Start saying it above a whisper – the fortunes of the West Midlands seem to be taking an upward turn.
Without wishing to sound at all Micawbership, maybe we should put some faith in predicted income and anticipate that all of the hard work by many businesses and institutions in the city is beginning to pay off.
From Mark Carney, Governor of the Bank of England, to the Chamber’s own surveys, from export figures that are out-stripping the rest of the country to a brief letter to this newspaper from a lady visitor from Wales, we can have reasons to be cheerful.
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Mr Carney has said that the recovery will “turn on the Midlands”, fearing that Britain’s economic revival this year has been too concentrated on southeast England and too dependent on credit and the housing market.
The Governor wants to see more evidence of a re-bound among manufacturers in the West Midlands before getting too confident. And we must be aware of over-confidence, because much of the manufacturing recovery in the region is down to Jaguar Land Rover’s storming performance and its supply chain.
The latest chamber quarterly economic survey reported growing confidence among the manufacturing sector with strong sales and orders. In many cases, the scores returned are at the highest levels since the 2008 recession. This leads us to believe that the tide has turned with business improving more rapidly than we were predicting.
There are some doom merchants. Like Peter Gutmann from data firm Experian. “A rebalancing in terms of the north-south divide? We can’t see that happening,” he is reported as saying.
But at least the Prime Minister is on our side when quite rightly he talks about the importance of rebalancing the economy. It is both a geographic and industrial rebalance.
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We are the most centralised economy in the developed world. Greater Birmingham only controls directly about five per cent of all taxes raised locally, with 95 per cent going straight to government. According to the OECD, compared to English figures, the level of taxes controlled at the local level is about; 10 times greater in Canada; 7.5 in the US; seven in Sweden and six in Germany. So you do not see an unbalance in the great regions of Germany. They do not have a divide like us and the Government has to do so much more devolution to get the most out of places like Birmingham, Manchester, Leeds and Sheffield. These cities are bursting to do more for the country’s economy but we need the tools to do the job.
And while the Governor of the Bank of England has spotted the importance of Midlands industry, we should take full advantage. And that is why last week’s interest rates standstill was a relief after predictions of a rise in the offing.
An interest rate rise would be a huge set-back, especially for our exporters, who, as I have said, are doing so well. Manufacturing accounts for 14 per cent of the West Midlands economy and the east of the region is doing even better with 18 per cent. And that compares with 10 per cent nationally.
Much of that production goes abroad. The chamber’s own export documentation department inbox is testimony to that. So the impact of an interest rates rise would knock exporters back because this would result in a stronger pound, making our goods abroad expensive and even more vulnerable to those countries where they have cheaper production costs.
And we must remember that according to the Carney mantra, we are in this with the East Midlands. Their importance should not be forgotten. Rolls-Royce and Toyota alone have 15,000 staff in Derbyshire and perhaps when we talk about bringing down the regional barriers we should look east as well as west.
Low interest rates give us the opportunity to compete on level terms with foreign competitors. It’s going to be a hard slog and we must be prepared to be patient.
The Government’s Help to Buy scheme has done wonders for the construction industry in the Midlands. There have been 4,000 applications in the Midlands compared with only 1,000 in London.
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And think what is going to happen in the property market when HS2 becomes a reality.
Back to the lady from Wales. In a letter to the Birmingham Post, Bev Reardon, from Newport, thanks the city for its “warm welcome and hospitality”. And concludes: “Hello Birmingham – Goodbye London.”
A sentiment we can all celebrate.
* Jerry Blackett is chief executive of Greater Birmingham Chambers of Commerce