Alan Mak: Boosting entrepreneurship is key to North’s prosperity

Leeds is integral to the Northern Powerhouse.

Leeds is integral to the Northern Powerhouse.

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ALARMISTS predicting a widening economic gulf between the North and South of England have made it easy to forget that Yorkshire, the North West and North East are home to innovative and growing businesses, and central to the success of George Osborne’s Northern Powerhouse.

While the media’s focus is often on the South, powerful research indicating the North’s prowess is sometimes overlooked – such as that from the University of Portsmouth, which found that the regions in the North lead the South in industries including manufacturing, defence and construction.

Or from Octopus Investments, whose study into the top urban hubs for high-growth small businesses (firms which make up less than one per cent of all UK businesses yet create one in three new jobs) placed two northern cities in the top five.

Or from Santander, which found that all UK regions perform well in terms of entrepreneurial ecosystem when compared with countries in the EU.

I grew up living above the high street shop owned and run by my parents in York, and I view Napoleon’s infamous line – that Britain is a “nation of shopkeepers” – as a badge of honour.

Times have changed in Yorkshire since my childhood years: once characterised by small local businesses, today cities such as Sheffield and Leeds are also key regional hubs for creative industries and internet startups.

The North is home to some of the UK’s most inspirational businesses while its 29 universities have become centres of collaboration between science and industry. Nonetheless, we cannot ignore the fact that, since the 1970s, the economic divide between London and England’s other cities has grown.

Britain’s economy is more regionally unbalanced than any other on the continent and the North’s substantial potential risks being wasted.

We know that entrepreneurs are vital to our economic growth, creating new businesses and jobs, intensifying competition, and increasing productivity, often through technological advancement. Bridging the gap between Northern and Southern cities will be a long-term project, but boosting entrepreneurship in the North could accelerate change.

Today I am today launching the new All-Party Parliamentary Group for Entrepreneurship in the House of Commons. The cross-party group of MPs and Lords will open up the dialogue between policymakers and entrepreneurs from Land’s End to John O’Groats. It will focus on four policy areas in its first 12 months: exporting, tax reform, enterprise education and female entrepreneurship. These are the four areas the Government need to crack if entrepreneurship is to flourish.

Of equal importance will be educating MPs on the schemes already out there to support entrepreneurs. We cannot expect all politicians to know all things, but according to a 2015 survey of MPs by The Entrepreneurs Network, close to a quarter either hadn’t heard of the Northern Powerhouse, or knew too little about the scheme to rate its effectiveness.

I suspect that figure will have dropped significantly in this year’s survey, given the raft of interventions introduced by the Chancellor as part of the initiative in the past 12 months, but there are other blind spots onto which the APPG will shed light.

In 1962, Harold Macmillan told an audience that he was determined to “prevent two nations developing geographically, a poor north and a rich, overcrowded south”.

Successive governments of all parties have dedicated substantial budgets towards the former Prime Minister’s task, but the problem has proven stubborn and seemingly intractable. The Northern Powerhouse, however, marks the most bold and ambitious vision for expansion in the North in decades led by a Chancellor who himself represents a seat in the North West.

It rests on three pillars: improving transport connections; backing science, universities and creative clusters; and devolving power. Since it was announced in June 2014, a host of initiatives have come into play, from the Greater Manchester Devolution Deal to Transport for the North. Giving significant proportions of national budgets to governments of city regions that wish to grow can boost progress: the Northern Powerhouse goes a long way towards realising these ambitions.

The North is home to many great cities rich in talent and economic potential. By giving its entrepreneurs a voice in the corridors of power, the APPG for Entrepreneurship can ensure the vision of a Northern Powerhouse becomes a reality.

Alan Mak MP is Conservative MP for Havant and chair of the APPG for Entrepreneurship. He was born and grew up in York.

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