What we think

Strangeways, Here We (All) Come

The news yesterday that Channel 4 would move its headquarters to Leeds is being trumpeted by some as another example of the economy rebalancing away from London and the South East.  It follows the successful relocation of much of the BBC to Salford, and the establishment of a financial services hub in Birmingham, driven by HSBC moving its UK headquarters to the city, and the growth of companies like KPMG who were already there.

Yet despite some fine words to the contrary, it is pretty clear that the Conservatives have been significantly less keen under Theresa May to talk about re-orientating the economy towards the North than they were under David Cameron and George Osborne.  This is not completely surprising, given that Brexit has sucked the life out of political debate.  It may also reflect the fact that the Cabinet’s ‘Big Beasts’ are almost exclusively MPs for Home Counties seats, whereas Mr Osborne’s roots in Cheshire obliged him to think about areas north of Watford.  But it is still a huge mistake.

The UK faces a number of big challenges once Brexit is finally, finally, over with.  Perhaps the biggest is housing.  Notwithstanding some recent small falls, house prices are out of control in London and the South East, usually far out of reach of anyone not already on the ladder, not earning astronomical wages and not able to access the Bank of Mum and Dad.  Finding a way to give a huge swathe of younger voters and taxpayers the stake in the economy that comes with property ownership is a necessity.  This isn’t just a ‘young voter’ issue; older voters increasingly worry too as their children cannot get onto the property ladder.  For the Conservatives, with Labour promising the earth in this as in so many areas, it is a particular challenge.

The Tories need to find an answer (and the usual promises of trivial bits and bobs won’t do anymore).  But as seems to be becoming typical of the Party lately (pace anything to do with Brexit), it has boxed itself in with a number of implicit and explicit red lines.  Implicitly it has done a deal with its base, promising them that their property prices will remain high, even if they are currently unnaturally puffed up.  Explicitly it has said it will severely limit building on the Green Belt.  A programme of construction in volume in the South East is therefore impossible.  And it would make little sense anyway when the region’s infrastructure is groaning.

So how to let the air out of the balloon gently and bring property ownership into reach?  Rebalancing, moving jobs and people to where there is often under-occupied existing residential property and space to build more, is the answer.

Let’s imagine you want a career in financial services: thanks to the agglomeration benefits being seen now there is a critical mass of companies in the city Birmingham is now a very real option for you – and could be even more so if the Bank of England moves some of its functions too.  Media more your thing?  Manchester (and Leeds?) beckon.  Encourage this and take some of the pressure out of the market and prices will settle back a bit (you could also, by the way, remove some more of the froth and maybe even clean up the stain on our national reputation by stopping dodgy money from Russia and elsewhere snapping up London flats en bloc as soon as they are built).

Of course, doing this will require the sort of boldness, taking the kind of leaps of faith, Government is bad at.  Specifically, the Treasury, whose focus on return on investment will always favour sticking money and infrastructure where productivity is already high, ie. London.  More on that subject another time.  For now, suffice to say the Conservatives need to be brave, visionary, and ambitious.  They need to want to change the country, and to see the balance of power shift, even a little bit, from South to North.

There is a potentially huge payoff for the Tories.  At the moment their electoral strategy (such as it is) is focused on adding seats in the Midlands to what it has already in the South and in the rural North.  This is unambitious; it is also dangerous for a party that still says it wants to be a truly national party.  So Conservatives, learn again to worry about every part of the country.  Be bold, and embrace rebalancing.  It will pay off in every way – other than in an abstract Treasury model.

Silence and Patience, Pining and Desperately Waiting: Ten years and more of political paralysis in the UK

Lost in the headlines yesterday about climate change, Brexit, Russian spies, and various accidents and tragedies was a deeply depressing and profoundly important story.  The Institute for Fiscal Studies out out a report saying that only 60 percent of young adults in England can afford to buy the cheapest homes in their area, even if they have a decent deposit.  In London the proportion was much smaller.  In 1996, in the Capital and elsewhere, the figure was 90 percent.

The IFS looked at what was affordable for young adults aged 25 to 34, willing to take out a mortgage for four-and-a-half times their income and with a 10 percent deposit.  It noted that average house prices have risen by 173 percent in England since 1997, whilst real incomes for this group have gone up by only 19 percent.  The result is that over the past 20 years home ownership in this age group has gone down from 55 percent to 35 percent.  In short, young adults, often young families, are being completely priced out of home ownership, with all the consequences that brings.  It is a huge societal change.

This is not new news, although it has rarely been pointed out so starkly.  Even politicians are aware that housing is a huge issue for the electorate – witness the promises made by Sadiq Khan when he ran for Mayor, Labour’s repeated pledges and, most recently, Theresa May agreeing to let councils borrow more to build social housing.  But these fine words have yet to make a real difference.  Like so many big issues they remain stuck on the ‘to do’ list.

That list is growing longer and longer – and longer.  Beyond setting a long range target for decarbonisation and the adoption of electric vehicles, do we have a comprehensive policy for addressing climate change?  What about dealing with our social care crisis in the context of an ageing population and severe shortages of competent and willing staff?  How about pivoting our defence strategy to respond to the age of asymmetric warfare and cyber as a weapon?  And what about our issues with productivity, our failure to invest properly in infrastructure, education and lifelong training, all the while with the AI juggernaut bearing down upon us?

The truth is, all of these are on the backburner because we are paralysed, unable to think, let alone to act, and all because of Brexit.  How many political decisions have been put off over the past two-and-a-half years whilst we go through this period of navel-gazing and introspection?  And what about businesses – how often have we heard about investment choices being put off until we know what a deal looks like?  The result is that in reality nothing much has happened at all.  By the time this exotic spresm is done we will have wasted 3, 4, 5 or more years and have done nothing to what really matters.

Paralysis because of Brexit is bad enough.  But it is just the latest reason to kick the can down the road.  The truth is we have been stuck for a decade.  When the banking system fell over so, apparently, did the ability of politicians to be bold and to lead, to develop a philosophy, confront the big issues, and do something about them.  David Cameron briefly looked like he might have some good ideas, but he was hobbled by coalition government and in the end by his lack of courage in the face of the Brexit headbangers.  Today there is no-one sensible putting forward any genuinely big ideas.  It says a lot for the paucity of thinking elsewhere that the Marxist ravings of the cabal running the Labour Party are setting the agenda these days.

So the question is this: can our political classes put aside the gradualist, managerialist, instincts they have learned over the past decade, and rediscover the joys of thinking big thoughts, setting the agenda and leading the country towards it?  In ten more years will we look back on this lost decade as a weird aberration rather than the new normal?  We have to hope so, because the alternative is unpalatable, leaving us all unprepared and anxious about the future and unsatisfied and angry about the present.  Time for our politicians to stop jockeying for position and angsting about the minor details of Brexit, and start instead to dream impossible things.

From Boutique to Bargain: How choices about party conference hotels say everything about the last ten years

Ten years ago, just about to the day, I was checking in to the Great John Street Hotel in Manchester.  I was all ready for the Labour Party Conference; Gordon Brown was the Prime Minister and this was a big event.  And not only was I arriving at Great John Street – so were platoons of my then-agency’s clients.  We had block-booked the whole of one of the city’s very best boutique hotels, we were taking over the rooftop bar for our party, and we were charging clients around £1500 for a four-day bed-and-breakfast package.

It was a bit of an odd atmosphere in Manchester that year.  Northern Rock had gone to the wall a year before; Lehman Brothers had collapsed only a few days before we all arrived at the hotel.  What had seemed like it would be an enjoyable extravagance when we booked Great John Street in the Spring now felt like a reckless moment of over-indulgence.  We enjoyed the luxury for a few days but with a sense that this was the fin de siecle, that we would never see the like again.

That is, of course, what has happened.  After the Great Recession and years of austerity memories of the excesses of the Mid-Noughties are fading away.  Where once frontline teams had budgets to spend as they wished, and often had money to spare, now the roost is ruled by procurement departments, challenging every bill (even ones that are far more justifiable than four days at a boutique hotel).  The idea of splashing the cash is now anathema, and probably rightly so.

This trend towards frugality has been followed by the choice of conference hotel.  After 2008 we stayed for years in a Hilton DoubleTree in Manchester and Birmingham, and we gave up on trying to sell four night packages: clients would come in for a couple of days, staying for one night, and get away quickly to return to the day job.  In recent years even a DoubleTree has felt a bit much, and Travelodges, Best Westerns and Airbnb have hoved into view.  For Tory conference this year I’m in a Premier Inn a good walk from the ICC, and I’ve questioned whether even £120 a night for two nights is worth it.

In part all of this is part of a tale about political party conferences.  Are they worth attending even if you spend as little as you can?  I would argue yes, but you have to decide which event you are going to: is it to do politicking in the hall, the bar and the donors’ parties; to try actually to lobby people at fringe events or in one-to-ones; or to go to the main public affairs trade show, showing your face and promoting your new firm?  If you’re clear about what you’re there for – and what you’re not – then yes, they can be valuable events.

But even if party conferences continue to be worthwhile will we ever return to the happy days of boutique hotels?  Probably not, and that’s not a bad thing – other than in one respect.  No one wants to go back to the irresponsibility and carelessness of pre-2008, but one thing block-booking Great John Street represented was a sense of optimism.  The economy was growing and changing, and it felt like we were all growing and changing with it.  By contrast, the last ten years have felt stagnant, and people have pretty much forgotten what it feels like to have the wind at their backs.  When I’m traipsing through Birmingham to my Premier Inn next week I’ll be thinking that the real shame of the last decade is the demise of self-confidence.

In deference to the APPC

Last Monday the APPC Management Committee voted to recommend to the Association’s membership that it should merge with the PRCA.  This was one of the final acts in a process that has been playing out for months and years; really since the Government established its own register of lobbyists.  From that day on the demise of the APPC has been inevitable.  It is now an idea whose time has come.

As well as being a board member of the PRCA these days I was very glad to serve on the management committee of the APPC for several years, including a stint as Deputy Chair.  So I do not approach debates about the future of the organisation with anything other than affection and respect.  The APPC has played an honourable and important role in regulating and professionalising our industry over the years.  That history should not be forgotten.

However, three things have happened that have convinced me that the APPC is now an anachronism.  First, as mentioned, the Government has legislated and introduced its own lobbying register.  Like many in the industry I have severe reservations about the legislation and what it has introduced, but the simple fact is that it is there, and thus most agencies now have three registers to sign up to, each with different rules.  In other words, it is a mess that should be streamlined.

Second, the PRCA register has increasingly established itself as credible, and the disciplinary regime that underpins it as effective.  The truth is that the PRCA code of conduct is pretty much indistinguishable from the APPC, and crucially the proposal for the merger makes clear that the PRCA will adopt significant elements of the APPC approach, including its independence.  More to the point, the PRCA has a track record of enforcing its rules.  In short, self-regulation is already safe in the PRCA’s hands; and the introduction of the APPC and its ethos into the mix will only strengthen what is there already.

Third, there is every likelihood that the Government will before long revisit regulation of our sector, particularly if there is a general election.  At that point having a confused and overlapping system of regulation and registration will be a weakness, not a strength; and failing to have a strong, unified, voice for our sector will be our Achilles heel.  Bringing it all together in a professionally run, powerful, single entity is vital if self-regulation, or for that matter any sort of workable regulation, is to survive.

When it comes to the APPC-wide vote I hope my fellow public affairs professionals vote with their heads as well as their hearts.  I hope they ignore those who hanker for a gilded past that never really existed.  I hope they do not allow their own and others’ personal affinities and interests to shape their decision-making.  I hope they will read the actual proposal and realise that what will emerge will bring together the best of both worlds.  In our hearts we all know that now is the time for change.  Time to make it happen.

Adding to our network of experts

I am delighted that Park Street Partners has today appointed another four partners, adding to our content creation capabilities and expanding our reach across Europe.

Joining the roster in the UK are Chris Roberts and Paul Smith.  Chris is a media guru, who spent more than 20 years as a senior reporter and presenter with ITN and Sky News.  He is fantastic at media and presentation training, and also strategises, dreams up, executes and distributes the most compelling video content.

Meanwhile Paul was one of the key figures in developing the UK’s tech startup scene, co-founding several innovation programmes, and advising the Government on developing and launching Tech North.  His background is as an editor and executive producer in radio, and subsequently in media relations here and in the Middle East.

Also becoming a Partner is Garrett Fennell, in my view the best lobbyist and public affairs professional in Dublin.  He works with big multinationals, public bodies, third sector organisations and many others who have interests in Ireland and in the EU.  His knowledge of the Irish and European political scene is unparalleled.

And finally we have brought Marek Matraszek into our ranks.  Marek is a leading light in public affairs and communications across Central Europe.  He is based in Warsaw and has offices in Prague, Bratislava and Budapest, as well as affiliates in Bucharest, Sofia, Kiev and the Baltic States.  He works with international businesses to design and implement strategic communications and lobbying campaigns in Poland and the whole Central European region.

It is fantastic to add to the existing roster of partners, bringing the total number to 15.  Content is king, so expanding our capabilities in content creation and particularly video is massively important.  And genuine, in depth, local knowledge is vital, so the greater geographical reach brought to the table by Marek and Garrett is really important.  We now cover Dublin, Warsaw, Bratislava, Prague and Budapest as well as the current Park Street Partners geographical network of London, Edinburgh and Birmingham.