Jim Hancock

FROM EASTLEIGH TO LIVERPOOL WATERS

Do Peel Holdings have the voters of Eastleigh to thank for the government go ahead for the massive Liverpool Waters project?

The decision not to hold a public inquiry is a clear sign that ministers are pinning their hopes on infrastructure growth to get us out of this economic malaise. While it’s true that it will be years before the scheme is completed, the government want to create a sense of momentum and confidence with projects like the Northern Hub, High Speed Rail and Liverpool Waters.

The other reaction has been for some Tory ministers to flirt with ever more right wing policies in the face of the UKIP advance. The suggestion that the UK might quit the European Court of Human Rights is a disgrace. The spectacle of the country that stood alone in the Second World War to preserve democracy and liberty, quitting the institution that protects those freedoms is deeply depressing. It would have unforeseen consequences at home and abroad would send all the wrong signals to countries where attachment to democratic values is tenuous.

I forecast that the Lib Dems would hold Eastleigh, but that was before the accusations came up about Lord Rennard. Given that and the fact that the by election was caused by the lies of Chris Huhne. Neither of these issues prevented the Lib Dems holding on. Of course this was an ideal seat for them to defend, nevertheless it does suggest that people care less and less about the scandals of the Westminster village and more and more about practical local issues that affect them.

It is all part of the huge disengagement people feel with conventional politics. The scale of the disenchantment is now becoming clear whether it be a stand up comedian doing well in the Italian elections or UKIP in Eastleigh. Heaven knows what the American public are making of the continued deadlock between the President and the House of Representatives. I raised this issue with Jack Straw the other day given his long experience in high office and as MP for Blackburn since 1979. He had no clear answer to my question as to when people might trust their politicians again. He did agree with me that apart from issues like expenses and poor moral behaviour, the continuing recession meant that politicians can no longer promise a visionary future of prosperity because they just would not be believed.

So where do the parties stand after Eastleigh. Nick Clegg gets a reprieve and the Coalition remains stable but Eastleigh was an ideal seat for them and they won’t be able to put in that massive effort across the country where their poll ratings remain weak.

UKIP are on a surge. They have been accused of being a one man band in the shape of leader Nigel Farage, but I thought their Eastleigh candidate, Diane James, was the best of the bunch. Now they face the challenge of the county council elections. What are UKIP’s policies for running Lancashire County Council?

Tory backbench reaction remained muted after coming third, but backbenchers remain unhappy with David Cameron and a flat budget might see a summer of discontent.

Labour didn’t try in Eastleigh, putting up a candidate who had made highly offensive remarks about Margaret Thatcher. They are still blamed for the economic mess and need to start fleshing out their proposals for the future more.

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.

MERVYN’S PANICKING!

THE ECONOMY

With inflation heading for 3%, the Governor of the Bank of England wants £25bn more quantitative easing. What are we to make of Sir Mervyn King’s views revealed by the publication of the latest Monetary Policy Committee (MPC) minutes?

He may have been influenced by Mark Carney’s indication last week that inflation targeting may be eased when he becomes Governor in July, or he may have run out of ideas to help our flat lining economy. In any event he was overruled by a majority of the members of the MPC.

Having been cheered up midweek by a speech by Sir Howard Bernstein, Chief Executive of Manchester Council at a Downtown event full of ideas about the city’s drive for foreign investment; reading the MPC deliberations was a reminder that we are in a dark forest economically with few chinks of light.

The Budget is less than a month away but there are low expectations that the Chancellor can pull any new rabbits out of the hat. The headwear is empty. Quantitative Easing, low interest rates and infrastructure spend have all been tried but the headwinds blow strongly.

There are indications that the mortgage market is easing and the infrastructure investment has long lead times but the recession continues to take its toll with Axminster carpets following HMV, Jessops and Blockbuster off our high streets. George Osborne was also a billion short on what he expected from the 4G sale.

Last December the Office for Budgetary Responsibility had factored in £3.5bn from the sale. It was an important factor in the Chancellor being able to claim that the deficit was falling. Some economists now claim the government overshoot this financial year will be £10bn.

Internationally there is talk of currency wars breaking out as countries try to boost exports. Japan has certainly embarked on this course. The pound is weak which partly explains the 10p hike in a litre of petrol since Christmas. By the way a friend of mine was asking the other day where are the fuel protests that we saw in 2000? A good question I thought.

COUNCIL TAX

Against this background local councils across the North are fixing their budgets for the forthcoming year. In our urban areas most people will face a rise in council tax. The politicians will argue they have no choice considering the cuts in government grant. Cynics will point to the fact that the metropolitan councils from Leeds to Liverpool have no elections this year. The Environment Secretary Eric Pickles is threatening to penalise councils like Manchester who have found a way round the need for a referendum if council tax rises by more than 2%.

EASTLEIGH BY-ELECTION

Meanwhile the voters of Eastleigh have to choose between the two parties of government as they go to the polls next week. We can judge the seriousness of Labour’s challenge by the refusal of their candidate John O’Farrell to live in the constituency if he was elected.

So it’s between the incumbent Liberal Democrats who have a dull but worthy candidate and an off message Tory. I don’t expect the “Chris Huhne” effect to be too damaging and I’d bet on the Lib Dems getting some good news at last.

NUCLEAR INDUSTRY CRISIS IN NORTH

The nuclear industry is a vital part of the northern economy, but recent events have cast a shadow over its future.

The vote by Cumbria County Council to reject deep storage of nuclear waste and the decision of Centrica to abandon plans to build new reactors in the UK raises major questions for an industry that the North has great expertise in.

From the hi tech skills being taught at UCLAN and Manchester University’s Dalton Institute to the “difficult” end of dealing with the waste legacy at Sellafield, from the uranium enrichment plant run by URENCO at Capenhurst to a string of supply chain companies across the North, we are looking at a major industrial asset.

There are two major issues. The need to build a new generation of nuclear power stations to avoid a UK energy gap in the 2020s and a solution to the long term disposal of radioactive waste.

On the latter issue, the government’s reaction to the decision by Cumbria Council to pull out of the exploration of underground sites seemed remarkably casual. Ministerial reaction was to say the search goes on as if there are a queue of other local authorities across England waiting to host the toxic legacy of 60 years of nuclear power generation.

The fact is that Cumbria is the only county in the country where there is the remotest prospect of building a consensus to locate a deep storage facility for nuclear waste. Actually that conclusion needs refining. It is only in West Cumbria, around Sellafield, that there may be public support. Copeland District Council voted to continue exploration and there is talk of them now going it alone.

It would require a change in the law as Cumbria County Council is the superior planning authority, but in the national interest this should be explored.

Cumbria councillors are facing elections in a couple of months. That brought its own pressures, along with a strategy by some anti nuclear campaigners to “scare the crap out of them”. But the vote still leaves the nuclear waste in place.

Now the government should concentrate on exploring for a site in West Cumbria so that this part of the work of the nuclear industry in the north can regain momentum and they should give Copeland Council the guarantee that they could pull out of the project at a late stage. Cumbria councillors claim they were not reassured on this point.

Now we come to the other issue which has implications across the economy of the north. After years of burying its head in the sand the Blair government acknowledged that we would need a new generation of nuclear power stations. This was good news for the North and Manchester University was quick to spot the opportunity to start training a new generation of nuclear engineers.

But forward momentum has been slow, partly because of the balance of risk to be taken by the private and public sector and the agreed price for electricity generation from the power stations.

Centrica’s decision to withdraw means no major UK company remains involved in plans for new nuclear reactors in England. The government point to Hitachi’s purchase of the relatively new UK nuclear power company, Horizon, as evidence of confidence in the UK nuclear industry by the Japanese.

For the sake of jobs in the north, we need rapid progress on plans for nuclear power stations and deep storage.