Judy Terry is a marketing professional and a former local councillor in Suffolk.
Labour threatens to bludgeon taxpayers with billions of pounds in extra taxes to pay for an endless range of uncosted promises. Just re-nationalising Energy and Water is estimated at £185 billion, and abolishing student loans a mere £11 billion a year; new announcements to ‘take back Private Finance Initiative (PFI) projects’, and revive the Regional Development Agencies (RDA), are further evidence of why their ambitions are nothing more than rhetoric. We hope.
The Blair/Brown government escalated the PFI programme for new hospitals and schools, without standardising contractual terms for best value. Hence, shadow ministers admitted that contracts would have to be individually examined (taking time and, inevitably, requiring consultants). The likely outcome being that PFIs cannot be ‘taken back’ without significant compensation being paid to the providers; some contracts have already been re-negotiated and a few paid off early. Others are so valuable they were sold on by the original contractor.
So, the bill would run into yet more billions of pounds – money which would have to be added to hard working people’s tax bills, and/or borrowed, but would anyone lend when the debt would bring no new benefits? There has to be a viable return on borrowings for loans to be repaid.
There is, however, a hint that assets would simply be seized, or compensation would be in the form of government bonds, for which yields have already collapsed in the wake of Brexit, contributing to the 30 per cent growth in the bill for public sector pensions – now at a record £1.8 trillion.
Last year, The National Audit Office reported:
“There is a limit to the level of pensions the government can finance annually as a proportion of GDP without having to reduce spending in other areas, or increase income through higher taxes or further borrowing.”
Gordon Brown’s £70 billion raid on private pensions mean that it’s not just public sector pensions at risk. BT and other companies are being forced to review final salary pension schemes, potentially capping benefits, to reduce future, unaffordable, liabilities for employees lucky enough to be still part of such schemes, most of which closed to new staff after 2001.
Surprisingly, the shadow chancellor seems to recognise the potential impact on the British economy resulting from his largesse, planning for a ‘rush on the pound’, and businesses facing punitive tax rises heading for the exit instead of investing to grow and create jobs.
These financially illiterate policies remind me of The Sun’s headline on election day in 1992, when everyone expected Kinnock to win:
“Let the last person to leave the country, turn the lights off”.
And the Regional Development Agencies?
Introduced by Labour in the nineties, they were huge bureaucratic talking shops, occupying expensive premises and employing large numbers of highly paid staff; in the Eastern region, the Chief Executive’s salary was more than £300,000 a year (plus benefits). Dictating policy to local authorities, instead of listening to local need, little was achieved beyond inter-authority squabbling over priorities, and endless consultants’ reports.
More effective, and accountable, Local Enterprise Partnerships (LEPs) replaced RDAs in 2011, with the New Anglia LEP amongst the most effective and focused. In contrast with the RDA, management costs are tightly controlled, and accommodation modest.
A true partnership between business, local authorities and education, covering Norfolk and Suffolk, it is non-political, with Leaders of both Labour and Conservative councils on the board. Led by business, it secured £117.5m government funding for a range of grants and loans targeting small business, ‘growing places’ and an agricultural technical growth initiative.
From my own experience, when I occasionally sat on the Board, relatively small sums can make a huge difference, enabling equipment to be purchased, or land released for development. Decisions are made within a few months, or even weeks, following applications being lodged and evaluated by helpful, knowledgeable, advisers; it is this speed which makes things happen, but every project is carefully scrutinised by the Board.
As the second Chairman, Mark Pendlington, retires at the end of his three and a half year term, it is time to celebrate NALEP’s success during that period:
- Creating 43,500 new jobs
- Supporting 5,700 new business, and
- Enabling the development of 18,850 new homes, and
- Unlocking a grand total of £267.2m of private investment.
It also secured £1.4 billion for the new Great Eastern mainline franchise, and channelled investment into the Norwich Aviation Academy, Easton & Otley College Construction Centre and the East Coast College Energy Skills Centre, as well as supporting various apprenticeship programmes. Another innovation is regular free business support roadshows, enabling existing and new businesses to seek advice on funding, share ideas and receive guidance from a range of experts.
As Mr. Pendlington says:
“NALEP provides the best opportunities for investment because we are local and connected to the business community, which is really reaping rewards for the region’s economy.
“The next stage is to give our region a stronger voice to attract investment from across the world. We have 60,000 small businesses, as well as some of the most advanced science and agricultural research centres, which are ambitious to grow and employ talented people.”
As he hands over the reins to new Chairman, Doug Field, joint Chief Executive of the East of England Co-op, Mr. Pendlington suggests three priorities:
- Encourage and support social enterprises;
- Connecting the region via improved transport and communications infrastructure; and
- Developing an enhanced reputation as a digital hub.
Local authorities across the two counties could never have achieved such results alone; economic development on this scale requires a level of communication, commitment and focus which few councils can offer because they lack the skills. Essentially, it demands an understanding of business and how it works, as well as a willingness and confidence to share a broad vision to benefit the wider community, regardless of political affiliations.
The Eastern Region was neglected by successive governments for decades; because it appeared ‘affluent’, without visible disadvantage. How wrong those governments were! The New Anglia LEP has been a revolution, directing investment where needed; it is proof that, by listening to local council and business leaders, regions can be much better at determining their own future with visionary strategies. LEPs have a unique insight which London-centric politicians too often ignore at their peril.
If Labour plans to unravel the LEP infrastructure, it will be making a big mistake; these organisations are a great innovation and mustn’t be undermined out of spite. They are proof that a strong economy – both national and local – breeds success.