Regional businesses believe that devolution could hold the cards to a more prosperous East Midlands economy – but many have said they want to see Leicestershire at the table with Derbyshire and Nottinghamshire.
The proposed East Midlands Mayoral County Combined Authority was one of the key discussion points at East Midlands Chamber’s inaugural State of the Economy Review, held in partnership with the University of Leicester and Geldards LLP.
More than 50 business and academic leaders attended the event, held at emh group’s headquarters in Coalville on 16th December 2022, which featured panels of business leaders speaking about how they have been affected by economic issues over the past year and future policy needs.
Amber Valley MP Nigel Mills and Nottingham North MP Alex Norris also gave speeches, in which they explained the latest situation with the East Midlands devolution deal – currently undergoing a public consultation with a view to being established in May 2024 – and how it could drive investment to the region.
The deal under review includes the local authorities across Derbyshire and Nottinghamshire, with a pledge to bring £1.14bn into those two counties over 30 years.
Chris Hobson, director of policy and external affairs at the Chamber, said: “There is a growing appetite among our business community to devolve decision-making powers over key issues like economic affairs and transport to local areas that have a greater understanding of their needs.
“While there was once a time when companies may not have wanted to wade into the debate over political structures, they have witnessed first-hand the benefits felt by their counterparts in other areas of the country with elected mayors and seen the scale of additional inward investment that devolution has facilitated.
“There was genuine excitement from businesses in the room on the opportunities devolution will bring, but also a concern that Leicestershire may end up missing out as a result of not being part of the current Derbyshire-Nottinghamshire deal.
“For businesses, the three counties are felt to be a natural economic area of co-operation – as devolution progresses, political leaders must present a clear vision for how they ensure Leicester and Leicestershire won’t be disadvantaged.
“When discussing our region’s USP, it was clear it all comes down to us being a Centre of Trading Excellence – a place for making things, moving them and innovating in how we do this – and this is something we have called on the Government to back further in our Business Manifesto for Growth via a package of measures to improve investment, innovation, infrastructure and international trade.”
The Annual State of the Economy Review took place against a backdrop of the Chamber’s latest Quarterly Economic Survey, which paints picture of declining activity throughout the past year but a slight renewal of confidence ahead of 2023 should the political environment stabilise.
A day earlier, the Bank of England raised interest rates from 3% to 3.5% in its latest fiscal intervention to arrest inflation, which was 10.7% in the year to November.
Chris added: “Our Quarterly Economic Survey has illustrated the myriad cost pressures and capacity constraints that firms have faced throughout the year, largely due to global headwinds but also because of our own doing in some cases.
“Looking ahead, businesses are acutely aware 2023 could be another tricky year to navigate as we enter a widely-predicted global recession, although a much shallower and shorter one than in 2008.
“As interest rates hit 3.5% and further forecasted raises are likely to impact further on already-dwindling investment intentions, there are things the Government can do to ‘get the basics right’, as we have stated in our manifesto.
“With four in five businesses with vacancies struggling to recruit throughout the year, we should be helping them to invest in skills – whether that be through expanding the remit of the Annual Investment Allowance so they can claim against training or making the Apprenticeship Levy more flexible to encompass a range of entry-level roles.
“Exporters are also growing frustrated with barriers to international trade and our relationship with the EU may once more become a big issue for 2023, while businesses will be eager to see new markets open up via trade deals to connect our region with the rest of the world.”
To read the full Quarterly Economic Survey report for Q4 2022, click here.