Sam’s Plan to Break the Brexit Impasse
GYIMAH UNVEILS FIVE-POINT PLAN TO BREAK BREXIT DEADLOCK, BRANDING NO DEAL ‘COWARDLY’
• East Surrey MP says Parliament should be given one last chance to deliver a Brexit solution, under a new Prime Minister
• But the Tory leadership contender also pledges to begin preparations for a Plan B – legislation for a new Brexit referendum with a new set of questions to avoid repeating the mistakes of the last two-and-a-half years
• And he warns that No Deal Brexit – the stark and bleak alternative to a referendum – represents a cowardly abdication of responsibility that is not in the national interest
Details of a five-point plan to deal with the Brexit impasse head-on are revealed today by Conservative leadership contender Sam Gyimah.
The MP for East Surrey proposes a Plan A and Plan B approach, which gives Parliament a final chance to deliver a form of Brexit as was demanded by a majority of voters in 2016.
Crucially, though, plans to hold a new public vote will run in parallel with any negotiations with the EU, to ensure that if MPs yet again fail to reach a consensus, that power then passes to the people, thus ensuring there is no repeat of the open-ended cycle of failure that has paralysed Parliament.
Mr Gyimah says his Plan A and Plan B approach recognises the importance of giving the Government one last chance to address the Brexit issue, by establishing cross-party support behind a future relationship, adding:
‘I believe it’s right that a new Prime Minister is given a final chance to succeed where Theresa May failed. We should be resolutely focused on delivering a solution that works for the country.
‘Given that the Parliamentary arithmetic remains the same, it is hard to be optimistic about the chances of this succeeding, but we owe it to voters to try.
‘However, this cannot be an open-ended process, with multiple requested extensions of the Article 50. That would further undermine public trust. The world won’t wait for Westminster, no matter how loudly we shout, and no matter how damaging a prolonged Brexit process is for Britain.
‘That is why I propose that a Plan B runs in parallel with any renegotiations, so as to limit the amount of time that can be spent on these negotiations, to reassure our European colleagues that we have a credible, definitive and deliverable way forward.’
Mr Gyimah’s proposals are as follows:
Step 1: A new PM, with a willingness to build alliances and consider compromise, seeks to establish the Parliamentary support required to develop a future relationship, setting a non-negotiable deadline by which negotiations will end
Step 2: In parallel, the new PM sets on course plans to bring forward a Bill for a new referendum to resolve the Brexit deadlock
Step 3: Bill presented to Parliament ahead of the Article 50 extension deadline
Step 4: As the current Article 50 deadline approaches, and if negotiations have ended without agreement by Parliament on a delivered Brexit, the new PM negotiates an extension for a specific purpose – a new referendum to break the Brexit deadlock
Step 5: A binding referendum is held, with three options on the ballot paper: a No Deal Brexit, a Revised Brexit Deal, Remain, but in a specific sequence to allow both the 2016 result to be respected, and to be fair to the different views this country holds. Parliament then implements the outcome of the referendum
A separate paper will be released shortly with the detailed proposals for how the referendum could be structured, in order to present the first draft Bill to the House.
Mr Gyimah’s proposals represent a credible and detailed plan to deal with the Brexit impasse. He says:
‘The so-called Brexit solutions being punted around elsewhere are nothing of the sort. The fudge they represent may be politically expedient, but will not move us forward.
‘The worst of all suggestions is No Deal without the consent of the public. This commits Britain to an open-ended period of uncertainty in which a minority government will be negotiating from a position of immense weakness, as it is clear the EU will not engage with us until we settle our EU bills, deal with citizens’ rights and remove the need for an Irish border. We will be back where we are now, in the same negotiations, but with our economic links to the EU disrupted.
‘Let me be clear: the Backstop and the future of the United Kingdom are not insignificant issues; the economic damage that will affect everyone from students in South Wales to pensioners in Perth to farmers in Northern Ireland are not insignificant issues; and Parliament would be consumed by, and focused on, dealing with the wreckage of a No Deal Brexit for years to come.
‘Here’s what No Deal really means: someone else will have to fix the mess. It means giving up control, not taking back control.
‘It’s not courageous, it’s a cowardly abdication of responsibility. It’s not leading, it’s running away from the most difficult issues. And it’s not what Conservatism represents – it’s hard to imagine something less Conservative in nature than tearing down institutions with no idea of how we will replace them, in the process damaging businesses and diminishing our presence on the world stage.
‘Some may claim my plan puts the United Kingdom before political expediency. To them, I say this: Conservatism and Britishness go hand-in-hand, and we should always, always put our country first. And we should be proud to do so.’
How the Tories can win on Housing again
So far, the big question in the Conservative Party leadership campaign has been how to handle Brexit. But there’s another issue that could be even more important, both for the country and for the Conservative Party’s continued existence, and scarcely anyone is talking about it. That issue is housing.
The price of property in many parts of the UK makes it hard for young people, even with good jobs, to own their own home. This is a tragedy on many levels:
A whole generation is paying through the nose for substandard housing, and seeing their aspirations to afford their own home thwarted.
It makes it harder for young people to start a family: between 1996 and 2014, 157,000 fewer children were born in the UK because of the cost of housing.
It hurts our economy, by making it harder for people to move to take up new jobs, and for employers to hire skilled workers.
What’s more, the housing crisis is political poison for Conservatives. The Conservative governments of the last century all had a strong offers to the British people on housing: Baldwin launched the ‘Metroboom’ which saw more than 350,000 houses built a year; Macmillan made his reputation rehousing Britain after the war; Thatcher introduced Right-To-Buy, turning a new generation of council tenants into homeowners.
Home ownership has long been a central part of the Conservative message of aspiration and prosperity. A generation that can’t hope to afford home ownership will be a generation ready to listen to Labour’s messages rather than ours. If we can’t provide a compelling answer to the question of housing, the Conservatives will fail the country and condemn ourselves to political irrelevance.
The way to fix this problem is to take radical action that will get many more houses built. We need to do this while preserving our Green Belts, protecting the country from ugly, unliveable overdevelopment, and without a government spending splurge that the country can ill afford.
My plan has four parts, which together would add up to a housing revolution, delivering millions of new homes and creating many a generation of new homeowners, without significant public spending.
1. Giving streets power over development
Places like London, where housing is especially costly, are far less dense than many other cities around the world. This is due to red tape, which puts councils, not local residents, in control over who can build what and where. I would give individual streets the power to densify and build upwards if their residents want to, up to a limit of six storeys.
If we make it easier to build upwards and between properties, we can add many more houses where they’re needed most. This isn’t about building 1960s-style high rises: just adding one or two more storeys to make more of our big cities like Pimlico, Kensington or Islington would do the trick.
This will be a massive incentive to build more in our cities, while maintaining their character. It also puts local people, not town halls, in control of development. Not every street will choose to take advantage of the new rights, but some will. I believe it could get more than one million houses built in the next five years around the country, without a penny of additional public spending. And for streets that choose to do it, it will provide a welcome financial windfall for homeowners.
2. Make big infrastructure projects self-financing through housing development
New homes will need new infrastructure, which costs money. But, by using our existing infrastructure budget more wisely, we can free up resources and at the same time get more housing built where it’s most needed.
In countries like Hong Kong and Japan, with some of the best rail infrastructure in the world, the builders of rail lines co-fund their projects by building and selling housing along the line. We could do this in the UK if we changed our planning rules.
This would have two effects. First of all, big transport projects such as Crossrail 2 would create more housing directly. Secondly, the projects would be much less expensive to the taxpayer, which would free up funding to provide infrastructure elsewhere.
3. Introduce a Flexible Right to Buy
The Right to Buy introduced by Mrs Thatcher created a generation of homeowners, by allowing council tenants to purchase their own homes from local authorities. We have a chance to create a similar revolution today.
Many council housing tenants in high-cost cities are sitting on a gold mine from which they cannot fully benefit, and more than half of tenants would like to own. Almost 700,000 local authority-owned homes are in areas where median house prices exceed £250,000. More than 200,000 of these are in areas where median house prices exceed £500,000.
I will give social tenants eligible for the Right to Buy a Flexible Right to Buy, entitling them to buy a new home using the value of their Right to Buy discount. The tenant’s previous home would then be sold, funding the discount and raising additional revenue which would go to the local authority. This could see as many as 197,000 tenants benefit, creating £62billion in net revenue for local councils, which I would allow them to use to build new social housing.
4. Aim to scrap Stamp Duty for homes under £1million
As I said earlier this week, Stamp Duty is one of the UK’s dumbest taxes. Not only does it increase the cost of buying a home, but it also discourages people from moving home for work or downsizing after their kids leave home.
I’d reform this bad tax, with a view to phasing out Stamp Duty on homes costing less than £1million. This would in effect eliminate Stamp Duty for 97 per cent of the housing market, providing a boost to homeowners and anyone who aspires to be one.
Taken together, this plan would create a housing revolution, increasing the supply of housing, creating a wave of new homeowners and making housing more affordable. It would do so without sacrificing the Green Belt, our built environment or our public finances. And it would be good for our young people, good for our cities, towns and villages, and good for our economy. If the Conservatives want once again to be the party of housing and of homeownership, we should get on with it.
A Tax Plan to Turbocharge the Economy
For nine years austerity and its consequences has dominated our debate and become the new normal. I am proud of what my party has done in rescuing the country’s finances.
But 1.5 per cent growth is not good enough. Economic growth creates better jobs, improves people’s standards of living, enables us to adequately fund public services, and gives people a reason to buy in to capitalism. If we are to solve the challenges that we face — social care funding, a well-funded NHS and an education system that gives everyone a great start in life, we need growth to do it.
I have not seen any candidate in the leadership contest put forward a plan that is going to address this – I want whomever triumphs as the next leader of our Party and Prime Minister to consider my tax plan as a way to turbocharge our economy.
Governments have got into the habit of raising taxes and introducing new ones. I want to change our debate around tax from introducing new taxes to cutting the worst ones.
That’s why we need to abolish Britain’s five worst taxes – the taxes that do the most damage for the money they raise, and whose abolition will get us the most bang for our buck:
1. Make the Annual Investment Allowance unlimited.
2. Index the tax thresholds to inflation – permanently.
3. Replace business rates with a commercial land tax.
4. Eliminate the personal allowance withdrawal for higher earners.
5. Move towards abolishing stamp duty for homes under £1 million.
Make the Annual Investment Allowance unlimited
We were right to bring Corporation Tax down from 28 per cent to 19 per cent. It’s made investing in Britain more attractive – the fact that McDonald’s, Starbucks and Snapchat have moved their European headquarters to London is evidence of that.
But we need to look beyond the headline rate. When businesses invest in new equipment, machines, and industrial buildings, they’re forced to deduct the investment at an arbitrary rate over a number of years, and because of inflation they cannot claim back the true amount. That’s not the case for ordinary day-to-day expenses like pens and paper. That’s a problem because if you’ve ever run a business, as I have, you know that cash is king. I want to fix this and ensure a level-playing field in the tax system between manufacturers and financial services.
That’s why we need to make the Annual Investment Allowance unlimited. This will level the playing field and fix corporation tax so that it is a tax on profits only, not investment. This follows similar moves in the United States, and academic research suggests it has boosted business investment by 17.5 percent where it has been done. This would be a tremendous boost to business across the country, especially manufacturers.
Index the tax thresholds to inflation – permanently
In 1988, when the 40p tax rate was introduced, around 5 per cent of taxpayers paid it. Today, closer to 15 per cent of taxpayers do. A similar effect takes place in the other tax bands. The reason is that every year, inflation pushes more and more people into higher rates of tax, without them being any better off.
This discourages work and hits workers with a stealth tax. And it means that, every year, we are effectively raising taxes on people without a proper debate in Parliament. If we permanently index the tax thresholds to inflation, we can eliminate this stealth tax on work and stop the endless creeping down of these higher rates of tax.
Replace business rates with a commercial land tax
Because Business Rates are levied on a property’s value not just the land beneath it, they act as a punishing disincentive to investment.
The worst affected businesses are manufacturers. Tata Steel’s rates bill rose by £400,000 a year when it rebuilt the blast furnace at Port Talbot. No wonder British Steel is struggling. Despite what the likes of Jeremy Corbyn and Nigel Farage say, the answer isn’t nationalisation of these industries. It’s modernising the tax system so they don’t get punished when they invest.
The next Leader must replace business rates with a tax on commercial land, paid by the landlords and levied only on the land value itself, so that no business is worse off if they invest and landlords do not have an incentive to keep commercial properties vacant.
Eliminate the personal allowance withdrawal for higher earners
Withdrawing the personal allowance for people earning over £100,000 creates a massive tax cliff-edge. It means that people earning between £100,000 and £125,000 face a 60 per cent marginal income tax rate, meaning they take home just 40p for every pound they earn (and just 38p after National Insurance).
That is madness. Back in 1988, Nigel Lawson was right to cut the upper rate of tax from 60p to 40p. We need to do it again.
Move towards abolishing stamp duty for homes under £1 million
Stamp duty has been described by the Institute for Fiscal Studies one of the UK’s worst-designed taxes. It discourages elderly people from downsizing and freeing up their homes for younger families, and stops people from moving homes for better jobs. Just this week the Resolution Foundation highlighted the economic damage caused by high housing costs trapping people in areas with weak work opportunities. A study of a similar tax in Australia found that it lowered GDP by 72p for every pound it raised.
We need to start the process of scrapping Stamp Duty altogether on homes under £1 million. This would eliminate stamp duty for 98 per cent of housing transactions, but forgo only 68 per cent of the tax receipts, at a cost of £6 billion. Alongside wider reforms to cut the cost of housing, this tax could be made cost neutral.
It’s not good enough to propose big, attention-grabbing tax cuts that would cost tens of billions without doing much to boost growth. We have limited resources, but there’s still a lot we can do if we’re smart about it.
There have been big debates among Conservatives about getting left behind voters and young people to buy into capitalism. But so much of that debate has conceded the Left’s critique of capitalism. Capitalism has its flaws, but it is the only thing that can give people the opportunities and standards of living that they want and deserve.
For the Conservatives to win over the voters we’ve lost to other parties, we need to rediscover our core values of work, enterprise and aspiration. We need to focus on using tax cuts to unlock growth, to create better jobs and more opportunities in life for young people and people who have been left behind. We can’t just offer voters more of the same: we need to make Britain boom again.