A robustly negotiated Brexit will offer a wealth of global opportunities for the North of England

A robustly negotiated Brexit will offer a wealth of global opportunities for the North of England

As the embryonic first steps of Brexit negotiations between the UK and EU begin, the North of England has its own divorce to execute. The Northern Powerhouse is a failed concept that, according to the think-tank Policy North, must now be cast aside in favour of a Global North policy strategy.

As the founding Chairman of Policy North it will come as little surprise that I wholeheartedly agree. The fundamental concept of George Osborne’s Northern Powerhouse strategy was to increase investment into the North in order to attempt a fiscal rebalancing of the extra-London economy. Unfortunately, in the short term at least, this required the investment to be funded by growth in the current centre of gravity – the central London economy.

But the future of the North of England cannot be dependent on the further acceleration of the economic divide between London and the regions. I have founded, scaled and sold numerous technology businesses in the North East of England and saw nothing emerge from the Northern Powerhouse process that assisted replicating and scaling this private sector success. The North of England has become umbilically dependent upon EU funding, but this significant investment has resolutely failed to achieve arms-length sustainable businesses.

Hundreds of millions of pounds have been spent on incubators, accelerators, almost £200m on the JEREMIE fund for SME and start-up investment. Yet I see little progress in the necessary drive to grow plc headcount and increase net Treasury receipts in the North as a result. It appears that following the closure of the Regional Development Agencies – which do deserve credit from taking a global view on inward investment and trade – the horizon of focus became limited to soft EU funding and projects. This was a mistake. We have a unique opportunity, in the management of Brexit and focusing on free trade, to remedy this.

So why does Brexit offer better prospects? It is a process that is in motion with defined dates in its direction of travel. Brexit is happening: an effective and robustly negotiated Brexit offers three key areas of opportunity for the North of England.

Firstly, the deadweight shackle of “state aid regulations” from the EU will be swept aside, thus allowing targeted and effective internal investment into the sectors and areas that offer the highest fiscal and social return. Some of the most innovative businesses I have invested in over the last five years were in “excluded sectors” and precluded EU investment with no regard for the social and economic prospects they had.

Secondly, Brexit shines an intense spotlight on the opportunities for free trade. The North East of England is the only region of the UK with a positive balance of trade, and sets the foundation for mass benefit from increased free trade on a global basis. Leaving the customs union as part of Brexit and being free to invest in free trade zones such as free ports, and enter into enterprise-led free trade agreements with the world will set the North on a trajectory to fiscal growth, overshadowing anything the Northern Powerhouse had to offer. I have recently returned from a trade delegation organised by the Arab Chambers of Commerce, representing a region that recognises the forthcoming opportunity to engage directly with the rich manufacturing, FinTech and digital skills base in the North of England.

Finally, a swift implementation of the democratic will of the British people (disproportionately those in the North) will offer the stability and directional confidence that both capital markets and private sector investors are looking for.

The Global North policy report issued this week by Policy North sets out a business led strategy for the North to capitalise on the opportunities of an ultra-globalised post-Brexit economy. In the late 18th Century, the North of England – particularly the North East – had a GDP per head greater in today’s terms than Qatar; it was the richest part of any country on the planet. This was achieved through the export of materials, skills and engineering to anywhere in the world with whom a robust commercial agreement could be reached – free trade, in a gold-plated nutshell. Free trade must be the focus of Brexit in the North. It will power the economic furnace that will facilitate investment in infrastructure, health, social justice and skills.

The North has phenomenal untapped potential. The Northern Powerhouse ended up alongside its policy cousin The Big Society as little more than a slogan on a hoody; Global North has far more potential to engage and win the battle of the ideas in Northern England. Brexit is the power lever for Global North to succeed and a swift and orderly departure from the EU, the single market and the customs union represents the trinity of prerequisites to begin this new chapter.

Photocredit: Liam Johnson