Jerry Blackett, the departing chief executive of the Greater Birmingham Chamber of Commerce, says the region badly needs an elected mayor. Steve Dyson finds out more over lunch.
I love a little challenge, like when an interviewee warns me before I’ve even started scribbling my shorthand notes that he’s determined not to say anything contentious.
Surely, my argument goes, after nine years as chief executive of the Greater Birmingham Chamber of Commerce, you must have something ‘inspiringly controversial’ that needs saying? At the very least, a few prime, retrospective thoughts on what’s needed next for the region?
And I’m pleased to say that Jerry Blackett, having said he wasn’t going to, was soon putting the world of business to rights – and throwing in a little grenade of politics for good measure.
“The most I’d be drawn to ruminate on,” he ventures, “is the time it’s taken for our region to work out what binds us together, and to realise that the economics for macro investments are only deliverable if we work across not just the West Midlands but also the East Midlands.”
Jerry’s talking, of course, about how Birmingham City Council has always struggled to break down political barriers with its Black Country neighbours of Dudley, Sandwell, Walsall and Wolverhampton, often finding it even more difficult to work with Coventry and Solihull. And that’s before anyone thinks about involving cities outside of the West Midlands.
His rumination becomes a gentle jibe: “The news about Greater Manchester’s combined authority getting health and education powers worth billions of pounds should be a wake-up call, if we needed one.”
So I push a little harder: surely Birmingham’s business leaders are big enough to pull their own weight, to fight their own battles and build their own investment argument with central government, without having to lean on the poor, undernourished, austerity-hit local councils?
Jerry’s having none of that, although he remains polite: “Councils deliver the democratic mandate for local action. It’s simply not possible to shift complete responsibility for places to semi-accountable bodies like local enterprise partnerships [LEPs].
“There’s an important place for business leaders to help and the LEP mechanism is the best one around. But we need a strong democratic mandate. The Kerslake report has revealed how much there is to fix [at Birmingham City Council], with better people and financial plans needed and better partnership working. We need to help Albert [Councillor Sir Albert Bore, the current Labour leader of the city] all we can.”
But is a better Birmingham City Council enough? No, not according to Jerry, who adds: “I’d risk an elected mayor and would not tremble if the government forced one on us. Or more likely, dangled such a big wedge of cash, like the £1bn that Manchester got, to encourage the local authority to vote a mayor model in.”
Elected mayors can be risky, of course, with the example of Chicago being on its knees financially, thanks to the bloated public sector built by the Daley dynasty. But Jerry points at Michael J Bloomberg, New York’s mayor from 2001 to 2013, and both Ken Livingstone and Boris Johnson, London’s mayors of different colours, as successful examples.
A little background is needed: the question of elected mayors was debated by both political and business leaders in Birmingham for the best part of two decades. But when the idea was finally put to the electorate in a 2012 referendum, it was rejected by 58% of voters.
More recently, Greater Manchester’s ten councils agreed to create a so-called ‘metro mayor’, and as a result the government has hinted that the West Midlands could also get an elected mayor to preside over a ‘city region’ – regardless of Birmingham’s referendum result.
And this is what Jerry fancies, because: “We can’t afford to have a council that doesn’t work. We have to have a local authority that’s working properly, and if we can’t achieve it through the current model, either they [the government] will tell us we’re having one or will incentivise us, and I don’t care which.
I’d take a chance and risk having an elected mayor. There’s no guarantee of nirvana, but if you got the right one you can galvanise people behind a cause.”
Interestingly, Jerry believes that the major barriers for such a mayoral agreement in the West Midlands are being placed by the noble council of Solihull, rather than the region’s more working class local authorities.
Jerry himself lives in Dorridge, Solihull, but is critical of anyone who feels the slightly snooty borough should be ring-fenced: “If anything’s standing in the way it’s indefensible sovereignty issues, and the most suspicious council is Solihull.
Solihull has a lot going for it – both the National Exhibition Centre and Birmingham Airport lie within its borders, along with economic assets like Jaguar Land Rover, and in terms of GVA it’s one of the top 20 boroughs.
“But Solihull worries about what they call the ‘Solihull £1’, because they collect a lot of business rates, and wouldn’t want that diminished by Birmingham or the Black Country, which might only be worth 60p. They [Solihull Council] are accountable to Solihull ratepayers, and so have to show by combining they’re going to get £1 and a penny.
“There are also greenbelt planning issues, which Solihull’s being asked to consider for house-building, and that might be necessary. We can’t just stop development because of the greenbelt, we’ve got to talk about it. We need houses in Solihull for people with jobs in Birmingham – we’re all in it together.
“So there’s a level of maturity that’s needed because we have to deal with those sacred cows. We just can’t have anything non-negotiable when we want to be one of the 100 global cities.”
Jerry’s also interested in the region forging better business and especially transport links with the East Midlands, which could include cities like Derby, Leicester, Northampton, Nottingham and Stoke, to name just five.
He says: “The work I’m involved in via Midlands Connect has identified five growth corridors that also serve the largest Midlands cities. There is an untapped £1bn in new GVA that can be released simply by improving the road and rail connections. That’s before factoring in the uplift possible from HS2 and an expanded Birmingham Airport.”
As well as attracting business investment and growth via an elected mayor and better regional cooperation, Jerry also believes that greater research and development is needed to drive increased productivity, with higher-paid – but not necessarily more – jobs.
He says: “We want the standard of living to rise in the region. There’s lots of talk about employers paying the ‘living wage’ and not the lower ‘minimum wage’, because of the worries about rising wage inequality and the super-rich.
“Real median incomes are down by 4% between 2009 and 2012, not unusual in recessions. What’s different this time is the sluggish rise in incomes during the recovery – expected to be only 1.8% in the three years since 2011 against 13.2% in the 1970s and 9.2% in the 1980s. Such a long period of stagnant living standards is not to be found in living memory.
“The main cause of the slow recovery in standard of living has been feeble recovery in GDP per head. In the 3rd quarter of last year – despite the UK’s recovery – real GDP per head was the same as in the 3rd quarter of 2006, and 1.8% lower than in the first quarter of 2008, the pre-crisis peak.
“Given jobs numbers have grown, this means the problem is feeble productivity. In the 3rd quarter of 2014, output per job was still 1% lower than in the first quarter of 2008. Output per hour was worse at 1.8% lower.”
That’s a lot of percentages and financial quarters, but what Jerry’s saying is: “Living standards will only rise with productivity growth. And improving productivity requires businesses to invest more in research and development.
Figures show that at our worst we invest only a third of the equivalent of Germany and the US. We also need to invest in developing skills – not just throwing cheap labour at production problems.
“So we need to look at government schemes like the Regional Growth Fund [RGF]. Currently, RGF money’s only awarded if a company can generate private sector jobs.
It seems to me that job creation is not the issue. What matters is business investment
Jerry adds: “I was with a businessman the other day who was describing that what his business needs is two robots. He has won some RGF but is really struggling to find a good reason to create jobs he really doesn’t need. Politically, of course, governments want to say they have created jobs – productivity improvements are far more nebulous.”
It seems to me that Jerry’s got a pretty clear idea on what’s needed for business and industry in the region. With so much to do, won’t he miss being at the helm of the Greater Birmingham Chamber of Commerce? On this point, he’s definite, if too humble: “Nine years is enough. I don’t want to become one of those people who says: ‘We tried that before and it didn’t work.’”
His plans for semi-retirement include plenty of reading and writing – maybe even stretching to a novel, lots of travelling with wife Flora, plenty of exercise and possibly a touch of public speaking.
But I doubt that’s all we’ll hear from Jerry Blackett: if I’m right, the 58-year-old will soon be in a boardroom somewhere in the region, if only part-time, lending his wise thoughts on what the region needs to do next.
Jerry Blackett will be replaced by Paul Faulkner when he leaves the Chamber in July.