In a speech to business leaders in the Tees Valley, John Allan, CBI President, set out why the Government’s Industrial Strategy must deliver if the UK is to remain a top destination for investment and innovation in the years ahead.
Speaking at Crathorne Hall, he will argue that after real progress in its first year, the Industrial Strategy must now pick up the pace to help drive up living standards and lessen regional inequalities in the years ahead, by improving the region’s productivity performance.
“We know that this year the Tees Valley was announced as one of five areas across England which will form part of the second wave of local Industrial Strategy trailblazers. It’s good news for the region.
“But, again, what this means in practice is that we need a renewed impetus from business and government to really bring local plans to life.
“Huge disparities remain across the UK. The most productive area of the country is now almost three times more productive than the least. And here in the North East the local economy is half as productive of London and the South.
“Not through a lack of effort, expertise or enterprise, but for structural reasons. A lack of investment in infrastructure, skills, and R&D. It means that, compared to London and the South East, this region is having to drive uphill.
“It isn’t just a problem for the Tees Valley. It’s a problem for our whole country outside London. “When it comes to productivity, nine out of 10 UK cities outside London perform well below the European average. These are sobering statistics.
“The CBI’s research is clear. If we were to raise productivity levels in this region it could boost the economy by up to £1.5 billion for the Tees Valley alone.
This isn’t just an abstract number. But more jobs for young people bigger numbers on pay-cheques at the end of the month, faster transport links for those commuting to work and more investment in R&D and innovation.
“Because if you boil the concept of Industrial Strategy down to its essence, it is the simple idea that governments and businesses can plan for the long-term. The idea that investment in certain industries, sectors, and indeed places can act as anchors and accelerators for a region’s economy, triggering further investment and gains in productivity.
“At the CBI we are supportive of the industrial strategy. In places, it’s already working well. But in many other places, in could work much better. And a year on, I’d like to give government – local and regional the business view on what we must do now.
“First – we still need that concise and compelling vision for the coming years. A set of specific, tangible outcomes the industrial strategy must deliver in each region. With a measurable deadline – say 2030 – against which we can test success.