General Election 2015: What a Conservative Government could mean for the North East

What are the implications for infrastructure, jobs and the negotiation of a devolution deal for the North East?

Steve Parsons/PA Wire Prime Minister David Cameron and wife Samantha arrive at his Tory headquarters in central London after the General Election put his Conservative Party on the brink of securing an absolute majority in the House of Commons
Prime Minister David Cameron and wife Samantha arrive at his Tory headquarters in central London

After the UK decisively elected a Conservative Government, regional leaders are looking ahead to how the future Tory agenda will impact the North East.

David Cameron is committed to holding a referendum on our membership of the European Union and it is feared by some this could place North East jobs in jeopardy.

The boss of Nissan, whose plant at Sunderland employs more than 6,000 people, has already spoken publicly about the business leaving the UK in the event of a British exit from Europe.

North East MEP Paul Brannen said: “Labour went into the General Election with a pledge to focus on reforming the EU in a way which works for people, rather than having the distraction of a referendum. We’ll make a positive case in that referendum but we also need to get on with the job at hand which is making the EU work better for the North East.

“A poll this week showed that 34% of people would definitely vote to stay in the EU compared to 18% would definitely vote to leave.”

But rather than desiring a ‘Brexit’, the Tories have said they hope to use the referendum, long campaigned for by the right of the party, to secure a renegotiation of the terms we have with the EU.

Claims joblessness could rise are muted from Labour figures, as it was David Cameron’s record on creating jobs - 50,000 in the North East over the last Parliament - that played a major role in winning marginals like Stockton South, despite this region still having the country’s highest unemployment rate.

The region’s private sector-led Local Enterprise Partnerships will continue to drive forward job creation, headed in the North of the region by Accenture’s Bob Paton, who now has the difficult task of healing a rift between the North East Combined Authority and the LEP over regional leadership.

The LEP chief executive role remained empty for a year as the two sides disagreed over who the LEP chief executive should be accountable to.

Question marks now hang over how power will be devolved to the North East, with the North East Chamber of Commerce highlighting this as a key issue in the wake of the election.

The North East Combined Authority has put together an ‘ask’ of powers it wants from the Government and talks are set to open with the newly-installed fully Conservative cabinet on this in the coming days.

But Tories favour devolution to city regions coupled with an ‘English votes for English laws’ model, where English MPs essentially have a second parliament for matters affecting this nation.

This is not welcomed by Labour MPs from the North East, who are outnumbered in a now-Conservative-dominated England.

Furthermore, the Tories are pushing for a boundary review of parliamentary constituencies, which could in the future further reduce the number of Labour-controlled seats.

This all comes as more powers than ever are set to be held in Holyrood, something which could offer cross-border opportunities with the now-SNP-dominated Scotland, who want high-speed rail to begin in Edinburgh, our closest capital.

Danny Lawson/PA Wire SNP leader Nicola Sturgeon casts her vote at Broomhouse Community Hall polling station in Glasgow.
SNP leader Nicola Sturgeon casts her vote at Broomhouse Community Hall polling station in Glasgow.

Enhanced devolution - to maybe include powers over NHS spending, as was agreed this year for Greater Manchester - to a city region, likely to be separated Tyneside/Teesside, may be dependent on the region accepting a mayor role, something George Osborne, now re-appointed as Chancellor, believes offers a greater level of accountability.

This version of devolution could pave the way for the introduction of a regional benefits cap. Mr Osborne offered the North East a “100% guarantee” a Conservative Government would not introduce regional pay for public sector workers in the North East. There will be no end to austerity and the incredibly unpopular Bedroom Tax will remain public policy.

Victory for the Conservatives, however, means the region’s Police and Crime Commissioners Vera Baird for the Northumbria force and Ron Hogg, for Durham’s, will keep their roles.

While there is some concern among North East businesses about the EU referendum, most are relieved to have a stable Government as opposed to the unpredictable hung parliament originally predicted by the polls. It is viewed as positive by infrastructure chiefs planning major projects such as rail improvements and the dualling of the A1.

Douglas Kell, director of the Civil Engineering Contractors’ Association in the North East said: “The last five years have brought a steady push to improve the management of infrastructure through visibility of investment and workloads. This has created long term certainty, allowing for investment in skills, equipment and innovation - reducing delivery costs and saving taxpayers’ money too.

“The incoming government should now recognise and fully commit to the importance, in this market, of maintaining long term certainty for the existing project pipeline. We look forward to working with the new government to build on this, and to go on delivering the infrastructure vital to UK needs in economic and social growth.”

Steve Parsons/PA Wire Prime Minister David Cameron
Prime Minister David Cameron

The Conservatives also plan to extend the right-to-buy plan to housing association.

Some housing chiefs have already spoken out about this policy, claiming that should they be forced to sell off their assets it would damage their borrowing power and in turn slow down house-building.

Ross Smith, Director of Policy at the NECC, struck a unifying tone.

He said: “It was generally expected that the next few days would bring uncertainty for UK businesses and with uncertainty brings a decrease in business confidence and economic growth.

“With that in mind, we are pleased there has been a decisive victory and offer our congratulations to the new Government. Nevertheless, the Prime Minister must deliver on some potentially contentious decisions with a small majority.

“Although we welcome the Conservative Party’s pro-business measures and their commitment to investment in infrastructure, concerns remain around their approach to housing, energy and most notably the EU.

“Devolution to the North East also remains a significant issue. The result in Scotland will absolutely raise questions over the constitution and it is vital that the North East does not lose its voice.

“In the interest of regional economy the Conservative government and Labour leaders in local areas must work together.”

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