Wednesday, 8 March 2017

It's Budget Day 2017!

It’s Budget day! The Chancellor has a number of big challenges to tackle in his first formal outing – from social care to business rates to school funding formulas, there are plenty of calls for him to find more money. But the overriding challenge still remains, bringing the deficit down to a manageable level, and ultimately delivering a surplus. Mr Hammond needs to keep his eyes on that goal.

Over the past weeks the newspapers have been full of headlines that the OBR will hand the Chancellor a nice little bonus in the form of a £9-12bn cheque for this financial year, undershooting his borrowing target and providing wiggle room to address some of those big issues. Added to this, forecasters expect revised growth figures could give him up to £60bn more over the course of this parliament than he was told just 5 months ago at the Autumn Statement. A week may be a long time in politics, but it seems the passing of a few months is economic memory loss for some – that £12bn “bonanza” is in fact just a revision back to the borrowing levels projected at the time of George Osborne’s last budget back in March 2016, which will still see the UK borrowing £55bn this year alone.

So what’s changed? That undershoot is partly a result of higher economic growth than expected following the Brexit vote, which has continued to exceed expectations, and builds in structural gains in tax revenue. That growth has fed through to near record tax revenues in January when self-employment and corporation taxes both hit recent highs – which goes someway to support the argument that current the tax rate actually raises more revenue for the Treasury.

But As the Chancellor rightly said on his tour of the Sunday morning studios, although he expects the OBR to extend his credit, he is right not to blow the lot. After all, the government put in place rules for others to ensure financial bonuses are linked to real performance and can always be clawed back if that performance is later proven to be a flash in the pan.

As I’ve argued ahead of previous Budget’s, in the interest of current and future generations the Chancellor must continue the laser focus on cutting the deficit. Let’s just remember that eight years after the financial crash, as a nation we have borrowed £1,700 over the last year for every person in the UK in work. The last time the public finances were in surplus was in 2001, in the last year of Ken Clarke’s financial plans that were carried over into the early years of New Labour. 

With the Budget set to reveal that National Debt (PSND) has hit a record £2 trillion, and new money already committed at the Autumn Statement to boosting spending on green energy, transport connections, and new homes, the Chancellor has his work cut out. But with employment remaining at record highs and tax revenues holding up remarkably strongly, now is the time to redouble deficit reduction efforts and not open the tap on reckless public spending commitments. However challenging, as someone once said, it is time to fix the roof while the sun is shining. 

Sunday, 13 November 2016

Don't let up on cutting the deficit, Chancellor, or you will betray millennials

Today's IFS report suggests that if the previous Chancellor's relentless focus on getting the public finances into surplus is abandoned, it will mean a deficit of at least £15 billion in 2020. This is neither a One Nation approach, nor does it meet the Prime Minister’s test of being "for everyone".

This article was originally published by The Telegraph 08/11/16

Since June 23rd, our decision to leave the EU is being misinterpreted in all sorts of ways - from a justification for bizarre policies on reporting foreign workers, to a mandate to withdraw entirely from the European Single Market or from free trade. Clearly voters in the referendum rejected "business as usual", but they did not reject the need for government to get to grips with the deficit. That was the central plank of the Conservative Manifesto which delivered a majority government just 18 months ago. The very first pledge in that manifesto was to “keep our economy secure by running a surplus so that we start paying down our debts”.

Speaking to voters on both sides of the referendum debate, it is clear to me that the decision for many was less about the impact of Brexit on them, but more about their children and grandchildren. Voters rightly thought about the future and how Britain can be most successful in a globalised world, in a way that will deliver that most basic of human desires – for those who come after us to have greater opportunities than we did. Abandoning plans to deliver a budget surplus as the Chancellor has suggested does nothing to help achieve this.

I have just turned 30, and it doesn't surprise me that the IFS found in recent research that my generation are half as wealthy as those born a decade earlier were at the same stage of life. People born in the 1980s are the first generation to earn less than those born in the previous decade; we’ve been locked out of the property market which has delivered huge capital wealth to those before us; we face higher housing and rent costs; and we have far less generous pension schemes.
More young people today believe they will start their own business than own their own home; while the start of that statement gives me great hope, the latter half is a disaster.

My generation, and to an even greater extent the one behind, face the triple-whammy of exorbitant student debt burdens, compulsory pension contributions, and higher taxes that deplete our incomes and ability to save. We live in a world of skewed transport costs, where it's cheaper for us to jet across Europe for a weekend in the sun than to travel home by train to see our parents. For the Chancellor to turn around post-EU referendum and land us with even greater debts to clear in the future, while continuing to protect pensioners with a triple-lock and universal benefits is simply unethical.

As the Chancellor himself said last at the Conservative Party conference in Birmingham “The deficit remains unsustainable…. And piling up debt for our children and our grandchildren to pay off is not only unsustainable... it’s unfair… and it’s downright un-Conservative.”
Public Sector debt has trebled in ten years and now stands at 84 per cent of GDP, a figure set to grow by a further £55bn this financial year. Eight years after the financial crash, in 2016 we will borrow £1,700 for every person in the UK in work. It is worth remembering that the last time the public finances were in surplus was in 2001, in the last year of Ken Clarke’s financial plans that were carried over into the early years of New Labour.

So while we must invest in major infrastructure projects that secure our economic future, from HS2 to Crossrail 2, Heathrow (and for that matter Gatwick) expansion, renewal energy projects, upgrading roads across the regions, and build the new homes we desperately need, there is no reason to do this off the backs of the next generation. Borrowing to build new homes young people cannot afford, with debt we expect those same young people to pay back, is far from a sustainable future that works for everyone.

Philip Hammond must stick to his predecessor's plans for a surplus. With employment levels at a record high, more businesses operating in the UK than ever before, inflation low, and interest rates on the floor, he has a moral duty to act now to secure younger Britons' future. If he fails to act in a way that delivers generational equality, he'll not only be storing up crippling debts for millennials: he'll be storing an electoral crisis for the Conservative Party.

Saturday, 5 November 2016

Chancellor must eliminate the deficit to deliver on generational inequality

There are few things in life that people across the political spectrum will agree on. One perhaps is the desire for the next generations to do better than we do. It is therefore surprising, to me at least, the willingness of many in politics to cast the next generation aside. For decades, political parties of all colours have skewed policies (and taxpayers’ cash) toward the grey vote. And who can blame them? People aged 18-24 are half as likely to vote as those aged 65+, our politicians are simply playing the numbers game.

Perhaps that is why it is so widely expected that the new Chancellor, Phillip Hammond, will abandon plans to deliver a budget surplus in his Autumn Statement later this month. If he chooses to do so, he will abandon the very first pledge in the 2015 Conservative manifesto that delivered the government an unexpected majority just 18 months ago. But in that very same Autumn Statement he will likely confirm that the Basic State Pension will rise by 2.5% in April, more than twice the rate of inflation. That’s because the Government will choose to keep its manifesto pledge to maintain the triple-lock that sees the state pension rise every year by the higher of inflation, earnings of 2.5%.

This article was originally published by Bright Blue (03/11/16)

So why might Hammond give up on the budget surplus? In the wake of the Brexit decision, some forecasters suggest the public finances face an £84bn black hole, while others, including the IMF, predict stronger growth as the weaker pound benefits exportersand brings floods of tourists to the UK spending on high-end goods. Equally, the Prime Minister has stated she wants to break away from the monetary-policy approach of the Osborne years and to use fiscal policy levers to do more of the hard work in rebalancing the economy and boosting exports. We’ve had numerous signals from Hinkley Point, HS2 and Heathrow that the government is keen to press on with infrastructure investment from both the state and private sectors. While this is good for the economy, and likely means tax cuts for investment as well as higher public spending, without measures that equally reign back day-to-day expenditure the deficit will grow, dramatically.

At a time when unemployment nears record lows, employment is at an all-time high and there are more businesses operating in the UK than ever before, surely we should be redoubling our efforts to fix the roof while the sun is shining?

The complexities of unwinding our EU-UK relationship may well put bumps in the economic road ahead, but to use the EU referendum result to add billions of pounds to the national debt is a bitter pill to expect young workers to swallow. Speaking to voters on both sides of the referendum debate, it is clear that the decision for many was less about the impact of Brexit on them, but about their children and grandchildren. After a decade shaped by turbulent economic events, voters rightly thought about the future and how Britain can be most successful in a globalised world, in a way that ensure those who come after them to have greater opportunities than they did. Abandoning plans to deliver a budget surplus, which in itself would have taken 150 years to pay off our debt, does nothing to help achieve this.

That inbuilt generational inequality in public spending is perhaps highlighted by the political impasse that is the pensions triple lock. Having promised bagfuls of sweeties to a generations of voters who are twice as likely as their grandchildren to turn out and vote, it’s near impossible to take those sweets away. The Cameron Government was right to prioritise protecting pensioners from the majority of cuts - pensioners, often on fixed incomes, do not have the same flexibility to adjust to income changes that working-age people do. However, over the 6 years since 2010 the basic state pension rose from £97.65 to £119.30 (23%), while average weekly earnings rose at half that rate, just 12%. The triple lock has done its job. In closing the gap that had developed between pensions and incomes follow de-linking in the 1980s, even Iain Duncan Smith now believes it is time to end the pensioner preference. With the start of the new Single-Tier pension guaranteeing new pensioners at least £155 per week, the state pension has been restored to near the level it would have been had delinking not occurred.

Theresa May has spoken extensively about opportunity and aspiration. If we all agree, which I believe we can, that we desire for the next generation to be better off than those who have gone before, the Chancellor must use his first fiscal event in three weeks’ time to ensure the burden of public spending today is not left for others to repay.

Public Sector debt has trebled in ten years and is still set to grow by a further £55bn this financial year. Put another way, 8 years after the financial crash, this year we will borrow £1,700 a year for every person in the UK in work. So, as the Chancellor prepares to borrow more to build new homes, roads and invest in our nation’s infrastructure, he needs to address the reality that unless he acts to prevent it, it will be this same generation he is seeking to help who will pay the burden of his borrowing.

For a generation of voters who join the workforce with lower earnings expectations than their parents, higher debts, higher housing costs and higher taxes, as the Chancellor himself told the Conservative Party conference “piling up debt for our children and our grandchildren to pay off is not only unsustainable…… it’s unfair…… and it’s downright un-Conservative.”

While he is right to act in the long-term interest of the nation by boosting spending on green energy, transport connections, and new homes it would be wrong to borrow to build homes that young people cannot afford with debt they are expected to pay back. Since the turn of the Millennium, our country has run budget deficits averaging £74bn a year. That’s £17,000 extra debt for every man, woman and child in the country, or to look at it differently, the deposit on a first home.

To be brave is to be bold. The new Chancellor has an electoral mandate to eliminate the deficit and a Prime Minister who is determined to tackle to gap “between a more prosperous older generation and a struggling younger generation.” In his Autumn Statement this month, he can get on and deliver on both.

Friday, 26 August 2016

How do we fix the housing crisis?

One of the greatest challenges that the Cameron/Osborne years struggled to get to grips with is the crisis in home ownership. With home ownership in England now at levels not seen since 1983, it is time to address one of the greatest social problems of our age.
Over the past 20 years, a multiplicity of factors have conspired to breed this problem, including familial changes, people living longer, and of course immigration, creating 3.3 million extra households. And, while it is true that we have failed for many years to build enough homes to keep up with demand, it may surprise you that the number of homes has actually risen at almost exactly the same rate – this crisis is not simply driven by numbers.
This article originally appeared on ConservativeHome (24/08/2016)
The Cameron government took steps to intervene in the market with a range of policies from Help to Buy to Stamp Duty changes and the impact of these is yet to been seen. But undoubtedly more needs to be done for a truly long-term solution.
This is a problem we need to get to grips with, and quickly. Partly because creating a sustainable and stable housing market is critical to our future as a party of government; but mostly because failing to tackle the issue now could prove devastating to the long term social cohesion of our country.
It is unacceptable that in Great Britain today, millions of hard-working, aspirational people, remain unable to realise their dream of owning their homes. A Tory dream our party has always championed. It is disastrous that millions have abandoned hope of ever doing so. That’s not the country I want to live in. The country I do want is one where future generations retain both the aspiration and the ability, to purchase not only a “decent” homes, but crucially, homes which are desirable. Well-located homes, at prices they can afford.
If that sounds like utopia, it needn’t. Theresa May has already called attention to the “housing deficit,” and she has highlighted that young people are finding it “harder than ever before” to own their own home. The real challenge, though, will be creating a sustainable housing market that works in the long term, during uncertain times and when economic conditions are stable; and to do that, I believe we need to reach for bold and creative solutions.
That is why I am leading a call for evidence from the Tory Reform Group looking for a new approach to housing policy. We’re canvassing the whole political spectrum for the best and brightest ideas, and I am already encouraged by the level of responses. What is increasingly clear is that we need different solutions for different parts of the country. This crisis is not national, it is local.
Consider this: the most expensive borough to live is Kensington and Chelsea, where the average house costs £1.27 million; by contrast, in Burnley the average house is 18 times cheaper at £69,000 and prices fell five per cent last year. And, while private rents in London continue to increase at inflation busting rates, in Wales and Scotland they have begun to fall. For most, £69,000 would be considered an affordable home, but with average first time buyer in London paying £385,000 can a national solution really be the answer?
While it would seem to make sense to increase density in London, does changing the rules to achieve that work if it leads to more new builds in Stoke-on-Trent? Do we need to rebalance our population away from the South-East; what role does government have in delivering this? Should we continue to protect green belt at all costs, or just seek to prevent ribbon development, by re-designating green belt in areas with the most pressure?
With a population growing at 600,000 a year, the equivalent of a new Glasgow every year, we must surely need at least one new town? Connected via one of the great transport links already in the underway – Crossrail 2, HS2, – but making the best of global technology solutions to not only be an eco-town but a desirable place to live and a practical place to work with the fastest of super-fast broadband, great schools, outside space, shops and community facilities? Can that be delivered without central government imposition?
Some would argue that we simply need to build more homes, “whatever the tenure”. While it is true that we have failed to build quickly enough, we can’t fall prey to a crude numbers game.
Planning regulations, skills shortages and financial restrictions are all holding up building, but there are other complex factors at work. Yes, we need to build more homes. But we also need to ensure those homes meet people’s needs. Homes people can take pride in, and enjoy living in. Desirable homes, in desirable places.
And what about saving that crucial deposit? The Lifetime-ISA (LISA) is an innovative way of helping ‘young’ savers, but falls woefully short of the challenge faced by many in their first years of work – paying off student loans, facing extortionate rents, being encouraged (and now forced) to save for retirement – a triple whammy that puts today’s graduates in the position of an additional 13 per cent marginal tax before they even begin saving for a home. One solution might be to allow first-time buyers to use their pension pot as a security deposit to buy a home, allowing the incentive to save, but not – as the LISA does – wiping out retirement saving at the point of purchase. But I’m keen to hear more ideas to solving the deposit conundrum.
So, this call for evidence is a chance to draw on the work of experts, and ideas of individuals, to create concrete proposals that offer practical solutions to deliver affordable home ownership, decent rental accommodation, and a sustainable housing market fit for the 21st century. The aim is to help establish a long-term housing plan that delivers not only for today, but for generations of home owners and happy renters.
Please, get involved in shaping that output. If we can get it right, then generations of voters will back us. Get it wrong, and millions will never forgive us.

Sunday, 10 July 2016

With Labour lurching to the left, now is the time for us to hold firm on the centre ground.

There are few genuinely momentous moments in politics, but no one could deny that we are living through one now.
During his decade-long tenure as leader of the Conservative Party, David Cameron has rediscovered the compassionate Conservative ethos which beats at the heart of the party in our One Nation doctrine. By delivering a historic Conservative-majority Government just a year ago, he has anchored the party in the centre-ground, and proven that this is where we need to be to win elections. Now is not the time to abandon his legacy or the manifesto on which we were elected to serve, but a time to embrace and build on it.
The leadership election is as much about how we deliver our 2015 manifesto as it is about the kind of party we want to be heading into the next general election. This leadership contest is not a time to re-run the referendum, nor to pour salt into the wounds of a bitter debate that divided families, colleagues, friends and our party. We must reunite and bring our country back together.
On the steps of Downing Street, Cameron rightly claimed his legacy as rebuilding the British economy, but also reforming education, revolutionising welfare to deliver record employment, increasing aid spending, building the Big Society, and legislating for equal marriage.
There are some in our party who would seek to reverse or denounce that legacy, and take the opportunity of a divided opposition to abandon the centre-ground in favour of what they perceive to be ideological purity. We must resist this temptation at all costs.
Ironically, the vote for Brexit that put an end to Cameron’s premiership was strongest from those he had done most to help – older people and voters with lower educational attainment. In protecting pensions and pensioner benefits, reforming welfare and education, delivering the national living wage, and increasing the personal allowance, he protected those in our society who are most vulnerable, and arguably most likely to suffer as a result of Brexit.
The task for our next leader must be to redouble those efforts to govern in the interest of One Nation; to reach out to communities right across our country and to regain their trust. We must build a party that once again speaks to every part of our great country and every community within it.
In doing so, we must govern in the best of Conservative traditions while understanding modern Britain. We must deliver our 2015 manifesto and continue to govern in the interest of One Nation. We should seek to reduce taxes on employment, providing employers with security and the incentive to retain jobs in the UK, and build on the legacy of record employment, and in parallel, invest in enforcement to ensure the benefits of the Living Wage reach the pockets of workers in every town across the country.
We must reform business rates to support smaller firms and our high streets in competing in a modern economy.
We should continue to meet our election promise to increase funding for the NHS, not least because voters in the referendum expect it; but we should direct investment towards social care and health prevention, including redoubling effort to tackle type 2 diabetes, revisiting funding for treatments like PrEP, and investing in mental health.
We must boost the Foreign Office with an army of negotiators, and a council of business leaders, to deliver the free-trade deals we need around the world, and to guarantee access to the Single Market.
We need to build more homes – a lot more homes – which will mean releasing more land, liberalising planning and providing housing associations greater flexibility to borrow and build.
We must deliver greater reform of the prison system, including tackling sentencing, to ensure we break the cycle of criminality with investment in education and training and incentives for businesses to take on ex-offenders.
We must retain our commitment to the world’s poorest, spending 0.7% of GNI on international aid, ensuring that we focus on priorities which help the world’s poorest, and enhancing global security by directing money to priorities which help build global security and the UK’s international trade links, providing opportunities for young people to travel the world in the process.
We must press ahead with building HS2, explaining airport capacity, investing in infrastructure to deliver the Northern Powerhouse, and extending local devolution through City Deals.
We must look again at major projects, like the Severn Tidal Barrage, to secure a renewable future, while exploiting shale gas to deliver energy security and transitional reductions in carbon emissions.
We should push ahead with greater freedoms for academies and free schools to ensure young people have greater opportunities at the start of their lives, and forge lasting partnership between local employers and academies to deliver the skilled workforce we need.
And we need to keep the public finances on track, so we do not burden the next generation with yet more debt. Radically simplifying the tax code and cracking down on avoidance will play an important role, as will keeping corporate taxes the lowest in the G20, but to deliver a surplus some taxes may have to rise especially if the market uncertainty around Brexit translates into the real economy.
So in this leadership election, let’s not look backward to the referendum, but forward to how we build on David Cameron’s One Nation legacy and cement ourselves in the centre ground. We have an opportunity and a duty with a weak and divided Labour Party to speak up for everyone and every community in our nation to ensure we capitalise on our position and build our majority in 2020 – or whenever the next election may be.

Friday, 4 March 2016

FOI reveals true scale of Labour hypocrisy as public sector funds 85% of 'cost cutting' advertising

The hypocrisy of Labour-run Lambeth council continues this month as a series of new posters appear across the Borough bemoaning cuts in the council’s government grant. At the same time, council leader Cllr Lib Peck states in the £250,000-a-year taxpayer funded Lambeth Talk:

“There’s nothing like the January bills to emphasise the post-Christmas pinch. The pressure on Lambeth Council’s funding is considerably more than a pinch – more like a throttling, with 56 per cent of our main funding cut….”
Cllr Peck goes on to claim that the council is:
“…always looking for new ways to use our resources and assets wisely.”
Well here’s a tip, Lib – cut the propaganda rag and taxpayer-funded political ads.
I’ve written before about the huge waste of cash that is Lambeth Talk, and Lambeth’s repeated claims about the cost of their cuts posters being just £600, ignoring the opportunity costs of Lambeth not selling on their ad space. But a new Freedom of Information request has revealed how Lambeth Labour are taking taxpayers for an even bigger ride.
The council have always claimed that advertising revenues off-set around 25 per cent of the cost to taxpayers of the monthly magazine, and that in recent years that advertising revenue has risen, nearly doubling this year to £54,319.
However, as Lambeth’s response to my FOI shows, a whopping 85 per cent of advertising in Lambeth Talk that is designed to offset the cost to taxpayers is in fact from other public sector bodies and 13 per cent is the council’s own advertising. Private enterprise has no interest in advertising in Lambeth’s unnecessary propaganda rag, so the council have resorted to pushing taxpayers money round in circles in an attempt to cover up their scandalous waste of residents’ money.
Let’s hope Lambeth Labour will follow colleagues in Tower Hamlets and finally take the axe to Lambeth Talk.

First published on Conservative Home (03/03/16)

Monday, 31 August 2015



The Conservative Party is holding an online primary to select its candidate for the 2016 London Mayoral Election. Anyone in London who is on the electoral roll can register to vote to help the party choose who will stand for the Conservatives in the election next year.

The current Mayor of London Boris Johnson was selected as the Conservative candidate in 2007 using a primary and the party is again giving all Londoners the opportunity to be involved in the process.

Four candidates have been shortlisted to stand in the primary. Andrew BoffZac GoldsmithStephen Greenhalgh and Syed Kamall .

Voting will take place online during September following an official hustings, with the result announced at the end of September, ahead of the Conservative Party conference. 

The election for Mayor takes place on Thursday 5th May 2016.

Tuesday, 18 August 2015

Is Corbyn a gift for the Liberal Democrats? #ToriesForCorbyn be careful what you wish for

There are two big ‘ifs’ in this political equation, (i) if Labour are actually fool-hardy enough to reject the idea of pragmatic politics in favour of permanent protest by electing Jeremy Corbyn as leader, and (ii) if the Lib Dems have the fight to get back in the game.

Putting aside that the election of Jeremy Corbyn as Labour leader would be a disaster for the Conservative Party, not the great gift the #ToriesForCorbyn would have you believe, a Corbyn victory could be a gift for our old coalition colleagues in the Lib Dems.

An extreme left-wing Corbyn Labour opposition not only risks allowing the Conservative Government to drift back to an unelectable comfort zone on right, it also runs a very clear risk of a loony-left Government come 2020. The old adage that Government’s lose elections, oppositions don’t win them exists for a reason.  

In dragging Her Majesty's Official Opposition to the unionised fringes of the left wing extreme, Corbyn would undoubtedly attract a gaggle of new lefty-lovies, but in doing so he will abandon the centre-ground on which almost every election has ever been won. The instant Conservative poll bounce that would likely should not be seen as a reason for our party to make the same mistake and abandon the centre, we would do so at our peril. Yellow Peril.

Having just evicted 49 Liberal Democrats MPs from Parliament, moving away from the centre ground would leave a gaping hole through which they could return and challenge us. Not only could our old coalition friends rebuild with their ever reliable tricks in the inevitable by-elections that will test our tiny majority, but in the 2020 marginals as left-wing liberals who abandoned the party in favour of Labour come looking for a new home as they escape the socialist ideology of Corbyn Labour. There may yet be a second Liberal surge.

Even if, as I hope we do, we take this opportunity to make a true One Nation Conservative claim to the centre ground, Labour’s own leftward plunge has opened a gap on the British political spectrum, on which any savvy Lib Dem strategist should be setting up tent. The centre-left, arguably the place they have always felt most comfortable, is looking like fertile territory for a party in need of an identity.

So let’s be careful what we wish for and not allow #ToriesForCorbyn to give the ultimate prize to the Liberal Democrats.