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Friday, 31 August 2012

Friday Guest Blog - Ports And Harbours

By Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce

Last week I got a call from Ports and Harbours magazine. Not one of my regular reads and perhaps the magazine might have had a higher readership in the Manchester area before Manchester Liners ceased operations in 1985. Nevertheless, despite the decline of shipping in the region and the British Merchant Navy, it is reassuring that Greater Manchester and the wider North West remains very much on the map as far as maritime transport goes.

The topic of the call was the Atlantic Gateway proposals. I have mentioned them before, but needless to say I was extremely enthusiastic about the potential for jobs, up to 250,000 and investment of £14bn over 20 years. I am also excited about the prospects for improving connectivity for existing businesses located here in the North West, but also for others that, as a result of siting a super port in Liverpool, improving rail connectivity and developing the ship canal, will now consider locating in the North West.

What the call did remind me of was a piece of work that I commissioned last Summer as an intern project from Manchester Business School. I wanted to look at economic diversification and its impact on the stability of growth, the labour market and house prices. I’ll save you all the detail as there is no obvious immediate link between economic number crunching and ships, except maybe an excitable naval architect trying to establish Taylor’s wake fraction. What was significant was the finding that the relationship between stability and diversification could be established in the North West region, but not with confidence at the level of Greater Manchester.

What a surprise, economic behaviour ignores boundaries drawn on a map. And why is this important? In a nutshell, the current government scrapped the Regional Development Agencies and replaced them with Local Enterprise Partnerships based on a “functioning economic area”, but these findings suggest that the North West would be better considered the “functioning economic area”. I’m not bringing this up out of some desire to bring back the Regional Development Agencies, but what we are now left with is a fragmented system of decision making on those big projects that stretch across the region and across several Local Enterprise Partnership areas.

Before those dreaming of a return to the days of the Regional Development Agency shout up, those days were no better. Petty regional protectionist arguments, that do nothing for business growth and employment, were as obvious then as they are today. Even the Atlantic Gateway proposals, when the country was staring into the abyss of a recession in 2008, had fierce opposition. What is needed is for national Government to be bold and step up to drive forward these projects. They are urgently needed to support national growth and establish long term prosperity in our region. The Northern Hub rail project and other infrastructure plans must be brought forward to now, not 2015.

Let’s hope David and George read Ports and Harbours, we need something to improve growth, and with it the country’s finances.

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