.One person with answers is Norman Lamb whose book appeared this week. Norman is a former ministerial colleague of mine in the Coalition government who gave outstanding service as a Minister responsible for mental health, learning disability and autism. He did as much as any minister could to elevate mental health from its Cinderella status where it accounts for 11-12% of the health budget even though a quarter of the population experience mental health difficulties in their lifetime. When he left office he served as Chair of an NHS Mental Health Trust. That history explains why the book launch was thronged.

Norman’s commitment was forged in a family tragedy caused by mental health problems and reinforced by experience as a local MP when, as with me, case work and advice surgeries were often dominated by desperate people for whom the system had failed. I cannot claim the same depth of knowledge and achievement but my current involvement in mental health charities like Twickenham’s Off The Record - which supports teenagers with mental health problems - and my work in government promoting mental health through adult education reflect my own experience. My mother suffered a serious breakdown and hospitalisation when I was 10 but eventually recovered with the help of adult studies where she discovered the education she had missed by leaving school at 15 to work in a factory. My own short experience as a mental health nurse 60 years ago left a profound impression.

The book is closely argued and evidence based but given emotional force by case studies, some harrowing and some drawn from the 18,000 suicides over a ten year period, of people with recent histories of mental health problems. He describes a ‘broken’ system: reliant on -belated - treatment rather than prevention; over-reliant on anti-depressants when better options are available; frequently inhumane with long waits for treatment and poor conditions in hospital; a failure to link physical and mental health; fragmented, uncoordinated public services with mental health often treated as a policing problem and ignoring poverty-related factors.

As a former minister Norman understands that there are no easy solutions to complex, interacting problems and that there is no magic money tree. He does however offer hope in the many examples of good practice. There is an alternative to over-medication in ‘talking therapies’. The LSE economist Richard Layard has demonstrated the great overall economic benefits from investing in such therapies but the government programme, operating since 2008, lacks therapists. There are excellent preventive programmes in Wigan and Gateshead. The Cambridge Childrens’ Hospital is pioneering an integrated approach to mental and physical health. The use of ‘social prescribing’ has been shown to have been effective in over 30 countries. Europe has some highly successful and innovative examples of overall, good practice, one being the Italian region of Trieste. We can do much better.

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Much of the sympathetic public and social media comment has reflected the basic decency of the British public, though some particularly loathsome individuals seemed to see the death of asylum seekers as a cause for celebration.

What is striking though is how any reference, however tangential, to ‘asylum seekers’ or ‘refugees’ triggers an immediate emotional, and frequently hostile, response. Within the last few weeks, the diminishing problem of ‘small boats’ - a fall of over 40% this year despite the placid conditions in the Channel - has been overshadowed by the news of one especially large boat; by the ‘invasion’ of Spanish Cueta in north Africa by migrants - since reversed; and eruptions of violent hostility towards groups of ‘asylum seekers’ - or people who may look like them -in the UK. Opinion polling suggests that ‘small boats’ remain a prominent issue of concern to the public.

In the current febrile political context, it is easy to overlook practical attempts to manage the issue. The Labour government can reasonably claim that numbers have fallen as a result of cooperation with the French authorities to disrupt people trafficking by smuggling gangs, with around 15,000 making the crossing from January to August, over 40% down on last year. Overall, the government argues that, in the last two years, 70,000 people were removed or deported since they had no legal right to stay in the UK, considerably more than the number of undocumented arrivals. Moreover, the numbers are a small part of total migration ( a net figure of 171,000 in 2025).

It is also useful to put the issue in a historical context. As I describe in the ODI Working Paper, The Evolving Politics of Immigration. Britain has experienced waves of migration panic in the past caused by crises around refugees. The Aliens Act of 1904 was a response to public unrest, whipped up by populist politicians of the time, about Jewish refugees. fleeing persecution in Tsarist Russia. A few politicians spoke out against the failure to defend the refugees -notably Winston Churchill, who crossed the floor to the Liberals- but the episode was a salutary warning as to how quickly a basically tolerant society could be influenced by agitators claiming that migrants bring crime, disease and other social harm.

In the late 1980’s there was a similar migration panic over refugees in the form of Asian British subjects from East Africa expelled, initially, from Kenya. That panic provided the fuel for anti-immigration prejudice and protest some of it inflamed by the rhetoric of Mr Enoch Powell. In the event, both the Jewish and East African refugees who made it to the UK proved to be amongst the most successful groups of migrants though that could not have been predicted from the horror stories circulated about them at the time.

Although Britain has lived through and successfully managed panics over waves of refugees in the past, the current problems are more difficult. `First, news, including fake news, spreads rapidly through social media such that protests go viral and inflammatory rumours get out of control very quickly. Second, there is now a powerful international movement, with powerful backing in the USA, seeking to maximise public anger over refugees and migration more generally as part of a move towards a divisive form of politics based on race and identity. And, third, the potential scale of refugee movements from Africa and the Middle East is very large and difficult to separate cleanly into ‘economic’ and ‘political’ motivations as the current international law demands.

For politicians trying to deal constructively with the problem, rather than seeking to exploit it, there are some challenges which cannot be met by evading the issue or by preaching to the public. The issue is strongly felt by many people who are not racist bigots and who recognise that there should be a right of refuge for people fleeing persecution. The first is a belief that the government has a duty to manage the country’s borders in an orderly way and that people who are allowed to settle should be vetted and approved. The second is that the current asylum system is not only struggling to cope with the numbers but very expensive: around £5 billion. The fact that ‘asylum seekers’ are unable to work and also have to be accommodated at public expense - and often in areas which suffer deprivation - inflame resentments about the costs at a time when public services are stretched. (Allowing asylum seekers to work while their claims are assessed is one reform which would go some way to meet public concerns and reduce costs).

These arguments about costs and pressures overlap with wider arguments about the costs and benefits of immigration. The evidence suggests that, on balance, net immigration may contribute positively to the government budget and to economic growth. But there are genuine disagreements on the evidence and there can be serious localised pressures -as on the housing market. For those of us who do believe that immigration has been broadly beneficial - a view shared by the general public until very recently, according to tracking surveys - it is all the more important to demonstrate that the process of admission is managed and seen to be managed.

That is the context in which Ed Davey has just launched a proposal that the UK should join the EU’s Migration and Asylum Pact (quite independently of whether we join other aspects of the EU). An obvious reason for seeing this problem as European is that almost all undocumented migrants, or refugees, come to the UK via Europe, mainly France. Other than a few eccentrics who envisage mobilising the Royal Navy to do battle with the French, almost everyone accepts that we need to cooperate with the French and other countries where refugees first arrive in Europe. It is not generally appreciated in the UK how much progress the EU has made in stopping undocumented (and often dangerous) crossings of the Mediterranean. Many who do make the crossing are returned (often, it must be said, to the less than tender care of unsavoury North African regimes). The Pact envisages not merely tough enforcement of border controls and returns, but also ‘burden sharing’ as between European countries either in distributing refugees or through cash payments, The detail needs to be worked through but the idea is basically right.

Good technical solutions however do not get to the emotional core of the arguments. Much of the politically inspired agitation about ‘small boats’ has the effect, and probably the intention, of dehumanising refugees. Advocates of ‘mass deportation’ of the kind now being implemented in the USA take that one stage further. Such ideas are getting some traction in the UK with the Musk-financed Restore Party. We have already seen, in Northern Ireland and in the organised violence directed at asylum seekers in England, what happens when refugees are no longer seen as fellow human beings: with attacks on homes of people assumed to be ‘criminal’ illegal immigrants - and by extension anyone who looks like them. By contrast, the sad episode on the beach of a Sussex seaside town is a very human story and it reminds us is how we would feel if a family we knew were destroyed in a tragic accident.

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There is currently a very ambiguous attitude in Britain – and other European countries - towards China. Much commentary and news concentrates on a hostile, if not downright evil, regime which plants spies in our institutions, sabotages digital networks, engages in widespread cheating and copying in commerce, oppresses its own people, threatens its neighbours, abets our enemies (ie Russia) and is in the process of trying to take over the world through unfair trade and subversion.

But, somehow, this message hasn’t stuck. The Pew annual survey of international opinion found that 46% of the British public have a favourable view of China. Moreover, this was a higher approval rate than for the USA (40%). Even allowing for personalised hostility to President Trump, it is extraordinary that China should be held in higher regard than Britain’s traditional ally whose culture and messaging pervade our lives.

These findings are not just a British oddity. People in Spain, Greece and Italy and in most parts of S E Asia, Latin America and Africa have even more positive views of China, comfortably over 50%, and even bigger margins of preference over the USA. People in France, Germany, Sweden, Holland, Australia, Canada prefer China to the USA by even bigger margins than the UK though they all view China less favourably: only around one third.

There is strong antipathy to China and a preference for the USA only in a small number of countries: Israel, India, South Korea and Japan (the last has long-standing antipathy, fully reciprocated, dating back to wartime). In other countries there is a US preference but also positive views about China: Poland, Hungary, Philippines. Even in the USA, itself, the percentage who see China as an ‘enemy’ has shrunk from 42% to 33% in the last two years though 77% still regard China unfavourably.

Trump has been a powerful recruiting sergeant for the Chinese cause; overall favourability ratings of China in 36 countries have risen from 33% to 46% in the 2024-26 period of the Trump second presidency. But the Chinese are also clearly doing something right. Even in countries, as in Europe, where there are no illusions about Chinese mercantilist trade policy and its autocratic regime, there is considerable respect for China’s history of economic modernisation and poverty reduction; for technological achievements in renewable energy, digital transformation and AI; for maintaining stability and order; for being able to think and plan long term; and for – seemingly- being an ‘adult in the room’ in global affairs.

Having a balanced view of China – practical and business-like rather than ideological and censorious – is necessary to the UK having a sensible and sustainable relationship. We should be alert to the threats; not naïve. And alert to the opportunities; not blinded by prejudice or the different priorities of the United States where fear of being ‘overtaken’ by China dominates the thinking of Maga Republicans and mainstream Democrats alike. Unless Britain is to acquiesce in being a vassal state to whomever is in the White House, it must identify and develop ways of engaging with China.

The first and most obvious is through human contact. One of the fundamental differences between China and the USSR (or today’s North Korea) is that the CCP is confident enough to allow its citizens to travel freely abroad. British universities have been consistently a key destination of choice for Chinese overseas students – currently around 140,000 in the UK - though the growing quality of Chinese universities may be reducing the pull. Chinese tourists have a – welcome - reputation as the ‘last of the big spenders’.

But the relationship is very one-sided with relatively few British students and tourists going to China and miniscule numbers of British people speaking Chinese (or any other language for that matter!). That is why we should welcome and encourage organisations like Engage with China which promote Chinese language teaching in the UK and visits to China by British schools. And there is a lot of scope for cultural exchange recognising deep Chinese interest in British drama and literature and a British appetite for Chinese classical musicians (and ballroom dancers).

Collaborative research is another. British and Chinese research is, in some fields, world class and it makes sense to work on shared problems to do with health, climate and energy, transport systems and much else. China ‘hawks’ have been ‘calling out’ British researchers working with Chinese institutions and individuals who may have some tenuous connection with the Communist Party or the PLA. But providing British researchers are careful to protect their intellectual property and to operate within rules governing ‘dual use’ technology, the scaremongering should be ignored.

Trade is the area favoured by politicians on both sides and there is a mutual interest which is far from trivial. British exports of goods and services to China (including Hong Kong) are just over 5% of total UK exports: much less than to the EU (41%, even after Brexit) and the USA (22%) but bigger than Canada, Australia and New Zealand combined and bigger than Japan and India combined. Financial services and creative industries are areas of competitive advantage.

China-sceptics will argue that we import from China more than we export and some of those imports -steel, for example – are competing with UK producers. We do not need to share Trump’s weird and economically nonsensical obsession with bilateral deficits to recognise that there is a deeper and more justifiable complaint. China is exporting its economic problems: weak demand such that its excess of savings cannot be absorbed in domestic consumer spending and investment. The Chinese do have a seriously unbalanced economy as do we; we save too little in relation to what we spend. China’s ‘mercantilism’ is a problem; but protectionism is not a solution.

A more mutually advantageous approach would be for China to export to us its excess savings (and advanced technology) in the form of direct foreign investment, with Chinese firms putting up factories in the UK (and the EU). This is how China progressed: absorbing investment and technology from the West and Japan. Some Chinese firms are already investing here (Geely, Chery). Chinese firms should be welcome but subject to the same pressure for technology transfer that China has applied to overseas investors.

The Chinese however can be excused for being confused when Britain turns its back on such investment, citing vague and unspecified ‘national security’ concerns. The exclusion of Huawei, at the insistence of the US administration, did damage to UK credibility (and the quality of UK telecoms infrastructure). More recently, the bar on Ming Yang’s collaboration with Octopus to build wind turbines in Scotland, transferring advanced technology to the UK, was a mystery yet to be explained.

The latter issue also matters since Ed Miliband, the new Foreign Secretary, has stressed the value of engagement in areas where we have a similar approach to the Chinese on global issues. Climate change and the promotion of renewable technology is an obvious area of common ground, (not shared by the US administration). Presumably, as Energy Secretary Mr Miliband signed off on the Ming Yang decision. The Chinese will be asking: what is going on here?

Sceptics claim that we cannot engage with countries, like China, where we do not have ‘shared values’. That test would however rule out close engagement with a large proportion of the world’s governments, arguably including the current USA. My experience has been that it is perfectly possible to have sensible discussions with the Chinese leadership on ‘difficult’ , values-based, issues (ie Hong Kong and wider human rights) providing we refrain from performative, finger-wagging, politics designed for domestic consumption.

In any event, Britain – an economically struggling ‘middle power’ - is hardly able to turn its back on one of the world’s two superpowers when it has deeply unsatisfactory, one sided, relations with the other one and has turned its back on the EU. Engagement with China is not a luxury, but a necessity.

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In the real world, progressive social democratic governments have abandoned wealth taxes. Scrapped in Denmark, Sweden, France ,Germany and the Netherlands. Apart from Norway, the survivor is Switzerland where some cantons charge a tax which is so low that it is too much hassle for the wealthy to dodge it (and it raises little money).

This promised bonanza from the wealthy is dangerous talk. It distracts from the economic and political necessity that if promised improvements in services and defence are to be realised there will have to be increases in broad-based taxes (VAT is 25% in Scandinavia!). And improvement in the modest but realistic wealth tax that we have - on high value property- which raises less that £1 billion at present.

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All good. The problem is that people mean very different things by the ‘social care’ problem. The obvious priority is to help unpaid carers - around 6 million people, 1.7 million of whom provide care for over 50 hours a week - and those they care for at home. There are rather meagre carers’ benefits but, for the most part, carers make a financial as well as emotional sacrifice - while keeping their loved ones out of hospital and as part of the local community. There is potential help in the form of local authority domiciliary care but the service has to be paid for since social care -unlike NHS health care - is not free, but means-tested for those with assets over £23,000 (and very expensive for -say- a live-in carer costing up to £50,000 a year). Moreover, the domiciliary care service is severely over-stretched and highly dependent on low paid, immigrant, care workers. If funding were available it could be used to relax the eligibility criteria which keep around 2 million, mainly elderly people, from receiving the social care they need; or to improve the quality of service. Based on the Scottish model (where social care is free) the cost of a fully funded care service could be around £ 8 Bn. That is a minimum.

But others are clamouring for ‘social care’ funding for a different reason. Many relatives with frail relatives, especially those suffering from dementia, choose not to assume caring responsibilities but to put them in a care home. Good care homes are expensive: upwards of £60,000 a year even without nursing care. Some residents are being forced to sell their family home to pay costs. Disgruntled relatives can see their inheritance disappearing in care home costs. There is insurance to cover at least part of the cost but a formidable lobby has assembled to demand a cap on the costs of care to protect ‘the family home’. Professor Dilnot recommended a cap to limit the cost of care and the government I served in endorsed the idea. The Treasury baulked at the cost of the cap -now, around £4 billion- and it is not clear why this government would want to prioritise what is in effect an inheritance subsidy for those families with an expensive granny.

Even if the government ignores the more extravagant demands, such as cap on care costs, a meaningful new social care policy is likely to cost around £10 billion pounds. That raises the obvious and difficult question : who pays?. The Daily Mail is already warning its pensioner readers that they may face a ‘death tax’ - a levy on estates, on top of Inheritance Tax - of a kind that Andy Burnham once advocated as Health Secretary. Since the government has already made boxed itself into a position of promising more spending without raising the major taxes, the Daily Mail may well be pointing in the right direction. Care or inheritance?

It is not clear if the Burnham pledge is to use councils - either mayoral combined bodies or single district councils - as developers to boost housing supply of a variety of tenures; or specifically to build and own more houses for - below market -social rent. In the three decades after 1950 local authorities did both, at scale. The high point was 1968 with over 190,000 houses were built, and let, by UK councils and the 1970’s average was 130,000. I was a Glasgow city councillor in the heyday of council house building to replace slum dwellings in the early 1970’s and 5,000 a year was achieved in Glasgow alone (albeit that some were of poor quality and later demolished - like the Red Road development). With the advent of the Thatcher government, council house building largely stopped, 2 million council homes were sold at a discount under the Right to Buy policy and most new ‘social housing’ was provided by non-profit housing associations. In 2025, English councils delivered a mere 1,705 new council houses and started a negligible 300.

Nonetheless, 16% of the total housing stock still consists of social housing.

Much of the criticism of Burnham’s vision is a criticism of social housing. Tenants , who enjoy (implicitly) subsidised rents, are not necessarily in financial need: one third are not judged to need welfare benefits with a small number -usually well publicised in the popular press - enjoy relatively high incomes. There can be indefinite tenure and, in some instances, inheritance. Most council tenants are in a more favourable position than those who rent privately, often with insecure short-term tenancies, and - if they can find a landlord willing to house benefit recipients- rely on far-from-generous housing benefit ( capped by local Housing Allowance). And there are growing numbers of homeless in temporary accommodation or shipped out to councils with housing surpluses, far from work and family support networks. Such invidious comparisons do not however mean that we should have less social housing. Rather, more. Without more social housing, families on low and unstable incomes are forced out of more prosperous areas, where there is work; there is a rise in homelessness; and villages die for lack of trade and tradesmen. At the same time, rents can rise, gradually, to reduce the subsidy element (with housing benefit for those in need) and the option of sale is available for those who are able to progress to ownership.

So who should build the social housing? And why councils? Housing associations have hitherto carried much of the responsibility but many are having to divert resources to improving and repairing their current stock. Councils have increasingly looked to ‘piggy-back’ social housing on the back of private developments in the form of obligations linked to planning consent. That formula, where it works, provides more social housing and also integrated communities. However, private developers are struggling. Despite some regulatory reforms to speed up development, building is depressed with total homes built in 2025/26 (April/March) only around two thirds of the government’s 300,000 a year target. Developers argue that rising costs, taxes and increased regulation make much new development commercially unviable at prevailing prices. The Mayor of London has scaled back the minimum share of social housing from 35 to 20% and some councils are having to settle for none, in order to get houses built. If the social housing obligation were to be assumed by the state, it would help private developers build more homes for sale (or private rent).

But are councils in a position to provide more housing, themselves? Most councils have disbanded their direct labour teams: architects, quantity surveyors and builders. Outsourcing could be expensive and hiring scarce skills, internally or externally, would be at the expense of private sector firms involved in housing development. At best, it would take several years to create the necessary capacity which could, genuinely, add to the stock of new homes. Then there is the issue of funding. One of Rachel Reeves’ achievements was to make it easier to borrow to invest, creating assets to net off against the capital cost. But social housing is still subsidised, reducing the value of the asset as a stream of income though the subsidy element will be lessened if social rents move closer to market value.

Burnham’s supporters argue that there are two other potentially mitigating factors. One is that rehousing homeless people or private tenants dependent on housing benefit would ‘save’ money from housing benefit, costing a staggering £38 billion; but, depending on the social rent, there will still be a need for public subsidy. Another is that councils can access cheap land for development - augmented by land obtained by new powers for compulsory purchase with compensation at valuations before planning approval. But the same, cheap, land could be used for any form of development, public or private.

The most compelling argument for councils becoming developers is that the private developer model, however valid for most housebuilding most of the time, depends on a set of circumstances - the ability to earn a profit margin above rising land and property prices - which may not exist. Public sector developers can build through economic cycles and where market conditions are unattractive for private developers. Their role is complementary.

Ideological arguments about public v private should not obscure the fundamental point that there is a need for more housing of all kinds and to reduce the regulatory and other obstacles to construction. Nor should we forget that, even if the target of 300,000 new houses were to be met that would constitute less than 1% of the total stock, meaning that comparable attention should be paid to removing barriers to better use of the existing stock, public or private.

But let councils get ahead with expanding council housing in their own way, reflecting local circumstances. That is what devolution means.

Andy Burnham’s launch speech in Manchester was well-judged. If he is able to carry out a ten year sustained plan for devolving power in England away from Whitehall that will be a massive achievement and will greatly improve our system of governance.

But I have questions. These are based on serving in the Cabinet which first launched the idea of devolving powers to elected mayors for city-regions broadly on the London model (prompted by a report to the Coalition from Michael Heseltine) ; and having earlier served as a city Councillor (Glasgow) in the early 1970’s, before Scottish devolution, and when councils had serious powers but were having them stripped away.

The fundamental idea that decisions by public. authorities should be made as close as possible to local communities -subsidiarity- is not in dispute. Nor is it controversial to say that Britain has been way behind in applying this principle; we are highly centralised (or specifically in England after substantial devolution to Scotland, Wales and Northern Ireland. And there is a plausible argument that such devolution of decision making as has occurred has improved outcomes though that is disputed in Scotland in relation to education or Wales in regard to health and it is questioned also in relation to Andy Burnham’s success story of greater Manchester.

Devolution of power is not the same thing as decentralisation or relocation. Various governments have despatched government departments to the provinces to be administered locally. Under the Boris Johnson administration, Darlington became a northern outpost of government. Andy Burnham envisages some Cabinet Office activities being based in Manchester. In the day I recall advocating the relocation of the Treasury to Liverpool as a means of shifting thinking regionally. But none of these approaches empower people in towns and cities outside London.

There is an important distinction between devolution of power to spend central government tax revenue on local priorities and fiscal autonomy with responsibility for local revenue raising. British regional devolution is largely the former albeit with very limited (income) tax raising powers for the Scottish and Welsh government. There is nothing like the revenue raising responsibility of Danish local government or German Lander, let alone US states and, so far, city mayors have none. Arguably, city mayors have become popular- or at least unobjectionable - precisely because they can spend without having to tax, though spending discretion is better than none.

Nothing Andy Burnham has said, so far, suggests a serious willingness to shift major tax raising responsibility to Mayors. By contrast, local authorities carry the odium of raising an unpopular local -council - tax within government approved limits while being required to pay for statuary duties such as social care or educational special needs even if it is at the expense of popular local services like parks, libraries and leisure centres or social housing or environmental improvements. Andy Burnham has hinted at reform of the council tax system but little to suggest a re-empowerment of local government at the expense of Whitehall (or the new regional bodies),

But let me be more generous and imagine that Manchesterism is just the first step towards something big in devolution: more freedoms for elected mayors and for councils to spend and raise revenue; less power for Whitehall to impose policies and priorities. Would that help to revive the economy and raise overall living standards and public satisfaction as Andy Burnham believes? Quite possibly; but not necessarily. If a powerful tier of regional government is built up at the expense of local government it may have the opposite effect, producing a different form of centralisation. More devolution may be at the cost of more ‘post-code lotteries’; indeed it is the point of devolution to allow more variety and experiment. Successful city regions may produce dynamic city centres at the expense of surrounding small towns and suburbs. Devolved government may produce worse outcomes by pursuing wrong-headed policies. Critics of the Nationalist government in Scotland argue that experimentation with a new school curriculum may have damaged school performance - at least as measured in PISA scores.

The success of Manchesterism depends in part on the public having a sense of identity with devolved government. One of Burnham’s achievements has been to create consensus as between the combined authorities of Greater Manchester who do not dispute the leadership of Manchester. London is London, and, despite some grumbling in the suburbs, its identity is not in doubt. Scotland is an even clearer case of identity based on historic boundaries, law and custom. Birmingham has assumed leadership of a West Midlands authority with a high profile and respected first mayor, Andy Street. Liverpool too. There is less obvious cohesion in the North East, subject to endless squabbling between authorities, or in the East Midlands as between Nottingham and Derby, or in an amorphous area like the West of England. Identity at a lower level of unitary local authorities is clear in some cases - Cornwall for example - but is currently being brought into doubt by local government reorganisation which is creating bigger units of local government leading in some areas - Hampshire for example - to bitter disagreements over seemingly arbitrary borders.

Further more, there are areas of policy where decentralised decision making may be at the expense of national objectives. The government has an industrial strategy; but what if some regional governments wish to compete when a clustering or concentration of innovation initiatives may be much more effective? There are suggestions that skill training should be devolved; but different standards and qualifications could undermine mobility. The government has - rightly - set ambitious national objectives for council housing but council housing (as opposed to the wider category of social housing) is a council matter and it is not clear how councils will gear up for a major building programme, most of them having disbanded direct labour departments. Nor will councils necessarily deliver good outcomes. My former council, in Glasgow, was brilliant in building large amounts of council housing quickly but some developments - like the Red Road multi-storey flats - were so poor that they later had to be demolished.

None of these questions should stand in the way of a badly needed devolution of decision making but they underline the complexity of the problem and the fragility of the promise that everyone will be better off as a result..

Consider the strange case of the Scottish wind turbine project. At the end of March, the UK government blocked a planned Chinese investment in the Scottish Highlands to manufacture wind turbines on ‘national security’ grounds. The issue got lost in the fog around the Scottish parliamentary elections. But it hasn’t gone away. The Chinese have indicated that they will switch the plant from Scotland to Spain. The British partners who spent years negotiating the project, in good faith, are furious and are questioning the capricious nature of UK government decision making around ‘security.’

The planned Chinese investment, at Ardersier, to manufacture wind turbines was potentially the largest turbine factory in the world, employing 1,500 people with more in the supply chain. For British partners and the Scottish government, utilising China’s impressive ‘green’ technology was thought to be a safe and sensible form of collaboration. The project involved making the most technically sophisticated bit of the turbine – the nacelle – in Scotland.

I don’t normally warm to the Scottish National Party but I have some sympathy with the then Scottish Deputy Chief Minister and Economics Minister, Kate Forbes, who said the decision was: ‘simply, sabotage of Scotland’s industrial future’.

The £1.5 billion project involving the Chinese company Ming Yang was to be on a site on the Moray Firth once used to employ 4,500 people for oil and gas platform assembly. Ming Yang is recognised as one of, if not the, leading company in the world for wind technology where China is the dominant producer with 70% of global wind capacity. Ming Yang is already a trusted partner of Octopus Energy, a reputable and popular British energy supplier.

Political dinosaurs in Britain and the USA may regard wind power as a ‘woke’ response to the ‘climate hoax’. But the Chinese long understood and planned for its development as a source of cheap, secure and clean energy. They are now being vindicated, not least by the disruption to oil and gas supplies from the Gulf. So, why is it a problem to utilise Chinese investment and technology to develop our own wind-power sector?

‘National security’ was given as the reason for vetoing the investment. What exactly was involved is unclear but the Scottish Conservative leader attempted to explain: ‘the Chinese will spy on British seas, defence submarines and the layout of energy infrastructure’. But the undoubtedly sensitive submarine naval base at Faslane is on the other side of Scotland. Satellites and container ships can see far more than static towers in the North Sea. And there are far more obvious ways of engaging with Britain’s energy system including the (minority) Chinese stake in our new nuclear power stations. If there were worries about ‘killer switches’, the project could have been approved subject to security inspection or subject to the most sensitive components being reserved for Western suppliers.

There are ominous similarities with the story of Huawei which was excluded from the UK for equally murky reasons, also rationalised as ‘national security’. Huawei was a key supplier of telecoms technology and hardware to the UK. When Secretary of State, I queried the use of Huawei in sensitive installations but was reassured that any hypothetical Chinese attempt to create ‘back doors’ into secure systems could be monitored and managed. The benefits of Huawei’s (apparently) superior products outweighed the risks.

Theresa May was given the same advice which led to the sensible compromise on 5G: that Huawei be excluded from the most sensitive work but used for peripheral hardware. After American intervention, however, this decision was overturned, and Huawei products were ripped out of the system at considerable cost to British consumers and companies.

Alleged Chinese security ‘threats’ are now appearing frequently, with alarming headlines about of Chinese ‘spies’ lurking in universities, parliament, science labs and Chinese-owned business. Some politicians and, perhaps also, individuals in our security services appear to be obsessed by this Chinese ‘threat’ beyond any plausible risk assessment. Since security advice is not, for obvious reasons, in the public domain it is difficult however to judge how much is prudent caution and how much is simply paranoia.

Of course, there are risks and security issues. It is right to be careful. There is plenty of evidence that Chinese entities have been involved in cyber-attacks. When travelling to China on official business dealing with sensitive issues it is sensible for ministers and others to surrender their mobiles (as I did when in office). Common sense also suggests that any Chinese investment in politically sensitive sectors should involve British inspection and surveillance of any potentially suspect hardware and software.

There are threats, but also opportunities. Many of these opportunities lie in the fields of renewable energy and associated manufacture. As a result of foresight not matched in the West, China now dominates production and technology in the sector: wind and solar power and their manufacturing supply chains; high-voltage transmission; electric vehicles; batteries.

Whilst Britain has made good progress in wind power development at competitive cost - helped by lifting the absurd fatwa outlawing cheaper onshore wind – the manufacturing supply chain is less developed. In the Coalition years, one big success of the Industrial Strategy was attracting Siemens to make turbines in Hull. There are now 27 (foreign owned) factories in the UK. But only the Chinese are willing to make the high-tech and high-value nacelles (the ‘brain’ and ‘engine’ of the turbine) in the UK. Or were, until banned.

The same issue will arise with EVs if we adopt the template of the UK government in the early 1980’s, responding to competition from Japanese car imports: that was to embrace UK production by Japanese companies. We should demand that BYD and other Chinese companies make their cars and batteries here. China has grown through demands for technology transfer (including theft). We should learn from them. We should welcome Chinese manufacturers as we welcomed Nissan, Toyota, and Honda. I was pleased to see that Nissan has agreed terms with the Chinese company Chery to make EVs in Sunderland.

I am reminded of advice I heard thirty years when working in a British multinational on prospective investments in China: ‘only the naïve ignore the threats; only fools ignore the opportunities’. Let this be the last time folly prevails.

VC is currently a Visiting Professor at the LSE, Nottingham and Shenzhen Universities and author of ‘Eclipsing the West’.He was formerly Secretary of State for Business Innovation and Skills, and President of the Board of Trade in the Coalition government, He was Leader of the Liberal Democrats.

There is a Brexit dilemma: a growing consensus that Brexit was a bad mistake together with the fatalistic acceptance that nothing much can be done about it.

For committed Remainers, there is the smug satisfaction of having been right all along. The predicted economic costs have duly materialised. The less predicted global upheaval has left Britain dangerously stranded in a geo-economic no-mans-land. Public opinion polls are increasingly negative about Brexit.

If the mistake is so obvious, surely then Britain can and will re-join, with some urgency? But there is a big difference between the virtual reality of opinion polls and the harder political reality of undoing Brexit.

This government has adopted a different tack: seemingly more practical but less ambitious. Anxious to close divisions amongst its (former) supporters, it has accepted Brexit as a fait accompli and is attempting to re-negotiate softer terms. But it cannot toddle faster than baby steps or further than its ‘red lines’ permit, and these preclude membership of the customs union or Single Market.

Gradualism doesn’t appear to be getting very far, though there is undoubtedly useful work being done repairing some of the damage caused by the breezy carelessness of the Brexit negotiators. Each modest step – be it a young person’s mobility scheme; or participating in a single market for defence equipment- is proving to be very difficult. The EU believes that the UK isn’t serious about reengagement. It then demands a high price for any concession which the British refuse to pay or, as with Erasmus, agree to pay (a lot). Even small improvements then attract howls of ‘Brexit betrayal’.

I suggest that we go to the nub of the problem: that the mistake was collectively made by the British public. Politicians are not allowed to say that the public made a mistake just as shopkeepers are obliged to say that ‘the customer is always right’. But politicians are having to sort out the mess. Left to themselves, politicians would correct their own mistakes by performing a U-turn and accepting the ensuing embarrassment, usually short-lived. But only the public can undo the Brexit mistake; the question is how and when.

I am not a fan of referenda. Complex problems are rarely captured in a simple question. We have also learnt that referenda can be rancorous and divisive. But, like it or not, we have established that model for big constitutional issues. The Brexit boil cannot be lanced without a new referendum.

The question then is whether to stage a referendum now to energise the process of re-engagement or to wait until negotiations have produced a tangible outcome. The problem with the latter is that any British government will continue be hamstrung without a popular mandate whilst the EU has no incentive to engage seriously without hard evidence of a change in the national mood. That evidence can only come from a definitive test of public opinion.

Objectors will say: ‘it is too soon’. There is the legacy of the Peoples’ Vote campaign for a confirmatory referendum which, however unfairly, was portrayed as an attempt to re-run the Brexit referendum to get a different result. In any event, it failed.

So, what is ‘too soon’? There is no manual which defines an appropriate interval. 30? 20? 10? years. Scottish nationalists have been campaigning for an independence referendum since they lost the last one (by a bigger margin than Brexit), and with no loss of enthusiasm. Westminster seems to have decided that the timing of a Scottish referendum is predicated on evidence of a decisive shift of public opinion which is not the case in Scotland but is apparently the case for Brexit.

Some will argue that these issues will need to be debated at the next General Election. To seek a mandate to seek a mandate? Why? The world is changing very fast, and time is not a costless commodity. The government has a huge majority in parliament should it decide to act. It would however need to build as big a consensus as possible.

There would have to be buy-in, not just from committed Europeans in the Lib Dems, Labour, the Greens and the Nationalists. There are many neutrals and many Conservatives who are conflicted but do not wish to be conscripted into a Reform-led defence of the current ‘hard’ Brexit.

Language is also important and any referendum question would necessarily be couched in broad terms. It should not be over-prescriptive -‘re-join the customs union’ or ‘re-join the Single Market’- and allow for new and bespoke approaches. The essential requirement is a mandate to energise the process of engagement. Something like: ‘to negotiate a closer, comprehensive, cooperation agreement with the EU covering economic, security and political matters’ or words to that effect.

The damage Brexit has caused cannot and should not be undone by stealth but only by the British public which voted for it. Soon.

Vince Cable is Chair of Business For Europe. This column is written in a personal capacity.

Andy Burnham’s position on the subject of fiscal rules and bond markets has not always been crystal clear though he has most recently signalled support for the Chancellor’s approach. If so, there will be trouble ahead with many of his supporters. I met some of them at a recent Compass gathering in London. The conference brought together those of us from different parties who have a common understanding of the need to work together to defeat Reform and to reform the voting system to reflect the fragmented nature of British politics. But it also gave vent to strong views on the kind of economic agenda Andy Burnham’s supporters will want to see.

Gordon Brown introduced formal fiscal rules in 1997 alongside the operational independence of the Bank of England: essentially, a commitment to balance current spending with government revenue - the “golden rule’ - and a commitment to borrow only to invest. Despite arguments about detailed definition- as over the period over which the ‘golden rule’ was to be applied - and some criticism of ‘the government marking its own homework’, the rules were applied effectively over the next decade and contributed greatly to the government’s reputation for economic competence: ‘prudence with a purpose’. The restriction on public investment were sufficiently severe that private finance was sought for many public sector projects - the Private Finance Initiative- which proved wasteful and costly in many instances. Ominously, there are rumours that the Treasury may bring it back.

The fiscal rules were temporarily and rightly suspended as a result of the 2008 Financial Crisis which required heavy government borrowing to rescue the banking system, to negate a catastrophic collapse in demand and to offset a sharp fall in revenue from the financial sector. The Crisis created a ‘structural deficit’ which had to be reduced over time alongside day-to-day fiscal managment. That task fell to the Coalition which reinstated the fiscal rules with an independent Office of Budget Responsibility to monitor compliance and also built in a ‘debt rule’ to require a fall in the debt to GDP ratio over time. The Coalition period was labelled ‘Austerity’ by its Labour critics but this criticism covered a range of different points: alleged exaggeration of the risk (in the bond markets) attached to postponing fiscal correction; the speed and phasing of the attempt to reduce the ‘structural deficit’; the emphasis on cutting spending rather than raising tax and the implementation of the spending cuts; the cuts to public investment as well as current spending. Those are now arguments for economic historians. But they left behind a Labour aversion to continued ‘austerity’: curbs on government spending.

The Covid pandemic led to a further suspension of the rules and a big increase of government debt. Then the Liz Truss episode, in essence, demonstrated that any government which clearly disregards the rules - in this case by making tax cuts alongside increasing government spending on reliefs for higher energy costs - risks losing the confidence of investors in the bond market. The incoming government made clear a commitment not to repeat the mistake and Rachel Reeves has been firmly committed to the fiscal rules albeit with a (welcome) redefinition of net borrowing to invest in projects netted of against the asset value created (which in principle makes it easier to borrow to build public sector housing which generates rental income).

At the same time Labour has felt it politically necessary to avoid increasing tax rates on taxes affecting ‘working people’: VAT, income tax and employee NIC rates. Andy Burnham has repeated that commitment. Slow growth of the economy, and tax revenues in particular, has led to increased taxation outside those ‘red lines’ such as freezing tax thresholds and, crucially the increase in employers’ NICs which is widely seen as depressing business confidence and growing unemployment amongst young people.

The freedom of manoeuver facing Andy Burnham or any new Prime Minister is therefore severe. A brave social democratic government would say. ‘if we want Scandinavian public services and welfare, we have to pay for them with Scandinavian taxation which, by the way, includes VAT at 25%.’ . But he has firmly ruled that out. An even braver leader would say we have to ‘embrace austerity’ with radical public sector reform (and to create more space for defence spending); but that is off the agenda too. The mood I picked up amongst Labour activists was that we have to revisit the fiscal rules: ‘why can’t social care and NHS spending be treated as ‘investment’’. Of course, that wont wash. So what is left for Andy Burnham and the ‘soft left’ to do? Undoubtedly there is room for ‘progressive’ tax reform such as making council tax proportional to property value; but that doesn’t, of itself, bring in more revenue. A ‘wealth tax’ may be symbolically important but, as much of Western Europe has discovered, it wouldn’t n’t bring in much money, if any.

Unless Andy Burnham wants to venture into Liz Truss territory - I doubt it- all those people agitating for an alternative to Starmer-Reeves who can deliver more public spending and avoid brutally difficult choices are likely to be very disappointed