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North East Northern Powerhouse insight: Stephen Purvis, CEO of SGP Technology Group Limited

In an ongoing series, Jamie Hardesty is talking to North East business leaders in an attempt to understand the region’s feelings towards the government’s Northern Powerhouse initiative.

Next up is Stephen Purvis, Group CEO of SGP Technology Group Limited, which supports the North East technology sector from its Newcastle base.

As well as being an active investor in startup technology companies and a business mentor via the Entrepreneur’s Forum, Stephen is the founding Chairman of Policy North, the first dedicated think tank for the North East of England and an active campaigner for delivery of the Northern Powerhouse agenda.

Come May, two years will have passed since George Osborne first spoke of the need for ‘building a Northern Powerhouse’.

Whilst awareness of the phrase has of course increased during this time, growing consciousness has not necessarily produced greater understanding of what the Northern Powerhouse actually is.

This investigation, surveying regional business opinion, hopes to add coherence to the concept.

What does the Northern Powerhouse mean to you?

It is the collective term for the economic rebalancing of the North of England to achieve parity with the South, particularly the South East of England. It is not a competition and not about taking trade away from the South, rather it should be focused on a collective effort to improve both the GVA and living standards in the North through creation of new jobs and wealth generation.

Are there signs of the Northern Powerhouse starting to bear fruit in the region?

The North East is lagging behind our colleagues in Greater Manchester. The proposed devolution deal, whilst not perfect, needs to be capitalised upon and improved where required; but it is a generational opportunity to devolve power.

There are promising signs with reduced unemployment and greater business growth, but these are the earliest green shoots and require significant collaborative effort to make real and sustainable change.

Has the government done enough to convince you of its commitment to Osborne’s vision?

Not yet. A strong and more powerful devolution deal, increased capital investment in infrastructure and an acknowledgement that the North East offers the best return on investment, per pound of public expenditure, when measured on a GVA improvement basis.

Transport improvement is intrinsic to the Northern Powerhouse. Do you believe that spending billions of infrastructure will improve Northern productivity?

I am a businessman and therefore believe that you invest where the improvement and returns are greatest.

Enabling investment into improving the North East’s road network (A1, A66, A69 and A19) and into the reduction of the rail commute time from Newcastle to London to under 2 hours would bear greater fiscal returns than investment in HS2+, elements of HS3 or the M62 expansion project.

Are there any other areas which you believe money should be spent on, ahead of transport?

Encouraging high growth business to be created in the North East or relocate to the region is key. It is the economic furnace that will provide substance to the Northern Powerhouse and underwrite the case for Government to invest further.

However, the benefits of an increased regional economy need to be shared with investment into our social care and health infrastructure to improve living standards, as well ensuring that social justice and aspiration are key fulcrums of improvement.

Does the North East need a mayor? If so, who should it be?

In short, yes. The North East needs a Mayor to maximise the devolution of power and spending to the region and show strong leadership; moving us away from the regional political infighting that I feel has held the North East back.

I firmly believe that the right mayor will come from the private sector and be business and economically focused. It is for that reason that I personally support Jeremy Middleton, a man I trust and respect, in his campaign to be the first directly elected Mayor.

Will the Northern Powerhouse be realised in the North East?

Yes, it has to be. This opportunity to receive devolved power and underwrite a business case for Government to devolve further power is essential. If we ignore London, and simply aim to uplift the North East’s GVA per head of population to match the South East, we would add £30Bn to the regional economy. That is an opportunity that cannot be allowed to be missed.

Thank you Stephen.

We hope to culminate our Northern Powerhouse insight series with an interview with James Wharton MP next month. Time still remains to nominate a North East business leader for interview. Get in touch with Jamie at jamie.hardesty@bdaily.co.uk for more information.