Sir John, Lord Redwood is a former MP for Wokingham and a former Secretary of State for Wales.
Manchesterism is a half baked mixture of more borrowing, higher taxes, dear energy and too much extra government. It believes that the state will push faster growth by taxing and controlling a misdirected private sector more. Each of the proposed policies in the likely package have been tried before and found wanting.
The whole idea that creating stronger devolved governments will boost growth has notably failed in Wales and Scotland. Both have had devolved governments all this century, and both have seen their growth rates and GDP slip further behind England’s since 2000. Their Labour and SNP governments have been swift to deploy their cheque books and have talked more money out of the national government. This has not brought about the investment and industrial revival needed to boost GDP and create enough better paid jobs.
Indeed, both regional governments have gone out of the way to be hostile to enterprise and success. In Scotland the SNP took exception to the high wages and good jobs of the oil and gas industry and to the prosperity of Aberdeen. They encouraged ever higher rates of national taxation of oil and gas, and helped impose a ban on all new exploration and development activity to speed an early closure of this important and successful industry.
In Wales, Labour imposed a 20 miles per hour speed limit across the country, hitting all those trying to earn a living from their own car and van based businesses with the fines, delays and traffic congestion it caused. They supported closing down the remaining blast furnaces of the steel industry to promote net zero. They backed policies to end petrol and diesel vehicle making , undermining the attendant component manufacturers which were well represented in Welsh industry. Ford packed up making engines in Bridgend.
The very idea of Manchester’s success was based around the Mayor lending large sums of public money to a few rich developers to put in expensive high rise blocks of flats for sale. The policy did not add to social and affordable housing in the way the Mayor said he wanted. It did require selling units to better off people overseas. I have no problem with entrepreneurs building flats for rich foreigners, but see no need to use public loans and government support to do so. Manchester now has some fine new residential towers.
The Mayor’s policy in the first decade had problems, according to him in a recent speech. “Too many of our towns and High Streets are struggling”. “Growth has been concentrated in certain locations”. “Not enough affordable homes”. “Too many of our residents are struggling with the cost of living crisis”. He should know. Only now has he turned more to commercial and industrial development. He has announced a £1bn Greater Manchester Good Growth Fund with a mix of government grant and more borrowing. We await progress with attracting new industry.
He has been demanding a new rail line from the Midlands to Cheshire and a Northern Elizabeth Line. He noted that the present government is not planning the necessary transport links, unlike the original Osborne proposals. He wanted to be given powers to spend the money from a tourist tax and was looking for other taxes he could control or impose so he could spend more. He fancied a higher Growth and Skills levy under Mayoral control, and a higher levy on land development gains. Will these tax and spending rises now materialise when he takes over in Downing Street?
Nowhere in his recent statements has he recognised what is holding the UK economy back. There is no criticism of the big National Insurance or jobs tax rise hitting vacancies. No attempt to stop the Labour government he supported from pushing through the Farms and Small business IHT increases. Little criticism of the Chancellor for putting business rates up for many High Street businesses, cutting hospitality and shop employment. No strong moves to offset the damage done to young people wanting work by Labour’s Employment Act and other regulations. There is no wish for a rethink to the net zero policies causing a wave of factory and plant closures.
He has been rightly criticised for not knowing the fiscal rules and for his remark about not being controlled by the bond markets. It is true he has now confirmed he will follow the Reeves much relaxed fiscal rules which have already given us considerably higher state borrowing rates than under the last government. This will severely limit his wish to give loads more money to City regions.
So how will he manage when Manchesterism has been all about more state borrowing to do more things in the public sector? Borrowing an extra £1bn in Manchester proved possible. Scaling that up to an equivalent amount for the UK as a whole would take £30bn of extra borrowing. That would rattle the markets, deter private investment and cost us all a fortune in extra interest charges.
The former Mayor’s realistic list of things that needed fixing in Manchester after 10 years of his regional state led spending should give him pause to consider. Maybe Manchesterism wasn’t as good as the hype. Maybe Manchesterism on a national scale is simply unaffordable. A bond crisis and dearer money would not help.
If Mr Burnham really wants to go for growth he will need lower taxes, cheaper energy, a roll back of net zero self harm, and more incentive for people to get a job and set up businesses. His wannabe advisers want more spending, more borrowing, more benefits, more socialism.
That did not work in the 1970s and will not work now.