CBI boss calls for England's mayors to have economic as well as political powers

Levelling up may be the current watchword when it comes to addressing regional inequalities and empowering the North of England. But for CBI director general Tony Danker, this process is about more than just politics. Business Editor Mark Casci reports.

For Yorkshire, devolution has been a long and often painful journey.

While the likes of Manchester, Liverpool and the West Midlands are currently counting the votes for the second round of mayoral elections, the process in God’s Own County has been less simple.

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Intractable arguments of whether the geography of the region should be carved up or kept whole meant that until recently Yorkshire had only one mayor, equipped with limited powers in comparison to counterparts around the country.

West Yorkshire is finally to have a mayor

Dan Jarvis, elected as Sheffield City Region mayor in 2018, finally got the powers to go with his title in July of last year and this weekend votes are being counted to see who will run the West Yorkshire region.

It may finally seem like Yorkshire is getting somewhere in terms of serious political representation.

But for the director general of the CBI Tony Danker, the process is only just starting to unfold, stating that now mayors in Yorkshire and elsewhere in the English regions now need to be equipped with economic powers to run in tandem with their political capabilities. “It is a question of where does localism go next,” he told The Yorkshire Post.

“Before the crisis we were discussing a world in which there would be a shared prosperity fund that would replace European money that would devolve significant funding on a longer term basis to regions of the country. At one point officials were hoping to have a seven year settlement for a shared prosperity fund.

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“Whereas instead we had a one year spending review and a pot of money at Whitehall that local people had to apply for, and I don’t think you can build any meaningful, skin in the game, strategy for a place if you are either dealing with a one year settlement or if you have to apply to London and meet London’s criteria for how the region gets money.

"If the creation of a mayoralty provides some political leadership in a place then the next step has to be giving it economic leadership,” he said.

"That means devolution of funding on a significantly long term basis so you can build the coalition I am describing, get people aligned behind a plan and go for it.

"That’s what needs to come next."

Piece Hall

Devolution had been building in the English regions since former Chancellor George Osborne launched the Northern Powerhouse movement in 2014 but stalled during Theresa May’s time at Number 10.

It may seem like a lifetime ago given the events of the past 15 months but in the winter of 2019, the current Government was elected in no small part due to a manifesto which promised sweeping changes to the way the country was Governed, with more powers to be devolved away from Whitehall.

A white paper for further devolution is being drawn up and, while many hope to see it included in the Queen’s Speech next week, it remains unclear as to when it will see the light of day.

Mr Danker assumed his role as head of Britain’s biggest business organisation in November and, while he acknowledges that the Government has a role to play in investing in upgrading the North’s outdated infrastructure, it will not be the silver bullet which restores the region to parity with the South East.

Tony Danker

Rather he hopes to use his time in office at the CBI to drive forward the creation of powerful economic clusters which can compete on a worldwide basis.

And for Mr Danker, this involves abandoning a one size fits all approach to how regional economic growth is achieved and instead focusing on the individual strengths of locaities and enhancing them to be globally relevant.

“I have discussed levelling up with the Prime Minister,” he said.

“All the infrastructure spending, increasing broadband, better transport - all that stuff the Government promises to lead on is necessary but not sufficient.

“If we don’t compliment that with business sector levelling up, if we don’t have thriving clusters, sectors and firms in Yorkshire, we are not going to have better jobs, better wages, better skills, better health and wellbeing - the lot.

“I think that is the missing piece.

“In fact there are two missing pieces in levelling up that we want to get serious about.

“One is changing the frame that has dominated the last four or five years which is that every region should look the same.

“What we actually need to do is what other countries have done, which is that regions and nations have unique local comparative advantages that they are internationally famous for.

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“We have never really put forward as part of our competitiveness the competitiveness of every single region and nation and allowed them to be different.

“The second thing that we need to do is get really serious about economic cluster development. When you see some of this stuff in the Humber and all the renewable energy output on the Humber,we could be really great at that.

“So what is it going to take? What I would like to see the CBI do over the next five years is answer that question and play much more of a role in fostering successful economic cluster growth and scale ups in different parts of the country.

“That’s my big regional focus, is making levelling up real, making it about business sector growth and allowing regions to build economic growth by being great at what they are uniquely good at.”

The obvious question that follows of course is what are Yorkshire’s unique strengths that could be built upon to be renowned internationally?

Our conversation takes place the day prior to Mr Danker holding a “virtual visit” to Yorkshire to meet with leaders in manufacturing, tourism, tech and retail.

Many of these areas and more are potential avenues for global success, he said.

“There is obviously a big play going on in renewables and what is really interesting for the whole country is that decarbonisation is a huge prize for the nation and for society.

“Whether or not it is in carbon capture, hydrogen or offshore wind, there is a huge opportunity to play in that sector and to lead the world in that sector.

“Not only that, if we place the investments to really be at the frontier of that sector, let’s think about the product and service export businesses around that. That’s what I mean about cluster building. If we are going to get really good at renewables on the Humber, then what are the Yorkshire and Humber businesses that can spurn off that surrounding cluster.

“It is the Silicon Valley story or the City of London story or its health in Massachusetts story. You build on from what you have got and you build the adjacent supply chain sectors and then they become exporters.

“In Leeds you clearly have a financial services cluster and professional services cluster.

“And the other thing you have going, and I know this from having visited the AMRC is that you have some real advanced manufacturing expertise.

“So listen, that is more than enough. Don’t get me wrong, we need a strategy for every sector for the economy to become more productive and to grow wages and opportunities for sure. But as somewhere to start the cycle of growth, I think these kinds of high value-added sectors are important.

“Thereafter I would like to see a coming together of public investment strategy with leveling up strategies, decarbonisation strategy and innovation strategy so the Government actually starts placing money very strategically into areas where we are also able to generate private sector growth.

“That is the prize.”