Osborne’s plan, big in the Eighties

Echoes of the Long Good Friday as the coalition goes back to the Eighties.

It was supposed to be the great idea that would show the UK's beleaguered business people that the government has a plan for something other than balancing the books.

Central to the Chancellor George Osborne's set-piece crowd-pleaser at the Conservative Party's spring conference was the announcement that about ten regional enterprise zones are to be created to develop the economy outside London.

It is a reheating of a very old idea that encountered serious problems the first time around. Violent gangsters used the big one, London's Docklands, as a way of getting very rich by laundering proceeds of crime.

To get an idea, rent a copy of The Long Good Friday, starring Bob Hoskins as the gangster Harry Shand, who tries to get the Mafia to invest in the Docklands boom. Sadly it's a true story copied by robbers, drug dealers, people smugglers and terrorists.

A repeat of the 1980s is now a possibility because of the decision to axe the regional development agencies (RDAs) among the quangos that are to be burned on that coalition bonfire.

RDAs weren't perfect, but, given that central government money and local people were involved, there was at least a level of scrutiny. The job of the RDAs was to attract inward investment. Regional planning, which is critical to investment, was dovetailed with local plans so that everyone was "on the same page".

The Chancellor's zones will be located outside London and will involve local enterprise partnerships, coalitions between businesses and local authorities. Critics say that compared to the multimillion-pound budgets of the RDAs, the local enterprise partnerships lack funds. The cash void, ministers hope, will be filled by private investors.

The model is the Docklands redevelopment, which included the creation of Canary Wharf.

On a superficial level, Docklands worked even though the Canary Wharf developer went bust. The City has relocated there and it has created jobs. But the local community was either locked out or shipped out. But behind the glass and chrome lies a dirty little secret: some of the Docklands regeneration money was seriously crooked.

A sizable amount of cash from the notorious Brinks Mat bullion robbery was invested in the Docklands redevelopment in the 1980s. Exactly how much, no one knows, but the return made the crooks involved even richer.

The idea was copied by several of Liverpool's crime families a decade later when they wanted to clean drug money. They simply bought in to the redevelopment opportunities created on their doorstep as part of the drive towards the City of Culture bid. Ever wondered why there are so many blocks of flats in regeneration?

And the IRA did something similar by investing in business properties in Greater Manchester. Rumours are that Northern Ireland will become a single enterprise zone. A frightening prospect.

The basics of it are simple: set up an offshore bank account in the name of an investment company and get some UK residents as directors, ideally a lawyer or two, to act as investors. They then bring the cash into the enterprise areas and either sell up on completion or stay as long-term investors. Either way, the cash is cleaned, and earns interest.

Standing in the way will be a group of broke councils with minimal scrutiny skills doing oversight of deals already signed, usually in the planning committee. And yes, there is the potential for bribery. Besides, who would dare to stand in the way of job creation and investment?

That committee votes the development through. Under the Chancellor's plan, there will also be sweeteners such as tax breaks or reduced developer fees, such as the Section 106 agreements that pay for local infrastructure.

Questions have been asked before about Britain's lazy approach to international money-laundering, particularly with the influx of Russian cash.

Chris Smith is a former lobby correspondent.

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Hannan Fodder: This week, Daniel Hannan gets his excuses in early

I didn't do it. 

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“Why Brexit should work out for everyone”

And yesterday, there was his column on Conservative Home:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Or, to put it more concisely, courtesy of Buzzfeed’s Marie Le Conte:

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

If there any rhetorical technique more skin-crawlingly horrible, than, “Your response to my behaviour justifies my behaviour”?

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.