CapX, London (2024)

09/09/2024

The Labour Government’s determination to restrict eligibility for Winter Fuel Payments is the sort of decision that the fictional Sir Humphrey Appleby would describe as ‘courageous’.

The House of Commons’ motion calling on the Government to delay the implementation of this change has no real chance of passing. But why on earth are Keir Starmer and Rachel Reeves willing to blow so much political capital for such a small saving to the taxpayer?

To recap, the Winter Fuel Payment is paid to pensioners in England and Wales at a flat rate of £200, or £300 for households with someone aged over 80. From this winter, it will be restricted to those in receipt of certain benefits, notably Pension Credit, which means that about 10 million people will lose out. This is expected to save around £1.5 billion a year.

As it happens, there is a strong case for making this change. The Winter Fuel Payment goes to almost all pensioners, regardless of income or need. Despite the name, it is not related to energy bills. Nor is it an essential part of the benefits system. Instead, it was another legacy of Gordon Brown’s penchant for clunky add-ons.

Moreover, pensioners as a group have done relatively well over the last decade or so. This is thanks partly to the generosity of the ‘triple lock’, which guarantees that the state pension increases each April in line with the highest of consumer price inflation, average earnings, or 2.5%.

✍️Julian Jessop

The Labour Government’s determination to restrict eligibility for Winter Fuel Payments is the sort of decision that the fictional Sir Humphrey Appleby would describe as ‘courageous’. The House of Commons’ motion calling on the Government to delay the implementation of this change has no real...

09/09/2024

How many times have you heard someone on the Right talk glibly about ‘equality of opportunity’? And how many times do you think they have stopped to consider what that phrase actually implies?

Superficially, it’s a handy riposte whenever the Left start talking about equality, allowing Conservative politicians to reject the progressive fixation on equality of outcome without sounding like old-school reactionaries who believe everyone has their proper place in the Great Chain of Being.

Equality of outcome is not only impossible to deliver in practice but would be miserable even if it could be: a relentlessly standardised world of queues for identikit (and inferior) state-provided flats, phones and every sort of service, where an individual’s talents and drive count for nothing.

Equality of opportunity, on the other hand, suggests a much rosier and more meritocratic picture, in which everyone is given a fair go and then allowed to rise as high as their ability will take them. Crucially, it seems to be commonly assumed that this version is compatible with a liberal society and a small (or at least, smaller) state.

But this is a complete fiction that does not withstand more than the most cursory scrutiny. In fact, once one approaches the concept in an intellectually serious way, it isn’t even obvious that equality of opportunity is even a more liberal concept than equality of outcome.

✍️Henry Hill

How many times have you heard someone on the Right talk glibly about ‘equality of opportunity’? And how many times do you think they have stopped to consider what that phrase actually implies? Superficially, it’s a handy riposte whenever the Left start talking about equality, allowing Conserva...

09/09/2024

If the trumpet gives an uncertain sound, who shall prepare himself to the battle? For years, the Conservative Party has dissolved into a syrup of platitudes. To the extent that its leaders uttered any distinctive Conservative ideology, it was contradicted by the policy that was pursued.

So they would say they ‘believed’ in freedom – but placed us under house arrest during the pandemic. Or that they ‘believed’ in low taxes and a smaller state – while imposing the highest tax burden for 70 years, the Gordon Brown era being a golden age by comparison. Or that they ‘believed’ in home ownership and increasing the housing supply – while making the supply more constrained and thus the chance of getting on the property ladder harder than ever. Patriotic rhetoric was offered with our country’s flag prominently in view – while Northern Ireland was sold out to appease the EU, British history denigrated in our schools amid the indulgence of other woke excesses and illegal entrants allowed in at the behest of foreign judges.

‘We talked Right but governed Left’, as Kemi Badenoch put it at her leadership launch. ‘Sounding like Conservatives but acting like Labour’. Sometimes it was worse than that. Theresa May was hardly a rousing champion for free enterprise. The 2017 Manifesto was a repudiation of such an approach. Nor did Michael Gove, at least in his later period in office, even pretend to believe in a small state.

While few dared repudiate Margaret Thatcher, we would hear that her approach was ‘right for the time’ but not for the ‘challenges of today’ – or some such assertion. Public spending was invariably dubbed ‘investment’ – with the implication that was the means to achieve economic growth. Churchill’s warning that ‘for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle’ was forgotten.

✍️Harry Phibbs

Over the coming weeks, CapX will be running a number of perspectives on the future of the Conservative Party. If you have an idea you would like to contribute, get in touch at [email protected]. If the trumpet gives an uncertain sound, who shall prepare himself to the battle? For years, the Conservati...

06/09/2024

‘Brat Summer’ was this year’s hot trend, but singer Charli XCX has finally declared it over. Don’t despair, though – as the nights begin to draw in, ‘Ayn Rand Autumn‘ is dawning in Brat Summer’s place!

I’ll be honest here – ‘Ayn Rand Autumn’ started a fun ploy in the Adam Smith Institute office to promote our upcoming annual Ayn Rand lecture. But there is a genuine imperative for us to embrace the spirit of Ayn Rand. Hear me out on this one.

Scarred from a traumatic upbringing in Soviet Russia, Rand recognised that, even with the best of intentions, an interventionist state inevitably leads to a loss of freedom. Her uncompromising views on this serve as the perfect antidote to the nanny state.

The term nanny state may have become a cliché, but in Rand’s book ‘The Fountainhead’, it was a real character embodied by the back-biting malevolence of Ellsworth Toohey. Posing as an architecture critic, Toohey is a parasitic and paternalistic cult leader.

✍️Sebastian Charleton

‘Brat Summer’ was this year’s hot trend, but singer Charli XCX has finally declared it over. Don’t despair, though – as the nights begin to draw in, ‘Ayn Rand Autumn‘ is dawning in Brat Summer’s place! I’ll be honest here – ‘Ayn Rand Autumn’ started a fun ploy in the Adam Smi...

06/09/2024

Earlier this week, the Government released the results of its latest renewable power auction – that rare bit of good news that both Ed Miliband and Claire Coutinho can get behind. After last year’s annus horribilis for offshore wind, it’s a welcome boost for the sector, alongside onshore wind, solar, and more – 131 projects all told. Yet for the sceptics, these results were further evidence that renewables are an expensive boondoggle. What should we make of all this, and what do these results mean for the future of our energy system?

To understand this, first we need a bit of background. Contracts for difference (CfDs) provide a wind farm (for example) a guaranteed price for 15 years, and this price is determined by an auction. If the price of power is below this guaranteed price, that wind farm receives a top-up subsidy (the ‘difference’), funded via consumer energy bills. However if the market price of power is higher, the wind farm pays this difference back to consumers (which happened during the energy crisis when power prices were through the roof).

This programme has been running for almost a decade, and it’s mostly been a big success at bringing down the costs of building renewables. From the first round in 2015 to the fourth round in 2022, prices for offshore wind dropped by nearly 70%, a great outcome for the sector and consumers.

But beyond the dry economics, these results also had political significance for the green movement – not only are renewables good for the planet, they’re also good for your wallet, as the cheapest source of new generation.

✍️Dillon Smith

Earlier this week, the Government released the results of its latest renewable power auction – that rare bit of good news that both Ed Miliband and Claire Coutinho can get behind. After last year’s annus horribilis for offshore wind, it’s a welcome boost for the sector, alongside onshore wind,...

06/09/2024

It might be unpopular to say it, but removing the Winter Fuel Allowance from all and making it means-tested is a good idea. An excellent one, in fact. It is, possibly, true that tying it to pension credit will make so many more claim that benefit that the change will end up being a money-loser for government overall, but it’s still a good idea.

How far, though, can we push this principle? What about the old age pension itself? It is, after all, a benefit. Perhaps access to every such benefit could be restricted by means-testing. Even, if this isn’t blasphemy against the national religion, the National Health Service itself.

The prompting for these heretical thoughts is a new report by Chris Pope from the Manhattan Institute, called ‘America’s Surprisingly Effective Welfare State’. Its thesis is straightforward, but startling:

"The U.S. welfare state is often disparaged for failing to distribute benefits to all citizens. But its greater targeting of expenditures makes it more effective than many European welfare systems."

This is, indeed, surprising. Surely we all know that, by comparison to much of Europe, the US poverty rate is horrendous: 14 or 15% live in poverty, nearly 20% of children and so on. But those statistics are an artefact of a big transatlantic difference, and not the one you probably think.

✍️Tim Worstall

It might be unpopular to say it, but removing the Winter Fuel Allowance from all and making it means-tested is a good idea. An excellent one, in fact. It is, possibly, true that tying it to pension credit will make so many more claim that benefit that the change will end up being a money-loser […]

06/09/2024

At the general election, the Conservative Party suffered its worst defeat in the modern era. We lost power – and many talented friends and former colleagues lost their seats – because we lost the trust of the public. Voters from Redruth to Redcar made clear that they did not trust Conservatives with the business of governing, because they did not trust Conservative politicians to show true leadership and serve the British public.

We need to reform the party and reset our relationship with the public. This will require not just a new face, but someone who can bring the leadership that our party, and our nation, needs so desperately.

They must serve the public, not themselves. Someone who leads with true conservative values and then isn’t afraid to act on them. Otherwise, we risk 10 years of Labour rule and our party taking another step towards oblivion.

And that is why I am very proud to endorse Tom Tugendhat as the next Leader of the Conservative Party.

✍️Amber Rudd

Over the coming weeks, CapX will be running a number of perspectives on the future of the Conservative Party. If you have an idea you would like to contribute, get in touch at [email protected]. At the general election, the Conservative Party suffered its worst defeat in the modern era. We lost power....

05/09/2024

Few politicians have been mocked as much as Keith Joseph, who found himself labelled the Mad Monk; and Labour’s Denis Healey once characterised Joseph as a combination of Rasputin, Hamlet and Tommy Cooper.

Of course, many leading politicians are mocked by those on the other side. But Joseph was mocked even by his own Tory colleagues. Lord Hailsham called him ‘dotty’, Reginald Maudling ‘nutty as a fruitcake’. Ian Gilmour thought that Joseph had ‘a Rolls-Royce brain without a chauffeur’, while Harold Macmillan thought him ‘the only boring Jew I’ve ever met’.

But Joseph achieved more than any of them, more indeed than any other post-war politician, except for Nigel Farage.

For it was Joseph who laid the ideological foundations for what came to be called Thatcherism. Margaret Thatcher was a politician of instincts, not ideas. Joseph supplied the ideas with which to clothe her instincts, and in doing so gave the Conservatives intellectual self-confidence, something that they had not enjoyed since the days of Joseph Chamberlain in the early years of the 20th century. The partnership between Joseph and Margaret Thatcher was, in the words of the journalist, Hugo Young, ‘one of the most formative political relationships of modern times’.

✍️Vernon Bogdanor

Few politicians have been mocked as much as Keith Joseph, who found himself labelled the Mad Monk; and Labour’s Denis Healey once characterised Joseph as a combination of Rasputin, Hamlet and Tommy Cooper. Of course, many leading politicians are mocked by those on the other side. But Joseph was mo...

05/09/2024

Since the 1980s, council tenants in England have enjoyed the right to buy their homes. When they do, councils are required to offer them a discount from what the properties would cost if they were sold on the private market. This reflects the fact that social tenants already have lifetime tenancies of the properties with rents capped at the cost of maintenance, meaning that they enjoy some of the rights that make up ownership already.

The private market price reflects the value of going from having no rights over the property to having full ownership; the discounted Right to Buy price reflects the value of going from having a secure tenancy with subsidised rent to full ownership. Without the discount, the Right to Buy is bad value for money: it is thus not surprising that uptake of the Right to Buy has been very low during periods when the discount was low, as it was under the New Labour Government.

On Wednesday, The Daily Telegraph reported that the Government is planning to consult on ending the Right to Buy for new social properties while reducing the discount for existing ones. Depending on how deep the cuts to the discount are, this could reduce the uptake of Right to Buy to near-zero. As we shall see, there are currently a range of problems and dysfunctions surrounding the Right to Buy, and the Government’s plans are arguably an understandable reaction to them. But there are better ways to fix these issues than through curtailing the right itself.

✍️Samuel Hughes

Since the 1980s, council tenants in England have enjoyed the right to buy their homes. When they do, councils are required to offer them a discount from what the properties would cost if they were sold on the private market. This reflects the fact that social tenants already have lifetime tenancies....

05/09/2024

On 5 July, I was elected as MP for my home constituency of Leicester East. ‘Conservative gain’ wasn’t a term we heard enough that night. We should have been toasting Conservative gains and holds up and down the country.

Instead, we let internal squabbles and distractions overshadow the incredible things that successive Conservative governments have done for our country.

I know that we can rebuild. As I said earlier this week, I’ve got bags of optimism for us as a party if we can just get our act together. Having seen James Cleverly in Leicester at the weekend, I know that he is the person to lead. No fuss, no drama. He just gets on with the job.

I watched him engage with businesses and local communities. He just gets it. He is on their side and he knows how to articulate a positive vision for them. As he has said, we have become the grumpy party. We need to change that and set out our positive stall in order to win back those voters that we lost to Labour, the Liberal Democrats, Reform – and those who simply didn’t come out to vote.

James also has a vision for our party that will win over young voters. One of my priorities is to make sure that young people have real reasons to vote Conservative. We must make sure that they have opportunities, whoever they are and wherever they come from. Let’s help them get the best education, own a home, and start their own businesses.

I am hugely encouraged by what James has said so far. He has a plan to show young people that capitalism and economic growth are what will drive opportunity for them. A lot of young people don’t feel that capitalism is working for them. We need to give them a stake in our society and in our growing economy.

✍️Shivani Raja

Over the coming weeks, CapX will be running a number of perspectives on the future of the Conservative Party. If you have an idea you would like to contribute, get in touch at [email protected]. On 5 July, I was elected as MP for my home constituency of Leicester East. ‘Conservative gain’ wasn’t...

04/09/2024

For many on the Right, the transition to net zero is a waste of time. A silly project that spun out of control, taking up political oxygen where more useful things might otherwise have been discussed. For many on the Left, the move to green energy can only be achieved by nationalising industry and a move to full blown socialism. A trip to Teesworks, near Redcar, convinced me that neither of these theories are correct.

I went to Redcar as part of a large research project undertaken for the Jobs Foundation, a charity dedicated to jobs as the best route out of poverty, and business as a societal good. It has involved travelling the length and breadth of Great Britain, speaking to hundreds of business owners and community leaders about how to create the 2 million jobs we require to move almost everyone in the country out of poverty. In all my travels, Teesworks was perhaps the most impressive thing I discovered.

It is a massive (4,500 acre) site, where the old steelworks was located, before they shut down permanently in 2015. In its place, one of the largest green energy hubs in the world is now being built. It has already brought hundreds of jobs back to the area and will create tens of thousands of new jobs by the time it is complete. Despite this, there has been some controversy around Teesworks.

✍️Nick Tyrone

For many on the Right, the transition to net zero is a waste of time. A silly project that spun out of control, taking up political oxygen where more useful things might otherwise have been discussed. For many on the Left, the move to green energy can only be achieved by nationalising industry and a...

04/09/2024

The Conservative and Unionist Party have always been great champions of British businesses, whether small or large. From growing up watching my father work seven days a week running the local shop, I have always believed in the values of hard work and enterprise. They are some of the best principles we have to promote freedom and deliver security and success for our families and our nation.

Britain is at its very best when we support our great entrepreneurs, inventors and innovators. People who take on bold risks to start a new business, just like my parents did when they came here from Uganda in the 1960s, are the wealth creators that our country depends on to create jobs and generate economic growth. For too long, like many other developed countries, Britain has experienced limited and slow rates of growth. To meet the challenges of the future, generate growth and the tax receipts needed to fund public services, the Conservatives must be the Party that promotes economic freedom to boost productivity. We must be a Party that is committed to emboldening our entrepreneurs and unleashing the UK’s great talent to seize on new technology before other countries get ahead.

The UK needs a new Leader of the Opposition to hold Keir Starmer’s big-state, high-tax and anti-business Labour Party to account, and I am best placed to do this. I have always been on the side of our businesses. Whether that’s championing local small and medium sized enterprises in Witham or backing British businesses as one of the leading voices in the campaign to leave the EU, I have always made backing British business a top priority.

✍️Priti Patel

Over the coming weeks, CapX will be running a number of perspectives on the future of the Conservative Party. If you have an idea you would like to contribute, get in touch at [email protected]. The Conservative and Unionist Party have always been great champions of British businesses, whether small o...

03/09/2024

The fundamental principles of economics are very simple, but it is an unending task to explain them and their implications in the face of widespread ignorance and hostility to the conclusions they lead to. We are seeing a classic example of this with the uproar over the way tickets to the Oasis concerts rose in price during the purchasing period, because the selling platform (Ticketmaster) employed ‘dynamic pricing’ software. As politicians are never averse to playing to the gallery of ill-informed and contradictory opinion, the Government has now announced a review into the use of dynamic pricing by vendors. Even for those clamouring for it, this can only bring bad results. It will not get them what they want because that is something impossible.

The fundamental reality that so many are busy denying is this. The number of seats at a concert or series of concerts (and hence tickets) is essentially fixed. In economic jargon, there is an almost perfectly inelastic supply. It does not matter how high the price is, you will not get additional supply. For concerts such as the Oasis ones where a lot of people want to go at the quoted price, there will not be enough tickets for everyone. This is inescapable. This means that there has to be a way of deciding who gets the tickets and who misses out. In other words, there has to be a way of allocating the fixed number of tickets between the much larger number of people who want them at the face value price.

There are several ways of doing this. The most efficient, which also maximises the revenue for both Oasis and the venues, is to use the price mechanism.

✍️Steve Davies

The fundamental principles of economics are very simple, but it is an unending task to explain them and their implications in the face of widespread ignorance and hostility to the conclusions they lead to. We are seeing a classic example of this with the uproar over the way tickets to the Oasis conc...

03/09/2024

It’s September 2034. You are gently awoken by the light streaming in through your sash windows, which were recently made legal again. Leaving your Georgian mansion block, you pluck an apple off a heaving bough, and you make a breakfast of it. Today you will be jetting off from the super-spaceport in Avalon, which is the name of the Wales-sized artificial island in the North Sea. To get there, you step aboard a gleaming HS24 train that whisks you past soaring urban skylines. Nobody is playing TikTok videos in the quiet carriage.

You spend an enjoyable day overseeing AI-enhanced chemical engineering in the microgravity of HMSS Beagle, Britain’s rotating, drum-shaped space station. Then it’s back home for lab-grown toad-in-the-hole, which you share with your children, whom you can afford, and your parents, who are long-lived and able-bodied. Another glorious day of Anglofuturism.

In reality, of course, the Britain of 2034 will house you in an ugly little flat, miles from anywhere, if you’re lucky. It will not enable you to work in biotech, because the industry isn’t allowed to build lab space. You won’t have kids, because you can’t afford them, and your parents will be decrepit, because the NHS is unfit for purpose. Everything in supermarkets will be behind locked cupboard doors, and train carriages will be overrun by anti-social oafs. In short, the Britain of 2034 is not likely to be much different from the Britain of 2024.

Most of what we’ve envisioned in our more preferable 2034, however, is possible right now. And it is not only possible right now – it is happening right now. Artificial islands, super spaceports – even high-speed rail. Even sash windows! But it’s other countries that are doing it, not us.

Anglofuturism is a vision of a Britain that leads the way into this future. We didn’t coin the term, and we don’t have a monopoly on what it entails. But a common thread is ambition – and, more precisely, a willingness to commit to intergenerational projects in order to build a future that feels like home.

✍️Tom Ough & Calum Drysdale

It’s September 2034. You are gently awoken by the light streaming in through your sash windows, which were recently made legal again. Leaving your Georgian mansion block, you pluck an apple off a heaving bough, and you make a breakfast of it. Today you will be jetting off from the super-spaceport ...

03/09/2024

We have been here before, when matters seemed, if anything, even worse. I was reminded of this by a work of light fiction, perfect for holiday reading, by Jim Naughtie, called ‘Paris Spring’, set in the spring of 1968.

Back then, it was some time since there had been a French revolution, so it might have seemed that one was overdue. The Parisian universities came out in revolt as did the Communist trade unions. The government seemed to be paralysed and the streets of Paris were full of chaos. Charles de Gaulle had regarded himself as the embodiment of France. In those fraught weeks, it seemed as if he had slipped from grandeur into senility.

There were similar developments in the US. The Vietnam War left the country bitterly divided. It is still not clear how many of the young were idealists, opposed to US imperialism – or whether they merely wished to avoid the draft. Either way, the conflict broke Lyndon Johnson, an underrated President who himself possessed a strong core of idealism. LBJ decided that he could neither control events nor unify his country. So he withdrew from the Presidential race and declared that he would not seek another term. Within days came the assassination of Martin Luther King. Chaos in the streets: bloodshed in the streets.

✍️Bruce Anderson

We have been here before, when matters seemed, if anything, even worse. I was reminded of this by a work of light fiction, perfect for holiday reading, by Jim Naughtie, called ‘Paris Spring’, set in the spring of 1968. Back then, it was some time since there had been a French revolution, so it m...

02/09/2024

There are few taxes more damaging than those levied against aspiration. Stamp duty is such a tax. By placing extra financial burdens on those seeking to buy a property, especially during an acute housing crisis, we’re pushing the goal of home-ownership just that extra bit further out of reach.

It’s encouraging to see members of HM’s Opposition recognising this. James Cleverly, one of the contenders for the Conservative leadership, has pledged to ‘root out bad taxes and avoid perverse effects on markets’ – starting with stamp duty.

But what are these adverse effects, you may ask? Firstly, stamp duty helps to price out those looking to move to economically productive areas. Take Oxford, where the average price for a house is £470,000. For a young family looking to escape their cramped, single bed flat, they would have to cough up an additional charge of £8,200. This is on top of a minimum deposit of £24,500 (almost £5,000 above the ISA allowance), and hardly accessible on the average salary in Oxford of £36,000.

But what about those who are looking to downsize? Driven by concerns about heating large, often poorly insulated houses, and wanting to cash out on properties which are 65 times the value they were in 1970, many want to sell when their children leave the nest. However, brokers cite stamp duty as the number one blocker on downsizing.

✍️Maxwell Marlow

There are few taxes more damaging than those levied against aspiration. Stamp duty is such a tax. By placing extra financial burdens on those seeking to buy a property, especially during an acute housing crisis, we’re pushing the goal of home-ownership just that extra bit further out of reach. It....

02/09/2024

Keir Starmer can’t blame the Tories for his tin ear for the public mood. Who but Starmer could have taken a rose garden in the ebbing glories of late summer and used it to hector his audience about the grim times they have coming under Labour rule?

That sobering prospect was solidified this week when it emerged that the Government wants to ban smoking outside pubs, and is open to imposing minimum prices on alcohol. So much for Starmer’s promise outside 10 Downing Street to ‘tread more lightly on your lives’. These policies have nothing to do with the state of the public finances, and everything to do with the new administration’s gusto for imposing its vision on a wayward public. The Puritans are in power, and they mean to use it for your own good.

The British people may be depressingly fond of nannying policies, but they don’t appreciate politicians who major on joyless self-righteousness, especially if they feel like you are handing jobs to your mates and generous pay settlements to your union paymasters at the same time. A new poll found that nearly two thirds of the public thought Labour put ‘helping themselves and their allies’ ahead of ordinary people. The same poll also revealed Keir Starmer’s personal approval score has plummeted well into negative territory since the election and now stands at its lowest-ever level. Is this really the way to secure ten years in power?

It might seem absurd to say so, as Labour return to Westminster after the summer recess armed with a huge majority and begin enacting their agenda in earnest, but Starmer’s misery-forward style has already created an opening that, if pried wider, could eventually offer the Tories a path back to power.

✍️Marc Sidwell

Keir Starmer can’t blame the Tories for his tin ear for the public mood. Who but Starmer could have taken a rose garden in the ebbing glories of late summer and used it to hector his audience about the grim times they have coming under Labour rule? That sobering prospect was solidified this week w...