The Answer To Our Economic Problems Is Generating More Wealth Here
May 14, 2023
“To boldly go where no one has gone before.” The mission of the Starship Enterprise and my mission as Mayor too.
For me it’s not about visiting other planets but tackling entrenched problems with fresh ideas. I’m not seeking out new life and new civilisations. I’m aiming to make ours better.
We all know the story. Our region fuelled the industrial revolution. The workshop of the world. Home of the locomotive. Birthplace of the railways. Supplier of ships to the world. Where renewable energy, electric light and turbine power were invented.
And then a rapid decline from the early 1980s – with the North East’s GDP per capita plummeting from 93% of the UK average in 1981 to 73% by 2017. No other English region has suffered this decline.
The reason is simple: long term under-investment. Investment in businesses, investment in infrastructure, and investment in our people.
The answers to the economic problems of the North East lie in generating more wealth here. This creates a virtuous circle of better health and higher skills, which in turn leads to greater prosperity.
If we can get everyone a secure job that pays their bills with enough left over a holiday and some savings, half of our other problems will evaporate. People with financial security live longer, healthier, more productive lives. Educational attainment rises and crime falls.
Even the Government seems to know this. When the North of Tyne Combined Authority was set up the Government gave us one main target: create 10,000 new jobs over 30 years.
We’re already creating 4,832 jobs under my captaincy. 14 years’ progress in 4 years. A decade ahead of the Government’s schedule. If anyone ever tells you Labour can’t run the economy, send them to me.
But I want us to go further and faster.
There are 68,775 people claiming unemployment-related benefits in the North East. We know that’s not the full picture – many more are economically inactive. And a quarter of those in work are in insecure, zero-hours, or temporary jobs, including bogus self-employment.
So we need more jobs, but crucially more good jobs. Jobs compatible with tackling the climate emergency, not ones paving the road to Armageddon.
Our Good Work Pledge now covers more than 50,000 employees in the North East.
Our advanced award requires employers to pay the Real Living Wage, recognise trade unions, build a balanced and diverse workforce, support career progression, and ban repressive practices like fire and rehire.
We developed it with the trade unions and enlightened employers and it underpins all of our investments and job creation.
But if underinvestment is the problem, how do we fix it with a government that still believes in austerity and an economy full of hedge funds after a quick buck?
We face a choice.
Allow hedge funds and private equity to extract wealth from places like ours, while they dodge their taxes on the way.
Or find new ways to get socially productive investment into the North East.
That’s why the North of Tyne Combined Authority has set up the Venture North fund. This is a totally groundbreaking approach where we become the venture capitalists – but invest ethically.
We’re starting with a £50 million pot. The North of Tyne is putting in £10 million, with a further £40 million from universities and pension funds. Pension funds are our money, remember – the returns flow back to us, not to billionaires.
We’ll invest in scale-up and start-up companies in the North East, including those that come out of our universities. So we’ll part own them. Our bright talents will no longer have to go to London, Oxford or Cambridge to start their businesses, in sectors like net zero, health technology, and life sciences.
The wealth generated by this fund will stay here, in our region, and be recycled to create more jobs.
This week I’m talking to more pension funds about investing here. In time I want to get this fund up to £500 million. By then it will create around 14,000 jobs and generate hundreds of millions of profit for us to reinvest in our region. That’s Community Wealth Building on steroids.
Making the North East prosperous again – that’s somewhere worth boldly going.