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Westlake Legal Group > Infrastructure

Andy Street: My West Midlands shopping list for the Chancellor’s first Budget

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

As Mayor of the West Midlands, I have learnt that the ability to work hand-in-glove with Government is critical to being able to deliver on the issues that really matter for the region.

Without Government support, we would not have been able to generate new jobs, create a better transport network, and build the thousands of new homes needed by our population.

And let’s be frank, one of the most important relationships is that with the Treasury – they, after all, hold the purse strings.

Devolution of power gave the regions the ability to make key decisions locally, but a close relationship with the Treasury is vital to get the funding to enact those plans. A huge part of any Metro Mayor’s job is banging the drum in Whitehall to win that investment.

I have been pleased to previously work with Phillip Hammond and Sajid Javid, both of whom are proven friends of the West Midlands. Since I became Mayor, we have brought in £2.3 billion of new Government money, prising it out of the Treasury. The results of that spending are reflected all around us in the West Midlands, not only in the new infrastructure and transport projects, but in the strong economic growth we have seen.

Now we get to work with the new Chancellor, Rishi Sunak, who was widely tipped as a rising star of Government. On Saturday he demonstrated an early commitment to the West Midlands by coming to the region to meet with me and the business team.

I took from that meeting that he has a clear passion for the Government’s commitment to “levelling up“ the regions and an understanding that it has to be followed up with serious cash. For my part, I was keen to stress that “unleashing our potential” is all about investing in opportunities here, and we will deliver for UK plc.

This budget may also illustrate for the first time that Whitehall is willing to change investment guidelines that have benefited the South East for decades, to the detriment of the rest of the UK. Known as the ‘Green Book’, these Whitehall rules are said to impose a bias on investment towards London, by pumping public cash to areas where productivity and prosperity are already higher.

After years of talk about rebalancing the economy, the time has come for us to rethink these rules. The voters who backed us expect to see the UK economy levelled up. It’s time to put our money where our mouth is.

For the West Midlands, that means a shopping list for the Budget on March 11th that will allow us to build on the successes working with Government has already achieved. First of all, we must continue our mission to create a world-class transport system across the conurbation, to tackle congestion, improve air quality, and attract jobs and businesses.

Work on Metro extensions is already underway in Birmingham and Dudley. We need to step up the pace and secure support for the next phase – through East Birmingham and out to Birmingham airport. By building this tram line, we will be able to create a corridor of prosperity giving people better access to the jobs and opportunities being generated by our growing economy, and attracting investment into communities who have been isolated by a lack of connectivity.

Sticking with transport, we are already leading the way in reversing the Beeching cuts to the nation’s railways. Proposals to re-open stations in South Birmingham and Walsall have already reached the planning permission stage.

Now we need the funding to go full steam ahead to open more new stations and boost public transport in communities that haven’t had a station for over 50 years. This spending would provide tangible evidence of levelling up in action, improving the lives of residents, boosting civic pride, and delivering footfall to high streets.

These old railway lines also need reopening to support our new housing and regeneration sites across Birmingham, Country and the Black Country. Our ‘Brownfield First’ housing policy is delivering thousands of new homes on once derelict sites, while helping to protect the Green Belt. We have a proven ability to deliver much-needed homes quickly, with a surge in house-building of 40% in just two years. Of the 17,000 houses built last year, three quarters were on brownfield sites.

The good news is we still have an abundance of old derelict areas that can be decontaminated ready for new homes – and a pipeline of developers keen to start construction. We want to see the investment released to continue the ground-breaking work of Brownfield First.

Finally, as the West Midlands continues preparations for the Commonwealth Games in 2022, we want to invest in a programme that ensures the event brings new businesses and lasting jobs to the region. The Games offer an incredible opportunity to showcase our region to the world, and we are determined to take full advantage of the international interest they will generate. That work will start this year, at the Dubai World Expo.

Before, during, and after the Games, we have planned trade and investment shows, activities to attract businesses, and promotional activity to extend tourism to the wider Midlands region, but these currently have no funding in the Commonwealth Games budget.

Backing this ambition to creating an economic legacy after the Games would provide a tangible, social example of levelling-up beyond infrastructure investment.

I am looking forward to a budget on March 11th that continues to demonstrate that we have a Government, and a Mayor, determined to work together for our region, as we have done for the last three years.

We have a proven track record of using Government money to deliver jobs, transport, and housing, in innovative ways. We have shown that we have the ideas and the methods to level-up the country. By continuing to back us with real investment, the Government will send a vote of confidence in the power of local decision-making.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

A storm over Heathrow threatens. Will the Prime Minister set a course for ‘Boris Island’?

One lesson Boris Johnson must be learning as Prime Minister, if he did not take it well enough as Mayor of London, is that big infrastructure projects have a habit of splitting a politician’s political coalition.

His decision to green-light the first phase of HS2 illustrates this. The move was warmly welcomed by a portion of the Tory tribe, most prominently Andy Street and his campaign to hold on to the West Midlands mayoralty. But it also met serious opposition, including from a section of the Party’s new cohort of northern MPs.

No sooner had he bitten that bullet, however, than he finds another whistling towards him in the form of Heathrow.

The Prime Minister’s record on this largely one of evasion. Whilst Mayor he famously advocated building an entirely new airport in the Thames estuary, which inevitably came to be dubbed ‘Boris Island’. But at least some of his City Hall team take the cynical view that this was much more a device to allow Johnson to simultaneously look pro-expansion whilst opposing every practical means of increasing capacity. Then he rowed back on his pledge to “lie down in front of the bulldozers” when Theresa May graciously gave him the chance to be out of the country during the key Commons vote on Heathrow.

Now he once again finds himself torn between two competing camps. As George Trefgarne noted in a recent piece for this site, many senior London Conservatives are strongly against expansion. Given the upcoming mayoral contest and the Party’s increasingly precarious position in the capital, that is not to be taken lightly.

But this morning’s Daily Telegraph reports that other Conservative MPs are heaping public pressure on the Prime Minister to press ahead with Heathrow expansion, and just as with HS2 there is also a well-established lobby – a ‘Heathrow-industrial complex’, if you like – which has built up around the current proposals.

With HS2, at least, Johnson can shift a lot of the blame to his predecessors. For the minute he could do the same with Heathrow, which was authorised by the previous Parliament. Yet if the Government ends up having to go to the Supreme Court to fight for the proposals, that will remove a lot of that distance and put the Prime Minister in an awkward spot.

Should that happen, it will raise an interesting question: will we hear any more about ‘Boris Island’? After all, the man himself now sits at the apex of British politics. There’s nothing and nobody to stop him at least setting the ball rolling on the idea, and one can see the appeal of building a new, 21st-century air hub which could incorporate a lot of extra capacity, as opposed to alternatives involving relatively small increases.

If we don’t, it probably tells you everything you need to know about whether or not the ‘Boris Bridge’ to Northern Ireland will ever get built.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

George Trefgarne: The Prime Minister is hovering in a holding pattern above Heathrow

George Trefgarne is CEO of Boscobel & Partners, an adviser to the Heathrow Hub extended runway consortium.

The Swedes, like the Germans, are good at inventing compound words, and here is a new one: Flygskam. It translates as “flight shame” and it is already having an impact, with the Swedish airports trade association reporting a four per cent decline in passenger numbers last year.

The Conservative Party is suffering from a British strain of this disease: Heathrow shame. Its symptoms include hiding behind a political face mask and nervously washing your hands with anti-bacterial gel at the mere mention of the nation’s hub airport.

The previous transport secretary, Chris Grayling, approved a third runway at Heathrow and Parliament voted in favour of it. But the current Prime Minister is uncomfortable with it, judging by his recent comments about “no immediate prospect of any bulldozers”, and he is apparently eager to stop it if he can.

Boris Johnson is right to be sceptical. A cynic will say his doubts are simply because Heathrow Airport Ltd is coincidentally due to submit its application for a Decision Consent Order to Grant Shapps around the time of the COP26 Climate Conference in Glasgow in November, or his promise to “lie down in front of the bulldozers” when he was Mayor for London. But the reality is that like so many things overseen by the Department for Transport in recent year, the third runway is a flawed scheme, beset with serious problems which may erupt whatever the outcome of an expected judgement by the Court of Appeal in coming weeks.

First, there is the cost. Heathrow Airport Ltd claims it will cost £14 billion. But that is a six years old number for a previously pared back scheme. Not only has the proposal since changed with, among other things, extra land take, they still have no confirmed means of getting the new runway over the M25 so close to the M4 junction, without causing years of traffic delays and construction chaos.

Critical elements, such as the business plan, Safety Case (necessary to show how the airport would be operated in practice) and the proposed new flight paths remain shrouded in secrecy. Put all this together and costs seem to be going through the roof. The Civil Aviation Authority recently refused to approve a £3 billion tranche of pre-application spending, triple the original estimate. Heathrow responded by announcing completion would be delayed three years until 2029.

Our estimate is the real cost is likely to be at least £38 billion. Who pays if there is a big cost overrun? The answer is, in the first instance, the punters. Heathrow is financed by passenger fees, already the highest in the world. It has wriggled out of a commitment to keep them flat and IAG, the owner of British Airways, reckons they could double to more than £40 each. The taxpayer is also on the hook for at least £5 billion of road and rail upgrades.

In order to make this complex project economic, Heathrow not only wants to increase passenger fees, it wants to add 50 per cent to its current capacity with an extra 260,000 flights annually, or another 700 departures and arrivals per day. Which leads us to the next point: how can this be compatible with the Government’s strict new limits for carbon emissions and air quality? And what about the extra noise over West London?

Supposing, for the sake of argument, it is either not compatible or the effect of “flight-shaming” is such that demand fails to arrive? What then? After years of paying out large dividends to its shareholders, Heathrow, already some £15 billion in debt, would currently struggle to absorb any cost overruns itself.

Messrs Johnson and Shapps will not be able to avoid this issue much longer. Some time in the next few weeks a judgement is expected from the Court of Appeal in a Judicial Review case brought by environmental campaigners and local authorities. We are supporting a parallel competition-based case brought by Heathrow Hub, an independent consortium which has proposed an alternative, extended runway (which came second in the process run by the Airports Commission).

Either the Government will win, in which case it will be game on with Heathrow’s planning application later in the year; or it will lose, in which case Ministers will, ironically, have to decide whether to take it to their favourite place: the Supreme Court.

If they decide to cancel the project, there will be uproar from the business community and the considerable Heathrow lobby in the Commons. Presumably, Heathrow itself would demand hundreds of millions of pounds in compensation. If they go ahead with it, then environmental campaigners and prominent London-based Conservatives – some of them in the Government, including trade minister Greg Hands (also chair of Shaun Bailey’s Mayoral campaign), environment minister Lord Goldsmith and Cabinet office minister Lord True – would instead kick up a big fuss, and all in time for the London Mayoral election in May.

There is actually a way out of this mess. The brains behind our cheaper, simpler and quieter extended runway concept – including Jock Lowe, a former Concorde pilot and some of the world’s leading engineering firms – anticipated the need to help politicians solve the Heathrow dilemma. The first phase of our proposal costs only £4.7 billion and would add only 70,000 additional flights. At that price, regulators need release no additional flights at all if they are not confident that carbon, air quality and noise limits could be met. In the meantime, the airport would operate more efficiently, with fewer delays, less taxiing and fewer track miles.

Our proposal came second in the Airports Commission process, which deemed it viable. And unlike the third runway brings no new communities into the noise footprint and has an independent Safety Case which has been shared with the CAA.

Under Section 6 of the National Planning Act, the secretary of state has a duty to consider a review if the circumstances change significantly after a major infrastructure project is approved by Parliament. In Heathrow’s case, the circumstances have obviously changed very materially. The best way forward for Johnson and Shapps would be to initiate such a review as soon as possible, before the Swedes invent another new word: Heathrowskam.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Ryan Bourne: The real Budget question on borrowing is not “could we?” but “should we?”

Ryan Bourne holds the R Evan Scharf Chair in Public Understanding of Economics at the Cato Institute. 

Rishi Sunak is reportedly being pressured to “loosen” the Conservatives’ already loosened fiscal rules in his scheduled March 11th budget. Not long ago, an overall budget surplus by the mid-2020s was the aim, with George Osborne and Phillip Hammond insistent that falling debt-to-GDP was the prudent path given high debt levels, future recession risks, and demographic realities.

Yet fiscal rules come and fiscal rules go. At any given moment treated as sacrosanct, the past 15 years shows fiscal targets only last as long as the politics dictates. So, when deficit reduction ceased to be the overwhelming pre-election priority, the rules changed and suddenly borrowing for investment up to three per cent of GDP was allowed, meaning debt-to-GDP would barely fall this Parliament. Now, Number Ten seemingly wants further relaxation, even contemplating debt-to-GDP rising.

Reaction from economists and ex-Treasury officials has centred on whether Britain could shoulder much higher permanent debt levels without fiscal crisis. Important as this debate is (and the long-term answer is uncertain and unknowable), it ignores more immediate questions: for what purpose is the extra borrowing being proposed? And is more borrowing actually appropriate for this aim?

None of us know why, exactly, further borrowing is being contemplated. Most analysts think that manifesto promises on public service spending and investment can, just about, be delivered within the current framework. This suggests Number Ten wants to “spend more” somewhere.

But given the Conservatives have no clear stated narrative about what they consider wrong with the economy (beyond pledges to “level up,” return to historic 2.8 per cent GDP growth rates, or “unleash the country’s potential” in response), it’s anyone’s guess what’s driving this new thinking.

This lack of a clear economic policy is worrying. Having a clear economic aim, be it growth, or reducing debt, or even reducing inequality, is what anchors decision-making. A pursuit of a goal imposes discipline to think clearly about trade-offs. The major concern in regard this proposed relaxation is not necessarily that it shows Boris Johnson’s priorities are wrong, but that it exhibits an unwillingness to actually prioritise at all. The fear is that the Prime Minister’s team is falling for any old spending or tax cut demand, without a limiting principle. “You can’t say everything is your priority,” Sajid Javid reportedly said before resigning.

In fairness, one reason that no clear economic narrative has emanated from this Government is precisely because they haven’t delivered a budget yet. For good or ill, modern budgets are the primary platform governments have to tell an economic story and outline a policy response. With Brexit done and a secure majority, the Prime Minister and Sunak now have the chance to try to synthesise the disparate stated ambitions for prosperity, regional rebalancing and more money for public services.

Our Editor asked me to offer thoughts on “what they should do.” My honest answer is that, having won a majority and with limited time of healthy political capital, my priority would not be delivering more cash for public services than promised in the manifesto, nor additional infrastructure splurges, nor even broad tax cuts to “put money back in people’s pockets”.

No, my major concern would be the sustained weak productivity growth performance post-crash. This makes every other government challenge more difficult, producing lower wages, less money for public services, and lower returns on saving.

The past decade shows this is now a deep-set structural problem, requiring coordinated policy change. In tackling it, I’d try to work through the difficult and thorny politics of meaningful tax and supply-side reform (land-use planning, immigration, welfare, public sector productivity, infrastructure, and education), recognising the uncertainty of success but mindful of the potentially massive rewards.

Prioritising long-term growth above all else means potentially tolerating more borrowing. But only if it helps to deliver the primary goal. So, no additional cash for the welfare state without productivity-enhancing public service reform as a chaser. No deficit-worsening tax cuts except to grease the wheels for actual pro-growth tax reform (by ensuring the inevitable pain of losers is bearable). And no additional infrastructure spending unless the spending is targeted at the most pro-growth projects with social returns exceeding private alternatives. And I’d apply these principles broadly: no new subsidies for housing, for example, without further meaningful planning reform.

If that sounds an austere, transactional type of politics, then that’s the point. Reform without relaxing resource constraints is difficult. But showering money without reform is a wasted opportunity. Ask Tony Blair. What’s uncertain as yet is whether Johnson and Dominic Cummings share these views that growth is the most important challenge and that most public spending alone does little to improve it. My hunch is they are more positive about the prospects of state-led growth. My hope is they haven’t swallowed dangerously seductive economic arguments about how more spending will drive it.

Many conservatives argue, for example, that now is a “good time to invest” because borrowing is cheap. But extra public service spending is mostly consumption and transfers. It is not “investment.” If Boris wants more funds for the NHS, social care, or the police, then he should raise taxes or find offsetting spending cuts to fund them.

There’s no “get out of jail free” card here.  The options are higher taxes or less spending for future generations or adding to a tax burden that’s already the highest in two generations today, weakening growth further. More public service spending might be a political imperative for the Prime Minister, but it comes with a clear growth trade-off.

Nor is more government infrastructure spending necessarily good for growth, even with low interest rates. Yes, projects that solve market failures or have high social returns can improve growth prospects and be self-financing. Paying for them upfront via borrowing avoids damaging spikes in tax rates.

But in an economy with a tight labour market, government projects take funds, workers, and machines out of the private sector, where they often do more good. In fact, if private projects generate higher returns than government projects then more government infrastructure spending may harm growth. In these instances, business tax cuts financed through borrowing to encourage private investment would be far better for economic health than just throwing more money at government transport projects.

Advice of “if you are to borrow, at least do it wisely,” might sound inane. But in the absence of a clearly stated economic goal, the real question is not “could we could borrow more in today’s environment?” but “should we?” My answer would be “maybe, provided the spending or tax cuts significantly improved our growth potential.” But then growth would be my overriding priority. What is Number Ten’s?

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Tim Morris: Freeports will be transformational, with the right approach

Tim Morris is the Chief Executive of the UK Major Ports Group.

Increasing trade and prosperity in the UK post-Brexit, or, as coined by the Prime Minister “unleashing Britain’s potential,” featured heavily in the Conservative Manifesto. Boris Johnson reiterated this commitment in his inaugural address to the country on 13th December, stating that the Government would ‘prepare for an economic package to boost British business and to lengthen [the UK’s] lead as the number one destination for overseas investment’.

A key part of this package are freeports, something the Prime Minister has expressed his personal support for in the past. With the consultation on freeports now live and the Budget soon to be announced, the Government is presented with ample opportunity to demonstrate the seriousness of its intent.

Freeports undoubtedly offer the promise, in the right circumstances, to boost post-Brexit Britain’s capability to trade with the world and to produce thousands of jobs in some of the UK’s most deprived areas, a number of which include historical Labour seats that Conservatives won in 2019. However, ensuring that the potential of the proposal is met will require decisive and carefully considered policy.

Freeports are an area, or linked area, that are subject to special rules to boost economic development, including differentiated duty treatment. These duty changes normally involve businesses avoiding onerous tariffs on imports and exports, and different models can be applied to different regions to boost specific industries. A freeport of course does not have to be a seaport. However, as 95 per cent of the UK’s trade with the world is by sea, the focus of this initiative to “boost British business” and “overseas investment” is clear.

With the UK leaving the EU, freeports have come back into focus. The UK has of course had the ability to establish freeports as an EU member- the UK had a total of seven freeports between 1984 and 2012 – and could indeed tweak duty rules today. But the opportunity now before us is to take a step change approach that this country hasn’t done before, really harnessing the potential of a full package of measures including, but certainly not limited to, duty treatment and bottom-up support. We don’t pretend that freeports are a silver bullet, and they must be part of a wider strategy to ‘level-up’ often hard-hit coastal communities all around the UK, but experience from elsewhere shows they can be transformational in the right circumstances.

Tariff and duty changes alone are not enough for long-term, sustainable success. Another vital area where Government can play a decisive role is in establishing planning rules which set out upfront the criteria for development, so locations can capture investment opportunities quickly.

Streamlined processes for approving the movement of goods for import and export will help all businesses, particularly SMEs, trade with the world more. High capacity road, rail and energy links must be in place upfront, so businesses are ready to trade straight away.

Incentives both in terms of funding and accounting treatments such as capital allowances are common across all nations battling to secure inward investment.

Finally, a strong local commitment must be central to making freeports work long-term and deliver benefits to surrounding communities, including through aligning local skills providers with the skill needs of the ‘Zone’.

We strongly believe that the adoption of these measures must be a core part of the new Government’s work. They are most powerfully combined within a freeport model, but can in fact individually bring benefits to the UK’s capacity to trade and to boost coastal communities.

Many port operators, together with local stakeholders, are interested in submitting freeports proposals. For industry and potential investors, it is crucial that the process for becoming a freeport is fair, transparent and evidence-based. Through such a process, a meaningful raft of policy and regulatory levers, as well as strong local support, we are confident that freeports and ports more generally can grow their vital contribution to the UK and all our lives.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Ryan Bourne: The core challenge that Johnson’s Government won’t face up to. Boosting growth.

Ryan Bourne holds the R Evan Scharf Chair in Public Understanding of Economics at the Cato Institute.

Boris Johnson famously wants to “unleash Britain’s potential.” But where economic growth is concerned, the Bank of England thinks the problem is too little potential in the first place.

Last week, it revised down “potential output growth” for the next three years, from 1.4 per cent to 1.1 per cent per year, implying less capacity for growth without overheating. That’s a stark contrast with the historic 2.8 per cent growth rate that Sajid Javid aspires a return to.

Potential growth is calculated by making judgments on potential additional hours worked economy-wide and on potential labour productivity growth (i.e. improvements in output per hour worked). On both, the Bank’s judgment is grisly.

With unemployment low, employment high, and EU immigration slower, the Bank revised down growth attainable by simply adding people or hours. More worryingly, it has given up expecting a productivity growth rebound, instead judging our post-crash performance a kind of “new normal.” For 2020-23, it expects productivity growth of 0.5 percent per year; far below the 2.2 per cent per year seen pre-crash or even the above one per cent forecast last year.

If this seems dry and arcane, the implications are not. If accurate, worse potential growth driven by weak productivity means less robust improvements in living standards, a worse “structural” budget deficit, and macroeconomic “stimulus” becoming more impotent. Indeed, trying to “boost the economy” through Government spending or monetary stimulus would more likely just generate inflation.

As Javid prepares for his March Budget then, the Bank’s verdict should trouble him. Last March, the Office for Budget Responsibility itself forecast potential growth at 1.5 per cent for 2020, rising to 1.6 per cent through 2023. But that assumed productivity growth jumping to 1.3 per cent per year. If the OBR now agrees that 0.5 per cent is likelier, Budget day will bring terrible economic headlines.

Now we should not take the Bank’s judgment as gospel, of course. Economists understand less about “potential” than reporting suggests. Defining “capacity” for companies, let alone large economies, is hard. As Chris Dillow has written, in a world of intangible assets and digital technologies it’s not even clear what capacity means. What is Google’s “capacity”? The Bank may prove as unduly pessimistic as it recently was overoptimistic.

But that doesn’t make its intervention unimportant. Olivier Blanchard, Guido Lorenzoni and Jean Paul L’Huillier’s work suggests negative judgments from forecasters about potential growth can become self-fulling. If consumers and investors expect to be poorer, they might cut their cloth now. They find, internationally, that a 0.1 per cent downward revision to potential growth leads to a fall in consumption growth that year of anywhere between 0.4 and 0.7 per cent. Just what the Chancellor needs.

Few can deny too the problem that the Bank’s revised judgment reflects. As years since the financial crisis roll by, it becomes ever easier to conclude that Britain is in a productivity growth slump with no sign of returning to pre-crash trends. The question really is: does the government intend to do anything meaningful about it?

It feels tired to posit this question. Commentators like me having been making the case for trying to raise the potential growth rate since 2010, to little avail. Partly this reflects a helplessness from policymakers in the face of trends beyond their control; partly it’s disagreements about what pro-growth policy is.

So let’s recognise uncomfortable truths upfront. Yes, slower growth across countries since the crash suggests something about the bank crisis or the unsustainability of what went before has impaired growth. Yes, an ageing population is another headwind. And, yes, Brexit has slowed growth to date, though how much due to pure “uncertainty” chilling investment, as opposed to negative expectations about future trade policy, is unclear.

But acknowledging all this shouldn’t induce fatalism. In fact, it strengthens the imperative for other pro-growth policies in recompense. We shouldn’t just treat the economy’s weak potential as a fait accompli – an unwelcome external force that affects budgets. No, given its importance, we should see weak growth as a failure of collective current policy. At the very least, sustained poor growth gives reason to review programmes tolerable in “good times” that we suspect come with a growth trade-off.

Is the government really prioritising growth today? Javid’s ambition is commendable, but actions must follow words. Prioritising something means willingness to accept trade-offs in its pursuit. Yet last week, ministers were asked to consider cutting programmes that didn’t fulfil the Government’s stated priorities – tackling crime, funding the NHS, or “levelling up” regions. Growth got no mention. Indeed, if growth is a priority, why not ask “does this programme improve the economy’s potential?”

Often, it seems that the Government thinks talking about any economic policy is synonymous with being pro-growth. But, listening to recent announcements, it’s difficult to conclude that rapid growth is a guiding star.

True, in some areas people like me just disagree with them on what might boost growth – little surprise given how contentious the literature is. Dominic Cummings thinks a British ARPA will generate loads of spillovers from public science and R&D spending. Javid thinks a further education skills push will raise human capital in the long-term. The whole government seems sold on regional infrastructure being transformative (Japan through the 1990s colours me sceptical). We can debate this, while recognising that government noises on planning have been well-evidenced and unambiguously pro-growth.

In other areas though, growth is clearly a secondary concern, at best. No coherent tax reform agenda appears likely, and Ministers are prioritising a broad-based National Insurance cut that will do little for potential growth. Boris Johnson talks up the benefits of using regulation to strengthen environmental outcomes and worker protection; there’s little mention of growth trade-offs here, or a pro-growth review of repatriated EU laws.

Though Johnson laments mercantilists and tariffs, last week his government briefed on using them to encourage countries to make trade deals with it – an approach that has seen Donald Trump cripple U.S. manufacturing productivity by raising its input prices. Public service reform ideas seem non-existent. The minimum wage keeps being raised. On infrastructure, HS2 is being prioritised over schemes with bigger estimated economic bang for the pound. And whatever your view of climate change, it’s undeniable that rapid decarbonisation impairs an economy’s growth potential, despite fairytales of win-win “green growth.”

Now, setting all dials to maximise growth is neither easy nor politically viable. Governments, understandably, have other aims and electoral mandates. But given its central importance – not least how it can make all other challenges easier – it still gets insufficient attention. With the government’s healthy majority, anti-growth headwinds, and leaving the EU, there’s surely never been a more necessary or better time to act on the Bank’s warning and try to see what sticks.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Danny Kruger: “Leaving the EU is about more than Global Britain; it is a response to the call of home.”

Danny Kruger is MP for Devizes and is a former Political Secretary to Boris Johnson.

I voted Leave in 2016, and I am glad that we are leaving the EU on Friday. The twenty-first century will reward countries that are nimble, agile and free, but Brexit is about more than Global Britain; it is a response to the call of home. It reflects people’s attachment to the places that are theirs. Patriotism is rooted in places. Our love of our country begins with love of our neighbourhoods. Our first loyalties are to the people we live among, and we have a preference to be governed by people we know. That impulse is not wrong; it is right.

As we finally get Brexit done this week, it is right that we are considering how to strengthen local places, especially places far from London. I wholeheartedly support the plans to invest in infrastructure to connect our cities and towns—the broadband and the transport links that will drive economic growth in all parts of the UK.

Just as important as economic infrastructure is what we might call social infrastructure: the institutions of all kinds where people gather to work together, to play together and to help each other. I make my maiden speech in this debate because I spent 10 years as the chief executive of a project I founded with my wife Emma that works in prisons and with young people at risk.

It was the hardest job I have ever done, and I worked in some very tough places. We often failed, but we were always close to the people we tried to help. Never bureaucratic, and never treating people as statistics or—a phrase I do not like—service users, we saw them as people whose lives had gone wrong and whose lives, but for the grace of God, could have been ours.

We are now trustees of that charity. If I might make a plea to Ministers, it is for them to recognise the role of independent civil society organisations—charities and social enterprises—in the fight against crime and, indeed, against all the social evils we debate in this place.

Social problems demand social solutions, not just a state response. Of course we need the police, the prison system and the probation service—we need them very badly, and we need them to be better—but, just as important, we need the social infrastructure that prevents crime, supports victims and rehabilitates criminals.

The Government have a great mission as we leave the EU and try to fashion a UK that is fit for the future. This mission represents a challenge to some of the traditional views of both left and right. The main actor in our story is not the solitary individual seeking to maximise personal advantage, nor is it the central state enforcing uniformity from a Department in Whitehall; the main actor in our story is the local community.

We need reform of the public sector to create services that are genuinely owned and cared for by local people. We need reform of business so that directors are incentivised to think of people and the planet, as well as their quarterly profits. And we need reform of politics itself to give power back to the people and to make communities responsible for the decisions that affect them.

I finish on a more abstract issue, but it is one that we will find ourselves debating in many different forms in this Parliament. It is the issue of identity, of who we are both as individuals and in relation to each other. We traditionally had a sense of this: we are children of God, fallen but redeemed. Capable of great wrong but capable of great virtue. Even for those who did not believe in God, there was a sense that our country is rooted in Christianity and that our liberties derive from the Christian idea of absolute human dignity.

Today those ideas are losing their purchase, so we are trying to find a new set of values to guide us, a new language of rights and wrongs, and a new idea of identity based not on our universal inner value or on our membership of a common culture but on our particular differences.

I state this as neutrally as I can, because I know that good people are trying hard to make a better world and that Christianity and the western past are badly stained by violence and injustice, but I am not sure that we should so casually throw away the inheritance of our culture. There is so much to be positive about. I share the Prime Minister’s exuberant optimism about the future, but we need a set of values and beliefs to guide us.

As we advance at speed into a bewildering world in which we are forced to ask the most profound questions about the limits of autonomy and what it means to be human, we may have reason to look about for the old ways and to seek wisdom in the old ideas that are, in my view, entirely timeless.

This article is an extract from the author’s maiden speech, which was delivered in the Commons last week.

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