Jim Hancock

EU. REFERENDUM WON OR LOST NEXT WEEK?

Business should demand that next week’s European Summit should settle the terms on which the referendum will be fought in June.

The year has begun badly with the markets jittery and talk of a new recession. There are uncertainties we can’t control in Europe like the Syrian war and oil prices but business should be demanding that the leaders of the EU finally settle Britain’s renegotiation next week so that we can end this tedious debate which is debilitating for business.

Although perhaps one is being naïve in thinking that the June referendum will end this debate. It will if we vote to leave but I fear a narrow vote to stay will result in Euro sceptics blaming an establishment conspiracy and vowing to fight on. Just look at the Scottish Referendum. That’s why this whole referendum idea was a bad idea and I suspect David Cameron agrees with me.

I’m sad to say the whole European project is facing the biggest crisis in its history with its poor handling of the refugee crisis, economic issues and Russian pressure in the East. To lose the UK would be a hammer blow and therefore it is to be hoped that the other 27 countries will not water down the terms that the Prime Minister has negotiated. They are modest, as I always knew they would be, and will be difficult to sell to the British people as it is. But if next week we see Cameron humiliated by an attempt to modify his new terms, then the chances of a vote to leave will grow further.

The temptation will be to put off a decision with the result that the referendum will have to be deferred to the autumn or beyond. That would be highly undesirable for business waiting to make vital investment decisions.

I remain nervous that we will vote to leave as the refugee crisis intensifies during the summer and the Murdoch dominated press continues to spew out its rubbish about the EU. However all is not lost. The disarray in the leave campaign is laughable. Vote Leave, Leave EU, and Grassroots Out are all squabbling with each other. That shows a truth about those that want us to become little islanders off the coast of Europe. Their mentality is to divide and argue whereas the European project is to unite to solve our mutual problems.

So let’s look at what Cameron has negotiated in a positive light. He has won recognition that the UK is not committed to an ever closer union. He has a renewed commitment to a more competitive Europe and protection from Euro Zone decisions. The issue of migrant benefits has assumed an importance to our whole continuation in the EU that it does not merit. However an emergency break and a four year curb will be possible with agreement and there would be lower repatriated child benefit for migrant parents living here.

So for business sake let’s hope the renegotiated terms are agreed next week and all those who believe our future lies within the EU can unite against the squabbling Euro sceptics.

WILL BUSINESS RATE REVOLUTION HELP FIRMS?

BUSINESS RATE REFORM.

Over the next few years businesses across the North could be set to benefit from a major revolution in the way that councils are funded.

By 2020 central funding of local government through the revenue support grant will be replaced entirely by business rates income. At the moment councils keep half the business rates collected in their area. The uniform business rate, set in Whitehall, will be scrapped and the Combined Authorities around Manchester and Liverpool will be able to increase the tax, but only if business agrees.

But in the new regime local councils will be able to reduce business rates too, giving the opportunity to encourage new firms into their area, boost growth and increase their rates income. This is certainly the intention of the Chancellor who is behind this change. However there are a couple of snags. Councils will have to carefully balance the impact of new firms moving in and swelling their coffers, attracted by competitive business rates, and the pressures on their spending on services like adult care.

The other problem is that all this may widen the North South divide. While it will be relatively easy to attract businesses to move into council areas in the south, further north it is a different story. Calculations have been done about the impact of the new regime in the North. These show what proportion of the national share of business rates an area would need to retain to replace the current central grant. Scores below 100% mean an area will cover its lost grant. London scores 52% whereas the North West score is 104% Relating these “self sufficiency” scores to specific councils makes even more dramatic reading. While Westminster is quids in because it can cover its lost grant with just 8% of its business rate, Knowsley scores 241% and would experience a massive shortfall of income. Even within the North there are sharp contrasts with Trafford on 38% whilst Wirral is on 187%.

Safety net mechanisms will be put in place to even out some of the disparities. Next month’s Budget is likely to reveal the details of how it will be done along with the outcome of the government’s review of business rates. It’s expected to confirm that rates will still be linked to property values.

The government’s overall intention is that councils should be incentivised to boost their business rates by competing to attract firms in their area.

FAREWELL SHIRLEY.

I see the former Crosby MP Shirley Williams has retired from the House of Lords. Roy Hattersley did the same recently. They were both politicians of the highest quality in the Labour governments of the sixties and seventies. Shirley Williams should have been our first woman Prime Minister.

It says a lot about them that they think it is time to retire with dignity, although I think they both still had a great deal to contribute to the House of Lords.

ON ILKLEY MOOR BAR DEVO BILL.

Jim McMahon, the new Labour MP for Oldham West is right to express his “deep unease” about the Northern Powerhouse. However it is the only game in town right now and just over the Pennines from his town the pressure is on Leeds City Region to get a similar deal to Greater Manchester’s.

Last week a conference in Leeds frankly discussed the difficulties involved. The background is that there are broadly two rival views on the way forward for Yorkshire. One believes that the county has a brand to die for and needs a single area covering West, North and East Yorkshire. Sheffield and South Yorkshire already have a deal. The other vision is for a Leeds City Region which includes Harrogate, Craven, York and Selby. The argument here is that the North’s best hope is in harnessing the energy of its cities whilst the more rural areas take a slower path to devolution.

Tom Riordan, the able Chief Executive of Leeds City Council is in no doubt he needs the power and resources devolution can bring. The city is without a tram system or adequate flood defences for instance. He is not obsessed with rivalry with Manchester pointing to major differences between the two cities. Leeds is five times as large geographically with large communities nearby like Bradford and Huddersfield. He thinks press reports of infighting are exaggerated but acknowledges there is a problem with the government’s insistence on an elected mayor. The concept was rejected for the City of Leeds three years ago and it is an arguable point whether Chancellor George Osborne can say he has a General Election mandate to insist that his mayoral model covers a wider geographical area.

Riordan insists he is not anti the Yorkshire concept pointing to the county wide cooperation that brought the Tour de France to the county with such brilliant success but the city versus county argument remains fierce. Peter Box, the chair of the West Yorkshire Combined Authority thinks the county has four distinct economies and with South Yorkshire having already gone its own way, the Greater Yorkshire model is flawed. This is contested by Lord Haskins, the former boss of Northern Foods and now chair of the Humber Local Enterprise Partnership. He is a firm believer that the Yorkshire brand has worldwide recognition and should have governance structures to match to promote the county particularly for business in Europe.

While the rest of the county struggles to get its act together it is interesting to look at what is happening in Sheffield. Events there may portend issues that may arise in the Liverpool City and Greater Manchester regions as elections approach for an elected mayor next year. A row has broken out over whether the elected mayor for the whole city region has a veto over all matters within the city itself.

It is also worthy of note that each of these devolution deals is different. Sheffield’s City Region mayor has not been combined with the Police and Crime Commissioner nor could they get vital powers over 16 to 18 year old skills powers. This is why MP Jim McMahon is deeply uneasy about the devolution project which lacks a national framework and coherence.

CAN LABOUR EVER WIN AGAIN ?

I’m not sure Labour can ever win another General Election, certainly under Corbyn and possibly anyone else.

The industrial and trade union base went long ago. Their traditional working class support is flirting with UKIP or if they are old, voting Tory. Scotland has fallen to the SNP and if the Scots want an alternative, the Tory Ruth Davidson is a better bet than Kezia Dugdale, the latest unknown to lead the Labour Party in Scotland.

Then there are the vicious Tories. Not content with smashing the Lib Dems, they are now targeting Labour with a string of legislative measures that will weaken them like individual voter registration, the reduction in parliamentary seats and the requirement for trade unionists to opt in to paying the political levy.

Then we come to the director of the polling organisation Britain Thinks. I heard Deborah Mattinson speaking at a Labour conference in London last weekend. Delegates had just heard party leader Jeremy Corbyn speaking. He was calm, unspun and true as ever to his socialist principles. He gave unilateralism a rest, instead coming up with the idea that companies should be prevented from paying dividends to their shareholders if they didn’t pay the living wage.

He was given a good round of applause and then the delegates spent the rest of the day looking at the mountain, nay the north face of the Eiger, that they would have to climb to win power again. They will need to win an additional 106 seats and 40% of the total vote to win in 2020. Last year they needed a swing of 5% in the marginal seats, next time it will be 10 %.

Now here’s the killer for Labour. In 2015 they could rely on large numbers of Liberal Democrats coming across. Next time 4 out of the 5 new voters Labour will need will have to be people who voted Conservative last time. How likely are Tory voters in Milton Keynes, Nuneaton, Bolton West and Morley to vote for Jeremy Corbyn?

Next the age problem. Older people vote and are increasingly voting Tory whereas the young who are more left leaning are far less inclined to go to the polling station.

Now I want to turn to a man with a low profile but who had a big job in last year’s election, Tom Baldwin. He was Ed Miliband’s senior adviser. He spoke some home truths to the activists, like don’t trash your record and expect to win. He was referring to the way the record of three time election winner Tony Blair has been heavily criticised by Labour activists keen to distance themselves from “New Labour”. Baldwin says that was why the Tories were able to blame the last Labour government for messing up the economy when in fact it was the victim of a global crash.

It gives me no satisfaction at all to write this. I want a vibrant democracy with two or three parties vying for power under a fair election system. But if we are not to face the prospect of the Tories in power for twenty years, what is to be done? Labour MPs who believe in “heart and head” social democracy need to sink their differences with Liberal Democrats and moderate Greens. Then they need to form a new party to represent the centre left where the British people have been in 1945, 1964, 1974 and for thirteen years from 1997.