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Regional growth gains, worth
more than £200bn over next decade
NEW CBI report lays out plans to power
UK productivity and increase UK economy by more than 10% in a decade. Unlocking
higher regional productivity could add £208bn to the UK economy over the next
decade, according to the latest CBI research. That's equivalent to an economy
that is 10% bigger than it would have been otherwise and should be a major part
of the drive to tackle inequality at a time of real concern about living
standards and wages.
Productivity is vital for long term, sustainable economic growth as it is the
foundation for prosperity. However, while some parts of the UK have seen
world class productivity gains, too many towns and regions have been left
behind, limiting opportunities for millions of families across the country.
The CBI's new report:- 'Unlocking Regional Growth' launched, on Thursday, 1
December 2016, at the Manufacturing Technology Centre, in Coventry, draws on special
access to ONS data to identify the 4 main drivers of regional productivity
differences across the UK:-
► Educational attainment of young people at 16
and skills.
► Transport links that widen access to labour.
► Improved management practices.
► Higher proportion of firms that innovate and
export.
In the Autumn Statement the Chancellor set out
to tackle regional imbalances by pursuing an industrial strategy fuelled by
infrastructure and innovation spending.
Now the CBI has calculated the potential gain to the UK economy if each local
area can increase its productivity at the same rate as the top performer in
their respective region or nation.
In the North West, our research shows it is 33% less productive than London,
with Cheshire East the most productive area, and Blackpool the least.
Damian Waters, CBI North West Director, said:- "Raising productivity
across all parts of the UK should be the single most important domestic goal
over the next 5 years.
Powering productivity in the North West could help lead to a UK economy that is
10% bigger in a decade than it would have been otherwise.
We can achieve this by pursuing investment in education, infrastructure and
innovation in an industrial strategy delivered in true partnership between the
Government and business.
So let's all unite behind this common agenda and usher in a new era of
opportunity; and prosperity; for all."
The Rt. Hon. Greg Clark MP, Secretary of State for Business, Energy and
Industrial Strategy, said:- "Our upcoming industrial strategy will have a
particular focus on improving productivity and just last week we announced the
?23 billion National Productivity Investment Fund. This new investment will help
us unlock the full potential of regional economies and support businesses of all
sizes to grow and prosper."
The size of the prize is huge; ?208bn to the UK's nominal gross value added
over the next decade and roughly equivalent to the combined GVA of Wales,
Scotland and Northern Ireland. This would lead to more jobs and higher standards
of living right across the UK.
To achieve this goal, business and policymakers must work together to place
increasing productivity and economic growth at the heart of further devolution
efforts, and take action to address the drivers specified above.
Examples include:-
Focus on building the right skills across the UK and producing the best
opportunities for our young people. Reduce the numbers of poorly performing
schools by enhancing the role of regional schools commissioners (RSCs), who are
charged with their improvement.
Improve transport links between Cities in the North of England could provide
access to a population of 16m; the same number within one hour of London.
Specifically, lowering transport times between Manchester and Sheffield to 30
minutes could provide a 10% lift in productivity.
Reduce urban congestion and speed up travel times in our cities. This could
boost productivity in Leicester by 8% and Nottingham by 6%.
Improve management practices and simplify the number of business support
initiatives, building on the work of the Productivity Leadership Group
More targeting of Government assistance for firms with the potential to export
at a regional level. Exposure to foreign markets facilitates competition and
promotes innovation.
Next steps
As part of the CBI regional growth project's second phase, which will come to
fruition ahead of next year's mayoral elections, the CBI is developing regional
productivity 'scorecards' that will assess the performance of UK local
areas relative to the rest of the UK.
These will provide business leaders, policymakers and local communities with the
evidence they need to identify practical steps help to plug the productivity gap
between; and within; regions. This data will help redress regional economic
imbalances and offer communities that have been left behind, new growth
opportunities in the face of further uncertainty that lies ahead.
To provide the best environment for growth, increasing productivity and creating
economic growth must be central to further devolution deals. Aligning devolved
powers to economic geographies, at the appropriate level and within robust
accountability structures, will help. New Mayors have a major role to play as do
local businesses, LEPs and local authorities.
Ultimately, only by embedding future investment in education, infrastructure and
innovation in an industrial strategy that combines regions with sectors and
delivered in true partnership between the Government and business, can the UK
deliver prosperity for all in uncertain times.
National law firm Irwin Mitchell is sponsoring the report. Vicky Brackett, CEO
of Irwin Mitchell's Business Legal Services division, said:- "Increasing
productivity across the UK's economy is a subject Irwin Mitchell is passionate
about, particularly as it can drive greater prosperity and ensure all businesses
are able to reach their full potential.
We are fully supportive of this CBI campaign and welcome their evidence based
approach which looks at each region closely and identifies tailored solutions to
boosting productivity. There are some significant challenges ahead, but if
businesses and government can make it a priority and work closely together, then
I genuinely believe that economic growth within our regions can be unlocked."
Marnie Millard, Chief Executive of Vimto (Part of Nichols plc.) and CBI Regional
Chair:- "The North West provides a great environment for businesses to
invest and grow with our local politicians leading the way in creating
opportunities to develop further. However, productivity performance must be
improved if the economy is to reach its full potential. The regional growth work
being undertaken by the CBI is offering vital insight into the causes of low
productivity and is identifying ways to unlock growth. Businesses only succeed
if they have a defined strategy and the CBI's growth report is helping to create
a growth strategy for the North West." |
