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I think it’s safe to say even after a weekend that there is still a state of disbelief about what happened last Thursday evening and Friday morning. As we watched the drama unfold at the Chamber’s Election Allnighter at times it felt like we were watching some sort of political episode of the Twilight Zone.
Well, yes it was real and despite all the opinion polls, predictions and forecasts we now have a Conservative majority government. I have to admit it took us by surprise. For weeks we’ve been looking at the “what next” question for our Campaign for Business as we planned for a few weeks of coalition negotiations and a possible second election before getting back to business and establishing new positions on key business themes. So much for that! No doubt the post mortem will continue for a while to come and by Summer we’ll be a bit jaded with party leadership contests but to be honest my focus is now on the here and now and what our immediate activity is. Congratulatory letters to all our MPs are on their way, we are watching closely who gets the ministerial jobs and also the key opposition roles – Shadow Chancellor anyone? We’ve also started to delve into the Conservative manifesto a bit deeper and also scanning for any hints at what may be in the Queens Speech at the end of the month. Whether you love or hate the government it has to be said having clarity on this stuff is making the job easier. We will be assessing and, if necessary, re-positioning our 5 Campaign themes with as much help from our members and other business as possible. Some immediate big issues to be dealt with include the continued roll-out of GM Devolution which should continue with clarity and speed now – especially if the government has to deal with greater pressure from the SNP. We’ll also have the whole EU referendum question to contend with which could actually make or break this government. Airport expansion will be high up the list of urgent issues. If you recall the Davies Review was “kicked into the long grass” a few months ago for post election follow up. Well, the lawnmower’s out now and the grass is being trimmed. There are genuinely interesting and exciting times ahead for business in Greater Manchester and a real chance to set the agenda. Look out for how we will make this happen. The country may well have spoken last week but the voice of business must carry on being heard.
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The last week in the election campaign has felt like half time at the Cup Final.
It's almost as if the parties have thought we'll get all the manifestos out have a bit of a breather then come out fighting for the second half. The tragic events in the Mediterranean and most recently in Nepal have also, unfortunately, added to this feeling as they have, quite rightly, knocked the election off the top news slots. I'm pretty sure though that with less than a fortnight to go to the election "normal" service will be resumed. This last week at the Chamber we swung our focus firmly onto the GM devolution issue and held the first of our events with Sir Richard Leese. A full summary can be found here and more can be found in May's 53 Degrees magazine. It was a great event and we had some excellent feedback from attendees both on the content but also the style whereby we gave Sir Richard and the businesses that were there enough time to get stuck in to what is developing into not just a local or regional issue but one that will be at the centre of the next government's agenda. As Sir Richard put it - government needs devolution to succeed. The big question at present is what will that government look like? To help answer that we have now released our overview of the various manifestos and what the parties have said about their plans for business. You can access this on our new Election 2015 page. There's some good stuff in there but how much survives post election is anyone's guess which is why we will be working in the immediate aftermath to keep track of what is happening and what the impact will be. I can guarantee that whoever is in Number 10 we will continue to make sure that your views continue to be represented and we will work with government to get the best deal for business. If the current poll forecasts and predictions turn out to be accurate that may take some time though. Maybe we about to go to extra time and penalties? I've taken a few days leave this week and thought I'd shun the normal holiday reads and take the chance to have a more detailed look at the various manifestos from the main parties. A bit sad, I know.
After wading through over 300 pages of promises, pledges, graphs, photos of smiling happy people and politicians on building sites I think I need another holiday! Over the next few weeks we'll be publishing our overview of how these relate to what the contents of our Campaign for Business 2015 are. On first read through there are a huge number of similarities to what the politicians are promising to what you told us should be in the Campaign document. There are differences obviously between the parties and still a lot of built in wriggle-room for after the election. For example I'm still none the wiser whether Labour intend to scrap all zero-hours contracts or as their manifesto words it ban "exploitative zero hours contracts". How do you define exploitative or is the assumption they all are? The Conservatives promise a business rates review. I'm always wary about reviews - from early work we have done on this it may just be too complex a subject and maybe Labour have a more direct answer in just cutting them? Manifestos serve a purpose - they set out stances, positions and policies on which an election is fought. However reading these this last week, at the back of my mind all the time was the question of how much would survive any post-election negotiations should they be needed to form another coalition government? It certainly promises to be an interesting month ahead. So, what do you think of it so far? With a distinct lack of cohesion and what appears to be “off the cuff” announcements I’m a little underwhelmed and concerned with what I’ve seen of the election campaigns so far.
From a business perspective I’m more convinced than ever that our political leaders just don’t get it. Last week after the 7 way Leaders “Debate” I tweeted a question around whether business owners felt short changed by what they had just witnessed. For nearly two hours the 7 leaders struggled to answer the 4 questions posed from the audience. The bog standard issues cropped up again and again, many irrelevant to the actual question, with the protagonists seemingly more intent on delivering the best soundbite. Some people have blamed the format – I think the format was right. It was the content that was poor. I think the business community was, once again, completely sidelined and taken for granted. Things don’t seem to have changed much this week either. My job at the Chamber means that I work to and promote a pro-business agenda, irrespective of party politics. That’s finding out from businesses what they need to grow, develop, increase profitability, employ more people and, yes, play a responsible role in the community (including paying taxes that are due). Lets just think about this for a minute. The people who set up and run businesses in this country are the wealth creators and the job makers. Without them and their employees how would money be raised to pay for the NHS, Trident subs and everything else that forms the ammunition in each party’s election campaign armoury? Rightly, when issues around the National Health Service get raised, especially at election time, feelings run high across the political spectrum. Depending on your opinion it’s something that should be protected or modernized or both – but it’s an issue that gets people active and prompts a response. I think it’s time we had the same response when business issues get raised – or more accurately get ignored. The people that own, run and work in business are the UK’s National Wealth Service – put simply they fund government. We shouldn’t forget that and neither should the politicians. Our collective task is to make sure they don’t. If you want to get involved and have your say as part of the Chamber’s election activity post a comment below or visit the Election 2015 page to find out more information. As the first week of campaigning comes to an end and the media builds itself into a frenzy about the 7 way Leader’s Debate, now’s probably as good a time as any to give the first of what will become a regular update and overview of election activity from a business perspective.
So far the most overused word has to be “better”. We’ve had Labour’s “A Better Plan for Business”; “A Better Plan for Britains prosperity” and “ A Better Plan. A Better Future”. The Conservatives have weighed in with “On the road for a better future” and “A Better Future for Your family and Britain” plastered on their election bus. So irrespective of who wins it seems that things can only get better….wait a minute haven’t we heard that somewhere before? Policy wise Labour released their business manifesto and also walked into a firestorm with their full page FT advert around business views on the EU. As regards the manifesto a lot of it certainly made the right noises and nodded in the direction of much of our Campaign for Business. Though light on details the direction of devolution looks set to continue under a Labour government. Proposals around cutting business rates are certainly welcome and backing up the work that we have been doing the last 2 years they have called for employers to have more control over apprenticeship funding. Interestingly what it doesn’t mention is any policy relating to Zero Hour Contracts. Obviously these changes wouldn’t impact on business. Of course how much may survive any future coalition deals remains to be seen but it seems a good start irrespective of the media nonsense about which business leaders can write a better letter (there’s that word again). The Conservatives hit back (sort of) with the now infamous 100 signature letter that many people now take as the gospel according to the business community. We know better of course and have a much more realistic overview of what a large city region business community expect form government. Whilst some relevant points were made I do hope that the Conservative business manifesto is made of something a bit more substantial. As I write this there’s another 35 days to go. I’m busy planning the Chamber’s activity around this and also the devolution issue which to me at least probably has more resonance than anything so far at a national level. Keep watching for news about some important events happening soon and how you can get involved with developing a genuine plan for better business. More next week.  On Thursday 8th January over 200 Chamber members gathered at the old Granada Studio building in Manchester for what was a unique opportunity to hear direct from the Prime Minister and the Chancellor about the government’s plans for future economic growth in the North West.
For keen followers of policy none of the announcements were new and much of the narrative centred around the Northern Powerhouse proposals however what was different was the fact that they have now been packaged under the banner of “The Long Term Economic Plan for the North West” with 6 pledges. The first was around creating 100,000 new North West jobs in the next parliament; the second was to deliver the largest transport investment ever in the North West – approximately £4.5 bn; next a statement to make the North West a global science centre; forth was to raise the quality of life in the region; fifth was to deliver on giving more power to the region’s cities and finally to raise the standard of living throughout the region so that residents earn more money. The Prime Minister outlined the pledge and then the Chancellor delivered the detail. All excellent stuff and nothing you could not disagree with. The caveats , as ever, are how this will be delivered, over what timescale and from our members perspective what is their role in making this happen? Some of these issues came out in the Q&A session that followed with particular focus on SME involvement with this – something that the Chamber’s skills service has tackled well the last 2 years with 900 new apprentices in work. When questioned on the region’s engineering and manufacturing business and what role this can still play the interesting answer outlined that when the government says rebalancing the economy – it isn’t just geographic ie London Vs everywhere else but the sectoral differences also need tackling. Something pleasing to her but which has proven a huge stumbling block in the past. The event ended after an hour and for the few members that hung on till the end both the PM and Chancellor came back into the room to do some personal meets (and quite a few selfies!). So all in all a great chance for a large number of Chamber members to get to listen meet and in some cases quiz the two most senior politicians in the UK. Obviously the starting gun has been fired ahead of May and we will keep tabs on all the major issues through our Campaign for Business and this no doubt will be the first of many similar events over the coming few months. So here we are, 2015 at last and just 4 months to the General Election.
We are about equidistant from the launch of our Campaign for Business as to Election day itself and things, I think it’s safe to say, are about to get really interesting and possibly a little fractious. Looking back to our initial campaign themes and set against some dramatic policy announcements at the end of 2014, it would be easy to say that there’s been some positive steps taken already. Take the whole Northern Powerhouse/Devolution issue. Whilst no-one would argue against getting more local powers and control away from Whitehall – a core “ask” from business that sits at the heart of our Campaign – there are untold issues still to be decided on and agreed, especially as to what role business have in this process. It could be argued that without real local taxation – including locally controlled business rates – any form of decentralized decision making is and always will be unfulfilled potential. That would be a criminal waste and a huge chance gone begging. There are plenty other similar issues. So as we enter the run-in to May its important that we step up and work doubly hard in making sure that what is already on the table gets delivered effectively as well as making sure that whichever party, or more likely parties, form the next government they understand and react to what businesses have made clear they want. Over the next few months we will continue to focus on our campaign themes at a national level as well as keep a watching eye on local issues that will impact on us here in Greater Manchester irrespective of who is sat in Number 10. We will increase our contact with you around specific campaigns – skills later this month, trade next month and more on devolution in March. Starting this month we’ll be digging deep into what a mayor will mean for Greater Manchester, how it will work as well as what role the business community will and should have in deciding the city region’s future. And as we get nearer to May we’ll be increasing our contact with political leaders allowing you direct access to the people that may make a difference to you come May and beyond. Stick with us as we make the points that need making, say the things that need saying and ensuring your interests and views are represented and taken care of. But most of all get involved - we cant do any of the above without you. The Chancellor of the Exchequer today announced an autumn statement that contained a number of positive measures for business and the wider economy in Greater Manchester and beyond, with some bold gestures but in some areas we believe he could have gone further. The macro-economic position reported is, on balance, more positive than at the Budget earlier in the year, though many of the public spending cuts yet to come remain some way away in the next parliament, with some ambitious and difficult to achieve volumes of cuts set for 2017 onwards.
The highlight for many individuals will be the raising of the personal allowance which will benefit higher-rate taxpayers for the first time since 2010 and the large-scale reforms to Stamp Duty Land Tax, removing the slab system which has heavily distorted pricing for many years. Alongside some detailed corporation tax reforms to reduce avoidance and measures to restrict the losses that banks can offset against future taxable profits, the measures around business rates, whilst positive, were disappointing in their scope. We are delighted that the government has committed to a wholesale review of the system to report by 2016, but the Chancellor’s continued insistence that this remains revenue neutral will always restrict what could be achieved without this constraint. Nevertheless, we commit to working closely with government and representing our members’ views vociferously on this important topic. The Chamber has repeatedly called for reform of Air Passenger Duty, particularly with Northern Ireland having responsibility devolved. It is a direct tax on businesses seeking commercial opportunities overseas and whilst the exemption of under-12s (with under-16s coming later) will be welcomed by families, this will have no impact on the costs of flying abroad for business purposes. Additional funding for UKTI to support our new and existing exporters is welcome, though greater ability to direct that spending at a local level will be important, and this was set out in the recent Greater Manchester agreement. The extension of the Funding for Lending scheme for a further year may help some of those businesses that continue to find access to capital funding difficult, and the further increase in the allowances for research and development will be welcome, helping businesses to invest in their own growth. A further freeze in the fuel duty escalator will also help all aspects of business and individuals. The Chamber of Commerce works at the heart of the local skills agenda, supporting businesses to grow their skills and staff through apprenticeships. The abolition of employers’ national insurance contributions on apprentices under the age of 25 will help businesses to mitigate the cost of developing their future workforce and, alongside the announcements in the Greater Manchester agreement to give GM greater control over apprenticeship grants may have a significant effect on the increased usage of apprentices across our region. For those who wish to invest in their own post-graduate qualifications, the establishment of a loans system to support them is also welcome. In the first minute of the Autumn Statement the Chancellor mentioned the Northern Powerhouse and his commitment to strengthening our regions. The establishment of a northern sovereign wealth fund funded by the proceeds of shale gas extraction has the potential to provide significant funds for investment but only if government moves to support the establishment and growth of this industry. It still has many arguments to win over the public and business in this space but, if this fund is to be successful, the Chancellor must do much more to calm concerns over this new form of energy and allow potential companies to begin extraction. Earlier in the week we saw the announcement of the £15bn investment in the strategic road network where the M60 and M62 will see substantial investment, as well as greater access to the new superport at Liverpool. Commuters and business people across the region will be delighted to hear that the next franchises for Northern and TransPennine Express will include provision for modern rolling stock to replace the outdated and unpopular Pacer trains. If the government’s northern powerhouse is ever to be successful, the speed and quality of public transport across the north must be radically improved, so we welcome the announcement of a comprehensive transport strategy for the north, working with Transport for the North, to include options, costs and a delivery timetable for HS3, and its interim report in the next four months. Manchester benefits directly from two other key announcements. The £235m investment in to the Sir Henry Royce Institute of Advanced Materials, to be headquartered in Manchester, builds on the existing success of our universities in this space. An additional £113m will also be invested in an algorithmic and big data research facility in Daresbury. Finally, government has agreed to £78m towards the funding of a new theatre and performance space in Manchester on the site of the old Granada studios, further reinforcing Manchester’s leading position as an arts and cultural hub, not just of financial, creative and manufacturing businesses. Overall, this is a positive statement from the Chancellor, but our future growth prospects will rely on seeing less timidity from government on investment support. We will assess the detail of the autumn statement over the coming days and will, over the coming years, ensure that we hold government to account on behalf of our members on the delivery of its promises announced today. Miranda Barker, Business Development Director at BENCHMARK HOLDINGS PLC, said: “It was good to see the re-statement of investment in key infrastructure projects to create the “northern powerhouse” which the Chancellor unveiled in Manchester in June - with particular investments in science and R&D especially welcome. This kind of positive support for industry is essential to maintain the substantial investment from the business community driving the manufacturing led growth, upon which the Chancellor's economic recovery depends. I also applaud the removal of National Insurance for apprentices under 25s and the removal of Air Passenger Duty for under-12s travelling on economy flights from 1 May next year and for all under-16s the following year.” I recently attended the launch of the Investing in City Regions report at Manchester Town Hall which made the case for long term investment plans for transport in and between the Uk’s cities.
It’s a compelling piece of work and backs up a lot of what members have told us about the need for a shift in mindset when it comes to looking at getting the best return from transport investment. To prove conclusively that something which doesn’t exist yet will yield X amount of investment is always a tough act to pull off. Sometimes the best evidence is what is right in front of our noses. During the ensuing discussion the point was made several times about the need to act quickly to make up for years of neglect and the potential impact this would have. In a way it’s having to go backwards to go forwards or, perhaps more accurately, just to catch up. Anyone that regularly watches the Michael Portillo series Great British Railway Journeys will know that the inspiration behind it was a series of guides written in the 19th century by George Bradshaw. If you’ve never seen the programme it’s a great piece of armchair travelling as Portillo follows various rail routes across the UK and Europe and follows up on the description of places and the journey made by Bradshaw over 100 years ago. I wonder though if anyone attempted a similar feat these days especially at a weekend how long they would spend on rail replacement buses whilst the significant and necessary overhaul of huge sections of track, signals and stations takes place. I’m not so sure that the BBC would have commissioned Great British Rail Replacement Bus Journeys as eagerly. It’s also the same on the roads. Overnight there seems to have been a surge in public works on a number of major roads in and around Manchester. With much of the city centre under the shovel ahead of the second city crossing for Metrolink and preparatory work for the Ordsall Chord; huge swathes of the M60 and M62 being upgraded to smart motorway status and a host of other works in progress. Should we complain though? I’m not so sure. For years the level of grumbling about shoddy railways, roads and poor connectivity has been deafening. Unfortunately due to the decades of under-investment we have managed to get ourselves in such a position that any attempt to make good the shortfall can only result in huge disruption. So, unfortunately, there are a few years of this yet to come as the job is still not finished and in some cases it hasn’t even started. What is clear though is that there must be priority work identified - those schemes that will have most benefit for the economy and these must be delivered quicker. I think everyone agrees that better transport connectivity and integration works and brings with it huge economic and social benefits. What isn’t so agreeable is the hit we are now taking with the current levels of disruption. With extra journey times, disruption to services and increasing levels of frustration we really are paying the price of progress. We must and can not afford ever to get left so far behind again. Over the last few weeks there have been a number of significant announcements made that, on the face of it, answers a number of key issues raised in our Campaign for Business.
Our members called for the government to continue support for HS2 and look at integration with new East-West transport links in the North of England (HS3). Check – the Higgins report of 27th October sorted this. Our members called for greater devolved powers from Whitehall – the favoured model being an elected mayor over an enhanced Combined Authority. Check – the announcement on 3rd November was a real game changer and in reality the proposal looks a little like a hybrid of the two. Our members wanted more road investment – often the poor relation of infrastructure investment. Check - the announcement this week of £15bn in the Autumn Statement is definitely a step in the right direction though like all similar “coming soon” trailers we await further details. With recent concerns being raised about the robustness of UK power supplies and the implied threat of outages this Winter this issue has risen in prominence in politicians minds. Members have again been vocal in expressing their concerns over the parlous state of the UK’s energy infrastructure and have made calls for longer term planning to be put in place. Again this chimes with recent thinking and announcements. So the big ticket stuff is certainly being looked at and responded to. In fact at this rate we should have the entire Campaign sorted by Christmas. If only. Let’s just take the announcement around the elected mayor. At first glance this is not only a big deal for Greater Manchester but is a huge step in the right direction in answering a number of our campaign calls. Just stop and think for a minute though about what hasn’t been said in connection with the announcement. What happens with the interim mayor – ie the person who will be holding the reins until 2017 when the first mayoral election takes place? What powers will they have and how can we make sure businesses have their say on the issues that affect them? Whilst the current proposal is definitely a product of this government (with a willing local audience) would a change in government have an impact on these proposals? We know that local taxation is a big issue with members, and the Chancellor has categorically denied that the mayor would be able to control business rates – but is this missing a trick? The list and debate goes on. What is clear is that the headlines sound and indeed look good and promise much but the work has to go on to make sure that what we end up with at the end of the day is what we actually want. The job is far from over and we mustn't fall into the trap of taking our foot off the gas or letting those in power making the announcements think it's job done. It isn't and wont be for some time to come. |
Chris FletcherPolicy & Marketing Director Greater Manchester Chamber of Commerce. Archives
May 2015
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