Local elections: The towns and cities that will be the real tests of Labour recovery

14 Apr

As I noted on Monday, there is an expectation from most pundits that Labour will strengthen its dominance in London. I suspect the results will be too uneven for any such clear verdict to be delivered. But even if it is, we really need to look beyond the capital, to the towns and cities across England, to assess whether Labour performance represents a serious threat. We have 21 unitary authorities and 33 metropolitan boroughs up for grabs this year. (I will consider the district councils tomorrow, where the main challenge to the Conservatives tends not to come from Labour.)

Birmingham is an obvious place to start – given both its size and that it has all its seats up for election. Labour has 62 of the 101 seats on the Council – the Conservatives 28, the Lib Dems have eight, and the Green Party one. Labour is doing a bit better in the opinion polls at present than in 2018, when the seats in Birmingham were previously contested. Then we had the Erdington by-election last month when Labour won with an increased majority. But it was a low turnout and the swing to Labour of 4.5 per cent was less than half what they would need to win an overall majority at the next General Election. Labour has a formidable campaigning machine in the city. These factors would suggest that Labour should be back with a clear majority – perhaps making modest gains.

Set against that are the Council’s serious failings – which have been detailed on this site by Cllr Meirion Jenkins. This makes predictions tricky. Perhaps if Brummies are displeased with the Conservatives nationally and with Labour locally they may look to the minor parties. However, the Conservatives are  putting up a vigorous fight.

Labour launched its campaign in Bury with a visit from Sir Keir Starmer. That gave them a chance to get some further publicity over Christian Wakeford’s defection. It is also a council where all the seats are being contested. But the choice of Bury shows a lack of Labour ambition. It is already a Labour Council (28 Labour councillors to 15 for the Conservatives.) At this stage in proceedings, Labour simply holding on in places it already runs like Bury – or Birmingham – shouldn’t be seen as good enough; they should expect to be gaining territory. If Sir Keir had gone a few miles west to Bolton that would have shown a bit more confidence. That Council has 22 Conservatives, with 17 for Labour.

Derby is a unitary authority under Conservative minority control. As only a third of seats are up for election this time Labour could not expect a clear victory. But they should be aiming to win most of the seats being contested and to alter the balance of power. This is one of the few places where Reform are fielding a full set of candidates. That may be of slight help to Labour if some Conservative votes are split off.

Peterborough, similarly, has a Conservative administration while being under no overall control and only a third of seats being contested. Paul Bristow gained the Peterborough constituency for the Conservatives at the last General Election with a majority of 2,580. Labour would need to win it back with a clear majority to be in contention next time. What indication will we get next month from the tally of councillors in that proud city?

Dudley will be another important test. The Conservatives gained control last year winning 23 seats to just three for Labour. Another third of the seats are up for election this time. Will Labour get trounced again or show signs of revival?

Wakefield Council already has a big Labour majority. Not only has Imran Khan, the local MP, been expelled from the Conservatives after being convicted of sexual assault but the Conservative councillors have been in disarray. So it is likely Labour will do well here in advance of the expected Parliamentary by-election.

Even in this category of council elections, it is not always a straightforward Labour/Conservative battle. As noted on Tuesday, Sheffield is a contest that puts Labour under pressure from the Green Party and the Lib Dems. Then we have Sunderland where Labour is being challenged by the Lib Dems as well as the Conservatives.

It should also be noted that we have elections for the new unitary authority of Somerset, with all the seats being contested. That will be an important battle between Conservatives and the Lib Dems. In another unitary authority, Wokingham, only a third of seats are up. But that is another place where Conservatives will need to watch out for a Lib Dem revival.

There are other places – notably Liverpool and Manchester – where Labour are already dominant. But while the elections next month are skewed to existing Labour territory there are other areas that are more competitive and so offer a genuine challenge for them. The sense I get is that while they may consolidate here and there, they will not make dramatic gains. Yet that is what they need to be able to make a credible claim to be on course to victory at the next General Election.

Jack Richardson: Critical minerals. We can and should offer a better model than China’s of extraction at any cost.

25 Nov

Jack Richardson is a Climate Programmes Manager at the Conservative Environment Network.

COP26 consolidated the direction of international political travel towards Net Zero. But for all the hard yards put in by the politicians and negotiators over the document, the market is miles ahead. The global clean energy transition is well underway, but with new technologies, from solar panels to electric vehicles, comes new challenges – including environmental ones.

‘Critical minerals’ (lithium, cobalt, nickel, rare earths, etc) are an essential ingredient to the modern economy. Their rise in the global economy initially came from laptops and smartphones, but the International Energy Agency projects that the Net Zero transition will mean a sixfold increase in demand.

There’s no avoiding that this presents an economic, geopolitical, and environmental challenge. There are some disingenuous arguments relating to it put forward by those who are sceptical of Net Zero because they cannot comprehend the economic or the scientific rationale behind it.

For example, some people point to the process of extracting these minerals and making lithium batteries or wind turbines, claiming clean energy technology is as bad as fossil fuel-based technologies.

But electric cars result in half the lifetime emissions of their petrol and diesel counterparts. Siemens wind turbines pay their whole production CO2 back in less than a year. Costs will come down further through the oncoming clean steel revolution. The fact is that clean energy transition is the only way to mitigate temperature rises and therefore maintain, let alone progress, our standard of living.

Some pundits worry that China is rubbing its hands with glee at the net zero transition because it has dominated many critical mineral supply chains. There is more merit to this concern: the world awoke to this particular threat when a dispute over the Senkaku Islands led China to reduce export quotas of rare earths by 40 per cent, leading to global prices rocketing.

Leaving aside the fact that this argument applies equally to the current fossil fuel based global economy, (OPEC countries provide 80 per cent of the global oil supply; Russia half of Europe’s gas, etc) the cases themselves are not like-for-like.

The world’s critical minerals are spread more evenly. China dominates the supply chain in refining and production – not reserves. It’s a result of decades of outsourcing industry to China; an issue of strategic miscalculation rather than geography.

We can diversify supply chains if we want to, and much of the world has been busy doing so since 2010. Diversification policies are now picking up pace as more countries have signed up to Net Zero. The US, for example, is now seeking to build an end-to-end lithium battery supply chain, while Japan has been working with Vietnam to develop its rare earth reserves.

Nevertheless, the risk is there, which is why William Young and I have written a report on the matter from the Council on Geostrategy. Ahead of the Critical Minerals Strategy which the Government will be publishing next year, we have identified two broad areas the strategy should focus on: resilience and growth.

Building more resilience into global supply chains comes through diversification, which in turn produces growth. Here in the UK, we can build on our progress of onshoring more Net Zero manufacturing as we have done with the new gigafactory in Sunderland, which will create thousands of jobs. Recycling and the circular economy, too, provides a chance for new industries and jobs while also reducing our supply needs from abroad.

Notwithstanding promising projects in Cornish lithium extraction, there is no avoiding the fact that we’ll continue to be importing much of the raw materials we need given the scale of demand. There are opportunities in working with other friendly countries who have massive opportunities for extraction.

Australia provides over 40 per cent of the global lithium supply; Canada has the fourth largest reserves of cobalt; Vietnam, a country the UK must forge closer ties with for other strategic reasons, has the second largest reserves of rare earths in the world.

In our report on critical minerals, we have concluded that trade and investment in diversification will bring both resilience and growth to our supply chains. There are also diplomatic and geostrategic opportunities for Global Britain to lead on developing human and environmental standards. We should seek to offer a better route to development than Beijing’s model of extraction at any cost.

We must walk a tightrope to extract these raw materials that are so vital for addressing climate change without worsening the nature and waste crises. As my colleague James Cullimore wrote on this site last year, human encroachment upon natural habitats risks zoonotic pathogens like Covid breaking loose. A mine has a pollution radius far beyond its boundaries, which risks irreversible damage to some of the Earth’s most important ecosystems. We must find methods of extracting what we need without inflicting unsustainable damage.

Nobody is saying this is going to be easy, but the solutions are there. Through our report we have provided some specific ideas to the Government, but the general direction of travel for critical minerals is clear and consistent with the rest of UK net zero policy: invest, diversify, trade, grow.

Michael Crick: The Royal Borough of Barrow-in-Furness. How does that sound?

8 Oct

Michael Crick is Political Correspondent of Mail+

It’s just a thought.  At a Policy Exchange fringe meeting at the conference on Monday, Sebastian Payne was discussing his new book on the Red Wall with Michael Gove, the new Levelling Up Secretary.  Gove explained that when he was Education Secretary and trying to improve state schools, the whole atmosphere and impetus could be often improved by apparently superficial changes – such as a new name, a new school uniform, or introducing a house system.

Such changes can be quick and cheap, but also signal a new departure – a change of ethos.  These are examples of what Payne called “hanging baskets” improvements.  On the same day, Rachel Wolf cited hanging baskets as a good sign that a place is being looked after.  

It got me thinking.  What other “hanging baskets” could the Government introduce in the Levelling Up areas, pending more substantial structural and economic changes – investment and improvements which may take years to make a tangible impact?  

I suddenly thought of creating a few more royal boroughs and towns.

Remarkably, there are only nine communities in England which have royal status that has been conferred by the monarch by royal charter or letters patent.  (Scotland used to have 70 royal burghs, but these were officially abolished in the 1970s, while Wales just has Royal Caernarfon). 

Not surprisingly, most of the English-designated royal locations are leafy, middle-class communities, far from areas likely to be targeted by the Levelling Up agenda.  And they are very much southern phenomenon.  None is further north than the Royal Borough of Sutton Coldfield, in north east Birmingham.  It was conferred with royal status back in 1528 by Henry VIII, giving the town a real boost after a spell during which its economy had seriously deteriorated.   

Windsor achieved royal status in the twelfth century under Henry I, and Leamington Spa became a royal borough in 1828.  Yet the other six English royal areas have all been created since 1900: Kensington (now with Chelsea) (1901), Tunbridge Wells (1909), Kingston upon Thames (1927), the County of Berkshire (1957); and, more recently, Wootton Bassett in 2011, and Greenwich (in recognition of the Queen’s diamond jubilee).

Most of these are examples of the genteel, prosperous conservative England of tea-shops, old maids and Georgian buildings – not rough, grimy, working class communities which once housed the heavy industries which kept the empire going.

So let’s change all that.  The Royal Borough of Barrow-in-Furness would be an excellent start.  Its new royal handle could be given in recognition of the town’s important role in Britain’s defence over many decades.  The Queen must have visited the Barrow shipyard during her reign to launch nuclear submarines and warships.

After that, perhaps we could recognise a few more towns associated with old heavy industries to which this country owes so much – Scunthorpe or Consett for steel; Doncaster (mining or railways); Sunderland (shipbuilding); Redcar (steel and chemicals); Grimsby (fishing); north east Lancashire (cotton); and Whitehaven (nuclear).  The new royal charters would be granted not just as nostalgic thank yous to a bygone age, but as statements of respect and intent for the local communities.  

Of course, you can’t just confer royal status on a single day in these places, have Her Maj up for a big jamboree and leave it at that.  The new royal charters would have to be followed by genuine long-terms programmes to boost and reorientate the local economies with investment and special measures. 

In many cases – Barrow, Grimsby and Doncaster, perhaps – the towns might be boosted by the creation of new universities, especially if they concentrate on STEM subjects – science, technology, engineering and maths.  The role of higher education in generating business activity and giving a kick-start to local economies, has long been obvious, from Silicon Valley to the hi-tech communities around Cambridge and Oxford.

In the interim, ministers should get on with the royal boroughs idea – though they should seek approval from the Palace first, of course.  And I’m told that a fringe event event on Tuesday, the new Party co-chairman, Oliver Dowden, endorsed the idea. 

Antony Mullen: As the Tories make gains in Sunderland, Labour are divided and in denial

19 Jul

Cllr Antony Mullen is the Leader of the Conservative Group on Sunderland City Council.

The last few years have been difficult for Labour in Sunderland.

Two of their former councillors have been convicted of child sex offences, the ex-Deputy Leader of the Council was publicly sacked by his Leader, and the Council’s children’s services provision has been deemed Inadequate by Ofsted. If that was not enough, one Labour councillor was sued last year, after he falsely branded a local businessman a “paedo”. Another recently appeared in court charged with allowing minors to ride a quad bike without insurance, though the CPS has dropped the case on the basis of evidential difficulties. Nonetheless, it was unfortunate that just two days before his first court appearance, Bridget Phillipson, the Labour MP for Houghton and Sunderland South, launched a campaign against the blight of quad-biking in the constituency.

It is almost incredulous that a local political party can be so bad at PR. The words “Promoted by Alan Mabbutt” would not be out of place beneath some of the newspaper coverage Labour has earned in Sunderland in recent years.

It is something of a running joke among Conservatives in Sunderland that Cllr Graeme Miller, the Labour council leader, reflects upon local elections results and blames “the national issues”, almost as if to replicate the “This is Fine” meme, in which a dog offers itself reassurance whilst the surrounding room is engulfed in flames.

It perhaps does not take the intellect of Professor Sir John Curtice to figure out that some of the local issues I’ve described also explain why the number of opposition councillors has increased from eight to 33 since 2016.

But at the heart of this joke is a more serious point: Miller is wrong for another reason.

Labour does not just lose seats, we win them. This year, we won six new seats: three in wards where we already had councillors and three in wards where we had no councillors before 2021. We won one of these three new wards – St Anne’s, formerly die-hard Labour territory – by just three votes. But what all the wards we won have in common is that we worked them. We delivered leaflets, canvassed, held litter picks, delivered shopping and prescriptions during the various periods of lockdown, and our candidates kept an active presence on social media. None of the seats we gained were “flukes” or won solely off the back of the so-called vaccine bounce. Indeed, it was striking how little the pandemic or vaccines came up on the doorstep. This year felt very much like politics as usual for us and turnout (which was roughly the same as 2018 and 2019) compounded this feeling.

Certainly the national picture is important – it goes some way to explaining why we improved our vote share across the board – but it was not enough to get us over the line. We needed to showcase our candidates, emphasise their local links, and expose the Labour-run Council’s numerous failures (or as many as the Campaign Toolkit templates would accommodate).

This is what Labour fails at. Its councillors are divided into at least two warring factions. Its leadership fails to properly handle criticism. Tired rhetoric about funding cuts and austerity that feels like a throwback to the Ed Miliband years is the ‘go to’ response for every question asked or criticism levelled. It lacks dynamism and creativity and many of its councillors look ready to retire (and this year, many of them did).

This kind of account might sound obvious (party that puts out a lot of leaflets does well, party with a record of failures doesn’t) but it reflects the kind of local factors that are often not captured in national accounts of why local elections produce the results they do.

An exception to this is the New Statesman. Its coverage of Sunderland’s local political scene is excellent, with one minor issue. Whilst it correctly identifies the Lib Dems’ strong performance in the city, it overlooks that we have outperformed them at the last two sets of local elections. Their ambition to become the main opposition party – sometimes by questionable means – has been unsuccessful.

That said, if Labour is looking to improve its local results, it should take a closer look at the Lib Dem vote.

In the local elections of 2019, Labour lost seats to the Lib Dems by some quite large majorities. Then, at the general election later that year, the Lib Dems got fewer votes across Sunderland Central than they got in the constituency’s Millfield and Pallion Wards alone, just seven months earlier. Then, at 2021’s local elections, those voters returned and the Lib Dems once again got more votes in Millfield and Pallion than they managed at the 2019 general election.

If Sunderland Labour was able to come to terms with its own flaws, it might ask why more people vote for the Lib Dems at local elections than at general elections. Having faced up to reality, it might accept it is not all about ‘the national issues’ and develop a strategy for taking back the voters who support Labour nationally, but not locally.

Is that likely to happen?

Well, as we look ahead to 2022, I am preparing for “No Overall Control.”

Will Holloway: The Government can show it’s serious about levelling up by launching a National Plan for Manufacturing

13 Jul

Will Holloway is the Deputy Director of the think tank Onward and a former Special Adviser.

One of the striking lessons of the last 18 months is that a country’s ability to produce goods has proved invaluable. In the early stages of the pandemic, manufacturers retooled production lines across the country to make ventilators and diagnostic kits – boosting the UK’s initial response to Covid-19 and saving lives. Our ability to make things improved our response in a time of national crisis. And the truth is the benefits of manufacturing are much broader in normal times as well.

Onwards’ new research, published today, shows the difference that manufacturing businesses can make in terms of pay packets and output.

Across the UK, manufacturing workers earn £1 an hour more, on average, than comparable workers in other industries. That pay premium is significantly higher in some parts of the country than it is in others. For example, workers employed in manufacturing firms in the North East and North West earn around £2.50 more per hour than people employed in other industries – worth £95 per week to somebody on a full time contract.

Alongside wages, we also found that productivity is higher in some parts of the UK than others. Outside London, output per hour in manufacturing was a fifth higher than the economy as whole. In growing the economies of areas like the North West, West Midlands and Wales, manufacturing is doing much of the leg work. Between 1997 and 2017, manufacturing made up around 40 per cent of overall productivity growth in those areas.

For these reasons, manufacturing is likely to be particularly important for the levelling up agenda. One way the Government could show it is serious is by launching a National Plan for Manufacturing. This could set out tax incentives for capital investment; take action to reduce industrial electricity costs; introduce greater 5G connectivity for smart factories, and include long-term funding for manufacturing R&D institutions.

The UK has a great history as one of the workshops of the world, but the role that manufacturing plays in our society, our national identity and economy has gradually declined. While many richer countries have de-industrialised since the 1970s, almost none has done so as much as the UK. In 1970 the UK had the sixth largest share of manufacturing in the economy in the G20. Today it is second from bottom.

Countries as diverse as South Korea and Ireland have caught up or overtaken our living standards while growing the share of manufacturing in their economy. Rising countries like India and China have grown their share. Yet today manufacturing is less than 10 per cent of GDP in the UK but about 22.5 per cent in Germany.

Even before the onset of the pandemic, most of the world’s developed economies were doing much more to sustain a vibrant and competitive manufacturing base than the UK has historically done.

In 2011, the Indian government published its National Manufacturing Policy that aimed to increase manufacturing to 25 per cent of GDP by 2025 and increase employment by 100 million. In 2012, the United States launched the National Plan for Advanced Manufacturing to accelerate advanced manufacturing investment and research and development spending.

In 2013, Ireland launched “Making it in Ireland”, which set out an ambition to have 43,000 more people directly employed in manufacturing by 2020. While in 2019, the South Korean government published I-KOREA 4.0, aiming to boost advanced manufacturing and automation.

The Government has already taken steps to support UK manufacturing, through the Made Smarter programme, the High Value Manufacturing catapult and the Super Deduction. But it needs to go much further. If ministers can marshal policies that would promote manufacturing further – as our international competitors are doing – it would pay political dividends.

On average, seats the Conservatives won in 2019 have a much larger share of manufacturing jobs than Labour seats. Just over 12 per cent of workers in newly gained seats by Conservative candidates at the last general election are employed in manufacturing, up from nine per cent of workers in incumbent seats and almost eight per cent in Labour held constituencies.

In an emblematic trend of the broader re-alignment of British politics, there are almost the same number of Conservative seats with 15 per cent or more of the local labour market employed in manufacturing than Labour seats with five per cent or less.

This both presents an opportunity for the Conservatives and a threat. If the Government can boost investment in manufacturing it is likely to disproportionately benefit voters in the party’s new electoral alliance. But if the Conservatives cannot halt the decline of manufacturing in recent decades, workers in Red Wall seats will more likely be at risk.

Recent weeks have seen great successes. From investments in Sunderland to Ellesmere Port to Derby to the banks of the Humber, thousands of manufacturing jobs have been secured and created. The Government should build on these decisions – creating a manufacturing renaissance – and reverse the historic decline in manufacturing in the UK. Doing so would increase earnings and productivity in some of the areas that need it the most, turbo charge levelling-up and maintain public support in the process.

Guy Opperman: In the North East, Labour’s Red Wall continues to crumble – here’s where we can win next

20 Jun

Guy Opperman is the Minister for Pensions and Financial Inclusion, and is MP for Tynedale and Ponteland.

During this year’s local elections, we saw seismic change in the North East of England. Hartlepool fell with a near 7,000 majority to Jill Mortimer. Ben Houchen secured 73 per cent in the Tees Valley. In County Durham, Northumberland and elsewhere, the Labour Party retreated.

I don’t think that is our high watermark. In May 2021, we solidified our 2019 general election successes in Blyth Valley, across County Durham and in Teesside – and we can do better.

It has taken time. When I was selected to be the Conservative candidate for Hexham at the 2010 General Election, it was the only Conservative-held seat in the North East. We gained over 100 seats in the 2010 election across the country, but only one new seat was gained in the North East. In 2015, Anne-Marie Trevelyan took the formerly ‘safe’ Liberal Democrat seat of Berwick, making it three.

However, our electoral success in the North East only started really to change in 2019. We gained seven seats – including Tony Blair’s old seat in Sedgefield. Following our Hartlepool victory, we now have 11 seats altogether.

However, there are opportunities for us to go even further, and to do so, we need real action, and determination over the coming years. Boundary changes may alter some seats, but this is how it presently stacks up.

In Northumberland, we now hold three of the four constituencies, and run the council on our own. As we head towards the next election, Wansbeck – the seat of Ian Lavery, an arch Corbynista – is well within our grasp. At the last election, Lavery clung on: but his majority was cut from over 10,000 to just 800.

In truth, he was lucky to hold the seat. We put most of our effort locally into winning the neighbourhood constituency of Blyth Valley but, in the May local elections, local Labour Councillors saw their majorities tumble. It will be for the new Conservative Council in Northumberland to deliver for local people, attracting major new employers to create jobs – building a new train line which will link Ashington and Blyth to Newcastle upon Tyne, and changing Northumberland for the better.

In County Durham, my southern neighbour Richard Holden has written on in ConservativeHome of the sea change in his constituency. I saw first-hand at the local election some of the amazing new Conservative councillors who are delivering for their communities. Richard will always be rightly famous for defeating Corbyn’s heir apparent, Laura Pidcock. In my view, no Labour seat in County Durham is safe. The remaining seats all have majorities under 6,000. There is a big change happening in Durham.

In Sunderland, Labour hold all three seats with majorities of less than 4,000, and in Sunderland Central (majority 2,964), the Conservatives topped the poll in the local elections.

Many of our recent gains came from the Tees Valley. Perhaps that’s no surprise. Ben Houchen is doing an incredible job in transforming Teesside – from delivering more jobs and investment, to saving the Airport, and more importantly projecting a ‘can do’ enthusiasm that all can see.

Ben’s landslide victory shows we can win in any part of Teesside. Both Stockton North and Middlesbrough now look very winnable. Even in Middlesbrough, a seat once so safe the former Labour MP lived in france most of the time, Ben Houchen won well over 60 per cent of the vote. And if Hartlepool can be won by nearly 7,000, anything is possible with work and a real commitment to bring change for the better.

We are making progress on Tyneside too. In a by-election in North Tyneside caused by the resignation of Kate Osborne, now a Labour MP, a local young campaigner showed local residents exactly what a hardworking local Conservative can achieve – and won, taking a safe Labour seat.

In Gateshead, Blaydon is another area with real potential. It is a seat that neighbours my own, and my sense is that Boris Johnson’s leadership and the Conservative message is resonating on the ground.

However, whilst there are many opportunities for success, we will only make progress in the North East if we continue to deliver the change people want to see. So how do we achieve that?

In 2012, as I recovered from my brain tumour, I did a four-week charity walk from Sheffield to Scotland – through what was then the Red Wall. I met people in pubs, mosques, bed and breakfasts, shops and at community events. I talked to people endlessly to get an understanding of the change people wanted to see.

Most of all, people wanted proper representation, with local champions fighting for better investment in schools and hospitals, improved public transport, and more job opportunities. That is exactly what the Government under Boris Johnson is doing. Key symbols of this that matter: like the relocation of part of the Treasury to Darlington, which will open up a world of opportunities for local young people, and play its part in ending the ‘London Centric’ culture that has existed for far too long.

In my own constituency since 2010 we have rebuilt all four high schools, refurbished a local hospital and invested heavily in our community. That is levelling up in action. By getting on with the job and delivering on the people’s priorities, there is a great future for the North East. The Labour Party is out of ideas and does not represent their heartlands. We must keep working, select candidates early, and make the case for conservatism in action.

Can we win more seats than the 11 we now hold? Yes, we can.

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.

Richard Holden: Knightmare on Starmer Street. Labour loses control of Durham – held by the party for a century.

10 May

Richard Holden is MP for North West Durham.

The Louisa Centre, Stanley, County Durham

At the count in Stanley at 3am on Friday morning after the verification checks on the ballot papers, I realised that I was witnessing the latest stage of the fundamental shift in British politics.

The communities that are not merely the heartlands but the birthplace of the Labour Party are decisively turning their backs on the party which turned its backs on them.

Two weeks ago in this column, I wrote about Keir Starmer and Labour’s five tests from this set of elections in the North East of England. To be fair to the Labour leader, these results cannot all be laid at his door – they have a much longer-term gestation.

However, the man who many thought would be Labour’s knight in shining armour has delivered results even worse than the outlier, “knightmare” scenarios that I suggested a fortnight ago.

Not only did the Conservatives remain the largest party in Northumberland, but they took overall control and, in doing so, took Hartley ward – and kicked out the Labour group leader on Northumberland County Council.

Sir Keir didn’t just fail my Stockton South test (remember: Stockton South was won by Corbyn’s Labour in the 2017 general election), but the excellent campaigning of Stockton South’s MP, Matt Vickers, with together with Ben Houchen, the Tees Valley Mayor, saw the Conservatives not just retain the Stockton South council seats that they’d held, but take all the seats that were up for election, including from Liberal Dems and independents.

Paul Williams, the former Labour MP for Stockton South, handpicked and put on a shortlist of one by Labour HQ, delivered a catstrophic result for Labour in Hartlepool. To lose the seat at this stage in the electoral cycle by that much would have previously been thought impossible, but it’s happened.

With the Conservatives gaining over 50 per cent of the vote in the by-election, and Labour finishing a poor second, it’s clear that, in terms of parliamentary seats, CCHQ now needs to be targeting the North East of England much more broadly for the next election, including such seats as: City of Durham, North Durham, all the Sunderland seats, Blaydon – and even perhaps Gateshead and Easington.

Houchen’s utterly overwhelming victory in the Tees Valley, gaining almost three quarters of the votes on the first round, is the strongest symbol of continued Conservative advance in the North of England. The Conservative gain of the Police Commissioner post in Cleveland is further proof of this. Particularly when the vote from Middlesbrough, widely believed still to be rock solid for Labour in Teesside, came out five to three in the Conservative’s favour.

To outsiders, the loss of Durham County Council by Labour to No Overall Control may not seem quite as totemic as some of the other results. But if anything it’s more so.

The Conservatives increased their number of seats by 14, taking them from the fifth largest group (there are two independent groups) to the position of second largest party behind Labour – in one fell swoop.

Durham is where the Labour Party first gained a county council in 1919 and they have held it ever since. The results overall for the Conservatives are really, really good – particularly in my constituency in North West Durham and in my good friend Dehenna Davison’s constituency in Bishop Auckland.

Scratch the surface, and the results are more impressive still. In North West Durham, we’re now second almost everywhere we didn’t win, from what were often poor third places just four years ago. The increasing vote and vote share was at least 100 per cent, and in some cases, such as in Consett North and in Consett South, the number of Conservative votes went up almost four times.

Even in Weardale, where Conservatives were challenging two long-established independent councillors, we jumped from third place to second place, and came within 85 votes of taking one of them out.

In Woodhouse Grove, in the Bishop Auckland constituency, Conservatives gained two new councillors, and only missed out by nine votes in the working class town of Willington in North West Durham. It’s quite clear that, from this incredible baseline, Conservatives can now make further progress both locally and at the next general election.

These campaigns really came down to incredibly hard graft on the ground. It’s clear that CCHQ needs to look at how we can really capitalise on this with extra resources in the coming months and years.

The results in the North East are not unique. To see Rotherham go from zero to 20 Conservative councillors is mindblowing, as are the exceptional gains in Hyndburn in Lancashire, where the Conservatives held the county council with an increased majority.

But this succes is not just in the North. The gains in Harlow, Dudley, Southampton and elsewhere by the Conservatives show an incredible national picture.

While these results are absolutely stunning, often with significantly increased turnouts, it’s clear that the future of these areas as key battlegrounds will require the promises made by the Prime Minister and the Conservative Party to deliver on levelling up to not only be delivered on in the long-term, but also to show that progress is being made within the next year-to-18 months too.

In some areas of the country, the Conservatives haven’t performed quite as well. Downing Street and CCHQ need to find out why this has ocurred, and learn the lessons not only from the great successes, but also from the places where we didn’t do as well as we’d hoped.

What’s clear from politics is that nothing ever stays the same. Who’d have thought that the narrow victory in the Teeside matoralty in 2017 following Brexit would have not only been the catalyst for a shift in voting, but a shift in poltical culture in the North East? People are no longer willing to accept either MPs or local authority leaders who see their position as a sinicure. Delivery is what counts.

We Conservatives are in government, and have the abilty to really make that happen. If we do so, our political prospects in these areas will just get better and better.

Neil O’Brien: Lessons we can learn from fast-growing countries to help us to grow faster

8 Mar

Neil O’Brien is co-Chairman of the Conservative Party’s Policy Board, and is MP for Harborough.

Here’s a striking thing: several countries which suffered decades of communism are now richer than large parts of the UK. In 2018, the GDP per head of Yorkshire, Northern Ireland and the East Midlands (where I’m writing from) were all below Slovenia. Wales and the North East were lower: below Portugal, Estonia and Lithuania. All are now poorer than the old East Germany.

Radical change is needed to claw our way back into the top economic league. And unless we raise growth we won’t escape from demographic trends putting upward pressure on taxes. If you look at countries that have enjoyed rapid growth, they have in common a conscious drive to increase their knowledge, investment and technology.

Take the east Asian countries. Japan, Korea, Taiwan and now China, all followed the same playbook and saw dramatic growth.

Between 1945 and 1970 Japan went from a 20 per vent of the GDP per person of the US to two thirds, rising to 85 per cent by the late 80s. When I was born GDP per person in Korea was a quarter of the UK level. Now they are roughly the same. To have seen as much economic growth as a Korean pensioner has in their lifetime, a British pensioner would have to have been born in the reign of George III.

All four invested heavily in bringing new technologies to the country. Through a mix of government support for new industries and control over the financial system they supported firms to enter new higher tech industries, and soak up the inevitable losses as they learned on the job. For example, TSMC, now the world’s leading chipmaker, was a originally part owned by the Taiwanese government. Likewise Korea’s POSCO, now one of the world’s leading steelmakers.

But unlike many poor countries, they used internal competition between firms and global markets to discipline such subsidies. Companies that grew the national knowledge base and proved capable of export success got subsidies, tax breaks, free land and infrastructure; those that failed were ruthlessly culled (the opposite of what we did with British Leyland).

Industry ministries like MITI in Japan systematically researched and plotted the conquest of one industry after another. China’s NDRC and “Made in China 2025” are similar today. Taiwan created a huge science park and established consortiums of firms to share research, development and knowledge.

Various kinds of regulations and incentives encouraged sky-high rates of investment: even after easing off a lot Japan invests about 25 per cent GDP each year and Korea 30 per cent, compared to 17 per cent in the UK. All four went through periods of importing, copying or frankly ripping off western technologies.

Or if that seems too distant, take an example closer to home. Since 1990 average wages in Ireland went from being 5-12 per cent lower than the UK to being 7-15 per cent higher, depending how you measure it. Ireland attracted four times more inward investment than the UK relative to the size of its economy. Those foreign-owned firms have higher productivity: employing 22 per cent of people but accounting for 57 per cent of value added and 70 per cent R&D investment.

Some recent growth has been driven by highly specific and aggressive tax policies. But the seeds of Ireland’s growth were sown in earlier decades, when Ireland opened up to foreign direct investment and introduced a zero tax rate for manufacturing exporters. From the mid 80’s, Ireland specifically targetted investments from higher tech firms: Microsoft arrived in 1985, Intel arrived in 1989, Amazon, Bell Labs, MSD, Google, Twitter and Facebook in the 90’s and 00’s.

The Irish Development Agency operates a sort of concierge service for inward investors, and recent court cases like that brought by the European Commission regarding Apple show how far Ireland has been prepared to go to attract leading tech firms.

What would it mean to learn from these fast-growing countries today?

First, attracting firms with leading knowhow. We’ve done it before: Mrs Thatcher wooed Nissan to Sunderland with tax breaks. Although evidence suggests previous tax breaks increased foreign investment into poorer parts of Britain, we gradually phased them out, only partly due to EU rules. So the creation of the new Office for Investment is a good start.

Second, improving our innovation-industrial system. Total investment in R&D in the UK is just way too low. The UK invested 1.7 per cent GDP on R&D in 2018, China 2.1 per cent, the US 2.8 per cent, Germany 3.1 per cent, Sweden and Japan 3.3 per cent, South Korea 4.5 per cent and Israel 4.9 per cent. Across the world there’s a clear correlation between government investment and business investment.

However, government investment is more geared towards prompting business investment in some countries. We’re now growing government investment in R&D after decades of neglect, but we must also make it more business-focused. Government should implement the proposals set out in a recent NESTA report to support innovation in poorer parts of the UK.

Third, we need to bring the same focus to manufacturing and tech policy that we’ve had for decades on financial services. We have a city minister, and have quite rightly intervened and changed the tax system to promote financial services, because finance has high wages and productivity growth.

But so do manufacturing and IT. Between 1998 and 2018 output per hour grew £20.60 in manufacturing and £22.70 in IT, compared to £11.90 in leisure, £11.50 in retail, £9.50 in admin support services and £7.20 in accommodation.

Outside London, weekly pay in manufacturing is nearly a quarter higher than the economy as a whole. However, over recent decades poorer parts the UK have seen employment dramatically shifting out of manufacturing, and into these slower-growing local services. Though this holds down unemployment, it represents a sort of economic Dunkirk. The pace of this shift has dramatically slowed since 2010, but not been reversed.

Fourth, we need to address the UK’s longstanding low rates of physical investment. As the excellent Plan for Growth published last week noted: “The UK has a lower proportion of innovating firms overall than other advanced economies and weaker business investment”.

One cause of this is that Britain has had the most miserly tax allowances for investment in the G20. So the “super deduction” unveiled by Rishi Sunak last week is a huge step in the right direction. It should boost investment everywhere, but particularly in poorer places where there is more manufacturing.

Last but not least, a lesson from the high growth countries is about making sure that finance serves growth, rather than itself.

Again, the budget saw steps in the right direction. The Hill Review will enable dual class shares, which tech firms (like Google, Facebook, Lyft, Pintrest etc) increasingly use to offset market pressures for short termism. The new Infrastructure Bank in Leeds will catalyse private infrastructure investment, while further extensions of the British Business Bank will support lending and equity for growing companies (it is gradually filling the hole where 3i used to be).

The next challenge is to unlock more institutional investment into venture capital. Sunak has set in train a review of the EU-imposed Solvency II regulations for insurers. Shifting even a small sliver of such vast institutional cashpiles out of gilts and into growth enhancing venture capital could be transformative for growing businesses. There’s also arguments for reviewing similar rules around pensions too.

Making Britain into a tiger economy is a daunting challenge – particularly its less prosperous parts. But the challenges facing other countries at different times have been at least as daunting. If we don’t want a future of ever higher taxes and slow growth, we simply have to make it happen.

Bill Bowkett: The pandemic has shown the value of localism. But the Government seems to be ignoring this lesson.

31 Dec

Bill Bowkett is a MA Newspaper Journalism student at City, University of London. He is a former editor of the University of Kent’s student newspaper InQuire and has worked as a researcher in Parliament for Sir Oliver Heald MP.

New year’s resolutions are always a fitting tradition. The Romans birthed this trend with the worship of Janus – the two-faced God of beginning and end. Back then, citizens gifted presents to their enemies. In return, Janus would forgive those who confessed their sins.

And lo, two millenniums later, the sun rises in 2021 and a chance to start anew. When news of a vaccine was announced back in November, an ending to this Covid-19 impasse looked imminent. But as the last few weeks have proven, hopes of a ‘social reset’ have been quashed.

New tiering measures meant Christmas was cancelled for families across England. Those that were hoping to spend some time with nanny and pappy last week had their plans shattered because of rising cases, particularly across the south-east. Not to mention a new mutant strain.

This year has dealt multiple blows, but these authoritarian restrictions leave a bitter aftertaste like a par-boiled Brussel sprout. Each of us who have sacrificed our freedoms in the name of public health – and were promised family festivities and an imminent return to normality – have been betrayed.

Serious questions continue to be raised about No 10’s handling of the crisis. But it seems that voters have had enough and have made their intentions clear: they want to take back control.

A recent survey by community network Locality showed that out of 2,000 adults polled, half lack faith in central government to make the right decision for their local community. Moreover, 56 per cent said that they wanted more local decision-making powers.

For all their efforts, this overbearing administration has failed to deliver on multiple fronts. Contract tracing has left thousands of infected individuals missing from the national database. Testing targets are repeatedly being missed at a cost of billions to the taxpayer. And with thousands of shops, pubs, and restaurants forced to close at this, the most wonderful – and profitable – time of the year, the economic forecast looks grim.

Funny that. The Conservatives usually pride themselves on being the party of localism. Yet, they certainly have enjoyed the powers given to them in the Coronavirus Act.

Just a fortnight ago, Education Secretary, Gavin Williamson, threatened Greenwich and Islington councils with legal action if they failed to keep schools open (even though keeping children in class, with days left until the end of term, was illogical).

Why the government is acting in this manner is anyone’s guess. They wish to be in command, yes. But this is not a job they can face alone. With anxieties of a third national shutdown on the horizon, we need new grounds for optimism.

Where should change come from? The answer is centred on those who are normally responsible for wellie bin collections and allotments. Because in 2020, local government has stepped up big time.

Take Leicester, the first city to go into local lockdown back in June. Authorities chose to ditch the NHS Test and Trace App. They used their own methods that applied local insight, calling residents over the phone and knocking on doors. Shortly after results started to show, and cases dropped in the short space of time the initiative was running.

The same goes for the West Midlands where Andy Street, the region’s metro mayor, said piloted tracing identified between 98 and 100 per cent of cases. Remarkable.

And in Sunderland, the council and local Mack’ems are looking towards the future, with the two working on a draft neighbourhood plan that aims to combat health inequalities.

The pandemic has changed the way citizens think about where they live. It has anchored us closer to what happens on our front door – whether that be civil associations working to deliver essential goods, or local authorities setting up support networks to care for our most vulnerable. Localised planning has made a positive difference (certainly a breath of fresh air to the ruckus coming out of Westminster).

With all that being said, if there is one New Year’s resolution the Prime Minister should make that will help the country in the long run, it is sharing the balance of power in England — and a comprehensive devolution framework that meets the needs of those closest to our doorstep.

Rishi Sunak’s “Shared Prosperity” funding announced in this month’s spending review – allocated to local authorities to help stimulate growth – should be spent by independently-minded legislators, not those in London. No conditions, ifs, buts, or maybes. As the Northern Powerhouse think tank director, Henri Murison, said, the government should not “top slice” funds and “pocket it in Whitehall for their own programmes”.

And like in the summer, authorities in England should have lockdown abilities returned so as to have the same power-status as the rest of the home nations. A hyper-localised approach means decisive action with local residents and businesses in mind. That also means control over mobile testing in places like care homes where the Health Secretary Matt Hancock recently announced £149 million of additional funding.

All aspects of life are going to bear the brunt these next few years, if not decades. The Tory’s manifesto pledge to ‘level up’ left-behind Blighty will invariably be set back amid Britain suffering the worst recession in history, as well as having the worst regional inequality in the developed world. Frankly, these are tasks beyond the executive’s capacity.

Radical thinking is needed to disperse fiscal and political responsibility away from high office, whilst also retaining accountability to those who govern. Therefore, a bottom-up approach holds the keys to our destiny – a meaningful partnership based on forward-thinking – because this epidemic impasse cannot last any longer.

Each new year brings the opportunity to resolve, and 2021 is no exception. If the frontbench continues as they are doing right now, we will continue to get the same. It is time to change our current trajectory. Time to give power back to the people.