Nick Hargrave: The capitalism of the future demands a bigger role for the state

Its muscular power is needed to boost share ownership, build houses and tax wealth rather than income. And let’s rule out a No Deal Brexit.

Nick Hargrave is a former Downing Street Special adviser where he worked for both David Cameron and Theresa May. He now works for Portland, the communications consultancy.

Philip Hammond’s speech to the Conservative Party Conference last October is unlikely to be remembered as a rhetorical classic. But it contains within it an important insight for the political fortunes of the Conservative Party and the long-term prosperity of our country.

Speaking to a less than packed hall, the Chancellor of the Exchequer told delegates that Conservatives of the future must:

“Harness the power of the market economy, taking a model which has evolved continuously down the ages, so that the capitalism of the twenty-first century looks nothing remotely like that of the nineteenth – and adapt it once again to speak to the values of a new generation.”

Hammond was speaking to a truth that Conservatives sometimes forget. Capitalism is not a static construct held in aspic. It is an economic system which flexes to meet the challenges of its time – and in doing so renews its mandate from one generation to the next.

This flexible conception of capitalism has been seen in the differing approaches of Conservative governments since the Second World War.

In the 1950s and 1960s, after a landslide defeat in 1945, our party accepted a greater role for state involvement in the running of the economy; spurred on by a gradual realisation that the laissez-faire approach of the 1930s had been an opportunity lost.

During the 1970s and 1980s, Margaret Thatcher burst onto the scene with an articulation of capitalism that was more libertarian and evangelical about the merits of free enterprise – in keeping with its time and a reaction to the drift and decline inherent in state involvement going too far.

The 1990s and 2000s saw the pendulum swing the other way, and voters demand a gentler articulation of the harder-edged approach of the 1980s – with support for a minimum wage, windfall taxes and more investment in the public realm. On this occasion, our party failed to meet this challenge, clinging doggedly to our post event conception of Thatcherism, and paid an electoral price.

The lesson of history is clear. When Conservatives adapt to generational calls for change on our political economy they prosper and own the terms of debate; more than capable of beating a Labour Party whose competence is usually doubted. When they fail to acknowledge the call for change they lose – and only regain power after a period of painful reflection.

If the events of the past couple of years have taught us anything, it is time for Conservative politicians to once again come up with a coherent answer for how capitalism can renew its generational mandate. Specifically, how it can materially improve the British people’s living standards in an economy that is undergoing a technological transformation; one that is increasingly global, that’s conducted online, that’s moving at pace to automation – and which is increasingly flexible in its conception of the nature of work.

It’s this transformation which is fuelling the rise of identity politics in our country – which for all its short-term attractions is unlikely to end well. It’s fuelling divisions between the upwardly mobile and the educated in our vibrant urban centres who are benefitting from this change – and the many in our towns and communities who feel left behind. Between a younger generation which is finding it hard to amass capital – and an older generation who have assets that have appreciated over the years.  It’s why a lot of public and private polling out there indicates that people feel the country is moving in the wrong direction domestically. And it’s why the main thing keeping the current Conservative voting coalition together is the illusory tiger of a Brexit which can never meet the hype – and one suspects will eventually end in disappointment.

So what’s the real answer for Conservatives in how we reinvigorate capitalism in a way that is relevant for the 2020s and beyond – and in the process renew our own mandate to govern? This could be the subject of several more articles, but here are a few core thoughts as follows:

  • First, in politics you must get the tone and definition right before you get into the policy weeds. The platform must feel upbeat, inclusive, and focussed on the guiding prism of a better future for us all to share. Optimism is infectious. This is where I think in hindsight Theresa May got the balance wrong during the period 2016-17.  The framing of the ‘privileged few’ may have been tactically popular, but it was caricatured and created expectations of a reckoning with business that was self-defeating and ceded political space to Jeremy Corbyn. It’s much easier to have difficult conversations with businesses about their responsibilities in the modern economy if you have an overall macro-message that is supportive. 70 per cent carrot and 30 per cent stick feels about right.
  • Second, I think we are going to have come to terms with a more muscular and high spending state over the next 20 years. Critically, that spending and guiding hand must be prioritised on investment in the future rather than pumping cash hand over fist into resource spending. In Treasury, speak this means more ambitious capital programmes than currently on R&D and science, digital infrastructure and transport. Always remember that the jobs, wealth and economic security of 25 years’ time will come from ideas that we cannot even conceive of yet.
  • Third, people have to feel confident they are benefitting from the system. Rather than using Labour language of ‘fixing a broken market’, focus instead on the positive articulation of what a muscular state can do to promote the holding of capital. Spend much, much more on state-backed programmes to build houses, remodel the corporate tax system with the strategic goal of incentivising employee share ownership – and turbocharge the somewhat limp National Retraining Scheme into a massive endeavour for all people in industries at risk of automation.
  • Fourth, we need to be able to pay for this and remain fiscally credible. There is no perfect way to do this but a shift towards wealth over income taxes is broadly the right way to go. This is hard but inevitable. Most realistically this can only come from a new leader at the height of their political powers.
  • Fifth, there is the question of how we maintain our political definition with Labour. I would strongly suggest we do not fall back into an ideological debate about libertarianism versus socialism (if put like that, Britain over the next 20 years is going to go for the latter). Focus instead on the values and language of economic competence and strong leadership, brought to life in the programme above, and the rest flows from there. With the current Labour frontbench this task is inordinately easier than if we were up against a centre-left leadership.
  • Finally, whatever you do – don’t countenance a ‘no deal’ Brexit. It will detract focus from this generationally important task – and will lead to many more years of austerity. This cannot be emphasised enough.

Iain Dale: Were it not for Churchill, McDonnell might be speaking German. And so could the rest of us.

Plus: Up, up and away – HS2’s costs. Staying down – LibDem poll ratings. Stuck where they are – Labour’s.

Iain Dale presents the evening show on LBC Radio and is a commentator for CNN.

I don’t know how many of you watched Liam Halligan’s Dispatches documentary on Channel 4 on Monday night, but he raised some real questions about the future of the HS2 project.

It’s cost the taxpayer £4.2 billion so far, but from this year the spending is ratcheting up, and that amount will apparently be spent each year. HS2 now employs 17 – yes, 17 – different PR companies to persuade us that a) HS2 is needed and b) it’s value for money.

As someone who thinks visionary transport projects are much needed in this country ,I think the jury is out on both counts. It’s rumoured that Theresa May wanted to can the scheme on her first day as Prime Minister, but was persuaded not to.

Were it cancelled now, it would be a humiliation for a Government which could do without any further humiliation, and there would be hell to pay for wasting more than £4 billion on a white elephant.

But sometimes you have to do the right thing and seal a political wound. I wonder whether we are at that point, or at least very near it.

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So John McDonnell thinks Winston Churchill is a villain. Good luck in explaining that to working class communities up and down the country, who see know nation’s war leader for what he is and was.

An absolute hero – without whom McDonnell and the rest of us might well be speaking German.

What is it about the Left who love to laud real villains like Chavez, Maduro and the like, yet delight in trying to denigrate the reputation of people who achieved things for this country that they couldn’t even dream of doing in a month of Sundays?

– – – – – – – – – –

It amuses met to see Labour supporters on Twitter trying to maintain the myth that Labour is constantly ahead in the opinion polls. The last three polls that I have seen showed a five to seven point Conservative lead. The last poll I saw a Labour lead of more than a couple of points was weeks ago. Even a poll of polls shows a Tory lead of 1.5 points, and that was before the last two Ipsos/MORI and Kantar polls showing seven and five point leads.

Given the shambolic state of the Government, it is incredible that, in what is now effectively a two party system, Labour isn’t way ahead. Yet those Labour supporters are so deluded they daren’t even ask the question as to why that is. They cling to the mantra that they started the last election 24 points behind and on polling day nearly won – nearly being 50 seats behind. This hubristic view that lightning is bound to strike twice may well be their undoing. It deserves to be.

Another polling mystery is why the Liberal Democrats still can’t get much more than ten. They are the only party with a distinctive Brexit message, and they ought to be cleaning up the Remain vote, given Jeremy Corbyn’s clear determination to avoid a second referendum. But they’re not.

Is it down to Vince Cable’s less than charismatic leadership? Is it the fact that their part in the coalition busted their support on the Left? Is it the hangover from the tuition fees debacle? A combination of all three, probably. I expect Cable to stand down in the summer. The leadership contest is likely to be between Jo Swinson, Layla Moran and Ed Davey.

I interviewed Moran for an hour on my show on Tuesday evening, and was hugely impressed. She may be inexperienced, but she comes across incredibly well and has the kind of charisma that a third party requires. She didn’t avoid answering some tough questions very directly. She’s certainly not an Orange Booker, but she is the sort of LibDem who might well appeal to people on the left of the Conservative Party. The Tories would do well not to underestimate her.

Henry Hill: SDLP link-up with Fianna Fail has a rocky start as senior MLA quits

Also: Backlash grows against SNP’s new tax; Labour AM apologises for antisemitic comment; and Scottish Tories say they’ve stopped Johnson.

SDLP ‘on back foot’ after senior resignation over merger

The alliance between the Social Democratic and Labour Party, Northern Ireland’s smaller and more moderate nationalist party, and Fianna Fail suffered a blow this week when the former’s most high-profile MLA resigned.

Clare Hanna, the SDLP’s Brexit spokeswoman, resigned from its Assembly group (although not her actual party membership) after a special conference on Saturday approved the new ‘policy partnership’ with the Republic party, the News Letter reports.

She said that: “I remain unconvinced that an exclusive partnership with Fianna Fáil is the right vehicle to deliver the non-sectarian, transparent and social democratic new Ireland I believe in”.

SDLP members backed the proposal at the conference, although 30 per cent voted against it. There apparently remains a lot of uncertainty around what exactly the new relationship entails, with senior figures being coy as to whether it would mean a joint manifesto or similar.

Hanna may not be the last to leave: Colum Eastwood, the SDLP leader, was reportedly warned that a group of members were “considering their options” after the link-up was approved.

In other Irish nationalist news, Sinn Fein have reiterated their belief that a no-deal Brexit would trigger a border poll in Northern Ireland.

According to the Guardian, Mary Lou McDonald described such a vote as a “democratic necessity” in the event that Britain left the EU without the backstop in place – but declined to say when a referendum should be held.

Writing on this site today, David Shiels has warned ministers that by talking up the prospect of a border poll – in a bid to shepherd unionist MPs behind Theresa May’s withdrawal deal – they are playing into the hands of the republicans.

Leo Varadkar, the Irish Taoiseach, continues to insist that such a Brexit can be avoided – even has he refused to negotiate with the Prime Minister during her visit to Dublin earlier this week. However Geoffrey Cox, the Attorney General, did meet with his Irish counterpart on that Friday, as well as meeting separately with senior figures from the Democratic Unionist Party.

Sammy Wilson, the MP for East Antrim and DUP Brexit spokesman, has had to insist this week that his party remains united in its opposition to the backstop. The News Letter reports that Arlene Foster had earlier refused to be drawn on whether or not she was still demanding its complete abandonment.

Backlash grows against SNP’s new tax

Teachers have announced that they will demand compensation out of public funds if they are subject to the Scottish Government’s new car park tax – in a move the Tories estimate could cost £1.7 million in Edinburgh alone.

According to the Daily Telegraph, this move by the unions comes as part of a growing public backlash against the proposals, which would see charges levied on private car parks such as those operated by businesses and other places of work.

There was also outrage when it was revealed that such a tax is liable for VAT if the cost is passed on to employees, pushing the cost to workers up to around £500 per year.

Derek Mackay, the SNP’s Finance Secretary, accepted an amendment tabled by the Scottish Greens introducing the levy in order to win their support for his budget, which could not have passed without them.

Opposition parties have also this week criticised Nicola Sturgeon, the First Minister, for talking up the prospect of independence whilst on an official trade trip to the United States.

This prompted Stephen Daisley, writing in the Spectator, to urge the Government to re-assert its prerogatives over foreign affairs and start attaching conditions to the Scottish Government’s use of public funds outwith its remit. Probably too much to hope after ministers’ foolish retreat over post-Brexit devolved powers, but definitely a good idea for a bolder, more imaginative leadership to consider.

In other news, the Scottish Conservatives have reportedly declared victory in their campaign to stop Boris Johnson becoming Tory leader. I wrote about the significance of ‘Operation Arse’ earlier this week.

Labour AM apologises for ‘unacceptable’ comments about Jews

Jenny Rathbone, a Labour member of the Welsh Assembly, has apologised and been issued a formal warning over “unacceptable” comments she made about Jewish communities.

Wales Online reports that the Cardiff Central AM said it was “really uncomfortable” how certain security-conscious synagogues now resemble ‘fortresses’, and that “siege mentalities” might be driving this change. She will now undergo antisemitism training by the Community Security Trust.

Meanwhile Mark Drakeford, the new First Minister, is apparently trying to ease out Wales’ most senior civil servant in order to get a “fresh start”.

Garvan Walshe: Orban’s fertility drive is an attack on Hungarian women

The man his critics call the ‘Viktator’ has two new policies – one a gimmick, one deeply sinister.

Garvan Walshe is a former national and international security policy adviser to the Conservative Party. He runs TRD Policy.

It’s been a busy view weeks for the man opposition demonstrators like to call ‘Viktator’. Freedom House downgraded Hungary to “partly free,” the first EU member state to qualify for this dubious distinction.

On Tuesday Mike Pompeo, the US Secretary of State, troubled Viktor Orban with a visit. The effect was mixed. On the one hand, the Trump Adminstration finds Orban’s nationalism congenial. But the US (if not the President himself) is growing increasingly concerned by how close he’s got to his fellow reactionary strongman, Vladimir Putin.

Then, on Wednesday, the reinvigorated opposition held another demonstration, this time on the banks of the Danube outside the Hungarian Academy of Sciences.

Not content with expelling Budapest’s internationally renowned Central European University, he’s now turned his sights on the rest of the higher education sector, seeking to politicise and control it. One by one, Hungary’s independent institutions are being snuffed out.

Some four-fifths of all nominally non-state media have been amalgamated into a single foundation controlled by one of his cronies.

New administrative courts are being created, directly under the control of the Ministry of Justice.

And the larger opposition political parties have been hit with arbitrary fines (the office of a smaller one suffered a mysterious fire).

Orban boasts a racist obsession with immigration, saying (according to the official English translation of his remarks): “we do not want our own colour, traditions and national culture to be mixed with those of others.”

But his real problem is emigration. The now discontinued independent news site Budapest Beacon estimated that 600,000 Hungarians — one-tenth of the working age population — had left to other parts of Europe by 2016.

People have gone not only for better wages, but to escape corruption and politicisation of their work. If you’re a heart surgeon, why work for a corrupt political appointee when you can go to Germany or Britain instead? Along with these disproportionately educated and hard working people go their taxes. Public hospitals are now so short of resources that the opposition Momentum party has taken to handing out loo roll to patients.

This is happening despite high nominal economic growth. The country is suffering from a severe labour shortage. Orban’s first plan to deal with this was to change the overtime law. This did not first sight seem inherently objectionable — except that the workers would have to wait three years for their extra pay!

His second plan is to find more workers, but he’s ruled out the easy way to get them — immigration. In the same speech where he said he wanted a white-only Hungary, he also pledged “to keep Hungary as it has been for the past 1,100 years.”

His method is import substitution. Perhaps inspired by that German AFD election poster showing two pregnant women under the caption “let’s make our own”, Orban has turned to natalism.

Like other Orban initiatives, this can seem superficially plausible but conceals a much darker reality.

Hungary’s fertility rate is low (1.42 births per woman) so in the long run more children are needed to achieve replacement level even with modest immigration.

Increasing fertility to those levels is not impossible. France has a generous system of child benefit and extensive state childcare (40 per cent of children below three and almost all above three are in formal childcare), and a fertility rate of 1.96. Sweden has a similar record (almost 55 per cent and 90 per cent), and a fertility rate of 1.85.

Both France and Sweden have done so without taking too many women out of the labour force. In France, parenthood reduces the average amount of time women spend in work by only about ten per cent (and in Sweden actually increases it fractionally). Yet in Hungary it reduces it by a third — by far the largest amount in any European country.

Instead of following their example, Orban has come up with two policies: the first a gimmick, the second sinister.

His first idea is an income tax cut for women who have four children. Fair enough, you might say. But since Hungarian childcare is so poor, how many women with four children are going to also have the time to earn enough to benefit from the tax cut? Cynics have already pointed out one benificiary: Orban’s wife (she has five children).

The second is far more ominous. Married women under 40 (and note, married women only) are to be eligible for a huge loan — of ten million forint, or about £27,000, 30 times the average monthly salary — which will be forgiven if they have three children.

This is a huge amount of money, particularly in poorer parts of Hungary where salaries worth a few hundred pounds per month are normal. It might sound like a nice deal if you’re a young woman from an impoverished village: get married, have some children. But what happens if you don’t like your husband? Or he’s violent or abusive? Or have a terrible pregnancy and don’t want another one? Or even if he just loses his job? The payments on the loan would be crippling. The pressure to have more children (and, given the parlous state of Hungarian childcare provision, and difficulty of getting part-time work; and long commuting times in sparsely populated areas) would be severe.

This isn’t a positive incentive to have children, but debt-peonage to the state.

Nor would it even work in the medium term, because it takes women out of the labour force, exacerbating the labour shortage, instead of getting them to work in order to relieve it.

This policy won’t make a dent in Hungary’s labour shortage, but it will put Hungarian women under the thumb of the government and their husbands.

Maybe he needs a new name: Orban the Taliban.

Robert Halfon: Thatcherism was wrong. We need to build social as well as economic capital. Including in our schools.

Educational traditionalists are wrong to believe that if we focus on academic rigour and high standards alone, everything else will fall into place.

Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.

I’m a supporter of free schools and truly admire the work that Mark Lehain is doing in Bedford. However, I’ve never been able to understand why so many of those with a centre-right worldview see the ‘anti-exclusions argument’ as an assault on school standards and traditionalist education.  I’m referring to his reply last week to my last column on this site.

We Conservatives have always been tough on crime and tough on the causes of crime but, for some reason, many of us turn a blind eye to this sentiment when talking about exclusions. Avoiding exclusions as much as possible ensures that more of our children benefit from the high standards in our schools that Mark rightfully champions.

First, exclusion rates. Yes, exclusions are not higher now than they were a decade ago, but this misses the wider picture. Whilst exclusions did once drop, they have been increasing steadily since 2012/13, and this trend is concerning. The latest figures show that the number of children being permanently excluded from schools has risen by 67 per cent since 2014.

It’s all very well arguing for less tolerant schools and more exclusions, but even if you subscribe to this way of thinking, we still need widespread and good-quality provision for children who don’t fit that mould. This is not the case. We have a postcode lottery of alternative provision. There is not one outstanding alternative provision place in the entire North East of England and if you’re looking for a placement post-16 anywhere, you can pretty much forget it.

Second, prison. Mark argues that underlying issues, not exclusions, are the cause of imprisonment in later life, but it doesn’t matter whether the chicken or the egg came first. Since these behavioural issues start at a young age, we need early intervention to tackle them before they escalate to something even more serious. Schools are often the only place these young people are engaged with who have the ability to turn their lives around.

For example, the Reach Academy in Feltham has 46 per cent of its pupils on pupil premium and a higher-than-average number of pupils with EHC plans. It also has a Progress 8 score of 1.11, placing it 15th nationally. This demonstrates what can be achieved when schools support disadvantaged pupils who, as the statistics demonstrate, are more prone to school exclusion.

There are lots of compassionate reasons why we should be doing more of this, but it’s also important to acknowledge that the taxpayer ends up forking out an estimated £370,000 per excluded child in lifetime costs.For those economic conservatives, there is a huge cost benefit to intervening early.

Our committee would like to see more support for schools to enable them to do this. We have made the case for improved teacher training, closer working partnerships with PRUs, and qualified staff for learning support units.

Third, SEND. Rough estimates suggest that 922 students with SEND are excluded, either permanently or temporarily, every school day. This vulnerable group of children accounts for around half of permanent exclusions even though they make up only 14 per cent of our classrooms. Some may not see this as a problem, but our committee does. The well-intended Children’s Act is not working. We have been left with a system that is unfair, facing a constant battle for resources, and undermining parents who are forced to wade through a treacle of bureaucracy.

It is wrong to say that students “are excluded for one of the main reasons they end up given the SEN label, their behaviour”. Social, emotional and mental health concerns are a legitimate SEND and, in many cases, are caused by a childhood trauma or a disruptive home environment. Belittling these children’s hardships to simple “behaviour” issues is too simplistic. For these pupils, school may be their only chance to experience the structure and support systems they so desperately need in their lives.

Fourth, off-rolling. There may well be rules in place that ban the practice of informally excluding children from school; however, these rules are not being enforced. As mentioned before, more than 19,000 pupils in year 10 in 2016 did not progress to year 11 in the same school in 2017.

If only half are going into other state schools as Mark highlights, where do the rest end up? Whatever the answer to this question, the point is that their original school should not be able to just wash their hands of students they aren’t keen on, particularly during crucial exam years. Sometimes, a move might be entirely reasonable and in the best interests of the child but, if this is the case, why does it need to be done behind closed doors? Ofsted would not have 300 schools under investigation for this very issue if they did not share our committee’s cause for concern.

Now for one thing we can agree on – school standards. On this ground, education is a success for us Conservatives and we are right to celebrate it. We have 1.9 million more children in good and outstanding schools compared to 2010, the results gap between disadvantaged pupils and their peers has shrunk by 10 per cent since 2011, and England has risen to joint-eighth in the world’s primary-level reading league table.

The problem with the great education debate is that it always ricochets between the binary traditionalists and progressives. I, as a self-proclaimed ‘Bakerite’ (a supporter of Lord Baker’s vocational and technical education vision), count myself as neither of these. My primary motivation is skills and technical education, but I am still able to appreciate the need for high standards and the pursuit of knowledge.

I’d also like to point out that I have never said there should be no exclusions. Of course, in certain circumstances, it is a necessary course of action to ensure the safety of teachers and other students. However, this should only used as a last resort.

During the 1980s, many Conservatives, myself included, believed in Thatcher’s trickle-down economics. The idea was that if you built up economic capital, everything else would come right – that society would benefit, too. With hindsight, I’ve come to understand that this was not correct. Economic and social capital need to be built hand-in-hand to construct a prosperous society.

Educational traditionalists make exactly the same mistake when talking about our schools –  if we focus on academic rigour and high standards alone, everything else will fall into place. But, we need to build up social capital in our schools too. If we do not, we are denying those most in need of accessing the high quality education our Conservative Government has worked so hard to achieve. If we get it right, then we ensure that everyone, whatever their background, can climb the ladder of opportunity and achieve the jobs, security and prosperity waiting at the top.

Andy Street: The West Midlands Local Industrial Strategy ensures we are the workshop of the modern world

From transport tech and data-driven healthcare, to creative enterprises and the services sector, we are forging ahead.

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

As the cradle of the industrial revolution, the West Midlands left its mark on the globe. In the 19th and 20th centuries the factories and furnaces of Birmingham, Coventry and the Black Country forged much of the modern world, exporting goods from ACME whistles to BSA motorcycles, from Cadbury’s chocolate to Bird’s Custard.

Even the ships that carried produce and people to far-flung new markets were anchored by huge chains wrought in our land-locked furnaces.

Now, as the first UK region to finalise a Local Industrial Strategy, we are once again leading the way.

The West Midlands has always been a hotbed of innovation and invention, driving advances in engineering, manufacturing, transport, marketing, social change and more. It was the workshop of the world.

Industrial decline began in the 1960s and, by the end of the last century, our region bore the scars of decay – empty, abandoned factories that once employed thousands. All of that has now started to change.

The West Midlands is undergoing a renaissance of growth and investment. New start-ups are choosing our region as the place to be. Nowhere else outside of London has seen the level of growth witnessed in the West Midlands. Output here has risen by 27 per cent in the last five years. Our productivity growth was twice the rate of the rest of the UK in 2017-18. The innovation and invention that once made us the workshop of the world is back.

Like other post-industrial regions in the UK, we must carve out a new strategy for the West Midlands in an increasingly global 21st century. With the uncertainty around Brexit, we need to think about how we build a globally-competitive economy.

That’s why the West Midlands agreed to be a trailblazer, creating the UK’s first Regional Industrial Strategy, leading the way for others to follow.

This strategy sets out the priorities we believe will enable local growth to continue, as well as ensuring that the success of our region is felt by all the communities within it. This success must be inclusive and accessible to all.

With this ground-breaking document now agreed within the region, we are awaiting the endorsement of Government so that, together, we can start turning strategy into action. With the uncertainty over Brexit, that endorsement would mean we can begin this important work soon – and share our message of confidence.

The West Midlands Combined Authority worked with our universities and the region’s three Local Enterprise Partnerships, from Greater Birmingham, the Black Country and Coventry and Warwickshire, to ensure the strategy not only provides a united vision, but that it also reflects the differing needs of our constituent members.

This spirit of inclusivity also included a wide-spread consultation, which asked regional networks, business groups and 350 different organisations for their input. They wanted a clearer definition of the West Midlands’ ‘unique selling points’, expanded opportunities for a broader cross-section of business sectors and more focus on the huge supply chains that link the conurbation.

Respondents also wanted our strategy to engage with all the different kinds of places where business flourishes in the region, from the big cities to the towns and more rural areas. By fully understanding the successes – and challenges – in our own backyard, we have created a strategy that will help sell the West Midlands to the rest of the world.

This meant identifying four major national and global strategic opportunities:

The UK centre for mobility: From driverless cars to light rail and aerospace, we have the supply chains and transport pedigree to steer huge investment to our region. We have a renowned automotive sector, ranging from world-famous brands like JLR and BMW to innovative smaller development firms. We also have the foundation industries that make the metals and materials that underpin vehicle manufacture at more than 20 sites. With our own transport system becoming more and more integrated, and the West Midlands pioneering the roll-out of the 5G network, mobility could bring billions of pounds.

Creative commerce: We have a wealth of nationally-important gaming, TV, film, VR and design firms. By connecting our universities and creative businesses we can design, develop and deploy new products and services. Evidence shows that Birmingham and Solihull alone have the potential to add nearly 4,000 new creative enterprises and 30,000 new related jobs, with the opportunity to scale this across the West Midlands as a whole.

Business services: As we move more towards a service-based economy, we expect to see large-scale growth across this sector. Business, financial and professional services already employ 400,000 people across the conurbation – with 125,000 more jobs forecast by 2030. Here in the West Midlands we have the full suite of services available, from huge international financial brands such as HSBC to an ambitious construction sector that is well placed to grow in strength with the building boom.

Data-driven healthcare: With our diverse and growing population, there are huge opportunities here for biomedical research, linking NHS patient records through 5G and enabling real-life testing of innovative new treatments. Our expertise and ability to work with patient data in an inclusive, collaborative way is a major UK and West Midlands strength. We have a growing cluster of both large and small firms and an associated supply chain, raising at least £35 million of investment in the last 12 months. Crucially, this innovation will be anchored in partnership with the NHS, translating directly into better health care for our citizens. Our diverse region has the research facilities and expertise. It has the population of Scotland and the genome of the world. It could be a global laboratory for data-driven translational medicine.

These four areas allow us to champion our specialist sectors in a way that will create growth and investment to benefit the entire regional economy.

Of course, all this industrial ambition requires a strong foundation in improved skills, transport, housing and land delivery. We are already making huge strides in all these areas but more remains to be done.

Our strategy lays out ideas to affect real change, from doubling the number of good-quality apprenticeships by 2030 to delivering £3.4 billion of investment in trams, road and rail over the next decade.

In housing, we will increase the rate of housing delivery with a £350 million housing plan, investing £250 million in land remediation and developing the skills required through the National Brownfield Institute in Wolverhampton. This is a great start – but more will be needed to serve our growing population.

The strategy will also push for post-EU growth funding to be targeted on the West Midlands and devolved to local decision makers. We must make the case for continuing to invest in us as a resilient and successful economy.

The former workshop of the world needs a world-class strategy to continue its remarkable economic renaissance. It needs to be distinctive to compete with likes of Berlin, Boston and Barcelona.

But in creating this new strategy, we have confirmed that this diverse, ambitious and inventive place still has an energetic, innovative outlook that makes it a powerhouse on the world stage, just as it did during the Industrial Revolution.

With this confident new vision, the West Midlands wants to lead the way in showing the Government’s Industrial Strategy can make a real difference.

Nicky Morgan: Brexit. Country before Party? It’s a false choice. The country needs the governing party to deliver.

The best outcome is for the Government and its partners to deliver the majority verdict of the referendum and of the last election.

Nicky Morgan is Chair of the Treasury Select Committee, a former Education Secretary, and MP for Loughborough.

What does the ‘national interest’ now demand of MPs?

We know that Brexit is an extraordinary political process, putting unusual strain on our party political system and our constitution. We also know that the stakes are getting higher, as March 29th gets closer.

Whatever one thinks about leaving the EU, it cannot be denied that it represents a fundamental change in relations with our nearest neighbours and our trading relationships with the world. Some people think that this change is long overdue, whilst others regret that it is happening at all. The issues are so important that the phrase ‘the national interest’ is being used more and more to argue that various matters relating to Brexit are or are not ‘in the national interest’.

I’ve no doubt that all MPs and Ministers believe that the Brexit path that they are treading is in this interest. Who goes into politics to act against it? And I’ve also no doubt that those who say they are putting Country before Party also sincerely believe that. Ultimately, I’ve no doubt that we all believe we should put country first, constituency second and party last (whatever the whips might say).

But given the very different Brexit scenarios and possible outcomes on offer, how can we all be right? Which option (or perhaps combination of options) can really be said to be in the national interest? Is this why it is easier to know what each of us is against in terms of Brexit than what each of us is in favour of? Is it easier to rule something out as being against the national interest, rather than to say confidently: ‘doing x is definitely in the national interest’?

After the first Meaningful Vote, and the inability of both main Party Leaders to seriously embrace proper cross-party talks, it became clear to me that everyone was going to have to compromise if we are to get a Withdrawal Agreement over the line. And that means we have to start to see that each of us might not have the only answer to what is in the national interest.

I’ve explained elsewhere why I agreed to be part of the ‘Malthouse Compromise’. And I’m now part of the Alternative Arrangements Working Group which spent over six hours with Steve Barclay last week, examining what the alternatives to the backstop might be, as demanded by the Brady amendment.

In the interests of finding that answer, let us then think what the national interest might demand. As Conservatives, we are surely in favour of a stable country with a well-functioning Government able to pass its Budget and its legislation. We want a system of representative democracy which retains the confidence of the electorate. We want to support businesses and entrepreneurs. We want a strong security and defence system. We want a strong economy, and a tax system which allows people to keep as much of the money they earn as possible subject to properly funding a welfare safety net and our public services. We support incremental change, not radical policy moves.

To me, all this would tend to suggest that the best outcome is that the Government remains in control of the Brexit process, and is able to deliver its biggest policy objective and necessary legislation with the support of a majority of its own MPs (and confidence and supply partners too) – thus fulfilling the majority verdict of the referendum and the last general election; implementing a policy which mitigates any economic damage caused by a big change in our trading relationships, and supporting businesses to carry on doing what they do,  and our security and defence forces to carry on doing what they do, too. This surely is what the national interest now demands of its MPs.

Ashley Fox: MPs must not bind May’s hands on Brexit next week

There are clear signs that Brussels is laying the ground for a compromise – we must not remove their incentive to produce one.

Ashley Fox is an MEP for South West England, and is the leader of Britain’s Conservative MEPs.

It is an oft-repeated truism about the European Union that deals are not done in Brussels until the coffee goes cold and the final deadline looms large.

Sleep deprivation, and a fear of being blamed for the consequences of failure, can sometimes be the only way of securing the agreement of 28 member states and MEPs from across the political spectrum. Hence, parliament budgets and council conclusions are frequently not settled until the early hours.

If you apply this principle to the Brexit negotiations, we could be some way off achieving a compromise on the Withdrawal Agreement. After all, March 29th is 49 days away, and the coffee is tepid but still drinkable. That means the Prime Minister may have little new to present to the House of Commons when she makes her promised statement on February 13, ahead of votes on another slew of amendments on Valentine’s Day.

I urge MPs to see that for what it is – a tried and tested EU negotiating ploy – and not play into Brussels’ hands by losing their nerve and restricting Theresa May’s room for manoeuvre in the more substantive negotiations that will inevitably take place as the deadline nears.

I am certain that the EU has a further offer to make as it attempts to avert a no-deal Brexit. But if MPs take the possibility of a no deal off the table on 14 February, that concession might never leave Michel Barnier’s briefcase.

Why should he produce it? The EU would have no need to invest the political capital required to reach a compromise if it believed that by simply sitting tight it might force the UK Government to accept a customs union or call a second referendum in order to break the deadlock. MPs’ votes against the Government embolden the EU in its approach.

There are plenty of signs that the EU is preparing the ground for a compromise. First came the unexpected comment by Margaritas Schinas, a senior Commission spokesman, who told journalists: “If you push me on what might happen in a no deal, I think it is pretty obvious that you will have a hard border.” This was intended to make clear to the Irish Government that a softening of its stance might be required.

It was not until 24 hours later, after much huffing and puffing in Dublin, that Michel Barnier issued a clarification. “We will have to find an operational way to carry out checks and controls without putting back in place a border,” he said. That sounds to me like a potential starting point for the post-14 February talks with the UK.

Separately, member states are beginning to exert influence. Jacek Czaputowicz, the Polish Foreign Minister, believes that “courageous actions” are needed to find an agreement and avoid a no deal. He said: “If Ireland turned to the EU about changing the agreement with Britain with regard to the provisions on the backstop so that it would apply only temporarily – let’s say five years – the matter would be resolved.”

Meanwhile, in Germany political voices are growing louder for the EU to do a deal. These culminated on Monday with the strongest comment yet by Angela Merkel, who expressed her hope that a compromise could be found. She said: “To solve this point you have to be creative and listen to each other, and such discussions can and must be conducted. We can still use the time to come to an agreement over the things that are standing in our way if everyone shows goodwill.”

It is becoming clear – not least to the Irish Government, whose citizens and businesses would be hardest hit by a no deal – that the backstop, which was conceived to avoid a hard border, is in danger of causing precisely that outcome.

The EU cannot allow that to happen and will, as March 29th approaches, either begin to flesh out Michel Barnier’s alternative “operational way” to carry checks or explore other options. For that to happen, MPs must understand what is playing out in Brussels and be mindful when they pass through the lobby next Thursday.

The temperature may be rising again in Westminster, but on this side of the Channel the coffee is not yet cold.

Iain Dale: Replace Hammond with Gove, promote Mordaunt, bring back Raab

Plus: Snubbed by a Remainer. Delighted for Beth Rigby. Tusk japes, May spooks, Francois almost self-combusts. And: is Brexit Brecksit or Breggsit?

Iain Dale presents the evening show on LBC Radio and is a commentator for CNN.

I spent much of Monday afternoon in the Commons catching up with a few MPs. Ok, Ok – it was a massive gossip session. Very useful for getting some background info on what the next Brexit developments are likely to be.

I did have one rather disconcerting experience, though. I was walking past the tables reserved for MPs when I spied one who I have known for years and always enjoyed sharing a few words with.

The MP looked up, I smiled in acknowledgement and went to start a conversation, but the MP immediately looked down at their phone without any sign of acknowledgement at all. I was officially blanked.

I’m sure the fact that this MP is the archest of arch-remainers and no doubt sees me as the Brexit-supporting enemy had nothing to do with it…what a state of affairs.

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Like many in Westminster, I was delighted to hear that Beth Rigby has been appointed to succeed Faisal Islam as political editor of Sky News. She’s a brilliant story-getter and has adapted to a broadcast role incredibly quickly, having been a print journalist for many years.

She won’t be starting her new job until May because, I gather, Islam is on a very long notice period which Sky News has decided to enforce. She beat off a lot of competition for the role, including two very well-known names in political journalism. I think she’ll be excellent in the role.

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At some point in the not-too-distant future everyone in the political media is going to start to obsess about the date on which Theresa May will announce she’s quitting.

So let me get ahead of the pack. I have always thought that she would go fairly soon after we (ostensibly) leave the EU on March 29th. But since Conservative backbenchers can’t now force her departure until the end of the year, it’s highly possible that she many stay on quite a bit longer than that.

One senior Tory told me he expects herr to announce her departure at this year’s Party conference, with the leadership contest concluding in January 2020. It’s a reasonable prediction but, if that is truly the plan, may I suggest that in early April she conducts a Cabinet reshuffle to enable all the potential contenders to test themselves properly?

This would entail Penny Mordaunt being given a big department, Philip Hammond being replaced by Michael Gove and Dominic Raab being brought back into the Cabinet. That last one might be a stretch, but the Party needs to be given a wide choice of candidates. I could argue the same thing about Boris Johnson, but it’s difficult to see how he could be brought back in any position which he would accept.

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Why do some people pronounce Brexit as ‘Brecksit’ and others ‘Breggsit’? I’m in the former camp, but there seems to be no rhyme nor reason as to which camp someone falls into. Any explanation?

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I doubt whether anyone believes that the prospects of a deal with the EU in advance of March 29th have been enhanced this week. Donald Tusk’s merry little jape on Wednesday was clearly calculated to spook Theresa May on the day before she arrived for several hours of apparently fruitless talks with the Commission.

Despite pressure from several member states, the Commission shows now sign of budging on the backstop and, if that continues, I can see no way for anything to pass through the Commons.

ERGers were also spooked by May’s words in Belfast, where she said that she is trying to amend the backstop rather than abolish it altogether. Cue Mark Francois almost self-combusting. As of today, there are 48 days to go until we are supposed to formally leave the EU. The odds on that happening reduce by the day. Just as Brussels has planned…

Henry Hill: Trimble raises over £10,000 for legal challenge to the backstop

Also: SNP insist on leading Holyrood inquiry into Sturgeon’s handling of Salmond allegations; and Ulster Unionists call for Direct Rule in the event of a no-deal Brexit.

Architect of the Belfast Agreement rallies support for challenge as UUP call for direct rule

The News Letter reports that Lord Trimble, the Northern Irish peer who helped negotiate the Belfast Agreement, has managed to raise more than £10,000 to mount a legal challenge against the mooted ‘backstop’.

An appeal by the “informal group” supporting his efforts has apparently elicited a strong response, backed by an online crowdfunding effort.

Trimble, who served as First Minister of the Province whilst leader of the Ulster Unionist Party, backed Brexit and has been a public opponent of the Government’s approach to Northern Irish issues during the Brexit negotiations – particularly its habit of giving false credence to Dublin’s assertions that the Agreement required an invisible border.

According to the Daily Telegraph, the legal basis for the challenge is set out in this Policy Exchange paper from Lord Bew, who also set out his thinking in the News Letter  and on this website.

Outside Trimble’s circle there is a great deal of scepticism about his case’s chances of success. However, that one of the two men who won the Nobel Prize for the Belfast Agreement felt moved to take this step illustrates once again the depth and breadth of political unionism’s opposition to Dublin’s demands in the Brexit negotiations.

All of this comes in a week when the Democratic Unionists sent out their own, somewhat contradictory signals over the backstop.

Whilst the Financial Times reported that Arlene Foster was hinting at ‘flexibility’ over making a deal work, Sammy Wilson – the DUP’s Brexit spokesman and most vocal Brexiteer – declared that the party would vote against “any” backstop proposal.

He added that Eurosceptics had been “surprised and annoyed” when the Prime Minister used a speech in Belfast to reiterate her commitment to the backstop – in the same week that the Times reported Angela Merkel’s intention to try to pressure the Irish Government into softening its own stance. Meanwhile Jacob Rees-Mogg told a DUP meeting that even a no-deal departure need not require a hard border.

In commentary this week, Ben Lowry claimed that it was a “massive failure of civic unionism” that the backstop got so far with so little criticism; Henry Newman set out 12 reasons the backstop makes “no sense at all”; and Eilis O’Hanlon alleged that Ireland was in the “grip of Anglophobia“.

Labour vote against SNP-led inquiry into Salmond

Scottish Labour yesterday voted against plans for a Scottish Parliament inquiry into the botched handling of the allegations against Alex Salmond – because the Nationalists would lead it.

The Guardian reports that under Holyrood’s rules the SNP is entitled to chair the next committee established, and that Nicola Sturgeon has declined the option of relinquishing control. Moreover, she has appointed to it four ex-ministers who served in her predecessor’s administration.

In an attempt to reassure MSPs and regain cross-party support, the Nationalists highlighted that one of these, Linda Fabiani, is currently Deputy Presiding Officer of the Scottish Parliament. But despite voting for the proposals alongside the Liberal Democrats and Greens, the Conservatives insisted that they would still prefer the governing party to cede the leadership of it to another group.

Elsewhere this week Derek Mackay, the Scottish Government’s Finance Secretary, insisted that his party was united around a controversial new parking tax he included in his budget to win the support of the Scottish Greens, after a Nationalist MSP had to perform a very public u-turn on the subject. Earlier this week business leaders said that they had been “humiliated” and “dismayed” by the raft of new tax measures the left-wing, separatist-inclined party had managed to extract from the Scottish Government.

Ulster Unionists call for direct rule in the event of a no-deal Brexit

Robin Swann, the leader of the Ulster Unionist Party, has said that Theresa May must introduce proper direct rule over Northern Ireland in the event of a no-deal departure from the European Union, according to the News Letter.

The North Antrim MLA said that the Province would require “political leadership and direction” to navigate the challenges posed by such a scenario. He added that the Prime Minister had apparently been extremely reluctant at their meeting to discuss progress towards restoring Northern Ireland’s devolved institutions.

Ulster has been run by its civil service, operating on effective autopilot and without direct political accountability, since the collapse of the Northern Ireland Assembly in January 2017.

Karen Bradley has been criticised for saying that getting the devolved institutions back on their feet was her “top priority” despite the dearth of any pro-active efforts by the British Government to do so.