Time to hear May’s stop-cor­byn strat­egy

The Sunday Telegraph - Money & Business - - Business - LIAM HAL­LI­GAN Fol­low Liam on Twit­ter @liamhal­li­gan

‘Peo­ple know the old way of run­ning things isn’t work­ing,” Jeremy Cor­byn told his party faith­ful in Liver­pool. “When we meet this time next year, let it be as a Labour gov­ern­ment,” he told his an­nual party con­fer­ence, “in­vest­ing in Bri­tain af­ter years of aus­ter­ity and ne­glect, bring­ing our coun­try to­gether af­ter a decade of divi­sion”.

Some dis­miss Cor­byn’s Labour as a dys­func­tional rag­bag of proto-marx­ists and Blairite hang­ers-on. An op­po­si­tion even more split than the To­ries over Brexit. But with opin­ion polls neckand-neck, and Theresa May on the ropes, party ac­tivists are start­ing to scent blood.

Hav­ing ditched its his­toric clause IV pub­lic own­er­ship pledge in 1995, Labour has come full cir­cle. Shadow Chan­cel­lor John Mcdon­nell made the party’s most rad­i­cal pitch for decades, push­ing ag­gres­sive re­na­tion­al­i­sa­tion and the re­turn of sweep­ing trade union pow­ers.

Un­der Labour, all listed com­pa­nies will trans­fer a 10th of their eq­uity to state con­trol, with div­i­dends split be­tween em­ploy­ees and (mostly) the gov­ern­ment. A third of board seats are to be re­served for work­ers. While Blair won three vic­to­ries by shift­ing to the cen­tre, Cor­bynites think dis­con­tent with “the sys­tem” is so en­trenched Labour can pre­vail from the far Left.

To­ries gath­er­ing in Birm­ing­ham this week­end de­ri­sively snort at Cor­byn. The man is a joke, the ar­gu­ment goes – he couldn’t pos­si­bly win power. But for a few thou­sand votes, though, across half-a-dozen mar­ginal seats in the last elec­tion, Cor­byn would now be prime min­is­ter. Since then, as May has strug­gled, the Labour leader has, if any­thing, gained pop­u­lar­ity.

We could see an elec­tion be­fore Christ­mas, or not be­fore 2022. When­ever it hap­pens, the To­ries are only go­ing to win, and pre­vent Cor­byn tak­ing over, if they ac­knowl­edge Bri­tish cap­i­tal­ism needs fix­ing. While propos­ing cred­i­ble ways to do that, May must, above all, present a cred­i­ble and com­pelling vi­sion of a post-brexit econ­omy. This con­fer­ence is the time and place to start.

The To­ries’ pitch should re­volve, to a con­sid­er­able ex­tent, around re­gional pol­icy. While cen­tral Lon­don is the EU’S rich­est lo­cal­ity, Bri­tain is home to nine of North­ern Europe’s 10 poor­est. Freed from EU rules, and with “co­he­sion fund” re­sources re­turn­ing from Brus­sels, there is scope af­ter Brexit to tackle our gap­ing re­gional di­vide.

Trans­port should play a trans­for­ma­tive role. The North­ern Pow­er­house and Mid­lands En­gine must evolve from clever slo­gans to pol­icy plat­forms driv­ing in­vest­ment, above all from the pri­vate sec­tor.

We need new bridges, toll roads and en­hanced rail links be­yond the South East – pri­ori­tis­ing the trans-pennine HS3 rail project. Eco­nom­i­cally and in terms of na­tional po­lit­i­cal co­he­sion, it is vi­tal to con­nect our north­ern cities, cre­at­ing an al­ter­na­tive UK growth cen­tre – even if that means scrap­ping the white ele­phant that is HS2.

Out­side the EU, low-tax “free ports” and “en­ter­prise zones” can be es­tab­lished, bring­ing en­ergy and in­vest­ment to de­pressed coastal ar­eas and in­ner cities. The plan­ning should have started weeks af­ter the June 2016 ref­er­en­dum – but must be­gin now.

May should cham­pion a na­tional in­fra­struc­ture fund, chan­nelling bil­lions of pounds into trans­port, com­mu­ni­ca­tions and en­ergy in­fra­struc­ture. It should be seeded by cen­tral gov­ern­ment – bor­row­ing specif­i­cally and lock­ing in low in­ter­est rates – with an em­pha­sis on pri­vate cash. Tweaked reg­u­la­tions could chan­nel Bri­tain’s vast in­sti­tu­tional pen­sion and life as­sur­ance sav­ings into in­fra­struc­ture bonds, match­ing long-term in­come streams with long-term li­a­bil­i­ties.

As one of two top do­mes­tic pri­or­i­ties, May should an­nounce a de­ci­sive shift of skills and vo­ca­tional train­ing to the heart of pol­icy. UK firms have un­der-in­vested in lo­cal staff

over many years, in part due to EU “free­dom of move­ment”. Bri­tain must be­come a high-wage, high­pro­duc­tiv­ity econ­omy – and, above all, that means skills. Our tax, train­ing and ed­u­ca­tion poli­cies should be aligned to meet clear goals, over­seen by a min­is­ter for skills and train­ing.

Build­ing on the role our uni­ver­si­ties play in re­gional growth, we need stronger links be­tween academia and in­dus­try. US uni­ver­si­ties are the only global chal­lenger to Bri­tish higher ed­u­ca­tion, yet are far more suc­cess­ful in trans­fer­ring busi­ness ideas from cam­pus to com­merce.

Tu­ition fees should be waived, on a means-tested ba­sis, for those tak­ing key eco­nomic sub­jects – par­tic­u­larly sci­ence, en­gi­neer­ing and maths. Uni­ver­sity num­bers are too high and vo­ca­tional train­ing num­bers too low, trends that should both be re­versed. The sec­ond do­mes­tic pri­or­ity is to en­sure more homes are built. While this means ad­di­tional plan­ning per­mis­sions, the im­me­di­ate need is to en­sure large builders im­ple­ment those al­ready granted. The “gar­den cities” move­ment should be re­vived, with lo­cal au­thor­i­ties set­ting up “new town com­pa­nies” – so lim­it­ing de­vel­op­ment on green­belt and other sen­si­tive sites.

Our hous­ing short­age is caus­ing such eco­nomic and so­cial dam­age that only rad­i­cal ac­tion will raise long-term build­ing rates. Ev­ery UK eco­nomic re­cov­ery over the last cen­tury has been linked to a sharp rise in res­i­den­tial con­struc­tion – ex­cept that since 2008, the slow­est, most sub­dued in his­tory. That is not a co­in­ci­dence.

Ad­dress­ing one of the main con­cerns be­hind the Brexit vote, May must ex­plain how Bri­tain will re­turn to man­aged im­mi­gra­tion. The new sys­tem should be busi­ness friendly and hu­mane, pro­vid­ing ad­e­quate skilled and un­skilled labour. But it must also demon­strate the elected UK Gov­ern­ment is now in charge.

As we leave the EU, Bri­tain needs a do­mes­tic eco­nomic pol­icy based on high growth and in­vest­ment, un­der­pinned by low and sim­ple tax­a­tion. Help­ing us see be­yond the tor­tured pol­i­tics of the Brexit process, May must ar­tic­u­late the up­sides once we’re out – in­clud­ing cheaper food, lower tar­iffs on goods from the 85pc of the global econ­omy be­yond the bloc, and more trade with world’s fastest­grow­ing economies.

The ap­petite for na­tion­al­i­sa­tion, and less cap­i­tal­ism, is grow­ing, with Cor­byn claim­ing to “rep­re­sent the new com­mon sense of our time”. Ten years only from the fi­nan­cial col­lapse, amid cor­po­rate scan­dals and po­lar­is­ing wealth in­equal­ity, UK cap­i­tal­ism clearly does face a cri­sis of con­fi­dence.

Min­is­ters aren’t dis­play­ing the grit needed to face down vested in­ter­ests, rein in ex­cess and en­sure pun­ters do not al­ways feel ripped off. The an­swer to bad cap­i­tal­ism isn’t less cap­i­tal­ism, but good cap­i­tal­ism. The To­ries must make that dis­tinc­tion – and fast.

‘May must, above all, present a cred­i­ble and com­pelling vi­sion of a post-brexit econ­omy’


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