Chancellor’s omission of an investment zone in the East is disappointing
Opinion | By James Palmer, chair, Eastern Powerhouse
With much disappointment but little surprise, the East of England failed to make the cut when the Chancellor announced the preferred locations for the government’s ‘refocused’ investment zone programme.
The government has significantly scaled back the investment zone project, a plan introduced by the Liz Truss administration, to focus on a limited number of areas with the potential for ‘catch-up growth’. This targeted approach is the correct one – recognising the relative underperformance of the largest local economies in the country, outside London, and the different contributions that they can make through existing specialisms.
Investment zones are a key part of the government’s ambitious plan for growth and prosperity, rooted in boosting the UK’s potential as an innovation nation, growing strengths in key industries to support national priorities, and levelling up communities across the country. However, the omission of an investment zone in the East of England is particularly disappointing given the objectives of the policy and the selection criteria that the Treasury has used to focus on economic and innovation potential as well as the need for levelling up.
As a region the East is the fourth largest economy in the UK and third most productive. It is endowed with knowledge-intensive and innovation-led sectors in new science and technology industries, such as life sciences, green energy, agritech, and information technology. Much of this growth and innovation is centred around Cambridge and its research-intensive institutions that have evolved one of the world’s most successful and best-known technology and bioscience-based clusters.
But there are other beacons of light across the region including Norwich Research Park specialising in biotech, agritech and medical science, Adastral Park, in Ipswich, home to global cluster of high-tech telecommunication and technology companies, and Stevenage Bioscience Catalyst, a leading location for companies to develop and commercialise cutting-edge therapeutics and gene cell technologies.
Peterborough is developing its case for a high-growth, knowledge-intensive cluster at the new university campus on Peterborough’s river embankment. This is the culmination of a 10-year plan to transform the local economy by targeted, technology-focused foreign direct investment to drive growth in the green economy, while delivering against the country’s productivity, levelling-up and zero carbon ambitions. With productivity in line with Manchester and other northern cities, and higher levels of deprivation than Sheffield or Stockton-on-Tees, Peterborough is a location that appears to tick all the government’s boxes for an investment zone.
While Cambridge hardly qualifies as underperforming, the city is underbound and its growth constrained when it comes to the potential for new business space and strategic sites for growth. This suggests that sites are needed, more distanced from the city, but which provide a many-centred model for growth along transport corridors that can more effectively connect different places in the East and provide the footprint for future development and growth.
As the government’s science and innovation audit of the region observed, the East will only achieve its potential by expanding the innovation ecosystem and accelerating the process of convergence. The region’s four major economic centres, all of which have competitive strengths in existing and emerging sectors, can act as hubs for regional growth bringing global trade and investment to drive job creation and research and development activity. The region as a whole is broadly in line with national levels of productivity. However, if it were to close the GDP gap with the South-east it would add £31.2bn to the national economy each year.
To reverse the pattern of sluggish growth and low levels of productivity the UK must unlock the latent talent, investment and innovation in all its regions and nations, including the East of England.