Why Rishi Sunak must deliver this Budget for Yorkshire – Drew Woodhouse

Will Rishi Sunak deliver a Budget for Yorkshire this week?Will Rishi Sunak deliver a Budget for Yorkshire this week?
Will Rishi Sunak deliver a Budget for Yorkshire this week?
THERE is a sense of irony that the new chancellor, Rishi Sunak, was pictured making a cup of Yorkshire tea during a “quick Budget prep break”. Tomorrow’s Budget needs to be a budget for Yorkshire.
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As the MP for Richmond, and in the job for less than four weeks, the pressure is on Mr Sunak in the second most powerful job in British politics – particularly given the challenges posed by Brexit and coronavirus. More widely, the pressure is on Boris Johnson’s government to deliver on his promise that “everyone can get a fair share of future prosperity”, but is this achievable – and what should it look like?

The reason Yorkshire should be brought into focus is because the shape of the local economy will be hit harder by economic shocks than any other region.

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Rioshi Sunak is preparing to deliver his first Budget as Chancellor.Rioshi Sunak is preparing to deliver his first Budget as Chancellor.
Rioshi Sunak is preparing to deliver his first Budget as Chancellor.

Given the business demographic of a bulk of small to medium-sized enterprises and weak ability to absorb cost increases, external factors such as Brexit, coronavirus and a lack of trading arrangements could all prove to be Yorkshire’s Achilles heel.

To be successful, there should be two aspects to ‘‘levelling up’’ the region. One, promoting resilience and agility as a defence to the immediate threats, and two, a forward-looking strategy which promotes structural change, competitiveness and productivity as a mechanism to sustain economic and social progress.

We can boil this down to two key themes: sustainable economic growth and societal reform. There is a need to support small to medium-sized enterprises which are more susceptible to uncertainty and volatility. There should be an attempt, sooner rather than later, to smooth uncertainty with greater support for bridging loans and more flexible bank judgments on business debt. This will help defend against immediate shocks and give firms the support they need to invest. It would be good news for workers too, creating stable jobs and an upgrade to real pay.

For too long, a lack of public spending – combined with the private sector’s unwillingness to pick up the slack – has meant that regions such as Yorkshire are failing to compete with other comparative UK and European regions.

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What will the Budget deliver for Yorkshire?What will the Budget deliver for Yorkshire?
What will the Budget deliver for Yorkshire?

Investment in key centres such as Rotherham’s Advanced Manufacturing Park (AMP), Sheffield’s niche manufacturing sector and Leeds service sector would attract both domestic and international investments, provide a sharper focus for universities in Yorkshire to support and create an appetite to boost our creaking transport infrastructure.

Projects such as supporting connections to Doncaster Sheffield Airport, high speed rail and the trans-Pennine rail electrification are all welcome. A greater move towards devolutionary powers will help and will give local authorities the chance to commit to active, inclusive industrial strategies. It would shift workers out of low-paid jobs and create greater social mobility and allow the private sector to reap the rewards.

With a policy package which promotes Yorkshire PLC, the mission should then turn to how one can ensure a closer relationship between sustainable economic growth and improved living standards for all. Economic growth can only happen through social reform.

With one in five people in Yorkshire now living in poverty, any plan to create growth is only possible where it ‘‘raises all boats’’. Delivering affordable housing for those with the greatest financial needs and increasing the housing stock will create aspiration, and make sure value adding citizens, such as recent graduates, have a defined path to a prosperous career and family life in the region.

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The biggest driver of regional and social inequality is between those that have assets and those that do not. Supporting the local housing industry would create an upward spiral, spurring societal mobility and make growth synonymous with regional development.

There is a chance for the Government to cement the Tory ‘‘blue wall’’ but that can only happen by ending austerity, giving SMEs the resilience to weather the coming storms and making growth sustainable by boosting investment. Social reform should also rise to the top of the agenda so that Yorkshire doesn’t just move up one level up. If done right, this budget should be a chance for Yorkshire to move through all the levels and rise to the top.

Whether it will do so remains to be seen.

Drew Woodhouse is a lecturer in economics at Sheffield Hallam University.