Posts Tagged ‘Featured’

Inflated figures, inflated opposition: how claims about welfare benefit levels affect public opinion

Politicians, journalists, and think tanks frequently try to put a number on just how much welfare recipients receive in benefits – often massaging the figures in the process. But do exaggerated claims about benefit amounts really change anybody’s mind about welfare overall? New research by Carsten Jensen and Anthony Kevins confirms that they indeed do.

If you follow politics, or even just glance at newspaper headlines from time to time, you’ve probably come across quite a few claims about how much welfare recipients can “rake in” from benefits. To take just one well-known example, former Chancellor of the Exchequer George Osborne recounted the shock he felt when, after taking office, he realised that some people were receiving “£100,000 a year in benefit”. Given how widely the exact amount of these figures varies, it seems clear that such numbers can easily be massaged or cherry-picked to align with prior ideological convictions. Presumably, the goal of propagating these sorts of welfare myths is to convince others that benefits are more generous than they should be, often by drawing comparisons to the income levels of those working in low-wage employment. But do claims like these actually have any effect on people, or have we all just made up our minds in advance?

In our new study, funded by Aarhus University’s Department of Political Science and recently published in Political Studies, we find that inflated claims about benefit levels may indeed have a negative impact on attitudes toward benefit generosity.

Using data from an original survey experiment that we conducted on approximately 2,000 Britons, we set out to answer two questions. First, we wanted to know if the size of the asserted benefit income matters. We therefore presented respondents with a benefit income level for the “typical family on welfare”, supposedly based on data from the Office for National Statistics – but we varied the stated figure, which ranged from £9,000 to £29,000 (in intervals of £5,000).

Second, because past research suggests that citizens may not be particularly familiar with the income distribution, we also examined whether adding in information about minimum wage income would shape responses to asserted figures. To that end, half of our survey respondents also received information about the take-home income of a typical family working at minimum wage (set at £19,000 in the text), presented alongside an asserted benefit income of a family on welfare.

Inflated figures, inflated opposition

Results of our survey experiment suggest that when the asserted level of benefit income is high, there is a greater chance that an individual will think benefit levels are too generous. At the same time, however, we find that information about the minimum wage income level only shapes reactions to these figures in one instance: when the asserted benefit level is modestly higher than the stated minimum wage income.

Note: the stated benefit amount is given in pounds sterling.

Figure 1 summarises our overall findings, illustrating the likelihood that an individual will agree that benefits are too generous, broken down by the size of the asserted benefit income presented to a respondent, as well as whether or not information about the minimum wage income was included in the same text. As we can see in the figure, there are only limited differences between the responses of those individuals who saw either the £9,000, £14,000, or £19,000 claims.

Although there is a meaningful difference between respondents who saw the £9,000 figure and those who saw the £19,000 one, neither group is distinguishable from the one that was presented the £14,000 figure. The effects are starker once we enter the £20,000 range, however: on the whole, respondents presented with the £29,000 figure were more likely to feel that benefits were too generous, regardless of whether or not they also received information about the minimum wage income; yet those who saw the £24,000 figure felt the same way only when minimum wage income information was also included.

Similar effects for egalitarians and anti-egalitarians

The size of the asserted benefit level does seem to matter, then. It could be, however, that these effects are driven by specific types of citizens. There’s probably good reason to assume, for example, that people with pro- or anti-welfare state tendencies might react differently to these claims, as may those with high or low levels of knowledge about politics. Our study explores these possibilities as well, ultimately finding that: (1) although egalitarians and anti-egalitarians start from different baseline attitudes, respondents generally react to increasingly large asserted benefit levels in surprisingly similar ways; and (2) the difference between responses to the £24,000 figure with and without minimum wage income information appears to be driven by those respondents with low levels of political knowledge. As a result, it seems that while increasing the asserted benefit level has a relatively widespread (gradual) impact, the importance of minimum wage information is limited to those with less pre-existing knowledge of politics.

Potential policy implications

Massaging the numbers to come up with headline-worthy levels of benefit income thus seems to be a potentially fruitful strategy for opponents of the welfare state. These findings are all the more important given their possible policy implications: to the extent that these sorts of claims can shape public opinion, they may serve to shore up support for welfare cuts. Policies like the benefits capfor better or for worse – seem to be a particularly likely end result. So, proponents of an expansive welfare state will want to pay particular attention to these sorts of number-based narratives, breaking down asserted figures and proposing their own in return.

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Note: the above draws on the authors’ published work in Political Studies.

About the Authors

Carsten Jensen is Professor in the Department of Political Science at Aarhus University. His research is focused on the causes and consequences of redistributive politics in advanced western democracies, as well as democratic representation more broadly. His work has been published in journals such as the American Journal of Political Science, the British Journal of Political Science, and Comparative Political Studies.

Anthony Kevins is a Marie Curie Postdoctoral Fellow at Utrecht University’s School of Governance. His research centres around the reciprocal relationship between public opinion and social policy reform, and his work has been published in journals such as Socio-Economic Review, the Journal of European Social Policy, and the European Political Science Review. You can read more about his research on his website, which also includes non-paywalled, open-access copies of all of his published articles.

Book Review: Public Sector Reform in Ireland: Countering Crisis

In Public Sector Reform in Ireland: Countering CrisisMuiris MacCarthaigh focuses on the unprecedented public sector reform agenda of the Irish government introduced to counter the impact of the Global Financial Crisis (GFC). This book provides a valuable, ‘thick’ academic analysis of cutback management by studying the case of Ireland, one of the most badly affected states. Yao Han appreciated its contribution to research on state retrenchment and reform from the perspective of the reformers.

Public Sector Reform in Ireland: Countering Crisis. Muiris MacCarthaigh. Palgrave. 2017. 

Find this book: amazon-logo

Beginning in late 2007, the Global Financial Crisis (GFC) exposed many states with fiscal imbalance and creeping public debt. In his new book, Public Sector Reform in Ireland: Countering Crisis, Muiris MacCarthaigh explores how the Irish government embraced the opportunity brought about by the crisis and retrenched the state.

The GFC pushed states to reform their public sectors. MacCarthaigh seized the rare chance to study state retrenchment in response to the GFC in 2011. His interest in the ambitious reform agenda met the desire of Robert Watt, the Secretary-General at the new Department of Public Expenditure and Reform (PER or DPER, pronounced ‘deeper’), to record all of the experiences and lessons of reform, allowing MacCarthaigh to go behind the doors of the Irish government to document and analyse the process primarily between 2013-15, with some follow-up data gathered up until 2016. The arguments throughout the book are supported by detailed evidence based on interviews with officials. Hence, Public Sector Reform in Ireland invaluably contributes to the study of state retrenchment as a response to the GFC from an insider perspective.

MacCarthaigh notes that although Ireland had reformed under New Public Management (NPM) principles since the early 1990s, the measures and changes introduced had not really reflected the essence of NPM, which emphasises efficiency and market-based objectives. The financial crisis created an opportunity for the Irish public sector to truly engage in NPM concepts through deep state retrenchment. The DPER was created to undertake the Irish reform. It led this by strengthening the coordination between individual sectors, which could be explained in accordance to the Post-NPM model which advocates ‘a strengthening of coordination through more centralized or collaborative capacity’ (Lodge and Gill 2011, 143). In particular, the new Minister Brendan Howlin, Watt and senior officials were empowered and legitimised to initiate a wide-ranging, whole-government public reform agenda taking advantage of the window created by the crisis, which corresponds to John W. Kingdon’s (1995) model of a policy window.

Image Credit: Government Buildings, Dublin (Gian Luca Ponti CC BY SA 2.0)

A newly established department does not necessarily have the de facto power to make other departments obey its orders or fulfill its expectations to reduce spending. But DPER did it successfully. MacCarthaigh nonetheless shows the frictions during the process. For example, the people inherited from the old department were very defensive when DPER was introduced. Some large spending departments – which remain anonymous within the book – felt that the public expenditure control was very difficult and that DPER did not understand them well. One Secretary-General of a department mentioned that DPER did not know operations and did not listen to people who did.

The author also shows how successes occurred. The window of opportunity offered by the crisis played a key role. The common atmosphere created by the GFC and the tiresome work of fighting against the crisis meant that resistance was not high. The DPER also reorganised institutional structures to meet its objectives. One example is the annual ‘away days’ held by DPER, which provided a platform for those at middle-management levels and above to hear from the outside and communicate public responses and media coverage about the reform. This helped the new department obtain feedback and adjust its strategies accordingly, which minimised the cost of the reform. It also fostered a bottom-up approach and brought in more opinions from diversified sources across levels. A new culture was thus able to form when time and space were created for the once-isolated top civil servants and the rank-and-file members to communicate and debate.

MacCarthaigh documents and analyses the organisational reform and rationalisation to reduce the size and cost of the public sector. Decentralised and individual sectors can make more efficient decisions pertaining to their specific functions or contexts. However, the advantage of shared services is also recognised by the reformers. The detailed description by MacCarthaigh shows the evolution of organisational forms, especially the incubation and birth of new offices such as the National Shared Services Office and the Office of Government Procurement, as well as regenerated offices such as the Office of the Government Chief Information Officer, previously the Centre for Management Organisation and Development. The establishment of DPER and related offices can be understood as the formation of hierarchies and networks initiated by the reformers, with these new levels and links helping to promote and facilitate the reform.

MacCarthaigh points out that this book contributes much to the academic analysis of state retrenchment. In fact, it also contributes much to studies of government growth – not in terms of spending but in terms of bureaucratic size. To retrench the state, new departments and offices were established and officials and officers were renewed generally. During the reform, the number of staff in DPER grew from 300 at the end of 2011 to almost 900 by the end of 2014. It is also noted by MacCarthaigh that a number of interviewees expected DPER to reduce its staff like the other departments, but DPER did not. Hence, when MacCarthaigh documents the government shrinking, he is also revealing a process of resource and power reallocation.

The general result of the Irish public sector reform was critical to Ireland and has been deemed to have saved Ireland in time. However, MacCarthaigh argues that overall assessment of the reform is almost impossible as reform success varies across issues. For example, MacCarthaigh shows how the cuts to pay and pensions evolved: at the beginning, pay and pensions were cut for officers of lower pay; after reaching agreements based on negotiations, pay and pensions were cut for all levels of officers, with a lower reduction rate for lower-ranking staff and a higher reduction rate for higher-ranking staff. Though not emphasised by MacCarthaigh, this sets a good example for other countries to reduce public expenditure in a vertically equal way.

The Irish government also took advantage of the opportunity to reform the public sector regarding ‘openness, transparency and accountability’. For example, the government made their data and performance information available through Irish public service bodies, though this did not receive sufficient media attention according to MacCarthaigh’s analysis. These reforms might be useful for countries that have heavy burdens in supervising government or business activities.

As it takes time for specific strategies to show their success, the analysis leaves room for future research to evaluate the performance of these and to explore the politics behind the specific decisions where there were alternatives. For example, when disposing of state assets, four assets were finally decided upon to be sold: the company Bord Gáis Energy (BGE, the customer supply and distribution part of the state company Bord Gáis Éireann); some of the non-strategic assets belonging to the electricity company Electricity Supply Board (ESB); forestry rights belonging to the state forestry company Coillte; and the state’s minority shareholding in the former national airline Aer Lingus. The process of how those four assets were decided can be further studied. Selling the assets to gain money in the short-term was a strategy reluctantly adopted by the reformers. Hence, the long-running impacts of this project are still to be evaluated.

In all, Public Sector Reform in Ireland documents and analyses the complexities of whole-of-government reform to counter the financial crisis using the single case study of Ireland. Cutbacks are always tough work. MacCarthaigh shows how the Irish government reduced its spending and reformed its public sectors. These successful experiences can be adopted by other countries after adaptation to their specific context. The findings can also be compared to cases in other countries to generate some common knowledge about cutback management studies.

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Note: the above was originally published on LSE Review of Books.

>About the Reviewer

Yao Han, PhD in Quantitative Social Sciences Program, School of Politics and International Relations, University College Dublin, 2017; Researcher, Geary Institute for Public Policy, University College Dublin, 2012-17; Visiting Research Fellow, Department of Asian Studies at the Hebrew University of Jerusalem, February – May 2017; Research Fellow, Dublin European Institute, June 2017 – . Currently she is a Visiting Research Fellow at the School of Public Policy and Management of Tsinghua University. She wishes to thank Dr. Rosemary Deller for her edit. Twitter: @hanyao_sara. Read more by Yao Han.

Post-Brexit immigration policy: Scotland wants to go its own way

sarah kyambiBritain does not yet have a post-Brexit immigration policy, and a likely shortage of lower-skilled workers poses a particular challenge. Sarah Kyambi (University of  Edinburgh) looks at how governments try to meet labour shortages and why Scotland is exploring ways to encourage migrants to settle permanently.

Despite the likelihood that free movement will end when the UK leaves the European Union, the shape of its future immigration system is still perturbingly unclear. The lack of specific goals for UK immigration policymaking – beyond bringing the numbers down and filling immediate vacancies – is hampering policy development. A more systematic approach is badly needed.

Our research considers both sides of the equation: what types of programmes are best suited for particular goals, and how different policies would impact on migrants’ decisions to come to, and remain in, the UK.

Since free movement has been the sole entry route for labour migration into lower-skilled jobs, low skilled, low paid jobs are likely to be hardest hit by Brexit. A growing number of reports address the potential impacts on particular sectors and occupations,  and shortages are predicted in areas like social care, agriculture, food processing and hospitality.

fiona hyslop scotland

Scottish external affairs secretary Fiona Hyslop launches a campaign in April 2018 to promote the country abroad. Photo: Scottish Government via a CC-BY-NC 2.0 licence

However, proposals for immigration into lower skilled jobs after Brexit are few and will probably be confined to short-term, possibly sectoral, schemes with restrictive conditions that require migrants to leave the UK at the end of their stay. This is in marked contrast to the open-ended flexibility provided by free movement, which offers access to benefits, generous family rights and, eventually, access to permanent status for those coming to work. This makes it all the more important for post-Brexit immigration policy to consider the full range of options and factors at work.

We identified three types of immigration programme:

  • Sectoral schemes, which recruit workers to particular sectors or occupations to address specific sectoral or occupational shortages.
  • Employer-led schemes, which select workers based on employer demand and assume that employers are best placed to identify shortages.
  • Human capital schemes, which select workers based on their individual characteristics, such as work experience, family status, language skills or ties with the country/region.

Looking at six case studies in industrialised countries, we found that the generosity of these schemes depends on their aims, the difficulty of attracting migrants and the social, economic and political context underlying social norms. Temporary, restrictive schemes for migration into lower skilled work are widespread, but other types of programme exist. Many balanced a range of competing and complementary aims, some more successfully than others.

Countries who want migrants to settle generally have to offer more generous conditions.  Mechanisms that target migrant labour to specific locations or occupations, such as tied visas, increase the risk of exploitation which calls for increased safeguarding. Migrants themselves trade off working at a level matching their skills and qualifications for the opportunity to access more generous programmes: pathways to permanent settlement can mean deskilling.

At present, we are awaiting the Migration Advisory Committee’s final report on the role of EEA workers in the UK’s economy. This is expected to provide a clearer picture of labour shortages, and whether the resident population benefits if migrants are recruited to fill them. While this will give a clearer picture – particularly of economic needs – it risks applying too narrow a conception of the goals to be pursued.  The Scottish Government, for example, has been vocal about seeking a wider range of immigration goals, such as averting population decline, offsetting population ageing and sustaining remoter communities. Short-term, sectoral schemes are least well suited to meeting these aims and likely to generate extraneous problems, given the level of population churn involved.

At the SNP conference First Minister Nicola Sturgeon made clear that Scotland remains committed to attracting migrants. Our research with EEA migrants in Scotland showed that a more restrictive regime would certainly impact migrants’ settlement decisions, although younger, unattached migrants would not necessarily be put off from coming to the UK in the first instance. Access to family and welfare rights, the opportunity to extend their stay and settle permanently, the ability to change jobs and move within the UK all matter, particularly for longer-term stay and settlement. This chimes with international practice, where programmes that recruit migrants for the longer term go hand-in-hand with more generous provisions.

We found that increased restrictions and barriers to entry would prompt EEA nationals to consider their options elsewhere, within other EEA countries, but also in other English-language destinations such as Canada and the USA. It is vital that considerations of the UK’s future immigration regime looks at the impacts of proposed rules on migrants’ decisions, an aspect often neglected.

Finally, as immigration policy in the UK and Scotland diverges, we need to give serious thought to the options for a differentiated system that lets regions pursue different goals. Despite many calls for greater regionalisation in this area, the Migration Advisory Committee interim report appears to indicate that it is unlikely to support it, as it cannot find sufficient variation in regional labour markets. However, this fails to take into account the strong desire in Scottish politics to do things differently on immigration, and the reasons and goals underpinning it. A system that cannot accommodate a fuller consideration of immigration goals, and how best to meet them, will chafe.

This post represents the views of the author and not those of the Brexit blog, nor the LSE. 

Dr Sarah Kyambi is an expert on immigration and integration policy. She provides policy-relevant research and strategic input for government, funders and NGOs and is affiliated with the University of Edinburgh. She is co-author of the ESRC-funded Choices Ahead: Approaches to Lower Skilled Labour Migration After Brexit (June 2018).

Britain will be scrambling hard to put Galileo at the centre of a new security partnership

Galileo, a niche satellite technology programme, has escalated to the top of the Brexit political agenda as  Britain and the EU wrangle over access to it. There is a thrilling tension as the two have become locked in an inter-governmental conflict overhung by industrial threats, against a backdrop of science-fiction-like technologies. Galileo symbolises the power of space communications for economic and security policy. And now the EU has signalled a red light to  Britain’s key demand for full access to a next-generation encrypted service, writes Monica Horten (LSE).  

The EU’s announcement of a €16 billion investment in a post-2020 space strategy puts into sharp relief the dispute with Britain over the Galileo satellite programme. The EU is thinking strategically to develop commercial and government applications, aiming to establish itself as a global leader in space. Britain is putting national security first in a move that seeks a deal to get full access Galileo’s encrypted service, with full participation of British firms, whilst apparently brushing off non-security elements. However, in a set of slides prepared for a Council of Ministers meeting this week, the EU has shown in a traffic-lights coloured chart how British demands don’t fit with the EU rules for third-country participation.

Galileo is the European rival to the GPS  (United States) and GLONASS (Russia) satellite navigation systems. The EU Space Programme post-2020, announced this week, positions Galileo as one of three major programmes being funded between now and 2027. Galileo will benefit from a $9.7 billion budget allocation from 2021-2027.  The other two are the Copernicus earth observation programme, and a new satellite-based secure communications system for government use. The  EU wants a ‘flourishing’ of commercial and government applications. It is looking for a €63 billion benefit to EU industry over a 20 year period, with up to an additional €45 billion in indirect benefits that would flow from a downstream exploitation of the system. According to its Impact Assessment, it sees the space programme as a key facilitator for other public policy objectives.

Centre Spatial Guyanais. Credit: Benoît Prieur – CC-BY-SA

The EU has proposed a new piece of EU legislation that underpins the space strategy and makes some changes to the governance structure of the Galileo programme and seeks to strengthen EU interests in the European Space Agency (ESA). This is the Proposal for a Regulation establishing the space programme of the Union and the European Union Agency for the Space Programme (6.06.2018). The proposed Regulation seeks to  “fully finance” Galileo and will be  “the owner of all tangible and intangible assets” (Article9).   The  Agency that currently manages Galileo – the GNSS Agency –  is being upgraded to be responsible for supporting the development of commercial applications. It will be re-named the European Union Agency for the Space Programme.

The proposed legislation states that Galileo is a key strategic asset from a security perspective and it is tightening up on the security accreditation to the programme, as well as access to sensitive information (Recitals 32-37). It seeks to restructure its arrangements with the European Space Agency (Recital 29) and seeks full autonomy over its space programmes in order to protect the EU against interference from third countries (Article7). Interestingly in the Brexit context, it includes  a provision to specifically exclude third countries from the decision-making process:

Article 7.2(c) (c) does not confer to the third country or international organisation a decisional power on the programme;

So where does this put Britain? An increasingly heated dispute has flared up between Britain and the European Union over Britain’s post-Brexit access to Galileo. Britain is under threat of being squeezed out of the Galileo programme due to certain provisions in the EU Withdrawal Agreement (Article 123 and 122 7(b) coloured version). The direct effect of these Transition provisions has been that British representatives will be excluded from the governing bodies and committees of the Galileo programme. In particular, Britain will be excluded from all participation in the encrypted Public Regulated Services (PRS), including  PRS technical development and will lose rights to use the service when it comes on stream in 2020.  A knock-on effect is that the ability for British-based to bid for new Galileo contracts, or even to complete work on existing contracts,  is thrown into jeopardy.

There is a real concern that British industry will lose out. Airbus, a Dutch-controlled corporation and  major contractor for Galileo,  has told the House of Commons Exiting the EU Select Committee that bids for contracts after March 2019 would have to be led by firms based inside the EU27: “Effectively that means that for Airbus to bid and win that work we will effectively novate all of the work from the UK to our factories in France and Germany on day one of that contract,”  said Colin Paynter, Managing Director, Airbus Defence and Space UK, when he appeared before the Committee on  9 May 2018.

The British government is unhappy with that situation, although it is actually hoisted on its own petard (Galileo satellites illuminate EU-UK divorce tensions ). It is now trying to negotiate its way back in. Britain wants to stay in Galileo and will pay for it. The government has laid out its position in a document with the unremarkable label of ‘Technical Note: UK Participation in Galileo’ issued at the end of May. Contrary to what it might seem, this document is more than a mere ‘technical’ note.  It makes the case for ongoing British participation in Galileo, stressing how much the British expertise has contributed. It suggests that British exclusion or withdrawal from the programme would increase system costs for the remaining participants, whilst issuing a gentle reminder that some of the sensor stations are hosted on British overseas territories.

However, according to this Technical Note, the British government is only interested in the secure PRS service, and has excluded itself from participation in non-security committees and working groups. It has called for Galileo to be a core component of a future EU -UK Security partnership (Technical Note 10, 18,). The big ‘ask’ is for full access to the military-grade Public Regulated Service (PRS) system that Galileo satellites will deliver. This includes being involved in its design and development at all stages, and a seat at the table on the committees that take decisions on PRS, with full access to information (S.22 and S.31). This would include the GNSS Security Board and technical working groups. Underlying concerns appear to be about control of critical technologies remaining in British hands (S.10) (S.16). Although unstated, this could include intellectual property rights (IPR).

Tied in with the security objective, is a demand for the re-admission of British tenders for contracts on both military and civilian applications. This demand has been underscored by a letter from the Science Minister, Sam Gyimah, to the EU Internal Market Commissioner Elżbieta Bieńkowska, as reported by the Financial Times. He is understood to have asked her to support the postponement of a new procurement round, in order to win time for British involvement to be discussed further. His request appears to have been unsuccessful according to the Guardian. The proposed new EU Regulation leaves open the way for Britain to negotiate its way back in (Article 7.1(b). However, a number of new agreements will need to be in place. There will have to be a  Security of Information Agreement, a Satellite Navigation Cooperation Agreement, and an Agreement on Access to PRS (See Galileo satellites illuminate EU-UK divorce tensions) This was confirmed by the European Commission in its presentation on security and defence from January 2018.

These agreements could all sit under the umbrella of the Security Partnership. However, it might take some time to negotiate this Partnership.  Talks  have only just begun, according to a Home Office official speaking to a House of Lords Select Committee on the European Union,  Home Affairs Sub-Committeeon 15 May this year: “Internal security, so far, has involved little more than an hour’s discussion with Task Force 50, where we presented a version of the slides that were published last week, and it presented some slides that it had  published in January. We were really setting out our starting positions,  with a view to further negotiations in more detail, and probably at a more  technical level, over the next few months.”  

All of this wrangling highlights a tension between national and corporate interests. International corporations can move staff and facilities to protect their own revenue streams, but the national interest should be about the strategic long-term well-being of the country. The British are presenting their long-term interests for space policy in terms of national security and military technology. This is in marked contrast to the EU’s big picture vision. Britain did have, and arguably still has, a Space Action Plan aiming at a £30 billion space industry by 2030. However, it would seem that in order to get a Brexit deal, the British government is less concerned about the civilian applications which will form the other plank to achieve that long-term industrial goal. Some experts think that Britain’s industrial success could be threatened by exclusion from Galileo projects ( See also Ground control to Mrs May – have we lost the signal? ).  Despite this, it is notable that the government’s Technical Note does not ask for access to the civilian applications of Galileo. Moreover, it effectively discounted them, saying that it does not envisage “attendance at non-security programme meetings” or “any representation at non-security meetings and bodies” in the GNSS Agency that runs the Galileo programme (S20 (a) and 20(b)).

However, the EU slides released this week, indicate that Britain will struggle to get its desired security deal. Using traffic-light colours, the EU highlights in red how third countries – which Britain will be after March next year – may not participate in the design and development of the PRS system, and how third-country industry may only participate in a limited way a sub-contractor. Third-country firms may not manufacture the PRS security modules. The slides state Britain’s demands go “beyond standard third-country status”.  The slides further state that “design and development of the secure encrypted PRS service”, together with upstream activities, will be reserved for EU Member States, although with a specific agreement, UK firms may be able to manufacture PRS receivers.

It looks like Britain will be scrambling hard to put Galileo at the centre of a new security partnership.

This article also appeared on Iptegrity and it gives the views of the author, and not the position of LSE Brexit, nor of the London School of Economics. 

Dr Monica Horten is a trainer & consultant on Internet governance policy, published author and Visiting Fellow at the London School of Economics & Political Science.

Read my lips: no such thing as a Brexit dividend

After all the debunking it has had, including the admission from prominent ‘Leave’ supporters that it was phoney, the continuing hold on British public debate of the claim of £350 million per week for the NHS is an abiding mystery. Iain Begg explains that there is no such thing as a Brexit dividend.

Few doubt the need for increased funding for the NHS and the government plans to boost its budget by some £20 billion a year by 2023 will be widely welcomed. Yet to portray it as somehow connected to Brexit is, simply, dishonest, the more so when it is being spun as enabling pro-Brexit ministers to deliver on a referendum promise. It has been explained endlessly, but apparently has to be reiterated yet again, that the true UK gross contribution to the EU has to be measured after deducting the rebate received since 1985. Admittedly, the way this is presented in official statistics can be confusing, but the principle could not be more straightforward. Rather than £350 million a week, what the UK ‘sends to Brussels’ is more like £280 million, fluctuating from year to year. Some EU spending also flows back to the UK, mainly for subsidies to farming and fisheries, economic development projects in poorer regions and to pay for research.

Once these flows are taken into account the net contribution of the UK to the EU falls to around £10 billion a year, equivalent to a little under £200 million per week. The latter figure is still substantial and would be enough to pay for plenty of nurses and doctors, but plainly is not £350 million. For there to be a public spending dividend from Brexit – even one attaining the true gross figure of £280 million, a week two conditions have to be met. First, the UK has to reduce the amount of money it ‘sends to Brussels’ or uses instead to pay for policies currently funded by the EU; and, second, the tax base of the economy has to be stable. As things stand, neither condition will be fulfilled sufficiently and definitely not in time to pay for what is proposed over the next five years.

In the short-term, the government has already committed to maintaining subsidies for the farm and fisheries sectors up to the end of 2020, as well as honouring economic development and research contracts which could stretch to 2023. Then there is the Brexit divorce bill of some £35 to 40 billion, to be paid in instalments over a number of years and equivalent to around 4 years’ worth of the UK net contribution to the EU. These are sizeable – if transitional payments – which effectively negate any plausible Brexit dividend before 2023.

Beyond the current budgetary round, it is likely that new subsidies to farming and fishing will have to be introduced, and at least some support provided for economically disadvantaged communities. It is also conceivable that the UK will want to remain in certain EU programmes, such as research, and these will not come free.

Realistically, therefore, at least some of what is currently ‘sent to Brussels’ will remain a cost to British tax-payers indefinitely and, by extension, cannot be ‘sent to the NHS’. A future UK government may well decide to abandon subsidies for farmers, but don’t hold your breath. However, the indirect budgetary effects of Brexit are the real problem. To state the blindingly obvious, the public services an economy can afford depend on the success of the economy through building up the tax base.

Over the next five years, public sector receipts (the bulk of which come from the combination of VAT, income tax and national insurance) are projected by the Office for Budget Responsibility (OBR) to be on average 36.7% of GDP. If GDP is lower than previously expected, as has been the case since the referendum, these receipts will fall proportionally. Although the actual calculation is somewhat more complex, a simple back of the envelope summary provides a pretty robust indication of the magnitude of the amounts at stake. Thus, in the fiscal year 2017-18 (just ended), UK GDP at current prices was a little over £2000 billion, and the tax take projected by the OBR was £750 billion.

Had nominal GDP been one percentage point higher, taking it to £2020 billion, the tax take would have been some £7.5 billion higher. It is important to stress, too, that these figures cumulate: growth one percentage point below expectations for each of the five years of the proposed new health settlement will (assuming no change in the tax regime) mean public receipts five times £7.5 billion lower (£37.5 billion) by 2023 than expected. It does not need rocket science to show how this greatly exceeds the potential cut in payments to the EU: it is approximately double the infamous £350 million per week. Even half a percentage point per year shortfall would more than negate the potential gains from ceasing to pay into the EU.

The impact of Brexit on the UK’s prospects for economic growth ought, therefore, to be at the heart of any discussion of spending more on the NHS or, indeed, any other changes in the public finances. Yet we remain stuck with seeing this through the lens of the fictitious £350 million per week. Certainly, some of the blame for this state of affairs has to be levelled at the proponents of ‘project fear’, who portrayed Brexit as an inevitable and immediate economic calamity. This allowed the relative resilience of the economy in the months after the referendum to be interpreted by Brexiteers as a reason to reject any and all economic projections.

But after five quarters of disappointing growth figures since the beginning of 2017 and with growing evidence of an adverse Brexit effect on the economy, the risks to the UK public finances have to be recognised. This is why the new NHS promise has elicited such critical comment and even allowed John McDonnell (the Labour Shadow Chancellor) to look fiscally responsible. More funding for the NHS can be generated by raising taxes or by allowing the public sector debt to increase. But to quote George Bush the 1st, ‘read my lips’: a Brexit dividend will not be the solution.

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Note: the above was originally published on LSE Brexit.

About the Author

Iain Begg is Professorial Research Fellow at the European Institute and Co-Director of the Dahrendorf Forum, London School of Economics and Political Science.

 

 

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Pixabay (Public Domain).

A changing democracy: the British political tradition has never been more vulnerable

Never before has the British political tradition been more contested, write Matthew Hall, David Marsh, and Emma Vines. They explain that British democracy is facing three major challenges – Scottish independence, Brexit, and anti-politics – and these have the potential to force change on an otherwise stale political establishment.

British politics is in a state of flux; yet for all the talk of Brexit, there is a far more fundamental shift taking place. This shift presents a challenge to a political system resistant to reform and which, consequently, remains in many ways ‘premodern’. It is conservative in its understanding of responsibility, limited in its idea of representation, and offers government by, and frequently for, the elite. What we are seeing challenged, therefore, is not just Britain’s European relationship, but also a dominant British political tradition (BPT), which centralises elite control and perpetuates structured inequalities.

Today, the BPT appears vulnerable and a rewriting of the rules of British democracy is perhaps not only possible, but inescapable. Here, and in our longer piece, we identify three forces leading to these demands – the Scottish Question, the Europe Question, and, most fundamentally, the question of anti-politics. These are not the only issues confronting British democracy, but they are crucial challenges with the capacity to force change on a reluctant and stale political establishment.

Arguments concerning the nature of the BPT are ongoing, with contestation between those who see fluidity in traditions, and those, like us, who argue that there is a dominant BPT, underpinned by a limited liberal view of representation and a conservative view of responsibility. As such, British politicians have favoured strong, decisive government over responsive governance. For this elite, committed to a view that ‘government knows best’, elections every five years are quite enough to keep the rabble at bay. Today, however, the BPT, at last, stands vulnerable.

If centralised power is crucial to the BPT, then Scotland presents a serious challenge, bringing with it its own nationalist tradition, which has, over time, led to greater demands for control and home rule. At first glance, devolution seemed a victory for the nationalist tradition and a blow to the BPT. However, the BPT was in safe hands under New Labour and Tony Blair. For Blair, devolution was a means of securing the Scottish vote – something that eluded the Conservatives – while making controlled, and limited, modifications at Westminster. It was, therefore, a way in which centralised power, albeit altered, could be reaffirmed and protected.

However, there was contestation built-into the devolution settlement, in particular through moves towards greater participatory democracy, most noticeably in the Additional Member System which institutionalised a contest between a Scottish nationalist tradition and the BPT, leading at times to coalition and minority government – an anathema to the BPT’s understanding of responsible government. However, this alternative to the BPT garners far greater trust from its citizens, with the 2016 Scottish Social Attitudes Report finding trust in the Scottish Government by Scottish citizens was an incredible 65%, compared to just 25% for Westminster.

Of course, it is not devolution which presents the greatest challenge to the BPT, but independence. If devolution was an attempt to mollify the nationalist spirit in Scotland, it has been a failure. Greater powers have been demanded, not least during the independence campaign. With the threat of an independent Scotland appearing a real possibility, a scared Cameron offered greater devolved powers, contra the centralisation tendency of the BPT. However, while greater devolved powers perhaps helped swing the campaign to the No vote, Cameron’s claims that the question was settled for a generation were naïve.

Britain has never truly welcomed European integration; with its violation of that most sacrosanct principle – Parliamentary Sovereignty – perhaps it never could. In Westminster, Euroscepticism is not an ideology of the fringe, but is instead deeply embedded in party competition. It is, as we have seen, also an ideology shared by many citizens – though of course, we must distinguish between the constituent nations of the Union, with Brexit in large part the consequence of a peculiar type of English rebellion.

Holding a referendum seems to mark a dramatic deviation from the BPT’s Burkean principles, but the two European referenda – 1975 and 2016 – were used to diffuse intra-party contestation and, as such, were a means of protecting stable government and the party system; this is what happened in 1975.

Brexit, alongside the rise of UKIP, reflected the growth of Euroscepticism, but as, if not more, important was the rise in alienation from politics as it is practiced, and a growing antipathy to the political elite. This phenomenon is often called anti-politics, although it is anything but non-political.

Anti-politics, and particularly antipathy to the idea that government knows best, underpins the looming threat of Scottish independence and the Brexit vote. This decoupling of citizens and authorities reflects an antipathy to the BPT as a governing strategy. The focus on strong, rather than responsive, government distances Westminster from citizens. The result, is either complete detachment from the mainstream political process, often coupled with an involvement in new forms, often, particularly for the young, social media-based, or else a revolt against the elite’s wishes, as we saw in Brexit. In our view, the growth of such anti-politics demands a rethinking of the way politics is practiced and, if such disillusionment is to be addressed, the BPT needs to be changed.

The key question here is whether a remarkably resilient tradition can adapt to these challenges with minimal change, or whether the changes will be more fundamental. The outcome of Brexit negotiations (and the outcome of any second Scottish referendum) will play a role, but more important is how we address citizens’ belief that the political elite are out of touch with their concerns. The BPT has been very resilient, but it is a large part of the problem, not of the solution. Recoupling citizens with authorities is vital to a healthy democracy and the issues we have discussed show the necessity of such a step. Government needs to know what its citizens want, rather than assuming it knows best.

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Note: the above draws on the authors’ published work in Policy Studies.

About the Authors

Matthew Hall is affiliated with the Institute for Governance and Policy Analysis at the University of Canberra.

Professor David Marsh is Fellow at the Institute for Governance and Policy Analysis at the University of Canberra.

Emma Vines is Research Student in the School of Politics and International Relations at the Australian National University.

 

 

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Pixabay (Public Domain).

The meaningful vote explained in sticky notes

joelle groganWhat does the Commons vote on a meaningful vote mean? Joelle Grogan (Middlesex University, left) and Georgia Price explain.

 

 

meaningful vote

This post represents the views of the authors and not those of the Brexit blog, nor the LSE.

Joelle Grogan is a Lecturer in Law at Middlesex University.

 

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