The Politics Bit ~ a plan

Many who engage with this concept need to suspend disbelief. Some are inspired, some cynical, some confused - all like the idea of more fiscal headroom for the Government. Yet, not only is the notion of another sovereign capital creator a very delicate subject, it would obviously require an Act of Parliament to exist. We must therefore tackle the political elephant in the room - sooner rather than later.

In the modern age, whilst "big change" is often vaunted - it is a very different reality to bring it about. However, we must acknowledge that all politicians are, in the main, justifiably motivated by the venn diagram of self-interest and service. Therefore the Insurer of State concept must offer politicians across the benches something for each.

It must give opportunity for thought leaders and advocates to emerge and help make history and "be the hero" - and it must serve the nation's best interests objectively and dispassionately.

Resources and Research

Whilst the political debate around this concept is mutually exclusive to the economic debate - the presence of both evidence and resources helps both interact effectively.

Given that the first hurdle to a political progression is evidence- the first challenge is to attempt to muster political support for research. Working on a timeline that results [en route] in the creation of vehicles for political conversation - these same supporters could be mobilised to credibly request the resources from key potential stakeholders.

Resources are required for the following key pillars:

• Economist Consultancy
  • To model some of the concepts variously
• Sub-editors and creatives
  • To format and edit the White Paper and collateral
• Lawyers to draft an Act of Parliament
  • The Insurer of State Act 20xx
• Public Relations
  • To assist in secretariat services (see below)
  • To raise awareness around the concept

The Act of Parliament:

It will be prudent for this project to commission lawyers to draft, in full, the Insurer of State Act 20xx. Through this act, the concept becomes tangible. Once a draft act is create, there is specific detail upon which discourse is enabled. Media, thought leaders, Lords and MPs can be engaged. The draft act is a defining move.

Economic Modelling:

Whilst the theory has undergone rigourous qualitative feedback and review - it has yet to be quantitatively modelled. This is naturally essential in order for the project to have any prospect of political support.

Such is the promise of the qualitative theory, that any economic or political opposition can only truly discredit the concept through economic modelling. Therefore the validation occurs, either way.

Modelling could be undertaken with one single consultancy in partnership, or with several working on different tracks simultaneously. Resources raised (not for profit) dictate the cadence hereon.

It is prudent to consider these branches of enquiry for economic modelling:

• Would using money printing in this way in the future be more or less inflationary than tax/spend and QE style stimulus
  • ergo - is this even a stimulus... if it is indemnifying economic loss.
• Would the creation of this balance sheet and the back dating "as if" of indemnity for Covid's costs help create fiscal headroom?
• If it did, what effects could that have on growth?
• How would the top line injection of suggested fiscal headroom "best be spent"?
  • Sovereign wealth
  • Carbon transition
  • Government cashflow and reduced debt auction
  • Infrastructure
  • Microeconomic Indemnity - indemnifying CBILs costs to SMEs
• How might the markets react firstly to this institutions mooted existence? Secondly, when it was used?
• How could any negative [gilt market] sentiment be pre-managed and mitigated to ensure stability?
• Would the advent of this institution make the UK a safer haven, less risky for Foreign Direct Investment [FDI]
• What would any derivative soft power creation mean in economic terms
• Lastly, what if the entire West mimicked this idea, with British support? (All of the above, aggregated.) 

Optimum pathway - a Private Members' Bill (PMB)

It is likely that the Insurer of State Act 20xx will first be heard by the political class via a Private Members' Bill. Private Members' Bills (PMBs) are a small sliver of the legislative process that allows for acts of parliament where consensus is likely - and the government's own manifesto is not threatened. Any member of the House of Commons or House of Lords may present such bills - however it is extremely unlikely any given proposed bill will become law. The best route to a PMB becoming law or being heard purposefully, is through the "Ballot".

Saturating the ballot - a Risk Caucus

The preferred route is a savvy strategy, designed here to raise awareness about the concept of the Insurer of State is to mass-lobby all members of all houses, in circulars and direct letters, to read the draft act, its white paper and collateral, and consider sponsorship.

The Ballot for PMBs takes place once a year as Parliament opens - therefore like any lottery, the best tactic to achieve success is either to lobby for a lessor number of competitor bills, or for a greater number of MPs to agree to support the Insurer of State bill.

The bill would be best served not by any one MP - rather by a caucus. We would seek that as many members as possible are willing to present the bill or "step aside" in the proceeding target PMB ballot. This maximises the odds of the bill making it through to First Reading and beyond.

Building and activating a caucus - an APPG

Whilst there exists an APPG for Insurance & Finance, it would be naive and improbable that its entire agenda would be subject to amendment because of the existence and need for this concept to reach parliament. Therefore, it is prudent to aim higher - and create a stand alone "single issue" APPG - based on the fact that the project is historically significant and able to, in theory, offer immense levels of fiscal headroom.

The first route to building a caucus is to present Economic Evidence and Research. The EER phase of this project, whilst mutually exclusive to the political phase, may be a pre-requisite for MPs to take the legislative phase seriously.

That does not mean they will not be willing to discuss or participate in a research process to debate and discuss both the qualitative and political aspects of the project.

It is therefore the intention of this project to create a single-issue All-party Parliamentary Group (APPG) - through this the EER, operationalisation and draft Insurer of State Act may be reviewed, debated and processed.

Requirements for the APPG:

• A chairperson, who must be from the House of Commons
• A co-chairperson, likely best drawn from the House of Lords
• A member from the governing party
• 20 members (drawn from both houses.)
• A secretariat (which this project shall form)
  • The secretariat may not be funded by a foreign government

This project shall therefore begin outreach to form such a group and will work towards creating a "Terms of Reference" for the APPG.

What might the agenda include?

The agenda for an APPG would include the following non-exhaustive items for discussion, formation and debate:

• The Insurer of State Act
• A long-list of requirements for inaugural Governor of the IoS
  • Candidate List
  • Interview process
• The size and likely shape of an "Indemnity Policy Committee" for the IoS
• Operational flow for the use of the Insurer of State's tools
• The Immediate Balance sheet opportunities
  • A Sovereign Wealth Fund
    • What desired rate of return
    • Cadence of investment
    • Estimated portfolio
  • Use of Fiscal headroom
    • Infrastructure
    • Forgoing future debt
• Rules, Checks and Balances
  • Capital Creation decisions and processes
  • Interaction with HM Treasury and Bank of England
  • Reporting and Oversight
  • Engagement with Industry
• Economic Modelling for the Insurer of State
• Congruence with the National Risk Register (Cabinet Office)
  • Including the effect on departmental obligations (see Existing State Intervention)
• Market Engagement and Sentiment
  • Interviewing Investment Industry Professionals
• Soft Power considerations
  • Diplomacy
  • Mobilising the "rest of the West"
  • Hosting other Insurer of States - an international institution
  • Research and thought leadership

Raising the flag - Ten Minute Rules

Here, members of the Insurer of State APPG will begin speaking in the House(s) on the subject, the need and the potential. They shall be asked to share:

• The existence of the concept
• The need for a free vote on it
• The fiscal benefits of it (should quantitative modelling conclude there are benefits)

The Insurer of State project shall progress with a "Radical Transparency" - always stating its motivations at every juncture - to endear itself to potential allies and grow trust in the concept.

Press and Communications:

Members of the Insurer of State think tank and APPG will be encouraged and assisted into media rounds - podcasts, guest posts and interviews on radio and television.

A Public Relations partner shall be retained for this purpose.

This is a non-exhaustive list to overcome the short, medium and long-term political hurdles for this concept to arrive on the statute.