Virtually every discussion around economic growth over the last four years has been framed through the prism of Brexit.
I have lost count of the amount of times the words “despite Brexit” have been used around any announcement concerning investment or good performance of companies and sectors, with the matter of our membership of the European Union so often dragged into discussions in which it has no place.
While the matter has given us a murky and uncertain climate to operate in and made investment decisions troublesome for many firms large and small, it has been referenced far to regularly and the reality is that we are still in the EU and, in theory at least, set to commit to a loosely orderly exit in January.
This is the stage where the real uncertainty begins as the UK sets about establishing a trade agreement with the EU, something senior cabinet ministers have claimed can be done in just 12 months.
But put aside Brexit and look at the growth projections for our great region here in Yorkshire.
Forecasts from PwC in its UK Economic Outlook document predict that, assuming we do not succumb to the lunacy of a no deal crash out, that Yorkshire’s economy will grow by just 0.9 per cent in 2020, with growth for this year set to be 1.1 per cent.
Regional productivity across Yorkshire and the Humber is approximately 17 per cent below the national average and the IPPR North think tank this week reported that the UK is more regionally divided than any comparable advanced economy.
These issues did not spring up overnight and have been festering since long before Brexit took over the national psyche.
The reasons for the malaise are pretty much what you would expect them to be.
Take for example the considered words of PwC’s chief economist, John Hawksworth, who opined that “a 1 per cent increase in skills is associated with a 2 per cent increase in productivity in a local area”.
He said: “Similarly, physical connectivity also matters, which reinforces the case for increased investment in transport infrastructure for areas that tend to lag behind, whether in the North of England or the far South West such as Cornwall. The prize for closing the regional productivity gap could be large.”
He is not joking.
PwC forecasts that if Local Enterprise Partnerships which are performing below the UK average can close 50 per cent of this gap in productivity performance, it could add around £83bn to the economy.
This would be massive, adding close to four per cent to our GDP as a nation. It would pay for HS2 in one clean sweep and still have some cash left over for a decent upgrade to many of the country’s congested road networks.
And if the gap were closed Yorkshire and the Humber could see the largest percentage increase, amounting to some 13.5 per cent.
These are no small potatoes. As I write this column I note the words of Lord O’Neill, one of the key architects of the Northern Powerhouse movement, during a speech he has given in Cumbria.
He lays into the Theresa May government for abandoning the Northern Powerhouse movement and says, troublingly, that if there is no large scale plan formed for Northern devolution published within a month of the formation of the next Government, he will “stop wasting his time on this stuff”.
Lord O’Neill is one of the world’s foremost economists and knows the value to the UK and the planet of an empowered North of England.
Let us hope and pray, as Christmas begins to appear on the horizon, that this understanding is bestowed on the next Government in full and that, rather than more vacuous pronouncements on Brexit, it puts its shoulder to the wheel of something which will actually make a difference to the lives of everyone in this country.
- This is my last column for 2019 as I prepare to welcome the birth of my second child. I wish to thank all my colleagues, contacts and readers for giving me a wonderful and fulfilling job.
See you in 2020.