There was a palpable frustration from the Prime Minister in his Labour conference speech this week. ‘I would love to go quicker’, Andy Burnham told delegates, explaining he was constrained by the reality of our public finances.
But his frustration isn’t just about not being able to splash the cash within the fiscal rules. He feels he needs a fresh mandate before making the more radical changes he’s keen to make.
In some ways we should be thankful; despite the clearly impressive oratory and the totally sound decision to break the ratchet effect of the triple lock, it was a speech with some quite radical socialist principles at its core. Principles that have Britain’s financial ruin at their end. That’s for the election though.
So I found myself frustrated at his frustration. Because there’s plenty of cost-free stuff the Prime Minister could just get on with now without a new mandate if he’s to unlock the long-term growth that will make all our lives better. Here’s three ideas to get him started:
1. Get on with approving Jackdaw and Rosebank
I warned in last week’s newsletter that if Donald Trump decided to go for an export ban on diesel we would be particularly exposed because of how much American diesel we have to import. We’ve destroyed our refining ability, which has had the knock-on effect of reducing our storage capacity. Since then the average price for a litre of diesel has hit £2 and one in three forecourts are now charging more. Now Donald Trump and his Treasury secretary Scott Bessent have said they may ask European countries to draw down from their own supplies as they consider an export ban. Oh dear.
Approving the Jackdaw and Rosebank gas and oil fields wouldn’t do anything to avoid this coming fuel crunch, but they’d show that we’re finally serious about at least trying to fix our energy security problem. It would signal to North Sea businesses that politics is no longer getting in the way. For now, I’m told the Jackdaw approval will come a week after the Holborn and St Pancras by-election. Let’s hope Rosebank gets the go-ahead too.
2. Call in and force through major infrastructure projects such as Heathrow
At Labour conference Burnham said a third runway at Heathrow ‘could be a good idea… I looked at the second runway at Manchester and it has capacity. So I think we do need to have a wider discussion about what is the right airport configuration for the country. In the long run, and where airports have got capacity, should that be used first before we allow further airport expansion?’ Eh?! Why can’t we have both?
If the PM wants to implement his Chancellor’s vision to ‘reindustrialise Britain’ then we need to stop thinking/discussing/consulting and get on with building. He can order his ministers and mayors to call in these projects and get them approved.
3. Fix the bits of leasehold that cost nothing
We all know about the financial problems caused by the leasehold system. HMT’s fear about unsettling pension funds has led to cardiac arrest in the market for new-build flats. But there are bits of the system Burnham could sort out right now at no cost.
There are bits of the system Burnham could sort out right now at no cost
Take broadband. The UK’s full-fibre broadband rollout is a national infrastructure success story, thanks to more than £30 billion of private investment. But there are more than 1.2 million flats in ‘multi-dwelling units’ (MDUs) that are waiting for fibre upgrades because of bureaucracy in the leasehold and renting systems. If a tenant or leaseholder wants the upgrade then Openreach and other network providers need the freeholder’s permission to drill a tiny hole into the building. But often the – increasingly foreign – freeholders are hard to locate or don’t engage. The PM could sort that overnight by granting builders automatic upgrade rights. Energy and water companies have automatic access rights to MDUs and Openreach already has the right to fix existing copper cables. Extend those rights to new fibre connections, and more digital-connectivity wins for the economy are inevitable.
As Lord Jim O’Neill pointed out on the Today programme this morning, our annualised growth rate this year is more than 2 per cent. By the dreadful standards we’ve grown used to over the last few years, that’s pretty good stuff. But British GDP growth has a habit of unwinding in the second half of the year. Implement the suggestions above and maybe this time it won’t.
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