Adonis's review should galvanise the North East and its neighbours

While the coalition dithers on its growth strategy, the Labour peer has set out precisely the rebalancing the nation needs to recover from the crash.

The launch of the North East Independent Economic Review, chaired by Andrew Adonis, provides further evidence that while the government dithers on economic growth strategy, others are prepared to set out their stalls. First Heseltine, then the Northern Economic Futures Commission and now Adonis all point to the importance of local and regional economies in returning the nation to prosperity.

Adonis sets out a North East vision comprised of "making, trading and exporting" – precisely the rebalancing the nation needs to recover from an economic shock which started in the financial sector but which has had its greatest impact in the north. It calls for the creation of 60,000 private sector jobs and makes clear that the north east has some key competitive advantages to enable that rebalancing and job creation to happen if only opportunities can be unlocked.

The review makes proposals to boost exports and supply chains and co-ordinate inward investment activities through the formation of North East International, it calls for a North East Innovation Board to oversee the development of key innovation centres in life sciences, automotive manufacture and offshore engineering, and it makes the case for a regional business bank and a successor body for the NE JEREMIE, European and social enterprise funds overseen by a NE Investment and Finance Board. In many ways this puts back together again some of the functions that were once carried out by the regional development agency but with a fresh purpose and momentum.

Skills, widely accepted to be critical to driving growth in regions like the North East, also have a key role in the plan with proposals for a North East Schools Challenge, a doubling of the numbers of youth apprenticeships, increasing number of young people in higher education by 1 per cent per annum and a payment-by-results component for local training providers. It also calls for a strategic plan for transport and a NE Infrastructure Fund to fund a series of key priorities including smartcard ticketing, the A1 Western Bypass and A19 developments, and a series of rail improvements including to maximise freight potential. These should be led by a new body: Transport North East.

All of the proposals are sensible and progressive and emphasise what the North East can do for itself if it can now get its act together, establish the Combined Authority it has recently announced, and come up with a delivery plan that turns aspiration into action. Three questions, though, remain.

First, there is the matter of scale. While many measures make sense at the North East level and require the kind of co-ordination that Adonis has proposed, there are a few where the North East will have to work more collaboratively beyond its borders to maximise its potential. On inward investment, innovation and transport in particular, North Eastern activities need to be quickly integrated with activity taking place in Tees Valley but perhaps, more importantly, with other Northern LEPs. For example, Transport North East will only be able to achieve its objectives of faster journey times between key cities if it quickly gets behind plans to decentralise the Northern Rail and Transpennine franchises being organised by the emergent 'Transport for the North' collaboration.

Second, there is central government. Adonis is right not to be too demanding and let Heseltine do the heavy-lifting in this regard, but in most aspects of the review, some central government leniency will be required to allow proposals the freedom – and investment – to really take off. Changes to the national FDI system, University Technical Colleges, locating the British Investment bank in the North East would all be cases in point but long term fiscal autonomy and much greater economic decentralisation must be the wider goals for all Northern LEPs and these will only be achieved with a wider Northern voice.

Finally, there is the question of time. With the Financial Times reporting that places such as Sunderland will be £618 per person worse off than before as a result of welfare changes, one wonders whether any plan of this nature can offset such a hit to the local economy. Clearly there is a very real sense that things can only get worse before they get better, but Adonis and his review team have put together a coherent plan and for now it’s the only game in town.

Ed Cox is director of IPPR North

@edcox_ippr

Labour peer and former transport secretary Andrew Adonis.

Ed Cox is Director at IPPR North. He tweets @edcox_ippr.

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Two referendums have revived the Tories and undone Labour

The Scottish vote enabled the Conservatives' rebirth as the party of the Union; the Brexit vote has gifted Theresa May a project to reunite a fragmented right.

In the final week of the Scottish independence referendum campaign, as the Union appeared in peril, David Cameron pleaded with voters to punish his party rather than Scotland. “If you are fed up with the effing Tories, give them a kick,” he said. Cameron’s language reflected a settled view: the Conservatives were irredeemably loathed by Scots. For nearly two decades, the party had no more than one MP north of the border. Changing the party’s name for devolved contests was discussed.

Since becoming Conservative leader, Theresa May has pursued a hard – she prefers “clean” – Brexit strategy that Scots voted against and the Conservatives have achieved a UK-wide poll lead of 20 points.

Yet rather than regressing, the Scottish Conservatives have resurged. On 22 April, a Panelbase poll put them on 33 per cent in Scotland (a rise of 18 points since 2015). A favoured Labour barb used to be that there were more pandas (two) in Scotland than Tory MPs (one). The poll would leave the Tories with 12 seats and Corbyn’s party with none. Tory aides confess that they were surprised by the figures but declare there are “no limits to our ambitions” in Scotland.

The roots of this recovery lie in the 2014 independence referendum. The vote, and the SNP’s subsequent landslide victory in the 2015 general election, realigned Scottish politics along unionist and nationalist lines. Led by Ruth Davidson, the Scottish Conservatives have ably exploited the opportunity. “We said No. We meant it,” the party’s official slogan declares of Nicola Sturgeon’s demand for a second referendum. Under Ruth Davidson, the Tories have already become the official opposition at Holyrood.

Labour is torn between retaining unionists and winning back nationalists. It has been punished for its equivocation, as it is being punished over its confused response to Brexit. In April 2016, the Scottish Labour leader, Kezia Dugdale, said that it was “not inconceivable” that she could back independence if the UK voted to leave the EU (and earlier suggested that MPs and MSPs could be given a free vote). Jeremy Corbyn recently stated that he was “absolutely fine” with a second referendum being held.

“For us it’s a badge of honour but there are some people in Scottish Labour who are quite queasy about that word [unionist] and I think Jeremy Corbyn would be very queasy about it,” Adam Tomkins, a Conservative MSP for Glasgow and public law professor, told me. “Don’t forget the Northern Ireland dimension; we’ve all seen the photos of him rubbing shoulders with leading republicans. The Scottish Union is very different to the Irish Union but the word migrates.”

The irony is that Corbyn allies believed his anti-austerity, anti-Trident platform would allow Labour to recover in Scotland. Yet the pre-eminence of the national question has left it in a political no-man’s land.

In contrast to the rest of the UK, Scots backed Remain by 62 per cent to 38 per cent. Far from protecting EU membership, as David Cameron had promised in the referendum campaign, the preservation of the Union now threatened it. Theresa May has since yielded no ground, denying Scotland both a second independence referendum on terms dictated by the SNP and single market membership. But polls show no rise in support for independence.

Conservative aides believe that Sturgeon miscalculated by immediately raising the prospect of a second referendum following the Leave vote last June. Families and communities were riven by the 2014 contest. Most had little desire to disrupt the uneasy peace that has prevailed since.

Nor are the politics of Brexit as uncomplicated as some assume. Thirty-six per cent of SNP supporters voted Leave and more than a third of this bloc have since turned against independence. As elsewhere, some Remainers have accepted the result and fear the instability that secession would cause. Scotland’s trade with the UK is worth four times as much as that with the EU. Davidson, who was one of the most forceful advocates for Remain, says that pursuing independence to counter the effects of Brexit would be “stubbing your toe to then amputate your foot”.

Theresa May, who spoke of the “precious” Union when she became Prime Minister, has devoted great attention to Scotland. Cabinet ministers are instructed to develop a “Scottish plan” when they formulate policy; buildings funded by the UK government now bear its insignia. Davidson’s influence was crucial to May’s decision to retain the 0.7 per cent foreign aid commitment – an emblem of compassionate conservatism.

After a decade of SNP rule, Tory aides believe that their rival’s poor domestic record, most notably on education, is “catching up with them”. More than a year has elapsed since the Scottish Parliament passed new legislation. “We’ve got a government that simply isn’t very interested in governing,” Tomkins said. “I thought that Nicola [Sturgeon] would change that. I was wrong.” What preoccupies the SNP is the constitutional question.

Shortly after the remarkable Scottish polls, a new survey showed the Tories on course to win the most seats in Wales for the first time since 1859. For some former Labour supporters, voting Ukip is proving a gateway drug to voting Conservative.

Two referendums have now realigned politics in the Tories’ favour. The Scottish vote enabled their rebirth as the party of the Union; the Brexit vote has gifted May a project to reunite a fragmented right.

Before the 2015 general election, Labour derided the Tories as a southern English force unworthy of their official name: the Conservative and Unionist Party. Partly through accident and partly through design, May and Davidson are now reclaiming it. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

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