In the limelight: September ’20

September 3, 2020

With the UK officially in recession following the COVID-19 pandemic, the Government has promised decisive action to nurse the country – and its finances – back to health by levelling up the economic and social opportunities across its many regions. But what does this really mean and how will the North East, so long viewed by many as a postscript in the national agenda, fit into this new landscape? Steven Hugill finds out more

As surprises go, it was hardly a jack-in-the-box moment.

From the second the Government unfurled its COVID-19 lockdown plan, it was a question of when, rather than if, we would begin to see – and feel – the economic ramifications of a country grinding to a halt.

That moment formally came in mid-August, when figures from the Office for National Statistics revealed the UK economy suffered a record 20.4 per cent fall between April and June.

Coupled with a 2.2 per cent drop in the months between January and March, it meant the UK had officially fallen into recession for the first time since 2009.

In truth, though, we’d known this months earlier.

Chancellor Rishi Sunak tipped us the wink back in May, telling a Select Committee on Economic Affairs that “we are likely to face a severe recession, the likes of which we have not seen”.

In the same economic health warning, the North Yorkshire MP used the phrase ‘scarring’ eight times.

Here, he was referring to the fiscal damage caused by the sweeping, ruthless pandemic.

But move forward a few weeks and the mention picked up new meaning.

Speaking in Dudley in late June, Prime Minister Boris Johnson laid out plans to ‘build back better’ from COVID-19, promising dramatic improvements to health and social care and increased investment in housing and skills.

Furthermore, he rolled out a blueprint to ‘mend the indefensible gap in opportunity and productivity and connectivity between the regions of the UK’, capping his intent with a vow to ‘unite and level up’ the country.

Essentially then, removing the scars of the past to create a healthier future.

But what does it really mean? And how will the North East fit in?

For many, this region has long been a forgotten sibling of the Westminster family when it comes to investment that supports new growth while re- balancing the social and employment landscapes.

What the recession – and, moreover, the subsequent Government repair job – must do is ensure the Prime Minister’s commitment is not merely a buzz phrase doled out around the country for easy headlines, but something that carries meaning and impact across all regions.

Whatever the nature of the UK’s economic recovery, be it a V-shaped or even U-shaped improvement, it must not go pear-shaped when it comes to levelling up the country.

To revisit the Chancellor’s scarring reference, the North East cannot be left injured while contemporaries undergo surgery to soften past wounds.

It is a point on which Jonathan Walker, North East England Chamber of Commerce, assistant director – policy, wholeheartedly concurs.

He says that while the region can control much of its destiny, it nevertheless remains crucial the Government acknowledges the need to invest in the North East if it serious about balancing the country.

“The North East urgently needs the idea of levelling up to actually mean something, rather than it simply being yet another soundbite with little in the way of substance behind it,” he says.

“The impact of the pandemic and recession will not be felt evenly between regions.

“We went into this crisis with above average unemployment levels and higher rates of inequality than many other places in the UK – this must be recognised by the Government.

“Our region has so much to offer the UK and the world.”

Jonathan says this potential will, in the main be catalysed by the people and businesses of the North East, but he reiterates this work must have central support.

“The solutions to many of our challenges sit within our own hands, but the Government has a significant role to play in ensuring any economic recovery is fair both between, and within, different regions,” he says.

“This means including our region at the heart of economic decision-making and taking the bold, difficult decisions that prioritise investment in the North East ahead of other places to close the economic gap.

He adds: “We’ve seen the strength of our region’s business community first-hand during this crisis.

“There is an overwhelming desire to build a stronger North East economy.

“If the Government is smart, and listens to the North East, it can leverage that desire to improve wealth and wellbeing across our region.”

Jen Hartley, director at Invest Newcastle UK – the body that helps firms locate, expand and grow in the city – echoes Jonathan’s calls around Government support, saying central help will add a crucial spark to work being done at a local level.

“If the Government really wants to level up the country, then it must give us the tools to do so,” says Jen.

“One of the big things is the upskilling of people – we have companies that are recruiting but we need to make sure we have the right people, with the right skills, to access the jobs.”

Highlighting the recent North East expansions of computer games developer Ubisoft, automated anti-money laundering technology specialist Caspian and communications firm BT, Jen says the foundations are very much being laid for future prosperity – which central Government backing will only augment.

“We have been enthused by the successes of companies, particularly in the tech and digital, corporate tax, e-commerce and ageing economy spaces against the backdrop of COVID-19.

“Our region’s strengths in these sectors will play a vital role in the recovery and renewal of our economy.

“We’ve also seen Ubisoft take further studio space in Gosforth’s Partnership House and BT identify its Newcastle hub as a flagship base for the workplace of the future.

“It is promising to see businesses recognising us as a ‘northern city hub’ as they look to move from multiple office locations and big London-based headquarters, valuing the quality of life and talent we offer.

“As a team, we are doing a lot on the trade side of things, on both pan-regional and international levels.

“This includes speaking to (unpaid Minister for Investment) Lord Grimstone and his MP colleagues about a £67.5 million Northern Powerhouse proposition – which would enhance our investment offer and bring greater trade into the region.

“Our world-leading research and sector-led expertise in ageing also means Newcastle is starting to become the go-to place for investors and companies looking to work in the UK on ageing projects and innovations.

“Being pioneers of the longevity economy enables us deliver economic growth and build relationships with areas around the world with similar specialisms; it is another string to our bow as we look towards the recovery of our economy.”


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