The economy is still reeling from the impact of the Chancellor’s previous budget.
 Business confidence collapsed even months before that when, during preceding summer, we were warned that things were bound to get worse before they got better. Then, when the budget eventually came, it was even, even worse than expectations, with its wholesale assault on enterprise, investors, family farms and family businesses, as well as employers of every kind.

After that budget last year the Chancellor insisted that she had ‘stabilised’ the economy and that, from then onwards, its stewardship was entirely down to her, and that she would not be back for any more tax increases. Throughout the last year the Government has trumpeted that it had achieved the fastest growth rate among the G7 nations– but that is what it inherited, and as the year passed, that growth became ever more anaemic: last month the economy actually shrank.

The Chancellor made exactly the same mistake of collapsing business confidence prior to this budget, in the way that she did before her last one: She spent the summer breeding uncertainty by flying all sorts of kites as to what sort of tax-hikes might be in the budget.
This behaviour is hugely unhelpful, it affects employer hiring and investment plans; it moves some markets whilst freezing others; and it increases the cost of servicing our debt.
That’s why we used to have pre-budget ‘purdah’.

And against that background, throughout the year, there has been the ever-present chilling effect of the huge extension of trade union power set out in the Employment Right’s Bill which is currently going through Parliament.
No surprise therefore, that unemployment has risen every month since the last budget and now stands at 5%, with vacancies sharply down.

This anti-growth agenda is only half the story. The other half is that the government is over-spending, even its bloated plans overshot by over 4%.
Prime Minister’s very modest proposals, only to slow down the accelerating growth of the benefits bill, ended in a disastrous climb-down..
Now the total benefits bill stands at £300 billion annually, £212 billion of which is for inactivity due to sickness. 4.3 million people are on benefit and under no obligation to seek work, and that figure is growing by 130,000 per month, – adding one and a half million more people to ‘benefits street’ every year.
The Chancellor’s response yesterday; was to announce even greater bounty: Billions more on benefits.

To pay for it, the Chancellor’s  Smorgasburg measures increasingly single out the minority who are already contributing the most: the entrepreneurs and the investors who can take their vision, their skills and their wealth elsewhere to places where there is a more business-friendly climate: And they are doing exactly that, they a leaving in droves, even the Secretary of State for Business has admitted it.
The Chancellor is killing the Goose. We are going to be left with the unsustainable position of more people claiming benefits than are paying for them.

The choice she made was to increase benefits at the expense of even higher taxes, we now have the highest tax burden in our history

The great danger of the inexorable growth of the state, now accounting for 45% of our economy, has turned out not to be the totalitarian fist raised in anger, not so much Hayek’s  Road to Serfdom, rather, it’s turned out to be an open hand dishing out largess, it’s more of a Road To Penury.

I will support the measures that the new Home Secretary, Shabana Mahmood, has announced, which are designed to regain control of our borders, but I don’t believe they will deliver the result that she wants.

Returning the grant of asylum to a temporary measure, until it is safe to return, rather than long term resettlement, which is what it has become, is entirely right and, to be honest, long overdue.
The problem is that, the opposition to the measures that she announced this week, came principally from her own back-benches. Many of her proposals, and even her language, just do not chime with Labour’s DNA.  You have to remember that we are dealing with so many politicians that campaigned against every flight deporting violent criminals back to the Caribbean.
The measures are far reaching and will require primary legislation. We have already seen the Government abandon its very modest proposals to cut welfare bills in the face of a back-bench rebellion. We will have to see how Mahmood’s determination and stamina lasts over what will be a gruelling campaign.

Irrespective of the importance of the proposals she has made, they are undermined, and rendered impotent by two vital omissions.
First, she is relying on A) telling our judges how to interpret our commitments under the European Convention on Human Rights and, B) negotiating changes in the Convention itself.
A) won’t work because our courts import case law and jurisprudence from the court in Strasbourg. And B) won’t work because it will require unanimity by all signatories to the treaty, which is simply not currently to be had, nor any time soon. The only realistic course is to withdraw from the Convention, which she won’t.
Second, You have to have somewhere safe to send people to when you cannot send them back to their own countries, either because you can’t get the agreement of those countries, or because sending them there really would amount to torture or death.
The last Government had a solution: the agreement with Rwanda, at a cost of £700 million – a ‘snip’ compared with the current costs of our asylum system. It would have been worth waiting to see what the impact of the first flights to Rwanda would have been, but the election intervened and the incoming government wrote-off the investment by closing the scheme before it had got underway.
Mahmood is now looking for somewhere else they can be sent to. I wish her the best of luck.

 

There used to be a convention of ‘pre-budget purdah’ whereby, for several months before the budget, the lips of ministers and their officials would be sealed with respect to even the slightest speculation of what might be in the budget.
But in the last few weeks we have witnessed the Chancellor calling a press conference to ignite speculation that income tax would be increased, notwithstanding her earlier promise not to do so, then days later to issue a clear signal that, on further reflection, she won’t after all.
If this were just all political noise, it wouldn’t matter, but these speculations affect markets with real economic impact. Over the summer all the kite-flying from the Treasury has slowed up investment decisions and frozen the housing market. They have also increased the cost of servicing government debt, as are creditors have taken fright at some of the speculation.
On Monday I challenged Janes Murray, the Chief Secretary to the Treasury, with this question
“Given the blatant breach of pre-Budget purdah, will the Chancellor follow the proper example set by Hugh Dalton?”
He replied “I fear that my history is not good enough to know exactly what that question means. I am embarrassed to admit it. I am not entirely clear, but I suspect that I do not agree with the right hon. Member, whatever it was. I will leave it at that.”
Now, I would not expect any casual reader of this column to know about Hugh Dalton, but a Labour politician, indeed a Treasury minister, ought to know that Hugh Dalton was the Labour Chancellor who resigned because he inadvertently he let slip a sentence from his budget speech just minutes before he delivered it.
Standards were higher then. I can understand why they wouldn’t want to remember.

A couple of weeks ago I was invited to address a Trafalgar Day dinner in Penzance.
Inevitably, as a great fan of Winston Graham’s Poldark novels, I reflected on the piracy associated with the coastline and the town: Piracy with the objective of tax evasion.
That same objective is also associated with our own heritage in the New Forest, just look at the place names on an Ordnance Survey map; ‘Picket Post’ just north east of Ringwood, to name but one.
The tax that piracy sought to evade was effectively the only tax that had to be paid: the Excise. Our forefathers would never have tolerated the extensive taxation that we now endure, especially the state intrusion into our private lives that is implicit in our income tax.
Of course, the other side of the coin, was that the state provided very little in the way of public services. Effectively, all that government provided for was the maintenance of order and the defence of the realm.
Government touched few aspects of life, which in turn had an impact on politics.
Frankly, it was of little consequence as to who represented you in Parliament, and political ideologies with which we are familiar to-day were unknown. So, if you were fortunate to have the franchise, you may as well sell your vote to the highest bidder. Inevitably ‘treating’ by the candidates was common. Of course, the fact that you would vote by public declaration at the ballot, sustained such transactional politics.
I am surprised that, notwithstanding generations of electoral reform, transactional politics remains implicit, and sometimes explicit, in a number of my encounters with voters. I’m often told that somebody will vote for me if I do such and such. Or, more often, that they won’t vote for me unless I don’t do such and such. The difficulty of entering into any such transaction however, is that -given the secrecy of the ballot- I will never know if they fulfilled their part of the bargain.
Instead, the transactional nature of politics is now sustained by the ‘offer’ that political parties make to voters in their election manifestoes, which increasingly involve large amounts of expenditure on all sorts of desirable initiatives. But now it is the voters themselves that will have to pay for the goodies that the candidates have offered.
Consequently, we are now in a cycle of ever higher public expenditure to afford all that the voters  were offered, and ever higher taxes to pay for it.
Within this cycle a particularly damaging phenomenon emerges: in an attempt to diminish the unpopular consequences of ever higher taxes on the majority, the temptation is to levy them on minorities. This results in ever greater distortions in markets. It punishes enterprise and drives entrepreneurs elsewhere. Ultimately, it will kill the goose that lays the golden egg, a goose that  is already paying the lions’ share of our taxes.
As we approach expenditure of £100 billion on benefits, and politicians are touting their willingness to be even more generous with our money, we have reached the position where more people are living on these benefits, than there are of us paying into the system to sustain them.
If we cannot break this cycle, and break it soon, we face economic oblivion, and we’ll all be reduced to piracy.

James Orr, Professor of Philosophy of Religion at Cambridge University’s Faculty of Divinity, was last month named as an advisor to Nigel Farage (US Vice-President, J D Vance regards Orr as his “British sherpa”).
This follows the defection to Reform by Danny Kruger, perhaps Parliament’s most committed Christian thinker .
Christian nationalism, Christian faith with national identity and national purpose, appears to be creeping ever so slightly into Britain. These ideas are almost all imported from the USA, where Christianity is used widely as the source and justification for much of the current political agenda. The worry, or hope, depending on your point of view, is that similar developments will follow here too.

I disagree with this Christian nationalist approach -I’m not sure one can call it a philosophy.
I consider JD Vance’s endorsement of Ordo Amoris – the concept of ordered love which justifies putting self, family and friends before others, -to be incompatible with biblical teaching (the good Samaritan immediately comes to mind). This ‘ordering’ justifies the America First foreign policy, which has seen severe aid cuts to some of the world’s most vulnerable, and threats of abandonment to some of America’s closest democratic allies.

That said, I’m not too concerned: Religion no longer has the same political resonance in Britain as it retains in the USA. I just don’t see it catching-on here.
In my experience voters are simply not swayed by political offerings presented as Christian and are not attracted to parties or candidates who make their explicit Christianity central to their campaigns. When Ram Gidoomal ran for Mayor of London for the Christian People’s Alliance in 2000, he achieved a share of just 2.4% of the total votes cast. The party’s share only decreased further in the two subsequent London mayoral elections, before they ceased standing.

 Christian politicians would need to be united to be able to affect change in any way, but I’d be hard-pressed to recall a division in the Commons on moral issues, let alone on legislation more broadly, where Christian members of Parliament haven’t divided almost equally on either side.

 My advice to Christians who are interested in entering politics has always been to join the party which best matches their outlook, and to use their Christian influence within it.
I meet for a weekly Bible study with parliamentary colleagues, irrespective of party, and we get along just fine. Were religion to have a more prominent role in defining our politics, I doubt that such meetings would remain so good tempered. There is something very unpleasant and divisive about politics currently in the USA.

The Labour Party owes much more to Methodism than it does to Marxism, and I consider myself a ‘Church and King Tory’: If a Christian nationalist movement did rear its head in the UK, it won’t encompass a majority of Christians, and I am not convinced that it would really be Christian at all.

Sometimes being in Government can be pretty miserable. Home Office ministers would have had a pretty ghastly couple of days with the public relations disaster, when a deportee on their one-in-one-out scheme with France returned on the first available dinghy.
Equally, the Secretary of State for Justice would have had a ghastly weekend with the mistaken release of Hadush Kebatu, the sex-offender from the controversial Epping asylum hotel, who was also due for deportation. Kebatu tried to return to the prison 5 times, but instead they sent him packing to the railway station.
I’ve never believed that ministers should take the blame for the incompetence of operatives. Ministers are responsible for policy, not for every operational matter.
I recall the occasion in 1997 when BBC’s Robert Paxman badgered Michael Howard, then the Home Secretary, after a mass escape from HMP Parkhurst. It was gripping television which saw a new departure in the treatment of politicians by interviewers, but it wasn’t fair.
Repeatedly Howard stressed his responsibility for policy and that operational matters were for Prison Governors.
So, I don’t believe that we should dwell on the discomfort of ministers over what was an operational blunder. Instead let’s confine ourselves to consideration of the Government’s policy.
On Wednesday the Sentencing Bill completed its Commons stages.
As ministers were saying how livid they were, and demanding maximum resources to recapture kebatu, they were, at the same time, pushing a bill through Parliament which will see hundreds of offenders just like kebatu, the dregs of society that wreck the lives of women and girls, avoid prison altogether. The Irony is that if Kebatu had committed his crime after this bill had passed into law, he wouldn’t have gone to prison in the first place.

The Government insists that the measure is forced on to it by a shortage of prison places.  In which case the Bill should contain a sunset clause to be invoked once sufficient new capacity, already in the pipeline, has been delivered.
At the same time, the Government prays-in-aid David Gauke’s sentencing review, which claimed that short sentences don’t work anyway; that they increase reoffending,  and that they should be replaced by community sentences.
I’m not convinced that they can have it both ways.

It ought to have occurred to Ministers that a remedy for the shortcomings of short sentences might be to make them longer.
To be fair, I do understand the issues that arise from short sentences: loss of employment, loss of accommodation, disruption to family, all rendering the offender without a support network on release from prison. Clearly there are offences and offenders who might be better suited to a community sentence. But sex offenders like Kebatu ought never to be among them

On Monday we debated the Government’s Diego Garcia Military Base and British Indian Ocean Territory Bill. This is the measure that will enable the Government to cede sovereignty of these Islands to Mauritius and then lease them back for the next hundred years.
Only one government back-bencher spoke up in favour of the measure. Little wonder, given that we are being prepared for a tax raising budget, when this leasing arrangement on something that we own will cost us some £35 billion. It enables Mauritius to cut its taxes whilst we are raising ours.
The Bill is riven with what, in the jargon, we call Henry VIII clauses: powers conferred on ministers to subsequently change the law without parliamentary amendment or full scrutiny.
Parliament, should always be very wary about letting minsters have almost unrestricted powers.

One of the things left entirely unresolved, is what will the future hold for the important marine protection zone that surrounds the islands. It is one of the world’s largest and most pristine of such zones, a haven of rare biodiversity.
Illegal fishing is already rife across the Indian Ocean. Mauritius simply does not have the capability, experience or expertise to manage or enforce the zone. There is a real risk that the zone will be plundered by industrial scale illegal fishing, including by Chinese vessels.

The territory is more commonly known as the Chagos Archipelago. The Chagossians, who, should they want it, under the UN Charter, ought properly to have the right to self-determination. But they haven’t had their say. They are certainly very unhappy with the proposals which give them no right of return to the homeland from which they were evicted in 1968. They ought to have been given a referendum.
The reality is that it was for mere colonial administrative convenience that the Islands were administered from Mauritius, some 1,300 miles away. Handing sovereignty to Mauritius, where Chagossians complain they have been treated as second-class citizens, offends their sense of fairness.

 The military base on Diego Garcia, the principal island in the archipelago, is critical to our defence. We own it. We police and protect its waters. Why would give it away and lease it back from Mauritius which is increasingly in allegiance with Communist China. It doesn’t make sense.
Or does it?
Perhaps my neighbour, Sir Julian Lewis MP, had the answer, when he said in the debate
“On the face of it, this does not make sense, unless we look at it in one particular way. If the Government have made a decision that they wish to have a strategic economic partnership with communist China, this makes sense, the closing of the case with the China spies makes sense, and the willingness for China to have the biggest embassy of any country in Europe makes sense. None of it makes sense, or all of it makes sense, as long as the National Security Adviser wants us to suck up to communist, totalitarian China.”

Yesterday at Exeter University I debated the question  that activist judges threaten our constitution.

Judges, by their decisions and the precedents that they set, make law.  Some of those decisions are the basis of our liberty -long before anyone dreamt of the Human Rights Act.

But, at PMQs the Kemi Badenoch raised the absurdity of a Judicial decision granting a Palestinian family sanctuary in the UK under a scheme exclusively for Ukrainians.
The PM agreed, saying that the decision was wrong.
This earned an immediate rebuke from the Lady Chief Justice saying that the role of Parliament “is visibly to protect the independence of the judiciary” and that where it disagrees with judges, then the proper course is to appeal to a higher court. 

The independence of the judiciary was not being questioned, merely their judgement.
In a democracy elected politicians will inevitably give vent to the frustration of their constituents when judicial decisions depart from common sense
We are now at the stage, through judicial latitude, where our proper obligation to prevent torture has come to mean any service provision less eligible than is available in the UK.

Of course the Lady Chief Justice is right that it is open to the Crown to appeal, and so many absurd rulings, which have filled our newspapers, have been appealed and overturned.
 But, appeal is a restricted and uncertain option.
  Parliament can legislate instead . When the Supreme court ruled that Rwanda was not a safe destination, Parliament simply legislated to change that judge-made law.
Alas, we don’t take this route often enough.
When in 2019 the Supreme Court absurdly ruled that the prorogation of Parliament was not a proceeding in Parliament, and therefore not protected from judicial interference under the Bill of Rights 1689 –“proceedings in parliament may not be questioned in any court” – they made a new law setting out a list of requirements that must be satisfied before the prorogation of Parliament can proceed . In my estimate it is a constitutional outrage and Parliament ought to reverse it. I urged Boris to do so, I told him to ‘let bygones be…his top priority’. But he bottled it.

In 2020 the courts set aside the long established Carltona principle: that a statutory power granted to the Secretary of State can be exercised his subordinates.
This opened the door for terrorists to sue for compensation because their detention orders were signed by a minister of state, not a secretary of state.
Parliament immediately legislated to close that door by restoring Carltona in sections 46 &47 of the Northern Ireland Legacy Act.
The courts vented their frustration by issuing a Declaration of Incompatibility between the Legacy Act and the Human Rights Act. But, as Jack Straw said when he introduced the Human Rights Act in 1998, such a declaration has no force, it places no obligation or expectation on Parliament to do anything about it.
After the election however, the new government announced that it would use a remedial order to strike out sections 46 & 47, opening once again the prospect of compensation for terrorists. The Prime Minister called that prospect grotesque, so I asked him why was he doing it.  He said that he must, because the courts had struck down the law.
They can’t.
They have no such power
But if the Prime Minister, himself a senior lawyer, believes that the courts are entitled to strike down Acts of Parliament, then our constitution, in which the High Court of Parliament is Supreme, is in real danger.

[as an addendum. I’ve won the argument on Carltona and Sections 46 & 47 of the Northern Ireland Legacy Act. On Tuesday, the Secretary of State came to the Commons. He said that he had listened and he announced that his remedial order would keep sections 46 & 47 in place until new legislation was introduced, which would also preserve the Carltona principle.
Throughout the exchanges however, he still insisted that Parliament was bound to respond to the decision of the courts, which is plain wrong]

 

 

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.

       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.