The new Prime Minister faces a formidable challenge uniting the country, delivering Brexit and tackling some of the big domestic challenges Britain faces.
This post sets out Onward’s plan for the new Cabinet to meet some of the country’s most pressing needs and to root the government’s agenda firmly in the common ground of public opinion.
For the past six weeks, Onward was delighted that many of our ideas were taken up by the various Leadership candidates. Jeremy Hunt echoed our call for Corporation Tax cuts to Irish levels while Boris Johnson took up our policy of raising the National Insurance contribution threshold. Our ideas around radically cutting Stamp Duty and introduce a major new Retraining Fund to help low-skilled workers were also influential in the race.
Even in the first 24 hours of the administration we have seen several Onward proposals echoed by the Government. The new Chief Secretary of the Treasury has already talked about an Onward-style new fiscal rule and the PM has pledged investment in schools and policing as we recommended in May.
We will be writing to the new Cabinet in the coming days to ensure our that ideas are the first to hit their desks. But in the meantime, here is Onward’s nine-point plan for domestic agenda of the new Government:
1. Reverse 15 years of declining home ownership, by:
- Moving from a passive and piecemeal planning system to an active approach that develops in places people want new homes and settlements.
- Giving renters a Chance to Buy, by giving landlords a CGT tax break when they sell homes to sitting tenants.
- Making 770,000 primary homes valued under £500,000 out of Stamp Duty and halving it thereafter.
In July, Chris Philp MP and Guy Miscampbell set out proposals to take homes worth £500,000 or less out of SDLT altogether, removing Stamp Duty entirely from 770,000 primary house purchases a year.
Our earlier paper, ‘Make a House a Home’ argued that Ministers should give Britain’s private renters a new Chance to Buy their rented home by rewarding landlords who sell to long-term tenants.
And our first paper, ‘Green Pleasant and Affordable’, set out a range of radical policies to reform Britain’s broken housing and planning system.
2. Help younger generations with the cost of their student loans, by:
- Giving every graduate now and in the future a tax cut on their student loan repayments of 50p in the pound
- Ensuring that universities can no longer use taxpayer funds to subsidise low-value degrees that are not worthwhile for up to 25% of courses
‘A Question of Degree’, Onward’s policy paper on higher education argues for a new graduate tax cut to halve the amount that graduates repay on their student loans and a reduction in low value university degrees that deliver weak earnings for graduates and poor value for money for taxpayers.
3. Deliver a training and technical revolution by:
- Rebalancing post-18 education funding away from low-value HE courses and towards technical education, including degree apprenticeships
- Introducing a Retraining Tax Credit for employers, targeted at low-skilled workers most at risk of automation
- Reforming the Apprenticeship Levy to create a £1 billion Retraining Fund to support workers up-skill
Our recent report, ‘Human Capital’ set out how to deliver a retraining revolution for Britain’s 8.5 million low skilled workers at risk of computerisation and automation. We found that these groups are concentrated in areas of relative economic weakness and which mostly voted Leave in 2016.
4. Get the economy firing on all cylinders by embracing trickle up growth:
- Raising capital allowances for fixed and plant investment, disproportionately helping regional growth
- Setting Corporation Tax on a long-term path to Irish levels of 12.5%
- Reviewing investment rules that mean London receives the lion’s share of transport, housing, R&D and culture spending
‘Firing on All Cylinders’, published ahead of the Leadership race, set out the measures that the Treasury should take to deliver trickle-up growth, a growing economy and higher employment at the Spending Review.
5. Use the Spending Review to invest against the public’s priorities, by:
- Introducing a new fiscal rule that sees debt falling every year of the forecast in normal times
- Investing in policing in England and Wales to tackle rising crime
- Boosting schools funding back to real-terms, per-pupil increases every year
‘Firing on All Cylinders’, authored by our Advisory Board member Neil O’Brien MP sets out what the next Spending Review should contain.
6. Restore confidence in immigration policy after decades of broken promises, by:
- Replacing the Net Migration Target with a Sustainable Immigration Plan
- Introducing an annual debate in Parliament on the Sustainable Immigration Plan, mirroring the Budget
- Establishing an Office for Migration Responsibility to hold Government’s feet to the fire
‘Beyond the Net Migration Target’, authored by Will Tanner and Richard Chew, makes these recommendations to renew the government’ s immigration policy.
7. Ensure the criminal justice system is tough on crime and its causes, by:
- Reviewing sentencing of the prolific 10% of criminals who commit 50% of all crime, yet who increasingly do not go to prison
- Introducing a 40 hour training week for prisoners, alongside prisoner apprenticeships, greater use of ROTL and employer councils in every prison
- Invest in Britain’s prison system, that is currently unable to accommodate either of the above
Our two recent criminal justice papers- ‘Super-prolific criminals’ and ‘Unlocking a Better Life’ discuss prolific offenders and sentencing and transforming prisons into institutions of education, training and work respectively.
8. Restore a much greater sense of community and belonging, by:
- Reforming the schools funding formula to reverse the decline of small and village schools, which have halved since the 1980s
- Helping communities to take over, save and run local services, such as post offices, libraries and village shops
- Adopting a more active approach to citizenship, for example by ensuring all migrants can speak English on arrival
The research note ‘The decline of small schools and village schools’, written by Advisory Board member Neil O’Brien MP recommends an increase in funding for small primary schools
9. Putting the low paid first when it comes to personal tax cuts by:
- Increasing the threshold for National Insurance contributions for people with children
- Delivering Universal Credit Plus, increasing work allowances and bringing in a separate work allowance for second earners
‘Firing on All Cylinders’ makes these recommendations and sets out a bold plan for trickle-up growth — to make sure all areas and all groups in our society share in the benefits of a growing economy, with higher employment and incomes for families that are less well off today.
These policies would root the new Prime Minister in the common ground of British politics and prioritise the issues that our work shows matter most to voters. In the coming weeks, we will set out further policies, but this nine-point plan would be a good place to start.
