The thoughts that count - the best of global thought leadership (September 2022)

What will the public services we use look like in the future? The Serco Institute’s monthly digest – The Thoughts That Count – pulls together some of the best thinking on public services policy from across the world.

UK ‘Mini-Budget’

Blowing the budgetResolution Foundation (UK)

The Resolution Foundation’s analysis of the Chancellor’s mini-Budget shows that the UK Government’s tax cuts, totalling £45billion, signal the Government’s shift in focus from fiscal conservatism and courting the red wall to borrowing and to benefiting the South of England. The study finds that: the Chancellor’s tax cuts would strongly favour higher-income households, with those earning £200,000 gaining £5,220 yearly but those on £20,000 gaining just £157; residents of London and the South East will gain on average £1,600, over three times the gains of those in the North East, Wales and Yorkshire (£500 on average); energy support and the economic outlook will increase borrowing by £265 billion in the next five years, with tax cuts raising total borrowing to £411 billion; and to achieve debt reductions by mid-decade, the Government would need to introduce £36 billion in spending cuts by 2026/27.

Mini-Budget response Institute for Fiscal Studies (UK)

In the IFS’ response to the new Chancellor’s mini-Budget, Director Paul Johnson notes that the Chancellor has ‘bet the house’ on growth: by making no attempt to ‘make the public finance numbers add up’, he has instead ‘put government debt on an unsustainable rising path’, reaching £190 billion this year (7.5% of GDP). Borrowing will remain over £110 billion (3.9% of GDP) by 2026/27. This will be £80 billion more than the OBR forecast in March, over half of which will be due to the £45 billion tax cuts announced in the mini-Budget, which amount to the largest tax cut announced by any UK chancellor since 1972.

All Pain, Little Gain: An Economic and Fiscal Forecast of the Growth Plan – Tony Blair Institute for Global Change (UK)

The Tony Blair Institute in this report partners with Oxford Economics to analyse the two major fiscal interventions announced by the new Prime Minister and Chancellor: the Energy Price Guarantee (EPG) which has frozen energy bills at £2,500 for two years; and the package of permanent tax cuts totalling about £45 billion announced in the mini-Budget. The report finds that the EPG more than halves the depth of next year’s likely recession, from 2% to 0.6%. However, the tax cuts of the mini-Budget will push up interest rates next year to 5.25% from 4.5%. The tax cut package will furthermore cost £169 billion of additional borrowing over the five years to 2026/27, and the impact of higher gilt yields on borrowing costs will add a further £82 billion to public sector net debt by that time. Despite all this, the Institute finds that the Chancellor’s tax cuts will have minimal impact on economic growth, predicting that the economy will be just 0.4% larger by 2026/27 than if the tax cuts had not been introduced.

Mini Budget 2022: the non-Budget that became a Budget CBI (UK)

The CBI lays out the main components of the mini-Budget, setting out the fiscal statement’s announcements in the areas of tax, thriving regions, decarbonisation, financial services and innovation. In each of these areas, the CBI offers an explanation for what the mini-Budget will mean for UK businesses and how the CBI will be following up on each area, such as by informing the review into net zero.

Kwasi Kwarteng’s new era of economic policy is a major gambleInstitute for Government (UK)

The UK mini-Budget was far more radical in its scope than many expected: encompassing £45 billion in permanent tax cuts, Chancellor Kwasi Kwarteng signalled a marked departure from his predecessors’ emphasis on fiscal sustainability. Moreover, the IfG argues that the Chancellor’s decision to hold the mini-Budget without a forecast from the Office of Budget Responsibility suggests a desire to avoid scrutiny from the Government’s independent fiscal watchdog. The article furthermore suggests the Chancellor would have been better-off announcing tax reforms rather than tax rate cuts: addressing the bias towards self-employment and against employees, for instance, would have cost less and perhaps been more effective in encouraging growth.

Levelling up is incompatible with the government’s plan for growth – Centre for Progressive Policy (UK)

In its response to the ‘bombshell’ UK mini-Budget, CPP contends that the fiscal statement is incompatible with levelling up, and that its ‘implicit assault on public services’ will lead to stagnation rather than growth. The think tank warns that, although promises of investment in infrastructure and childcare reform are welcome and will boost working families’ productivity, there is little evidence to suggest the low-tax investment zones will work, and the regional inequalities in prosperity between the UK’s regions will grow worse still. What is needed, says CPP, is not trickle-down economics, but a growth plan built on investment in public services and infrastructure across Britain.

CPS welcomes Government’s plan for growth – Centre for Policy Studies (UK)

The CPS welcomes the Chancellor’s mini-Budget in this note. The think tank furthermore notes the take-up of many of its proposals, including the reversal of the National Insurance rise; the cancellation of the corporation tax increase; the creation of investment zones around the country; and the introduction of a permanent £1 million Annual Investment Allowance.

Cutting corporation tax is not a magic bullet for increasing investment – IPPR (UK)

In an article released shortly before the Chancellor’s mini-Budget, IPPR argues that the much-anticipated cancellation of the planned corporation tax increase from 19% to 25% will not bear fruit in increasing private sector investment. It points out that UK corporation tax has fallen since 2007, and yet private sector investment in Britain remains fell to the lowest in the G7 in 2019, and the country ranked 28th out of 31 OECD countries in 2020.

Cancelling corporation tax rise will boost GDP by 1.2% – but reforming capital allowances could do even more – Centre for Policy Studies (UK)

In a direct contradiction to the article above, the CPS calculates that cancelling the UK’s corporation tax rise will boost GDP by 1.2%, investment by 2% and wages by 1.1%. Furthermore, the report’s models more generous scenarios which would extend capital relief to structures and buildings as well as plant and machinery. The most generous of these options would increase GDP by 2.5% in the long term.

Economy & public finances

Seeing It Through: A Plan for 'Full Fat' Freeports Adam Smith Institute (UK)

Published before the Chancellor’s mini-Budget on 23 September, this paper sets out the case for freeports as vehicles to ‘turbocharge’ economic growth in the UK, and lays out four policies within the freeports to help address inefficiencies in the British economy, including: creating a ‘light-touch’ planning regime; providing local investment packages to smooth concerns over crowding of public services and infrastructure; implementing a ‘tax regime designed for growth’; and establishing a ‘regulatory sandbox’ to allow governments to trial new regulatory changes within the freeports.

Uncoordinated monetary and fiscal policy during Covid-19 – NZ Initiative (New Zealand)

This article asserts that the monetary and fiscal policy responses to the Covid-19 pandemic set the stage for the inflation we are currently experiencing. Monetary policy was too accommodative for too long, given the large debt-financed fiscal spending programmes that were issues without a strategy on how this debt will be repaid in the future.

After the UK Super-Deduction: Assessing Proposals for the Reform of Capital Allowances – American Enterprise Institute (US) & Centre for Policy Studies (UK)

This tax foundation reports looks at reform options published in March’s Spring Statement to make the system of capital allowances more supportive of investment. It concludes that Treasury options “would reduce marginal effective tax rates on new investment and boost investment, wages, and economic growth”. It also calls for government to be as bold as possible when it comes to permanent reform of capital allowances.

Why Company Headquarters Are Leaving California in Unprecedented Numbers – Hoover Institution (US)

This paper provides detailed data to explain why California-based businesses have been relocating in the 2018-2021 period. It finds that among the most notable economic factors are tax policies, regulatory policies, labour costs, litigation costs, energy and utility costs. If California does not reverse course on many of these policies, it will continue to lose business headquarters.

Inflation, living standards & the cost of living

A blank cheque – Resolution Foundation (UK)

The Energy Price Guarantee (EPG), which caps energy prices at £2,500 for two years from October 2022, means that fuel bills will be £1,074 lower over the next half-year than current forecasts of the Ofgem energy price cap. Combined with the £400 energy bills rebate announced in May, the EPG will cover 76% of the increase in energy bills relative to last winter, with prices remaining around their current levels this winter. In other findings: the energy support package is broadly equal across income groups in cash terms, while the now-announced reversal in the National Insurance rise would skew support towards the wealthiest households; the EPG will reduce headline inflation by four percentage points in January 2023; support for households would likely cost around £120 billion over the next two years; and the package will likely add pressure on the Bank of England to increase interest rates.

The North-South divide of the Energy Price Guarantee – Centre for Cities (UK)

While welcoming the Energy Price Guarantee (EPG) which has frozen energy bills at £2,500 for two years, Centre for Cities finds that, due to factors such as the varying energy efficiency of housing stock across the UK’s regions, the EPG’s effects will not be felt evenly throughout the country – even with the EPG, the typical household energy bill in cities with the leakiest housing stock such as Swansea or Bradford will be significantly higher than £2,500. As such, Centre for Cities recommends that the Government supplement the EPG with targeted support, as well as improve energy efficiency in homes and accelerate retrofitting of the UK’s homes to ameliorate these issues in the long term.

Expanding the Safety Net During a Recession Prevents Worsening Economic Pain - Centre for American Progress (US)

Census Bureau data shows how increases to safety net funding during the pandemic kept poverty low, prevented a worsening of the economic picture and promoted a faster recovery.

Train local, work local, stay local: Retrofit, growth and levelling up – IPPR (UK)

The UK is facing its worst energy crisis in decades, and while households are now shielded from the worst effects, gas prices are projected to remain high for years. IPPR calls upon the Government to move away from gas permanently and begin a large-scale retrofitting programme to insulate homes and fit them with heat pumps rather than gas boilers. In addition to being a critical lever for economic security, the think tank contends this could form a cornerstone of the Government’s levelling up strategy, and in this paper sets out recommendations for how it could go about doing so.

Hard Up – Centre for Progressive Policy (UK)

This CPP report explores how which parts of England are most vulnerable to cost of living pressures, finding that ex-industrial towns such as Middlesbrough, Sandwell, and Walsall have the most vulnerable residents, and that the North East remains the most vulnerable region overall: 71% of former red wall areas are in the 25% most vulnerable places in England. CPP therefore presents several policy recommendations, including revamping the Household Support Fund; reforming the UK Shared Prosperity Fund; creating further place-based funds to support the green transition and retrofit millions of homes; allocating funding to local areas based on need; and allowing places to consolidate these funds with other local government funds where possible.

Warm homes, cool planet – New Economics Foundation (UK)

In this report published days before the UK’s energy price cap freeze was announced, NEF proposes an energy support package scheme from April 2023. Measures include: replacing the energy price cap with a ‘free basic energy’ system; introducing an ‘energy element’ in welfare benefits such as Universal Credit; and a £750 ‘cost of living allowance’ paid to all families. NEF calculates that 80% of British families would receive considerable net support through this package, with the lowest-earning tenth of households receiving £6,200 in support.

The Myth of American Income Inequality – Cato Institute (US)

Income inequality is overstated by a factor of four in official statistics. This report finds that the Census Bureau overstates both income inequality and poverty by not counting transfer payments. “Counting all subsidies and taxes shows that income inequality is far less than claimed and continuing to fall.”

A plan for household energy bills – Policy Exchange (UK)

Policy Exchange makes the case for a Tiered Energy Relief Scheme, an approach based on escalating consumption levels at a maximum cost of £26.6 billion over six months, complemented by a targeted welfare package for the most vulnerable British households. This, the report argues, would provide deflationary relief and better equip the Treasury to lead an economic recovery through 2023 and beyond.

Economic Bulletin: The Bleak Midwinter – Centre for Policy Studies (UK)

This briefing note lays out the likely costs of an energy price cap freeze and the impact of the energy crisis. Its findings: holding household energy bills at the April level would cost £44 billion; an energy price cap freeze for households at £2,500 is likely to cost £29 billion; if energy prices reach £6,616, an energy price cap for households would double the current deficit of £115 billion.

What does Liz Truss’s energy plan mean for workers? – Trades Union Congress (UK)

The new Energy Price Guarantee means fuel prices will be frozen at £2,500 for two years. While the TUC welcomes this certainty on bills, it notes families will still be paying almost twice as much as they did last year, furthermore observing that nearly one in four families were in fuel poverty (spending over 10% of their income on energy) during spring 2022. Given this, the TUC calls for an overhaul of the British energy market, involving: public ownership of energy utility companies; a plan to bring about pay increases for all; and a social security system with a real safety net for those who need it.

Do States Need Income Taxes?Cato Institute (US)

Nine US states, including Alaska, Florida, Nevada and Texas, do not impose individual income taxes on their residents. Cato observes that most of these nine states run leaner, smaller governments than the rest of the country, only partly make up for the lack of income tax revenue through other forms of taxation, and provide government services without ‘anti-freedom and anti-growth’ individual income taxes. This article suggests that the other 41 states learn from the nine states without state income taxes to provide government services in a ‘lean and efficient’ manner.

Employment & workforce

Labour market overview – September 2022CBI (UK)

The latest labour market overview from the CBI finds that pay growth is continuing to fall in the UK: while the number of payrolled employees has risen to a record 29.7 million, real regular pay growth has fallen to an all-time low of -2.8%. The CBI recommends that the Government make the UK’s skills and immigration systems responsive to labour shortages such as the current one by updating the shortage occupations list, the courses eligible as part of the Lifetime Skills Guarantee, and reforming the Apprenticeship Levy to unlock business investment in the full range of skills needed in the economy.

A New Era for Worker Power: Labor Wins during the Pandemic, and the Policies We Need to Sustain the Momentum Roosevelt Institute (US)

As we leave the pandemic behind, the benefits of labour-management bargaining should not be forgotten. Labour unions helped sustain employment levels through Covid and, together with a full employment economy, are necessary to increase worker power and improve job security. The report shows that union-covered workers were able to recover pandemic employment losses much faster than the national average and that “we need more policies supporting both labor organizing and full employment”.

5 ways to integrate employment charters into public procurement – Trades Union Congress (UK)

Employment charters which set out local or sectoral employment standards are securing commitments to good work among employers, given the lack of strong national employment legislation – devolved authorities are, in particular, connecting employment standards to procurement by requiring suppliers to comply with charters. This briefing sets out five lessons on how to integrate employment charters into public procurement contracts.

Social Security Administration Needs Boost in Continuing Resolution to Avoid Customer Service Crisis – Center on Budget and Policy Priorities (US)

This article calls for policymakers to restore critical funding and staffing to the SSA (Social Security Administration) following significant customer service delays and problems with the agency’s 800 number. The SSA currently plays a critical role in the delivery of public services and must be adequately funded.

Nine facts about the service sector in the United States – Brookings Institution (US)

Four out of five private sector workers in the US are employed in the service industry. This report explores how the service sector’s recovery has differed from other business cycles, the trends in spending, employment, pay and the nature of work within the sector, and what impact inflation is having.

Over 60% of low-wage workers still don’t have access to paid sick days on the job – Economic Policy Institute (US)

This analysis by the Economic Policy Institute finds enormous disparities between high- and low-wage Americans in terms of benefits: over 60% of low-earning US workers still have no access to paid sick leave, while nearly all (96%) of the country’s highest-income workers enjoyed this benefit.

Government reform

What did we learn from the State of the Union address? – UK in a Changing Europe (UK/Europe)

This article analyses the annual State of the Union address by President of the European Commission Ursula von der Leyen, setting out the EU’s priorities. It notes that the speech lacked ‘concrete policy commitments’. As the article states, the Commission President stressed the need to reform the EU electricity market despite a lack of agreement between member states; expressed solidarity with Ukraine, but committed neither to further aid for Kyiv nor to additional sanctions on Moscow; promised to ‘improve understanding of mental health issues’ but failed to expand on this; and finally backed a European Convention to reform the EU treaties, urging leaders to be ‘serious’ about EU reform.

Smarter Money: Reforming HM Treasury Adam Smith Institute (UK)

This report finds that HM Treasury’s stated objectives are too broad, and that it should instead be organised around realistic quantified objectives. Quangos should be abolished or turned into executive agencies if they add to the departmental capacity. Furthermore, the Government Internal Audit, the Office for Tax Simplification, the National Infrastructure Commission and more should be closed down. This would bring about a reduction of 1,505 staff, 43% of the current headcount.

Centralisation Nation: Britain’s system of local government and its impact on the national economy – Centre for Cities (UK)

This joint report by Centre for Cities and the Resolution Foundation finds that Britain’s high degree of centralisation is hampering local economies; subnational governments have very limited resources to improve local economic circumstances. This centralisation has grown since 2015, which form a ‘bottleneck’ on local as well as national economic performance. The report therefore calls upon central government to devolve fiscal responsibilities to local authorities, fix fragmented local government structures and boundaries, and equip local authorities with the resources they need to handle local economy affairs.

Home Truths: Reforming the Home Office – Adam Smith Institute (UK)

The Adam Smith Institute calls for sweeping reform of the Home Office, which according to the 2021/22 performance report failed to achieve all four of its delivery objectives. 23 of the 29 arm’s-length bodies associated with the Home Office should be closed down, and the Home Office core handling policy, legislation and the supervision of executive agencies should number only about 1,000. These suggestions would reduce the headcount by 6,991.

Measuring Up: Reforming the Department for Levelling Up, Housing and Communities Adam Smith Institute (UK)

This Adam Smith Institute paper makes suggestions to reform the Levelling Up Department and make it more efficient. These include closing various arm’s-length bodies, and possibly merging the Scotland, Wales and Northern Ireland Offices into the reduced department, to be renamed the Department for the Union. This would amount to a saving of 5,030 staff, 88% of the current total.  

Tech & AI

Operationalising Responsible AI – CEDA (Australia)

AI innovation is expected to lead to unprecedented growth in productivity, indeed it is already making decisions that affect our everyday lives. If AI technologies are not applied within an ethical framework, a lack of trust will slow down the adoption of AI and potential benefits as a result.

No choice, no rules – Australia Institute (Australia)

This submission from the Australia Institute highlights how social media is a significant part in the daily economic and civic life of Australians. It asserts that groups such as ‘influencers’ have no regulation applied to their activities despite gaining revenue, as well as influencing consumers. The Australia Institute recommends that this problem be addressed to create a safer and healthy environment on social media for Australians.

The impact of artificial intelligence on the nature and quality of jobsBruegel (Europe)

In this paper, Brugel Institute researchers explore how technology development is a product of power in organisations, and posit that it replicates existing power dynamics in society. Consequently, they argue “disadvantaged groups suffer more of the negative consequences of AI, risking further job-quality polarisation across socioeconomic groups”. To address this, they call for “meaningful worker participation in the adoption of workplace AI”.

Growth, Innovation and the Organization of Science Policy in Canada – Public Policy Forum (Canada)

A report that argues for a re-think of Canada’s industrial policy to focus more on technological development and progress to better compete. Conceptualising Canada’s ‘growth potential’ requires looking at “the ways we do science”: the report highlights that “the organisation of science policy is the most overlooked feature of modern industrial policy”.

Health & social care

High inflation to erode NHS spending power – The Nuffield Trust (UK)

The Nuffield Trust examines how inflation is eating into the health service’s spending power. Given new forecasts, the article estimates that the £30.5 billion increase the NHS had anticipated back in March over the three years from 2021/22 would now amount to about £14 billion by 2024/25, a real-terms cut of about a fifth in the spending power pledged to the DHSC.

Thérèse Coffey’s plan does not do enough to support the NHS and social care – Institute for Government (UK)

The IfG argues that the new Health Secretary’s plan for health and social care lacks ambition with its target to ensure all patients who need a GP appointment are able to get one within two weeks – in the year to July 2022, 86.1% of patients had a GP appointment within that timeframe. The Government has also had little luck with recruiting GPs, with a 1.1% drop in the number of fully qualified GPs between March 2021 and March 2022. Furthermore, while the £500 million outlined by Ms. Coffey for social care should be welcomed in a sector experiencing a vacancy rate over 10%, this will not by itself address systemic problems in the system, and as it is repurposed money taken from the NHS budget, this will only mean poorer services in another part of the health and care system.

Building an organisational culture of continuous improvement – The Health Foundation (UK)

This report concerns the findings of an evaluation of the NHS partnership with Virginia Mason Institute, which examined how five NHS trusts in England attempted to build a culture of continuous improvement. The report argues that this evaluation yielded important lessons about planning and implementing organisation-wide approaches to improvement, and outlines some of these lessons, including that a strong culture of peer learning and knowledge-sharing is a critical enabler of such organisation-wide improvement.

It’s not just about speed of access: we must ensure patients with the greatest needs can see a GP – The Nuffield Trust (UK)

While the new Health Secretary would like to see all who want a GP appointment be able to get one within two weeks, this blog argues that until there are enough GPs to meet that ambition, the NHS will need to make sure those patients with the most urgent needs are prioritised and able to see doctors. The blog goes on to discuss the importance of triage in general practice and puts forward five policy approaches which could better enable access.

Reimagining health: a framing paper – Reform (UK)

The UK’s health needs have changed drastically since the NHS was established in the 1940s – patients now struggle to access care; the health service’s workforce is disillusioned and burnt out; and taxpayers foot an ever-higher bill for a system under strain. Reform’s new framing paper sets out the challenges faced by the NHS, opportunities for change, and explores areas which the think tank will explore in its new ‘Reimagining health’ research programme.

Public perceptions of health and social care: what the new government should know – The Health Foundation (UK)

This report shows the findings of public opinion polling conducted in the UK in late May and early June 2022. Among its findings: 55% of Britons think the general standard of care has worsened in the past year; 56% think social care standards have also declined, with 43% believing they will deteriorate still further; but 77% believe that ‘The NHS is crucial to British society and we must do everything to maintain it’, with 71% agreeing that greater government investment in the NHS is necessary beyond the Health and Care Levy.

Will the ‘down payment’ be enough to sustain the social care system? – The Nuffield Trust (UK)

Newly installed Health Secretary Therese Coffey outlined in her maiden speech to the House of Commons a £500 million fund as part of her plan for care. While this may help enable some people to leave hospital more swiftly over the winter, the Nuffield Trust warns this sum may be a ‘drop in the ocean’ in the face of an expected £3.7 billion funding black hole next year. While framed by the Health Secretary as a ‘down payment’, this blog says it may not be enough to prevent the British social care system from ‘crumbling completely’.

Polling Research – Territory rights and voluntary assisted dying – Australia Institute (Australia)

The Australia Institute’s polling results show nationwide high support for voluntary assisted dying (VAD) and for the Commonwealth allowing the Territory governments to legalise VAD in their jurisdictions.

Defence & national security

Understanding Russia’s mobilisation – RUSI (UK)

RUSI explains some of what Russia’s mobilisation of former servicemen could mean: the move is, for example, more likely to impact Russia’s poorer regions. The article furthermore explores how Russia may seek to train the newly mobilised soldiers heading into battle, and what equipment they might be fitted with. It ends on a grim note, however, by observing that Russia’s history of rushing forces into combat may open a ‘grizzly’ new chapter in the war as former servicemen arrive on Ukrainian battlefields.

What Does Russia’s ‘Partial Mobilization’ Mean? Center for Strategic & International Studies (US)

A shortage of personnel prompted Putin to announce partial mobilisation on September 21st. This article argues that “mobilization will not turn the tide of war, but may allow Putin to implement his political strategy, which is to outlast the Europeans”. The time it takes for Russia to mobilise will also provide an opportunity for Ukrainian counter-offensives.

Renewing U.S. Security Policy in the Middle East – RAND Corporation (US)

This report argues that the US should not deprioritise the Middle East, but rather take into consideration the full extent of American interests in the region. Vital security interests in the Middle East should not be neglected notwithstanding great power competition with Russia and China. Both traditional interests such as terrorism, protecting energy markets and Iran, together with newer interests like climate change, well-being of allies, and great power competition should be prioritised.

US Policy on Taiwan and the Perils of Strategic Ambiguity – RUSI (UK)

US President Joe Biden recently told CBS News that US troops would fight China if the latter attempted to invade Taiwan, seemingly abandoning his country’s longstanding policy of strategic ambiguity towards the self-ruled island. This article sets out some of the problems with strategic ambiguity, including a lack of ability to plan for a Chinese invasion and the danger that foreign aggressors may ‘wise up’ to the fact that there is no plan in place to counter their belligerence.

Airpower and Interdiction: Overcoming Defender Advantages – American Enterprise Institute (US)

This article examines the role of tactical defensive warfare in the context of the Ukraine War. It raises the issue that too often weapons systems are declared obsolete while innovation in strategy on the ground proves otherwise. Precision weapons reduce the effectiveness of offensive military operations, and many commentators now point to a shift in warfare towards stronger defensive capabilities.

A compass and a concept: A guide to the EU and NATO strategic outlooks – European Policy Centre

This paper argues that following the outbreak of war in the east of Europe, the EU and NATO should find a “division of labour that avoids duplications, identify roles that each institution may perform better, and coordinate their defence spending.” EU–NATO cooperation will be key to ensuring that both organisations reinforce and complement each other, especially once the Alliance’s European pillar is bolstered by Finland and Sweden, they argue.

Europe should not forget the challenges to its south – Centre for European Reform

European policy-makers are rightly focusing on the war in Ukraine and the economic challenges that Europe now faces. But Europe should not think that it can insulate itself from what happens to its south. This paper explores some of the economic, security and social challenges that persist to the south of Europe.

Saudi-German Cooperation is Essential for Middle East Security – Gulf Research Center (Middle East)

Following a visit to the region by the German Chancellor, this article examines how greater cooperation between Gulf states with Europe and Germany specifically is impacting security, economic and social challenges.

How to Strengthen US Deterrence and Weaken the Attempts of Rival Nuclear Coercion – Hudson Institute (US)

Russian President Vladimir Putin continues to flaunt his country’s nuclear arsenal as a means of deterring the US and its NATO allies from intervening further in the Kremlin’s war on Ukraine. This may cause the fighting to become unnecessarily protracted and strain the relationship between NATO allies. The Hudson Institute urges the Pentagon to adopt a strategy of counterforce deterrence towards not just Russia but also China, which enjoys a close relationship with Moscow and is also a nuclear-armed power.

Security Implications of Nord Stream Sabotage – Center for Strategic and International Studies (US/Europe)

On September 27, large leaks were detected in the Nord Stream pipelines carrying natural gas from Russia to Europe. Two days later, NATO issued a statement saying the leaks were acts of deliberate sabotage and promising a ‘united and determined response’ to any attacks on allies’ infrastructure. CSIS experts answer questions on what this means for the national and energy security of the US and its allies in Europe.

Justice & crime

Policing Can Win – Policy Exchange (UK)

Policy Exchange is publishing a new edition to its report Policing Can Win as the new Commissioner for the Metropolitan Police begins his term. In addition to setting out the problems the Met has faced over the past half-decade, this paper calls for the force to focus on three areas where changes must be made: Leadership at Every Level; Fighting Crime and Reconnecting with the Public; and Police Officer Conduct and Competence.

Solid Majorities of Californians View Crime as a Problem – Public Policy Institute of California (US)

The latest PPIC Statewide Survey finds that nearly two in three Californians consider violent crime a problem ahead of November’s midterm elections. This includes 31% who say it is a big problem, a significant increase from 24% in February 2020. This may have implications for the outcomes of local and congressional races as voters head to the polls in November.

Education

Student catch-up programs are vital beyond the pandemic – Grattan Institute (Australia)

Across 2021 and 2022, the NSW and Victorian Governments invested about $1.2bn in Covid catch-up programmes for students who fell behind during the long period of remote schooling during the pandemic. Evidence shows that big investments in catch-up tuition can work. Well-designed, short-term, small-group catch-up programmes can boost student learning and bring them back up to speed with their peers.

Education in an evidence-free environment – NZ Initiative (New Zealand)

In 2011, the New Zealand Ministry of Education initiated a new school property strategy to replace classroom with ‘modern learning environments’ (MLEs), large open plan classrooms. This article asserts that this new strategy wasn’t based on evidence, but ideology, a desire for ‘self-direct learning’ in education.

Transport

What can we learn from Germany’s €9-a-month public transport scheme? Centre for Cities (UK/Europe)

Between June and August, the German Government operated a scheme which offered passengers unlimited travel on regional train networks, trams and buses for just €9 a month. Part of a €30 billion cost of living package, the scheme was used by 38 million people, nearly half of Germany’s total population, and even slowed inflation by about two percentage points. However, in its goal of encouraging Germans not to use their cars, it was not entirely successful, as pre-intervention levels of car usage returned by mid-July. Centre for Cities recommends that the UK consider similar initiatives to alleviate transport costs for travellers in the immediate term, before overhauling transport policy and allocating higher levels of investment towards public transport and establishing an expanded, better integrated, and more efficient network, as a lack of public transport infrastructure is one of the biggest impediments to its uptake in the UK.

How to reduce carbon emissions from trucks – Grattan Institute (Australia)

Trucks cause 4% of Australia’s total carbon emissions. Australia should prioritise more fuel-efficient engines and tyres with less rolling-resistance in order for new truck engines to be 3% more fuel-efficient year-on-year.

Energy, climate & net zero

Public ownership of clean power: lower bills, climate action, decent jobs – Trades Union Congress (UK)

Households, businesses, schools and local authorities are struggling with the rise in energy bills, threatening fuel poverty, job security, and the provision of public services. TUC analysis, however, shows that the Government is missing out on between £63 and £122 billion of direct income due to the privatisation of power plants and the lack of state ownership of electricity generation, revenues which could have covered much of the Energy Price Guarantee freezing fuel bills for two years – amounting to £2,250-£4,400 per household. The green transition also has enormous potential to create over a million good jobs. The TUC is therefore urging the UK Government to set up a public energy champion (such as EDF in France) to invest in new clean power, accelerate the net zero transition, create high-skilled green jobs, and share the benefits of climate action with the British population.

Why climate policy scenarios are important, how to use them, and what has been learned – Brookings Institution (US)

A report that looks at how scenario analysis is becoming increasingly important in climate policy. It argues that it is crucial to first inform policymakers about existing scenario approaches and model them accurately to understand the scale of the challenge posed by uncertainty. Not forcing convergence of results across different models is a core lesson for policymakers. The report also draws conclusions for policy design, highlighting climate risks with an embedded high economic cost.

Keeping the Lights On: Testing the Government's Projections for Electricity Supply and Nuclear Capacity – Adam Smith Institute (UK)

The Adam Smith Institute finds that the Department of Business, Energy and Industrial Strategy (BEIS) is both underestimating the amount of power the UK will be consuming by 2050 and failing to take into account periods when Britain will not be able to rely on wind and solar (such as when the wind does not blow or the sun does not shine). As such, the think tank calls upon BEIS to rapidly ramp up the UK’s nuclear capacity if the country is to meet its decarbonisation targets. Moreover, Small Modular Reactors (SMRs) show particular promise in helping the country meet the shortfall in zero-carbon electricity production, as they are quicker to finish and have far lower capital costs.

The Cost of Extreme Weather – McKell Institute (Australia)

This report asserts that climate change is driving worsening destructive extreme weather events around Australia. More extreme weather including more severe bushfire seasons, intense heatwaves, more powerful cyclones, flash flooding and droughts. These costs will only continue and need to be addressed.

Tackling the UK’s energy efficiency problem – Institute for Government (UK)

This IfG paper calls upon the UK Government to seriously tackle energy inefficiency in Britain’s homes – the UK’s housing stock is among the leakiest in Europe, which is making the energy crisis all the more painful for British households and businesses. The report lays out how the Government can learn from successes abroad and failures at home to build a stable, long-term approach which will build confidence among consumers.

When America Leads: Competing for the Future of Clean Energy – Third Way (US)

A report by the Boston Consulting Group, commissioned by Third Way and Breakthrough Energy, finds that by 2050 key industries that support six clean technologies (advanced nuclear, clean steel, direct air capture, electric vehicles, low carbon hydrogen, long-duration energy storage) “will have a market of $2 trillion a year, equal to roughly 10% of current US GDP”. This is a very lucrative opportunity for the US, which is also poised to become a dominant player in electric vehicles.

Political Short-Termism is Putting our Environmental Security at Risk – RUSI (UK)

RUSI argues that the myopia induced by soaring energy costs and the war in Ukraine is endangering the net zero commitments of the UK (and others) to transition to clean energy sources. By incentivising continued investment in fossil fuels, the UK risks locking in a high-carbon future, rather than taking advantage of the opportunity to accelerate the green energy transition.

How to end Australia’s climate war – Grattan Institute (Australia)

This article asserts that reforming the safeguard mechanism is crucial to Anthony Albanese’s Government to meet its legislated carbon budget. The Labor Government has legislated a carbon budget to 2030 and committed to net-zero emissions by 2050.

UK growth should be aligned with climate change commitments Chatham House (UK)

The UK Government has set a target for the country to become a net energy exporter by 2040 and established a new Energy Security Taskforce. New Prime Minister Liz Truss has furthermore suggested that new energy sources can be found by licencing oil and gas exploration in the North Sea, in addition to new nuclear power plants and an expansion of offshore renewable energy. Chatham House calls for the UK Government to pair its pro-growth agenda more closely with climate change and net zero commitments. The high fossil fuel prices and instability of energy supply should accelerate the green energy transition rather than impede it, argues the think tank.

The Hand of Government in the Intergovernmental Panel on Climate Change – Fraser Institute (Canada)

This paper argues that the IPCC is not the unbiased, objective authority on climate science it presents itself as. The author analyses the IPCC’s origins, structures and processes to conclude that it is “a scientific advocacy organisation” that only selects scientific evidence in support of costly regulations while neglecting published scientific work that contradicts its aims.

Social value

Social value roadmap for real estate – Social Market Foundation (UK)

The SMF calls upon the real estate and investment sectors to begin truly putting social value into practice. The think tank finds that maximising social value could result in a 5% upswing in the value of a real estate asset, and outlines several recommendations, such as: central government allying with industry to produce a social value kitemark; a new ‘social taxonomy’ alongside new Sustainability Disclosure Requirements to parallel the Government’s ‘green taxonomy’; using existing provisions in the planning system to maximise social value; and use the new Infrastructure Levy to hold developers to account on social value pledges.

Making the Most of Local Authority Assets – Centre for London (UK)

Councils in London own one-fifth of land in the capital, manage pensions worth £48 billion, and spent £13 billion on procurement in 2019; these assets provide huge value to London, and in this report the Centre for London investigates how London’s councils can adopt ‘community asset approaches’ when buying goods and services to maximise social value for residents. Recommendations include that councils: define ‘social value’ priorities, including how much social value to deliver and how to measure it; include delivery of social value as part of drawing up contracts for procurement as well as requiring providers to report on the social value they are creating; engage a broad group of local people on their approach towards asset management; and work with one another to manage assets to share knowledge, reduce costs and increase impact.

Immigration

Will Ukraine’s refugees go home? – Bruegel (Europe)

“There will be large short-term costs and long-term economic gains from Ukrainian immigration in Europe. The best way to help Ukraine, and to moderate the likely outflow of its people, will be to assist in the country’s reconstruction, and not to place artificial impediments to the immigration of individuals who have already suffered greatly.”

Will DHS Again Leave H-2B Winter Industries Short Workers? – Cato Institute (US)

US Citizenship and Immigration Services (USCIS) announced this month that employers had already reached the 33,000 cap on H-2B visas, used to hire foreign workers for seasonal and temporary non-farm jobs. This comes in the midst of an acute labour shortage in the US, with twice as many job vacancies as unemployed people in July. Cato calls upon the Department of Homeland Security to immediately raise the H-2B cap to allow foreign workers to enter the US and help fill the labour shortage.

Politicians are playing politics with refugees, but these workers are exactly what the US economy needs – Brookings Institution (US)

Republican state governors, such as Greg Abbott of Texas and Ron DeSantis of Florida, have recently courted controversy by bussing irregular migrants to the country’s northeast. Brookings contends that many of these new arrivals, predominantly young Venezuelan men of working age, present an enormous opportunity to the US workforce as the country experiences an extremely acute worker shortage which is fuelling inflation.

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