A recently published report from the ‘think tank’ Policy Exchange sets out what they would like to see in the King’s Speech. We have rarely seen such superficial and misguided analysis, and yet Policy Exchange is highly influential on UK government policy.

This article explores:

• What is Policy Exchange?
• What is the Policy Exchange ‘solution’ to the challenges the UK faces?
• What is a rational solution?

And it sets out how you can help reduce the influence of this kind of ‘think tank.’

What is Policy Exchange?

Policy Exchange describes itself as follows:

“Policy Exchange is the UK’s leading think tank. We are an independent, non-partisan educational charity whose mission is to develop and promote new policy ideas that will deliver better public services, a stronger society and a more dynamic economy.”

That would all be rather wholesome, if it were accurate.

Wikipedia says:

“Policy Exchange is a British conservative think tank based in London. In 2007 it was described in The Daily Telegraph as ‘the largest, but also the most influential think tank on the right’. The Washington Post said Policy Exchange’s reports ‘often inform government policy in Britain.’ and Iain Dale described it on ConservativeHome as the ‘pre-eminent think tank in the Westminster village’”

The founders of Policy Exchange are well-known – Conservative MPs Nick Boles, Francis Maude and Archie Norman – but its funders are as opaque as any think tank in the Tufton Street network.

Its claim to be non-partisan is clearly suspect. Its claim to help deliver better public services is ludicrous. And, as we shall see, its status as an educational charity deserves investigation.

We know who is named as the author of the Policy Exchange report; we do not know who is paying for these policies to be promoted in the UK, or what their motivation is for doing so.

What is the Policy Exchange ‘solution’ to the UK’s challenges?

After 13 years of misrule, the UK is now – by Sunak’s own admission – facing a national emergency. Our economy is failing and we have a cost-of-living crisis more serious than any in the last 100 years. Our public services are failing – even the NHS is struggling badly – and our national infrastructure is crumbling. And we face a climate emergency whose impacts are becoming clearer by the week. A solution is urgently needed.

Let’s start with the economic issues: the cost-of-living crisis and the impoverishment of the British people, which according to many polls is the #1 concern of British voters.

Last week the Joseph Rowntree Foundation issued a new report on destitution (being unable to meet basic physical needs to stay warm, dry, clean and fed) in the UK which found that nearly 3.8 million people, including 1 million children, were destitute at some point in 2022. That is over one in 20 people in the UK – and the number is rising.

When people are starving what are they to do? The Guardian reports on a family of four driven into destitution by the husband’s cancer leaving him unable to work:

“Putting food on the family table takes time and ingenuity. A weekly grocery budget of £35 has to be supplemented with trips to food banks. Some weeks, when other bills have to be paid, she has had as little as £10 for food.

She and her husband regularly skip meals – ‘we never have three meals a day’ – to ensure the boys always have enough to eat. But going without is hard: ‘I often wake up hungry at three in the morning’.”

The Trussell Trust, the UK’s largest provider of foodbanks warned:

“Food banks are being forced to ration supplies. We can’t sustain this level of poverty for much longer.”

When the foodbanks cannot meet demand, people are forced into begging or crime.

What does Policy Exchange recommend? It focuses on the anti-social behaviour rather than its cause:

“The most recent Crime Survey of England and Wales shows that 30% of people believe that Anti-Social Behaviour in their local area are [sic] increasing”

Its proposal in response is that begging should become a criminal offence.

And rough sleeping (which is increasing fast: up 26% on last year) would continue to be a criminal offence with an aggravated offence of being part of a tented encampment where there are multiple individuals sleeping rough for security in the same location.

Suella Braverman, a cabinet member whose sole raison d’être appears to be performative cruelty has latched onto this suggestion and wants to ban tents – making it an offence for charities to provide tents to rough sleepers, and even arguing that it is a “lifestyle choice” to sleep rough.

It is perhaps worth looking at the root cause of the problem the Policy Exchange ‘solution’ is intended to tackle. Put simply, for the first time since the 1920s, Britons have been getting poorer.

In other words, the Policy Exchange ‘cure’ for 13 years of mass impoverishment, is to criminalise those driven into destitution. And – astonishingly for a democratic society – the government is listening.

How about the NHS – voters’ #2 issue? Our own report, The Rational Policy-maker’s Guide to the NHS sets out the key strategic imperatives:

“What our research has shown is, in essence, very simple: the pre-underfunded NHS was the best proven model for healthcare delivery; it has struggled because of prolonged and severe underfunding; and with proper funding it can be restored to its natural position as the world’s best healthcare system.

So the choice for rational policy-makers is stark: if we do not act, both the NHS and the UK economy will fail; if we do act, they can both thrive.”

Many other analyses have reached the same conclusion.

Does the Policy Exchange mention the issue of NHS funding? No: it focuses on increasing digitisation – not necessarily a bad idea in itself, but far short of what is needed.

The Institute for Government has pointed out that underfunding is not limited to the NHS, saying, “Public services are crumbling in the face of workforce problems, years of underinvestment, and current spending plans.”

And the government’s own National Infrastructure Commission says of its latest report, “The report is upfront about the need for significant public and private investment in infrastructure if the UK is to rebalance its economic geography, meet climate obligations, improve resilience and enhance the natural environment.”

In contrast to these expert commentaries, at no point does Policy Exchange suggest increased funding for any public services.

And what about voters’ #3 issue: climate change? Policy Exchange would like to see: “a requirement for the North Sea Transition Authority to commit to undertaking a new licensing round for domestic oil and gas exploration and production every 2 years, or write to the Secretary of State justifying why a licensing round is not required at this stage.”

A government which follows the Policy Exchange recommendations, in other words, has nothing to offer British voters except further hardship and decline.

In addition to the perverse policies set out above, Policy Exchange aims to extend the power of the Executive above the Courts and above Parliament. We have already seen a – surprisingly systematic – series of Bills to dismantle the UK’s democratic safeguards. Policy Exchange would continue this dismantling process.

Policy Exchange proposes further restrictions on judicial review – if the government breaks the law, it will become increasingly difficult to do anything about it. It wants to ensure, “that no court may question the lawfulness of a public act on the grounds that it is allegedly incompatible with parliamentary accountability and that no court may question whether the Houses of Parliament, or any parliamentary committee, has acted properly.” If a government passes a law which restricts parliamentary accountability, or otherwise acts improperly, we will have no redress under the law.

When the government illegally prorogued parliament in order to push through a no-deal Brexit (which would have been even more damaging than the Brexit we have), it was judicial review which prevented them from doing so and restored the right of Parliament to review the Brexit deal. This would have been impossible under the proposed Act.

Furthermore, Policy Exchange proposes a new Act to prevent a government from introducing Proportional Representation or lowering the voting age without first holding a referendum. This is an unprecedented restriction on Parliamentary sovereignty which could only be removed by repealing the Act.

What is a rational solution?

Fully detailing a rational solution to all the problems which have arisen over the last 13 years would take many hundreds of pages. But the essence is simple – rather than continually doubling-down on the type of market fundamentalist policies which caused these problems, we should change tack. The type of reform we need, in other words, is diametrically opposed to the Policy Exchange proposals.

Taking five relatively straightforward steps will put us back onto a path of rational policy-making in the interests of UK citizens. These five steps are described fully in the book 99% and outlined briefly below.

Step 1: Democratic Reset

Of  course, we need to see policy change. But even more fundamentally we need a democratic reset. We don’t have a written constitution in this country – and the last few years have shown clearly how precarious our rights are in the absence of such a protection. It is not illegal for a government in this country to pass legislation that it knows will harm the interests of 99% of the population. And we are now living through a government that is happy to take advantage of that freedom. Here are the key elements of that democratic reset.

Step 2: Fact-based Policy

And we need fact-based policy. There is a spectrum of truth from absolute truth to unfounded falsehood. And far too much recent policy has been based on the right-hand end of that spectrum.

Since 2010, policy has been guided by the myth of unaffordability – that was the reason for austerity. When Theresa May wanted as her final act to commit the UK to carbon neutrality by 2050, Philip Hammond didn’t try to deny the science, but he claimed that it would cost £1 trillion, and it was taken for granted that this meant that we couldn’t afford to do it. Why not? Because of the ‘state of government finances.’ But Government Debt:GDP is today roughly at its 300-year average, below where it was before the Industrial Revolution took off, and below where it was before the Golden Age of Capitalism. It is simply a myth that we couldn’t afford to protect the health of the population, the economy and our environment. And in the US, they don’t even accept the science.

Without facts, there can be no sanity.

Step 3: Policy for Solidarity and Abundance

On the basis of this constitutional reform and a commitment to look at the facts, we can then expect government to formulate policy that will tackle and reverse mass impoverishment. Policy formulation is complex, but there are only fundamentally four types of policy.

Each policy either grows the pie or it doesn’t; and it either shares the benefits of that growth fairly or it doesn’t. That gives us these four types of policy:

• Captured growth policies;
• Shared growth policies;
• Vulture policies; and
• Balancing policies.

The chart below helps understand both how we got into our current mess, and how we can get out.

We got into this mess because we have had far too many captured growth policies and vulture policies, and far too few shared growth policies and balancing policies.

And we can get out if we focus as much as possible on shared growth policies. and recognise that where we choose to adopt captured growth policies, they need to be balanced.

First, the shared growth policies. Why not spend £100 billion over the next few years insulating every house in the country? Why not spend a few £ billion on R&D for battery technology or infrastructure for electric vehicles? Why not build a million eco-friendly social housing units? And why not fund the NHS properly?

And for the balancing policies, why not pay a ‘green dividend’ to the poorest, funded by taxes on fossil fuels? How about immediately ensuring a true living wage? And why not ensure that benefits are high enough to prevent rising homelessness? Why not stop the roll-out of universal credit and replace it with something fit-for-purpose, and why not return to a taxation system that at least stops inequality growing?

Step 4: Investing in the Future

The fourth step is to invest wisely in the future. That is the Type II policies. We haven’t been wise, because of the narrative of unaffordability which has prevented all kinds of sensible investments. The chart shows the case of flood defences. And of course other environmental investments would fall into this category, too. It is no more prudent for the Government to say that it cannot afford these things than it would be for me to ‘save’ money by not fixing a leaking roof in my house.

Step 5: Clean-up Capitalism

And the fifth step is to clean up capitalism. At the moment, the immensely powerful force that is the profit motive is too often fighting against solving the problems we are most concerned about. But it need not be.

In Appendix IX to the book 99% (you can download the Appendices free from the website), there is the story of a fictitious but quite realistic business, Alpha plc. The story as it is normally told goes like this:

In 1997, Robin Quickly was a young man with a dream. Working with two friends from rented premises in an out-of-town business park, using second-hand IT equipment funded by a loan from his parents and a small government grant, he founded a company which was destined to change the way Britons buy their clothes. In its first year of operation, the then unknown Alpha company had a turnover of just over £300,000 and made a small loss.

Today, Alpha plc is recognised as one of the UK’s most dynamic and successful companies. In little over 20 years, it has grown from nothing to a turnover of £1.5 billion and is still growing at over 10% per annum. Customers love Alpha. Because of its innovative business model, its costs are approximately 5% lower than those of bricks-and-mortar competitors – and it has passed this cost saving on to customers. Its service levels are consistently high. And Alpha was one of the pioneers in using algorithms to drive product selection. It has swept its competition aside.

And the reported profit of Alpha looks very healthy.

But underneath the surface, the picture is very different. Alpha externalises many of its costs. It gets us to pay for its pollution, for its underpayment of staff and its failure to pay its taxes.

Because it externalises its costs, it can outcompete more ethical businesses. Because it externalises its costs, it becomes an engine for mass impoverishment. And because it externalises its costs, it gets rewarded for destroying the environment.

But if it could no longer externalise all these costs, it would cease to have an advantage over more ethical businesses. It would not have grown. It would not have contributed to mass impoverishment or environmental destruction.

In a world without externalisation, ethical businesses would outcompete unethical ones and the profit motive would become a force for good.

Conclusion

The influence of far-right ‘think tanks’ like Policy Exchange and those in the Tufton Street group on British politics is extraordinary. Our media – even the BBC – regularly platform them without asking who funds them and who dictates the policy line they all follow. Many of our politicians are incubated in such think tanks. And as a result UK policy is often set by their unnamed funders.

If you think this is wrong, here are a few suggestions:

1. Sign a petition against Braverman’s plan to evict the homeless from their tents: https://act.38degrees.org.uk/act/homelessness-tents-petition
2. She has been sacked before, let’s get her sacked again: https://99-percent.org/how-to-stop-the-government/
3. Next time the BBC reports on a report like this without questioning who is behind the proposed policies, write to BBC complaints: https://www.bbc.co.uk/contact/complaints/make-a-complaint/#/Complaint As well as your overall point, BBC complaints require specifics: programme name; broadcast date; and incident time (how many minutes into the programme);
4. If you think that a body like this whose policy prescriptions are manifestly not in the interests of the UK population as a whole has no business being given charitable status, write to the Charity Commission. https://forms.charitycommission.gov.uk/Raising-Concerns/ To get them to take your complaint seriously you must first write to the think tank itself and then explain to the Charity Commission why you feel that their actions are causing “serious harm to the people the charity helps” – notionally the British public.

In all cases, if they get a sufficient volume of complaints, they may act.

And take a look at The 99% Organisation and join us.