Two things have happened in recent weeks which I think help summarise some of the opportunities and the threats that face the economy of Cornwall and the Isles of Scilly.
One of our biggest opportunities is the role that Cornwall can play in providing secure, responsibly sourced technology metals like tin and lithium for the transition to a greener, cleaner economy. So I was delighted to see the recent announcement that Cornish Metals is raising £40 million towards reopening South Crofty tin mine. This follows ongoing private investment into Cornish and British Lithium.
Demand for tin and other tech metals is expected to outstrip supply in the coming years because of its use in electronics, electric vehicles and renewable energy. That’s good news for Cornwall’s growing tech metal sector, which the LEP is supporting directly. But in recent days I have also heard some bad news about two local farmers who have decided to leave the industry. Rising energy and fertiliser costs have driven their businesses to the wall, so they are getting out.
And they won’t be the last. The NFU recently highlighted a rising costs crisis in farming and the impact this could have on domestic UK food production. Changes to farm support payments and labour rules since Brexit haven’t helped. In Cornwall, we have already seen cropping levels reduce and dairy production will follow. The major supermarkets will keep a cap on prices which will produce a massive and possibly unmanageable squeeze on producer margins. There will be much rationalisation and consolidation through the industry.
The continued war in Ukraine is exacerbating these problems. Rising commodities prices, from natural gas to grain, are stoking inflation here and impacting businesses and households across Cornwall, just as we are emerging from the shadow of the pandemic. Indeed Andrew Bailey, the Governor of the Bank of England, recently talked of the very real threat of stagflation and a continuing rise in real levels of poverty.
That all sounds pretty grim, but in tackling these threats we have a lot of opportunity to change the structure of our economy for the better, playing to Cornwall’s strengths at a time when issues like energy and food security are more important than ever.
Cornwall is among the first wave of the Government’s County Deals, with the promise of more devolved powers and the pledge of long term investment through its Shared Prosperity Fund. That’s a massive opportunity to shape our own destiny, but it also means getting the balance right between investment in places, people and emerging sectors of our economy. In the early days of the LEP our focus was very much on getting Cornwall’s physical infrastructure right, with significant investment in road and rail projects to make it easier for people to get to, from, and around Cornwall, and opening up sites for new homes and businesses.
Latterly we have focused more on emerging sectors that can create more high wage jobs in the future and harness Cornwall’s natural assets as part of a low carbon economy. That has seen the LEP invest directly in lithium extraction, space assets like Goonhilly and Spaceport
Cornwall, the development of a floating offshore wind industry in the Celtic Sea, and support for geothermal heat and electricity projects.
The scale of these emerging sectors should not be underestimated. We are talking about thousands of jobs in industries that can make a huge contribution to Cornwall and the UK’s low carbon ambitions, and our economy. These sectors will also need trained staff, which is why skills need to be such a key plank of any future economic investment strategy for Cornwall and Scilly. And why the LEP is already investing in a STEM centre at Bodmin.
If we are going to make sure that Cornish people benefit from the emergence of thousands of new jobs in new industries like tech metals and clean energy, then we need to invest in the right skills. That means working with businesses to find out what they need, and with educators to
make sure they provide the right training. That’s what the LEP’s Employment and Skills Board does. We’re not just talking about training young people. We need to make sure that all our working age population in Cornwall, and people furthest from the jobs market, are given the
And we shouldn’t overlook our traditional industries like agriculture and tourism, which are vital to our economy and our environment. Both have faced severe pressures from the pandemic, and like many are now wrestling with rampant inflation.
As a LEP we’ve been able to lobby on their behalf for more support, and in the case of agriculture are working with Government to help farmers adjust to a new post-Brexit subsidy regime in the coming years. Recent short term business support advice for farmers and food producers has demonstrated that we know what is needed and works. We just need much more of it delivered directly to our businesses in Cornwall and Scilly.
The common thread that runs through all this activity is the importance of the private sector in helping to inform the challenges, opportunities and solutions for Cornwall’s economy.
Through Covid and the G7, I’ve been hugely impressed how the business community has been able to work together over the last few years with local authorities and others with a unity of purpose around threats, opportunities, needs and lobbying for Cornwall and Scilly. And I believe maintaining that cohesion is going to be a vital part of making our County Deal work. I’m not talking about preserving the LEP, because under a county deal the LEP will most likely disappear as new governance structures evolve.
What I’m talking about is a tremendous opportunity to nurture that strong existing spirit of co-operation, collective will and determination to improve the lot of our communities, businesses and environment. And at a time when we’ve never needed it more. I believe the voice of business is vital to any devolution agenda, and it’s something that the Government has recognised. It has outlined how it wants to embed a strong, independent and diverse local business voice into local democratic institutions.
I think that’s a good thing because the private sector can bring another valuable dimension to local decision-making, and has shown its value in Cornwall in recent years in helping to identify issues, come up with solutions, and inform investment decisions.
And it’s private sector that can leverage public investment to create more impact. That will be an important criterion for all funding decisions going forward, given the growing pressures on the public purse. It is evident that our energy, tech metals and digital and space sectors will attract billions of private investment in the medium term. I’m also pleased that local businesses are hard-wired into the Government’s Shared
Prosperity Fund. This says that local investment plans put forward by devolved areas should focus on the three pillars of:
- communities and place
- local businesses
- and people and skills
I think that’s an agenda we can all get behind.