James Frayne: Johnson need not abandon the Tory commitment to enterprise to deliver levelling up

28 Sep

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

Less than ten years ago, the most frequently seen symbol at the Conservative Party’s conference was the torch of liberty and free enterprise. The Party’s self image was entirely based around a small state that encouraged people to set up and grow their own businesses and to develop a stake in the economy via home and share ownership.

How times change. While there’ll be dozens of fringe meetings at Manchester’s conference where politicians and activists talk about the Party’s commitment to the free market, this isn’t where the party’s leadership is focused. Within the party, policies of the free market feel old school – and the language associated with it even more so.

Over the last decade, the Conservatives have steadily made it harder for people to develop and grow their own stake in the economy. As it stands, for most prospective entrepreneurs there’s little financial advantage in taking a risk to do their own thing as opposed to staying on PAYE.

The announcement that employers will have to pay yet higher National Insurance Contributions was only the most recent cost the Conservatives have added to businesses. It followed an increase in Corporation Tax, higher taxes on dividend payments (the method by which most business owners pay themselves), higher contributions for employees’ pensions, and of course a much higher minimum wage. There remains talk of higher taxes on private pension contributions, as well as on Capital Gains Tax.

However, arguably the clearest sign the Conservatives’ torch of free enterprise has been extinguished is the party’s lack of interest in defending the gig economy, which is slowly being regulated to death by the courts and left-leaning governments as Conservatives stand by largely inactive.

I should declare an interest here: Public First has worked for a number of businesses in the gig economy, including Uber. I try to avoid commercial comment on these pages, but I find the attitude towards the gig economy from the Party mystifying – and it’s an important aspect of this trend against business.

In a recent opinion research project we undertook for Uber, we spoke to both drivers and the general public about their attitudes towards their work in the gig economy. The theme that came out – endlessly – was the great benefit of flexibility: drivers value flexibility in the workplace three times as much as the general public and we found drivers more satisfied with their working life than the general public. (This is, of course, on top of the benefits consumers have enjoyed).

It’s a role which is a world away from the 9-5, PAYE life that most follow. Some drivers clearly thrive on the flexibility their job offers; others simply require it because of the nature of their lives (eg childcare or other caring responsibilities); others might need a flexible income to fit around study; others might be waiting for their dream job to materialise.

Either way, it’s a role that Conservatives should be encouraging, not dismissing while they consider which taxes to raise next.

It’s not just Uber. The businesses in the gig economy that have grown in the last several years are massively expanding the opportunities for ordinary people to do their own thing in the economy – opportunities that, for most, would never ordinarily arise. They are engines of the free market but the Conservatives have been slow to defend them.

In recent times, the Conservatives have rightly pivoted to working :class voters and they’re actively trying to raise living standards outside the prosperous South East. These are things I’ve been encouraging on these pages for several years now. But amid the pivot, Conservatives have lost this zeal for free enterprise – as if it was somehow in conflict with their new strategy.

But no such conflict exists. On the contrary, free enterprise can and should be at the heart of the Government’s levelling up agenda. After all, those of us that contribute to the debate above and below the line on these pages surely all agree that it’s free enterprise – and the creation and growth of many new businesses – that will ultimately spread wealth across the country. Support for the gig economy should go hand in hand.

Sanjoy Sen: How can the Government accelerate a cleaner, more efficient future for transport?

10 Sep

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

“It’s a bit like saying we’re banning the sale of steam engines by 2040″. So responded Aston University’s David Bailey to the axing of “conventional” (i.e. petrol and diesel) new car sales. As green alternatives improve and prices fall, which they both are at last, today’s vehicles will become obsolete long before any government deadline.

On the face of it, the road to zero-emission transport ought to be straightforward. Anything too big to lug around massive batteries (lorries, buses) works fine as a hydrogen fuel-cell vehicle (FCV). Small stuff (private cars) are well-suited to becoming electric vehicles (EVs). And intermediates (taxis, delivery vans) could be either.

That, of course, overlooks myriad “where” issues: where to source the hydrogen and electricity, where to obtain battery metals, where to plug in. And that’s just one future scenario: the automotive industry is feeling highly uncertain with autonomous (self-driving) technology set to ultimately consign driving and car ownership to history. Furthermore, Covid-19 might fundamentally alter travel patterns, with greater flexibility replacing rush-hour madness.

Here in ConHome last month, Ruth Edwards MP proposed bringing forward the cut-off to 2030 whilst accelerating electric vehicle (EV) roll-out. Although I can’t violently disagree with that, EVs still aren’t an option for everyone yet. Meanwhile, others who could switch remain confused about technology and are wary of legislation changes. So, in the absence of a clear roadmap, how best might the Government help transportation to support the economy – and the environment?

Short-term: all about EVs?

Last year, I made some tentative EV queries. At one leading manufacturer, the UK’s annual allocation had long been snapped up on-line. At another, the dealer had plenty more customers than cars. Whilst I chose to hang back, EVs are fast becoming a practical, affordable proposition for many: it’s supply that can’t keep up until battery production ramps up and new models hit the market.

An increased purchase grant or scrappage scheme would offer manufacturers a much-needed short-term boost. But, as per Norway, could these become largely subsidies for the well-off? There’s only one thing I might contest in Edwards’ article: even Jeremy Clarkson isn’t berating EVs any more, it’s the dearth of plug-in facilities that infuriates him. To tackle the public’s fundamental concerns, government support might be better directed towards the charging network. (And, for that matter, energy storage.)

For many, however, EV prices and charging headaches remain a deterrent for now. But commuting on a small battery backed-up by a petrol engine whenever required might offer a near-seamless transition. So, rather than focussing solely on EVs, let’s see the Government recognise the value of plug-in hybrids and support these also.

But the biggest short-term improvement in urban air quality might be via an early switch towards zero-emission public transportation. Whilst the Government has provided urgent sector support during the current crisis, the Bus Service Operators Grant (BSOG) still favours diesels over FCVs and EVs: an obvious candidate for review.

What does the long-term future look like?

Environmental concerns and new technology put transportation into a state of flux long before Covid-19 did. And no-one seems more uncertain than the automotive industry itself. In Germany, Mercedes-Benz abandoned hydrogen cars just as deadly rival BMW announced its own FCV. Over in Japan, Toyota has long backed hybrids allowing Nissan to forge ahead in EVs, including Sunderland’s top-selling Leaf. Whilst in the States, GM’s Volt competitively-priced plug-in hybrid flopped (Vauxhall Ampera to us) – yet the public just can’t enough of upstart Tesla’s super-pricey EVs.

But there is growing acceptance that autonomous technology will prove a game-changer. Responding to the threat of sector entrants Google and Uber, Volkswagen’s vision of the future is a self-driving, shared-use ‘pod’, summoned up via an app. (So the next time you hear “I’m never buying an EV” or “you won’t catch me driving one of those plug-in things”, you’re probably listening to an enlightened futurist, not a frustrated Luddite.) This is a reality government needs to contend with in years to come, not decades.

Self-driving is often seen in a purely urban context but its opportunities could go much further. In rural areas, bus operators often ditch lightly-used routes uneconomic for a large, manned vehicle. Here, the Government might encourage early adoption of autonomous mini-buses operating in response to real-time demand: the Industrial Strategy Challenge Fund is a welcome first step in this field. As well as a lifeline for the elderly and the socially-isolated, as we work from home in remote locations or commute at different times, it’s economies with flexible transportation that will emerge the strongest post-Covid.

And what shouldn’t the Government do?

Gone are the days when you could freely drive any vehicle down any street at any time. But let’s not make the future any more complicated than it needs to be. In addition to addressing infrastructure bottlenecks and supporting new technology, the smartest thing the Government can do is not confuse or antagonise motorists.

ConHome regulars will recall my satisfaction at trading an ageing gas-guzzler for an eco-friendly hybrid – quickly followed by indignation at the withdrawal of its Congestion Charge exemption. Clobbering folks nudged into doing the right thing might prove highly counter-productive, creating uncertainty and provoking resentment. Similarly, the Scottish government’s Workplace Parking Levy (a hastily thought-out concession to the Greens) penalises those lacking a public transport alternative, whilst in itself doesn’t reduce emissions.

No-one can predict precisely how the future of transportation is going to pan out. But it’s critical for the Government to consult consumers, industry and experts alike before taking the big decisions. The consequences for getting it wrong are significant. Remember, diesels were once touted as the clean future. And why rolling out smart motorways before the advent of smart vehicles was never going to end well.