Andy Street: Making connections to change our region

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

When the Prime Minister gave his first speech at the Manchester Science and Industry Museum on July 27, he spoke of the “basic ingredients of success for the UK”.

He spoke about culture, liveability, responsibility in power and accountability – but the subject that resonated most with the experiences of the West Midlands was his belief in the power of connections.

He said: “Inspiration and innovation, cross fertilisation between people, literally and figuratively, cannot take place unless people can bump into each other, compete, collaborate, invent and innovate.”

The West Midlands provides a case study for the UK in how connectivity can transform an area by linking its communities, its geography, its businesses and its people. In the UK’s most diverse region, this commitment to connection is a key part of the new Urban Conservatism we are building here, which is winning support.

In a region spread across the seven boroughs of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton, connectedness has been vital in building a sense of unity. Most obviously, huge investment in our transport network is allowing our communities to physically meet.

But as the Prime Minister said, connectedness isn’t just about tramlines and buses, it’s about encouraging the sharing of ideas to drive growth – and it’s as old as the hills.

Successful city states – going back to the Italian Renaissance and beyond – flourish by bringing people together to drive social and economic progress through greater understanding and innovation. The lesson of history is that places that unite different cultures to distil their ideas and harness their ambition are successful, be it 18th century London or 20th century New York.

Here, that ambition means connecting an increasing number of economic hotspots. From the cluster around the NEC known as ‘UK Central’ to the massive Phoenix 10 brownfield reclamation scheme in the Black Country, the resurgent economy in the West Midlands is creating jobs that require connectivity. Investment in public transport is building an arterial network taking people – and their ideas– into these centres of opportunity.

But the real lesson of the West Midlands story is how we are learning to connect people, not places. The Mayor’s Community Weekend, for example, brought tens of thousands of people together over 165 events through a partnership between the West Midlands Combined Authority and the National Lottery Community Fund. A hundred workplaces joined in with the Mayor’s Giving Day, encouraging charity in all forms. My Faith Action Plan brings together different faiths. We are even connecting the generations through my Cricket Cup at Edgbaston on September 8, which will see grandparents and grandchildren take the field together.

In such a diverse place, these soft social initiatives solidify to bind the connections we make, simply by getting involved. The alternative to connectedness is isolation, which breeds intolerance. It’s critical to stand against intolerance of any kind, whether it’s racial, religious or the kind of schools protest against equality teaching we have seen in Birmingham.

We are also making great strides in closing divisions in our communities to improve social mobility. In 2007, 20% of our young people left school with no qualifications, a figure that has been brought down to 11% through retraining in areas like digital and construction, and growth in modern apprenticeships.

That’s being helped by a unique feature in the West Midlands – the Apprenticeship Levy Transfer Scheme, which allows us to spend the unused apprenticeship levy paid by big firms more sensibly. Closing skills gaps like this is another way that we promote connectedness across and within our communities.

Connectivity in a more literal sense can be achieved through technology. I was encouraged by the PM’s commitment in his candidacy to speed up the roll-out of Fibre Broadband across the country. This kind of quick expansion is vital if we are to ensure that no areas are left disconnected from digital opportunities through under-investment.

However, with 5G coming first to our region, we aren’t prepared to wait for connections to spark innovation. Just a few weeks ago a ground-breaking trial here hinted at what can be achieved with 5G, when we linked local ambulances to doctors in A&E in real-time. The same technological connectivity is driving our automotive sector in its ambition to become the UK capital of driverless vehicles.

Sitting as we do at the heart of England, the West Midlands is positioned to benefit from the Prime Minister’s ambition to better connect the nation and rebalance the economy. As the PM said, “We need to literally and spiritually unite Britain, and that means boosting growth and bringing our regions together.”

To me, there is no greater instrument for this ambition than HS2 – the single piece of investment that will unlock millions of pounds of transport and housing infrastructure our region desperately needs.

Sites like the new tram line from East Birmingham to Solihull are indelibly linked to HS2. We have a target to ensure local people are never more than 45 minutes from a HS2 station, and schemes such as reopening closed railway lines and the impressive Sutton Coldfield Gateway have been meticulously planned around this major investment by the Government to sew our country together. Without it we are definitely poorer.

Connections need to be international too. As Michael Heseltine pointed out in this report ‘Empowering English Cities’, which was commissioned by the West Midlands Combined Authority, the underperformance of our major cities on the world stage is a critical problem that must be solved if we are to balance our economy.

However, this does not mean adopting an adversarial position to competing city regions like Rotterdam, Lyon, Frankfurt, Milan, Chicago and Sapporo, it means ensuring that we have the global connections to take in the best ideas and turn them to our own advantage.

This crucible of cultures concept is the very purpose of the civic university, and you will not find a better example than Chamberlain’s University of Birmingham – which is why our universities must, post-Brexit, continue to welcome International students. They literally connect us to the world and the ideas developing beyond our shores.

Travel opportunities are also important in nurturing our global position. Birmingham Airport has its sights set beyond the Brexit horizon with continued growth in passenger numbers. Work is due to start on its T18 project – named because it will create a terminal that can handle 18 million passengers a year, a rise of nearly 40% on the previous record, achieved in 2017.

HS2 makes this project even more important, as the airport will only be 38 minutes away from Euston, much quicker to get to from North London than both Heathrow and Gatwick.

Finally, I consider my own role as Mayor of the West Midlands to be one of connectivity. Overseeing a region where Labour control the majority of local authorities has meant that my job has often been about providing the glue that holds us all together, encouraging teamwork. In the UK’s youngest, most diverse area, this Urban Conservative approach is paying dividends politically as we attempt to make more of our constituent authorities Conservative.

This kind of inclusive Conservative leadership is where the party must be – and we are looking to Prime Minister Johnson, as the former Mayor of Britain’s mega city, to understand this and follow it through in Government. The Prime Minister will know what a Conservative Mayor in an urban region can achieve through physically connecting people – whether it’s through social connections, transport connections or digital connections – and I hope he will be considering how we can replicate this across the country.

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How Johnson could play the politics of an economic contraction

Yesterday, another of the Brexit Wars’ endless fronts opened up as both sides tried to put their spin on the news that the British economy shrank in the last quarter.

On the one side, Remainers keen to jump on anything which bolsters their view that our departure from the European Union will bring about severe economic disruption. Arrayed against them are Brexiteers who argue that this is either unrelated to Brexit or at least in part due to the previous administration’s botched efforts to get Britain out.

Who is right? On one level, it scarcely matters. Both sides are sufficiently entrenched by this point that it is difficult to imagine the voter who is politically-engaged enough to register a 0.2 per cent contraction and yet sufficiently agnostic on Brexit for it to swing them one way or the other.

For what it’s worth, experts such as Ed Conway of Sky News and Rupert Harrison, until recently chair of the UK Council of Economic Advisers, seem sceptical that yesterday’s figures were the lip of a precipice. Instead, they both seem to expect the economy to grow again in the third quarter (Q3), with the Q2 dip a result of the unwinding of companies’ No Deal planning, which inflated the Q1 figures.

Moreover, the publishing schedule for this economic data means we won’t even find out if the UK has entered a so-called “technical recession”, i.e. two consecutive quarters of contraction, until after October 31.

Of course, this doesn’t necessarily mean that the Government is out of the woods – Conway says that the numbers will be a “challenge” for Sajid Javid to explain, and the Prime Minister won’t want press speculation about economic bad news undercutting his attempt to rejuvenate the Government, and indeed the country, with his new, optimistic style. The UK is also exposed if trading partners on the Continent run into difficulty.

However, there may nonetheless be a few political opportunities in the story.

First, Britain continues to outperform its principle EU rivals, such as France and Germany, on a range of measures, and raising this story with ministers will offer them more opportunities to hammer home this message.

Second, speculation about a recession might lend Boris Johnson more political cover for his clearly-signalled intention to turn on the spending taps. What might once have looked like vulgar pre-election bribes can now be recast, or at least spun, as prudent investments to bolster the economy at a crucial moment. Handy, if you anticipate an imminent election.

Finally, it can bolster the Prime Minister’s push for a decisive resolution on Brexit. Some commentators have noted that certainty around the exit date, even including the possibility of a no-deal exit, is preferable to many businesses than running their stockpiles up and down whilst the Government prevaricates. There is now something to point to which illustrates the economic risks of kicking the can.

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John O’Connell: Cuts to inheritance tax could help the new government

John O’Connell is Chief Executive of the Taxpayers’ Alliance

The cost of dying is going up. The TPA published work yesterday detailing the taxes and charges involved when someone passes away. Inheritance Tax (IHT) is the obvious money spinner – in 2019-20, the government is projected to receive £5.35 billion from grieving taxpayers, the highest amount ever.

Inheritance Tax (IHT) is unpopular. Some polls put it ahead of other taxes as distinctly unloved – it’s often followed by Council Tax and the Licence Fee. That won’t come as a surprise to many ConHome readers, but it possibly is surprising to left-wing campaigners – who believe that inheritances entrench inequality, and that we must punish an imagined ruling aristocratic class.

Simply, IHT goes against a natural human instinct to make sure your family is looked after when you’re gone. To that end, it’s anti-aspirational – why work so hard to look after your children if the taxman guzzles it all up anyway?

But this is only one of the many ways that the government extracts money from the dead. These charges also include the cost of death certificates, land registry fees, probate and VAT.

All of that means a homeowner living in London, without a spouse or children to pass assets on to, who purchases a coffin and is cremated, faces a cost of death of up to £60,773.

This could rise to £61,308 if the newly proposed probate fees come into force. Under the innocuous sounding ‘Non-contentious Probate (Fees Order)’, Philip Hammond’s Treasury looked set to push ahead with a plan to hike the fees charged for a grant of probate from the current flat rate of £215 (£155 if a solicitor is used) to a sliding scale of fees ranging from £250 to £6,000, based on the value of the estate.

That ignores the fact that the probate service is not optional for many households. Receiving an inheritance is often unexpected and so families may not have had an opportunity to plan. This will often be the case for households on lower incomes, who do not have the resources to consult expensive solicitors. They are the people who will be most unfairly impacted.

Perhaps the cost of dying all seems rather small fry, in relation to delivering Brexit by October 31. But there is likely to be a Budget ahead of the deadline, which will need to encourage investment and win back support for the Conservative Party potentially embarking on a No Deal and General Election. So there could be three interesting elements to consider:

1. Help everyday families.

Philip Hammond’s proposal to whack up probate fees on families that may not have expected an inheritance, and may be cash poor. It is also a disproportionate increase. The level of service involved in a grant of probate is roughly equivalent, regardless of the size of the estate. Therefore, increasing the fees all the way up to £6,000 is extremely difficult to justify. As Guido reported at the time, the Lib Dems had issues with the move, as do the Law Society. It should be immediately junked.

2. Win back support with tax cuts.

The Government should consider increasing the thresholds at which people pay IHT. Consider how this issue was weaponised by George Osborne in 2007 – he dared Gordon Brown to hold an election with a promise to raise the thresholds to £1million. Brown blinked. Popular tax cuts alongside a Brexit-friendly Budget might just help a party aiming to bring voters back onside.

3. Encourage investment.

Simpler taxes are better and in the long-run, IHT should be abolished. But for now, investment is crucial. Leftist groups such as the Resolution Foundation and the Tax Justice Network have been critical of IHT reliefs like Business Property Relief (BPR). In doing so, they argue that reliefs “cost” the Treasury money; that “the government is handing out” money. Such talk is nonsense – it assumes all money belongs to the government and they simply decide to give some of it back. But until we simplify IHT by abolishing it entirely, reliefs like BPR and the Enterprise Investment Scheme can help drive growth and encourage responsible saving. BPR has been a vital tool in helping smaller companies across the UK, via the Alternative Investment Market (AIM), and has a role in ensuring that companies aren’t broken up to meet IHT liabilities, as the government alludes to. So MPs and mandarins must ignore calls from leftwing Twitter hordes and ensure that investment continues apace after the 31st October.

The new government has come flying out of the blocks and looks set to deliver Brexit by October 31st. The cost of dying may not be top of the list of priorities, but a Budget could be upon us before we know it – now’s the time for good ideas and fighting off bad ones.

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