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My first year as IoD North East Chair
As we meet for our annual dinner this year I would like to report that the IoD in the North East is in good heart.
It has seen membership grow to almost 500, a new regional director has been appointed – the excellent Natalie Sykes, it has an active and successful women’s network led by Shelia Stokes White, and it has spoken out forcefully on the issues that matter to business in this region.
It has two new and active committees in each of the two local enterprise partnership areas. In the North Eastern LEP area, our committee is chaired by my redoubtable deputy David Cliff of the coaching firm Gedanken. In the Tees Valley LEP area the committee is chaired by one of the most connected executive recruitment specialists in the North, Paul Barron of Executives Online. They have active programmes and I know they are keen to hear from anyone who wants to support their thriving committees.
I am also happy to remark that the North East economy appears to be its best shape for years.
We know the narrative of previous years has been of recession, decline and division but now we can see evidence that real change is taking place.
The economy is in recovery and, even better, it is a ‘Heineken Recovery’ in that it is reaching parts of the UK other recoveries haven’t reached.
Here in the North East unemployment has come down – last week’s figure indicates there are 103,000 people out of work in the region - down 15,000 on the previous quarter. In fact unemployment is falling here at the fastest rate of anywhere in the UK. Economic activity is also growing at the fastest rate of anywhere in the UK.
In the North East more people are employed than ever before; around 1.2 million.
Each of the region’s LEPs have made real progress; in Tees Valley, which has existed for longer, £2billion of inward investment has been secured including deals with SSI and Air Products; £180 m of Regional Growth Fund money has reached local firms and around 5000 jobs have been created or safeguarded. In the North Eastern LEP area, a major growth deal has just been announced with the Government, which will see millions of pounds directed to help SMEs create sustainable futures for more than 2000 young people aged 17 to 24.
The abundance of initiatives and programmes designed to help this region grow and compete is too large to mention tonight; but many of them are directed at private sector growth, which is absolutely critical.
The IoD understands this. Our members form a cohort of business cheerleaders who back the risk takers, nurture the wealth creators and mentor those individuals who want to create opportunities and jobs in the North East.
Partly as a result of the optimism and hard work of the region’s entrepreneurs one set of data released recently was extremely positive. The North East is now the top region in England for the growth of new businesses.
That’s right we’re No.1 in England!
Positive, unassailable, undiluted good news!
The region now has over 150,000 businesses for the first time. Its business population grew by 12% last year. It is still below the national average but it is catching up. We used to have 633 businesses per 10,000 of population now the number is well over 700 per 10,000.
Together with the Entrepreneur’s Forum, the IoD champions this statistic as the most important of all. We want the ‘Enterprise Agenda’ to be foremost in the minds of policy makers and opinion formers as the most important way of generating and sustaining economic opportunities for the North East. Lots of these new businesses are one-man bands; but many in this room started that way. My own business started in my bedroom, now we employ quite a few people and have a significant turnover.
When Chancellors stand up and announce measures to help businesses, most people glaze over and tune out. Some even think that businesses get too much attention. But private business really is the only source of taxation the Chancellor has. If private business isn’t trading, making profits and employing people there is no way of generating the tax revenues for public services.
In the North East the need for more businesses of all sizes is, in my view, the number one issue. Anything that makes business easier will help strengthen our economy further. For example, business wants and demands better transport links. Improvements to our road connections are underway but rail is critical too. Improvements to Darlington station will free up log jams on the East Coast line enabling more trains to run at more convenient times; Network Rail needs to prioritize them. Electrification from Middlesbrough to Northallerton is also a pressing issue. Thankfully, George Osborne didn’t stop massive capital expenditure in his first few years – hence the road works we all face frequently – and any chancellor must resist the temptation to do so in the future.
The percentage of public spending in the economy is set to fall to 35% - about the same as Australia. The task of Government is to spend its reducing resources on projects that generate wealth and ensure businesses can keep a ready supply of taxable profits. Generate it, tax it, and spend it – in that order. The economy will be unforgiving of a political leader that plans to do the reverse. Political leaders would do well to remember what Churchill said about business; he remarked that it is not a tiger to be caged or a cow to be milked but a strong horse which can pull the nation’s wagons.
In addition to the agenda of promoting and supporting entrepreneurial activity in the region, the Institute of Directors wants to actively support its individual members when they hit the headlines for merely doing their jobs in managing great businesses.
That’s why I was happy to speak up for the management team at Barbour earlier this year. It’s why a few weeks ago I was happy to support the private sector board members of the North East LEP over a matter of tension with the local authorities. It is also why I strongly support Durham County Council over the disgraceful decision of a planning inspector to stamp on its plans for economic growth by rejecting whole-scale its local development plan. Where business has an interest, the community has a whole can prosper. Businesses and communities are not on different sides.
The IoD is also working jointly with other business organisations to promote our idea of an entrepreneurial North East. I’m proud that on three occasions recently we have held joint events with the Entrepreneurs’ Forum, whose excellent chairman, Nigel Mills, joins us tonight. We have jointly afforded our members two opportunities to meet with the business minister, the Defence Secretary is here tonight and members have the chance to talk to the Chancellor who is in the region tomorrow.
Finally, I would like to say something very personal.
There are times that leaders in business need the support of friends and colleagues. Being the boss can be an isolating place. I encountered this first hand in the last six months. I took over as IoD chairman last April and, unexpectedly, I lost my wife to cancer in July. The loss was a shock and my family are coming to terms with it; and I am proud that my 26-year-old daughter Jessica is accompanying me tonight in place of her beloved Mother. But the thing it has shown me is that, despite the cut and thrust of the business world, there is a huge reservoir of kindness and support. I can tell you, if you didn’t already know, that membership bodies like the IoD also offer a fellowship and camaraderie which can help you when times get hard. It is the often unspoken reason we come together in our various business tribes. I’d would like to offer my sincere thanks to, my deputy David Cliff and all those those in the IoD and Entrepreneur’s Forum who have been such supportive friends during this difficult year.