Richard Holden is MP for North West Durham.
The Grove and Moorside Club, Consett.
What a fortnight it has been! The music was pumping until the small hours, and hordes of people were gathered in sweaty and deafening proximity as the beer, wine, and G&T flowed. That’s how it was down at the Grove Club in Consett, as we celebrated my caseworker Deborah’s 50th birthday on Saturday night.
There, it became clear that the Party Conferences hadn’t really touched the sides beyond the Westminster Bubble. Between 80s covers performed by The Breakfast Club on the stage, I asked my team if they could remember anything of what Sir Keir ‘Special K’ Starmer said.
One had a vague recollection of someone interrupting him, but that was about it. Chatting to others in this working men’s club, for Starmer, that’s as good as it gets. One bloke at the bar mentioned Boris Johnson to me, saying that “it was good to see him firing on all cylinders”, and when I spoke to my team they remembered his bounce and optimism.
But overall, unprompted, it’s clear that, for most people, the conference season passed them by like the proverbial tree falling in the wood.
If you’ve read the papers or listened to broadcast news during the last few weeks, you’ll be convinced that everyone is talking about fuel. But I have barely received an email about it, despite acres of newsprint about apparent “chaos at the pumps.”
There has hardly been any issue at all the filling stations of North West Durham. “We were busier than normal”, said one owner when I spoke to him before travelling to conference “but it eased off when people realised there was no issue with supply.” If any area should have seen issues – due to the necessity of cars as transport – it should have been North West Durham, but it didn’t
While the daily merry-go-round of Westminster keeps churning and tossing up flotsam and jetson for the front pages, local people clearly want to see some ‘levelling up (when pressed in conversation on the High Street).
On the ground, our new community hospital to replace Shotley Bridge is coming along. And there are bids in terms of transport, too. But, as the Prime Minister highlighted, a high wage, high skill, high productivity economy is the crucial target. That’s only going to happen if we involve private capital, and enable our businesses to play as full a role as possible too.
There is a substantial move that could inject a hundred billion pounds or more into long-term infrastructure, industrial and social housing projects across the country, which is to move beyond the ‘Solvency 2’ regulations – a hang-over from our EU membership and, as ever, gold plated by the UK regulator the Prudential Regulatory Authority.
The rules are simply over-prescriptive for the UK insurance and pensions sector. Essentially, they make it incredibly difficult for our pensions and insurance firms to invest in long-term, secure, fixed assets in the UK (such as social housing) and much simpler for them to invest in blue-chip international financial stocks (like the S&P 500).
One pension provider with hundreds of billions of pounds under management recently told me that they’d taken years to get a £1/2 billion investment in social housing through the regulator and that, if they’d known the effort it would have taken, they’d have simply whacked their policyholder’s cash in blue chip stocks overseas.
Our large pensions and insurance firms are chomping at the bit to look at next generation of manufacturing as investment – think of Teesside and the Freeport – but current requirements make actual investment in our country in long-term, stable assets much more difficult than investing in international stocks and shares. The very investments from the private sector that are essential to deliver levelling up are currently being needlessly held at bay.
During his leadership campaign, the Prime Minister talked of the two wings of the UK economy – a strong dynamic and productive private sector supporting a public sector that delivers better health and education outcomes, and which supports people when they need it. To get that private sector growing we need to see long-term investment and that can only come from three places: taxpayers, foreign firms and UK businesses.
The Government’s role is important and it is already helping. But, given the enormous hit on the public finances due to the global pandemic, the extra investment that it can make is limited when it’s already delivering long-term commitments to investment in public services.
Foreign investment, which the naysayers said would never happen, is taking place in companies like Nissan in Sunderland. But we’re yet to really unleash ourselves from the old EU regulations that curtail our ability to invest in ourselves.
A sensible reform of “Solvency 2” to allow our big insurance and pensions firms to be more easily able invest in secure, non-financial, UK assets. I want to see the City of London working for the whole country, and putting long-term capital investment into County Durham rather than Wall Street.
But, at present, over-caution has prevented this happening. The rules that allow us to make the necessary changes are in the Government’s hands. After a turbulent two years, it’s time we took sensible steps to free the City to invest in towns and cities across the UK rather than forcing them into established global financial markets. If we do, we’ll strengthen levelling up, and give ourselves a greater chance of delivering not just for the people of North West Durham, but for communities that are crying out for levelling up across the whole of the UK.