Ben Houchen: Unleash the free market to deliver on levelling-up

7 Feb

Ben Houchen is the Mayor of the Tees Valley.

The release of the Government’s Levelling Up White Paper on Wednesday was a very welcome change from Westminster gossip, with serious policy issues leading the news, and the government getting on with the job of delivering for the British people. There is no shortage of serious thinking behind the white paper, and much to be positive about in it.

When Michael Gove was appointed as Secretary of State for Housing, Communities and Local Government, one of his first acts was a visit to Teesside. I took him to see Teesworks, the transformational project that is breathing new life into the former Redcar steelworks and the heart of the Teesside Freeport. While he was on the site I spoke to him at length and in detail about securing jobs, private investment, and growth in my region, and the lessons that could be learnt from Teesside’s experience. Michael has certainly listened, and the strategic direction the white paper outlines has the right priorities – giving back control to local people, ensuring that there is strong local leadership, enabling people to restore local pride, and hugely raising ambitions for communities abandoned to decline.

I’ve always said delivering levelling up was not going to be achieved in just a few years, and the White Paper has the breadth and depth of vision necessary to guide Government policy for years to come. It’s going to be an invaluable blueprint for both this and future governments, as its ideas work through the different departments of state. But whilst the White Paper is strong on getting the shape of government intervention right, there is a lack of clarity when it comes to enabling the real engine of levelling up to take off. Investing in local priorities and fixing skewed research and development funding formulae is important, but what will really restore pride to left-behind areas and create the new opportunities we all want to see is private initiative. The paper’s relative silence on this essential part of the equation is a missed opportunity. A free market focus could have supercharged the White Paper.

Nevertheless, the free market is going to be crucial to the next stage of levelling up: delivery. At the next election, I believe the government will stand or fall on whether people can see visible progress on levelling up. People need to see cranes on the skyline, spades in the ground, and steel going up, as key infrastructure projects are delivered. But as Conservatives, we know that it’s not always about throwing taxpayers’ money around. History shows the State, with its default mindset diktat handed down from upon high, simply can’t do the right things quickly enough. Plans to extend the kind of devolved powers I have to new elected Mayors need to be accelerated. The invention and skill that the Prime Minister has rightly said exists in every part of our country needs to be unleashed. And we need to convince private investors to commit with confidence to places with a proud past and huge potential but a recent history of reliance on state-administered sticking plasters. How do we achieve this?

Firstly, I’d aim for the low-hanging fruit of business rates. Tax devolution may not sound exciting. But I believe devolution of business rates could be as revolutionary as Margaret Thatcher’s “big bang” reforms to the City of London in 1986. If I, as Mayor, had control of business rates, I’d slash business rates across the board, with a special focus on capital and energy intensive businesses which are a huge strategic priority for Teesside, Darlington, and Hartlepool. Overnight this would stimulate massive private sector investment in strategic industries that are critical for UK PLC. This in turn would lead to an explosion of job creation, put more money in people’s pockets, and restore local pride. Different areas could take different approaches – for example, London could focus on its world-class financial services sector. The result would be a spectacular renaissance and an economic boom not seen for generations.

Getting competition into local government would not only get some much-needed downward pressure applied to tax on job-creating British businesses – it would stimulate over-cautious local authorities to shift from micro-management of decline to big thinking about success – something far too few councils do. Cleverly deployed, it could be a crucial tool in incentivising a net zero recovery, putting the UK at the global forefront of net zero technology, securing first-mover advantages in jobs and technology, and showing that green goals are better achieved through the market than through socialist levies.

The reason I’m so keen that the Government moves boldly on hydrogen technology is because we have a once-in-a-lifetime opportunity to become a global centre for a huge growth market. No great opportunity is completely risk-free, but it’s a moment we need to seize or we could be outstripped even by the usually sluggish EU. The hydrogen contracts for different business models need to be released; heating and transport projects need to be accelerated; and we need to incentivise private investment in the sector on a big and immediate scale, or we are going to come late to a German party.

Treasury officials, lacking confidence in the free market and British enterprise, fret that fiscal responsibility requires regulations and taxes – especially business rates – to stay equally high in all fields and across the country. But the example of Corporation Tax is instructive. Gordon Brown left behind a Corporation Tax rate of 28 per cent. Despite howls from the opposition parties, Conservative chancellors have cut this down to 19 per cent. That led to the creation of huge numbers of new jobs and new businesses, whilst the actual tax yield to the Treasury from Corporation Tax grew. Singapore has pursued the same strategy with much more conviction, and their ten per cent Corporation Tax cuts and other business incentives have been rewarded with six per cent growth. If we’re to overcome the cost of living crisis, this is the kind of growth we too should be reaching for.

We need every part of Britain to be firing on all cylinders if we are to win the global competition for investment. Instead, Treasury fixation on the short-term is keeping a tight central rein on growth. The Treasury plans to let the government’s most pro-growth policy, Rishi’s super-deduction, lapse next year. If the super-deduction is indeed allowed to lapse, CPS and Tax Foundation research shows Britain will fall to about 31st in global competitiveness league tables. This simply isn’t good enough. Brexit gives us the opportunity to make bold business incentives happen without needing EU say-so. We need to take that opportunity and make bold moves now.

Levelling up requires not bigger, but smarter government, smarter politics, and smarter tax. The White Paper rightly prioritises the open publication of new levels of data so that the Government can be held to account on delivery. I’m willing to be judged on delivery, and with the strategy set in the White Paper, the time to deliver jobs, investment, and growth is now. Giving Combined Authorities genuinely extensive powers to set Business Rates is only one of many actions we need to take. But all paths to delivering levelling up need Whitehall officials to be led by Conservative ministers to embrace lower taxes, lower regulation, and the power of private enterprise.

Jonathan Webb: To get levelling up right, we need to rethink where power lies

21 Jan

Jonathan Webb is a senior research fellow at IPPR North.

Before January draws to a close, the Government will have faced the biggest test of its flagship levelling up agenda to date. The highly-anticipated levelling up white paper represents a watershed moment for the Government – a chance for it to deliver a plan worthy of the rhetoric, and meet the promises made to the country in 2019 to raise prosperity and close regional divides. If the white paper is to be a success, it must provide a framework that changes the way this country is governed.

The UK is more centralised than any comparable country. Economic and political power is centred around Westminster and this is a root cause of our deep regional divides. Not only is our centralisation a long-standing problem, it’s also one that is getting worse. New research released this week by IPPR North shows that since 2010 central government employment has increased, while local government has continued to shrink.

More decisions are being made from departments in Whitehall and not by local government. At the same time, increasing amounts of tax revenue are flowing to central government, not local government. In 2017/18, 95p in every £1 paid in tax was taken by Whitehall compared to 65p in every £1 in Germany. This has worsened in the intervening years, rising to 96p in every £1 paid in tax being taken by Whitehall in 2019/20.

This centralisation of resources in Whitehall is problematic because decision-makers in London are too far removed from many of the communities that need to be levelled up. Where power lies matters. The further people are from Westminster, the less likely they are to trust government. While some steps have been taken to disperse civil servants across the country, this doesn’t provide the ambitious rethink of central-local relations needed to shift the dial, nor does it compensate for the fact that local government’s capacity has been diminished.

Creating a new economic campus in Darlington won’t make a difference if it simply results in more civil servants moving North. What the region and other parts of the country need is investment, steered by local leaders who know their communities best. Levelling up cannot be delivered from central government alone.

Fortunately, the building blocks needed to level up are already in place, that is, strong local leadership and ambition. Regional and local leaders, like metro mayor Ben Houchen, are making a difference. Houchen has attracted significant economic investment to Teesside, creating a new economy that prioritises green jobs and industry. All areas should be given the same economic opportunities as Teesside.

And at an even more local level, community groups are proving that they have the determination and understanding needed to tackle big issues and level up from the bottom up. Organisations like the Wigan and Leigh Community Charity are giving people the chance to turn their interest and skills into a social enterprise or community business. With the right support, communities can do incredible and entrepreneurial things for themselves.

Shifting power away from central government and to communities requires a strong local state. The white paper must deliver this by outlining a new ambitious way of governing, that puts communities first. Instead of hoarding power and resources in Whitehall, the government must give these away to local leaders. As a start, it should commit to ensuring that 50 per cent of all capital investment and spending on economic affairs sits at the subnational level. This would shift significant resources to combined and local authorities in England.

At the same time, empowering local government and communities would allow them to work together to create new economic opportunities for people and tackle problems like crime and anti-social behaviour. The more say and involvement that people have over their lives and the bigger

input they have in shaping the places they live, the more likely they are to foster local pride. This pride in place is crucial for strengthening community ties and a sense of belonging.

To make levelling up a success, it also has to be underscored by collaboration, not competition. Competitive pots of funding, like the levelling up fund, creates winners and losers. It isn’t right that Barnsley is the only place in South Yorkshire not to win a levelling-up bid. Their need for investment is just as great as in Doncaster or Sheffield.

A more decentralised country, where political and economic power sits at the regional and local level and not in Whitehall departments, would speak to the scale of change needed to match the levelling up rhetoric. So, when Gove presents his levelling up white paper to the country, a radical vision of, and clear plan for, devolution must be at its heart.

Shifting power to local places and communities could give people the chance to better shape their own lives, restore local pride, and finally address the deep divides that cut across our country. Most importantly, it would fulfil the promises made in 2019 – that a fairer and prosperous economy that works for everyone can be realised.

Mieka Smiles: Why Middlesbrough should be made a city

16 Dec

Cllr Mieka Smiles is the Deputy Mayor and Executive Member for Culture and Communities on Middlesbrough Council.

The City of Middlesbrough. Middlesbrough City.

Has a nice ring to it, don’t you think?

The Queen’s 70th Platinum Jubilee celebrations will see a small number of towns across the UK given ‘city status’.

Bidding for the honour is a rare opportunity to showcase your town and talk about the things you’re most proud of. And our bid is now officially in.

We as a town have previously bid for the honour three times. It’s something I’ve always supported.

But rightly, this is something that a few will question. Why are we doing this? What benefits will it bring? How much money and effort will go into this? Don’t we have better things to be concentrating on? All valid points. They’re questions I’ve asked too.

The first answer for me is that most residents want to see it happen. A poll we conducted showed an overwhelming 91 per cent of those who cast their vote supporting it. It is also a bid from the entire North East – with independent Middlesbrough mayor Andy Preston gaining cross party support from every council leader in the region.

Our greatest educational institutions – including Teesside University – have also thrown their weight behind the application, the cost of which we’ve kept well below £5,000. Recently crowned University of the Year for Social Inclusion by The Times – and with a staggering 20,000 students – it is the second largest university in the UK not in a city.

My second justification for the bid is I think statistically this should have happened a long time ago. City status actually seems somewhat overdue. According to the Office of National Statistics (ONS) it’s game, set and match. As it is local authorities that apply rather than towns, it’s natural to consider the population of the area the authority covers – ours being around 140,000 residents.

Neighbouring Stockton’s local authority area has a population of around 190,000 – but that takes in a number of towns including Stockton, Thornaby, Billingham and Yarm.

For me, a city is one built up area. One central hub of activity like Middlesbrough rather than a spread of towns. Looking past local authority boundaries, and using ONS stats, Middlesbrough as a built up area is greater than its local authority boundary and has a population of 177,354 – a larger population than neighbouring cities such as Sunderland, York and Durham.

We’re also a major centre for employment: another city hallmark. Once again using ONS figures, there were 71,000 employees working in Middlesbrough in 2019, accounting for almost 27 per cent of all Teesside employee jobs. It’s easy to see why many people think we’re already a city, with respected think tank Centre for Cities already classing us as one.

Thirdly? Healthy regions have cities at their heart. That’s because being a city is shorthand for being a region’s engine room for work, education, culture and leisure. It gives people from the area – and not from the area – an extra reason to visit us: even if that’s due to an increased ability to market ourselves in a positive way. In terms of the wider region, it would also be a recognition of what’s taking place here on Teesside and a great example of levelling up in action.

There’s such a feeling of positive change in our area. The Freeport, Treasury Teesside and the many, many millions invested in our towns thanks to the Future High Streets and Town Deal funds – including £36m invested directly into Middlesbrough. But despite all of this…Teesside is arguably the biggest metropolitan area in the country without a city at its heart.

Extrapolating direct statistical benefits of what city status bestows is difficult to do and I’ve done plenty of research to find out there’s not much data on the topic.

Preston – which became a city in 2002 – became one of the top five areas in the country for private sector growth. I decided to get on the phone to the man who led Preston’s bid to talk to him about the benefits and his answer was that city status was a vital ingredient to the transformation of the area. I thought that was a great way of looking at it.

City status is very clearly not any kind of silver bullet. We won’t be given an extra billion quid as a result. But it could be a part of our wider journey of transformation, which takes me neatly onto my final reason: ambition.

We do, of course, have extraordinary challenges, like many big towns and cities.

Some cynics have decided that a city status bid is a distraction and simply about ego and status. But I don’t think there’s anything wrong with being proud and would question the merits of any politician who didn’t genuinely love the area they represent, want their area to be given whatever status it deserves and investigate its next step on the journey to becoming a better place.

And if being a little egotistical about where I’m from is a crime, then I’m happily guilty.

Sanjoy Sen: Scottish nationalists’ new hardline stance on oil has presented the Conservatives with something of an open goal

10 Dec

Sanjoy Sen is a chemical engineer. He contested Alyn & Deeside in the 2019 general election.

“It’s Scotland’s Oil” was the rallying cry that put the SNP on the political map in the 1970s. And ahead of the 2014 referendum, the Yes campaign envisioned healthy offshore revenues feeding an ‘oil fund’ in an independent Scottish economy. Nicola Sturgeon even called on David Cameron to cut taxes to support the sector following a global price slump.

How things change. After 50 years of production, North Sea output is predictably in terminal decline (barely a third of the 1999 peak) with occasional new discoveries out-weighed by ageing fields dropping off their perch. But, more surprisingly, the SNP are no longer interested. Under pressure at COP26, Sturgeon finally relented, declaring her opposition to Cambo (a major development west of the Shetland Islands), casting doubt over the future over the entire sector.

In the ensuing media storm, Shell (a 30 per cent Cambo partner) announced its exit. Whilst environmentalists are naturally delighted, others fret over the consequences of an early end to North Sea oil. Industry and trades unions have warned of the impact on current jobs – and on the ability of businesses and workers to achieve the ‘just transition’ to clean energy opportunities. Even the SNP faithful are aghast, warning that the economic fallout could irreparably damage the independence campaign. A re-think appears unlikely, however, with Sturgeon now locked into a power-sharing agreement with the Scottish Greens.

But whilst the nationalists may have backed themselves into a corner, there’s no need for the Conservatives to do likewise. And there are sound reasons for doing so: key political, economic and environmental considerations all overlap.

What are the political implications?

Contrary to what we often hear, not everyone is fully signed up to the Thunbergian agenda. Experience from Cumbria shows that local support for new nuclear power and even coal mining can be strong as they create employment in areas where alternatives can be limited. Teesside battled in vain to save its steelworks whilst Coventry’s City of Culture celebrations paid tribute to its lost car industry. And Aberdeen remains proud of its status as the oil capital of Europe. Backing traditional industries is very far from the electoral liability that strategists fear.

With offshore oil and gas reserved to Westminster, the North Sea Transition Deal was signed earlier this year to support 40,000 (mostly Scottish) jobs. Sticking to the plan to safeguard production whilst supporting the shift to new opportunities now gives Scottish voters (especially around Aberdeen) a solid reason to get behind the Conservatives. Meanwhile, Scottish Greens co-leader Patrick Harvie is already at odds with his SNP partners over further extraction and has stoked controversy amongst voters with his “hard right” depiction of oil supporters. Unionists should not be slow to capitalise: any split in nationalist support impacts the case for indyref2.

Strengthening energy economics

Early cessation of production brings forward offshore decommissioning activities, a headache for the Treasury which is on the hook for some £24 billion in tax relief. And, needless to say, writing big out cheques to big oil is a PR nightmare for a government committed to net zero. Extending production defers taxpayer costs and buys time for the UK decommissioning supply chain to prepare. It could also see certain liabilities converted into assets if technology developments allow pipelines and platforms to be re-purposed for carbon dioxide storagewindfarm support and hydrogen production.

More significantly, with so much of the discussion framed around the environment, energy security has received scant attention. And past decisions are now back to haunt us, especially the unworkable price cap in combination with the closure of offshore gas storage. (If it’s any consolation, things seem even worse in Europe with ever-growing reliance on Russia.) Until we establish viable alternatives, continued North Sea production reduces our import requirements – and limits our exposure to global instability.

Tackling environmental concerns

And find alternatives we must: we will never be self-sufficient in oil and gas again. So if we’re going to extend domestic production, let’s use the time it buys us wisely. Offshore wind power generation is increasing at pace but to harness its fluctuating output, we need to take big steps in energy storage. This could be via hydrogen which is deployable across electricity, heating and transportation sectors.

Or it could be in grid technology, harnessing the ever-growing combined battery capacity of electric vehicles. (EVs clearly have some way to go but recent progress has been swift and now account for 10 per cent of UK new car sales.) Nuclear, both large-scale and small modular, also needs to be accelerated – sadly, none of these opportunities will be coming to Scotland due to the SNP’s continued opposition.

In the meantime, shutting down our own fields doesn’t reduce emissions. Not unless we intend to sit at home in the dark in order to meet our climate commitments. In fact, shipping in refrigerated cargoes of liquefied natural gas from around the world is far more energy-intensive than pipelining our own supplies from the North Sea. And the Transition Deal backs further improvements by the electrification of UK platforms via new offshore windfarms and subsea interconnector cables, an increasingly common feature in the Norwegian sector.

A month ago, the UK government was in the bad books of the Scottish offshore sector, backing two English carbon-capture developments (Merseyside, Humber-Tees) ahead of the much-fancied Aberdeenshire Acorn project. Since then, the nationalists’ new hardline stance on oil has presented the Conservatives with something of an open goal. If we hold our nerve and back the North Sea, it might still help the UK in its present energy crisis whilst also tackling long-term emissions. Who knows, it might even help preserve the Union.

Interview: Osborne – “Whatever you’re doing in terms of devolution, double it. In terms of local taxation, double it.”

29 Nov

George Osborne urges Boris Johnson, Michael Gove and their colleagues to pursue devolution of powers to metro mayors with indefatigable determination:

“Whatever you’re doing in terms of devolution, double it. Whatever you’re doing in terms of local taxation, double it.”

Osborne recounts how as Chancellor of the Exchequer he launched the Northern Powerhouse, abandoned during Theresa May’s prime ministership but now revived by Johnson as the centrepiece of the present Government’s levelling up agenda.

He looks forward to the forthcoming White Paper about levelling up, on which Gove and Neil O’Brien are at work:

“I’m optimistic about the White Paper because of who’s drafting it, and I would only tell them, not that they need my advice, to trample over anyone who gets in the way.”

In Osborne’s view, the benefits of elected mayors should be spread to the English counties, regardless of any opposition from Conservative councillors:

“The Conservative Party is quite easily led if it’s given a strong direction.”

At the end of the interview, he dismisses as “nonsense” the idea that Johnson needs a new team of advisers, and insists that success lies within the Prime Minister’s grasp.

Osborne describes how, having spent his childhood in London – “I’d grown up I guess with that world view that nothing of any importance happened outside the M25” – he came round, after becoming MP for a northern seat, to the idea of decisive action to revive the cities of the North of England.

He urges the Government to be ambitious:

“I would say…to the current crop of Conservative ministers and to the Prime Minister…you never know how long you’ve got in office, and the wheel turns, and then suddenly you’re out.

“And I can tell you as someone who’s been out of office and out of politics for five years, you look back on the big things you feel you got right, and they’re often the things against which there was the most opposition, the hardest internal arguments in your party, but they’re also the most rewarding things.”

ConHome: “Let’s start with a broad-brush question. How do you think the Government’s doing?”

Osborne: “I think the Government has every opportunity to be a great success, and it has hit what all Governments hit, which is that kind of mid-term moment when people think, you know, is the focus there, is the direction there, are they going to deliver.

“It’s not unique to the Boris Johnson Government. Something quite similar happened to the Cameron Government in 2012, 2013.

“And, you know, we got our act together and won an election. And so it’s perfectly within the capability of Boris Johnson and his team to do the same. But they do need to act.”

ConHome: “How do you assess their chances of winning the next election?”

Osborne: “Well the odds are greatly in favour of the Conservatives winning, because the Labour Party has not yet done enough in my view to make itself electable.

“Though Keir Starmer is a very presentable Leader of the Opposition, he has not distanced himself from the Jeremy Corbyn era enough, apologised to the public for presenting Corbyn to the country as a serious candidate for Prime Minister.

“He has not done internal reform to reduce the influence of the trade unions.

“When I look back at my own career, I spent half my time in Government and half my time in Opposition. Opposition is in many ways harder than Government, because you don’t have the kind of natural agenda that a Government has.

“You certainly don’t have the full weight of the British state carrying you forward. The Leader of the Opposition – the Shadow Chancellor, which I was for five years – if they don’t do something that day, nothing’s going to happen.

“And if you look at the enormous efforts which Gordon Brown and Tony Blair went through in the 1990s – I was at the time a junior staff person in Downing Street and I saw at first hand their efforts to make the Labour Party electable.

“If you think of the huge efforts that David Cameron and myself and the people we worked with went through 15 years ago to make the Conservative Party electable, you just don’t see the hunger, the effort, the appetite in the Labour Party at the moment to do what is required to win back the trust of the British people.

“But the Conservative Party cannot just sit there and rely on their opponents failing to get their act together.

“And if the Labour Party were to get its act together, which is perfectly possible, there are still a couple of years to go until the election, yes, then the Conservative Party could be in real trouble.

“It doesn’t need to be, because it has all the instruments at its disposal to make itself eminently electable and to get itself re-elected.”

ConHome: “So let’s get on to the main subject of the interview, which is the Northern Powerhouse, devolution, elected mayors and all that.

“The Treasury is often viewed as an anti-localism, anti-devolution department. In Opposition, you yourself were a bit of a sceptic about localism.

“When did you become a convert to localism and mayors, and why?”

Osborne: “Yes, my own thinking on this did change over time. I remember early on thinking the Conservative Party had made a mistake in not initially opposing the creation of the Mayor of London.

“And then once we got into office, I think the definition of localism we had was a little bit limited. It was all about giving parish councils a bit more power over planning.

“There were some ideas, actually from the Liberal Democrats, that there had to be a referendum, because at that time there were lots of Liberal Democrat councillors in those cities.

“And so the whole agenda basically went nowhere for the first two or three years of the Government I was part of, and I guess around 2012, 2013, essentially the kind of emergency job on the economy was beginning to bear fruit and we were moving out of the financial crisis period, I became very focussed on what we could do with our opportunity of being in Government to tackle the really, really big economic problems the country faced, rather than the very immediate ones of the deficit and the recovery from the financial crisis.

“And I guess because I was a northern MP, you know, I’d grown up in London, educated in London, I’d grown up I guess with that world view that nothing of any importance happened outside the M25, and one of the luckiest and best things that happened to me in my political career was that I got selected for a seat in the North of England.

“It completely changed my perspective on the country, and it changed my perspective on how the rest of the country sees London.

“And for a long time I was one of only a couple of MPs for the Conservative Party who were even remotely close to Manchester. There was basically me and Graham Brady.

“And I’d already begun to get more involved as an Opposition MP in what we could do in Manchester as a party. I supported for example the BBC’s move to Salford.

“All this kind of thinking was evolving in my head, and we got to the middle period of the Government, 2013, and I thought why not take on the biggest domestic challenge of all, which is that the North of England has lagged behind the South – and the greatest political challenge, which was that people thought the Conservative Party had nothing to say about that.

“So it was both an economic and a political challenge, and I threw myself into it, and the Treasury is sceptical of devolution, for the simple reason that it always has to pay up when devolution fails, because people will not let local public services fail, let cities fail, and in the end the Treasury has to step it.

“But the Treasury is also an amazing department, full of incredibly talented and committed people, and if they’re given direction, they have the best chance of anyone in Government of delivering.

“And so with a selection of very talented civil servants, one in particular, John Kingman; my special adviser at the time, Neil O’Brien; with one of my Treasury ministers at the time, Jim O’Neill; we really focussed on would it be possible to reverse a century-old trend in British economic geography.

“High Speed Rail was already there, in fact an idea originally born of the Conservative Opposition, not the Labour Government, so High Speed Rail, High Speed Rail across the Pennines, and devolution and the creation of metro mayors, not just city mayors which had been the original idea in 2010.

“And so a much bigger economic geography than just Manchester city centre, they’ve got all of of Greater Manchester including places like Bolton, Bury and so on, and within Merseyside, South Yorkshire and so on, real devolution, allied with a big commitment to what I would call the social capital of the cities, the teaching hospitals, the universities, the science facilities, the cultural facilities, that would make these cities really attractive places to live and to commute to work in, so that it would also help the surrounding towns.

“And that became known as the Northern Powerhouse because the speech I gave launching it was in the Power Hall of the Manchester Museum of Science and Industry, and right from the start in the front row I had Labour councillors, the Leader of Manchester City Council, Richard Leese, who’s just retiring, the then Leader of Liverpool, and so on.

“So right from the start I thought it was never going to work if it’s not a bipartisan effort, and they’re never going to trust the Conservative Government, these big Labour urban fiefdoms, if they don’t see that there’s a Chancellor who’s prepared to share the credit with them.

“And I always thought the political gain, which was very much a secondary consideration, would flow from that. People would blame the Government when things go wrong, they would give the Government credit if things went right.

“If I have a regret it’s that I’d have either started earlier or had longer in office, to really cement it, because we made enormous progress in those subsequent three or four years, we got metro mayors created in all these places, which people had been trying for decades to set up.

“We got the plans in place for the railways, we created organisations like Transport for the North, so there was enormous progress.

“We then hit unfortunately the buffers of the Theresa May Government. She was not interested in it and basically ditched it.

“And then what excites me genuinely is that the Boris Johnson Government – which calls it levelling up, which is a good slogan – had doubled down on something I thought was very important.

“So all the political stars are aligned. Of course the really hard thing in government is then actually getting the job done.”

ConHome: “Was there ever any element of wanting to push the responsibility for public spending consolidation out and down to local authorities, many of them Labour?”

Osborne: “Well yes, at the time the country was spending too much, whether at national or at local level, so there were reductions in local authority budgets.

“But we gave them more freedom, we removed a lot of the ring fences that dictated how they spent money, something I think we should go much further with.

“If I had my time again, I would have doubled down on that.

“We explicitly said, for example, if they allowed more development in their area then they would keep the proceeds, the extra council tax receipts which would come from having more homes, the extra business rates which would come from having more businesses.

“Until then they didn’t see any benefit from that, so there was zero incentive to consent to planning or to encourage economic growth.

“One of my proudest achievements was that by the time we left office Manchester was the fastest growing city in Europe. And that was certainly not all down to me and I pay a lot of credit to people like the Labour Leader Richard Leese and people who worked for him and around him.

“I should particularly credit by the way Howard Bernstein, who was the Chief Executive of the Council, who was also brilliant.

“And that partnership really delivered Manchester. And we were starting to deliver in Liverpool, in Sheffield, in Leeds, in Newcastle and so on, and I think laid the groundwork for the Conservative revival in Tees Valley as well.

ConHome: “You outlined what you did in terms of allowing councils to keep more of business rates and so on. How far do you think the tax-raising powers should go, and what should the Government do?”

Osborne: “I think you could go quite a lot further. I think you could give local authorities, I wouldn’t do it at an individual council level, I think it has to be at a metro level or a big county level, but I don’t see why you couldn’t give them their own proper business-rate raising powers.

“So it’s a choice an area would make, you could either cut your local taxes to encourage business, or you could raise your taxes and spend on infrastructure.

“I think it’s worth looking at local income taxes as a supplement. I mean after all we have that arrangement in Scotland, I wouldn’t necessarily say you have to go that far in English devolution, but I was one of the architects as Chancellor of giving Scotland more tax-raising powers, and I think as a result, by the way, the SNP is being held much more to account for its own domestic performance, and they can’t keep saying we want more money from Westminster, because everyone goes hold on, you’ve got the power to raise taxes if you want to.

“So the public are not stupid. I think it’s really interesting that when the metro mayors have come up for re-election, the good ones have been re-elected – Andy Street in Birmingham, I was also very involved in creating a West Midlands Mayor.

“I’ll give you a local example where I don’t particularly agree with the approach the Government is taking, in London, where I was for several years editor of The Evening Standard.

“Sadiq Khan is saying Transport for London – we’re having a set-to about a Tube strike – he is the Mayor, he’s the Chairman of Transport for London, and he should have responsibility for running the transport system in London.

“And the freedom to run that system as he sees fit, to raise fares if he is prepared to. And what’s happened instead is the Government has stepped in and is trying to micromanage how he runs Transport for London.

“I would let him take responsibility, because then I think the public would say, ‘Are you doing it well?’

“At the moment you’re giving him a free pass of saying ‘Well, you know, the Government’s not giving me enough money.’

“I suspect it’s not a ministerial failing, it’s just the Whitehall system seeks to take control when it has the opportunity – it’s often the simpler solution to a problem, when, you know, Covid means the Tube’s gone bust.

“But the harder solution, but the better one, is to put the Mayor in charge.

“I think it’s a great shame that Transport for the North has been downgraded – I would upgrade it with more powers, make it more like Transport for London.

“I would give the metro mayors more responsibility. For example, we devolved the NHS in Manchester, which was a really bold thing to do.

“It’s the only place in England where that’s the case. It integrates social care. There’s no reason why the Conservatives should be afraid of this.

“Fundamentally, it should be in the Conservative DNA, if you go back to Edmund Burke etcetera, that they trust local communities.

“I remember at the time, when we started all this, there were some prominent members of the Cabinet who said, ‘We’re just handing power to the Labour Party in Birmingham and Teesside and so on – we’ll never ever have Conservatives elected there.’

“And I would reply, ‘We don’t have Conservatives there at the moment – it’s not as if we’re starting from a position of giving away power.’

“And the election of Conservative metro mayors in the West Midlands and in Teesside essentially proved that point. And I would also say there’s nothing really to be lost.

“The best news at the moment from my point of view is that Michael Gove and Neil O’Brien have been given the opportunity to demonstrate this, because I think they’re two of the smartest and most creative Conservative thinkers we’ve got at the moment.

“And I would just say – well they don’t need my advice, they’re both good friends of mine – just let them get on with it.

“Every time you’re confronted with something which is, you know, ‘Oooh, should we trim a little, this is a little bit too radical, the Treasury’s got a problem with this,’ I would go for the reverse.

“Whatever you’re doing in terms of devolution, double it. Whatever you’re doing in terms of local tax-raising powers, double it. Whatever you’re doing in terms of devolving the NHS, double or triple it.

“That is why we have ministers, and we have political leadership in government: to push the system where it doesn’t want to go. For the Conservatives, this is really the once in a generation opportunity to show the whole country it can deliver.

“And if you just limit yourself to a couple of town-centre funds, which by the way the Cameron Government had, the Blair Government had, they’re not new, that’s not what’s needed.

“What’s needed is proper economic theory about creating big economic clusters in the North, bringing the cities closer together, connecting them to the towns that surround them, connecting them with real transport links that work, and attracting business, which cannot be done by the public sector alone, which is another classic mistake.

“You’ve got to make business feel that these are the places to go to, to create jobs and invest, the wonders of the free market will then work, and in a way that no Government White Paper will ever predict, real activity will happen.

“I’m optimistic about the White Paper because of who’s drafting it, and I would only tell them, not that they need my advice, to trample over anyone who gets in the way.”

ConHome: “This question of doubling everything you’re doing, does that extend to more elected mayors outside cities, in counties with smaller populations?”

Osborne: “Yes, I think it would be great to have elected mayors. I was an MP in Cheshire for 16 years, and I remember the time when we were in Opposition, I was a junior MP, and there was a plan to create unitary authorities in Cheshire.

“Pretty much all the MPs in Cheshire, led by the redoubtable Gwyneth Dunwoody, the Labour MP, and Sir Nicholas Winterton, led the fight against it, and thankfully we were ignored by the Government and unitary authorities were created, and it’s a much more efficient and effective way to run Cheshire.

“No one likes local government reorganisation, and local MPs and councillors have got to resist because it’s your local power base, but on a country-wide scale you could easily have mayors for Cumbria or Cheshire or wherever it happens to be.

“And I think the point about a mayor is it provides a point of accountability, an individual who can’t really pass the buck and is held to blame or indeed applauded for what they do.”

ConHome: “A former Conservative Leader of a big county said, ‘When I was the Leader, I had to oppose having an elected mayor in our area, because of all my Cabinet colleagues – they would all have protested and given me a lot of political trouble if I had come out in favour.

“Now I’ve gone, I’m all in favour of an elected mayor. So that leads to a political question, which is how do you deal with a mass of Conservative Cabinet members, county councillors and district councillors who won’t want any change, at a time when the Government is moving towards an election and you really need their good will.

“You should arguably have done this much earlier. Can you do this politically in the next few years?”

Osborne: “Yes, absolutely. The Conservative Party is quite easily led if it’s given a strong direction. We did succeed in creating these metro mayors in large parts of the country where there were no Conservative councillors.

“Let’s take Manchester. I remember Trafford Council, it was Tory-run, and they were like, why would we want to give power to a metro mayor in the middle of Manchester.

“The truth was the council leader at the time, the Conservative council leader was very courageous and led his group in support.

“And I always thought the best way was never to try to impose these metro mayors – to use the carrot, not the stick – so I would pile up all the advantages that come from having a metro mayor, the additional money, the support for local transport – and that did work. The hardest area was West Yorkshire and Leeds, it was politically contested, but even that now has come into line as they’re seeing the benefits.

“So you can show them the treasure at the end and they will follow the trail.

“In any organisation, it’s quite hard to lead from behind. You have to have a view, and ultimately if people don’t like you, they’ll get rid of you.

“There’s no point just occupying those offices. I always felt [as Chancellor of the Exchequer] there was a ticking clock, I never knew when the axe would fall, and I would try to be as bold as possible.

“I would say the same to the current crop of Conservative ministers and to the Prime Minister, which is you never know how long you’ve got in office, and the wheel turns, and then suddenly you’re out.

“And I can tell you as someone who’s been out of office and out of politics for five years, you look back on the big things you feel you got right, and they’re often the things against which there was the most opposition, the hardest internal arguments in your party, but they’re also the most rewarding things.”

ConHome: “So far, hasn’t levelling up really been a bit of a mess? You’re right to say that Michael Gove is a great executive politician – Neil O’Brien a huge brain, did a column for us – they will instil some order and political shape to it.

“But so far, hasn’t it been a bit incoherent? And has it had the strategic grasp the Northern Powerhouse had, in terms of a very clear plan to link up the cities, make them bigger, establish an economic counterweight to London?

“Hasn’t levelling up by contrast been a bit of a shambles?”

Osborne: “Well I am a glass half full person. I would say it was moribund for several years after I left office, as an agenda, and obviously there were enormous distractions, Brexit and then more recently Covid.

“But I think Boris Johnson deserves full marks for picking this up as the big domestic agenda. That’s what a Prime Minister does. A Prime Minister says ‘My Government’s going to be defined by a few things’, and he has decided levelling up is one of them. So I strongly applaud him for that.

“I also applaud him for now having the right people in place to deliver it. I wish he had stuck with, and I think he will end up recommitting to, elements like the High Speed line in Yorkshire, the Eastern Leg, and the Trans-Pennine route, because those are long-term infrastructure projects which you don’t want to throw away and start again on some other project that’ll never get off the ground.

“So I’m quite optimistic about it all. What it needs is proper intellectual underpinning. If you think it’s all just about planting some civic flowerbeds in northern towns then the Tories will be out on their ear.

“It’s got to have proper, serious economic thinking about it, which Jim O’Neill, a world-class economist, provided me with on this, and others like Neil O’Brian and Rupert Harrison.

“There are around the world great city clusters. They are where the action is. The towns around them benefit as well, but a bit more slowly.

“And you have to do the things that make those cities work, so you have to make them exciting places that attract professional people, you need the buzz of universities and cultural institutions, you need excellent transport links between the cities and commuter links into the cities, and you need to empower the city leadership.

“If you’d said to me 30 or 40 years ago that Manchester would be the fastest growing city in Europe I would have thought it was an impossible ambition, because the Manchester area was on its knees.

“You have to think big, you have to be ambitious, and you have to realise that Government puts the kind of instruments in place, but then it’s the private sector and the business community, and not just the big corporates but every little small business, every entrepreneur that decides actually I’m not going to move out of Manchester, I’m going set my new web design business in Manchester rather than move to London. That is how progress is made.

“I think the Johnson Government can do it. It’s got the majority, they’ve made this its central domestic agenda, and if it sticks with it it can work.

“One of the things I find annoying, having been a political secretary in Downing Street in the distant past, is all this ‘Boris Johnson needs a new team in Downing Street. He needs grey hairs around him. He needs as Deputy Prime Minister a Willie Whitelaw-type character.’

“All of that is such nonsense. Actually in my view the Downing Street team is pretty talented at the moment, and they are a good team.

“And there are some real issues the Government’s got – it’s got a difficult economic backdrop, falling real incomes, it’s got to repair the relationship with Europe, which is absolutely critical to Britain’s economy, its immigration policy, its security policy.

“These are the big tasks alongside levelling up. But the idea it’s all going to be solved with some reshuffle of the kitchen cabinet or indeed the Cabinet is in my view nonsense.”

ConHome: “You’re really saying the problem with Boris Johnson isn’t his team, the problem with Boris Johnson is Boris Johnson.”

Osborne: “No I’m not actually, because I think Boris Johnson has the kind of charisma and leadership to deliver a lot of what he’s set out to do.

“But governments in the mid-term, they have to kind of refocus, and the glittering prize is there if they just reach out and grab it.”

Ben Houchen: Achieving hydrogen heat for the nation is worth investing in – as Teesside can prove

27 Jul

Ben Houchen is the Mayor of the Tees Valley.

As we approach COP26, the Government has been firm in its commitment to lead the world in decarbonising our economy and to see Britain become a pioneer in a new green industrial revolution. From powering Britain’s chemical industry to keeping our homes warm, these laudable aspirations mean big challenges on the ground.

As the Tees Valley Mayor, I see all around the amazing technological advances we are making which will make this possible, but I’m also acutely aware of how pressed many hard-working families already are by rising energy prices.

There is increasing anxiety about the cost of Net Zero. As Daniel Hannan has also emphasised on this website, the climate challenge needs to be tackled not with millenarian self-indulgence but with practical, level-headed, down-to-earth solutions.

Though some on the Left may think otherwise, the Treasury’s coffers are not bottomless. Jacob Young, Redcar’s MP, was right to recently warn on ConservativeHome that green policies needed to be affordable for ordinary people, and that’s true whether the burden falls on people through taxation or through rising living costs.

In Teesside, there’s nothing we do better than practical solutions. For years, Labour politicians have instead tried to drag us down the road of griping self-indulgently in the hope of a few more handouts, without offering real answers. Since my election in 2017 I’ve worked hard to reverse this and unleash the true spirit of Teesside.

Now, Teesside is tackling challenges and seizing the day, from manufacturing vaccines in Billingham to being the first part of the country to welcome e-scooter trials, bringing many people a flexible, affordable, and Covid-regulation compliant commuting option. And I believe our biggest contributions on the horizon are going to be the ones which will make Net Zero affordable and even profitable for Britain.

The Government is soon going to publish its Heat and Buildings Strategy, which will attract a lot of attention – rightly so, because it will lay out the Government’s approach to affordably achieving significant efficiencies in heating our homes. Less widely anticipated are the detailed guidelines for the Government’s hydrogen village trials, but these will be essential in actually delivering on more widely-quoted aspirates for homes powered through green technology.

Customer choice is essential in domestic energy, as in most areas of life. However, many fashionable options for designer homes won’t work for many ordinary people. In terraced streets or in blocks of flats, electric heat pumps are a non-starter. Many electric technologies may struggle to give elderly people the quick and powerful heating which is needed to keep people not just comfortable but safe in much of the North in winter. In many cases, only hydrogen can effectively overcome the difficulties. Making hydrogen work as a real alternative for natural gas is imperative.

There have been a variety of tests of hydrogen technology in homes, but these have been limited to proving that hydrogen is fundamentally safe, and that it could run safely through its own new and expensive pipe network. What we now need to prove is that the existing network can be very affordably repurposed to safely deliver gas to all the different kinds of homes people want to continue to live in, with minimal disruption and reversible technology.

Scientists and engineers in my region are working on some amazing plans to deliver this. Wedded to assumptions about electric heating developed in Whitehall many years ago and long since overtaken by cutting-edge research, some in government still work on the basis that hydrogen must be outlandishly expensive because of a need to replace all the gas pipes in the country. In Teesside, we can prove that these fears are unfounded and that hydrogen really can be the solution we all need.

The time for tinkering trials has come to an end. Achieving hydrogen heat for the nation is worth investing in, and I am urging the Government to ensure that we secure the right level of participation in these trials by subsidising participants’ bills.

We can’t test the affordability of this technology if ordinary people are put off from joining the trial by the risk of costs for new hobs, potential short-term heating bill increases, and reversing any trial technology if it proves necessary. We also need to be looking to scale up the planned hydrogen village to a hydrogen town at a much faster pace than over-cautious bureaucrats are planning.

In a sense, hydrogen heating is a back to the future technology – Britain’s houses were heated by hydrogen until North Sea gas was found and took over the network within many of our lifetimes. To that extent, we are looking at tried and tested British technology which just needs to be honed to ensure it’s safer than ever and genuinely affordable for ordinary people today.

But the development of blue hydrogen and green hydrogen is what is putting hydrogen back on the energy map. Making green energy for homes affordable isn’t just about pipes and boilers but about the supply of hydrogen. Again, my part of the country has the answers we need.

Teesside already produces more than half of the UK’s hydrogen. The pioneering Carbon Capture technology of Net Zero Teesside will create the clean blue hydrogen which ought to be a big part of the Government’s plans to affordably bridge our energy transition – blue hydrogen needs to be incorporated in as many trials as possible and ministers make sure that it is consistently backed.

We’re also doing outstanding research into green hydrogen, whose production can become increasingly affordable. Teesside, Darlington, and Hartlepool are key to making hydrogen supply affordable. Achieving critical mass in this technology is also crucial to securing the future of Britain’s chemical industry, so much of which is based in my region.

What is even more exciting is that, by leading the way in hydrogen technology, Britain can set itself up to export our green technological revolution to the world, just as we exported the technology of the first industrial revolution across the Earth.

This kind of technology can be a significant part of Global Britain’s international trade offering, securing prosperity and a better quality of life for our people. But to position ourselves to achieve this, first we have to get the basics right. Little is more basically essential than securing an affordable power supply for British homes, and I will do all I can to help our government to make the future-proofed choices and the investments that can achieve this.

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

19 Jul

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

Nick Faith: The UK is well placed to emerge from the pandemic in a stronger position over time. Here’s how we do it.

28 Apr

Nick Faith is the Founder of WPI Strategy.

Over the past 10 months, my company has been working with a group of some of the highest profile business leaders from across the UK on a long-term plan to ensure we do not just recover from the pandemic but thrive in a post-Brexit Britain.

The National Prosperity Plan, published today by the Covid Recovery Commission, is the culmination of this work and includes input from over 100 public policy experts, academics and business groups.

It is overwhelmingly optimistic in its tone. By harnessing everything which is great about Britain – our leading universities, world-class innovation and R&D, our businesses and financial system, our democracy, our institutions and governance – the report makes it clear that the UK is well placed to emerge from the pandemic in a stronger position over time.

The report is also pragmatic. It acknowledges the deep-rooted challenges that we face as a nation; poor productivity levels, underinvestment in high-quality technical education and training, the inability of small businesses to access the finance they need to scale-up.

The plan that we are setting out today will not solve all these problems with the flick of a magic wand. It is, however, an attempt to set a framework that we hope will lead to a new compact between government, business and civic society to deliver on a set of shared national imperatives.

There are a number of elements to the report but five core areas are set out below:

1. For “levelling up” to be successful, it cannot be constrained to specific geographical regions and we must be able to measure progress

The inequality gap has only worsened as a result of the pandemic. Unemployment levels, mortality rates and mental health cases are rising fastest in the most deprived communities across the UK. These communities are found in every part of the UK, and often within some of the wealthiest local authorities. A one size fits all approach to “levelling up” simply won’t work.

A successful recovery will rely on having clearly defined objectives and metrics and using data to make decisions and monitor progress. We believe that this should be delivered through a National Prosperity Scorecard. This would be a list government would publish of how every locality in the country measured up against some key social and economic indicators, including employment and benefit dependency rates as well as health and educational outcomes.

2. Government needs to play an active role in creating the conditions for high value, globally competitive industries to flourish

Industrial strategy as a term may be confined to the store cupboard in the Department for Business, but there is a clear role for government to play in setting a national framework for growth. The Government’s Plan for Growth, published alongside the March Budget, is the industrial strategy’s successor. It has many strengths including a focus on growing existing and building new net zero industries and creating the conditions for high growth, innovative businesses.

Business stands behind these ambitions but needs more detail. We need to be honest about our existing industrial strengths and weaknesses. We need to develop a Great British Supply Chain to support our globally competitive industries, using the government’s purchasing power to create long-term certainty for businesses.

Were the government to commit to a 15 year National Deal for Net Zero Homes, for example, including publicly financing the retrofit of all council owned homes by 2030, it would act “pump prime” the energy efficiency market, providing the demand certainty needed for businesses to invest, innovate and deliver better and cheaper products at scale.

3. Local leaders must be given proper powers and funding to set their own plans for growth and prosperity

With poverty and inequality spread right across the UK, success will mean ensuring that prosperity rises in all parts of the country. However, the nature of the opportunities and challenges in different areas varies greatly between regions and communities, and policy responses will need to reflect these differences. This means that we need to understand these differences, build plans and track progress on delivering prosperity at a local level.

Local leaders should be given the power and funding to create their own Local Prosperity Plans, working with businesses and civic leaders to ensure their area can identify and seize upon the unique opportunities to develop high value industries in their area while supporting local people through tailored training programmes and financial and mental health support. Ben Houchen’s ambition for Teesside to become a global hub for clean energy development and deployment is a perfect example of what can be achieved when the centre devolves more power.

4. Retraining and upskilling our workforce is a non-negotiable if we are to create a more productive and a fairer society

The pandemic has caused significant economic disruption across the UK and, despite extensive government support, millions of people have lost their jobs. Digitisation and decarbonisation have the potential to create hundreds of thousands of new jobs but the transition to a tech enabled, greener economy could have an unequal impact on specific areas of the UK, for example those traditionally reliant on carbon intensive industries.

The Commission believes that lifelong learning will be key to supporting this transition to higher skilled, higher paid jobs. That is why our report proposes that every worker in the UK be given an individual pot of money – potentially as much as £10,000 – which can be used throughout their working lives to access accredited courses, for example, to improve their digital skills.

5. Businesses can no longer sit on the sidelines or be sidelined

Economic success in the next century calls for a more compassionate form of capitalism. More than ever, businesses must recognise that they have a broader role to play in supporting and driving the delivery of shared societal goals.

This means working more closely with central government, local policymakers and civic institutions to deliver real change in communities across the UK.  This could take the form of providing increased mental health support to workers or co-investing in social infrastructure projects, for example, supporting local technical colleges or investing in digital training courses for local residents.

The businesses on the Covid Recovery Commission are committed to working with others to build prosperity right across the UK: ensuring that individuals, families and communities can enjoy better economic, social and environmental outcomes. Let’s harness this energy and create a stronger, fairer and more resilient society.