pluralism rejects the idea of the unlimited internal sovereignty of any group, including "the People" as a whole, external sovereignty is indispensable. The reason is that the negotiations and compromises among communities that are the essence of democratic pluralism can only occur within the fixed boundaries of a political community with fixed membership. Cross-class compromises among labor and business, for example, are pointless if businesses can unilaterally annul the contracts at any time by transferring operations to foreign workers or bringing foreign workers into the country to weaken or replace organized labor. The various cross-class settlements in the US and Europe from the 1940s to the 1970s would not have been possible if employers had been able to use large-scale tax and regulatory arbitrage and offshoring and access to high amounts of low-wage, non-union immigrant labor to escape the constraints imposed on them by "new deals" with organized labor and democratic national governments.

For this reason, a world order that can support many countries organized along democratic pluralist lines will be quite different from a neoliberal world order in which most decision-making has been transferred from nation-states to supranational institutions or from national legislatures to national executive bureaucracies and judiciaries. Rejecting neoliberalism at the national level requires the rejection of neoliberalism at the global level as well. A world safe for democratic pluralism will not be a neoliberal world order.

Quick links

Three quarters of British adults are cutting back spending as living standards fall.

Low economic confidence is fuelling support for Britain rejoining the EU.

Ministers published regulations allowing them to construct border posts in Northern Ireland ports - for checks on trade with the rest of the UK.

56% of voters back minimum service agreements on strike days.

A teaching union failed to meet the legal threshold for strikes among its members.

George Freeman set out government plans to make Britain a “science superpower”…

… and the FT took a long look at the prospects for success.

Britain agreed to send heavy tanks to Ukraine.

Britain and Japan signed a defence agreement, deepening relations even further.

Illegal immigrants will be removed from America without claiming asylum.

Organised criminals used the now-closed “golden visa” scheme to move to Britain.

The Church of England has set up a £100 million fund to “address past wrongs of slavery”.