Tory Peer comes under fire for recommending fracking in the "desolate" North East

By Mark Wallace
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"Fracking OK for 'desolate' North East, says Tory Peer". Oh dear. 

As a Government energy adviser, a former Cabinet minister and father-in-law to George Osborne, Lord Howell should have known better on a number of fronts than to set himself up for the headlines which are sure to savage him in tomorrow's newspapers.

By declaring that "there are large and uninhabited and desolate areas" in the North East of England where fracking would be appropriate, he should have seen the controversy coming a mile off.

For a start, it's worth noting that the row which has now blown up about exploiting shale gas in the North East of England is slightly misplaced. I have no idea why he chose to discuss the North East, particularly given that most of the UK's shale reserves are estimated to be in the North West and the South East. Perhaps it was an incident of mis-speaking and he named the wrong region, but if so then it could not have been less fortunate.

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A hearty welcome for Renewal, the new campaign group designed to extend the Tories’ electoral appeal

By Peter Hoskin
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Actually, there’s another word of the day – and that word is “group”. David Skelton’s campaign group Renewal, designed to extend the Tories’ appeal into areas like the North, properly launches this evening. The Forty Group, composed of Tory MPs in marginal seats, is publishing a list of policies designed to attract those voters floating in the centre of the political spectrum. And then a cross-party group called British Influence, as chaired by Ken Clarke, Peter Mandelson and Danny Alexander, is saying some stuff about Europe.

Of these various group interventions, perhaps the most eye-catching is the first. ConservativeHome readers will already be familiar with David Skelton’s campaign, not least because he wrote about it for us at its conception in April, and we also, last week, published four extracts – one, two, three, four – from a collection that it is releasing today. But familiarity oughtn’t breed anything other than cordiality, in this case. Renewal is doing important work, and all signs are that it will do it well.

I suppose one question is whether the Tory leadership will take up Renewal’s ideas. Looking at the policies that the group is advocating today, I’m sure Cameron & Co. will be struck by the proposal for allowing trade union members to donate their political levy to whichever party they choose. But as for raising the minimum wage, that could fall against worries that an ever-rising minimum wage will dissuade employers from taking on new staff. The trend within Government has been more towards a frozen, or even reduced, minimum wage.

But let’s leave all that aside for now, and simply welcome Renewal to the Westminster landscape – and beyond. Good luck, David.

Margaret Thatcher's legacy should be a Conservatism For Bolton West

By Paul Goodman
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The Conservative Party is itself in poor health as it gathers to bury Margaret Thatcher.  It hasn't won an election in over 20 years.  The effects of vote distribution and out-of-date boundaries conspire against it breaking the habit next time.  It has lost Scotland altogether, and is the third party in much of the urban north.  It won 16% of the ethnic minority vote in 2010: by 2050, ethnic minority members will make up one in five of the total.  It has a serious political competitor on the right, UKIP, for the first time in living memory.

Labour's rout on welfare earlier this month, and its squabbles over leadership and policy last week, have cheered up some Tory MPs - unduly so, all considered.  A doctor's diagnosis of their party's condition would find serious illness, perhaps terminal decline.  And the structural obstacles to a Conservative majority would remain even were this not a Government of which the whole is much less than the sum of the parts.  So what can the Conservatives learn from the most potent election-winner in their history - the woman who they will honour today?

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George Osborne appoints Neil O'Brien as new adviser and opens door to a more blue collar, northern conservatism

By Tim Montgomerie
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Another sign this morning that Team Cameron is succeeding in recruiting the calibre of people that it needs to maximise its effectiveness. Less than a fortnight ago we learnt that Lynton Crosby would be joining the political side of the Cameron operation on a consultancy basis from the new year. In last Saturday's Times the Tory Chairman Grant Shapps confirmed that Crosby would be overseeing the general election campaign.

News is just breaking that Neil O'Brien, director of Policy Exchange, will be joining George Osborne's office as a Special Adviser*. This is a big loss to PX but a big boost to Number 11. O'Brien has been wooed for some time by the Tories and they've finally got their man. I've always thought highly of Neil and included him in my 2020 Cabinet as "Minister for Cabinet Office and Policy Development".

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We still don't have enough friends in the North

By Tim Montgomerie
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The Economist publishes an interesting essay in its latest edition, examining the continuing decline of the north of England relative to the south. It argues that austerity has a strong anti-northern bias. Cuts for northern local authorities are deeper, it argues, and because of the northern regions' weaker private sectors they are felt more acutely. This is partly due to the unwinding of Labour's investment in the North during its time in power. "According to a study by the Centre for Research on Socio-Cultural Change at the University of Manchester, the state accounted, directly and indirectly, for 64% of the jobs created in the north between 1998 and 2007, against just 38% in the south."

This all represents a big political problem for the Conservatives. The party needs to advance in the North, particularly the North-West, if it is to win a majority and recent Policy Exchange polling suggested Conservative values (on crime, tax, immigration, human rights) travel well across the North, if rooted within a pro-blue collar economic message. Unfortunately, however, the need for cuts is meaning that we are reminding many northern voters of the tough Thatcher years rather than using our time in office to challenge perceptions.

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Why regional public sector pay still won't happen

By Matthew Barrett
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I have previously written about why regional public sector pay will not happen. 

My reasoning then was fourfold: 

• The Liberal Democrats, including Nick Clegg, were opposed
• Conservative MPs in poorer areas, such as the North East, had spoken out against the idea
• Marginal Tory seats quite often had majorities far smaller than the number of public sector workers in their seats
• Public opinion was against it, including amongst Tory voters

However, that was mid-June. Since then, there has been some more activity suggesting a) the Government has some willingness to pursue the policy, and b) it is unlikely to succeed.

Matthew Hancock, an MP extremely supportive of the Treasury, appeared on the Today programme yesterday morning. He framed regional pay as giving public sector managers the ability to decide pay for their employees as they see fit. 

There has also been plenty of activity from those opposed to a move towards regional public sector pay, too. The UNISON union commissioned Income Data Services, an independent labour market research organisation, to investigate the Government's policy. IDS have now published their findings, "Crowding out: fact or fiction?" (pdf), and they found three things that undermine the Government's case for regional public sector pay.

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Tories should support more property taxes if proceeds are used to cut other, more harmful taxes

By Tim Montgomerie
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It's not unreasonable to see Nick Clegg's call for an emergency tax on Britain's wealthiest people as (i) another attempt by him to shore up his beleagured position within a very unhappy party and (ii) another sign that the Coalition will drift to the Left. Tory backbencher Bernard Jenkin certainly sees Clegg's intervention as a sign of the politics of envy. He told the Today programme that if we keep increasing taxes we will kill the goose that lays the golden eggs.

Regular readers will know that I support a shift in the nature of taxation, away from the taxation of wealth creation and towards the taxation of accumulated wealth. I think it's the policy position I hold which is most unpopular with readers! In particular I support extra council tax bands for larger properties and a special tax on the sale of large properties. Many people got wealthy during the boom years not because of great ingenuity on their part or through hard work but because they invested in Britain's highly state regulated property market. They benefited from state intervention and that benefit should now be taxed by state intervention. I don't want to confiscate all of their gain - or even most of it - but I think it's right that the propertied wealthy make a bigger contribution to the Exchequer.

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Are Tory MPs wrong to complain about Osborne's spending priorities?

By Tim Montgomerie
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Four weeks ago Matthew Parris asked: Why are Tory MPs so "unbelievably lily-livered and flaky"? He was thinking of their failure to back the Chancellor's austerity measures.

He returns to the theme today, hurling his keyboard at the "perfect idiots" on the Tory backbenchers who, he says, are "economic nimbys". "They are in favour of cuts," he writes, "but nothing that affects their own votes or pet causes." His Times column continues (£):

"The Conservative Research Department has long employed an officer to tot up the costs of Labour’s miscellaneous promises and the costs implied by their complaints. It should turn its hand to the Tory Right. Defence, local A&E, Tory-led town halls, council tax, rail fares, road improvements, pensioners’ benefits ... every backbencher has his list. The perfect idiots are on many levels only what our unwritten constitution encourages a constituency MP to be: counsel for the defence of Loamshire West. Fine. Carry on, Sir Bufton. But their barking for lower taxes, and higher spending should be met with an indulgent chuckle, not a sucking-of-the-teeth. They don’t merit elevation to the ranks of “the Chancellor’s critics”."

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Why regional public sector pay won't happen

By Matthew Barrett
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The Coalition's idea of making public sector pay relative to private sector wages within each region is one with which I agree. The latest word from the Treasury seems to be that such a proposal is still under review. It was announced as a proposal in the Budget, but the Lib Dem Chief Secretary to the Treasury, Danny Alexander, told a GMB union conference last week that no decision had been taken. He said: "There will be no change unless there is strong evidence and a rational case for proceeding."

However, I suspect that no such policy will come to pass, for four reasons. 

First, the Lib Dems are opposed - as the Independent reminds us today. The leader of the Lib Dems in Wales has vocally opposed it, and Nick Clegg has given the signal he will fight against regional pay. An Early Day Motion opposing the plans currently has eight signatures from Lib Dem MPs.

Second, Conservative MPs in low private sector salary regions (who would therefore see the biggest drop in public sector wages if such a policy came about) have spoken out against the idea. 

• Guy Opperman, the MP for Hexham is quoted by the Daily Telegraph as saying: "I see no economic argument for introducing regional pay. ... I am very concerned that regional pay would lead to a reduction in the pay packets of some public sector workers in the North East. I do not believe reducing public sector pay will help stimulate private economic growth."

• Rory Stewart, the MP for Penrith and the Border, opposed the plan, according to Carlisle's News & Star, who say he "worries that setting regions against each other would result in bitter local negotiations with unions and resentment."

• John Stevenson, the MP for Carlisle, appeared on an ITV Border programme, saying he has "concerns" about the idea of regional pay, and "would have to be convinced" of its merits before voting for it. 

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A firm prediction... HS2 will never happen

By Tim Montgomerie
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That's my firm prediction and I think Lord Adonis, the Labour Transport Secretary who pioneered the idea, knows it too. Earlier this week he accused the Government of dither and delay over what was once thought to be a flagship environmental and economic project.

Three things have changed the Government's view of HS2. The two most important factors are the rising cost of the project - partly because extra tunnelling has been promised to protect the countryside but also because costs of these projects nearly always run out of control - and secondly new doubts about the perceived benefits of the project. These doubts will be heightened by today's Sunday Telegraph story from Andrew Gilligan. He reports that a Department of Transport analysis into HS2's benefits was suppressed after it questioned whether the giant scheme would produce anything like benefits that had been claimed it would bring. The original claim was that HS2 would cost £17 billion but produce benefits of £23 billion. Estimated costs have already risen by 10% to 30% while the benefits may have been grossly overstated.

The third factor is the politics. The Tories were willing to swallow unhappiness amongst shire Tories if the project won support in target northern seats. Again both sides of this equation have changed. The party leadership had calculated that neither Labour nor the LibDems as supporters of HS2 would seek to capitalise on southern discontent. They hadn't anticipated the UKIP factor. Nigel Farage has instructed all UKIP candidates in the south to campaign strongly against the hi-speed rail link and its impact on England's green and pleasant land. On the other side of the equation the project is not so popular in the North. By 53% to 32% northern voters told pollsters for Policy Exchange that HS2 was poor value for money. The idea of immediate rail investment - as advanced in the Alternative Queen's Speech - might prove more compelling.

George Osborne - behind last week's scepticism on windfarms - is thought to be leading the change of heart. The Treasury has always been sceptical of 'grand projets'.