In Thursday’s Autumn Statement, Chancellor Jeremy Hunt will set out his plan to steer the flailing UK economy back on track. With the bond markets still fractious, stability will be the watchword. But the Chancellor will also know that sustainable growth is a precondition of any economic recovery.
In short, he must stabilise and promote growth at the same time. This is therefore a timely moment to send a constructive message from the UK’s growth region: if the Chancellor wants to get the economy moving again and fast, he should look East.
Since setting up the Eastern Powerhouse in March, our message to prime ministers Johnson, Truss and now Sunak has been consistent: give us parity of investment and attention, and the East can do the rest. This is not a begging bowl exercise – our county councils have tried that tactic for decades and it doesn’t work.
In contrast, the Eastern Powerhouse is business-led and singularly growth-focussed. The abundance of life science, agritech and green energy businesses across the region makes us hugely attractive to foreign investors. With the right strategic lead from the centre, we can attract the private investment the country so badly needs, and deliver the proceeds of sustainable growth.
It is certainly true that, historically, the East of England has been overlooked by central government. It receives 40 per cent less Levelling-Up funding than other parts of the UK. Its share of national spending on transport, health and education is lower than the national average.
Our own economic research estimates that closing these gaps could generate an extra £31bn a year in GDP, and £11bn of additional tax-take for the Exchequer. Put simply, the East can deliver more growth per pound than any other UK region.
Sign up for our FREE Reaction Weekend Email
Read the week's best-read articles on politics, business and geopolitics
Receive offers and exclusive invites
Plus uplifting cultural commentary
As Chairman of the Eastern Powerhouse, I travel the length and breadth of the region to talk to businesses. They show me the major obstacles to growth that currently exist, and we discuss what policy interventions are needed to remove them.
No surprise that local skills shortages are a top priority. Hundreds of businesses have full order books and growing customer bases, but they are struggling to find skilled workers to fulfil the orders. Local schools and Further Education colleges are not producing enough highly-skilled graduates to meet their needs.
Fixing this need not be costly. By improving access to already-existing FE institutions, we can equip local students with the skills that employers need. An obvious solution is better, quicker regional transport links, and subsidies for student commuters where they are needed.
We currently have an appalling situation whereby students’ choices of courses are restricted to those subjects offered by FE institutions they are able to reach by bus or train. In the rural East, this can severely limit a student’s choices. A young person might have a passion for engineering, but the subject is off-limits if the bus or train can’t get them to a provider, or the cost is prohibitive.
Broadband would be an obvious solution to this, but the East’s broadband infrastructure is in dire need of a revamp too. Woeful connectivity in many smaller towns and villages is limiting the options of students and businesses that need a reliable internet connection to function properly and get on in life.
Poor physical and Wi-Fi connectivity forces local entrepreneurs to relocate to larger towns and cities. This sets in train a downward cycle. Hence, skills and connectivity are prerequisites for any government that is serious about growth and the welfare of local communities.
Public sector funding can address this problem in the short term, but private sector investment is what’s needed for the long run. The government should provide a strategic framework that encourages private investment in broadband to support promising local entrepreneurs. In turn, their success will encourage further place-based investment.
The government has other levers too, of course. The right tax and regulatory frameworks are critical. The Eastern Powerhouse was supportive of the proposed network of low-tax, low-regulation Investment Zones, but with certain important adjustments.
Instead of single geographic locations, we need a “polycentric” approach to Investment Zones that encourages multiple points of economic light across a region, instead of just a few lucky locations around the country that suck in businesses from elsewhere. This would spread prosperity to all areas of the East and avoid the problem of aggregation.
With the Autumn Statement, the government has a chance to set a framework that enables the East to drive sustainable growth both regionally and nationally. The Chancellor should look East to the UK’s growth region.
Write to us with your comments to be considered for publication at firstname.lastname@example.org