Regional power 'is key to growth'

AN industry chief has called for more power at regional level after a report warned that the UK economy could stall without the right investment in the East of England, London and the South East.

By Sarah Chambers

AN industry chief has called for more power at regional level after a report warned that the UK economy could stall without the right investment in the East of England, London and the South East.

The three regions, together referred to as the Greater South East, represent 42% of the UK's total gross domestic product and are the only UK regions to make a net contribution to the UK balance sheet, says the report, entitled “The UK's engine for growth and prosperity”.

But this position is under threat, with “serious challenges” from emerging economies in India and China, and established ones such as the US, and as a result, the UK is falling down the world's competitive ranking, it says.

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The study, written by the East of England Development Agency, the London Development Agency and the South East England Development Agency, says to keep the “mega-region” on track and secure the future of the UK economy, central government must ensure the right conditions for growth are set, and that major infrastructure scheme, both public and private, should be prioritised.

The regional agencies in the Greater South East must collaborate to prioritise investment in skills, knowledge and infrastructure, it says.

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EEDA chair Richard Ellis said the Greater South East must “at the heart” of the government's economic policy.

“The key to long term sustained growth in a global economy is productivity, and to do that, we need a vision for the future and to start to plan more strategically and collaborate,” he said.

“Growth has been strong, but to continue to remain competitive the government must give us more power at regional level.

“Working across regional and local divides, we can deliver what is needed to attract investment to the region, ensure the right infrastructure - like transport and housing - is in place, and make the region an appealing place to live and visit, so as to support the region and the country's prosperity.”

The report points out that in all other UK regions, investment from government exceeds value added and that it is the economic success of the Greater South East and the redistribution of its resources which supports national prosperity.

“In itself, the principle of redistribution is fair. Where the Greater South East can exploit comparative advantage for the benefit of the country as a whole it should continue to do so,” the reports says.

“But the engine of the national economy is creaking under the strain. Without prudent maintenance, performance will suffer.”

It calls for the mega-region to move up the Government agenda for investment and strategic priority, and says it needs to refocus its economic policy on international comparisons, rather than dwelling on regional disparities.

“The Greater South East is a leader in innovation and hosts four universities from the global top 30. It attracts 60% of all private research and development, and Cambridge, along with London, is a 'honey pot' for venture capitalists. We need to exploit what we have got and encourage growth and investment where appropriate so we can spread the knowledge economy to other regions in the UK,” said Mr Ellis.

“It shouldn't be forgotten that the Greater South East is also the largest market for UK businesses and is the most important outlet for more than half of businesses from the midlands and the north.”

Targeted investment, particularly in critical infrastructure such as Crossrail, is vital, the three RDAs argue.

Research has shown that the Greater South East has led UK economic performance over the past 25 years. It is home to 21million people, or about 35% of the UK population, and is responsible for 43% of the gross domestic product.

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