The Government must use the Midlands Engine to build a Global Britain
The Midlands Engine is the key to Britain's prosperous post-Brexit future. The Government must prioritise the region's post-pandemic economic recovery, with international trade deals and fresh, targeted investment, writes John Longworth, chairman of the International Business Network.
As the Midlands reels from the economic punctures caused by recurring lockdowns, the Government must ensure a strong recovery for the region post-pandemic and smooth out the creases in post-Brexit trade.
The Government has already proven to be proactive in the latter, with a £20 million SME Brexit Support Fund to help small and medium-sized businesses adapt to new trading rules with the European Union. They have also indicated plans to 'level up' areas beyond London and Southwest England, in a move to equalise the distribution of wealth and prosperity across the nation.
Yet, while these measures are helpful in dealing with the initial hiccups of post-Brexit trade and their 'levelling up' agenda is promising, they do not go far enough to encourage innovation and growth within the region or seem to demonstrate a firm commitment to the Midlands.
The highly anticipated Chancellor's budget announced today will be crucial in setting out the long-term future for a post-Covid Britain, particularly for the Midlands. It must be the Chancellor's imperative to support family-run businesses as the backbone to both the Midlands and British economy as a whole.
Indeed, as discussed in the IBN's latest report, this should formulate in a reduction of VAT, the elimination of Corporation Tax – a suffocating tax for small businesses – and the repurposing of National Insurance to fund the NHS.
It is thus the Government's responsibility to determine the region's long-term economic success and to bolster the Midlands Engine. While the deal between the Manufacturing Growth Programme and D2N2 Local Enterprise Partnership has granted a £500k support boost for Derbyshire and Nottinghamshire manufacturers, Westminster must play an integral role in carving out a strong economic future for the Midlands.
Indeed, the East Midlands Development Corporation (EMDC) has already outlined its £235 million investment vision for the East Midlands. The innovation the programme offers, demands Government attention, with the projection of a more than £4.8 billion boost to the East Midlands economy each year and the chance to create more than 84,000 jobs.
The lack of patient capital available through traditional lenders already limits business growth. If the Government were to instigate an initiative such as the EMDC has suggested or offer a 'scale-up' loan for businesses, it would rectify many of the systemic shortcomings faced by SMEs.
Crucially, Government-backed plans for 10 low-tax freeports in the East Midlands must be realised in order to secure its place as a regional hub for trade. The freeports offer tax-reliefs for imports, offering simplified customs procedures and duty suspensions on goods and ultimately, allow for fewer regulations. By placing these freeports in and around the East Midlands airport, businesses would be able to capitalise on the record levels of commercial business and airfreighting experienced at the airport during lockdown.
As international trading deals are being struck, the Government has the power to realise their dreams of a "global Britain" by ensuring that East Midlands airport becomes a trading hub. If the Government is committed to encouraging British businesses to 'go global', measures must be taken to create a more streamlined funding process, an improved system of dialogue between DIT officials and the SME community, and ensure that an overseas network of trade officials is not overstretched nor under resourced.
Indeed, emerging from the shackles of EU trading restrictions, new opportunities for international trade and investment have opened up for Britain with India, America, South Korea, Latin America and North Africa. In order to broaden their export markets, Midlands businesses must also look beyond Europe for post-Brexit deals.
With 5 out of 10 of the world's fastest growing economies residing in Africa, alongside existing, large, industrialised economies such as South Africa and Nigeria and high-growth economies including Ghana and Côte d'Ivoire, trade opportunities with Africa have never been more favourable.
The Midlands must appeal to the emerging global economic powerhouse and rise to the growing demand for British goods, services and expertise in Africa crossing a range of sectors including healthcare and cyber-security.
As lockdown begins to ease and the economy reopens, the Government must seize the opportunities Brexit has provided and indeed 'level up' Britain. The detrimental effects the pandemic has had on the Midlands economy demands Government attention and support. The Chancellor must accommodate the Midlands in his latest budget and propel the region into global markets. With post-Brexit trading opportunities aplenty, the Midlands must meet the challenge to become the engine of a "global Britain" so desired.
