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Graham's latest column for The Journal
Publish in the Newcastle Journal on 15/12/2016
By Graham Robb, Chair NE Institute of Directors, Vice-Chair Entrepreneurs' Forum
It is not every day that I get asked to give evidence to a House of Commons Select Committee but it happened last Thursday. The committee on Trade and Industry was meeting in Durham as part of its enquiry into UK industrial strategy. I gave evidence as part of a panel with James Ramsbotham of the NECC and the redoubtable John Elliott of Ebac. I confess I was nervous, I had swotted up on all the arguments, facts and figures. Unlike James, I only lead the IoD in my spare time, it’s not my day job. While John is too experienced and set in his ways to worry! Despite my tentative apprehension, it went well and I presented to the committee a picture of the North East that is enterprising and determined and cited quite a bit of evidence that suggests we are starting - ever so slowly - to close the large gap with the rest of the UK. For example, did you know that in the last 12 months employment has grown by more than 50,000 - enough new jobs that if it were one investment it would represent seven Nissans!
Coincidentally, the same day I attended the launch of the Tees Valley Strategic Economic plan. Lord Heseltine has had a hand in developing the plan and at the launch he rightly gave credit to the leadership of Tees Valley Councils and the LEP for the ambitious yet realistic document. Unlike local authorities elsewhere in the North East, Tees Valley has come together to speak with one voice. Its combined authority has solid and credible business involvement and the leadership bodies know what they want to achieve. The result is that from May next year there will be a new elected Mayor for the area, substantial powers and resources covering everything from skills to transport to special planning and – significantly – a new development corporation.
I currently serve on the shadow South Tees Development Corporation. Being a shadow director is a very exciting position to hold. This body will dovetail into the big agenda being followed by the Combined Authority and Mayor by acquiring powers to provide infrastructure, develop land and make planning decisions. The full range of powers are currently out for consultation but when linked to the Government’s Autumn Statement announcement of substantial extra borrowing ability it could be the single most important development for the Tees Valley economy in this generation. The Tees Valley devo-deal demonstrates local and national leadership at its best. The area is starting to recover from the grievous economic blow delivered by the SSI closure and – thanks to proven
The Tees Valley strategic plan has six building blocks it will follow to unlock transformational growth: Business Growth; Research, Development, Innovation & Energy; Education & Skills; Place; Culture; Transport and Infrastructure.
The most important one is first: Business Growth. Even during the recent turbulence business growth has been strong in Tees Valley, the ‘business birth rate’ is higher than the national average. In fact the North East as a whole is seeing more new businesses per 10,000 of population than anywhere else in the UK. This is a necessary catch up process as we lag too far in the business density index and remain too reliant on inward investment and large employers, welcome as they are!
The importance of business growth cannot be understated and my evidence-giving friend at the select committee was able to demonstrate it perfectly. John Elliott, chairman and founder of Ebac, has some radical ideas about the economy. Not everyone agrees with everything he says but one thing he is right on is the importance of our balance of payments deficit. We import more than we export and cannot sustain this in the long-term. He has done something about it. Until October this year every washing machine bought in the UK was imported. In October, Ebac produced its first UK-manufactured washing machines. They can only be bought in local electrical retailers or on line from Ebac. Hundreds have been sold, representing almost £2m benefit to the UK economy through a reduction of imports.
The next most obvious way of tackling the balance of trade is to increase our exports. Businmess organisations like IoD, the NECC and the Entrepreneurs’ Forum give full backing any initiatives to support exporters. Next year, the Department for International Trade is running many Northern Powerhouse export missions and they would welcome first time exporters. The missions use the Northern Powerhouse brand because of its size. Going to the Far East and saying the mission is from a region with 44 million people is impressive – some of China’s individual cities have populations which dwarf our major population centres. In 2017 at least twelve such missions are planned based around different sectors and geographies.
Work is currently underway to boost the North East economy; the Government calls it the Northern Powerhouse and its Industrial Strategy, local authorities refer to local strategic plans, and business to enterprise and ambition. If all the positivity that has started to emerge in our region is harnessed others who give evidence to MPs, won’t have any cause for concern.