Business leaders in Cumbria are urging the Government to set out more detailed investment plans in research and development to match its rhetoric on levelling up for the region.
The call from Cumbria Chamber of Commerce comes after recent studies show that North West businesses have the lowest expectation for growth in export sales over the next 12 months, with a projected rise of less than two per cent.
Figures from a combined Bank of England and Institute of Chartered Accountants of England and Wales presentation also reveal that the region has one of the worst expectations for a rise in domestic sales over the next 12 months.
The region trails areas such as the South East of England, Wales and Scotland, with the South East in particular expecting a rise of more than eight per cent, compared to just six per cent for Cumbria and other areas of the North West.
The latest study, which was presented to business leaders last week said:
- Sales have been weak over the last year. Domestic sales are lower in quarter two of 2021 than a year ago while exports contracted at a much sharper rate than nationally.
- Employment levels have fallen over the past year, but the declines have been modest, thanks to the Government’s furlough scheme.
- Regulatory requirements and transport problems have come to the fore as growing challenges, partly linked to Brexit delays and COVID-19 containment measures.
While the majority of the report will be concerning for businesses, there are some positives in the report, with the North West’s Business Confidence Index rising in quarter two, underpinned by expectations of rebounds in sales and profits.
Meanwhile there is a hope that as businesses continue to rehire and people return from furlough that there will be a post-pandemic lift in investment rates.
Suzanne Caldwell, the chamber’s managing director, said: “Levelling up the North of England has been a key part of the Government’s rhetoric for a long time and it is vital that communities which have suffered levels of deprivation or feel left behind have that chance to catch up.
“A combination of Brexit and the COVID-19 pandemic has accelerated a lot of issues that businesses have already been experiencing, whether that’s decline in retail and more traditional business sectors or a struggle to recruit workers with the right skills.
“Government spending in the last few years in the North West on research and development has been less than a third compared to London and the South East, less than half compared to the South West and Cumbria is behind our neighbours in Lancashire and Manchester so there’s a lot that the Government needs to do.”
Research from the Institute for Fiscal Studies (IFS) found immediate conditions remain very uncertain for businesses, and with renewed surges in coronavirus cases across the world, risks are skewed to the downside.
Companies in the North West report a range of growing challenges, led by regulatory requirements. The proportion of businesses citing these has been exhibiting an upwards trend in recent quarters and now stands at 39 per cent.
Positive prospects for the next 12 months by the ICAEW is a return to economic growth, with domestic sales like to be far quicker than exports, reflecting slower vaccine roll-outs and a Brexit effect.
Employee growth, investment rates and R&D budgets are also expected to improve at varying levels.
Mrs Caldwell added: “These latest figures show that we can expect steady growth, which is desperately needed but what is clear is that while we’re likely to see growth, it is at a lower rate than in the south of the UK.
“That needs to close, and for that to happen some of the key problems are recruitment and exporting issues need to resolved imminently.
“The Turing Scheme needs to start immediately rather than in two months’ time and the Government needs to smooth out the red tape issues with the EU.”
