North East England’s billion dollar man has worked his way round almost a third of the world dealing with audits, stock exchange deals, mergers, acquisitions and business’s myriad other complications. Sticking out in Bill MacLeod’s mind, though, was doing the first ever bond issue by Qatar for over $1bn to start its momentous liquefied natural gas industry.
That bond issue began a $12bn project amounting to the world’s third largest deal ever in international construction. What’s more, it brought to West Wales an LNG terminal, offering from 2007 to supply up to 20% of all Britain’s gas needs, contradicting energy Jonahs here who’d been claiming like the foreboding of Private James Frazier: ”We’re all doomed!”
In the scale of economies, it puts some perspective into our own Government’s recent apportionment of £379m for ongoing North East development, especially as Qatar’s population is smaller than our region’s. But comparisons may be odious except to indicate the sort of deal Bill can shoulder, come the call.
Today, as office senior partner at PwC in Newcastle, his challenge on succeeding Peter Woolston is being tackled with undiminished enthusiasm and expertise. He’s heading the business consultancy to even greater success from pristine new offices, a relocation after neighbouring the Civic Centre for 25 years in Haymarket area, to overlook instead the multi-million, fast developing Central Square, behind Newcastle’s Central Station.
Previously spread over five floors, daily operations now take place over the top two floors of Central Square South building, 24,000sq ft offering better internal communication and greater flexibility. “Best of all,” Bill beams, “we’ve got a balcony, a terrace overlooking the Stephenson Quarter.”
Many may not realise 40% of PwC’s business comes outside London, and Ian Powell, group chairman and senior partner, believes regional practices offer major opportunities. Many companies in the regions are interested to make acquisitions or expand overseas, he says, mentioning specifically opportunities for Leeds, Newcastle and the North.
Bill confirms: “We’ve double digit growth in Newcastle. And we mirror what clients are doing. If we’re enjoying real success it’s because our clients are doing things. In some ways we’re a barometer of the economy.”
There are three elephantine enigmas he and his 300 staff must guide clients through - FTSE 100s, family firms and private individuals alike - with unwavering acumen amid tackling audits, taxation, corporate finance, business recovery, deal services and wider consulting. The issues are: the Scottish referendum, the General Election and Europe. Is it tortoise shell time? Or should businesses be bold?
Bill cites a fundamental many politicians wilfully or otherwise ignore: businesses detest uncertainty. “I see uncertainty now,” he confirms. “Clients look at things in Scotland, investment for example. We’ve one company that bought a business there recently. The Press were on to them asking ‘why have you invested in Scotland?’ They’d invested because it was a good business.
“Europe creates awful uncertainty, as too a general election. I say to businesses that if you’re doing something, hopefully you’re doing it for sound long term reasons. Political changes come and go. If you think it’s the right thing to do on a long term basis, do it.
“We’ll have clarity on Scottish independence by September, General Election by next June, but Europe will remain uncertain for years. So that’s a bigger one. Every Government I’ve known has chopped and changed policies. Tax is a good example. While politicians want to be business friendly, no-one will wholeheartedly support it. Yet the UK’s long term economic future depends on a successful private sector.”
On the referendum, Bill opines: “I think the North East will be more affected than other parts by the outcome, one way or the other. I have clients, some of whose employees may be based in Scotland. The North East is at the border. It sells a lot in Scotland.
Irrespective of the outcome there’ll be changes because the Scottish Government, even if independence doesn’t happen, has many more tax varying powers, and that can impact on businesses.
“I think the North East’s biggest challenge in attracting investment is that the Scottish Government acts as one in promoting business or inward investment anywhere in Scotland. The North East is split up - two LEPs, various local authorities. That we don’t necessarily speak with one voice to attract inward investment puts us at disadvantage with Scotland. It makes it all the harder to do deals.
“I’ve heard someone was looking at doing something in the North East or Scotland. They looked separately at two or three locations here with different LEPs and local authorities helping in each case. They then went to Scotland and the Scottish Government put them in a helicopter to tour various locations and said ‘we don’t care which one you do, as long as it’s here in Scotland’.
(It was a helicopter flight that landed Hitachi in Newton Aycliffe, true, but that was through the enterprise of one private sector individual, Geoff Hunton of Merchant Place Developments).
Otherwise, Bill would argue, North East ability to match Scotland’s offering is a challenge. Does he argue like a North Easterner? Well, half of his 18 years as a PwC partner have been dedicated to the North East. And Europe, he warns, may be an even bigger challenge.
“The North East is ideally located to deal and trade with Europe. The vast majority of our trade is with Europe. We have the ports. Diversity is the strength of the North East economy, and we’ve some strong sectors.
“We’ve a lot of family and privately owned businesses of good sizes contributing a lot to the economy. Manufacturing is back very strongly – Nissan, Hitachi, and many other companies doing well through exports. Oil, gas, renewables, petrochemicals, chemicals – all are a real strength.
“It’s well known we’ve too disproportionately large a public sector. I think as a consequence the private sector is having to pedal relatively harder to make up for public sector cutbacks. That’s a challenge. There’s paradox too.
While employment is at its highest, the last two sets of North East unemployment figures show it as the only region where unemployment has risen. The North East does represent a deprivation challenge. We all have a duty to try to support that with something.”
Bill’s client base, however, reflects “not just optimism but confidence”. Companies are hiring and investing. The commonest complaint is lack of resources, especially skills. “I can’t rationalise why unemployment has risen against that backdrop,” he says.
PwC is currently running debates nationwide, considering how much high centralisation of England is restraining regional growth. “I think it’s a debate worth having,” Bill says, having observed mistrust between local and central government at the Newcastle gathering. The Institute for Public Policy Research will compile a report from all the findings. Meanwhile, Bill cites dispassionately how the UK has the most centralised of any major Western economy. Newcastle’s round-table mood favoured more decentralisation. Could central Government trust the regions?
“We’ve been down this route before in the North East with the rejection of a regional assembly,” Bill recalls. “Against a background now of greater autonomy in Scotland, Europe and Northern Ireland, devolution is already changing all those locations. Does England need something similar? “
He perceives growing cross-party support at Westminster for more autonomy to regions. But he also observes that, like all these things, the concept may be great, but how you execute it is a much bigger challenge. Then, of course, the truth that hurts…
“The North East’s trouble is, we don’t speak with one unified voice. It perhaps says something that we’ve got two LEPs.”
He thinks Manchester a textbook example, compared with experience here: “We had a Middlesbrough office 10 or 12 years ago, and we still hear ‘we won’t deal with you if you don’t have a Middlesbrough office’.
Bill concedes the same is heard between Edinburgh and Glasgow but believes social media and electronic connectivity are changing things fast, let alone that it’s only 45 minutes’ drive between Newcastle and Middlesbrough.