Tag: Autumn Statement

NOW MORE THAN EVER, DEMAND A NORTHERN COUNCIL

SCOTLAND AND THE NORTH.

Now we see more clearly what we are going to have to contend with as we try and bring power to the North.

We knew about Boris land in the South East and London with its power to drain the brightest talent southwards and its vastly disproportionate transport spending.

Now we see the full dimension of the challenge north of the border. The Scottish Government will retain all the income tax raised in Scotland, a share of VAT and power over areas of welfare. Air Passenger Duty will be a devolved power and expect it to be cut. APD is an issue that Manchester and Leeds airports have been campaigning on for years without success. Now they face a competitive disadvantage which could be significant in the border region, particularly Newcastle.

The city regionalists have written to The Times along the lines of what’s right for Scotland is right for the cities. Quite right but even our northern cities are not fit for purpose in the new economic landscape. We need to build on the Rail North and One North concepts, adding functions that apply across the North and make it a democratically elected body so that ordinary people have a say.

Meanwhile, as I write, we await the Combined Authority deals for Leeds and Sheffield promised by Nick Clegg before the Autumn Statement. On Merseyside the problems continue. Phil Davies, the leader of Wirral and the City Region has now stated that the concept of an elected mayor should be put to a referendum. That is unlikely to please Liverpool Mayor Joe Anderson.

JUERGEN SHOWS THE WAY.

Business leaders usually recoil when it is suggested they become involved in politics. But with an elected mayor for Greater Manchester on the horizon, it is interesting to see some of the non political names coming forward. For instance Scott Fletcher of ANS Group, and lively contributor to Downtown events, has not ruled himself out.

Another man who impressed me this week with his wider skills and vision was Juergen Maier, Chief Executive of Siemens UK. He is also Chairman of the North West Business Leadership Team, an organisation that takes a region wide view on the big issues facing business.

It published its business manifesto this week. It calls for action in the areas of skills, transport, world class science and emphasising our energy resources.

Speaking to MPs at Westminster Maier made a number of key points including the fact that there are too many skills initiatives for business to cope with. He said devolution had to operate within a national framework to preserve coherence (that is why a constitutional convention is essential). He also showed how far behind we are in only now arguing for HS3. Essen, Dortmund and Cologne were linked 25 years ago. He also hoped the autumn statement might bring economic catapults in precision medicine and energy to the North West.

The North needs leaders like Juergen Maier.

AUTUMN STATEMENT.

Next week’s statement by the Chancellor will be important for northern business. With the election looming we can expect further measures in connection with the “northern powerhouse” as George Osborne seeks to confirm his position as a friend of the north.

But we mustn’t be distracted from some hard underlying truths. There are signs that the fragile recovery is stalling, the government has missed its deficit reduction targets by a wide margin and all these city region councils that are going to get devolved powers are facing remorseless cuts in their budgets.

THE YEAR OF THE ECONOMIC TURN

The year ends with the Chancellor smirking and Ed Balls going red in the face.

The Tory baiting of Ed Balls during the Autumn Statement debate brought parliament to a new low, but Balls had wound them up for years with his flat lining gestures. They are now redundant. 2013 saw the debate move from double and triple dip recessions to modest optimism about growth. It would be handy if the recovery could be based on manufacturing and exports rather than consumer and housing spending in 2014, but at the moment George Osborne is winning the plaudits. Labour ends the year relying heavily on their argument that the cost of living is the real issue.

This Christmas the Conservatives find themselves in a strange position. They lag behind Labour in the polls but in normal circumstances, they would expect to be able to surge past the opposition with the usual pre election sweeteners in the last full year of the parliament. However uncertainty over UKIP and how they will perform against Lib Dems has led to a pessimistic spirit this festive season.

When the tuition fees issue was at its height, there were forecasts that the Lib Dems would be sending their MPs elected in 2015 to Westminster in a taxi again. This year they showed signs that the darkest years that saw them virtually cleared out of Town Halls in the north may be over. They held the Eastleigh by election and leader Nick Clegg got support for policies at his party conference that would have seen grass roots revolts under previous Lib Dem leaders.

Ed Miliband is never likely to gain the adulation that Tony Blair enjoyed before he took office in 1997 but this year he has strengthened his position as party leader. By focusing on the cost of living he struck a rapport with voters and forced Ministers to take notice. There are many questions around his promise of an energy price freeze but it has made the political weather this autumn.

Miliband also won plaudits for his stance on military intervention in Syria. It led directly to the Americans having second thoughts. Whilst the war drags on and the poor refugees suffer, we are in a better place in the Middle East overall. Chemical weapons have been removed in Syria and the Iranians are coming in from the diplomatic cold.

In local politics we saw the Conservative regime of Geoff Driver defeated in Lancashire whilst two leading females departed in less than happy circumstances. Marie Rimmer lost her battle for the leadership of St Helens Council whilst Salford Chief Executive Barbara Spicer fell out with the Mayor of Salford. Happily Barbara has a new job heading up the Skills Funding Agency. Personnel changes are the least of the problems for Town Halls set against the continuing rounds of spending cuts.

The possibility of an energy gap has become more real this year as we wrestle with the problem of keeping prices down whilst dealing with global warming. The weather was rarely out of the headlines in 2013. A bitter winter was followed by a great summer. The Philippines typhoon was followed by a major battering for the coasts of the North West and Yorkshire. Fracking and nuclear power have risen up the agenda this year.

We are likely to be better connected after decisions taken in 2013. Final plans for the new Mersey Gateway Bridge were approved; the northern Rail Hub in Manchester got the green light; and consultations began on HS2.

The year saw the death of two of the twentieth century’s great figures; Nelson Mandela and Margaret Thatcher. Their politics were very different but they both made a difference and that’s all we can hope to do each in our own way.

Have a peaceful Christmas

AUTUMN LEAVES AND GREEN ECONOMIC SHOOTS

The last leaves are falling from the trees but George Osborne will be pointing to the green shoots on Thursday in his Autumn Statement.

If there is going to be a turning point for this awkward coalition government, this should be it. Apart from that sunny day in the Downing Street rose garden when the two posh boys (as I called them at the time) did the coalition deal, we have lived through unremitting economic gloom. Business investment dried up, the banks went into their shell, wages were frozen, interest rates went to zero. Only inflation seemed to go up.

Now at last the economic indicators are looking up and the North of England will be hoping for some sensible decisions from George Osborne to help our part of the world. Although places like Liverpool have shown more resilience than in the past, the North has suffered under the ConLibs particularly in the haemorrhaging of public sector jobs and the popular squeeze on benefits.

Unemployment has actually been slightly rising this autumn in the North West and the squeeze on living standards continues as the controversy continues over zero hours contracts. Youth and graduate unemployment remains a real problem in the North and the shortage of new houses remains.

So why might this be a turning point for the government. Simply because it looks as if the Chancellor will have all the economic indicators pointing in the right direction for the election in 2015. The news on headline growth and the deficit will be good. Economists are forecasting the following growth figures: 2013 1.6%, 2014 2.3%, 2015 2.5%.

Its expected George Osborne will revise down unemployment and inflation figures. There may even be expectations of real wage growth. We’ll then have to wait to see if there is aresponse in terms of business investment.

The Chancellor is likely to make much of new figures showing a reduction in public borrowing forecasts, perhaps down to £80bn by 2015/16.

Sweeteners for the voters will follow the already announced free school meals and marriage tax breaks. Petrol prices are likely to be held down again and personal tax allowances are likely to rise.

The headline measure is likely to be the transfer of “the green crap” that the Prime Minister referred to from energy bills to general taxation.

So will Labour be blown out of the water by all this. Ed Balls can no longer entertain us with his flat lining gestures in the Commons. Well not entirely, the living wage issue has been well handled by Mr Ed. The real wage gap from peak remains substantial and GDP per capita in 2015 will be way below the last good Labour year of 2008. Then there is the psychological issue that the Tories fear. If people think the economic pressure is off may they feel they can vote Labour again and get away from all that nasty Tory economic rigour?

The Lib Dems will remain associated with Budgets and Autumn Statements right up to the election but we will increasingly hear from them the message that they prevented even more vicious cuts from the Tories and lifted millions out of paying tax which, they claim, was not a Conservative priority.

After his statement, the Chancellor will pray that the polls will start turning like the economic indicators. Realistically all the Tories can hope for is to be the largest party in 2015. However if the voters want to punish them for three years of misery and forget Gordon Brown’s administration, then they will hand over a repaired economy to Mr Ed.

IT’S NOT GEORGE, IT’S BALLS !

In 1994 in a brilliant piece of conference oratory,Tory Deputy PM Michael Heseltine was describing a complicated speech on economics that had been made by Gordon Brown. It turned out it had been written by his researcher Ed Balls. So Hezza was able to tell the conference the speech wasn’t Brown’s it was Balls.

The Autumn Statement was meant to see George Osborne discredited for having to come to the Commons confessing he’s missed his targets for growth, borrowing and debt reduction. He had to do all those things and the country remains in a dire state. But politics is often about mood and presentation.

With a string of announcements to help business, scrapping petrol price increases and measures on tax avoidance, Osborne gave a strong performance in a dire situation. Ed Balls meanwhile was left floundering. An uncertain performance in the Commons will be quickly forgotten. It will be less easy for the Shadow Chancellor and his party to respond to the measures proposed.

How for instance will Labour vote on the tiny 1% increase in benefits? Will Labour re-examine its critic of the Coalition that it is cutting too far and too fast whilst there is still political mileage in the claim that Labour got us into this mess? The Private Finance Initiative (PFI) is a case in point. The refurbishment of our schools and hospitals was long overdue but it was an expensive way to do it and the Chancellor’s PFI Mark 2 should ensure that the public purse benefits a bit more in the future.

There were a number of measures to help the economy in the North. We are shortly to see the plans for extending high speed rail to Manchester and Leeds. Salford is to get ultra fast broadband. Local Enterprise Partnerships are at last going to get some real money to play with. From 2015 they will be able to bid for a single pot of money covering local transport,housing and skills. More money is being poured into the Regional Growth Fund although it has been weakened by resignations and complaints of slow delivery. The new business bank is to have a billion pounds set aside for SME’s.

Finally back to the politics of the Autumn Statement. It is quite possible the UK will lose its AAA rating soon but leading economic commentators like Gillian Tett of the Financial Times and Robert Choate of the Office for Budget Responsibility seem relaxed about that. They claim investors have already factored the downgrade into their calculations. They also argue that most countries are struggling at the moment and the UK won’t be that disadvantaged.

Nevertheless the loss of our AAA status would be a blow to the Chancellor who must be hoping his package doesn’t unravel in the run up to Christmas. Memories of the aftermath of the Budget with rows over pasty tax and charities were clearly on the mind of key Coalition Ministers in the run up to the Autumn Statement. The senior Lib Dem Ministers involved in this process, leader Nick Clegg and Chief Secretary Danny Alexander are determined to see the economic strategy through and are working effectively with their Tory counterparts.

That reassures the markets, but its a very different picture up North. I was talking last week to a senior ex Lib Dem councillor who gained office when the Lib Dems first started to make an impact on northern councils. He has seen all that swept away. His bitterness was tangible. The price for the Lib Dems signing up to this budget reduction strategy is high.

May I wish you as happy a Christmas as austerity will allow.