CBI @10am: What does 'levelling up' mean for businesses?

Speakers:

• Tony Danker, Director-General, CBI​
• Dr. Emran Mian OBE, Director General of Decentralisation and Growth, Stronger Places, MHCLG
• Lucy Whiskell OBS, Pro Vice Chancellor, Northumbria University and Chair, NE LEP
• James Harding, Co-founder and Editor, Tortoise Media (chair)

In this session:

Tony Danker opened the session by talking through the CBI’s latest economic forecast. The forecast paints a more optimistic picture for the UK, and the CBI expects the UK economy to bounce back to pre-Covid levels by the end of the year.

Whilst the unemployment peak is expected to be lower than expected, there are growing concerns about the labour market. This is being seen by a number of firms across sectors, due to a myriad of factors.

Ahead of the upcoming review of the Global Travel Taskforce, and the “green list” review on Friday, Tony also discussed the importance of business travel to the UK economy.

Beginning the session, Tony highlighted that “levelling up” is a key plank of the CBI’s Seize the Moment campaign, launched last month. He identified the CBI’s role as understanding how business clusters work. Tony mentioned that, in other countries such as Germany and parts of the US, business clusters are a key component of their economies. Whilst parts of the UK do this well, Tony is keen to explore how to transform the UK economy into economic clusters. To do this, regions need longer-term assurance of investment and funding, greater strategic thinking about a region’s strengths and opportunities, and closer engagement between business and government.

Lucy Winskell opened her remarks by outlining some of the longer-term issues her region of North East England faces, such as unemployment, but that the region also has significant strengths. Their challenge, according to Lucy, is to be able to effectively communicate those strengths – in energy, advanced manufacturing, their strong record of attracting inward investment etc – to government. Lucy felt that Covid has reduced some parochialism and has created an opportunity for greater strategic thinking about how the UK ensures each region thrives. A key part of this, according to Lucy, will be the importance of universities as anchor institutions. The industries with skills, according to Lucy, will thrive so each region requires a long-term plan for future skills delivery – working with Further and Higher Education, local and national governments, and businesses.

Dr. Emran Mian outlined the “problem” government is trying to solve, namely that some of the UK’s cities underperform in productivity compared to their European competitors, and also some of the initiatives designed to rectify this.

In particular, government sees a big opportunity to “level up” on infrastructure, in order to build a bigger labour market pool for cities outside of London. London gets this right, but government wants to ensure other cities benefit from this too.

Government also has a big focus on skills, “not just for the young, but for adults too”. Part of this is about investment, but also about introducing flexibility within the skills system. In agreement with Lucy, Emran discussed the importance of designing a skills strategy in conjunction and collaboration with Further and Higher Education establishments, businesses and LEPs. Therefore, skills supply can better meet future demand.

Finally, Emran discussed the importance of devolution to this agenda, saying that most international examples of countries “levelling up”, have been accompanied by decentralisation in decision making. The government has already begun this programme of decentralisation, and West Yorkshire recently elected their first Metro Mayor, and government is exploring ways of funnelling investment through these mayors to develop local economies.