Chris Loder: Our rail industry is a sleeping giant when it comes to boosting international trade

24 Feb

Chris Loder is the Conservative MP for West Dorset.

As Brexit negotiations have concluded, the Government is working hard to both protect and expand British industry by creating a future of new opportunity through trade negotiations. When developing a new independent trade policy, it is crucial that we prioritise sectors in which we are global leaders and create the best framework possible to help them remain that way in a post-Brexit world.

Recently, I wrote about the importance of rail in the context of our fight back against Covid-19. Today, I am again banging the drum for the rail industry that I know and love; particularly because of its rather unknown status as a major exporter – but we need to change that.

The rail industry always takes up a lot of column inches in the British media. Debates rage about strikes, fares and leaves on the line. These are all issues that the British public experience directly and so it is no wonder that we all hear so much about them.

However, our rail sector is a major industry in its own right compared to the automotive or aerospace sectors; albeit on the verge of a major reform. Crucially, it is also an international success story, exporting £800 million a year in goods and services. The sector employs around 600,000 people (more than the entire workforce of Birmingham) and fuels jobs in the UK’s industrial heartlands; places like Crewe, Derby, Stockport and Doncaster. And it could do so much more for UK plc.

Key to protecting and enhancing the UK’s role as a major rail exporter is to make our market attractive and open for business. Rail should be included in any free trade deal post-Brexit; and I have already met with Graham Stuart, International Trade Minister. These deals should be signed with the purpose of making it as easy as possible for the UK to continue to export.

A recent survey by the Rail Supply Group showed that the UK rail sector’s priority markets are very much aligned with those of the Government – rail suppliers want to access markets like America, Australia and India, all of which are top priorities for agreeing Free Trade Agreements. The industry is also keen on ensuring reciprocal market access; and we should reject protectionism wherever it rears its head. If we are restricted from accessing another market because of protectionist procurement legalisation, as we have been within the EU, the Government needs to ensure these barriers are broken down for the benefit of all; and that is my mission here at the moment for the railway.

The potential of the rail industry in exporting abroad knows no bounds, and it says something about the growth of the industry that the Rail Sector Deal, agreed between industry and Government, has targeted a doubling of UK rail exports by 2025. This is very much achievable, with lots to play for as the global rail market is due to expand significantly over the coming years; with the recently released UNIFE World Rail Market Study predicting annual market growth of between one and 2.3 per cent until 2025, when an annual volume of approximately ER 240bn pa could be expected.

However, now more than ever, we need to show off what we can sell to our new trading partners. Support from Government, recognition of the exporting potential of the sector and schemes like the Department for International Trade’s Tradeshow Access Programme (TAP) are vital in helping fund small businesses in the rail industry to go to trade shows around the world and bring home contracts. As we leave the EU, it is vital that these sorts of schemes are maintained and supported more because Brexit means the UK becomes less prominent internationally. Now is when our presence on the world stage is needed most.

In September 2019 at the Conservative Party Conference, the rail industry leaders present did not appreciate the opportunities that Brexit offered. Senior executives were not at that time wanting to embrace the future. But we have now left the EU. We have countless trade deals in place and I have been making the case throughout Government to make sure rail features in these deals; and the industry would do well to also make the case.

The Railway Industry Association (RIA), the voice of the UK rail supply community, has made a number of key asks about what the industry needs from future trade deals in order to continue to soar. To summarise these in simple terms: rail needs to be included in trade deals; have tariff-free access to other markets wherever possible; and retain a great, highly skilled workforce with people from around the world able to come here if they fit the bill. If we can achieve this and combine it with a renewed drive to “sell, sell, sell” through our negotiations around the world; there is every opportunity for our rail industry to lead the world in our new, global Britain.

Hugh Sykes: How spatial planning can make levelling up a reality

14 Jan

Sir Hugh Sykes is Chairman of The One Powerhouse Consortium, a retired industrialist and was Chairman of the Sheffield Development Corporation from 1988-1997.

Today sees the publishing of four draft “Spatial Plans” for the four super regions of England that show how spatial planning can finally solve the seemingly intractable problems of regional inequality and make levelling up a reality.

Right across the political spectrum it is understood that it is unacceptable for a child to be born 25 miles from London and have one set of life chances, while a similar child, with similar capabilities, born 25 miles from Plymouth, or Doncaster, or Stoke or Lowestoft has a completely different set of likely outcomes – unless he or she moves.

That is the stark human reality that lies behind the levelling up agenda.

And yet this situation persists. The regions of England have been blighted by low productivity and inequality of opportunity for many years. The causes are historic and political, local and national.

Governments of all colours have tried various ways of addressing inequalities with little evidence of success. Of late, Boris Johnson has been more than explicit in his ambition to address the issue – especially as many of those who live in these areas have turned to him at the ballot box to find a solution for them.

So what can be done? My experience as Chairman of the Sheffield Development Corporation in the Eighties showed me that there is a solution. It is the simple discipline of making a plan, agreeing the plan with stakeholders, and implementing it effectively.

Fortunately, the discipline of spatial planning exists precisely for this purpose.

But I am not here today to simply urge the Government to adopt spatial planning. I wanted to show what can be achieved. That is why my charitable foundation has worked with The RSA and globally recognised practitioners Aecom, Atkins and Barton Willmore to produce draft spatial plans for the regions of England. They are a gift to the nation – and they are available to view today on our website.

Why spatial planning? Put simply, it is the “where” of decisions – it helps policy makers to see where, and how, to focus effort, direct investment, encourage economic activity and – in a very practical way – address inequality and encourage economic activity. In very general terms it is a map, combined with a shopping list.

Spatial planning as a discipline is well understood in countries and regions around the world, notable examples include advanced economies similar to ours, Germany’s Rhine/Ruhr, Holland’s Randstad and New York City’s Regional Plan Association, all of which use spatial planning as a discipline to focus political will, economic activity and social reform to great effect. Indeed, spatial planning has been used in Scotland and London with demonstrably positive results. We now need it for the regions of England.

Not only is spatial planning reliable, it provides the Prime Minister with a transparent framework to show his government’s practical commitment to levelling up. Not least in terms of government spending. There are of course funds available to the regions – the Shared Prosperity Fund, the Towns Fund, funds for green energy, and others too numerous to mention. But those monies will be dissipated if there is no plan, no “focused effort” to organise and deliver the investment.

One of the mistakes of the past has been to think that solving regional inequalities is just about money. It isn’t just about money. It requires the transformative potential of spatial planning, harnessed to locally representative bodies such as LEPs, mayors and local authorities, brought together to work together, in partnership with ministers in Whitehall.

Scale is important too. To break out of the inevitable competitiveness of city regions, and make the most of much needed infrastructure investment, Johnson needs to think in terms of millions of people, not hundreds of thousands of people. Especially where infrastructure is important – as it is in the North in particular.

Lord Kerslake’s UK2070 Commission has been very active in this area and his Commission has cited our work specifically in its recommendations.

We believe that the time for theorising and conjecture on regional issues has long passed and we trust that the work that The One Powerhouse has done, shows a clear direction of travel for further work.

Our recommendations are, we believe, straightforward and achievable. We have done the early work on drafting what the plans should look like. We suggest the Government tasks Sir John Armitt’s National Infrastructure Commission with developing our plans further. As that work takes shape, we also suggest his commission works in collaboration with locally representative “Growth Boards” made up of existing LEPs, mayors, local authorities and other interested parties to ensure the regions themselves are well represented. Both then report into a minister. Perhaps the Prime Minister…

Brexit is done. I believe we have produced the way for levelling up to be done.

James Frayne: Big tax rises would make Tory campaigning impossible – in Red Wall seats as well as traditionally blue ones

1 Sep

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

In my last column, I suggested that the best hope for the Conservatives in building an effective campaign infrastructure in newly-won Northern and Midlands seats was by developing a new business-led coalition in these places.

Many of these towns and small cities have no activist networks of any description, and new voters come from families that openly despised the Tories a generation ago. Practically the only truly culturally Conservative people here – in the North East, the far North West and South Yorkshire – are businesspeople. Businesspeople are relatively large in number and are trusted by their local communities; they would be a perfect launchpad for a new Conservative Party.

It’s early days, of course, and details are yet to emerge, but news of a major assault on British businesses via higher taxes would make such a campaign totally impossible to run. It would be a massive set back to Conservative plans to become a regional party.

If reports are to be believed, amongst other things, the Treasury is considering significantly raising Corporation Tax, as well as Capital Gains Tax (CGT) and taxes on pension payments.

“Corporation Tax” is badly named; it’s a tax on pretty much any significant business, not on “corporations” – but, while larger businesses have both the resources and the endless budget lines to be able to minimise profit and keep corporation tax bills down, SMEs just have to lump it.

And increases in CGT and pension payments will put fear into small businesses, because they ultimately allow business owners to take a lower income now in the hope and expectation of being able to enjoy pay-offs in the future – with their currently lower income supporting their ability to employ others.

All of this would be a bad idea politically at the best of times. But doing it now, just when businesses have been struggling very badly, would be unbelievably risky. It’s not just high street retailers that have bit badly hit; vast numbers of firms have been hit either directly by the logistical difficulties of running a business while social distancing is required, or by a collapse in the confidence of their customers, or both.

New, higher taxes would make it harder for businesses to earn a living, and they would also make redundancies more likely and the scrapping of recruitment plans much more likely. Many businesses will be looking to develop a decent financial cushion over the next year or two – with at least six months’ operating costs in the bank – having been scarred by how close they came during lockdown to oblivion.

They would not be able to generate such a cushion with higher taxes on their profits. (Some businesses are also complaining that this comes on top of Brexit – something else that they would sooner not manage).

Aren’t these businesspeople effectively locked-in to the Conservative Party? Where would businesses go to vote? It’s true to say there are many, many businesspeople across the Midlands and North that would be very unlikely to vote Labour – on the basis the Conservatives would pretty much always be better for them.

But we’re not talking about simply securing their votes for future elections; we’re talking about trying to energise businesses so that they became local recruiters, fundraisers and campaigners for the Party in places where there are no activists. They simply won’t do this if the Conservatives turn them over. Again, if the businesspeople of Rotherham, Doncaster, Barrow, Workington, Bishop Auckland and so on aren’t going to create a new Conservative campaign network, who on earth is going to do it?

While major tax rises on business would make the growth of new regional Conservative Party much more difficult, I strongly doubt it would retain any medium-term popularity with the public either. Public opinion polls always lag behind business polls – and these are showing extreme concern about the state of the economy.

The public would catch up when reality bit and growth slowed and redundancies rose; at that point, the public would see that raising taxes on employers doesn’t help anyone. So where should the Treasury look? There are already suggestions they are being strongly encouraged to look at spending cuts first; only when they have exhausted what’s reasonable morally, economically and politically should they turn towards tax rises.