WILL INDUSTRIAL STRATEGY HELP PRODUCTIVITY ?

 

 

 

WILL IT LAST ?

The latest government industrial strategy was launched this week. Let’s hope it lasts. History tells us it won’t. Business is certainly sceptical having made investment decisions in the past based on Whitehall plans which ministers lose interest in after the first sound bites have gone away or a new set of young advisers have come up with a new plan for a new minister.

The other reason past initiatives to boost productivity, wages and the Northern economy have disappeared is because of changes in government. The use of state control during the war led to the Attlee government’s confidence in a nationalisation programme. The Thatcher government reversed this and until 2008 it was generally accepted that capitalism and the private sector would guarantee economic success. All that changed after the crash and ten years on we are reaping the whirlwind of people’s distrust in markets, experts and globalisation.

This Industrial Strategy shows that the Conservatives are now committed to the state having a real role in intervening in the economy. To a considerable extent this has been driven by the success the Labour leader Jeremy Corbyn has had in identifying people’s distaste for rampant capitalism.

That brings me back to the question businesses are asking, will it last? Possibly if Greg Clarke, one of the abler members of the Cabinet stays in post and if Jeremy Corbyn doesn’t get into Downing Street. His industrial strategy based on nostalgia for the Attlee days would look very different.

PRODUCTIVITY.

The industrial strategy is targeted at the construction industry, life sciences, driverless cars and artificial intelligence. So, there is an emphasis on high tech jobs. The question is will this help with our chronic lack of productivity. Most companies in the North operating at the cutting edge of research are productive but 60% of jobs are in retail and manufacturing which is where the productivity problem really lies. There are 40% more jobs in retail than pharmaceutical. The industrial strategy is too narrow to address this widespread problem.

It is also in danger of being southern focused. Currently only 10% of research spending is in the North. The investment by healthcare giant MSD in Manchester is to be welcomed but confidence in the Northern Powerhouse is shaky at the moment. There is a growing sense outside the Manchester and Liverpool conurbations that the whole project is city based. Of course, one answer to that is for counties like Lancashire and Yorkshire to stop squabbling and get their act together. But the piecemeal approach of governments since 2010 to devolution has not helped. Transport for the North (TfN) is a big step forward but in outlining its new powers recently, the government document contained weasel words about “formally considering” TfN’s statutory transport strategy and TfN’s right to be “consulted” on rail franchises. It does not have the same powers as transport for London.

Finally, there has been a bitter reaction from local government. Whilst mayoral areas will have full control over their local industrial strategies, other councils feel they have been excluded from playing a role at the expense of the Local Economic Partnerships (LEPs). This despite the fact that ministers are calling on LEPs to address problems relating to their leadership, governance and accountability.

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JOHNSON MAKES ME SPUTTER

 

TAKE THE RISK AND SACK BORIS

The Prime Minister may be spluttering from a cold, what should make her splutter is Boris Johnson. How much longer must we endure the spectacle of fellow craven Cabinet Ministers making excuses for this excuse of a Foreign Secretary.

The buffoon is dragging the name of Britain through the gutter. The post of Foreign Secretary has been held with dignity by almost all holders of the office since the war. They only have to look around the grand building on Whitehall to realise that it was the base from which our wisdom was sought after centuries of foreign experience.

Johnson is in that worst tradition of upper class British toffs who think their mild racism is amusing. That it is funny to talk about clearing bodies away so that Sirte can become another glittering enclave of wealth amid Middle East poverty.

He should have been sacked over his Brexit interventions designed to destabilise the Prime Minister. He has now crossed a line which in any normal circumstance would have seen him sacked.

But at the end of this conference season we do not live in normal circumstances. My journey around the conference venues have taken me from The Lib Dems defiant in their policy of exit from Brexit under new leader Vince Cable, to Labour where their third successive defeat was celebrated like a victory and finally to Manchester. There the party that has, one way and another, won three elections was depressed and uncertain. Spooked by Jeremy Corbyn’s anti austerity rhetoric, they are now running before the Labour wind offering concessions on student fees and housing. The danger is they will get no credit for it whilst abandoning their reputation for economic rectitude. The last time that happened, in 1992, they were out of office for a long time.

The Tory conference began behind the most extensive security wall I had ever seen in Manchester. Thankfully there were no arrests and it was good to see, alongside the austerity protest, one opposed to Brexit. It is time Remainers found their voice.

But inside the cordon there was anger among the Tory grassroots over the election manifesto, the selection of candidates and the centralisation of the party. On the conference floor it looked as if  no ordinary representatives were called to speak, just a succession of Cabinet Ministers.

Labour on the other hand have reverted to allowing everyone a voice except MPs. The resulting chaos of card votes and remitted motions was a real throwback to the 1970s.

So where are we at the end of this conference season. I have always believed that Mrs May would be left in place because nobody else wants the inevitable criticism that will be hurled at the holder of the office when whatever Brexit deal is done.

After Manchester I am not so sure. The darkening weeks after conference is a dangerous time for Tory leaders from Mrs Thatcher in 1990 to Iain Duncan Smith in 2003.

If May goes surely the Tory Party won’t elect Johnson? Surely their love affair with the lovable tousled clown has turned to contempt for his incompetence as Foreign Secretary and impatience at his blatant careerism.

NORTHERN RAIL: ARE THE TORIES SERIOUS ?

 

AWKWARD TIMES AT MANCHESTER CONFERENCE.

The May government is rattled by the growing perception that they are not serious about the Northern Powerhouse. So, it perhaps would have been easier for the Conservatives to be meeting in their other conference city, Birmingham. The city has been confirmed as the UK candidate for the 2022 Commonwealth Games following the election of a Tory West Midlands mayor. In Greater Manchester we elected Andy Burnham who has expressed his outrage at the decision to downgrade the electrification of the Leeds-Manchester rail line whilst giving the go ahead to Crossrail 2 in London.

We know the government is rattled because last week I was present at a meeting in Manchester where the Transport Secretary, Chris Grayling, came out fighting over his government’s transport spending. He told a startled business audience that he was going to slay some myths and rattled off a whole series of road improvements from Cumbria to Cheshire before tackling rail. His argument seems to be that electrification could be an old hat solution and bi-modal trains with state of the art technology could be the answer.

The issue is sure to come up at a conference where the Tories are reeling on many fronts. Whereas I saw Jeremy Corbyn lauded at every turn in Brighton for losing the General Election, Theresa May comes to Manchester having “won” but with the worst Conservative campaign in living memory. The Tories are past masters at preventing unrest breaking out on the conference floor but there is sure to be some raking over of the General Election coals at the fringe meetings.

Europe will also be an issue to watch at the Manchester conference. The prospect of us effectively being in the European Union until 2021 has angered the hardline Brexiteers. There will be plenty of them in Manchester Central. The Tory activists who come to conference have always been very Eurosceptic.

Besides the Northern Powerhouse, the poor election campaign and Europe, the main challenge for the Tories this weekend will be to answer the growing opposition to austerity and cuts. Labour is shamelessly promising everything to everyone, even acknowledging that if they came to power there could well be a massive run on the pound. Nevertheless, they seem to have caught a tide of opinion against pay curbs, high rents and homelessness. The Tories’ austerity programme has been in place for over seven years now and people are fed up. There are some signs that ministers are recognising this but that can spell danger. Small concessions don’t necessarily assuage the anger. They can make matters worse as workers take industrial action to push for more and the uncertain tone from ministers gives the impression that the government is running out of ideas and is past its sell by date.

Jeremy Corbyn said in Brighton that he was a Prime Minister in waiting. It was a bold, some would say fanciful claim, but if the Cabinet infighting over Europe doesn’t stop, if the cracks are on display in Manchester, there can be no certainty over what might happen this winter.

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SINGLE MARKET CHALLENGE TO CORBYN

 

NO ENEMIES TO THE LEFT.

Jeremy Corbyn does not take easily to adulation. This weekend he would probably prefer to be tending his allotment than hearing “Oh! Jeremy Corbyn”, ringing out from the Brighton conference centre.

But Labour’s surprisingly good performance (they failed to win for the third time by the way) in June’s General Election has confirmed Corbyn in the leadership for years to come if he wants to stay. Except for Alison McGovern’s Labour Campaign for the Single Market, most moderate Labour MPs have become political zombies. They remain because of an admirable sense of loyalty, hoping the tide will turn. I fear they will be disappointed.

In Brighton at the weekend we will see the hard left not only buttress the current leadership in power but take steps to make the left revolution permanent. Corbynistas are set to take control of the Conference Arrangements Committee and National Constitutional Committee. Most people have never heard of these bodies but the former used to be used by New Labour to keep embarrassing subjects like unilateral nuclear disarmament off the agenda. The latter body came into existence after the expulsion of Militant in 1986, but would be unlikely to expel similar people today. “No enemies to the Left” is likely to be the guiding principle.

But Corbyn’s people are looking beyond the day when Jeremy returns to his marrows. The percentage of Labour MPs needed to nominate a leadership candidate is being reduced so that in future left wingers will not need misguided moderates like Frank Field and Margaret Beckett to put them on the ballot paper.

Don’t expect a huge row on the conference floor about all this. The outside chance that the Tories might implode under Brexit strains and Labour come to power in yet another General Election will probably ensure good behaviour.

 

BREXIT REVOLT?

If there is to be trouble for Corbyn, it is likely to come from the Wirral South MP Alison McGovern and her attempt to get the party to commit to staying in the Single Market for ever. The Shadow Brexit Secretary Kier Starmer won a surprising partial victory in getting the Eurosceptic people around Corbyn to commit Labour to the Single Market during the Brexit transition period. McGovern wants to go further with all the implications that has for continued freedom of movement. McGovern belongs to the Blairite Progress faction in the party which has recently suffered a huge financial blow from the total withdrawal of funding by Lord Sainsbury.

LIB DEMS STICK TO THEIR GUNS.

While Labour try to walk the tightrope between Remain and Leave supporters, Tory Cabinet infighting was patched up just ahead of the Prime Minister’s Florence speech. But that was after Foreign Secretary Boris Johnson repeated the lie over a £350m Brexit windfall for the NHS. Let’s remember we do not send £350m to the EU each week. After the rebate and European aid is considered the figure is £161m.

Meanwhile I was in Bournemouth with the Lib Dems. They were celebrating the EU with flags and yellow starred berets. They also reaffirmed their commitment to letting the people vote on the Brexit deal.

It would have been easy for the new leader Vince Cable to have taken the party’s poor election showing as an excuse to abandon this policy which shows no sign at the moment of being popular.

However, talking to representatives, I detected a hope that public opinion will undergo a massive change when the consequences of the botched Brexit talks become apparent. Let us hope that change of view is lead by the North, the area that was sadly deceived by the Boris bombast and which has most to lose from leaving.

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