Who needs time travel when you have enterprise?

The economy is back to where it was in 2006 - where do we go from here?

It’s strange to be waking up in summer 2012 to find ourselves in an economy that is no bigger than it was in 2006. So how can we travel "back to the future" and get the economy back on track? In the absence of a plutonium-powered car, the vehicle to get us back to economic growth is enterprise.

Centre for Cities’ new report, "Open for Business", shows how important enterprise is to a city economy. The research, sponsored by ICAEW, takes a detailed look at the make-up of city economies to establish what makes a city economically successful.

It finds there are two prongs to private sector economic growth in our cities – the ability to attract businesses from elsewhere (other UK cities and abroad) and the ability to "grow your own’. Our strongest cities are those that have been able to do both.

A detailed breakdown of the business bases of UK cities reinforces this point. The majority of the UK’s strongest cities are those that have a large proportion of branch businesses and high levels of enterprise:

Of course, being open to external business also means that in the short term some cities may be even more exposed to turbulence in the global economy. The Eurozone crisis may impact upon businesses headquartered in the Eurozone, potentially leading to consolidation of businesses and knock-on job losses. Cities like Coventry and Swindon, with a higher proportion of Eurozone-owned businesses, will need to focus on policies that can support domestic enterprise to help offset any potential fallout from troubles across the Channel.

Overall it is clear from the research that cities with a mix of home grown businesses and branches are best placed to weather any storms heading our way. But what does this mean for policy?

There has been no shortage of enterprise initiatives from previous Governments, ranging from Thatcher's Enterprise Allowance Scheme to New Labour's Local Enterprise Growth Initiative. The recently launched Start-up Loans are the latest addition to the list. But the impact that these schemes have had upon levels of enterprise is difficult to quantify based on existing evidence. So what can the government and cities do to hit the accelerate button on enterprise at a time of economic instability?

One thing that can make an important difference is for national government and cities to continue investing in the core themes that make a big difference to business. This means improving transport and skills and making the planning process more responsive to business needs.

Cities also need to respond to the specific challenges facing their local economies. Our work shows that open, entrepreneurial cities are best placed to grow, and cities should aim for this mix of home-grown business and receptive to new ideas and people.

Depending on the city’s specialisms and where it needs to improve, this could mean implementing policies from support for start-ups or existing companies to ensuring the city is working with UKTI and others to showcase where there are opportunities for external investment.

It will take time to get back to where our economy should be. But by getting enterprise policy right today, cities can help to steer the wider UK out of economic underperformance and into growth.

TechHub, a start-up shared space in Old Street, West London. Photograph: Getty Images

Alexandra Jones is the director of the Centre for Cities

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.