Business leaders call for regional industrial clusters

The director-general of the CBI called for industrial clusters in every region as the only way to level up.

Speaking at the CBI’s first Urban Revival conference, Tony Danker said the government must harness local strengths to propel regional economies through recovery towards enduring prosperity.

‘For economists, the UK’s productivity gap – perhaps our most important driver of living standards is now at its widest in a century,’ said Mr Danker.

‘London’s productivity is almost a third higher than the UK average. And over 50% higher than in Yorkshire & Humber – hitting wages, and quality of life.

‘Meanwhile, compared to other advanced economies. In Europe, or America, our cities, outside London, aren’t reaching their full potential. Costing the economy around £50bn every year.

‘For citizens, the UK is a deeply unequal country,’ he added.

‘For too many – where you’re born determines your health, wealth, life expectancy, and opportunities.

‘We have to liberate ourselves from the ‘cookie cutter’ thinking of the past. And empower different regions to find different solutions – figuring out what works for them,’ he added.

‘We’ve already seen where these clusters work. Think auto, in the West Midlands. aerospace, in the South West. The catchily-named ‘Holyhead Hydrogen Hub’. Or the ‘Golden Triangle’ of research and innovation, in the South East.

‘Many of them are globally competitive, in their own right. And these clusters are some of the most productive parts of the country. Though they make up only 6% of UK employment.

‘They punch well above their weight when it comes to output per worker at about 11% of GVA. It’s a model that builds local momentum. And put simply, true levelling up will not be achieved by regions working towards identikit strategies.

‘Instead, it will come from areas knowing their strengths. Recognising their opportunities. And capitalising on them – forging their own path to long-term prosperity.’

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