Paul's latest Journal column

17 August 2016

Not long ago I read William Armstrong: Magician of the North by Henrietta Heald.  What I took from the book was how mighty a region the North East was 150 years ago.  People came from all over the world to see our manufacturing powerhouse first hand, to place their orders and to meet those that had forged this success. 

A few years back a car journey was never complete without the playing of Jimmy Nail’s poignant Big River.  While it is a song about the past, I was always drawn to the last verse: “And this is a big, big river, And in my heart I know, It will rise again, The river will rise again.”

Can the North East be great again or is the best we can hope for that our collective endeavors will halt our decline? 

That we were once a dynamic, powerful and rich region should give us hope that to aspire to be so again is not a pipe dream.   What worries me is that our exit from the European Union is going to make the task harder, not easier, because as a region we are currently a net beneficiary of EU funds.  Well, so be it, we will just have to try all the harder to move out of bottom position in the English regional economic table.

As a spot of holiday reading I’ve been making my way through The North East Strategic Economic Plan: Evidence Base a document produced jointly by the North East Local Enterprise Partnership and the North East Combined Authority (neither of which include Tees Valley).  What did the Evidence Base have to say that can give us confidence going forward?

Our region is managing to sustain an annual growth rate of around 3% a year, and we’ve record numbers of people in work, due to the rise of women in the workplace. We are closing the gap with national averages.  Our workforce is getting better qualified.

In four key areas we are developing what are referred to as ‘smart specialisations’; passenger vehicle manufacture, subsea and offshore technology, life sciences, health and creative, digital software and technology based services.

Overall the ambition is to reach 1 million jobs in the North East by 2024, from the current level of around 888,000.

To achieve this we are going to need increased inward migration both from elsewhere in the UK and from across the world.  Why? Because the North East has an aging population and we need to increase the number of younger people in work to balance this demographic shift.  We also have skill shortages, which will hold companies back from expanding.  The North East in particular needs entrepreneurs to move here to set up new businesses.  That the region has just voted to leave the EU with many Leave voters motivated to do so as a way of preventing further immigration is both ironic and economically self-defeating.  It is not co-incidental that London has the highest levels of immigration and is the economically most successful part of the UK.  If we returned to the North East of Armstrong’s powerhouse of 150 years ago, it too was full of immigrants.

So to get where we want to go economically we need to grow our population, which means we need an additional 130,000 homes by 2033.

Here I would add my own suggestion. Globally 8% of climate change is the result of producing concrete for construction, as a consequence of the large amount of energy needed in the manufacturing process.  Conversely, timber stores carbon and we in the North East have large amounts of timber, and the potential to grow much more. We should be aiming to build the majority of the new homes we build from timber as a way of tackling climate change.

Building more in timber is but one aspect of the emerging bio-economy being pioneered in Finland, that we could copy.  This involves the production of renewable biological resources and their conversion into food (eg cellulose from wood pulp), bio-based products (eg wooden buildings, wood fibre clothing) and bioenergy (eg bio-diesel, wood pellets). 

I don’t know about you, but I truly believe the North East could rise again.

Do you think the North East needs its own voice in the EU exit negotiations?

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