Category: Business

MANCHESTER: A YOUNG CITY

 

 

ECONOMIC SURVEY PART 1

 

First, congratulations to all my colleagues, past and present, who have contributed to 15 years of success for Downtown in Business.

In the run up to the International Festival of Business in Liverpool I’m going to be taking an in depth look at the business prospects of our three great cities, Liverpool, Preston and Manchester.

My interest in doing this was stimulated by a report this week claiming that Liverpool’s economy was growing faster than Manchester’s. I read it as I was about to meet with the leading movers and shakers of the Manchester economy. We can reach some conclusions at the end of the series of blogs, but just to say for now, Manchester is buzzing and perhaps the truth is that both of the large cities have a bright future despite Brexit. In Preston’s case we’ll be looking at the “keep it local” model which is attracting national attention.

But first to Manchester where Eddie Smith, the city’s Strategic Director, exudes vision and optimism. He has been in post a long time and remembers the challenges around the turn of the century to deal were to deal with jobs and office e accommodation. Since 2010 the drive has been to make Manchester a place where people want to live because the city is getting younger and there is an imperative to keep the graduates spilling out of the city’s excellent universities.

Future planning for the city, and conurbation more widely, will become clearer this summer with the opening of the review of Manchester’s local plan for the next fifteen years. Transport for Greater Manchester will publish their plans towards 2040. Finally, the Mayor of Greater Manchester will publish his revised spatial plan. The latter sounds dry and dull but is highly controversial as it involves housing and the green belt. When he came into office, Andy Burnham didn’t like the plan he inherited, and we will see what reaction he gets to the revised options.

The major infrastructure issue for the centre of Manchester now is Piccadilly station. It is due to be the hub for HS2 and the Northern Powerhouse rail link to Leeds. In the neglected area around the station, there is the prospect of 60,000 if the whole redevelopment benefits from the sort of central government vision and funding that has been invested in King’s Cross in London. There Eurostar, the London tube, national and local rail services converge in a spectacular station. The area around King’s Cross that was once a haven for sex workers and drug dealers has been transformed. Manchester wants a similar response from government for Piccadilly station, but ministers remain to be convinced.

Around the conurbation there are significant growth points in Salford (more on that next week), and airport city. Smith draws our attention to developments in Wythenshawe. It is already benefitting from the prospect of an HS2 station at the airport with Vodaphone and Virgin Media increasing their investment in an area long associated with unemployment.

In a week when Manchester City paraded their Premiership trophy through the streets, regeneration continues around the Etihad Stadium. The world’s first sports business park is being developed and 15,000 houses are planned out towards Collyhurst.

Next week I’ll be looking at developer interest in Manchester, the Salford story, and young entrepreneurs innovative approach to housing and office development.

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CHIEF SECRETARY TRUSS ONE TO WATCH

 

TRUSS GETS THE DOWNTOWN MESSAGE.

My 40 years of covering ministerial visits to the North have left me a bit jaded. They are billed as opportunities for ministers to get out of the Westminster bubble and hear what “real people” are saying. One of two things then happen. Eager ministerial aides pack the programme with too many events so nobody has a satisfactory dialogue, or the dreaded call to Return to The Bubble comes and the event is cancelled or curtailed at the last minute.

This nearly happened this week when regional Conservatives, led by Knowsley businessman Tony Caldera, had set up an excellent visit to Merseyside by the Chief Secretary to the Treasury, Liz Truss. Luckily a call to return for a three-line whip didn’t materialise and Downtown was able to host a gathering of the leaders of the business community on Merseyside with a powerful Treasury Minister. Liz Truss has had a colourful career which perhaps contributed to the relaxed and frank way she handled questions at the Downtown event. At the end of the day the Treasury calls the shots and an hour with the Chief Secretary in listening and delivering mode was very useful.

The main message from Merseyside business was that the region was on the up. The local economy had grown by £30bn since 2010. Max Steinberg, chair of this year’s International Festival of Business, was in particularly upbeat mood. As he thrust festival publicity leaflets towards Ms Truss he announced that 13,000 delegates had already signed up for the event.

Mark Basnett told the meeting that the Local Enterprise Partnership had just received a further tranche of money this very week. Phil Redmond (Merseyfilm) was told by the Minister that she had been a fan of Grange Hill, before he stressed the need to refocus on the importance of the cultural economy ten years after Liverpool’s year as European Capital of Culture. Bringing Channel Four to Liverpool would help.

This week has seen Town Halls announcing big increases in council tax and the minister was pressed on this. Liz Truss believed the future lay in council’s funding themselves locally. A time when central government grant disappears isn’t far away.

The Minister had come armed with statistics showing the growth of the Mersey docks with most exports going to Europe. This provoked a flurry of questions on Brexit. Mark Povall from Liverpool Airport wanted reassurance on the very basic issue of whether the current freedom of the skies arrangements would continue with Europe. Airlines were having to plan for 2019.The Chief Secretary didn’t directly address the issue but said £3bn had been put aside for Brexit preparations.

Perhaps most interesting was the Minister’s observation about connectivity. We have just had yet another plan from Transport for the North (TfN) about what we want. She urged us to concentrate on intracity projects rather than the entire HS3. The thinking appears to be that the Treasury will back projects where there is intensive use (Liverpool-Manchester, Leeds-Manchester) but fast journeys across the whole North might not get the funding.

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2017 AND THE FOG OF UNCERTAINTY

 

NO WINNERS

For people planning the future of their businesses, 2017 has been a nightmare. While Cabinet members fought amongst themselves over whether to stay close to the EU post Brexit or take our chance on the world stage, firms had to try to plan. Political and business timetables don’t match. For instance, it might make great political drama if we are still negotiating at the last minute of the next EU deadline, but it is not how British business should be treated.

On top of the Brexit uncertainty, we had Theresa May’s opportunistic attempt to increase the Conservative majority. All the signs were in her favour when the local elections saw Labour controlling not a single county council. In the North this meant Lancashire returning to Tory control joining North Yorkshire and Derbyshire, the latter was once a strong Labour county.

But a few weeks later the combination of a disastrous Tory General Election campaign and a wholly unexpected youth driven surge for Jeremy Corbyn, saw a hung parliament elected. The most significant aspect of the General Election may turn out to be that it represented a return to two party politics. In 2017 the centre has not held to paraphrase W.B Yeats. The Lib Dems were defeated in places like Sheffield Hallam and Southport as both Labour and the Conservatives got over 40% of the vote each.

It was a troubled summer for Theresa may who faced much criticism for throwing away a working majority, but the autumn has seen a recovery in her position. Her spluttering performance at her party’s Manchester conference gained her some sympathy but there has been a growing sense that she is trying to bring coherent government to a Cabinet that is fundamentally split on what Brexit should mean. I never felt she was in danger of being kicked out purely because who would want the job of negotiating Brexit? Nor did I think there was any chance of another election. The Democratic Unionist Party will always side with the Tories when the chips are down. It has been little noticed that after having a hissy fit two weeks ago about the Irish border issue they settled for a solution that could leave them very much in line with the republic’s terms of trade.

2017 ends with the Conservatives running the country (as they usually do). The bitter divisions rarely lead them out of office so Corbyn shouldn’t hold his breath.

Many Labour supporters will regard 2017 as being a good year. I disagree. They didn’t win the General Election. They haven’t won a General Election for 12 years. But the misplaced euphoria around Corbyn has been followed by a systematic transformation of the party. Moderate Labour MPs are impotent while constitutional changes locally and nationally will embed the hard left for years to come. If there was an election now, Labour might win. But will the Corbyn bandwagon endure till 2022, the most likely date of the General Election?

So, a poor year for Labour and an even worse one for the Lib Dems, SNP and UKIP. There is an opportunity for the Lib Dems to rally the vast unrepresented centre ground, but they are just not taking it. They are partly hampered by the failure of moderate Labour MPs to realise that the game is up in their party. The SNP fell back at the hands of Ruth Davidson’s Tories. Perhaps Mrs May will stay on until she can hand on to the Conservatives third female leader? UKIP having caused all this Brexit chaos were wiped out under Paul Nuttall’s hapless leadership. But it is Nigel Farage that will go down in British political history as a man who made an enormous impact on the future of the country whilst never being elected as an MP.

In America Donald Trump took office, grasped Theresa May’s hand and then began to systematically demean the most powerful office in the land. As with May, don’t pay too much heed to talk that he’ll be out of office soon although there is a growing chance he’ll be denied a second term nomination by his party.

Finally, back to the North where we have seen the election of mayors in Greater Manchester and the Liverpool City Region. Andy Burnham was only in office a few days before the awful Manchester Arena bombing. It was one of the many terrorist outrages that have reminded us this year that however much we talk about advances in artificial intelligence and robotics, there are people around who would take us back to the darkest periods of human existence on this planet.

Burnham rose to the occasion and at Downtown events with Steve Rotheram began to set out visions for the future. However, the success of northern devolution remains in the balance. It is threatened by a loss of momentum in the Northern Powerhouse project, government Brexit distraction and internal tensions in the city regions, Lancashire and Yorkshire.

Despite all that thank you for reading my blog during the year and a very happy Christmas.

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BREXIT CONSEQUENCES BEGIN TO BITE.

 

BOTH BREXITEERS SHOULD BE OUT OF THE CABINET.

A government weakened by scandal and divided over its approach to Europe continues with its ill-starred attempt to leave the European Union.

One leading Brexiteer Cabinet Minister Priti Patel has resigned, but another, Boris Johnson is still in place despite risking extending the detention of a British national in Iran.

Immigrant workers, vital to our caring services, are staying away, jobs are going at British Aerospace in Lancashire and Vauxhall in Ellesmere Port. Both industries rely on the easy movement of parts across borders. Thousands of lawyers and civil servants are being taken on to deal with the whole miserable negative exercise of Brexit. (No doubt their wages will be coming out of the £350m a week that was promised for the NHS.) The port of Dover is making plans for the huge congestion that will build up after March 2019.

So how is all this affecting the heart of the Northern Powerhouse? What is the economic outlook in Greater Manchester as the Budget approaches? I’ve been testing economic opinion which indicates that the crash that was forecast immediately after the EU referendum didn’t happen because of a credit boom and the growth of car leasing. It is felt that is now coming to an end as inflation and now the rise in interest rates kicks in. There is a fall in business confidence amidst the chronic Brexit uncertainty with a demand that the 2019-21 transitional agreement be broadly in line with the final agreement.

Northern economists believe we are looking at a growth rate of 1.5% not 2.5% that was previously hoped for. Looking further into the future we need to prepare for automation, robotics and paying more for UK workers as immigration falls.

In Greater Manchester next year jobs growth is expected to be flat. Employment in retail and financial services will be weak. Mike Blackburn, boss of the Local Enterprise Partnership, is worried that ministers don’t realise the impact Brexit will have on an area which exports 58% of its goods to the EU compared to a national average of 42%. He wants powers returned from the EU devolved to the North.

The Chancellor will be under severe pressure in the Budget to do more on housing. Steve Rumbelow, CEO of Rochdale Council, wants a major programme of council house building. He points out that permission for 50,000 houses in Greater Manchester are not being exercised.

Joanne Roney has had a quiet start since succeeding Sir Howard Bernstein as CEO of Manchester Council. She has indicated her priority is people rather than infrastructure development which characterised her predecessor’s tenure. She identified poor school starts for a large section of Manchester pupils fed into poor GCSE performance leaving colleges to teach Level 2 skills.

Eamonn Boylan is charged with looking at the picture across Greater Manchester as CEO of the Combined Authority. The spatial strategy which deals with the use of green belt and brownfield land is being rewritten after running into opposition from Mayor Burnham, is being rewritten.

Boylan points out the devolution deal is much more about powers than giving the city region money. Promises over devolving power over adult skills had still not been delivered. Local politicians and officers had many bright ideas about what could be done locally. For instance, there was an abundance of advice on how to get to university but very little on taking up vocational courses.

So that’s a sample of the thinking of people charged with putting the concept of the Northern Powerhouse into reality. But they are handicapped by the shadow of Brexit. Let’s hope for a substantial change in popular opinion that would allow Labour to oppose our leaving the EU and we could have an Exit to Brexit.

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