Treat towns like Ilkley the same as Islington over broadband if levelling up to succeed – John Longworth

Coinciding with the Levelling Up White Paper, the Independent Business Network (IBN) of family businesses has produced a strategy of its own.

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Based on Yorkshire as a good example of what can be done to boost a region, the report is very clear as to what is needed and what is not to produce results rather than window dressing in the cake shop.

Crystal clear is that the regions need wealth, not welfare. They need the proverbial fishing rod, not a measly fish thrown down by the Treasury, while the City of London continues to merrily “rake it in” at the expense, to some extent, of the rest of the economy.

The IBN makes it clear that the single greatest thing that can be done to boost the regions is to increase the size of the national cake by going for super growth in key aspects of the national economy.

By doing this the regions will enjoy a differential advantage as they have greater capacity for growth than the South East and London, especially in a tight labour market.

For Yorkshire and the regions to succeed, there needs to be a fillip to manufacturing. This means a favourable investment environment including access to long term, patient loan and equity capital, a favourable tax regime of lower corporation tax and business rates which recognise investment.

These would increase the chances of businesses surviving the first few years of their existence, and thereby persuade prospective entrepreneurs that the risks involved in beginning their company are outweighed by the potential benefits.

Manufacturing still represents 10 per cent of the economy, more than banking and insurance combined. There is no doubt that it is robust and efficient for the most part, having survived the excessively high value of Sterling during the oil boom of the 1980s and 90s and having fought off the growth of China in the noughties to the present day.

In terms of productivity growth bang for buck, it is manufacturing that can deliver; services rarely provide such productivity increases. Having said this, AI may change the nature of services which is all the more reason to also back manufacturing. One thing is for sure, an increasing and unlimited supply of cheap labour is no way to grow productivity and wealth in the economy.

The report also identifies specific indicators of levelling up. It applauds the abandonment of the over costly anachronism which is HS2, and calls instead for the money to be spent on road and rail infrastructure within Yorkshire and across Pennine links between the major towns and cities. Faster journeys between York, Leeds, Sheffield and Harrogate will encourage less car use.

The provision of world class digital infrastructure is more essential than ever to regional development. People living in Ilkley deserve, and should expect, the same broadband connections as those living in Islington. Furthermore, given the new propensity for remote working, the development of digital infrastructure is a sure-fire way of both attracting new talent to the regions, and putting a stop to the brain drain that has blighted the regions for decades. Given the choice to work in high skilled employment in either London or Yorkshire, I know which option many would choose.

The necessary provision of house building to make the regions attractive is also identified, as is the continued requirement for ongoing education and clusters of higher education excellence linked to business. It is all these investments that will make possible high paid jobs in the regions and attract entrepreneurs, which are the foundations for wealth.

What we do not need are the brand new ‘elite sixth forms’ that the DfE is proposing. These will only serve those pupils who already perform well; we need centres which help those struggling to improve, and develop the skills local businesses will need in future.

We can think of the above as the combination of ingredients that will produce the Yorkshire cake – the combination of policies that will lead to sustainable levelling up. The one thing that is not helpful is trying to put a useless cherry on the top through the creation of more mayors. Typical as it is of Whitehall and politicians to think that the answer is more bureaucrats and politicians, it is most definitely not.

John Longworth is chairman of the Independent Business Network and a former director general of the British Chambers of Commerce.

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