The benefits of sticking together

Posted on the 24 March 2017

The benefits of sticking together

By Nigel Mills

Entrepreneurs are renowned for embodying individualistic virtues such as determination and self-reliance, but our strength comes as much from sticking together and supporting each other as it does from doing our own thing. When business people get together and share the benefits of their own individual experiences they can add to the capabilities of their own enterprises while supporting others.

Similarly, in the world of politics, regional devolution is a concept that draws on an area’s distinct identity, while bringing together the governmental areas and people within them, so it is no surprised that the devo-deal proposed for the North East had so much support in the business community. The deal originally proposed is now off the table and we’re waiting for the details of a ‘North of the Tyne’ agreement that could bring devolved powers to at least some of the region.

While it is unlikely that the areas of the region south of the river Tyne will be included in any devolution deal in the near future, there are some notably positive things happening there. Business Durham, County Durham’s economic development company, has been very successful in encouraging business activity in its area.

The new international advanced manufacturing park planned for Sunderland and South Tyneside is a fantastic opportunity, not only for the immediate area, but also for the North East as a whole. Its location next to Nissan sends a strong message around the globe that we are ready to build on our region’s reputation for excellence in manufacturing.

An example of what the North East can gain from devolution is Tees Valley. Close to home and quietly successful, the Combined Authority in Tees Valley has become one of the first areas to get devolved powers, including one unique to it, the ability to create powerful mayor-led development corporations. This puts it in the first wave of areas to achieve devolution, alongside flagship areas like Greater Manchester and the West Midlands.

Since last year businesses have been looking at how they can meet the challenges and take advantages of the opportunities that will come as the UK leaves the European Union; currency fluctuation in the short term, the availability of skills from the continent in the months and years to come, and changes to international trade rules to name but a few.

It is now possible that we will have to deal with another potential change in market dynamics, a second referendum north of the border and perhaps even an independent Scotland. In the immediate term this would present the opportunity of the North East being seen as a comparatively stable location for investment in the northern half of the UK, while in the longer term it could mean huge changes to how we do business in our region.

While an independent Scotland would be at liberty to enact business-friendly policies to lure North East companies to move north, the Scottish Government’s use of the devolved tax powers it gained as a result of the last independence referendum do not point to this being the case. On the contrary it has already moved to make Scotland less competitive than the North East by freezing the point at which people pay the higher rate of Income Tax at £43,000, this year it changes to £45,000 for the rest of the UK.

As things stand today the economy is strong and continues to grow, unemployment in our region is falling and the number of businesses is increasing. To ensure we can maintain this our region’s entrepreneurs need to stick together and make their voice heard so that when local and national Government make decisions on schemes like devolution, Industrial Strategy and The Northern Powerhouse, they put North East businesses in the best position to meet the challenges on the horizon.

This column was originally published by The Journal