The North risks long-term scarring unless unemployment is tackled soon, says CBI boss Carolyn Fairbairn

CBI Director General Dame Carolyn Fairbairn will today tell the region's business and political leaders that their immediate focus and determination is needed to "keep people in work and reskill those who sadly lose their jobs".

But in the longer term she says investment in the green economy, connectivity, and innovation is vital if the North is to be "the engine for growth for the whole of the UK”.

The current national unemployment rate is 3.9 per cent, with Yorkshire areas reliant on the visit economy among the worst hit, but there are fears it could soar to nearly 15 per cent if there is a second wave of the pandemic.

The Office for Budget Responsibility (OBR) said yesterday that the "UK is on track to record the largest decline in annual GDP for 300 years", warning that the economy could shrink by as much as 14.3 per cent in 2020.

In its latest set of financial forecasts, it said a worst-case scenario would also not see GDP recover to pre-crisis levels until the third quarter of 2024.

Speaking at the Northern Powerhouse Education, Employment and Skills Summit, Dame Carolyn will say in the coming weeks northern leaders "must urgently work together to flatten the unemployment curve to prevent long-term scarring of the North".

Talking about the task ahead for the next six months, the leader of the organisation which represents nearly 200,000 businesses will say: “We must then reinvigorate economies and create jobs across the North by investing in the green economy, connectivity, and innovation.

“We have to light the spark in the North. This can be the engine for growth for the whole of the UK.”

And she said the Government must "seize the moment to empower places" by building upon long-promised Devolution White Paper setting out how powers will be transferred to local leaders, which is due to be published this year.

She said: “Business has been ambivalent on devolution, but no more. We want action and we want it in the next twelve months.

“Rebuilding effort will require exceptional levels of partnership and trust across central, Mayoral Combined Authorities and local government. We truly are all in this together.”

She will be joined at today's virtual summit by speakers including Regional Development Minister Simon Clarke, Lord Jim O'Neill, the co-founder of the Northern Powerhouse concept, and Leeds city council leader Judith Blake.

Gill Morris, who chairs the summit, said she was disappointed by the lack of references to regional or local leadership in Rishi Sunak's £30bn 'plan for jobs' speech last week.

She said: "A centralised command and control style approach is the old normal – we need a new normal. Now is the time for a New Deal for the North, led and delivered by the North – if we are truly going to build, build, build."