Tag: Juergen Maier

NORTHERN POWERHOUSE BACK ON TRACK.

It would be easy to be cynical about this week’s Cabinet meeting that was held in Cheshire. Ministers forced out of their Whitehall offices to gather in the frozen North.A quick photo opportunity, meetings with hand picked business people( but definitely not the public), then back to London.

On this occasion however there was a real point in coming North.After a wobble last summer Theresa May seems to be taking the Northern Powerhouse (NP) seriously.As part of the new industrial strategy, the NP is getting a £556m cash boost.Much of this will be channeled through the Local Enterprise Partnerships who,its hoped will begin to raise their profiles as engines of growth,productivity and skills. Among the specific schemes are £10m for small businesses in Greater Manchester and Cheshire involved in the new industries around life sciences. Our heritage is not forgotten with plans for a major revamp for Blackpool’s Winter gardens. The resort hopes it will encourage the political parties back from Birmingam and Manchester for their annual conferences. I think the hotel offer will have to improve before that happens.

The main thrust of the new industrial strategy is for government to target help on particular sectors were future jobs will come from. Juergen Maier,the boss of Siemens UK will head up a review into the impact of digitalisation across industry. Other sectors indentified include life sciences,the nuclear and creative industries.

We have seen many industrial strategies come and go and yet UK productivity remains stubbornly behind our competitors. It is an issue that the new leader of the North West Busienss Leadership Team will be taking up. It is to be welcomed that they have appointed a woman, Emma Degg. The North West business scene remains very male, if not stale. Degg used to work for the North West Development Agency which was doing good work in all these fields until it was scrapped for petty political reasons by the Coalition government.

The Business Secretary Greg Clarke is in charge of this strategy. He is one of the better Tory Cabinet Ministers having gained a good reputation when he held the Local Government portfolio. He has identified ten strategic pillars. We shall see if they are Greg’s ten pillars of wisdom.Besides the obvious ones of skills and science research, there is to be a drive to improve government procurement and deliver clean energy growth. Restoring the subsidies would be a start.

Improving productivity is a long term challenge which requires better management and a better educated and motivated workforce.In that connection let’s hope the specialist maths schools and technical colleges mark a move away from an excessive emphasis on university education. Vocational qualifications will be as useful as a degree in the next few years.

The question remains how robust this industrial strategy will be as the consequences of Brexit and the Trump Presidency begin to kick in.

Follow me at www.jimhancock.co uk.

NORTHERN POWERHOUSE AND PRODUCTIVITY.

For years business has moaned about our poor productivity figures in the North. So what are we actually going to do about it?

The North West Business Leadership Team(NWBLT) have come up with some practical suggestions but also some stark analysis of the scale of the problem. People in this country work some of the longest hours in Europe but our output is below the average of the G7. Although we have recovered from the 2008-12 recession with growth reasonably healthy and unemployment and inflation low; productivity has remained flat. The NWBLT warn that if this remains the case as the Living Wage comes in, unemployment will be on the way up again.

Manchester is seen as the heart of the Northern Powerhouse yet it still has big problems with its in-work productivity which is £8.2 bn below the UK national average, the greatest shortfall of any of the core cities. As NWBLT Chief Executive Geoffrey Piper recently pointed out only Cheshire and Warrington are above the national average in the North. Manchester’s problem is due to poor skills levels of course, but also shortcomings in transport. Manchester is getting a reputation for chronic congestion on the roads and trains. Recent announcements may address the latter but regarding the endless traffic jams, do you hear murmurings about another attempt to introduce congestion charging?

The NWBLT feel that the vision of a Northern Powerhouse as a truly competitive global economy will remain a distant dream until productivity is improved. So they have come up with some sensible, but quite tough policies. One is to link early introduction of the Living Wage directly to enhanced training for relevant qualifications. Another is to channel government research and development money into Performance Bonds and remove it from under=productive assets. The NWBLT want a Regional Productivity Index to measure performance every quarter by Local Enterprise Partnership area; and they want support for the national Productivity Leadership initiatives on process efficiency, digitalisation and working practices.

Juergen Maier, the Chief Executive of Siemens UK is chair of the NWBLT and wants urgent implementation of his report because he sees caution returning among business leaders. This is due to a number of factors including volatility in the Chinese economy, Middle East conflict and uncertainty over the E.U referendum. Maier believes there are other domestic factors that are unsettling business including the implementation of the apprenticeship levy on larger firms, cuts in industry support and the need for a stronger narrative about the aims of the northern Powerhouse beyond transport.

The Chancellor clearly shares Maier’s analysis of the economy. In November at the time of the Comprehensive Spending Review, George Osborne was bullishly confident that he’d repaired the roof while the sun was shining. Perhaps it was the floods or a fear that he had induced complacency, that has lead to his current reminders that the austerity programme is far from over.

Whatever the prospects for the Northern economy in 2016, they will be improved in the long term if everyone if everyone implements the NWBLT report” Unlocking our Potential: Solving the productivity puzzle.”

NOW MORE THAN EVER, DEMAND A NORTHERN COUNCIL

SCOTLAND AND THE NORTH.

Now we see more clearly what we are going to have to contend with as we try and bring power to the North.

We knew about Boris land in the South East and London with its power to drain the brightest talent southwards and its vastly disproportionate transport spending.

Now we see the full dimension of the challenge north of the border. The Scottish Government will retain all the income tax raised in Scotland, a share of VAT and power over areas of welfare. Air Passenger Duty will be a devolved power and expect it to be cut. APD is an issue that Manchester and Leeds airports have been campaigning on for years without success. Now they face a competitive disadvantage which could be significant in the border region, particularly Newcastle.

The city regionalists have written to The Times along the lines of what’s right for Scotland is right for the cities. Quite right but even our northern cities are not fit for purpose in the new economic landscape. We need to build on the Rail North and One North concepts, adding functions that apply across the North and make it a democratically elected body so that ordinary people have a say.

Meanwhile, as I write, we await the Combined Authority deals for Leeds and Sheffield promised by Nick Clegg before the Autumn Statement. On Merseyside the problems continue. Phil Davies, the leader of Wirral and the City Region has now stated that the concept of an elected mayor should be put to a referendum. That is unlikely to please Liverpool Mayor Joe Anderson.

JUERGEN SHOWS THE WAY.

Business leaders usually recoil when it is suggested they become involved in politics. But with an elected mayor for Greater Manchester on the horizon, it is interesting to see some of the non political names coming forward. For instance Scott Fletcher of ANS Group, and lively contributor to Downtown events, has not ruled himself out.

Another man who impressed me this week with his wider skills and vision was Juergen Maier, Chief Executive of Siemens UK. He is also Chairman of the North West Business Leadership Team, an organisation that takes a region wide view on the big issues facing business.

It published its business manifesto this week. It calls for action in the areas of skills, transport, world class science and emphasising our energy resources.

Speaking to MPs at Westminster Maier made a number of key points including the fact that there are too many skills initiatives for business to cope with. He said devolution had to operate within a national framework to preserve coherence (that is why a constitutional convention is essential). He also showed how far behind we are in only now arguing for HS3. Essen, Dortmund and Cologne were linked 25 years ago. He also hoped the autumn statement might bring economic catapults in precision medicine and energy to the North West.

The North needs leaders like Juergen Maier.

AUTUMN STATEMENT.

Next week’s statement by the Chancellor will be important for northern business. With the election looming we can expect further measures in connection with the “northern powerhouse” as George Osborne seeks to confirm his position as a friend of the north.

But we mustn’t be distracted from some hard underlying truths. There are signs that the fragile recovery is stalling, the government has missed its deficit reduction targets by a wide margin and all these city region councils that are going to get devolved powers are facing remorseless cuts in their budgets.