Usually, political policy announcements are trailed well in advance, there are few surprises. So, the announcement this week that a Conservative government would abolish Stamp Duty was an exception, and a most welcome surprise.
Stamp Duty Land Tax is paid when you purchase a property or land. First-time-buyers pay a zero rate on a home purchase up to £300,000. Everyone else would pay 2% up t £125,000, 5% between £125,000 and £925,000, 10% between £925,000 and £1.5 million and 12% on anything over £1.5 Million . Non-UK residents would pay 2% more. Given the way that house prises have risen, the tax can amount to very substantial sums on relatively modest properties. Even at £250,000, if you weren’t a first-time-buyer, the purchase would set you back £2,500 in tax, adding to all your other costs of moving home.
Home ownership provides a stake in a stable society, but in the UK it has been in decline. The average first-time home buyer is now 34 years-old, which is an increase of 10 years over generation.
Almost all economists agree that stamp duty distorts the housing market and prevents it working effectively. The institute for Fiscal Studies has dubbed it ‘the most damaging tax’.
Young people are often trapped in rental accommodation because the tax at the higher end of the market deters sales, discouraging older homeowners from downsizing from family homes that no longer suit them, whilst younger families can’t find larger properties that suit their growing needs. This inefficient market reduces labour mobility because the shortages are a deterrent to moving in pursuit of better employment prospects.
The abolition of the tax on a main residence will therefore improve productivity by addressing one of the principal impediments to an efficient and mobile labour market.
The abolition, however, will deny the Treasury some £9 billion annually if it were to be implemented at the beginning of the next Parliament. This sum will have to be had from elsewhere: there is no such thing as a free housing market, anymore than there is such a thing as a free lunch.
The Conservative Party has identified £47 billion from savings, almost half of which will be had from the benefits budget. Inevitably, there will be much scrutiny over the coming months about how deliverable these savings are. Nevertheless, they are essential – not just to fund the reform of Stamp Duty; they are vital for our economic survival in an increasingly competitive world. We just can’t go on spending and borrowing as we have been.
Hopefully, the announcement may also put some political pressure on the Chancellor regarding whatever shocks she may have been planning for Stamp Duty in next month’s budget.
National Service
The chancellor has announced a new scheme to get the under-25-year-olds that are currently not in work, training or education, the so-called NEETS, offering a guaranteed job for those of them that have been out of work for 18 months or more, and a reduction in benefits for those who ‘unreasonably’ refuse a job offer.
First, I do not believe that this will offset the damage already done to young people’s employment prospects by the Chancellor’s imposition of a job’s tax on businesses through increased employers’ National Insurance contributions.
Second, the eighteen month threshold is far too late. By that time, the propensity to live on benefits will have become a habit. People will have got used to it and will have found ways of adapting in order to get by.
Third, What constitutes ‘unreasonably’ refusing a job offer?
The current cohort of under-twenty fives appear much less work-ready than their predecessors. This partly stems from the pandemic and the substantial school absenteeism that has followed it. Though my prejudice is that much of it also flows from the degenerative effects of social media and video games. In addition, many fewer young people now have had the experience of part-time jobs during school and university holidays than in previous generations. All this means that the system will need to be rigorous. The availability of benefits is part of the problem: Life on benefit must absolutely be less eligible than full-time employment, otherwise, for many, it will be a favoured choice.
Fourth, the announcement does nothing to address the alarming growth amongst young people opting for Personal Independence payments (PIP) because they have mental health ‘issues’- be it stress, anxiety, or whatever. Apparently, coaching now can be had from online ‘influencers’ for successful completion of the PIP application process (which, extraordinarily, is increasingly conducted over the telephone, rather than face to face).
Fifth, though in this column on 4th September I expressed my scepticism about the impact of Artificial Intelligence on the jobs market ( Artificial Intelligence ), nevertheless, if it is going to have an increasing impact on the work opportunities for young people, then the Chancellor’s scheme will need to rise to that challenge.
For all these reasons I believe that what has been proposed does not address the generational problem that we now face. We simply cannot afford to allow a generation to become addicted to a life on benefits.
We Must be bold and radical. The great non-event of last year’s election was the proposal for the re-introduction of National Service. I thought that it would dominate the campaign, but it became a damp squib buried by gambling allegations, the PM’s early departure from D Day celebrations, and the rest. But its time is now: we need National Service to give young people the opportunity of earned income, discipline & routine, skills, self-esteem and the confidence that so many of them are now lacking.
The two-Child Cap
The removal of the two-child benefit cap is also a policy being touted by the Reform Party. The rationale that they give is that we need to increase our birth rate. I don’t believe it will work. Other countries have tried incentive payments to increase their birth rates without success.
The falling birth rate in developed countries has much more to do with other complex social factors than it has to do with the cost of raising children.
Anyway, in the unlikely event of the policy working, it would only be doing so for families on welfare, at the expense of families without it.
We are told that removing the cap is the swiftest way to reduce child poverty.
There is a common misunderstanding about the two-child cap: additional children are not left without means. A universal (not means tested) Child Benefit is paid in respect of all children, whatever their number, and irrespective of whether their family is on welfare or not.
Currently the rate is £26 per week for the eldest child and £17 per week for every additional Child.
Kruger
A liberal Democrat parliamentary colleague leaned over the gangway towards me on Monday, confiding that he had been listening to James Obrien’ s LBC news programme as he drove to Westminster: Danny Kruger’s defection from the Conservative Party to Reform was under discussion; Obrien asked for listeners to text him with their prediction of who would be the next turncoat.
Apparently, I was the most favoured choice!
Well, I suppose that I should be mildly flattered that the listeners even know my name.
I accept that I have been very critical of my own party when I thought that it properly deserved such criticism. Nevertheless, I remain a ‘Church and King’ Tory, even though I have also picked up much that was part of the Whig, and indeed, National Liberal traditions. Furthermore, I’m a former whip: A parliamentary political party is so much like a pack, where colleagues are bound together, not just in a common purpose, but also in friendship and loyalty. More often than not, it is the loners and semi-detached, that tend to peel off, being les encumbered by those bonds.
I do not underestimate Nigel Farage, he is a very clever politician who, in the estimate of Professor Vernon Bogdanor ‘makes the weather’. But I could never reconcile myself to his fondness for President Trump, his equivocation over Ukraine, and his stated admiration for Putin. To say nothing of some of the superficial and ill thought through policy positions he has recently taken.
Nevertheless, many constituents have urged me to support some form of electoral pact between Reform and the Conservative Party in order to prevent a right-of-centre split among voters, which would ensure another Labour victory at the next election. My answer is that no such arrangement is on offer: Farage believes that he can destroy and replace the Conservative Party and secure a majority in Parliament.
(I doubt it, and current polling doesn’t support such a conclusion).
Notwithstanding the Government’s current difficulties, the probability is that we are still three and a half years from the next general election. Anything can happen in that time.
Political parties have come and gone in our modern history, but the Conservative Party has endured. Given the form of the parties over recent years, were I to take a bet on the one most likely to implode, it wouldn’t be mine.
Even if it were it so, I’d prefer go down with the ship.
Saga of the gender neutral WC -continued
On the 5th September I added a post Parent of parliaments? In which I expressed my surprise at one of the parliamentary lavatories being converted to a ‘gender neutral’ facility, by having the urinals boarded up, and leaving only the two WC cubicles that had previously been available. This represents a reduction of three fifths, in terms of service provision. Since when, I have had correspondence condemning my selfish approach by only measuring the reduction of provision for gentlemen, without considering an increased provision of two WCs now available to ladies.
My wife, however, assures me that Ladies use lavatories very differently, they often use them as safe spaces in which they can adjust their make-up etc. The last thing that would suit them would be to have some bloke intrude, whilst on his way to the remaining closets.
I conclude that, as far as lavatories are concerned, gender neutrality suits neither sex.
Online Safety – and pornography
We often have to identify ourselves by providing our date of birth, for example when we collect a prescription at the chemist’s.
So, I am very surprised at the number of complaints I have received, demanding repeal of the Online Safety Act 2021, because of its recently implemented requirement that verification of age be provided before access to adult content can be had.
I doubt that this deluge of emails has been prompted alone, by the call from the Reform Party that the Act be repealed.
No doubt, the complaint is one of principle, entirely prompted by the infringement of liberty that requires one to give an account of oneself before proceeding with lawful business.
Were it just prompted by a reluctance to provide adult content websites with sufficient bona fides to identify oneself, then surely complainants would have been too embarrassed to bring the matter to my attention (just as, as a schoolboy, I was embarrassed, when I sought to avoid disapproving looks, as I reached for the top shelf at the newsagent’s, for the latest edition of Health and Efficiency).
I voted for the age verification provisions in the Online Safety Act and I believe that they provide important protection for children. The Children’s Commissioner, Dame Rachel de Souza, has expressed her dismay at the quantity and nature of pornography that has been circulating on social media amongst young children. The early sexualisation of children is deeply disturbing.
Of course, no system is fool proof, and those so determined, will find ways of getting around the identity requirement. Nevertheless, the provisions have already led to a very significant reduction in access to adult content and certainly prevent children stumbling across it by accident.
One of the ways that the age verification can be circumvented is through the purchase of virtual private network (VPN) software. There has been an exponential rise in the sale of this software since the identity requirement was implemented on 25th July. VPN provider Proton has revealed a 1,800% increase in demand!
Well, as I said, if people are really determined, they will find a way to get access without having to identify themselves. In any event, I would be very reluctant to restrict access to VPNs because they are essential for exiles and political dissidents, in order to conceal their whereabouts from authoritarian regimes that are determined to silence them.
There are however, legitimate concerns about the Online Safety Act and the chilling effect it can potentially have on freedom of expression, to which I will return.
The power of Prayer
I Chaired a debate commemorating the Battle of Britain on Tuesday. Here is a gobbet from Sir Ian Duncan -Smith’s contribution:
“I was fortunate enough to sit next to Jock Colville, who was assistant private secretary to Churchill throughout the war. They were visiting Uxbridge on 15 September, when a huge armada gathered. Churchill was watching as, one by one, the lights went up, until everything was up. He said to the air officer commanding, “What are you going to do now? Where are your reserves?” The officer said, “We have no reserves, Prime Minister.” Churchill asked, “What will you do?” The officer said, “I don’t know about you, but I’m going to pray.” Jock Colville told me that, with that, Churchill stayed silent for three hours, something he never did, but that when he got into the car, he turned to him and said, “Never in the field of human conflict has so much been owed by so many to so few.”
Parent of parliaments?
I was surprised went went to the lavatory at Westminster, to discover that the three urinals had been boarded up, leaving only the two WC cubicles: a significant reduction of three fifths in service provision.
Then I spotted the notice announcing that this was now a ‘gender neutral toilet’.
Change is usually for the worse.
Digital ID
The announcement that the Government is considering introducing a digital ID system for everyone, as a means of tackling the UK’s ‘pull factors’ which fuel the channel crossings, has prompted a large number of constituents to send me their objections.
I share their concerns and I opposed the last Labour Government’s proposals for ID cards under Tony Blair.
We would be sacrificing a great deal of our privacy and our right to go about our lawful business unimpeded. Once available, many more uses would be found for such technology, which would increasingly require us to account for ourselves.
I accept that levels illegal migration are overwhelming our resources and putting enormous strain on our social fabric. A further tragedy is that the endeavour to accommodate the migrants is being funded by our foreign aid budget, which should properly be being spent in the regions from which the migrants are coming, and where it would so much further in helping many more people.
Were I persuaded that digital ID’s were solution to our problem I could at least consider if such a surrender of our privacy and liberty was worth it. I am not so persuaded. Employers, banks and landlords are already under an obligation to check the bona fides of employees and tenants. Means already exist by which that information can be had.
The existence of a more convenient tool for checking will have no impact in the black economy where there is no intention of checking, in any event.
The reality is not that we can’t identify illegal migrants, we have hotels and other accommodation burgeoning with them. Our problem isn’t finding them, it is finding somewhere to send them.
The main effort must be to find a safe place to send them, which was the whole point of the Rwanda agreement that the Government scrapped before it was implemented, despite the fact that £700 million had already been spent setting it up. I believe that it would have worked: Even before we were anywhere near getting it up and running, the Government of Ireland were complaining that illegal migration was increasing sharply to the Republic as migrants sought to avoid UK with the possibility of deportation to Rwanda.
Now other jurisdictions are looking seriously at the prospect of Rwanda, including the facilities that British tax-payers provided before our government abandoned the endeavour.
Digital IDs won’t go any way salvage the opportunity lost.
The Snake
As the aggressor escalates the war, this Russian regime is no better than its Soviet predecessor in its determination to subjugate parts of Europe and enforce its malign influence throughout the world.
The tragedy is that we could have seen it crushed once and for all, only had we the will to do so. The reality is that we have forced Ukraine to defend itself with one arm tied behind its back: We forbad it to use our munitions to take the fight to Russia, and we consistently failed to implement a sanctions regime that would have brought its relatively small and hydrocarbon-based economy to its knees.
Even as things stand, there are enormous strains in Russia’s fuel markets as a consequence of sustained Ukrainian drone attacks on attacks on Russian refineries. With the result that kilometre-long queues at petrol stations are not in Russia’s eastern Regions, and wholesale prices for petrol and diesel have hit record highs. Officially, the reasons are no longer hidden – refineries are shutting down after Ukrainian drone strikes. During peak summer days, up to 14% of processing capacity was idle. Some of the largest refineries have stopped receiving supplies of crude oil.
Ukraine’s drones are also targeting the export terminals and pipelines.
In addition, Russian refineries were constructed by Western oil companies and they are fast running out of parts, only some of which can be supplied by China
Russia’s problem is that its refineries are concentrated in closer to Europe, within reach of Ukraine’s drones, but industrial consumption had been growing in the east thousands of kilometres away, creating a logistical vulnerability, hence the queues at petrol stations.
Lest any Russian stuck in a queue at the petrol station complains, the state is increasing its surveillance of all its citizens.
Starting this month, the Russian Messenger Max will become mandatory for preinstallation on all devices in Russia. The app accesses the device’s camera every 5-10 minutes, even when running in the background. In effect, a smartphone turns into an Orwellian monitor for the security services, switching on without the owner’s knowledge.
The app collects all your contacts and text input, it tracks location. All the user’s conversations will be available to state security services.
And what might they do with recalcitrant Russians, and anyone else for that matter, caught expressing dissent?
Well, reports indicate that Russia is about to withdraw from the European Convention on the Prevention of Torture (not that its membership made any difference to the citizens of Bakhmut).
As the sell-out of plucky and resourceful Ukraine proceeds, we should reflect on the missed opportunity to remove the greatest challenge to world peace, prosperity, and freedom.
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