Call for £1bn 4G windfall to kickstart growth

Ed Cox, the director of IPPR North and Deputy Chairman of the Northern Economic Futures Commission, also argued that Yorkshire needed “bigger shovels” in order to attract investors and compete on a global stage.

Mr Cox made the comments at an event to mark the first anniversary of the launch of Yorkshire Vision, the Yorkshire Post’s quarterly magazine, which highlights the region’s business successes and makes the case for inward investment into the region.

In his speech, which was delivered in Yorkshire Post Newspapers’ new offices in Whitehall Road, Leeds, Mr Cox subjected the £2.6bn Regional Growth Fund to critical analysis.

The Fund was set up by the Government as part of its overhaul of regional economic development. It aims to support businesses looking to create jobs in areas previously dependent on the public sector for employment.

Previous rounds have seen major projects including a new road linking the M18 with Robin Hood Airport and the expansion of sweet maker Haribo, as well as broader packages of funding to help local enterprise partnerships support businesses.

Mr Cox said the RGF had an emphasis on what he called “shovel-ready” projects.

He added: “I want to argue that the problem is that our shovels are just too small. As with any significant Government programme, the Regional Growth Fund has its advocates and it has its critics. Business projects across the regions, Yorkshire included, are enjoying significant sums from this RGF money. The first three rounds claimed to have created or safeguarded half a million jobs, and levered in £13bn worth of private sector finance into the national economy.

“But, it’s difficult to measure just how many of those jobs might have been created anyway and how much of that investment might have come anyway, without that Government support. We have to remind ourselves too, that the £2.6bn pot that is the RGF is spread over five years. That’s the same amount of money the regional development agencies were spending in one year, when times were much better and confidence was not in such short supply.”

Mr Cox said the RGF was symptomatic of a fundamental problem which is holding back economic recovery outside London.

“That is our economic centralisation that we currently suffer from,’’ he said. “The RGF as a Whitehall-driven, spatially blind, beauty contest, actually causes regional partners...to have to go cap in hand to London to plead for what are, in fact, tiny slices of the economic development pie.”

According to analysis carried out by IPPR North, in 2010 and 2011 the Government spent £1,050 per person in London on economic affairs, compared to around about £450 per person in Yorkshire and Humber.

Mr Cox said disproportionate investment in London was not, in itself, the problem.

He added: “It’s the inability of English regions like Yorkshire to determine their own path to growth, in what is an increasingly competitive global economy. Regions, quite simply, don’t have the shovels that they need to be able to get digging.”

He added: “In our report, the Northern Economic Futures Commission, has advocated that what we really need is a northern innovation council, that can work alongside the technology strategy board, and will be endowed with £1bn of the proceeds of the sale of the 4G spectrum – if you like, it’s our fair share of the air. Then we can actually identify and advocate a small number of innovation priorities on a global stage.” Hopes that this year’s sale of 4G airwaves could generate a windfall for the Government have been fuelled by successful auctions in other countries.

Mobile phone operators in the Netherlands paid a total 3.8bn euros (£3.1bn) for the country’s 4G spectrum in December, easily surpassing expectations of about 450m euros (£366m).

The event at the Yorkshire Post’s new offices also attracted Deputy Prime Minister Nick Clegg, the Sheffield Hallam MP, who urged businesses to turn Yorkshire’s Olympic triumphs into commercial successes.

Garry Wilson, the managing partner of Endless, who was also one of the speakers, said Yorkshire could claim to be a “gold medal” county following the success of Olympians such as Jessica Ennis and Nicola Adams.

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