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Paul Callaghan’s North East Economic Forum address

One North East’s Chairman Paul Callaghan opened the North East Economic Forum last week, with a speech reflecting on the work of North East, and setting out his support for the Local Enterprise Partnerships.

“This will be the last formal speech I will give as Chair of ONE North East. In fact it will be the last speech from anyone at ONE North East with our demise rapidly approaching.

You will be pleased to know that I do not intend to offer a eulogy for the Agency nor do I seek to argue, as many have done from all parts of the political spectrum and from many parts of the private and public sectors, that the Agency should not be abolished. I am a democrat. I believe in elections where the party (or parties) elected take control and make the decisions. I accept such decisions. It’s the way democracy works. Yet once I step down as Chair and the Agency closes I will continue to argue passionately for structures and for institutions that I believe best serve this North East region and its people.

When I spoke at the first NEEF conference, what seems such a long time ago, this region was in a very different state. During the early part of this century while there was clear evidence of growing economic activity, it was often haphazard and in many cases did not have the support it needed. Business start-up rates were poor and the region’s entrepreneurial culture was very thinly spread. On most economic measures the North East sat very firmly at the bottom of the league. I remember saying that what I thought was essential were three things:

1. A regional economic strategy that was bold, ambitious and innovative and had the buy-in of all stake holders in the region;

2. A business support system that targeted and helped all types of businesses from start- ups, to SMEs, to growing indigenous businesses, to multi-nationals based in the region and inward investors who looked to locate here; and

3. A focus on stimulating and catalysing the region’s entrepreneurial spirit.

Many others shared my view and in the years from 2002 to 2009 we saw an exciting time for the region. Traditional Industries such as the Process Industry and Manufacturing gained fresh impetus and with some resource from the centre and a lot of drive and initiative from individuals and companies we saw growth and profit. The Automotive Industry in the region came of age with Nissan becoming ever more productive and efficient and setting new heights in output and exports. The North East was, and still is, the only region with a positive balance of payments. Emerging knowledge-based industries like software, digital and biotech began to flourish and to mature, holding talented graduates in the region from our five universities or attracting incoming graduates from elsewhere. Investment in physical infrastructure was aligned to these growing sectors with sites specifically developed for uses in offshore wind, biotechnology, low carbon vehicles and engineering and technology. House prices rose as did skills levels and educational achievement. We saw the fastest growth of new business start-ups in any region outside London. Unemployment fell to 4.5%, the lowest level in more than 20 years. And for the first time the perception of the region was representative of the vibrant, energetic and positive place we all knew it was, through the Passionate People Passionate Places campaign. We were really starting to get some traction. As an economist, an optimist and a Mackem I was delighted. Heady days indeed. Then came the global Credit Crunch, the Recession and the Government ‘Rebalancing’ and Public Sector Cuts. Just as an aside, wasn’t the rebalancing supposed to help shift work and prosperity from the over-heated southeast to the regions? Maybe I just misheard that bit or somehow didn’t understand it.

The region now faces some of the most challenging times in my life. Unemployment has

returned to the bleak days of the 1990s. In the last 12 months unemployment in the region has increased by 19% and with overall unemployment rate at 11.7% it is the highest in Great Britain. We are in danger of creating a generation of young people with no jobs, no prospects and no hope. If the UK economy as a whole is bumping along then you can be sure that we in the northeast are facing negative growth although I can’t be certain of that, as we have stopped publishing economic activity by regions We need policies to stimulate growth and get businesses going again and get people back into work. Much of what had been achieved in the region over the previous tenn years is still in place. Nissan is growing, Hitachi is coming, steel is back in Redcar and the opportunities that the Green Economy and Offshore wind offer are still there just as long as we can grab them. We know we can do this but we need, as we did a decade ago, a strategic plan and vision albeit this time in two sub-regions. We need strong, determined and credible leadership and a level playing field to compete against London, Scotland and elsewhere.

We now have two Local Enterprise Partnerships, led by two very intelligent, able and committed chairmen. They have good boards and have, or are about to have, able staff. They need more resources, alongside the Regional Growth Fund, which has been criticised for not getting to businesses quickly, and, most importantly, they need our support. Not our grudging, half-hearted support but our full blooded, enthusiastic and genuine support - from the business leaders and the business community of the region and from the council leaders and the public sector. They are the only game in town. If the LEPs don’t succeed, the North East doesn’t succeed. Believe me the public and private sectors of Leeds and of Manchester have come together and they will leave us floundering in their wakes if we don’t recognise this. No town or city can stand-alone in an increasingly competitive global market. If it chooses to do so it will fail or, if it does manage to succeed, it will be at the expense of its neighbour. We must put aside political differences and personal differences. Our vision and our ambition must not stop at the door of our own office or factory or at the boundary of our own local authority. I returned on Monday from a trip to Washington DC where I was part of a civic party who re-signed Sunderland’s Friendship Agreement and Sister City status with the American Capital, the only city in the world that is not a national capital that has such an agreement. I was filled with civic pride that we were there and at times had to pinch myself at the recognition that my city was given by the Americans. Of course I’m old enough to remember the 1960s and 1970s when the only twinning arrangement that Sunderland had was a suicide pact with Hartlepool. But the other highlight of the visit, as well as the signing ceremony, was seeing the new Martin Luther King memorial. Next to an imposing statute of Dr. King there are engraved on slabs of stone some of his most inspiring words. The one that resonated most with me and which seemed most pertinent to today read “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy”. These are indeed times of challenge and controversy so let us stand together with our two Local Enterprise Partnerships for the good of our region and of our people.

As I said at the beginning, this is the last formal speech I will give as Chairman of ONE North East and I’d like to end by telling you of my two over-riding emotions as I stand here today. These are pride - in what ONE North East has achieved over 12 years and - disappointment - disappointment that we can’t be here to finish many of the things we started and to help when times are at their worst.

Finally as they say on Radio Two’s Pop Master can I give some people a mention? I’d like to thank my two predecessors as Chair, John Bridge and Margaret Fay. They both had courage, vision and broad shoulders on which I could stand. I’d like to thank my current board members and all that have served on the board over the years. An overriding characteristic of most of them has been that as they entered the board room at Stella House, they left behind their sectoral or locational allegiances and made decisions and judgements based on what they believed was in the best interest of the region as a whole.

I’d like to particularly mention Alan Clarke and Malcolm Page and Ian Williams and all the other dedicated and talented staff at the agency whose great achievements should not be lost or forgotten. Also all our partners and extended enterprises who helped deliver the programmes and projects, thank you. There are too many to mention here this morning but it is pleasing to see both NAREC and CPI confirmed by the Technology Strategy Board as national assets playing a vital role in delivering the technology and innovation that this country will need in the future. That wouldn’t have happened 15 years ago. Over its lifetime the Agency invested £2.7bn in the region’s economy with a return of £4.50 for every £1 invested. It helped create jobs and businesses throughout the region and that’s not to mention ‘Passionate Places, Passionate People’ and its impact on our £4bn tourism industry. Electric Cars, wind-turbines, hi-tech manufacturing, world beating software, Yes I am proud of what has been achieved. A fraction of our achievements are captured in a suite of legacy documents that we launch today. The Association of North East Councils has been kind enough to host this information on their website.“

Paul closed by thanking the audience for their work over the years; their help, support, ideas and initiatives that were brought to the region.

This was posted in Bdaily's Members' News section by Paul Callaghan .