The Northern Powerhouse….Centre Stage
George Osbourne, during his tenure as the Chancellor of the Exchequer, relaunched the Northern Powerhouse and his commitment to equalise the distribution of economic wealth across the UK. Since his departure from the Cabinet, momentum has slowed down. This article aims to explore the current perception of the Northern Powerhouse and what we need to do achieve its potential.
The current perception
In order achieve the momentum required to realise our potential, everyone must live and breathe the Northern Powerhouse. Currently there is extremely limited awareness within the region, not to mention outside our international borders. Foreign companies are keen to invest in the United Kingdom as evidenced by countless statistics but currently, they are attracted to London and the South-East. As an example, 44% of the Indian businesses based in the UK are located in London, compared to 15% in the North of England.
So what does the Northern Powerhouse need to do to?
A primary objective must be to improve the awareness regionally, nationally and internationally. Questions asked by foreign investors include what area does the Northern Powerhouse cover? If we were to take the North of England as whole, we would be comparable in size with global super-cities such as Mumbai and Beijing, which would speak volumes to our Indian and Chinese counterparts.
Secondly, what strengths do we wish to convey to the international market. London has developed a world-renowned financial services practice. Scotland has a strong oil and gas sector. So what does the Northern Powerhouse have to offer? This is where local government needs to facilitate and provide opportunities for our regional businesses through trade fairs or exhibitions.
The Northern Powerhouse is home to 15 million people and over 1 million private sector businesses. Our region is far too fragmented and needs a body or individual to pull North, South, East and West together. Whether this through an elected mayor or a public body, we need to stand together. The role of our Local Enterprise Partnerships must be defined. We must identify the official channels that support trade and investment and the champions we wish to showcase on the global stage.
With or without a strategy for the Northern Powerhouse, we’re all acutely aware of the transport and connectivity issues we currently face. £13 billion is being invested by the UK government to address this and hopefully high speed rail will enable greater collaboration across the region. The Northern Powerhouse has a great strength of having 7 international airports in our region. However, in my opinion, only 2 of these airports (Manchester and Newcastle) are arguably currently fit for purpose to facilitate international travel. More work needs to be done to improve international routes. It’s encouraging to see Leeds Bradford Airport working hard on this endeavour.
Why would an investor prefer the North over the South?
The abundance of land and resources and lack of competition (compared to the South) means that these are not always auctioned to the highest bidder. The Northern Powerhouse is home to 15 million people and we have a lot of labour, unskilled, semi-skilled or skilled, for businesses to utilise. Finally, the geographical location enables a business to efficiently serve the entire United Kingdom, as evidenced by the recent investment in the distribution centres in Bradford.
Conclusion
During the current period of economic uncertainty, owing to the ongoing dialogue with mainland Europe regarding Brexit, now is the time for the Northern Powerhouse to take certain stage and seize the opportunity to invigorate growth enabling the North of England to be an attractive place to live, work and play.
However, there are several areas that need to be addressed and every business, politician, employee and resident has a key role for the North of England to unlock and realise its potential. It’s four key objectives being, a) science, skills and innovation, b) connectivity and transport, c) quality of life and d) devolution and local growth – there is something in it for us all to benefit; whether it’s high speed rail, job creation or greater autonomy for local government.
Author
Sherad Dewedi
Managing Partner
sherad@shenward.com
