Sir Vince Cable: I am wary of threat posed by Brexit

As a born and bred Yorkshireman, I am proud of its achievements. I grew up in York, which was then an industrial city; both my parents started their working lives in the chocolate factories and my friends' parents were at the carriage works.
Vince Cable in a driverless car. Technology and innovation should be at the heart of local economic development. PIC: PAVince Cable in a driverless car. Technology and innovation should be at the heart of local economic development. PIC: PA
Vince Cable in a driverless car. Technology and innovation should be at the heart of local economic development. PIC: PA

Much of that has gone. But the city has a flourishing economy based on entrepreneurial small businesses, universities, tourism and financial services.

Leeds, which I visited often for football and cricket, is now one of the most successful Northern cities with a reputation for excellence in financial services – and increasingly fintech and big data.

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Even those parts of Yorkshire which have struggled most with the aftermath of industrial decline have success stories to boast about. Sheffield has some outstanding advanced manufacturing companies. And one of the legacies of my five years in government I am most proud of, the Catapult network of innovation centres, has produced a flourishing partnership between the University of Sheffield and local businesses, helping them address challenges with cutting-edge research.

The virtual extinction of textiles has gone into reverse, with pioneering work on new fabrics and yarns around Huddersfield. Bradford has some world-class food manufacturers. Hull is making waves, not only as the European City of Culture, but through wind turbine manufacture with Siemens, one of the success stories of the Industrial Strategy I led. Teesside has lost integrated steel-making but, with the help of a locally-focused university, has a future in speciality chemicals and new digital activities.

I see Yorkshire as facing two big challenges. The first is identity. I was brought up to see Yorkshire as on a par with Scotland and Wales (and most definitely with Lancashire). Successive local government reorganisations have destroyed much of that spirit, and power has been sucked out of local councils to feed the appetite of London-based government departments and quangos.

This centralisation is unhealthy. Every nation is made up of smaller local units and the best way for it to flourish is through maximising the productivity and prosperity of each of its constituent parts. And the way to do that is to put technology and innovation at the heart of local economic development, while empowering local actors to decide how that development takes place.

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Under the coalition Government a few halting steps were taken to reverse centralisation and to introduce a meaningful degree of devolution, which had ground to a halt when the North East rejected regional government in a referendum.

Manchester led the way with a negotiated ‘city deal’, followed by a combined authority structure. Sheffield and Leeds as well as Liverpool, Birmingham and Bristol are following a similar route, granting them greater powers over policy in the areas of transport, skills, business support and innovation. While it is still too early to evaluate the results of devolution, there are some indications that this renewed focus on the northern cities has energised their technology sectors.

According to a recent report by Tech North and the RSA, the North’s digital economy is thriving. It employs 280,000 people, contributes £10bn to the region’s economy, and creates jobs at ten times the rate of the non-digital economy. By 2020, it is on course to employ almost 400,000.

The presence of universities and strong FE colleges, and their integration into devolved decision-making, has driven innovation, facilitated knowledge exchange with businesses, and ensured a stream of talented and ambitious young graduates into the local economy.

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Moving forward, what can policymakers do to maintain this momentum? This leads to the second big challenge, which is infrastructure.

At a time when billions are being spent upgrading London’s rail connectivity, the North is being starved of capital. Cross-Pennine routes are slow and the main promise of an HS2 extension from Birmingham is lost somewhere in the long-term future. The Northern Powerhouse was designed to mobilise Northern cities in a common purpose, but I see little sign of action.

Investment isn’t just about rails, roads and wires. It is also about networks of financial institutions. Yorkshire’s local banks and stock markets have largely gone. But the British Business Bank – which I set up as Business Secretary – works with private-sector partners to increase funding to small businesses across the UK, and has been important in narrowing the finance gap faced by start-ups and expanding SMEs.

The aforementioned Tech North runs a range of programmes aimed at boosting the digital sector in the North, including business pitch competitions, training workshops and networking events. I hope that both of these organisations continue to receive the support they deserve from government.

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While I am optimistic about Yorkshire’s ability to build on its emerging identity as a hub for technology and innovation, I am wary of the threat posed by Britain’s impending exit from the European Union. Not only is the North more reliant on European Structural Funding than other regions, but it also risks losing access to the research funding, investment and international talent that are the bread and butter of any successful innovation-led economy.

That is why, alongside our commitment to a modern Industrial Strategy and a major upgrade of the UK’s creaking infrastructure, the Liberal Democrats will fight to ensure that the UK maintains the closest possible relationship with Europe.