Government Must Re-Focus On Building On The Northern Powerhouse’s Potential
The UK Government should redouble its efforts to rebalance the economy after a new report predicts a widening gap between the North and the South East one year after the UK’s expected departure from the EU.
The UK Powerhouse study by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr), predicts that in 2020 Q4, annual GVA* growth for Manchester will be 1.4% putting it in 17th place in the study’s league table.
Milton Keynes, Reading and Oxford will be in the top three for economic growth with no cities in the North in the top 10. The annual GVA growth in these three South East locations in 2020 Q4 will be around 2%.
The forecasts are based on the assumption that an amended version of the Brexit withdrawal agreement will form the basis of the future UK – EU relationship. It also assumes a transitional arrangement will be put in place that allows a continuation of the current relationship without any major disruptions until at least 2021.
There was better news in terms of employment growth with Manchester securing a top 10 position taking headcount figures to 477,300.
Expert Opinion“This report paints a mixed picture for Manchester but certainly highlights the attractiveness of the city to investors. Brexit has and will continue to take up a lot of Government time, but it is vital that it refocuses its attention on rebalancing the UK economy and building on the he potential within the Northern Powerhouse.” Roy Beckett - Partner
The report highlights that city is home to several high growth businesses which are employing more and more people in the city. It points to Amazon confirming that it will open a major new office in Manchester in 2019, creating 600 new technology and research jobs. It adds that TickX, a Manchester-based company which brings together more than 50 ticket sellers so users can compare prices for events, recently raised £3 million in funding.
All forecasts in this report utilise Cebr’s central scenario. Cebr’s central forecasts are based on the assumption that an amended version of the Brexit withdrawal agreement will form the basis of the future UK – EU relationship. We further assume that a transitional arrangement will be put in place that allows a continuation of the current relationship without any major disruptions until at least 2021. On the immigration policy, we rely on the lower immigration population estimates assuming that a visa system will be implemented for EU nationals, but that the requirements (e.g. the minimum salary, the NHS surcharge payment, the application fees, etc.) would be more relaxed than they currently are for non-EU nationals requiring a visa.
* Gross value added