Category: Regional Government

COUNCIL OF THE NORTH TO COPE WITH SCOTS’ POWER

 

 

 

 

It’s 2018, The United Kingdom of England, Wales and Northern Ireland is out of the European Union with an independent Scotland to its north. The BBC is trying to report all this despite being impoverished by the new subscription system.

 

I’ve feared this nightmare scenario for about two years and recent events confirm my fears. If you think I am scaremongering, don’t underestimate the political and commercial enemies of the BBC. Don’t underestimate UKIP’s Nigel Farage or the Scottish National Party leader Alex Salmond. Despite all the threats about the currency, major companies threatening to leave Scotland and the President of the European Commission saying it would be extremely difficult for an independent Scotland top join the EU, the polls are tightening north of the border and the “No” campaign is under heavy attack for its negativity.

 

So where is the debate in Manchester, Leeds and Liverpool? It’s about time business people in the north started to think about the employment and tax implications of an independent Scotland or even a Scotland with “devolution plus” powers.

 

In search of answers I went almost as far north as one can go in England to listen to a discussion organised by the Institute For Public Policy Research (North) on how we should respond to events beyond Hadrian’s Wall. In Newcastle at least the Geordies are giving it some attention.

 

There is a view that Alex Salmond didn’t want a vote on independence. It’s only happening because of the introduction of a system of electing a Scottish government by PR to ensure power sharing failed when the SNP got a majority in 2011. And why would Alex Salmond want independence when the other political parties are falling over themselves to appease the Scots’ thirst for power and money? Since 1999 the Scottish Parliament has exercised considerable power,and soon Scotland will set a Scottish rate of income tax and control Stamp Duty and the landfill levy. More is promised if the Scots vote no. The lesson is that the more noise you make, the more you get heard. But by contrast the North of England is bought off by City Deals, Combined Authorities, Elected Mayors, Local Enterprise Partnerships and Regional Growth Funds.

 

The Chief Executive of Newcastle City Council said these were the instruments she would be relying on as Scots’ power grows. She was challenged on the need for a powerful strategic Council of the North to bring everyone together from Carlisle and Newcastle to Hull and Liverpool.

 

Professor David Bell, an economics professor at the University of Stirling,said independence or even the extra powers I’ve listed above would leave an imbalance with the North of England that will be unsustainable.

 

Let’s remember that this demand for Scottish independence has been driven since the 1970s by economic grievances, largely centred on North Sea oil. In that it differs from independence movements in Quebec and Catalonia where political and cultural factors are more to the fore.

 

Then there is the dramatic effect independence would have on British politics. 59 Scottish Labour MPs would be out of Westminster. The party that relies on London, the north and Scotland to form a government would be very lucky ever to see power at Westminster again. The Tories, with their strength in southern England, would be bound to reflect those interests at the expense of the North.

 

We need to hope for a no vote, but prepare to welcome the headquarters of Scottish based multi nationals relocating in the North after independence rather than London and demand a Council of the North to give northern business and people real strategic and economic power here

 

 

 

REGIONS MAKING A COMEBACK?

 

 

Can we hope that business people and politicians are once again thinking about regions like Yorkshire and the Humber and the North West? The Shadow Chief Secretary and Leeds MP Rachel Reeves told a Downtown event in the city a year or so ago that Labour would work with the Local Enterprise Partnership structure. But according to Shadow Chancellor Ed Balls, his colleague Lord Adonis is devising an Infrastructure Commission that will devolve power to regions as well as cities.

 

It is high time the prevailing doctrine that cities are the only drivers of the northern economy was challenged. Without a strong regional policy, towns around our big cities are going to suffer. Leading academics of my acquaintance, who support the cities agenda, openly say that people in places like Burnley are going to have to travel to Manchester to get a job in the future.

 

 

 

It was so refreshing to attend a North West Business Leadership Team (NWBLT) event where we had a chance to survey our excellence in science from Cumbria to Crewe. Present was the Director of the Department for Business Innovation and Skills North West. It is the only regionally based government body to avoid the insane culling of everything else regional by the Coalition when they came to office.

 

The NWBLT report won’t be launched until the end of next month. It is in draft form and further views are welcome, but the title will be “Exploiting the Excellence” England’s North West: Where World Class Science underpins wealth creating innovation. So you get the drift. It emphasises throughout, not only our heritage of scientific invention, but the large range of science based businesses that can take us forward with the proper support.

 

The region’s assets include advanced materials and cancer research in Manchester and Liverpool, cutting edge nuclear research in Cumbria, oil and gas research in Lancaster and world class astronomy at Jodrell Bank.

 

NWBLT Chairman Juergen Maier of Siemens called on government to make it easier for SMEs to access government funds. He added that leadership would be needed as market forces alone would not bring the region’s economy back to health.

 

Andrew Miller, the Ellesmere Port MP, who has done so much to promote science, spoke of the need for eco systems and catapults! The former refers to the need for businesses to cluster together and feed off each other’s expertise. The latter relates to innovation centres which can help get embryonic science companies off to a flying start.

Of course everything hasn’t been rosy on the North West science front. The decision to locate the 3rd Generation Light Source at Harwell and AstraZeneca’s relocation of its research facility from Alderley Park to Cambridge have been big blows.

 

Chris Doherty is responsible for the sale and redevelopment of the AstraZeneca site and had some interesting things to say about the company’s relocation decision. Apparently the reasons were far more social than economic. The new AstraZeneca CEO was from California and felt Alderley Park was an isolated place compared to the dynamic environment of Cambridge. Doherty said the site had become isolated from Manchester.

 

That’s the danger of the City Region policy as opposed to a wider strategy taking care to be aware of Cheshire, Lancashire and Yorkshire’s needs as well as Liverpool, Leeds and Manchester.

 

 

 

 

 

 

NORTHERN REVOLUTION

Downtown in Business  campaign for a “northern revolution” to close the North South divide got a major boost this week. A leading think tank has recommended that cash strapped councils and public agencies across the North should come together to find new ways of delivering services in cooperation with the private sector.

 

The Smith Institute launched the report in Leeds amid claims that public spending cuts were on such a scale that senior officers and councillors could quit in despair. The report’s author, Michael Ward, warned town hall trade unions that they must cooperate in change of suffer the fate of the print unions who led a futile fight against changes in newspaper production in the 1980s.

 

Public sector cuts are leading to a major rethink about the very basis on which services are delivered. Roger Marsh, Northern Leader for Government and the Public Sector for Price Waterhouse Cooper in Leeds feels the current system of delivering council services is broken. He believes the Combined Authority model already operating in Greater Manchester could be copied in West Yorkshire.

 

The report paints a gloomy picture of the central government’s ability to sustain local government from a shrinking pool of tax revenue. It says that North Sea oil is in decline and countries are engaged in a race to the bottom in slashing Corporation Tax.

 

The report analyses the claim that northern councils are doing worse than their southern counterparts in the current settlement. They find that it is so and point out that the New Homes Bonus is benefiting southern councils that would have built new houses anyway.

 

Mr Ward called on councils to use technology to cut costs so they could concentrate on personal services for children and the old. John Pugh, the Lib Dem MP for Southport, said it was not a good time for council’s to be visionary. His authority, Sefton, was totally preoccupied with coping with the cuts.

 

Mr Ward ended with a rallying call for a Constitutional Convention for England to debate his proposals. Perhaps he will join Downtown’s Northern Revolution.

NORTHERN CHALLENGE FOR THE CHANCELLOR

THE IPPR REPORT

“Northern prosperity is national prosperity”, that’s the title of an excellent document published by the Institute For Public Policy Research (IPPR North) ahead of next week’s Autumn Statement. If the Chancellor implements its recommendations, the North can play its rightful part in pulling the country out of the slump.

 

Addressing the gross imbalance in the UK economy between the North and the South East, the report claims halving that output gap would increase national income by £41bn.

 

The economic proposals include a British Investment Bank with £40bn capitalisation, but with regional allocations, a plan for a new body to take over the Northern Rail Franchise and devolution of welfare to work funding to local councils.

 

On the constitutional front IPPR (North) favours metro mayors for West Yorkshire,Greater Manchester and Merseyside. It also favours two bodies to encompass the whole North of England, an Innovation Council and an annual convention of the 11 Northern Local Enterprise Partnerships.

 

This concept of bringing the whole of the North together chimes with a report published a year ago by the Smith Institute.

 

The abolition of the Regional Development Agencies was an act of supreme folly by the incoming government in 2010. Ministers seem to acknowledge that now as they seek to beef up the Local Enterprise Partnerships. But there is probably no going back to the pattern of Yorkshire Forward, One North East and England’s North West. IPPR (North) are right that we need to bring together the collective strength of the whole of the North.

 

My only regret is that the report has a democratic deficit. The people must be given a chance to elect a Council of the North so they can have a say in what is being done in their name. The presence of indirectly elected councillors would not be enough.

 

The report also highlights the importance of plans for the Liverpool Superport and Atlantic Gateway. Amidst all the gloom there are teams of people across the North West trying to cash in on the government’s commitment to infrastructure as a way out of the economic downturn. One of the biggest projects is Superport and Atlantic Gateway.

 

It has three components. A deep water terminal in Liverpool to take the larger ships that are now coming through the widened Panama Canal. The multi-modal Stobarts freight depot at Widnes and the new bridge across the Mersey linking Runcorn and Widnes.

 

Beyond that Peel Holdings have plans for port facilities all the way up the Manchester Ship Canal and with the Northern Hub rail improvements in Manchester expected to upgrade rail movements across to Leeds and beyond, we have a framework on which jobs and prosperity can be hung.

 

To be fair The Chancellor has pump primed some of these projects with government cash. Now we have to hope that the boost of infrastructure development isn’t overwhelmed by continued pessimism amongst bankers, investors and the public at large.

THE AUTUMN STATEMENT

This is the time for hard pounding by Chancellor George Osborne when he makes his autumn statement next Wednesday.

 

The 2010 optimism that the economy would be on the turn by now has disappeared as the Bank of England cuts its growth forecast to 1%. The Bank is also predicting that inflation won’t fall to the government’s target of 2% until the middle of next year. That forecast should ensure that Mr Osborne cancels the planned increase in fuel tax at least.

 

The UK’s economic prospects have deteriorated since the Budget. This is most starkly illustrated in the fall in tax revenues the Treasury is receiving and also the higher welfare payments that are being paid out.

 

This is where Labour is on the attack accusing the Chancellor of digging himself into a hole that is counterproductive to getting the economy moving again. There is still some political capital in the Tories reminding people that ex Labour Minister Liam Byrne left office saying there was no money left; but not much.

 

The Tories and Lib Dems have been in charge of the economy for two and a half years now and the measures in this autumn statement will cast a long shadow towards the next election.

 

We are used to local councils across the North from Leeds to Liverpool crying foul when cuts are made in Town Hall budgets. But this year they really do seem to have a case. Having already made drastic savings, demands for further economies will bite into front line services. In Wirral for instance leaks suggest the entire Town Hall staff may be asked to reapply for their jobs.

 

The Institute For Fiscal Studies is predicting that austerity could last until 2018 and if this Autumn Statement is going to be a tough one, what can we expect? There’s speculation that the maximum tax-free annual pension contribution will be cut from £50,000 to £40,000 and there could be further increases in stamp duty on the sale of properties worth over £1m. However there is a real battle going on about the possible introduction of new council tax bands on high value houses. The Daily Mail claimed recently that Osborne and Lib Dem leader Nick Clegg favour the move but the Prime Minister is resisting.

 

The Lib Dems are desperate that if they are to be associated with an austerity statement, they will be able nonetheless to show some evidence of their “fairness” agenda. This may come with an announcement that the income tax personal allowance will be raised to £10,000 by April 2015. That’s a month before the General Election when the voters will get their chance to decide if all this economic pain has been worth it.

 

ANNE McCARTNEY: A WARRIOR FOR DEMOCRACY

At the Livercool Awards I had the pleasure to meet Anne McCartney. She works for Price Waterhouse Coopers in Shipley near Leeds. Anne is a keen supporter of the new Downtown Leeds project.

 

On polling day for the West Yorkshire Police and Crime Commissioner elections she was staffing a temporary polling station in a rough area of Leeds. A generator provided heat and power so that the few could vote in the election. However the generator expired, plunging voters and polling staff into darkness. The Town Hall was consulted by Anne but didn’t know what to do to keep the wheels of democracy turning.

 

Anne did. She set up a temporary polling station in her car until power was restored. That’s democracy in action. Well done Anne