The general view that I have picked up from Downtown members this week was that the chancellor’s latest budget was okay, although not earth shattering.

Among most there appears to be an acceptance that there is little room for manoeuvre for our politicians and decision makers as far as economic policy is concerned, and so we are relatively sanguine about the lack of any real radical proposals coming from government.

I have to say I take the opposite view, and believe that the continuing flat lining of the economy demands radical, risk taking, entrepreneurial measures from the chancellor and his treasury colleagues.

The announcement on National Insurance contributions was positive as far as it went. But why not scrap all NI fees for any new employees that a business takes on? The subsequent savings from the welfare bill would more than pay for such a move.

Boosting the housing market through the new mortgage guarantee scheme again appears attractive on the face of it. However, there is a danger that this initiative will simply inflate property prices – one of the main reasons we find ourselves in this mess in the first place.

The absence of any mention of the banks and business lending in his latest commons address signalled to me that the chancellor has given up on making demands from the financial sector that they clearly ignore anyway. But the problem of access to finance for small businesses, the life blood of UK Plc, continues to be the single biggest problem facing the business community.

The governments own Regional Growth Fund initiative, which should be helping at least in part to address this, has been massively bogged down in bureaucracy and red tape, whilst alternative sources of funding through venture capital funds and private equity are not being given enough coverage or support. The failure of Osborne to take any action in this area was hugely disappointing.

On tax, the cut to corporation tax to 20% should have been introduced immediately – and the top rate of tax needs to be reduced back to 40%. This would not cost the treasury a single penny according to the treasury’s own studies, which indicate that, at 40%, high net worth individuals are far more likely to pay up and not explore the tax avoidance loopholes that exist.  

The penny off beer duty was a political stunt not worthy of the joyous whooping coming from Westminster’s green benches on Wednesday afternoon, whilst the freezing of fuel duty was inevitable.

It was a low key budget from a low key chancellor. The politics of coalition may be the reason that we are not seeing bolder business friendly policies from the government. Or it may be that the chancellor is not a risk taker at any level.  The lack of imagination and radicalism from a Tory chancellor on the business agenda is both surprising and disappointing.

His one saving grace is that there is little coming from the opposition benches that would suggest they have any more of a clue either.    

Sir Howard

Downtown Manchester held its third annual City of Manchester Business Awards last night, and welcomed the city council’s chief executive Sir Howard Bernstein as the keynote speaker. I know of no other town hall boss who can inspire a business audience in the way that Bernstein can – and offer a valuable opinion on how his city has to react to the global challenges that it is facing. If we had 100 Bernstein’s then the country would be in a much better place. Nonetheless, Manchester does have him, and they rightly cherish him. Manchester has become the undisputed premier city on the UK outside of London, and that in no small part is because of the civic leadership the city has benefitted from for the best part of thirty years now.

The government’s recent announcement about a £33 billion investment into our railway system that will further cut journey times from the North of England to London has been met with much celebration by those provincial cities that will directly benefit, including Leeds, Manchester and Preston, whilst civic and business leaders in Liverpool are all set to lobby the Department of Transport for its inclusion in the proposed new infrastructure improvements.

It currently takes just two hours and nine minutes to travel from Liverpool Lime Street to London Euston, yet some in the city region believe that failure to cut this time by around thirty minutes will place Liverpool at a significant economic disadvantage.

Although I don’t share the rabid scepticism about HS2 that was expressed by Downtown’s political blogger Jim Hancock here last week, I am finding it equally difficult to get overexcited about the impact shaving half an hour off a journey time to our capital city will have on the economy of the North.

Indeed, I find it somewhat bizarre that this plan will potentially mean that I will be able to get to London quicker than I can get to Leeds or Sheffield, not to mention Newcastle and Glasgow.

The assumption that enabling Northern cities quicker access to London will equate to a business and economic boost to the North is neither proven nor inevitable. Indeed, there is an argument that what HS2 may lead to is a talent drain from the North to the South.

For me, a multi billion pound investment that connected the North better, with more efficient rail and road networks, would be an exciting and innovative programme that would be well worth getting behind.

The HS2 project is twenty to thirty years off delivery anyway, and it does offer Westminster politicians a fig behind which they can hide when challenged on the North – South divide.

The unhealthy obsession that we have in respect of London means that this project is unlikely to be de-railed. However, Northern business leaders and decision makers should be arguing for infrastructure schemes that will provide us with better connectivity across our region, rather than allowing the capital to seduce us and dictate the agenda once again.

There is no doubt that during the past decade there has been a re-emergence of the major Northern cities, Manchester leading the way with its spectacular regeneration on the back of the IRA bomb attack in the nineties, followed by the Commonwealth Games; Liverpool capitalising on culture in 2008; and Leeds managing to create a buoyant centre for professional and financial services.

Nonetheless, the chasm between the North of England and our counterparts in the South East has barely closed, with London and surrounding areas accounting for over one third of the UK economic activity, whilst we provide only a fifth.

This is not to bemoan or envy the success enjoyed by our capital city. I have gone on record recently as saying that without London’s success the UK could well be Greece!

However, for UK PLC to function effectively then it is essential that the North takes maximum advantage of the opportunities it has – and that means investment in our people, investment in our infrastructure and decentralisation of power from Westminster and the city of London.

In Germany comparable regions such as Brandenberg, Sacksen and Thüringen have all managed to grow relative to the rest of the country. Indeed, Germany has seven cities in the top 20 economic performing cities in Europe. Holland has two, as do the ‘basket cases’ that are Italy and Spain. The UK has just one. You know where.

The North was where the industrial revolution started, but although we should celebrate our past we cannot live in it. We need to listen to what the recent report from Think Tank IPPR North is saying about how we can begin to punch our weight as a regional giant once again.

They argue in the recent report ‘Northern Prosperity is National Prosperity’ that it is simply not good enough for London to be spending £1,000 per head on economic development, whilst we spend only £500 per head. Similarly the North invests just £37 per head on science and technology, compared to the £57 per head spent in the South East.

Downtown hosted a Roundtable discussion on this important report last Friday in Leeds, with a group of business leaders from across Yorkshire, and the Shadow Chief Secretary to the Treasury and Leeds West MP Rachel Reeves.

There was broad agreement of the need for infrastructure improvements that cuts train travel times down significantly, making it easier to cross the North, rather than the obsession we appear to have in cutting the time it takes to get to London. And we need to recognise that in the twenty first century we should be able to get a direct flight to places like Beijing, Shanghai and Delhi, without travelling to Heathrow first.

Crucially, we need a regional business bank to invest in Northern businesses. And we need metro mayors in Manchester, Liverpool, Yorkshire, the North East and Lancashire who will have the strategic powers to help make all this happen. Boris’s for the North.

Downtown will be campaigning for and talking about this exciting agenda in 2013. I hope you come and join us. It’s time for another Northern revolution.

As this is my last blog of the year I thought I would take the opportunity of looking forward to 2013, and what I hope for over the next twelve months.

The budget statement from George Osborne on Wednesday doesn’t really give you a great amount of optimism as far as the economy is concerned. ‘Flat lining’ appears to be the new normal, and the chancellor is either hamstrung by his coalition partners from creating an agenda for growth driven by enterprise, or lacks the courage and imagination to back the UK’s entrepreneurs and business owners.

I hope that in 2013 the coalition collapses. We need, more than ever, clear and decisive leadership, and an agenda that the whole of the government believe in and can get behind. I have always been sceptical about government by coalition, and it is a particularly tricky art when you are dealing with a party as flaky as the Liberal Democrats. I would much prefer an outright Tory or Labour led parliament, where we would know where we were as far as policy was concerned. 

My next hope is that, whoever is in charge in Westminster, there is recognition of the need to re-balance the economy across the regions. We may be suffering recession in most parts of the country, but London and the South East continues to enjoy prosperity.

I do not begrudge London its place as a leading world city. Indeed it could be argued that without London, we could be another Greece! Nonetheless, the austerity measures that have been imposed on the public sector in the North have been disproportionate to the South, and if we really are ‘all in this together’ then a review of the next round of cuts ought to be undertaken as a matter of urgency.

Internationally we must all wish for the United States to agree a budget! The President is currently in a stand-off with his Congress over the country’s economic strategy, and if there isn’t agreement in January then the US economy falls off a cliff – taking the rest of us down with it.

The fact that we are so clearly operating in a global economy nowadays, with the prospects of the Euro and the Dollar every bit as important as to what is happening to the Pound, does make one question why world leaders are not working more closely together and finding a way of co-ordinating their approach to an elongated financial crisis that has seemingly got our world leaders totally baffled.

Closer to home, and on planet Downtown, I am expecting an exciting year in our newest city Leeds, where we will see a new arena and the new Trinity retail centre opening. Regeneration projects in Liverpool include a new conference centre, four hotels and hopefully the green light for the multi-million pound Liverpool Waters project. Manchester will continue to cement its position as the economic hub for the North, whilst in Lancashire the Local Enterprise Partnership has defied the odds and appears to have actually got the 999 local council’s talking to one another, and doing some decent work around business and economic growth.

With no elections in the cities next year, politically all eyes will be on the County Council elections, with the Conservative controlled Lancashire facing a strong challenge from Labour in May.

Promotion for Leeds United and one of the Lancashire Championship clubs to the Premier League would be good not only for supporters of the respective clubs, but for business too. The Premier League brings a profile and prestige to any town or city that money just can’t buy, and the spin-off economic benefit is enormous.

Qualification for the Champions League for Everton and an FA Cup win would be nice, and I’m happy for the Premier League to remain in the North West – so long as it doesn’t go to Anfield, of which there is more chance of Nick Clegg delivering a Liberal Democrat pledge.

Finally, I wish success and a recession proof year for all those companies who are members of Downtown. Your loyalty and support is very much appreciated and I wish you all a very merry Christmas and a prosperous New Year.

I am finding it hard to remember a more manic month than this one, and I am hoping that this means continued momentum and growth for Downtown in Business, rather than me simply becoming a busy fool! A few observations and thoughts that have been stimulated by my travels during the past twenty five days that I want to share.

The Economy

When the head of the International Monetary Fund, previously a strong advocate of our government’s austerity programme, says that the UK needs a plan ‘B’, we need a plan ‘B’. The chancellor has to recognise that the global economic circumstances have changed dramatically during the past month, never mind the past year, and it would be foolhardy for his policies not to change in order to take this into account. I have said before Osborne has shown ability for cutting. He must now demonstrate that he can implement a more ambitious growth agenda too.

Football

Congratulations to Manchester City on their remarkable last gasp Premiership win. It was the most exciting finish to a season one could imagine; just watching the scores coming through on the big screen at Goodison Park was nail biting stuff. For United it was a cruel way to lose the title, but over the course of 38 matches the best team won. On Merseyside, we had the unusual scenario of Everton finishing above Liverpool in the League. I doubt if this was the reason Kenny Dalglish was dismissed though. More likely his appalling handling of the Luis Suarez affair did that for him. At the wrong end of the table, bad news for the region as Bolton and Blackburn were relegated. This will be a blow not just to supporters but to the local economy of both towns. You wouldn’t put any money on Blackburn coming back up anytime soon either.

Lancashire

I attended a Smalls Business Summit along with the Queen in Burnley last week – well Her Majesty and the Duke popped in to say hello during the day. There was a massive amount of negativity in the room, and it felt like many of the delegates had been for a session with Robert Peston beforehand! The big moans were around red tape and employment law. Both are being discussed by government at the moment – but I think access to finance and confidence are what are really missing from the wider business community. Optimism has never been a strength of the red rose county, so little surprise that there were an disproportionate number of ‘glass half full’ merchants at the conference. On a more positive note, there are indications that the Lancashire Local Enterprise Partnership is beginning to sort out a strategy that will improve communications with the SME community. More on this in the coming weeks.

Manchester

Sir Howard Bernstein was the special guest at a dinner for Downtown sponsors last night at the superb Abode Hotel. As always the Manchester Chief Executive gave much food for thought and demonstrated why, outside of London, the city is top of the tree as far as UK Plc is concerned. His ideas on how to get the economy moving were radical and innovative – Osborne should ask for an audience with Bernstein.

Liverpool

Congratulations to Mayor Anderson and his team for finally securing the turnaround cruise liner terminal. It adds real value to the local economy and continues the city’s momentum as a visitor destination. Joe is a guest on my show, City Talks Business, on Sunday morning, 10am, City Talk 105.9fm.