Since former chancellor George Osborne first coined the Northern Powerhouse in 2015, critics have doubted the initiative’s impact in generating regional economic growth. Here, Mark Sismey-Durrant, CEO at Hampshire Trust Bank, offers his assessment of the concept’s importance.
The Northern Powerhouse was established as a feature of government strategy to increase the impact and contribution of the North of England to the UK economy, helping increase opportunities for both local residents and businesses.
The Northern Powerhouse concept is based on existing models that have been implemented in the regions of Randstad, The Netherlands, and Yangtze, China, and three years since its inception businesses are clearly striving to make it a success.
Our annual SME Growth Watch Report found small enterprises in Leeds and Greater Manchester are demonstrating strong levels of growth, which is forecast to outpace other cities in the UK.
Our predictions, developed in partnership with the Centre for Economics and Business Research (CEBR) found smaller firms in these cities are expected to contribute 26 per cent growth to the economy by 2025.
This trend highlights the scale of opportunities available to smaller businesses based in the region and, with small businesses considered as the engine room of the UK economy, we bankers need to be supporting this drive and ambition to ensure these economic goals are met.
The announcement of the Transforming Cities Fund also demonstrates the level of government support for the region, which is key to maintaining the momentum of the growth in the Northern Powerhouse.
Government infrastructure investment means that the many local small business owners relying on their vehicles to deliver goods and services will be able to travel more efficiently and even expand operations.
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HS2 promises to enable regional economies to close the gap on London
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Improved links across the North will help businesses achieve their growth goals and should further encourage more top talent to look at opportunities outside of London.
As for the rest of the country, businesses and regional bodies say improved connectivity, both to and within the North, will drive productivity growth across much of the UK and help close the gap between the best and worst performing regions.
Yet, while the concept of the Northern Powerhouse is well established, recent reports have shown cities outside of the region, such as Cambridge, Oxford and Milton Keynes, will have the fastest growing economies of all Britain’s cities in 2018.
Therefore, to make the Northern Powerhouse a true success and viable in the future, the government needs to ensure they remain focused on supporting and delivering the initiatives that are planned in the region.
At Hampshire Trust Bank we understand the importance the Northern Powerhouse plays within the wider UK economy and are committed to helping businesses in the sectors in which we operate, both here and across the UK, succeed in achieving their ambitions for growth.
We saw from our annual SME Growth Watch Report how business in the North is booming, and we wanted to provide on-the ground support to work with small local firms, specifically on property deals in the region. For this reason we have committed to opening a new office in Leeds in 2018.
With small business owners across the country calling for clarity around the UK’s future, the Government should not lose its focus when it comes to supporting the Northern Powerhouse and the businesses operating within it.
It is an imperative for both government and industry to help small firms to invest and grow, so we as a nation can see positive economic progress in 2018 and beyond.
Mark Sismey-Durrant is CEO of the Hampshire Trust Bank
Read more about the UK’s regional initiatives:
- Midlands Engine threatens to run out of steam as concept fails to reach to founders
- Northern enterprise boosted by new regional infrastructure powers
- Could DUP deal give Northern Ireland enterprise the support needed?
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