Careful what you wish for: Conservatives, strikes and inflation

As many wags have quipped in the past few weeks, it really does feel like we’ve been transported back to the 1970s. Sputtering economic growth, hot weather (briefly), a war causing oil prices to spike, a government with no real direction and authority – all of this seems very familiar. Inflation has made a comeback too, hitting levels not seen since the very start of the 1980s. And now we have the prospect of serious industrial unrest, another echo of the strife of that decade.

As this week’s disruption to the railways and the tube loomed Conservative Ministers sounded like they were ready for a fight. The Transport Secretary has been touring the studios proclaiming that the rail strike is an act of “self harm” and trying to tap into public anger at the RMT by pointing out the inconvenience and worse that will be faced by millions of commuters. The sabre rattling has included proposals to use agency workers to break the strike. Although Grant Shapps has said that he is not relishing the prospect of strike action the opposite has often appeared to be true.

Because sitting behind all this it all has been a conviction on the part of the Tories that the strikes are bad for Labour. And Keir Starmer and co do seem to have been paralysed for weeks, caught between backing ‘the workers’ or commuters. This has given space for the Conservative Party website to say that these are ‘Labour’s strikes’. But this is dangerous territory for Ministers.

It is true that the RMT is all too often its own worst enemy, seemingly going out of its way to rile passengers. The narrative that this is the worst possible time to go on strike, with rail travel patterns altered permanently by the pandemic, is a real one. The fact that ‘fat cat’ commuters will mainly be able to ride out this week safely tucked up at home while teachers, nurses and others who depend on public transport will be hugely inconvenienced will not play well. But the main argument of the strikers – that we face very high inflation and a cost of living crisis and they need a pay rise to suit the times – will resonate even with the fat cats. Basically, it doesn’t seem unfair.

That argument will only gain strength as teachers and others start to ask for more money and threaten strikes themselves. When inflation was 2 percent and below most voters could probably justify to themselves that public sector workers were getting tiny or non-existent pay increases. But now the evidence of the pain caused by higher bills is all around. Is it reasonable to ask health and education workers to suffer? Isn’t there now real evidence of shortages of teachers, nurses and other staff, caused in large part by uncompetitive pay rates? Isn’t it fair that they want more?

The Government has done what this Government always does: take a purely tactical view that the strikes are good for them politically. They’ve given no thought to the fact that voters might start to think that higher pay is fair enough, and strikes to secure it not unreasonable. Nor have they pondered whether they will be punished electorally if their approach ends up causing real damage to the economy. The first role of governments is to govern competently. Once again, its focus on short-term politics is going to turn round and bite.

Your ivy grows: Is Britain really a laggard when it comes to returning to the office?

Another month, another attempt by the Government to stoke a faux culture war, this time over working from home. Ministers seem to have decided that the average voter will scorn lazy civil servants who refuse to return to the office, and have dispatched Jacob Rees Mogg to try to bully them into coming back. The Prime Minister seems to have convinced himself that the UK’s productivity challenges are the result of loafers dawdling at home and eating pieces of cheese rather than chronic underinvestment in education, skills and physical and digital connectivity. What fun to pick a fight with public sector unions and idlers in the upper middle classes, showing that this Government is truly on the side of Ordinary Hard Working People.

Into this debate marches the Financial Times with a chart showing definitively that the UK is lagging behind the pack when it comes to returning to the office. “The UK’s shift to homeworking has made it an outlier among most other advanced economies” the paper notes on Twitter. Mobility data from Google shows that travelling to work is down by around 23% this month compared to February 2020, whereas in places like Portugal, Greece, the Czech Republic and Slovakia commuting patterns have pretty much returned to normal.

But read the actual article and the picture becomes a bit murkier. It points out that perhaps the fact that the UK has an economy that is strongly skewed towards the services sector has a role to play: in this country 80 percent of people work in services whereas in the Czech Republic nearly 40 percent are employed in manufacturing and agriculture. It’s hard to assemble a car when you’re sitting at your kitchen table, but you can be an architect, a lawyer – or a PR person. And our dire transport system must also affect decision-making: the average person in the UK spends nearly an hour travelling to and from work each day whilst in Portugal and Greece they spent around a third fewer hours commuting. The cost is important too. London is beaten only by Copenhagen and Stockholm for the cost of public transit, whilst Bratislava is less than a quarter of the price.

In other words, it is no surprise that Britain is ‘lagging’ when so many more people have the opportunity to work from home, and doing so is so appealing. And companies like it too, given the opportunity to downsize their expensive offices in the middle of London and other cities. (It’s worth noting in passing that despite Rees Mogg’s crusade Whitehall has been encouraging civil servants to work from home for years.) They also find that their employees are happier and in fact, despite the PM’s caricature, more productive too, as the pandemic has amply demonstrated.

None of this means that the Prime Minister isn’t right when he talks about creativity, energy, learning on the job and a host of other benefits that result from spending at least a bit of time in the office. Productivity gains from working from home are unlikely to be maintained forever if peoples’ skills wither or are never developed in the first place. Workers toiling away alone are unlikely to be as innovative as teams bringing together diverse thinking. And for many people working from home involves being isolated, often in cramped spaces that they want to escape. As so many people have said, hybrid working for those who can do it will be the new normal. And it will be agreed between employers and employees: the Government should stay out of it.

Instead, Ministers who want to solve the UK’s productivity challenges might want to put their energies into supporting people rather than attacking or dividing them. It would, for example, be a lot better use of Jacob Rees Mogg’s time to focus on encouraging the delivery, finally, of superfast broadband and a joined-up and ambitious programme of investment in transport links. He could support training in the skills people will need in the future, and he could urge fellow Ministers to tackle every part of the education system to make sure it is turning out more people with the qualifications and aptitude needed. Or he could just get a computer on his own desk, and see what that does for his own productivity and that of the people around him.

Home is where the heart is: Kirstie Allsopp and levelling up

At some point last week everyone’s favourite property experts sat down with a journalist from the Sunday Times and gave an interview puffing their Love It or List It show on Channel 4. It was meant, seemingly, to be a gentle little chit chat for one of the lifestyle sections of the paper. But Kirstie Allsopp shared a few asides about first time buyers, the paper gave them a ‘newsy’ polish, and voila! she was at the centre of a storm, cast as a wildly out of touch, impossibly privileged, villain.

There is so much to say about this story, not the least of which is to wonder if Kirstie and Phil were given solid PR advice prior to talking to the newspaper. Kirstie claims that her words have been twisted, but someone who has been in the public eye as long as she has must have spotted a few red flags before saying she was “enraged” and referring to “easyJet flights, coffee, gym memberships and Netflix” when talking about getting on the housing ladder. But what’s most interesting to me is that one aspect of the furore illustrates how difficult ‘levelling up’ is going to be.

Perhaps the least objectionable thing Kirstie said was that if people were prepared to move they would find much cheaper and much better houses elsewhere. She might also have mentioned folk not moving in the first place, since a reasonable proportion of those trying to get on the London housing ladder are not originally from the Capital (note: this ‘proportion’ doesn’t have to be huge; imagine the impact on property prices in London if even 5 percent fewer people wanted to live there). And yet this doesn’t happen enough. Why?

There is something that doesn’t add up in the economics of where people in Britain choose to live. In theory, if prices in one place are too high then cheaper housing elsewhere ought to draw people in (or discourage them from leaving). Companies should be attracted to this pool of labour and also to lower property costs for themselves. People would then take those jobs. Levelling up should be pretty automatic, except it isn’t. At least until the pandemic businesses preferred to be in and around London; people followed them; businesses followed the people; so on, almost into infinity.

In theory, then, don’t we crack this by encouraging job creation outside London and the South East? Move a few Channel 4s and Government departments to the North, provide incentives to private businesses to locate in the regions, and that should do the trick, right? People will follow the jobs or better yet won’t leave their regions for employment in the South, and their presence and spending will create other jobs, and everything will be better. But in reality all the evidence suggests that job opportunities and cheaper houses are not enough by themselves to make the difference; look at the fact that unemployment is currently higher in London than anywhere else. What more is needed?

This is the bit of levelling up that Kirstie failed to address. Companies are reluctant in part to move out of the South East due to the productivity gap with, for example, the North, driven largely by structural issues such as smaller labour markets stemming from much worse transport infrastructure. Individuals may be unwilling to depart from, or never migrate to, London for similar reasons – and also because of the concentration of cultural, educational and other amenities in the Capital and the surrounding areas. Simply using economic levers is not going to be enough; until the whole picture is changed who will take Kirstie’s advice and look to buy up north?

To this extent the broad sweep of the recently-published Government’s Levelling Up White Paper is really welcome. Yes, there are heroic assumptions in there about Whitehall actually taking a joined up approach and about future funding streams, and we still need a lot more detail. But there is at least a recognition that to level up the UK will take a lot more than scattering some jobs around the North. By shining a light on these points Kirstie Allsopp’s otherwise tone deaf comments may just have been a tiny bit worthwhile, after all – although only by accident.

Marvellous Time Ruining Everything: Why empowering fringe politicians has been such a mistake

Back in the mists of time when I worked in the House of Commons there were plenty of MPs who were at best on the fringes of their parties. They were widely regarded by their colleagues as idiosyncratic or eccentric; in some cases they had tipped over into monomania. But with no chance of them ever needing to exercise power, of becoming Ministers or Shadows, they were essentially seen as harmless, and often indulged and treated with some affection.

On the Labour side there was an ‘awkward squad’ which included people like Bob Cryer, Alan Simpson, Paul Flynn – and Jeremy Corbyn. They had a fine time doing things like objecting to private legislation (a particular bugbear for someone working in that area, as I was) and refusing to follow the Labour whip. For many of them this rebelliousness reached its peak when Tony Blair was in power: during the 2001-05 Parliament Mr Corbyn defied his party’s whip 148 times. The Conservatives had people like Bill Cash, Tony Marlow and Sir Teddy Taylor, and others who regularly abstained or voted against their party, for example over the Maastricht Treaty. And quite a few of the Liberal Democrat MPs of the time could reasonably be described as eccentric.

Everyone who worked in Parliament had a story to tell about their dealings with these folk, using told with a smile and a roll of the eyes. I once sought out Mr Cash, as he was then, for a discussion about a completely innocuous Statutory Instrument Committee he was due to chair and on which I was the clerk, only to find myself listening to a lengthy monologue about a dastardly – but entirely unrelated – act on the part of the European Union. But again, it didn’t really matter. I listened politely and the Committee itself went off without a hitch.

All of these people were a long way from power, so whether or not they were competent didn’t really matter. But then came 2015, and the strange combination of events that led to Jeremy Corbyn becoming leader of the Labour Party. Affection, or maybe the sense that he was a harmless outsider, was part of the reason he ended up in the top job: more than one of those who nominated him had no intention of supporting him. But as he got closer and closer to wielding real power many ended up regretting their decision. Bringing someone in from the fringes with no track record of competent delivery began to look like a big mistake.

Once in post those fears were realised. Mr Corbyn filled many senior positions in the party with fellow travellers from his part of the party, and for a while it looked like they had captured Labour forever. But it turned out that competence matters to voters. Keir Starmer realised immediately on becoming leader that the most important trait he had to demonstrate was that he knew what he was doing; he has made progress but the road back has already been a long one and he has much further to go. How he must regret the misplaced indulgence shown by far too many people who should have known better.

For a long time the Conservative Party looked on at the Labour Party’s travails with smug complacency. What happened with Corbyn could never happen to us Tories, has been the refrain; we would never allow our party to be captured by the lunatic fringe. And despite the party’s divisions over Europe for a long time it seemed that it would at least continue to promote competent leaders: Theresa May was not exciting but she appeared to be a solid senior manager. But once she went the slide into bringing in fringe figures of questionable competence accelerated.

It is all too easy to question the abilities of Boris Johnson. In any other circumstances would a man who was sacked by The Times and by Michael Howard and who was widely derided for his performance as Foreign Secretary (and who is now clinging on by his fingertips in No10) have been trusted with the top job? Of course not: he is the Conservatives’ Corbyn, but he made the right call, electorally, on Brexit, and he is significantly better on television. He does have some competent Ministers in his Cabinet: Rishi Sunak, Michael Gove and Therese Coffey are amongst those who seem to know what they are doing. But the list of people in important roles who in normal circumstances would have been obscure figures far from the levers of power does not begin and end with Jacob Rees Mogg. Whatever happens next there is an urgent job to do to root out those brought in from the fringes and promoted far beyond their abilities.

Because in terms of having a competent frontbench the Labour Party is much further down the road than the Conservatives: at least they have realised there is a problem. As I’ve said, Keir Starmer has made a good start, and in Yvette Cooper, Rachel Reeves and Wes Streeting, amongst others, he has put together a team that is starting to exude competence and also confidence. If they carry on this way, and the Conservatives don’t raise their game, then Labour will have a chance at the next election just on the basis of whether they look and act the part. Time for whoever succeeds Mr Johnson to return some fringe folk back to the margins.

Champagne problems: Why being irate about spending a few quid on an important lunch is not just ridiculous, but dangerous

Perhaps it was because the festivities were over and the prospect of a long Dry January was looming that prompted so many people to get so upset. Perhaps it was just a slow news day. But the leak of emails from civil servants questioning the cost and location of a lunch given by the Foreign Secretary for the US Trade Representative prompted a short-lived but intense storm on social media and in the newspapers this week. Which leaves me asking: why?

The facts are that the Foreign Secretary wanted to provide a working lunch as part of talks with the USTR, Katherine Tai. Ten people were to attend. Given the nature of the conversation a private dining room was required. Presumably the Minister and her advisors wanted to impress. So they proposed (or “insisted upon”) going to the private members’ club, 5 Hertford Street, and ended up paying £130 a head including drinks.

Cue snide headlines implying that Liz Truss somehow personally benefitted (this was an official event and she didn’t). Others spotted that the club is owned by Robin Birley who donated to Boris Johnson’s leadership campaign (although it is doubtful that he is so short of cash that he was desperate for the profit margin on a £1300 bill). And there was a general feeling that “public money” was being squandered on an “obviously expensive” meal, and that probably they should have gone somewhere cheaper.

Where even to start with this? At a time when there are so many things to criticise the Government for, and so many reasons to question Liz Truss’s record, spending a few quid on a really important working meal is ridiculous and infantile. For one thing, how much money spent at what location would be acceptable? The civil servants apparently thought Quo Vadis at £100 a head would be okay. But would that have passed muster with the self-appointed auditors general online? It is impossible to know.

This matters for two reasons. First, it demonstrates how pathetically penny-pinching our attitudes towards public bodies have become. Do we really want to entertain a senior official from our closest ally on the cheap? What does that say about us and our global standing? Wouldn’t we rather impress, showcase the best that the UK has to offer (Hertford Street isn’t that, but it is the principle that counts!) and demonstrate that we matter?

This all reminds me of working in Parliament and someone suggesting that Select Committee fact-finding visits should be conducted via low cost airlines. Fine, obviously public money shouldn’t be spent frivolously, but does it really present the best image of the UK to the world for senior Parliamentarians to stumble off planes filled with boozy stag parties to go into meetings in which they are representing our country? Whilst we wouldn’t want to go as far as the US, which sends a huge entourage with every visiting member of Congress, surely we can have a bit of pride?

I appreciate that focusing on this aspect of the story is idiosyncratic. Maybe what we spend on diplomacy, hard and soft, is not important. But it is indicative of an attitude in which almost any spending on anything (perhaps other than the NHS) is viewed by many, including in the media, as inherently wasteful. We are particularly cheeseparing when it comes to pay or to working conditions. This damages our public services in countless ways, not least the difficulties faced in attracting and retaining good quality staff. Being cheap is not always efficient. We need to think again.

The second, and most important reason this matters is that this story reflects a dangerous lack of understanding of where our taxes actually go. Spending this amount on lunch might on one level sound like a lot, but by comparison to what Government spends – and wastes – on so many other things it is not even remotely relevant. For example, it takes the NHS around a third of a second to spend what Ms Truss did on lunch. Yet coverage of the mechanics of health policy (as opposed to individual cases and coronavirus) is incredibly slight when compared to the front pages devoted to this restaurant bill.

The endless stories about sleazy politicians – and yes, profligate lunch choices – obscure what is really important. Polling published just before Christmas showed that the public believes that fully 8 percent of public spending goes on MPs’ pay, an over-estimate of staggering proportions. But they also think that only 11 percent goes on pensions and benefits (the real figure is 26 percent). This feeds upon itself: the public is interested in political sleaze so there are more and more stories about it, so we think it is far more important than it really is – and inevitably we end up collectively focused on the wrong things.

I am not at all sure how we break out of this cycle. But the mainstream media definitely has a role to play. It could do a better job of filtering out whether a ‘political sleaze’ story really matters (or even really involves much sleaze) and of instead looking in detail at the many ways Ministers spend billions of pounds of our money. Maybe that would make the media unreadable and uninteresting. But it is what we as taxpayers need, and so it surely has to be worth a try. Something has to change.