FREE EVENT: How can the Conservatives grow the rural economy?

4 May

You are cordially invited to our next ConservativeHome Live event, held in partnership with the Country Land and Business Association, exploring the topic:

Rural Powerhouse – How can the Conservatives grow the rural economy?

Join us for free, via Zoom, from 7pm-8.15pm on Tuesday 10th May to hear from an expert panel including:

  • Julian Sturdy MP, Chair of the APPG for Rural Business and the Rural Powerhouse
  • Selaine Saxby MP, Member of Parliament for North Devon
  • Jonathan Roberts, Director of External Affairs, CLA
  • Paul Goodman, Editor of ConservativeHome (Chair)

A recent report by the All-Party Parliamentary Group on the Rural Powerhouse found that the rural economy is 18 per cent less productive than the national average – it is estimated that if this gap were to be reduced, it could add up to £43 billion to the UK economy. What are the current limitations on rural productivity and growth, and how can they be overcome? What are the opportunities that could arise from levelling up rural areas?

Finding a successful answer to these economic questions is also a political challenge – recent polling found that Labour and the Conservatives are now neck-and-neck among rural voters.

Sign up here to put your questions to our panel, and to debate how the Conservatives can best deliver prosperity and opportunity in the countryside.

Robert Goodwill: Relaxing development rights is crucial for levelling-up the countryside

6 Apr

Rural communities, small businesses and local economies have, for the last two summers, benefited by tens of millions of pounds by providing extra much-needed camping and glamping accommodation to the public. This is because permitted development rights for the use of land for pop-up campsites have been temporarily doubled from 28 days to 56 days. This concession has facilitated safe and affordable outdoor holidays with a low carbon footprint, resulting in minimal complaints over the 18-month period.

However, this temporary extension of permitted development rights concluded at the end of last year, as the Government stated that it does not plan to extend the 56-day allowance in the future.

On the 7th March, I raised the success of pop-up campsites in my constituency in rural Yorkshire with Levelling Up Secretary Michael Gove. He answered by stating that he recognised how permitted development rights can be used to provide people with the opportunity to holiday in places as beautiful as North Yorkshire. But, as of yet, the Government hasn’t made a commitment to extending the current 28-day limit on allowing landowners to place tents and structures (such as portable toilets and shower blocks) which are needed for campsites to operate.

Now is the time for the Government to seize the benefits of the 56-day allowance, recognise inherent issues with the current 28-day allowance, and implement this modest reform that will contribute to the rural-proofing of the Government’s levelling up agenda. Whilst relaxed permitted development rights have been made permanent for bars, cafes, restaurants, outdoor weddings and historic visitor attractions, the 56-day allowance for camping has reverted to the original 28 days. As a result, site owners and rural communities stand to lose out. This is particular galling for a sector which has borne the brunt of the estimated £146bn in UK tourism losses between 2020 and 2021.

This is because the 28-day permitted development allowance isn’t long enough for rural business to recoup the cost of investment needed to set up a temporary site. This means that most of the sites that successfully operated in 2020 and 2021 with the 56-day rule won’t be able to open again.

For example, when the 28-day period begins for a temporary site, it cannot be easily paused in the instance of poor weather, midweek days with lesser demand, and the days on which temporary structures are erected and taken down. The 28-day period is therefore expended quickly due to a range of unavoidable circumstances, reducing the chances for sites to make their money back, and increasing the risk for site owners of the financial outlay on hiring moveable structures like loos and showers. Applying for planning permission for small temporary sites is simply too expensive and time consuming

This is a point that has been recognised in Scotland and Wales. Wales has consulted and proposed a permanent extension to the 56-day allowance, and Scotland has de-facto extended the 56-day rule through an instruction from the Chief Planner not to enforce the 28-day allowance. This leaves England out of step.

This divergence places a number of border site owners like Jonathan McEvoy, owner of Farndon Tent Camping Meadow near the Welsh border, at a competitive disadvantage compared to Welsh site owners. Mr McEvoy explains that with his campsite just a one minute walk to the Welsh border, it was unfair that other sites just minutes away could legally open for twice as long as he could each year: “It is discouraging countryside holidays in England, which seems a strange thing to do given how the pandemic has impacted on the economy”, he told me.

Temporary sites generated an average of £12,500 annually for the landowner, and an average off-site spend per night of £30 during a camping and caravan holiday with a negligible number of complaints across over 130,000 Pitchup.com bookings.

Whilst the relaxation of permitted development rights in rural surroundings should rightly be examined in terms of the impact on rural communities, the reality is that allowing self-regulated, well-run temporary sites can help to take the pressure of ‘honey pot’ locations and help better distribute tourist spend across rural areas.

For example, the Lake District National Park Authority (LDNPA) has said that the extension was “hugely helpful” in reducing pressure on the county’s roads and established car parks, whilst other groups like Forestry England are also supportive on the grounds that the move will prevent unregulated camping rather than encouraging it.

We see a resilient staycation market after two years of the pandemic. As the campsite booking platform Pitchup.com’s data shows, advance bookings for this season have increased by 97% compared to February 2020, reflecting persistent demand for affordable holidays this summer which cannot be met by existing sites.

The Government still has the chance to make this modest but incredibly impactful reform before the summer. Action from DLUHC would preserve the crucial extra cash derived from temporary campsites by farmers – now suffering a squeeze on incomes- as well as off-site beneficiaries such as local pubs and shops.

We have been promised a report this spring which will look at how to level-up rural areas. Allowing more temporary campsites to operate would be one policy that the government could bring forward which would benefit rural areas across England.

Bim Afolami: Working from home means a radical culture shift – and it’s here to stay. Here are some of the consequences.

6 Sep

Bim Afolami is MP for Hitchin & Harpenden.

Holidaying in Cornwall this summer, I was struck by how many people I met who had relocated there (or elsewhere in the South West) permanently.

They all wanted a change of pace of life, a larger home in a cheaper area, and could work from home more often than not. Speaking to my constituents over the break, in a sear in which there are a large number of commuters to central London, the overwhelming feedback is that most former daily commuters are trying to restrict themselves to working only two or three days a week in the office, and working from home as much as they can (though some firms are resisting this change). Things have changed a lot in a very short period of time.

I believe that this is a trend that we will have to contend with, because people want more choice about how and where they work. This will have some significant political consequences in the shorter term, and over the longer term may have quite profound economic consequences that we should be wary of.

First, the number of working parents who are more involved with home life is palpable. Many more professional commuter dads (and mums) are more present in the local community – people who previously only saw their local area at weekends (they left early and came back late during the week) are now much more engaged with local issues, and noticing improvements they want to make to their area.

In my experience, many of these voters are highly intelligent and informed about a wide range of issues. But they used typically to consider political issues on a national, macro level. I am willing to wager that these voters are now going to be a little more localised in their perspectives: what their local MP does, and says, will matter more and more to them.

This does not necessarily make these voters more parochial – many people value their MP if they have a high profile and speak sensibly about national issues. Yet overall, I think the impact will be more variation in voting patterns seat by seat, as local issues and the reputation of individual MPs will increasingly drive voting patterns.

Second, with less commuting, there is a certain amount of spending that is not going to return to cities, and will instead be spent in affluent commuter towns in the Home Counties. Towns such as Hitchin, Tunbridge Wells, Ascot and Sevenoaks will thrive even more, and the propensity of local people to spend more of their money locally has increased, is increasing, and will continue to do so. People feel more connected with their local areas, and they are spending less money in London and other major cities.

What will be the political impact of these changes? In the short term, I fear that they may strengthen the existing divide between affluent areas and less affluent ones. Major cities will be a small net economic loser. This will perhaps slow or even reverse the rise in property values in our cities, which will perhaps lead to more young people, and more people in lower earning professions being able to live in the centre of cities like London.

Third, the environment will continue to grow in importance as a critical issue. The voters will increasingly focus on their own experience of the green spaces near where they live and reducing local air pollution; for most voters, the environment will not primarily be considered in an abstract sense about getting to net zero or reducing carbon emissions.

New large housing developments or new major roads over green fields will become even more unpopular. This is why the Government’s policy of introducing “biodiversity net gain” is so important. It is an opportunity to show the public, particularly in the Home Counties and in other areas outside major cities, that we can actually improve the provision of nature in their local area.

When the policy starts to bear fruit, people will know that we are serious about the environment in a way that directly matters to them. I think that the implementation of this policy should be sped up, and by doing so we can demonstrate our environmental credentials faster and in a more impactful way. I wrote about this a few months ago on this site.

As a Conservative politician, I instinctively take the view that the Government’s job is to support people’s aspirations and aims for themselves, their families, and their local areas. Many millions of white collar workers prefer to work a lot more from home; especially commuters who previously used to dread their commutes, whether by train or car; and there is mounting evidence that this shift is particularly pronounced amongst women.

However, we must be careful about the impact of this over the longer term. If accountants, solicitors, marketing executives, or insurance underwriters demand to work from home in Hitchin or Oxted, why can’t the firm hire someone with similar skills on half the pay in Hyderabad or Odessa? Even in situations where having a high standard of written English is fundamental to the job, technology for real time translation services is developing extremely quickly.

We know from the 1980s and 1990s how societally and economically difficult it was to lose millions of manufacturing jobs – let us beware of inadvertently accelerating the same process for services jobs, which would have an even more widespread and profound impact. Also, as my friends and colleagues Claire Coutinho and David Johnston have argued, younger workers lose out from the shift to home working – since they frequently don’t just lack space at home but also lack connections to help them develop the employability skills and social capital they need for the workplace.

We need to support the aspirations of all those who want more control over when and where they work – and more home working is inevitably here to stay. Yet in responding to this trend, our policies also need to take the interests of everybody fully into account, and bear in mind the longer term interests of the country as a whole.

Neil Hudson: To level up rural areas, we must rewild them

2 Sep

Dr Neil Hudson is MP or Penrith and The Border, a member of the Environment, Food and Rural Affairs Select Committee, and a veterinary surgeon.

To succeed, the Government’s much-anticipated levelling-up strategy must recognise the geographical and ecological diversity of our great nation, and enable different areas of the country to thrive by doing what they do best.

We hear much about the potential for clean energy and manufacturing to bring jobs to our industrial heartlands, but less about the significant economic opportunity in restoring nature to our treasured national rural landscapes. To truly level up, we must restore both our natural and industrial heritage.

This week, along with fellow MPs from the North West, I am leading a delegation to visit RSPB Geltsdale Nature Reserve, a local “rewilding” site in my Cumbrian constituency, to see levelling up through nature in action.

There are huge misconceptions surrounding rewilding. Also known as wilder farming, rewilding is an approach to conservation which restores ecosystems by reinstating natural processes: putting nature back in the driving seat. In one way, it’s actually a very conservative idea – letting nature take responsibility for itself rather than intensively managing and controlling.

Through changes in land management such as blocking drains, phasing out heather burning, and replacing sheep with low-density, extensively-grazed cattle, the two hill farms at Geltsdale have restored large swathes of degraded peatland and ushered in the return of wildlife which thrive on healthy upland peat habitat, like the endangered curlew and lapwing birds.

But these measures need to be done on a case-by-case basis with local consent and consultation; it needs a sort of ‘horses for courses’ approach – the balance and type of livestock on any project need to be considered and selected sensibly and pragmatically.

While we know rewilding delivers good outcomes for wildlife and biodiversity, what has been less well-documented are the benefits for farmers, communities and the local economy. Nature underpins our economic prosperity and resilience, as outlined by the recent Dasgupta Review into the economics of biodiversity which was commissioned by Treasury ministers.

For example, healthy peat bogs act like sponges, reducing runoff into rivers and streams during periods of rainfall. This helps to reduce flooding – essential for protecting Cumbrian residents and businesses from the increasingly frequent and severe episodes of heavy rainfall and storms. It also improves water quality, so reducing treatment costs which contribute to household bills.

In this year of COP26 we have a real opportunity to lead the way in innovative environmental management as we look to protect our precious environment and combat the crisis that is climate change.

Managing land in this way is also a stimulus for jobs, with new employment opportunities in conservation and tourism alongside continued vital income from food production and livestock, like the cattle at Geltsdale which are so essential to the local ecology.

One recent study found that rewilding just five per cent of marginal land in England could create nearly 20,000 jobs in rural communities and deliver a nine-fold increase in volunteering opportunities, all while food production continues on this land. Looking after and protecting the environment while producing good quality sustainable food using high animal welfare standards very much go hand in hand.

And there are opportunities for farmers beyond core rewilding sites. The recently-published independent review of England’s food strategy, led by the entrepreneur Henry Dimbleby, envisages three broad categories of change to land management to improve food security, halt the decline of nature and tackle climate change.

In short, some farmland will sustainably intensify using technology and science to improve soil and animal health; some businesses will adopt more nature-friendly farming to combine food production with the provision of environmental goods and services; and others will undergo landscape changes such as peatland and woodland restoration. All will reward existing farmers and landowners.

The Government’s new Environmental Land Management schemes, which are replacing the EU Common Agricultural Policy, will pay farmers for the public benefits that these improvements deliver, including high animal welfare, flood mitigation, carbon sequestration and public enjoyment of nature to cleaner air and water.

The government’s £640 Nature for Climate Fund is supporting efforts in Cumbria and beyond to treble tree planting and restore 35,000 hectares of degraded peat by the end of this Parliament.

And recognising our duty to pass on the natural environment in a better state than we found it, our world-leading Environment Bill will mandate county councils to establish Local Nature Recovery Strategies, as piloted in Cumbria, and the government will set a legally-binding target to halt the decline of nature by 2030.

And the Government is determined to facilitate the return of some of the iconic British species which are integral to our natural inheritance. Last week, the government published a strategy for reintroducing wild beavers after a successful trial reintroduction on the River Otter in Devon found that the dams constructed by these natural engineers protected communities downstream from flooding and provided vibrant wetland habitats for other wildlife. In Cumbria, the return of the white-tailed eagle could help to reverse the historic decline of wildlife while also further boosting our eco-tourism sector.

The 25 Year Environment Plan recognises the significant potential of the uplands to deliver environmental improvements, creating the prospect for increased investment in nature recovery efforts in Cumbria. Already some farmers in my area are ‘re-wiggling’ rivers, re-wetting floodplains and moving to a more mixed, rotational farming system.

Many many people in Cumbria work in farming and tourism. With the right investment, Cumbria is well positioned to take advantage of this new land economy. That’s why the restoration of our natural heritage should be at the forefront of the rural levelling-up agenda.

Johnson puts the case for more localism in England. Now he must deliver it.

19 Jul

The unconvincing plan for growth apart, and the aftermath of Coronavirus not withstanding, ConservativeHome identified three main areas of policy weakness in the Queen’s Speech: social care, the delivery of net zero and English localism.

The first two turn out to be connected to the last – as are the whole country’s future prospects for growth and recovery.  Why?  Because, as David Lidington put it recently

“Whether it’s delivering an industrial strategy, or high quality apprenticeships, or integrated transport or a joined-up plan to implement net-zero carbon, we are likely to get better and faster results, and to encourage innovation and experiment…

…if these things are done by the central government of the UK working in genuine partnership with elected devolved, local and regional leaders…

…who in turn are able both to use their convening power to rally business, education, cultural and third sector organisations and through their endorsement give additional democratic legitimacy to the plan”.

Boris Johnson began to correct that weakness in his speech last week, in which he sketched out what may be taken from the postponed devolution white paper and put into the coming levelling-up white paper.

The nub of the Prime Minister’s case was that the mayoral experiment is working for cities and their suburban hinterland, and that the towns and countryside could do with a bit of it.

“Local leaders now need to be given the tools to make things happen for their communities, and to do that we must now take a more flexible approach to devolution in England,” he said.

Which could mean “a directly elected mayor for individual counties”; or devolution “for a specific local purpose like a county or city coming together to improve local services like buses”.

Ideas on a postcard, please, to our recently-departed columnist, Neil O’Brien. Or, as Johnson put it, “come to Neil O Brien or to me with your vision for how you will level up, back business, attract more good jobs and improve your local services”.

Put like that, the Prime Minister’s case sounds lamentably underdeveloped, open to fresh thinking, or simply cautious, depending on how you look at it.  But he, Robert Jenrick and others will have to make the following decisions.

At the outset, whether or not to push for uniformity, or something very close to it.  Both of the main schemes that would ensure it are out: regional government and an English Parliament.

Labour tried to make the North East a start-up zone for regional government, and the project was duly trounced in a referendum – the event which gave politics early sight of James Frayne and Dominic Cummings.

An English Parliament would institutionalise potential conflict between a First Minister for England, who would run the bulk of the country, and a Prime Minister stripped of responsibility for nearly everything other than foreign affairs, defence and security policy.

Which returns us to the options on Johnson’s table.  He could sit back and wait for local leaders to come to him.  And the map of local government in England would continue to look much like the patchwork we see today.

There is a good case for this approach.  “A bit of local laissez-faire and free choice when it comes to English local governance might not be the worst outcome,” as Johnathan Werren wrote on this site.

The downside is that if that, with so many cooks preparing the broth, nothing much might be served up: experience suggests that county, district, town and parish councils don’t easily come to agreement.

Some senior Tory figures in local government, and elsewhere, are keen on unitarisation – some has already happened (as recently in Buckinghamshire); more is happening (as in North Yorkshire), and more may happen still.

But ConservativeHome finds no appetite near the top of government for an attempt to force amalgamation on unwilling Conservative-controlled authorities: the whips have enough trouble with agitated councillors and backbenchers, thank you very much.

Nonetheless, experience suggests that if the Government wants more local mayors, it will have to push for them – and, if local people are given a say in a referendum, they tend to push back.

Remember May 3, 2012: the day on which ten cities voted for or against new mayors.  Only one, Bristol, went for change.  Since then, some authorities, such as Hartlepool, have voted to abolish their elected mayors; others, like North Tyneside, have not.

There are further problems about political legitimacy.  The Tees Valley has a population of about 1.2 million people.  Kent has one of approximately 1.8 million.  It follows that if an elected mayor can work for it might for the other.

Government sources also named other well-populated counties, such as Lancashire and Warwickshire.  But would it be practicable to  bundle ones with smaller populations together under a single mayor?

One of the problems that is wrecking the police commissioner project is the sense that there is no real local ownership of whoever is elected to the post.  Might not enforced, multi-county, amalgamated mayoralities run the same risk?

But if, to use the Prime Minister’s own example, a county or city comes together “to improve local services like buses”, who or what is to take charge, if not a Mayor?

Mention of an actual service is a reminder not to put the cart, structure, before the horse, services.  The first question is what to make more local.  The second is how to do it.

Which takes us to the mayors in place already.  Consider Ben Houchen in Teesside.  He already controls education for people over 18.  Wouldn’t it make sense for this to be joined up to that provided to people over 16 – given the stress he places on skills?

Andy Street made the same case for the West Midlands in a recent column on this site.  Why not go further, and let Houchen, Street and some of the other mayors pilot more local control?

For example, they could retain a slice, say, of airport passenger duty, vehicle excise, and VAT.  Douglas Carswell and Daniel Hannan recommended the full devolution of the last in The Plan, opening the door to tax competition between local authorities.

Johnson said that counties could “take charge of levelling up local infrastructure like the bypass they desperately want to end congestion and pollution and to unlock new job or new bus routes plied by clean green buses because they get the chance to control the bus routes”.

“Or they can level up the skills of the people in their area because they know what local business needs.”  The Prime Minister was careful to add that “we need accountability”.

But the thrust of his case was there are fewer “irresponsible municipal socialist governments” and that “most of the big metro mayors know that private sector investment is crucial”.

Johnson has no experience of running a major domestic department.  His sole government experience at Cabinet level was in the Foreign Office.

Nonetheless, he has been mayor of the biggest city in the whole country, serving two terms.  He will need to draw on that experience as he decides which localist options to take.

One thing is certain – though it won’t be what anxious MPs and councillors want to hear.  If the mayoral experiment had needed existing councils’ and sitting councillors’ agreement to happen, it wouldn’t have happened.

So since the Prime Minister wants more localism, and rightly, he must ready himself for a row – to add to the one already raging about housing and planning.  One can’t serve up a muncipal omelette without breaking eggs.

Mark Bridgeman: If Ministers really want to build back greener, they need a sceme to help homes that works

18 Apr

Mark Bridgeman is the President of the Country Land and Business Association, and is a Northumberland farmer.

When the Government announced recently that it was ending its much vaunted £2 billion ‘Green Home Grant’ scheme with just 10 per cent of funds actually distributed, rural communities felt let down – as Government once again over promised and under delivered on infrastructure investment.

Homes in rural areas face particular challenges, so the scheme designed to contribute towards the cost of installing energy efficient improvements in people’s homes – provided the opportunity to reduce their bills and minimise their environmental impact.

As the only significant action to date following from the Government’s vow to ‘build back greener’, these grants of up to £5000 should have represented the start of a process which created real change.

Instead, the scheme was hamstrung from the beginning, and failed to deliver even on its limited scope, being shelved after six months, with thousands of applications for funds left unfulfilled.

The Green Home Grant Scheme failed to make an impact for two key reasons.

First, red tape. Builders complained of having to jump through hoops just to become accredited to carry out Green Home Grant projects. This was a particular problem in rural settings where these firms are typically smaller, and often do not have the scale and financial cushion of bigger urban businesses to gain accreditation. Lack of certification led to a massive backlog of applications, meaning that, even if people wanted to join the scheme, they would have to wait months.

Second, time. With the scheme set up for an initial six months and a one-off payment of up to £5000, few homeowners or construction companies thought it was worth taking on the huge financial and time commitment that rural home improvements require in exchange for this limited government support , against the backdrop of Covid controls and uncertainty,

By proposing that all privately rented homes may need to reach an Energy Performance Certificate rating of C by 2028, the Government has failed to consider the differences between urban and rural housing. EPC ratings are a different beast when it comes to rural homes, many of which were built hundreds of years ago, and rarely have access to mains gas.

One CLA member spent some £40,000 to improve a home’s energy efficiency, only to reach a band E rating, which is the current legal requirement. The shortcomings of the existing EPC system mean that many rural houses will never be able to achieve a rating of C, irrespective of huge investment.

The consequences of pulling the rug out from underneath rural property owners will be severe and far-reaching. For many rural landlords, these mean being forced to sell off property, since they will not be able to recoup the huge expense that bringing their property into line with regulation will entail through rent increases. For many homeowners, it’s a missed opportunity to make a difference to their carbon footprint and reduce their heating bills.

Ultimately, this insistence will see a decline in the rural private rented housing supply, and will push out of the countryside people who are the backbone of the rural economy and are an important part of the social fabric in rural areas.

The failure of the scheme in its current form also slows progress on climate mitigation. More than 800,000 rural homes are heated by oil, and will need to transition to cleaner sources of power in coming years, such as heat pumps. But the Energy Saving Trust estimates that it costs £19,000 to install one pump, with the annual bill saving of using the technology just £20 a year. If Government do not help bring about a green transition for rural communities – which so often are first to suffer the impacts of climate change in this country – then we risk it never happening at all.

We need a new Green Home Grant made available without delay. Significant improvements should be made to its scope and the help available. The amount available from the failed scheme was £5,000. Taking into the account the huge extra costs with upgrading rural homes, this should be doubled to £10,000 for rural properties.

Some £2 billion was initially promised from the scheme, with £1.5 billion part of the Green Home Grant voucher scheme and the remaining £500,000 for the local authority delivery scheme. We believe this amount needs to be doubled, and spread out over five years, giving builders and homeowners the confidence to take part in a scheme that could revolutionise Britain’s homes.

The idea of a grant to directly support ‘building back greener’ is a fine one. But the Government’s willingness to throw in the towel after six months raises more questions than answers. A new, reformed scheme, properly thought through and adapted to serve the whole country, is required if the Government is serious about embarking on a journey to net zero carbon emissions.

Sunak opts to suck it and see

25 Nov

We must be thankful that no-one is forecasting that Government borrowing will rise to record levels this year.  Or Rishi Sunak wouldn’t have been in a position to announce that Government spending will rise at its fastest rate for 15 years.

Apologies for the sarcasm – which isn’t aimed at the Chancellor’s measures, but is meant instead to provide an introduction to the thinking behind them.

One response to a ballooning deficit is to cut the rate of growth of spending.  That’s what the Coalition did after 2010, when the deficit hit seven per cent of GDP.

The Office for Budget Responsibility is forecasting a peak of 19 per this year.  But Sunak’s response is to raise the rate of spending.  Why?

Because in 2010 George Osborne judged the deficit to be structural (he was right), and his successor judges this one to be exceptional (he’s right, too).

It is almost entirely a product of the pandemic and what has followed.  It is in this context that the OBR forecasts the economy to shrink by 11 per cent this year and unemployment to hit 2.6 million next year.

In these circumstances, the Chancellor has found it impossible to produce the four year spending review he hoped for, and has been forced to issue one for a single year instead.

Furthermore, his statement was only one side of the tax and spending coin. Today, we got the spending.  In the Spring, we will get the Budget – and the tax.

Given all this, it will be very odd if Sunak turns up then with large-scale tax rises to raise revenue quickly.  The foundation of his measures today appears to be: suck it and see.

Broadly speaking, the spending package suggests that the Chancellor is going for growth.  That’s the logic of the infrastructure spending, the coming review of regulation, the new northern bank and the enlarged Restart programme.

The Levelling-Up Fund is a classic Treasury exercise in the English centralist tradition, with its central feature of bids from the provinces to Westminster for money.  So it is in a country with relatively few local taxes.

On that point, Sunak announced “extra flexibility for Council Tax and Adult Social Care precept”.  Local authorities will like that, council taxpayers not so much.

It’s worth stressing that the OBR’s forecasts, like all such animals, shouldn’t be taken too seriously.  Our columnist Ryan Bourne debunked its record on this site earlier this week.

If you walk down the sunny side of the street, you will smack your lips at the thought of a Roaring Twenties effect, as employment recovers, consumers spend, the hospitality sector booms and people pile into holidays abroad.

And it may be that post-Covid changes even out for the better, with a shift in activity and spending from city centres to the suburbs and countryside, together with music, art, theatre and all the rest of it.

That might not be such a bad things for towns and their centres, at which the new Levelling Up Fund is partly aimed.  Our columnist James Frayne believes they are a core concern for provincial voters, and government listens to him.

If on the other hand you stick to the shady side, you will point to the economic equivalent of Long Covid: fearsome economic and social bills for damaged mental health, postponed operations, lost educational opportunities.

All that is a big minus for levelling-up – because it’s the disabled, poor and disadvantaged who have been hit hardest by restrictions and lockdowns, especially if they work in the private sector.

The background in recent years is not encouraging.  Since the financial crash exploded, we haven’t grown at more than 2.6 per cent a year.  That suggests recovery may be sticky.

Sunak’s persuasive manner, grip of detail and spare eloquence have served him well during this crisis.  Others holding his post would not have survived roughly ten major finance annoucements in less than a year.

It’s not as though he hasn’t sometimes had to recast his plans – as in October, when he pumped more money into his Job Support Scheme.

And if the economics of his strategy are straightforward enough, its politics was sometimes a bit odd.  If the Government’s overall plan in the short-term is expansionary, why raise the minimum wage but curb public sector pay?

If spending on nearly everything else is rising, why crack down on the 0.7 per cent aid spend?  Doing so because you think aid is wasted or the target is wasteful is one thing.

But that wasn’t the basis of Sunak’s decision – since, after all, he said that the Government intends to return to 0.7 per cent “when the fiscal situation allows”.

The Chancellor also left a big unresolved question hanging in the air.  What will the Government do about the Universal Credit uplift?  Will it be extended or not?

The sense of a statement with contradictory messages was picked up Rob Covile of the Centre for Policy Studies.  (The Treasury would do well when the Budget approaches to look at its supply side ideas.)

“Feels slightly like Treasury couldn’t decide whether the message was ‘tighten belts’ or ‘we’re still spending’,” he tweeted. “So we’re getting two or three minutes of each in turn.”

That first element in the Chancellor’s statement, plus the OBR’s horrid short-term forecasts, comes at a bad time for the Government.

For tomorrow, the toughened tiering details are announced. Lots of Conservative MPs won’t like them.  The detail of which tiers apply in which areas will be published, too.  Many Tory MPs will like those even less.

Graham Brady, Steve Baker, Mark Harper, and the Covid Recovery Group will say that the economic damage of restrictions is so severe that the Commons should not vote for more – at least, without an impact assessment.

They may not be alone.  “These measures may be a short-term strategy, but they cannot be a long-term one,” Jeremy Wright declared in the Commons during the recent debate on the lockdown regulations.

He and Edward Timpson (another ex-Minister) plus other MPs backed the Government but, sounded a cautionary note.

Will the prospect of vaccines be sufficient to rally the doubters round?  Or will they take a leaf from the book of Theresa May, who savaged the regulations during the same debate?

We shall see – but Ministers are not helping themselves by dodging requests for that impact assessment, urged by this site and others, and the subject of a dogged campaign by Mel Stride, Chair of the Treasury Select Committee.

All in all, Sunak is shaping up to go for growth.  Good for him.  Nonetheless, he must watch and wait to see how and when the economy rebounds.  Brady and company are less patient.

Robert Halfon: Who’s up for a Southern Research Group?

18 Nov

Political fusion

Is it really true, as has been suggested over the past few days, that Conservatives can only appeal to either blue-collar voters or the professional classes – but not both?

Those who know me will not doubt my commitment that the Conservative Party should be the party for workers; indeed, I’ve written that about the Workers Party many times on this website.

But, my passion for the Workers Party does not mean that we cannot, nor should not, appeal to the public in cities, as well as towns – the Putneys as well as the Pudseys.

It seems to me there is confusion about so-called metropolitan views. Of course, there is left-of-centre “wokeist metropolitanism” – a school of thought that is unlikely to ever vote Conservative, whatever policies the Government come up with.

But, protecting the NHS, cutting taxes for lower earners, freezing fuel duty, boosting skills and apprenticeships, helping small businesses, offering affordable housing (such as the £12.2 billion investment announced recently by Robert Jenrick) and Help to Buy schemes are policies that transcend the ‘somewheres’ and the ‘anywheres’ divide, as noted by David Goodhart.

Even measures on environmental issues, for example, can have widespread appeal, so long as they are not balanced on the backs of the poor (such as ever-increasing energy bills due to “green” taxes) and are focused on a cleaner, greener Britain (including cleaning up our beaches, tackling litter and safeguarding our forests and countryside). Those who are more sceptical about Brexit might be a bit more optimistic if they could see the reduction in VAT once we’re out of the transition period and we control our own VAT rates.

Similarly, Overseas Aid. At a time when our public services at home are financially strained, spending huge amounts on international development is extremely frustrating to many voters. However, it could be made more palatable if taxpayers money was used to fund thousands of British apprentices to work overseas in developing countries, or even to support our armed forces in some of their peacekeeping roles.

It is dangerous if we are perceived to be identifying solely with one group of citizens or class over another. If the Conservatives are truly the One Nation Party, the Government needs to find political fusion. Whilst, thanks to Boris Johnson, the Conservatives have a solid majority, to be diminished as we are in the great cities like London is neither healthy nor desirable for our party in the long run. Yes, absolutely a Workers Party…but a Workers Party that represents young professionals as much as white van men and women.

Please don’t forget the Southern side of the Blue Wall either

I don’t think a day goes by when I don’t read the words “Red Wall” in a national newspaper. Don’t get me wrong, I am as delighted as any Conservative by how we won so many seats in the North. All the more extraordinary given the long-standing Labour MPs that were deposed. I would, of course, prefer it if the media wrote about the “Blue Wall” rather than red.

But, my point is a different one. Both the Government and the media classes should not forget the Southern side of the ‘blue wall’ either. The politicos and the press seem to be under the illusion that the South is paved with gold; that there are no road, rail and infrastructure issues; that every pothole is magically filled, and that no one lives in poverty.

What about the deprivation and lower educational attainment in the Southern New Towns, coastal communities, inner cities, rural coldspots?

The Centre for Education and Youth’s 2019 report, ‘Breaking the Link? Attainment, poverty and rural schools’, found that in areas designated as “countryside living” – a vast proportion of the South West – the correlation between the proportion of pupils on Free School Meals and their attainment 8 scores was 0.58 – the highest of all types of local authority area. In other words, “rural schools have particular difficulty breaking the link between poverty and low pupil attainment”.

Seaside village Jaywick, in Essex, was named the most deprived area overall for the third time in a row in 2019. We also know, from the Social Market Foundation’s 2019 research, Falling off a cliff, that average employee annual pay in coastal communities was about £4,700 lower than in the rest of Britain in 2018. These areas also saw “much weaker economic growth since the financial crisis than other parts of the country” which will demand urgent Government attention as we emerge from the Covid-19 pandemic.

Does the South not feature in policy making? Perhaps if there was a Southern side-of-the-wall Research Group, then these MPs might be invited to breakfast at Number 10 and policy meetings with Ministers.  Anyone for another MP Whatsapp group? Perhaps we have enough already.

As I wrote in the first section of this article, we must be careful not to ‘politic’ or govern in silos. We should not Balkanise the Tory Party. Conservatives must genuinely be a One Nation party for all our country – not just parts of it.

Home education

Given the name of this website, I suspect many readers are fully in favour of home education if that is what a parent decides. Although personally I think a child is better off at school – not just for daily education, activities, wellbeing and socialisation with other pupils, I also believe in a free society by which we support parents’ decisions about educating their child. Clearly, many parents who teach their children at home give them a wonderful education. However, this is not always the case across the board.

The Department for Education has a duty to ensure that every child has a proper education – that doesn’t stop just because the child is learning from home. There should be a national register or regular inspections to ensure that these pupils are getting the education they need for their futures. Perhaps, each home educated child could be linked to a nearby school for this purpose. These are all matters that my Education Select Committee is considering as we begin an inquiry into home education.

Rightly, schools are held accountable for the learning and environment they provide, whether that be through Ofsted, local councils, the regional school commissioners or the Department for Education (DfE).  So, too, must there be transparency and accountability for parents providing an education to their children at home. The DfE should have a national register of all home educated children and gather data to assess levels of attainment.

In a recent report on home education, the Local Government Association stated:

“Using evidence provided by councils, school leaders and parents, the LGA estimates that in 2018/19, 282,000 children in England may have missed out on formal full-time education – around 2 per cent of the school age population – but this figure could be as high as 1.14 million depending on how ‘formal’ and ‘full-time’ is defined…. gaps in the coordination of policies and guidance around pupil registration, attendance, admissions, exclusions and non-school education is allowing children to slip through the net, with children with additional vulnerabilities – such as social, behavioural, medical or mental health needs – most at risk of doing so.”

Whilst many parents educate their home educated children to the best of their ability, and with much success, there are too many children falling through the cracks. It is right that there are changes.

Neil O’Brien: The next algorithm disaster – coming to a Conservative constituency near you. This time, it’s housing growth.

24 Aug

Neil O’Brien is MP for Harborough.

Algorithms have been in the news, not for good reasons. One lesson from the A-levels row is that principles which seem reasonable can lead to outcomes you don’t expect. Another algorithm’s coming down the tracks: the new formula for how many houses must be built in different places. There are few with higher stakes.

I wrote about the housing White Paper in my last column: it proposes not just to change the methodology for assessing housing need, but also to make a standard methodology compulsory for the first time. In other words, if we don’t like the results of the new algorithm, we’ll have blocked off the emergency exits.

The new algorithm is set out here. It’s not particularly easy to read. For example, one of many factors is set out in bullet point 30:

Adjustment Factor = [( Local affordability factor t = 0 – 4 4) x 0.25) + (Local affordability ratio t = 0 – Local affordability ratio t = 10) x 0.25] +1 Where t = 0 is current yearr and t = -10 is 10 years back.

Clear enough for you?

I thought it might be a while before we saw what the new algorithm would produce in practice. But Lichfields, the planning consultancy, has translated the algorithm into what it would mean for local authorities.

The numbers that the formula spits out can be compared to the number of homes actually being delivered over recent years, or to the numbers in the current (optional) national formula. Whichever way you look at it, it’s controversial.

I’ve long argued we should concentrate more development in inner urban areas, for various reasons I’ll come back to below.  But this algorithm doesn’t do that – at least not outside London.  In the capital, the algorithm would indeed increase numbers substantially.

But in the rest of England the formula takes the numbers down in labour-run urban areas, while taking them dramatically up in shire and suburban areas which tend to be conservative controlled.

Overall, the algorithm proposes a south-centric model of growth for Britain (with some growth in the midlands).

If we compare the algorithm to recent delivery, the South East has been delivering just over 39,000 homes a year, and will be expected to increase that to just over 61,000, a 57 per cent increase. The East of England would see a 43 per cent increase, the East Midlands a 33 per cent increase, the West Midlands a 25 per cent increase and the South West a 24 per cent increase.

For the North East, North West and Yorkshire, the numbers the algorithm proposes are lower overall than the numbers delivered over recent years. But as with A-levels, the devil’s in the detail.

The really controversial changes are within regions, where the algorithm suggests jacking up numbers for shires, while taking them down in urban areas. Comparing the existing national formula to the proposal, we can see this for most large cities.

The number for Birmingham comes down 15 per cent, while the rest of the West Midlands goes up 52 per cent.

Numbers for Leicester go down 35 per cent. The rest of Leicestershire goes up 105 per cent.

Nottingham goes down 22 per cent, the rest of Nottinghamshire goes up 48 per cent.

Southampton goes down 17 per cent, Portsmouth down 15 per cent and Basingstoke down 23 per cent, but the rest of Hampshire would go up 39 per cent.

Wealthy Bristol would see some growth (5 per cent) but much lower than the rest of Gloucester, Somerset and Wiltshire (47 per cent).

It’s the same story up north. Leeds down 14 per cent, Sheffield down 19 per cent, and Bradford down 29 per cent. But the East Riding up 34 per cent, North Yorkshire up 80 per cent, and North East Lincolnshire up 123 per cent.

In the north west the core cities of Manchester (-37 per cent) and Liverpool (-26 per cent) see huge falls, while the areas around them shoot up. In Greater Manchester, for example, the growth is shifted to the blue suburbs and shires. Outer parts go up: Wigan up 10 per cent, Bury, up 12 per cent, and Rochdale up 97 per cent. And areas to the south and north of the conurbation up much further: Cheshire up 108 per cent, while Blackburn, Hyndburn, Burnley and the Ribble Valley together go up 149 per cent.

But it isn’t just that the numbers in the new formula are lower than the old formula for urban areas. In many cases the new formula suggests a lower number than their recent rate of delivery. This is true of Sheffield (12 per cent below actual delivery), Leeds (16 per cent), Bradford (23 per cent), the entire North East (28 per cent), Nottingham (30 per cent), Manchester, (31 per cent), Leicester, (32 per cent) and Liverpool (59 per cent). The new formula seems to assume we are going to level down our cities, not level up.

It’s true that there’s another step between the Housing Need Assessment which this algorithm produces and the final housing target, which can be reduced a bit to account for delivery constraints like greenbelt.

But if we go with this algorithm unamended, outside London most Conservative MPs will be seeing large increases in the housing targets for their constituencies, while many Labour MPs see their local targets reduced. Is this what we want?

Leaving aside the politics, I think not. Compared to the rest of Europe, the UK has much less dense cities.

Places like Dundee, Glasgow, Liverpool, Sunderland, Birkenhead, Hull and Newcastle all had smaller populations in 2017 than 1981, while places like Birmingham and Manchester weren’t much bigger. Our cities have untapped potential, many went through a period of shrinkage and have space, and there are health and environmental reasons to prefer urban growth too.

In dense urban areas, people are more likely to walk or cycle – and in the UK, people in cities walk twice as far as those in villages each year. This reduces public transport costs and improves health.

Denser cities can sustain better public transport and so cut car congestion and time spent travelling. As well as reducing pollution from transport, denser cities reduce energy use and pollution because flats and terraced homes are much more energy efficient.

I’m not sure the draft algorithm is even doing what Ministers wanted it to. The document in which it is set out says that “the Government has heard powerful representations that the current formula underestimates demand for housing in the growing cities in the Northern Powerhouse by being based on historic trends.”

But the algorithm seems to do the exact opposite.

There may be technical reasons why things aren’t working out: there’s lots of ways to measure affordability… differences between residence-based and workplace-based income measures… there were certain caps in the old model, population projections have changed and so on.

However, the bigger issue is this.

There’s no “objective” way of calculating how many homes are “needed” in an area. While there are ways of carving up the numbers that are seen as more or less fair, ultimately a vision is required.

Projections of population growth are circular: the projected population growth for the farmland between Bletchley and Stony Stratford would’ve been pretty low before we built Milton Keynes there.

Likewise the forecast for the derelict Docklands of the early 1980s. While there are real economic constraints, the future need not resemble the past.

Though it took a huge effort, Germany raised East Germans from 40 per cent to just 14 per cent per cent below the national average income since reunification. That’s levelling up.

Do we want to continue to concentrate growth in the South East? Do we want European-style denser cities, or for them to sprawl out a bit more? An algorithm can help deliver a vision: but it’s not the same as one.