Minutes before the West Midlands metro mayoral election result on May 5, Green Party candidate James Burn responds sharply to my suggestion that the campaign he has just fought had been more consensual than other present-day political battles: “There were key disagreements about economic plans!”

The election was won by Conservative candidate and former John Lewis managing director Andy Street, who saw off rivals by a mere 3,766 votes. He issued a green-coloured manifesto rooted in bread-and-butter jobs and skills issues, and played up his Birmingham and Solihull upbringing on the campaign trail. Burn contends this glossed over his underlying message of trickle down prosperity from booming industries and new construction.

“If you look at Sheffield City Region, we’ve seen significant growth but it’s not been shared. Or in Barking, there’s great transport links to a massive new development, but the development has not economically benefitted Barking or significantly changed poverty levels. The West Midlands is at the bottom of the table for most indexes of deprivation. We need a very different approach.”

When Street suggests a leading role for the West Midlands in UK industrial strategy, or innovative new approaches to public service delivery, Burn accuses him of a naïve faith that central government makes evidence-based, rather than ideological decisions. His ambitions for an improved public transport network, Burn says, are pole-axed by the rail companies being locked into contracts, the government’s Bus Services Bill which rules out new municipal bus companies, and Transport for West Midlands lacking the money to carry out the franchising exercise Street wants to undertake.

Not everyone agrees. Community activist and former council housing officer Desmond Jaddoo, who interviewed all six candidates, praises Street for being “crystal clear” about the mayor’s powers, while his rivals wanted to veer off into wilder political waters. Being a high street store boss gives him an advantage, Jaddoo suggests, when it comes to proposing technocratic convincing solutions against the background, in Birmingham at least, of a long underperforming local authority.

“We needed an independent lead who has cross sector experience and more importantly, proven impact” says Birmingham-born serial entrepreneur and diversity champion Joel Blake, who looks forward to a greater fusion of private and public sector thinking and shared resourcing under Street and the West Midlands Combined Authority.

Other analyses would point to other factors: the degree that Street outspent other candidates against the spirit of campaign limits, the mixed local reputation of Labour contender Sion Simon and discomfort with his party leadership, and the loyalty that John Lewis inspires as a West Midlands employer. Simon Jeffrey of the Centre for Cities think tank believes that ideological differences take a back seat in urban leadership, recalling 1930s New York mayor Fiorello La Guardia’s “no Democratic or Republican way to take out the garbage” quip.

Andrew Stevens of citymayors.com sees Street as both a partisan Conservative central to Number 10’s plans for further regional devolution, and “a very emollient quiet operator” as the chair of the Greater Birmingham and Solihull Local Enterprise Partnership. Rebecca Riley of Birmingham University remarks that with the calibre of runners-up – including an ex-MP and serving MEP, the leader of the opposition group on Solihull council and a former CBI regional director ­– “it’s a shame we didn’t get more of a debate and that we can’t do more with them as a region”.

Black Country: from employment black spot to in the black

In a 2016 report, the Resolution Foundation pinpointed the West Midlands’ economic challenges – the lowest employment rate of any UK city region at 64.5%, and the slowest recovery in employment prospects after the financial crisis (half the average for conurbations). Average household income post-housing costs is the lowest in any of Britain’s city regions. Chronic and severe skills shortages hold back productivity growth as measured by GVA per hour worked.

Charts produced by the Resolution Foundation

In late 2015, eight out of nine manufacturers reported to the Greater Birmingham Chambers of Commerce that they faced hiring problems. 16.3% of residents have no formal qualifications and only 28% have a degree, compared with 37% nationally. Rebecca Riley outlines the supply and demand mismatch: a long line of older workers without advanced technical qualifications who aren’t reskilling, migrants arriving who may be highly skilled but not with UK-recognised qualifications, and limited graduate retention, despite the highest per head student population of any region. Areas like Wolverhampton have structural skills gaps going back generations.

Street’s ambitions to make wage growth the fastest in the UK, a zero youth unemployment target, and a string of initiatives – from a “West Midlands First” graduate programme to an All Age Careers Service – align closely with the Resolution Foundation’s skills and jobs priorities. His manifesto emphasis on boosting tech, creative, life sciences, professional services, construction and green jobs also addresses think tanks’ calls to champion growth potential across the West Midlands’ diverse economy, beyond the car industry and other manufacturing.

However, there is a far bigger economic challenge for the metro mayor than this, as Street acknowledged when he told the Birmingham Mail that the competition is Berlin and Barcelona, not Liverpool and Manchester. The region has scored a striking success with 50% export growth since 2008 – “quite phenomenal for a mature economy”, says Black Country-based economist Paul Forrest. Along with the North-East, it functions as a dynamic standalone economy in the global supply chain, giving it a key role in an export-led, globally trading vision for the UK post-Brexit. Meanwhile output, Forrest argues, has been damagingly underestimated by statistical practices, such as attributing some manufacturing firms’ output figures to their London HQs. Local Conservatives’ claims of a £16 billion productivity gap on the basis of £20,137 output per resident fail to square with separate calculations of almost £45,000 output per worker, said think tank IDEA Birmingham in 2015.

“We are owed billions”, says the Lib Dems’ Beverley Nielsen, who welcomes the £1.1 billion devolution deal over the next 30 years but insists that it does not detract from decades of underinvestment, or the massive cuts in public services now being exacted. With 80% of rail freight and 30% of the nation’s road freight passing through the Midlands, 45% of the UK’s exports to China coming from the West Midlands, 30% of UK automotive manufacturing and 3% of the world’s aerospace industry located there, Nielsen argues that her region is the heartland of the UK economy, and should be treated as such. She worries about a Brexit double whammy through the impact on supply chains and exports. She laments the lack of serious thinking about how to access substitute markets such as India and, for all the talk of industrial strategy, about how to protect regional economies.

Top down or bottom up?

Directly elected mayors have been energetically championed in the UK since Tony Blair’s government introduced them. Simon Jeffrey of Centre for Cities argues that the individualization of policy and accountability yields dividends locally and for the rest of us: “Getting Birmingham close to average productivity would move the needle on national aggregate performance, as well as doing so much for the people of Birmingham”. While Andy Street’s executive power is constitutionally limited, Jeffrey concedes, he enjoys a “bully pulpit” that foot-dragging local councillors and national politicians will find hard to ignore, and will be able to galvanise schools and academies over skills, for example.

Jeffrey admits to the “anathema”, for many voters, of having yet another politician on the scene – the city of Birmingham voted against an elected mayor in 2012 – but points to the historic lack of collaborative working between West Midlands local authorities and the huge strides made to address this in just a few years. Andrew Stevens of citymayors.com says the lack of a mayoral scrutiny function was an oversight and may soon be remedied.

For others, it is more the notion of a top-down development agenda which is anathema. Karen Leach of Localise West Midlands says that the metro mayor is “part of this macho individualistic emphasis on big and shiny. We’re going to have faster trains and bigger buildings! It’s deeply frustrating”. Questioning the emphasis on foreign direct investment investment by Street and the region’s business and political leadership, she points to Localise’s 2013 research literature review, which found community economies delivering better on job creation, resilience, stability and economic returns compared to a centralised approach. She thinks the skills debate is mistaken by failing to anticipate companies’ needs in future, and by falling into a crudely reductive approach of matching deprived community A with company B rather than putting humans at the heart of policy-thinking.

Localise is working on a report with New Economics Foundation looking at social care as an economic sector bringing value to communities, rather than as a service to deal with a social problem. Leach argues that serious investment in the sector would generate returns to the regional economy which would compare favourably to billions being poured into the car industry or HS2,.

“We’ve been known as a city of a thousand trades in the past, and I’d like for us to become a city of a thousand SME clusters” Birmingham City Council leader John Clancy said last year. In the metro mayor race, Beverley Nielsen called for platforms for in-region investment – a West Midlands regional bank, £1 billion innovation fund and Chamber for Business Growth – and suggests FDI is better directed into supporting local businesses through on-shoring supply chains than in the form of headline-grabbing mammoth projects.

The scale of funding in the UK for start-ups and scale-ups is dwarfed by that in California and Germany. Rather than put £100 million into self-driving vehicles, Nielsen asks, why isn’t the government dedicating billions in innovation funding for the likes of Dudley-based Westfield Sportscars, whose experimental autonomous POD has done half a million miles more than Google’s driverless car? Her other priorities include getting university innovation closer to market and offering meaningful business support by getting companies like Jaguar Land Rover and engineers GKN sharing expertise with SMEs. “We need more ambition in our economy – we’ve got talent, we’ve got the people” she says.

Towards a sharing and caring economy

The opening of a new chapter for the West Midlands presents an exciting opportunity for economic experiment, such as the pilot of Universal Basic Income (UBI) that the trade union Unison called for in its mayoral election manifesto. Becca Kirkpatrick, chair of Unison West Midlands community workers’ branch, describes UBI as “recognition that at this point of history it is not right that some are going without”. It would enable people to study or reskill and figure out what kind of work they really wanted to do, she says. “It provides a safety net for innovation”, James Burn argues, pointing to the wasted potential of much smaller numbers of BME and female West Midlanders than white males starting their own businesses.

Filmmaker and campaigner Paul Stringer would like to see UBI in combination with a “West Midlands Pound”, on the model of the Bristol Pound, payable for local government services and at participating independent shops to keep more money in the regional economy. In the mayoral campaign, Sion Simon and James Burn committed themselves to a UBI trial while Nielsen, Street and UKIP candidate Pete Durnell expressed some degree of interest. (On the Living Wage, Street says his retail experience has shown him it isn’t the best way to deliver prosperity).

In his first weeks in the job, Street has struck an inclusive tone, setting up hot desk offices in Birmingham, Wolverhampton and Coventry and making a commitment to eliminate rough sleeping, while at the same time saying he will pursue the “economic feelgood factor” by lobbying for the Commonwealth Games and Channel 4 to come to the region. But how relevant is his upbeat, growth-driven vision to those at the bottom: the increasing number of residents using food banks, the one in three children growing up in poverty and the children of refugees who are starved of training opportunities, jobs and youth provision? How much room will the John Lewis mayor allow for co-operative and collaborative economic thinking?

Street won the election with 50.4% of the vote to Sion Simon’s 49.6%, but perhaps the key figure is voter turnout at 26.7% ­- more than expected, less than the 30% Street described as “credible” during the campaign. A successful economic policy will mean engaging with many more people of the West Midlands before the next vote comes around in 2020.

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Is the Commonwealth a part-solution to Britain’s trade woes post-Brexit?

The government’s Article 50 bill cleared the Lords last week on March
13th: Commonwealth Day. Economists’ and MPs’ positions on what the
Commonwealth offers post-Brexit Britain in terms of opportunities for
trade and future prosperity have, meanwhile, become almost as heated
as those on the referendum.

In the red, white and blue corner, Brexiteers have been quick to claim
the eagerness of Australia and New Zealand to sign free trade deals
with the UK, with Boris Johnson heralding the Commonwealth’s
“stunning” global GDP share and GDP growth compared to the EU’s as an
indication of the UK’s bright prospects. Remainers are withering about
what they see as muddle-headed imperial nostalgia. “Get real,”
Conservative-turned-Lib Dem MEP Edward McMillan-Scott tweeted at his
former party colleagues Douglas Carswell and Daniel Hannan as they
welcomed former Australian premier Tony Abbott to an event earlier in
the month – Australia represents 1% of UK external trade and the UK
sells more to Belgium than to India, he told them.

“The Commonwealth is many things, many good things”, says veteran
Commonwealth diplomat, now Antiguan ambassador to the US Sir Ronald
Sanders – but it has not been a trade organization since the end of
Commonwealth Preference in 1973. At a much-vaunted meeting of
Commonwealth Trade Ministers in London on March 9th, Lord Marland,
chair of the Commonwealth Enterprise and Investment Council (CWEIC)
readily admitted that it can be no replacement for the EU for
commerce.

While covering a third of the world’s population, it accounts for one
fifth of the value of goods and services the UK exports to the EU, and
imports in a similar proportion (8.8% of total UK exports/10.6% of
imports compared to 44.6% and 53.2% for the EU). It represents an
assortment of wildly differing countries, from Singapore to Sierra
Leone and from Belize to Bangladesh. More than half of the
Commonwealth’s citizens are contained India’s borders. Aside from the
UK, two-thirds of its GDP is generated by India, Canada and Australia.
No Commonwealth leader outside these islands was a cheerleader for
Brexit – Narendra Modi sees the UK as India’s gateway to selling to
the EU; for Canada, Britain is its “key vector of interest” in the
European Union. Twenty Commonwealth members have free trade or
Economic Partnership Arrangements with the EU and 24 have them
pending; only 5 are entirely outside the framework.

A bilateral deal with the UK may not offer Commonwealth countries
anything more than a deal with all 28 countries of the EU, and Brexit
negotiations could delay any such agreements. The imposition of a
multilateral Commonwealth free trade area would be unwieldy and
disruptive for an equal partnership of nations. The EU has hardly held
the UK back from growing its Commonwealth trade – UK exports to the
Commonwealth rose 120% between 2001 and 2011.

There are further problems: as former HM Treasury advisor Desmond
Cohen points out, UK exports are highly integrated with European
supply chains and there is no real way of substituting these without
hugely increased costs. With a switch of trade to the Commonwealth, UK
exports to the EU may fall foul of rules of origin requirements and
get hit by higher tariffs. Economist Pankaj Ghemawat’s work on how a
common language and shared imperial history boosts trade is cited by
Commonwealth optimists – yet Ghemawat says those factors are
outweighed by others in favour of the EU because of the distance of
Commonwealth countries from each other and their GDP levels. And while
Tony Abbott calls for a one page UK-Australia Free Trade Agreement,
Tony Blair’s former Europe Minister Denis MacShane points out that the
Australian Labor party sees a bilateral deal with the UK as a
“third-best outcome”.

These are powerful and perfectly logical arguments. But the reports
making them tend towards catastrophist thinking – eg countries that
have free trade agreements with the EU being unwilling to sign mirror
agreements with the UK – and fail to reconcile themselves with the
political circumstances of the vote for Brexit, and a government
intent on carrying it through, with Parliament’s support. They also
take altogether too much pleasure in the spluttering colonel
stereotype, suggesting all Commonwealth trade advocates hanker after
lost Empire, rather than look at the more humdrum things many are
actually saying: about member states’ youthful populations, fast
growth rates and common legal systems, and how the Commonwealth is a
useful jumping off point for the UK to achieve a full complement of
global trading partners.

On the eve of the Trade Ministers’ meeting, for example, the Royal
Commonwealth Society (RCS) was keen to promote its polling showing UK
businesses’ enthusiasm for the government to prioritise trade with
Australia, Canada, Singapore and India – an impetus for trade ties
from the grassroots up. The 17% year-on-year fall in sterling
following the referendum result has indeed given a fillip to British
exports (equivalent to a 7% boost by the start of 2018, according to
Standard & Poor). For Tim Hewish of the RCS, it is vital not to talk the UK down,
there are “small and symbolic things Britain can do to gear the wheels
of trade agreements with countries keen to trade with us” – however
confounding those agreements may in reality be to sign – and civil
servants carping about “Empire 2.0” is a travesty.

Hewish and others see international trade in starkly moral terms, with
the EU’s Generalised Scheme of Preferences offering, for instance,
tariff-free trade on agricultural produce while tariffs remain on
processed goods locking some developing countries into pernicious
dependency. The Legatum Institute’s Shanker Singham, a former trade
official, describes “extraordinary, Alice through the Looking Glass
conversations” with ministers urging preferences to be maintained,
with the added result that poor UK families pay more for their food.
(The EU Commission denies its trade policies have held back
development, a claim that backbench Brexiteer Peter Bone MP dismisses
as “lying”, pointing to the size of the German coffee processing
industry). With some lower income countries diversified enough that
they would welcome free trade, the time is ripe for change – Hewish
thinks that “you can eat values for breakfast”, with populations
becoming wealthier under free trade that in turn gives them more say
in how their taxes are spent, empowers women etc.

In a speech at the Guildhall last Tuesday, Lord Howell argued that
with the fragmentation of production processes and the emergence and
rapidly falling cost of new communications technology, world trade is
undergoing fundamental disruption. Pointing to a 2016 McKinsey report
that found digital information flow now has more impact on GDP growth
than trade in goods, he says that the service-dominated UK is ideally
placed to benefit and that the Commonwealth’s dispersed network fits
the future trade blueprint “like a glove”. Sir Ronald Sanders retorts
that it is a fallacy to simply look at total value of trade – people
can’t eat services or build infrastructure out of them, the need for
commodities including oil and gas continues, and current demand for
services in the Commonwealth is very largely concentrated in a handful
of countries.

Shanker Singham thinks the brightest hope for UK trade is through
reaching “plurilateral” agreements with a group of like-minded
countries, citing the 2006 P4 agreement between New Zealand,
Singapore, Brunei and Chile which provided the backbone for the Trans
Pacific Partnership. Formulated on an open accession basis, such
agreements carry much more market clout than bilaterals because they
can quickly bring in large swathes of the world economy. Over time,
Commonwealth countries’ shared values would attract more of them to
sign up; developing countries with more liberalised economies like
Ghana and Botswana would act as leading lights in their regions.
However, the Trump administration’s withdrawal from TPP, the public
dismay over the powers ceded to corporations in global trade deals and
the UK’s circumspection over globalisation suggest that following this
approach would be as fraught as anything in Britain’s current trade
predicament.

Intra-Commonwealth trade may still be “miniscule”, but it’s a great
opportunity to diversify exports in terms of basket and destinations
to reduce the UK’s vulnerability to shocks like the financial crisis,
says Rashmi Banga, head of trade competitiveness at the Commonwealth
Secretariat. “In India, Nigeria, South Africa, Kenya and the Caricom
countries, there are openings for many new services and products – eg
infrastructure, accountancy and legal services, [or] providing the
technology to the India Smart Cities project. This is where UK
services can grow exponentially”. The inaugural India-Commonwealth SME
Association trade summit in May will present opportunities. Grow the
value of trade now, and there may be more incentive to reach free
trade deals after 2019.

Meanwhile, Trinidadian economist Marla Dukharan gives hope to the
prospect of UK bilateral deals gaining traction. In her view, regional
association Caricom has been too weak and slow-moving to represent the
Caribbean at the negotiating table, and each island should seek a more
meaningful discussion over trade bilaterally with both the UK and the
EU.

The boisterously Brexit-friendly CANZUK movement with Tony Abbott and
historian Andrew Roberts among its leading lights calls for free
movement as well as free trade across Canada, Australia, New Zealand
and Britain. What do citizens of other Commonwealth nations think
would sweeten relations between their countries and the UK? Gaston
Chee, a Malaysian with an education business operating in China and
Britain, contrasts how London and Beijing court his compatriots: it
takes three months to get a bank account in the UK but less than 15
minutes in China. As for the May government’s insistence that foreign
students return home promptly after finishing their courses rather
than encouraging them to stay to build a business, “Do you think it is
fair to have paid hundreds of thousands of pounds and not be able to
attend graduation?”, he asks.

Rajesh Thind, a British-Indian writer and filmmaker who has spent five
of the past 10 years in Delhi and Mumbai, says Indians are predisposed
towards trying to understand and to work with the UK, “but it comes
from a muscular position of wanting a good deal and the securing of
free movement”. This needn’t mean long-term immigration – “it could be
two or five to ten years. A lot of people want to train up and go
back”. Peter Bone MP says he is potentially open to this – “One of the
great things about coming out of the EU is that if we want to decide
that, we can”. Thind echoes the recent calls on Channel 4 News by
dapper Indian MP Shashi Tharoor for Britain to come to terms with its
actions as a coloniser – for much more practical reasons, to Thind’s
mind, than post-imperial guilt. “The middle-ground in India is very
self-aware that rapid growth since 1991 has been a) very unequally
distributed and b) taken place in the context of bureaucratic inertia.
Cities are teeming, infrastructure is creaking, manufacturing needs
upgrading. We need expertise and partners… We can make the Indian
success story part of the British story, but that will take a
historical reckoning”.

Brexit and its consequences occasion radical and courageous fresh
thinking. The Commonwealth might yet assume an unexpected role in the
UK’s economic future – but this might take a brave new departure by
the immigration-chary May government, too.

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