Daniel Hannan: A Levelling Up Fund will not, on its own, turn Sunderland into Singapore. Localism will takes us closer, though.

9 Jun

Lord Hannan of Kingsclere is a Conservative peer, writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.

How exactly does levelling up work? The aspiration is unimpeachable and the slogan pithy. But how does a government go about realising it? Imagine that you’re the official in charge of enriching one of our poorer regions. You sit at your desk, you open your laptop. Now what?

Part of the answer has to do with infrastructure. That’s the easy bit, the bit that the PM, with his boyish enthusiasm for bridges, railways and airports, most enjoys. But a £4.8 billion Levelling Up Fund is not, on its own, going to turn Dudley into Dubai or Sunderland into Singapore.

A certain reshuffling of government departments might help at the margins. When, for example, the Department of International Trade moves 500 jobs to Darlington, it slightly boosts the economy of County Durham. But it does so at the expense of other regions, since those jobs are maintained at public expense.

So what can ministers do? How might they stimulate the generation of new wealth rather than simply pushing piles of cash around? The obvious answer is one that, for some reason, is rarely heard these days: more localism.

Let’s stick, for a moment, with Teesside. Labour, in retrospect, made a bad mistake when it held the Hartlepool by-election on the same date as the regional mayoral contest. Ben Houchen, the incumbent Conservative Tees Valley mayor, romped home with an astonishing 72.8 per cent of the vote. Why? Because he is seen as an effective local champion who stopped the airport from closing, is redeveloping the former steel works at Redcar and is turning the region into a freeport.

It is an iron law of politics that, the bigger the unit of government, the less efficient it becomes. Town halls are by no means perfect, but they are far less likely than Whitehall departments to preside over monumental cock-ups involving consultants and computers. So why not extend the model? Why not push more powers out to local people?

In 2008, Douglas Carswell and I co-wrote a book called The Plan: Twelve Months to Renew Britain. It set out a comprehensive agenda for the diffusion, democratisation and decentralisation of power.

Some of its ideas were successfully implemented by the Coalition government which took office two years later. A recall mechanism allowed local voters to challenge an unpopular MP. Proposals could be forced onto the Commons agenda by petition (people tend to forget that this is how Brexit first made its way into Parliament). Whips lost some of their patronage powers, and parliamentary committees were elected. MPs’ expenses were reformed.

Other ideas turned out to be less successful. Locally elected sheriffs were watered down until they became Police and Crime Commissioners. I have always disliked that name: it is boring, technocratic and inaccurate (read literally, it suggests that PCCs are responsible for crimes). But, in a depressingly ahistorical spasm, Whitehall decided that sheriff sounded “too American”. Nor were the PCCs given anything like the powers we had proposed. In any event, the reform never caught the public’s imagination. People carry on grumbling about woke coppers without it seeming to occur to anyone that PCCs are there precisely to ensure that the police’s priorities don’t drift too far from everyone else’s.

Our biggest idea, granting English counties and cities the sorts of power that are exercised by Holyrood, wasn’t tried. It never is. Central governments are not usually in the business of devolving power. In almost every democracy, the long-term tendency is the other way – driven, in part, by media cultures which make it almost impossible for a minister to say “this is nothing to do with me – talk to the local council”.

Go back, for a moment, to the idea of freeports or special economic zones. The original example, Shenzhen, was a huge success. It didn’t simply suck activity in from neighbouring provinces. It generated new wealth, because it had real power.

Imagine that our freeports could, say, scrap all taxes on savings and inheritance, or require balanced budgets, or introduce Singapore-style healthcare systems. Then we would get the growth that comes from innovation. New schemes would be piloted and trialled. What worked would spread. Jurisdictional competition would give us something we have never known before in this country – downward pressure on tax rates.

Sadly, though, whatever interest politicians show in localism when they are in opposition tends to evaporate once they assume office. Indeed, it is surprising – and creditable – that David Cameron went as far as he did.

Still, there are real dangers in letting things lie. The epidemic and the lockdowns have placed powers in the hands of the central administration that would have been unthinkable two years’ ago. Closed committees decide whether we can leave the country, enjoy our property or meet our friends. State budgets have grown commensurately. And governments are never in a hurry to return the powers that they had assumed on a supposedly emergency basis.

We left the EU precisely to take back control. Having repatriated power, it would be unforgivable to leave it in the hands of Whitehall functionaries. Instead, we should give local communities the tools to raise themselves. Otherwise, four or five years from now, we might find our levelling up rhetoric thrown back at us in anger.

James Frayne: Four lessons for industry and government from monstering of AstraZeneca

30 Mar

James Frayne is Director of Public First and author of Meet the People, a guide to moving public opinion.

In Andrew Roberts’ great biography of Winston Churchill, he tells an unflattering story of how Churchill unfairly criticised the behaviour of Shell Oil when he was First Sea Lord, before the First World War.

As Roberts tells it, Churchill had made the sound decision to shift the Royal Navy onto oil and away from coal; this would make British ships faster and more efficient. Doing so, however, required vast amounts of oil, which the Royal Navy secured via a huge deal with Shell.

In announcing the deal to Parliament, Churchill said it was a great deal other than the cost – which he implied had been too high and therefore that Shell had ripped off the taxpayer. The Chairman of Shell asked Churchill to make the details of the arrangement public, but Churchill refused.

In 1966, it was finally revealed that Shell made almost no money from the arrangement and had even offered to put a Royal Navy commander on the board of the company. In hindsight, it was an extraordinary attack on a company that had offered the British Government help.

Fast forward a hundred years and here we are with another part-British company – Astra Zeneca – being smashed apart by politicians for doing something more altruistic than Shell did – providing vast numbers of injections to Covid-hit countries across the world at cost. Politicians and officials in the US and Europe have lined up to criticise the company’s methodology and the drug’s safety whilst also effectively (and wrongly) accusing it of unethical behaviour in the form of stockpiling, failing to meet contractual arrangements, and so on.

The British Government hasn’t been the one attacking AZ this time, but nonetheless, as with Shell, politicians are attacking a company that has been doing the right thing. (Disclosure: Public First does occasional work for the University of Oxford, but has not worked on the vaccine project, nor have we ever worked with AZ ). Little wonder AZ are publicly musing whether they made a mistake in offering all this at cost.

What have we learned from the AZ affair? Four big lessons stand out.

1. There are massive risks of working with any Government – and this Government in particular

Any business that works with Government puts itself in the firing line: more people hear about them; the media takes a closer interest; opponents of the Government start criticising them. Businesses that work with Governments aren’t choosing to work with apolitical “states” and masses of neutral civil servants, but with political entities who have political supporters and political opponents – and this Government has more than its fair share of opponents.

As I’ve written before, much of the British media likes to think of most European countries being led by entirely rational, reasonable, great statesmen and women – driven only by vision and altruism and utterly uninterested in politics. But just as Leo Varadkar’s hostility to Britain during Brexit negotiations was in part driven by an electoral need to attract “soft” Sinn Fein voters, so Macron’s hostility to AZ is partly driven by embarrassment at French and general European failure to get their act together on vaccination, while Britain steamed ahead.

What was Macron – who faces his own election again soon – going to say? “Sorry everyone, I have personally messed up and Britain, who I always criticised, has made impeccable decisions”? Clearly not: there were obvious short-term political reasons why AZ would come under fire. You choose to work with Government, you pay a price.

2) British companies might face particular vulnerability in this new world

The fact AZ is part-British caused the company big political problems. While the idea of actual anti-British hostility is way overdone, the reality of Brexit made the failure of the European vaccination programme more problematic politically for some European leaders. In other words, it’s just hard luck on AZ that the political stars were lined up against them; there was little they could do.

But this is unlikely to be a one-off; while Covid raised the stakes, it’s nonetheless reasonable to assume that British companies are going to become more vulnerable politically and commercially in the coming years. Has Britain been in the EU, other European leaders would not have trashed it; outside the EU, it’s a different story. Our closest ally – the United States – is eye-wateringly aggressive in promoting and protecting its leading businesses (like Boeing); the EU is equally combative.

Outside the EU, for all the benefits that brings, there’s no question our businesses will lack the same protection that membership of a bigger block will bring.

3) The British Government will have to become more assertive on behalf of British companies

While there’s a limit to what the British Government can do to promote and protect British firms, it is going to have to start becoming much more assertive. At the moment, the Government helps to promote British trade by, for example, making introductions to foreign companies and foreign states; it also promotes Britain as a destination to invest in. This is all useful and the marketing teams at the Cabinet Office and the Department for International Trade have done a decent job over the last decade.

But the Government isn’t set up to engage in PR combat on behalf of British firms; in other words, to help defend firms in the media (and indeed on social media). While the Government can plan neat marketing campaigns to invest in Global Britain, they’re just not geared up to, say, engage in close combat with the New York Times, which is an entirely different model of communications.

The Government needs to explore the creation of a team within BEIS, the DIT or the Cabinet Office to help British businesses out when they’re unfairly attacked. While it’s not for them to promote one firm over another or to act as a business’ press office, the reality is that only Governments can make the news and command attention at certain times.

What could AZ really do when attacked by the President of France? At best, have a paragraph of context dumped on the end of a story. There’s no reason why the British Government can’t or shouldn’t be more assertive in helping British companies in the media – at least amongst top-tier titles like the NYT.

4) ‘Purpose’ is overplayed as a concept in corporate communications

For those of you that work in and around public affairs and corporate communications, you’ll know the recent obsession with firms demonstrating so-called “purpose”; this is where firms project their values to the outside world to show their decency. It’s a good idea in principle, although, as I’ve bored those of you in public affairs to death with for a decade, demonstrating purpose has to reflect the realities of public opinion, not the opinion of a company’s own marketing team.

In many ways, AZ had the perfect model to show “purpose”; in the end, though, it wasn’t enough. This is because “purpose” soon becomes “politics”.

I have no special knowledge of AZ or what happened, so I make a broader point not directed at them: you can only engage in this sort of work if you are ready for political combat. Again, AZ aside, there are many, many firms that are dipping their toe into the most controversial policy issues without even basic thought or preparation about how such policy conversations might play out.

AZ’s experience should make all businesses preparing to engage in seemingly innocuous policy conversations – or ones where there seem only to be upsides – think again.

Andrew Bowie: Our new Trade and Agriculture Commission will protect – and economically enhance – British farming

29 Jun

Andrew Bowie is MP for West Aberdeenshire and Kincardine.

I grew up in Aberdeenshire – surrounded by some of the best farmland in the United Kingdom; home to some of the best produce in the world. The highest quality beef, lamb and malting barley was produced, quite literally, on my doorstep. Sitting now, as the Member of Parliament for West Aberdeenshire and Kincardine, I am proud to represent these famers, the guardians of our countryside, the producers of our food and drink, in Parliament.

And as a Conservative, I am also proud to support our Government and stand behind its commitment to have 80 per cent of our trade covered by free trade agreements. This means that Aberdeenshire, Scottish and indeed British produce – salmon, beef, lamb, whisky and so much more could and should be enjoyed in every corner of the world.  

British farmers in particular have so many opportunities ahead of them: we have a £66 million opportunity for beef in the US, but it could be even bigger if tariffs of up to 26 per cent were dropped. As for British lamb, it’s currently banned from the US. Just a three per cent market share represent an £18 million opportunity. I want to see the great produce we make here in the UK, enjoyed across the world with all the benefits that can bring for British farmers and producers.

But too often, these opportunities and benefits that these deals might bring are drowned out amidst the noise, nonsense and mistruth peddled about the Government preparing to lower our import standards and undercut, “sell out” British farmers.

It is simply not true and utterly misses the point about the enormous economic benefit that free trade deals can bring to the farming industry and the British people. Indeed, it is our very high standards and quality of our produce that makes it so attractive to the outside world. 

We will always stand full square behind our farmers. And we will strain every sinew to enable farmers make the most of these new and exciting opportunities. And we will not allow our fabulous producers to be undermined due to their high standards. British farmers are, and will remain, competitive. 

That is why I am delighted to see that today, Liz Truss, the Secretary of State for Trade, has announced there will be a Trade and Agriculture Commission to provide expert advice in setting our agricultural trade policy.

The Government has listened and engaged, with the industry. We recognise and understand the concerns they have. It has listened to the National Farmers Union’s across England, Wales and Scotland, as well as the Ulster Farmers Union in Northern Ireland. We are determined to get this right for our whole United Kingdom.

And we agree that any trade deals the UK negotiates must be fair and reciprocal to our farmers; it must not compromise on our high standards. We are fighting for the interests of our farming community in every agreement that we negotiate.

As a newly independent nation, freed of the restrictions placed on us by the European Union and the Common Agricultural Policy, we are deciding the shape of our own agricultural trade policy for the first time in over 40 years. This needs to consider the views of consumers and farmers to ensure that we have a sustainable and thriving agricultural industry. A Trade and Agriculture Commission can bring these voices together. 

Like ConservativeHome’s readers I do not support generating additional layers of bureaucracy. That is why the Commission will not be another quango or regulator.

It will have a clear set of objectives and be strictly time-limited. Once the Commission has finished its work, it will produce a report that will be presented to Parliament by the Department of International Trade.

The Commission will look at how we can ensure fair competition for British farmers in our trade agreements, while protecting consumers and developing nations. It will advise on how we can use the WTO to advocate for higher animal welfare standards internationally and identify export opportunities for UK farmers. It will advise on the best way forward for UK agriculture.

We must make the most of our new lease of freedom and strike trade deals far and wide and spread our produce to every corner of the earth. We’re Great Britain and we believe in free, and fair, trade. We’re just getting started.