Rachel Wolf: Tests for the delivery of levelling up, and levers with which to deliver it

10 May

Rachel Wolf is a partner in Public First. She had co-charge of the 2019 Conservative Manifesto. She was an education and innovation adviser at Number 10 during David Cameron’s premiership and was founding director of the New Schools Network.

The Conservatives have won more stunning victories. Why?

First, the approach that drove the 2019 victory continues to deliver.  Second, vaccines and furlough have rewarded sitting governments: they have demonstrated competence, agility, and a willingness to spend.

The next great test won’t come for a while. Boris Johnson is Merrie England: he is the perfect leader for our summer of freedom. The economy will temporarily boom. Furlough won’t be withdrawn until September. Provided it stops raining, everyone should feel good.

But the Government will be acutely conscious that the next six months is also the last window for policies that can deliver by 2024. They will also know that, by Christmas, any lingering effects of what my partner and ConservativeHome columnist James calls ‘furlough morphine’ will have worn off. Some economic scarring is likely.

In other words, ‘levelling up’ now needs to get real. This is clearly the plan in the next few months, starting with the Queen’s Speech tomorrow, and then leading to the Levelling Up paper.

Truth be told, levelling up is a poor slogan. It has never done very well in our focus groups – people find it confusing and then, when it’s explained to them, mildly irritating. They don’t think they’re ‘levelled down’, they think they’re ignored. Equally, they find the idea that in four years they’re suddenly going to become London and the South East bizarre – it’s not what they want, and they don’t think it’s credible.

But the danger of ‘levelling up’ is not that it confuses voters, but that it confuses policy. Too many seem to equate it with transforming regional productivity, affecting every town in provincial England and Wales, within a Parliament. Obviously if that’s what voters wanted, they would be disappointed.

Of course regional productivity and innovation are vital, and longer term work should begin. But there are also shorter-term gains. Here are some important ones, some obvious levers, and ways to measure progress.

The high street test.

People care deeply about where they live. They ‘measure’ decline by their town or city centre. Here’s what you hear time and time again: shops boarded up; graffiti on the cenotaph; drug addicts; no monthly market; no decent playground.

In other words, it’s depressing to be in, feels mildly unsafe, and there’s nothing to do.

  • Levers: Business rates; soft infrastructure (local museums, libraries, playgrounds); events including markets and protecting green spaces; incentives for lower margin, often civic enterprises from soft play to youth clubs to sports. Decent bus services. Core public services in the town centre.

It is crucial that ‘economic investments’ (many of dubious effectiveness) do not trump these. Yes, it becomes easier to sustain this kind of infrastructure when people are wealthier. But it is worth remembering that many of these things existed when people were much, much poorer.

  • Tests: vacancy rates. Footfall. Number of events. And, of course, what people tell you about their town.

The safety test

Under-reporting of crime is a big problem, and there is reason to believe it disproportionately affects the Red Wall. Burglary, shoplifting and vandalism are particular problems.

Fraud, too, is a national problem with unequal consequences. Pensioners in Red Wall seats who may own their own homes but have very modest savings and no private income are particularly exposed to losing their life savings. Meanwhile, specific estates suffer from low police presence, and deprived coastal communities and small towns are the targets of County Lines.

In other words, crime is a particular issue in particular ways in these places.

  • Levers: the extra police will help. We also need to change the way in which Home Office funding is allocated and put more emphasis on localised funds like the Safer Streets Funds (which pays for things people want like CCTV). We need a massive, revived focus on fraud – it is getting insufficient airtime and attention.
  • Tests: the obvious source is surveyed crime, but the government also needs better ways to measure crime than annual face to face interviews,

The Opportunity Test 1: Skills and Jobs. 

Training and apprenticeships are a huge priority for working class people. They want local training opportunities – ideally leading to local jobs. We know there’s huge untapped demand for technical level skills in the labour market, and that many adults want to retrain. It remains one of the great challenges of our system.

  • Levers: the Queen’s Speech will create a proper lifetime learning entitlement. Now it needs more funding and less bureaucracy (which is already blighting other skills entitlements and apprenticeships).

On jobs, big changes will be long-term. As well as incentives for private sector investment, the public sector is an opportunity. People want trained people to stay or return home. A start – and one of the most popular things universities can support – would be incentivising public sector graduates (like teachers, nurses, and doctors) to stay in areas where recruitment is a challenge.

  • Tests: number of adults in retraining. Reduction in skills shortages in ‘technical’ roles. I’d include reduced reliance on foreign skilled labour in specific areas (such as parts of construction, who are presumably going to see investment, and therefore job opportunities through net zero and transport).

The Opportunity Test 2: Schools

Schools perform less well in many Conservative target areas. In the past, I would have said this was a moral imperative, but not an electoral one – school quality wasn’t a big vote winner. But I think there’s now greater desire from parents (and we’ll be publishing a report with the Centre for Policy Studies on this in the near future). They are more aware of how their children are doing, how far behind some of them are, and how differently schools responded to the pandemic.

  • Levers: incentives for teachers to go to underperforming areas. Renewed focus on academies and free schools. Ofsted inspections with a focus on standards. Continuing the drive on behaviour. There should also be new focus on the most gifted through programmes in schools and more academically selective sixth forms.
  • Test: Ofsted ratings (including number of failing schools); percentage getting five good GCSEs in core subjects (called the EBACC).

Finally, an overall measure: retention of people and inward migration – in other words, do people want to stay and move to the towns of England? It is implausible that this will transform in a few years, but you might start to see a little movement towards the end of the Parliament (and post-Covid home working will accelerate this effect if places are nice to live in).

You will no doubt have issue with many (if not all) of these levers and measures. There are some omissions (most obviously health). But my point is that it is possible to generate and measure progress within a few years. The job won’t be done, but people will see the path. That shouldn’t diminish the importance of the longer-term, even harder job of thinking through regional growth and productivity. But if you don’t get these areas right, Johnson and the Conservatives won’t be given permission to carry on.

Rachel Wolf: Johnson’s re-set choice. He can focus on the Just-About-Managing. Or go after Affulent Britain. But not both.

14 Nov

Rachel Wolf is a partner in Public First. She had co-charge of the 2019 Conservative Manifesto. She was an education and Innovation adviser at Number Ten during David Cameron’s premiership and was founding director of the New Schools Network.

There has been a lot of discussion about what the departure of Dominic Cummings, Lee Cain and the “Vote Leave Gang” means for the Prime Minister and his agenda.

On the sensible assumption that voters care more about what happens to them than who decides meeting agendas in Downing Street, I thought it worth sketching out what I think the different paths are. In other words, let’s talk about what the Government actually does – and the different political choices which underpin its actions.

It’s probably worth saying, first, that the supposed ‘split’ in ideology between the City Hall gang and the Vote Leave gang bears zero resemblance to what I saw during the election campaign (where my seat was firmly on the policy side). The commitment to ‘levelling up’ and Brexit was absolute.

But it is also true that there are essentially two distinct paths, which revolve around a simple question: when the Conservatives go back to the country in four years, what do they want to be able to say – and to whom?

For ease, let’s call this “Just About Managing” Toryism on the one hand, and Affluent Toryism on the other. I should say that I am a fan of the former, though I supported and worked on some of David Cameron’s public sector reforms – but that I think the worst of all worlds would be a failure to choose.

To retain the support of the Just About Managing voters, concentrated in the North and Midlands but also found in coastal areas and indeed on the outskirts of London, this Government is going to have to achieve four things, and fast.

First, better towns. You must be able to show, visibly and viscerally, that towns are in better shape. This is not just an issue with the ‘North’. Go to parts of the outskirts of London, and pretty much any coastal town or small city, as well as the Midlands and the North and you see the same problem. People who are simultaneously proud of their town and their place, and loathe its trajectory: who hate dirt, and crime, the lack of shops and places to do things.

This is more of an uphill battle post-Covid, but still a central one.

It means as soon as lockdown is done, you focus on new markets, incentives for shops, cultural and civic infrastructure (libraries, museums, things for children to do), and a complete lack of tolerance for crime and grime (including through a greater visible police presence).

You fund buses properly, so they come regularly and don’t cost the earth. You make sure there is charging infrastructure everywhere, and create subsidies so thatpeople who rely on cars can shift to electric vehicles easily. You also understand that, in the long run, these towns will thrive if their local cities do.

Finally, you show that you don’t think opportunities for people require them to leave their hometown. The most obvious way to do that is to get serious about skills, training, and job incentives.

Second not just Brexit being done, but Brexit creating change. That has to mean, in large part, a new immigration settlement.

When the points-based system passed into law yesterday, it gained astonishingly little coverage. But it’s one of the few policies that people truly care about (including, it must be remembered, many Remain voters).

A Just About Managing government would consistently make the distinction between the people they have welcomed with open arms (doctors, scientists, successful entrepreneurs from any country) and the people they have not.

Third, public services. You demonstrate you care about public services by giving them money. You build new hospitals. You support wrap around care for school-aged children, and show you recognise how desperately difficult it has been for most working parents during lockdown.

Fourth, jobs. Just About Managing voters believe in supporting hard work and decency, in the family, and in fairness. This has to be reflected in how you incentivise work, progression in work, and incentives for jobs. In the aftermath of Covid, this will be a dominant concern.

Keen readers will have noted that none of this is at all cheap, and it can’t all be met by capital expenditure.

But if the Conservatives don’t show results on these issues, Keir Starmer will make sure it’s noticed. Labour will be a vastly greater threat at the next election.

The alternative is to embark on the long and winding road back to Notting Hill. This would be likely to mean softening the edges of Brexit, even at the price of abandoning the sainted fishing industry.

It would also mean less of a focus on limiting migration, and more on welcoming diversity and helping businesses get the labour they need. It would mean being an explicitly pro-business party, including financial services.

It would entail a focus on urban strivers – for example, over renting and housing supply in very high cost areas. In terms of social justice, it would mean a relentless focus on the most disadvantaged (mostly urban, not in towns) at home – for instance dusting off the long shelved ‘life chances’ strategy, and abroad – wholeheartedly reaffirming the commitment to spending 0.7 per cent of GDP on international aid.

Justice policy would likely see a return to the focus on rehabilitation rather than tougher sentencing. Public services spending wouldn’t disappear, but it would take a backseat to more traditional requirements for fiscal discipline, restraint, and relatively low taxes for business.  Transport might matter, but it would be cycle lanes and metros, not provincial buses and cars.

In other words, the Government wouldn’t just be using words like ‘global’ and ‘open’ and ‘diverse’, but changing policy. And Cameron won a small majority on a platform not unlike this.

I am not convinced this second path is tenable any more (leaving open the question of its desirability). Cameron hadn’t indelibly associated himself with Brexit, let alone prorogation and No Deal. But if the Prime Minister is going to move towards it, he had better do it now, and wholeheartedly.

Most importantly, there is no third magic middle path. I fear that the desire to talk about the green agenda – important though it is in its own right – is an attempt to do just this.

To be clear, having a net zero plan matters. Everyone supports the environment, and it opens up doors on trade and transatlantic relationships. But it’s not enough to win an election, and it creates no dividing line with the opposition: Starmer will be just as credible on the environment.

It won’t convince Just About Managing voters you are on their side, nor overcome Brexit for Remainers. The Prime Minister still has to choose the rest of his agenda.

I am of course simplifying – there are some combinations. The last election campaign did not promise infinite spending, for example. And tonal changes can make some difference – you can be clear that ‘levelling up’ does not mean ‘levelling down’ for London and the South East. There are some policy agendas that could fit anywhere, such as civil service reform (though they tend not to matter to voters). But you have limited time, limited capacity, and limited choices. Where does your focus lie?

The challenge for the Government is that both paths require a lot of work. The manifesto path relies on results – that means you need to start doing things now, and talking about them. The Cameroon path relies on a public rejection of much of you have said before, in word and deed. A vague agenda in the middle won’t cut it.

Rachel Wolf: Net Zero risks upending our lives and livelihoods. Here’s why carbon pricing gives it a better chance of working well.

2 Oct

Rachel Wolf is a partner in Public First. She had co-charge of the 2019 Conservative Manifesto. She was an education and innovation adviser at Number 10 during David Cameron’s premiership and was founding director of the New Schools Network.

Worrying about the state of the environment in the middle of a pandemic might feel like rearranging the deckchairs on the Titanic. Will the public question the Government’s sense of priorities if ministers start talking about how to protect the environment in the midst of a health crisis and a long potential downturn?

Actually, no. This week marked the first substantial policy intervention of the Prime Minister in months – a long awaited change to the education system that will make it easier for adults to retrain, and support more technical education. The rationale was clear: now, more than ever, we need to make sure people are trained for their next job.

The same argument can be made for the environment. The hard lockdown and the gentle recovery reminded people of two things: that everyday life is better for everyone when roads are quieter and the air is cleaner; and that economic growth is always precarious. That means we need to focus on industries and technologies of the future that will help maintain jobs and living standards.

In short, precisely because of their Covid-19 experience, the public have seen the importance of a practical, commercially-minded environmentalism.  That is fortunate, because there are some major choices to be made, and we are unprepared for them.

The target of Net Zero emissions by 2050 was passed into legislation with little public notice – most people still haven’t heard the term. There was also remarkably little Westminster debate: all the leadership candidates in 2019 signed up to the policy, so scrutiny was absent. Then, of course, the pandemic halted the entire domestic policy agenda. For this reason, we are still waiting to understand exactly what ending a 200-year dependence on fossil fuels really entails.

In my view, carbon pricing must form a large part of the answer.

As someone on the centre-right, I have always simultaneously applauded the aims and had great fears about the execution of Net Zero.

First, I worry it might upend too much. Our economy and lives are built off copious amounts of affordable energy. It is the main reason we were able to escape the destitution of the past. A life unimaginable to even the elite in the eighteentj century is now accessible to nearly all.

Therefore, any successful programme to reduce emissions must understand that people will not go backwards. Policies must work within the grain of people’s lives – not rewire them. We cannot be against trade; or consumption; or travel.  We just need ways to achieve all three without catastrophic environmental effects.

Second, I worry the plans rely on an implausible level of omniscience and competence from governments. We cannot engineer economies. We do not know exactly what innovations to support. We are likely to end up with endless unforeseen consequences and costs. We can encourage and support technology and invention; but prescribing what it should look like in 50 years time? That’s implausible.

It is for both of these reasons that I have spent much of the last six months working for an independent commission on how carbon pricing might practically, and technically, work.

To put it simply, possibly too simply, a carbon price requires those who produce, distribute, or use fossil fuels – or who produce greenhouse gas emissions in other ways – to make a payment for every tonne of greenhouse gases that enters our atmosphere.

In principle, the arguments for a carbon price are fairly obvious. It works with the grain of the market. It doesn’t make grand regulatory predictions about what will work, what we should do, or how exactly people ought to change their behaviour. It just prices in the ‘bad’ – in this case, emissions.

In practice, too, it has been effective. Electricity is the only area we have had a consistent approach to carbon pricing in the UK, and that is why electricity is the area where we have driven down emissions the most.  But electricity represents only a minority of our carbon emissions, and we now need a clear approach to the rest of the economy.

Carbon pricing also provides two things that we now – badly – need.

First, revenue. In some countries, carbon pricing is completely revenue neutral, and the money is distributed back to households. This deals with the challenges of the environment without leaving people worse off. But in others, it is used to support general government objectives – like funding the health service (or reducing the deficit).

If the Government needs to raise money, doing it in a way that will win public support and support environmental aims, without burdening businesses excessively, is a sensible way to do it. The other way to use revenue is to support transitions to cleaner energy alternatives and new green jobs – incentivising people away from carbon emissions, while supporting innovation.

Second, it provides certainty. A lot of the money for net zero should come from private investment. A fixed, clear price gives them the confidence to spend.

We already have some carbon pricing in the UK tax system. Unfortunately, it lacks transparency, is far too complicated and is piled sequentially on top of electricity bills. It has the bizarre consequence of actively encouraging people to move from electricity to gas – the opposite of what we want if we care about carbon emissions. Neither consumers nor suppliers have a clear idea of who is paying what and why.

Carbon pricing is not a silver bullet. I have oversimplified the changes necessary to reach Net Zero, and in our commission report we outlined a list of complementary policies required for different sectors to reach it. They recognise that the cost of reaching Net Zero is likely to be different for electricity, heating, industry and agriculture, and that the technologies are less mature for some sectors than others. Nor can it be too high: the economy is fragile, and business must be able to recover and grow. But the basic human principles remain – if there is a price, people will change their behaviour, and human ingenuity will always outstrip governments’.

We have been submerged in environmental rhetoric for years. Now the UK, alongside other countries with similar commitments, is having to make some real choices. Often, understandable fear of a public backlash has held them back – our research suggests there’s a credible way of gaining public consent and achieving our environmental aims: by having a clear price, credible alternatives for people to switch to, and cushioning so that no one is too badly affected. That is both deliverable and desirable, and it should form the core of the UK’s net zero roadmap.