I spent the last week travelling down to Lisbon from Bilbao and then back up through France. I did this on my BMW K1300s. I had to speak at a Conference nr Lisbon and I thought why not take the bike rather than fly.
Firstly, can someone explain that why it is that in Spain, Portugal and France, diesel is significantly cheaper than 95 petrol whilst in the UK the differential is the other way. There must be an element of profiteering gong on in this country.
Secondly, the sheer scale of road building that has recently gone on in Spain,Portugal and France and indeed continues to go on is staggering. Coming up from Dax, there was 40 miles of continuous work going on. In Spain, major new highways continue to be built. This shows that there is an understanding of the benefit of public works and that there are politicians who are able to get things done.
Thirdly, in Lisbon where I had to have a new rear tyre fixed at the main BMW dealership – it wa heaving with servicing and new sales in the car side of the dealership. However, interestingly they refused to take payment in any other form but cash. This shows German faith in the short term future of the Euro!
Whilst waiting, I visited the waterfront in glorious sunshine. New developments with many new apartments for sale and half the cafes that had only recently opened, now closed and boarded up
In all the trip I had not the slightest problem getting a hotel room, although half the price in Iberia than they were in France.
Finally, if you want some really spectacular motorcycling, head for the mountains in the middle of Portugal
It is clear that there is a momentum behind the growing anti-diesel lobby.
My message – be very careful, for there is too much loose talk.
As cities pile in to promote substantial levies – London is proposing that owners of cars that are less than 2 years old will pay up to £24 a day to enter central London from April 2019, has thought been given to the potential impact on business and trade at a time when the High St has never been under such threat? Could this not further promote out o town developments?
What about the impact on prices of a substant increase in local taxes?
In 2016 – 2.69m cars were registered in the UK, 48% of them Diesel.
What would be the impact on the UK economy of a collapse in residual prices when individuals and companies try to sell these vehicles? Enormous. We already have high levels of debt and this would exacerbate an already worrying trend.
What of the impact on jobs at vehicle makers and their suppliers? You cannot just switch overnight to petrol or hybrids.
No one is saying that we should not seek to improve air quality but we need to have thought on the huge potential damage to the economy.
The idea that the Bank of England may be considering a cut in interest rates (Sunday Times 31/1/16) is simply staggering.
Since the Financial crisis in 2008, the UK has ploughed £375bn into Quantitative Easing.
We have had 7 years of record low interest rates, sticking at 0.5%.
Over the same period the UK Government has had £878bn of net public borrowing.
After all of this stimulus , we are now in a position where the CBI is reporting that growth is weakening and indeed GDP growth for 2015 was 2.2%, down from 2.9% in 2014.
The response that we seem to be considering is a further cut in interest rates.
What if that does not work? Where next for the UK, which appears incapable of developing enough momentum to become self-sustaining? We are simply running out of policy options.
Importantly, with zero or negative rates savers will pile into assets, not least housing where there is clearly a bubble emerging in parts of the country. GDP running at 2.2% but house prices in London showing a 12 month increase of 12% and the South East at 10%.
This is very scary economics. We should have raised rates 2 years ago and that would have given us leeway to cut now. We are entering unchartered territory where the outcome is far from certain.
The news that there will be no further elections for a Police and Crime Commissioner in the West Midlands raises an interesting question. The role is to be subsumed into the office of a elected Mayor.
I have always questioned the legitimacy of the PCC when he was elected on a 10% turnout and only received half the votes. Only 5 of every 100 eligible voters voting for such an important post is hardly active democracy.
Now we have the Mayor coming along. What is the threshold that should be accepted to give this post real legitimacy? Huge store is being set on the powers this post will have, yet it is clear that these Combined Authorities are failing to grasp the public imagination.
Those involved need to start talking to the public and not just to themselves.
The Office for National Statistics has today published the following:
- “The UK population is projected to increase by 9.7 million over the next 25 years from an estimated 64.6 million in mid-2014 to 74.3 million in mid-2039.
- The UK population is projected to reach 70 million by mid-2027.
- Assumed net migration accounts for 51 per cent of the projected increase over the next 25 years, with natural increase (more births than deaths) accounting for the remaining 49 per cent of growth.
- Over the ten year period to mid-2024, the UK population is projected to increase by 4.4 million to 69.0 million. This is 249 thousand higher than the previous (2012-based) projection for that year.”
So, taking the last point, the population of the UK will grow on average by 440,000 pa over the coming 10 years. To put that in perspective that equates to a city the size of Bristol (think about it) being created every year.
To also illustrate the growth – in the decade between 1991 – 2001, population growth was at a level of 144k pa – so we are growing at a level 3 times that rate we saw at the start of the new millennium.
The implications of this growth are huge – Yes there will be a contribution to GDP from an increased working population but the demand that will be put on public services, not least Health and Education will be immense.
Then there is transport. This growing population will need to be fed, watered and clothed and they will want to travel. So the current plans for the transport network are nowhere near expansionary enough, although it clearly highlights the need for HS2. The Midlands, lying in the centre of the UK, will bear the brunt of increased traffic movements as people and goods move from North-South-North.
There will be ever greater pressure on housing. As we are completely unable to build anything like the houses needed for the population of today, how do we cope with ever increasing demand?
Where is the big national debate on how we as a country manage the outcomes of this growth? Don’t hold your breath.
The US consultancy BCG reports the massive boost to US manufacturing that has been provided by fracking. US industrial electricity prices are now up to 50% lower than other major exporters. The result, US manufacturing costs are only 5% higher than China. The US has a 15 year lead on other nations on fracking which will see this edge grow.
We worry about poor manufacturing performance and weak exports. Looking at the Lancashire decision last week, I don’t really think we as a nation care that much about our global economic performance.
As we approach the end of the year, I thought I would reflect on the achievements and challenges facing the LEP.
It has been 8 months since I was appointed and I believe much has been achieved, built on the firm foundations laid down by my predecessor. The Growth Deal, implementation of the City Deal, an AGM, effective working relations with a host of Partners – particularly the Local Authorities, and the recent signing off of new Governance arrangements, position the LEP well for the future.
With the Growth Deal, City Deal and European Funding, £250m of public money will be coming into our LEP over the coming years, which will itself lever in very substantial amounts of private sector investment.
I have spent time in London promoting amongst politicians, the civil servants, and indeed any one that will listen, the benefits of doing business in the area and the good work that is carried out under the brand of the LEP.
I have been struck by the desire by Partners to work for the common good, and by the commitment of the core staff working for the LEP.
Of course, we have been helped by the growing strength of the economy and the confidence that business shows in investing not only in our patch, but in the UK as a whole. No better has this been exemplified than with the opening of the JLR engine plant at i54.
So what of 2015? We know that a General election will be held in May – a result that is certainly difficult to call. No matter who is in power, we also know that very difficult decisions will have to be taken regarding public expenditure and it will be a responsibility for us all to ensure that the maximum value is squeezed out of every pound of taxpayers money.
It is also clear that the Scottish referendum let the genie out of the bottle in respect of devolution.
We need to ensure that the LEP focuses on delivery of the City and Growth Deals and is not sidetracked by discussions on potential new structures. Delivery will dominate the agenda for the LEP. We bid for projects through the Growth Deal, we gave assurances to Government that we were capable of delivering these on time and on budget. We now have to get on with doing exactly that.
The most concerning aspect of my time has been the endless complaints by business on the difficulties in finding skilled labour and the poor employability skills of many of those seeking work.
These issues have been flagged up for decades and despite the billions of taxpayers money that we have spent, we appear to have made little progress. Where did the money go?
So this to me is the main challenge for 2015. We have an Education Trust, it has been given a central role in the LEP. It now has to be given the teeth to function. To do this we have to be able to determine precisely what skills business needs now and in the future. On the back of this we have to align Further Education and the key training providers to meet these needs and we have to incentivise local people to take the jobs on offer. Importantly, we have to get into schools and build extensive links with business.
Employment is intertwined with Immigration which will continue to be central to political debate. The LEP has a responsibility to ensure that the benefits to business are expressed. Visits to farms across the County have highlighted the vital contribution that Eastern Europeans make to our local economy.
The work of the LEP will be set against a global economy that is some turmoil – would any of us at the start of the year predicted the collapse of oil prices and the current meltdown of the Russian Economy?
What my time at the LEP has taught me is that we are well placed to face any coming storms. We have a diversified economy anchored by JLR in the south and JCB in the north. We have a resurgent ceramics sector, and a host of engineering companies exporting to countries across the globe. We have two excellent Universities. Our location at the heart of the country with good communications means we are attractive to professional services and distribution. National tourist attractions including Alton Towers and Drayton Manor put us in the public eye. We have a truly balanced economy.
So in 2015, we will raise the profile of the LEP and concentrate on delivering the the key investments which will benefit the businesses and people of Stoke and Staffordshire, and we will continue to shout about what a great area this is to do business.
We are all about creating more jobs, better jobs and higher paid jobs for local people
Can I wish you all a Happy Christmas and prosperous New Year.
David Frost
Chairman – Stoke on Trent and Staffordshire Enterprise Partnership
The historic announcement on Monday, seeing substantial powers being decentralised to Greater Manchester, has had the required impact in the West Midlands, with an announcement 4 days later that Birmingham and the Black Country were seeking to form a Combined Authority. Despite the years of discussion, still no Solihull or Coventry.
As regards a name, and still despite the years of discussion, no agreement.
If the intent is to promote the area to the outside world here is a sobering story. A decade ago I had to give a lecture to a substantial business audience in the mid-west of the United States. These were big hitters but none had heard of the Black Country and at a maximum, 30% had heard of Birmingham with no one having a real idea where it was. So if this is the track that politicians want to go down then get over the local politics and go for Greater Birmingham.
What is also required is for someone to get in front of the cameras and explain what the bright sunny uplands are going to look like for the people and businesses of the area. Not one person, either a politician or business leader, has been able to articulate this other than to say it will “give us more power”. Do you think that will appeal? As a resident I would say that local authorities haven’t exactly exercised their current powers particularly well – Children’s Services/ Trojan Horse/ Educational Performance to name but a few.
We also need to ensure that this is not seen as a land grab. The letter to Osborne made reference to discussions with ” a number off neighbouring district councils”. Here I must declare an interest as Chairman of an adjacent LEP. Clearly the Metropolitan West Midlands sees chunks of Staffordshire, Warwickshire and Worcestershire being sucked into it. We shall have to see what these Districts want to do and no doubt all sorts of economic reasons will be put forward by the metro, but ultimately the residents will need a say if they want the ties breaking with the historic Counties they are attached to.
I am also increasingly uncertain of the mantra that Cities drive economic growth. I can look at Birmingham and the Black Country and I can see the concentration of business but also the concentration of huge socio economic problems in terms of health/education/ unemployment and I can contrast those with the Shire counties which not only have hugely successful businesses but less of the deep seated problems. We must look at new economic geographies – The M6 corridor for example.
There also needs to be some openness with the public. As I have said before, the working population has no spare cash. A new Combined Authority cannot be seen as a mechanism to levy extra taxes on the electorate. Indeed what this new Authority should result in is a significant reduction in back office costs – single Chief Executives and single Directorates for Education and other services. it should equally be about cutting costs as about attracting more public money into the region.
So overall, it is a start. Some way behind Manchester with no agreement on the need for an elected Mayor ( A must surely ), a name, or the geography. The task now is to a paint a vision of what the future is going to look like.
A practical example of the benefits.
Caught the train from Euston to Birmingham International. Arrived Coventry at 6.15pm where a group of middle aged drunks jump on – effing and blinding. Police support followed them onto train but did nothing.
Got off at International to total gridlock. No one able to get off car park, so abandoned it and hopped on train to New st.
Absolutely no local radio announcements on reason for problems and no sign at all of police taking control of the chaos.
When I got to New St, most trains out of this abonimation of a station delayed and looking outside it is difficult to see if any progress has been made over many months with the tramway.
So a very simple issue where a whole range of agencies were involved, but no one in control, and importantly no one who can be held to accountable.
Imagine a powerful City Mayor who could grab hold of this. Having control of Rail; Roads; Police and communication and be accountable for delivery. Would performance not be driven up?
I think it would.
The media briefing over the weekend focused heavily on the proposed HS3 corridor, connecting Cities across the M62 to further the ambition of creating a Northern powerhouse. There was little on HS2, other than the decision by Higgins to put a station at Crewe.
Indeed that is how the announcement yesterday panned out at the launch of his report, held in Leeds.
More interesting was the Governments formal response delivered yesterday to Parliament:
“The government, working with Transport for the North, will now produce a comprehensive transport strategy for the region. This will include options, costs and a delivery timetable for a HS3 east west rail connection. An interim report will be produced next March” – A clear timetable, not surprisingly with a report delivered just in advance of the Election to a Northern audience.
When it came to the response to HS2 – the timetable is different:
“The Report from Sir David Higgins also gives strong backing to the case for Phase Two of HS2 and sets out proposals to maximise its benefits. His proposals include bringing forward plans for a hub station at Crewe to 2027 and a fundamental review of the right solution for Leeds station to allow connections between HS2, existing rail services and improved east west connections. The government will set out its detailed plans for Phase Two in 2015”. – So unlikely before the election, or it would surely have been specified, and this is for a line where a huge amount of detailed planning has already taken place.
Now if the election does result in a significantly changed makeup of MPs in the House of Commons, what guarantee of support to take a HS2 Bill through Parliament?
So could an outcome be an HS2 line going to Birmingham. An HS3 across the M62 corridor and no high speed line connecting them?
What this also highlights is how the North is getting it’s act together – A group of the key Northern cities working closely together to develop a strong brand, vision with clear outcomes.
Compare and contrast with the West Midlands.
Are we not in danger of becoming the “squeezed middle”, sitting between the ever surging global economy of London and an emerging Northern Powerhouse.
Who is providing the Visionary leadership in the West Midlands and where are the big ideas? If we were asked what are the 3 big projects we want to see in the Region, could we provide an answer?
David Frost 