Ask the experts: Doing business in the UK

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The FT, as a global newspaper, reports on and records the march of globalisation. But, if this story has an international and national dimension, it also has a regional and sub-regional dimension.

Which is the best place to do business in Britain today? What do you think the government should do to foster entrepreneurialism in the UK? What should regionally-based companies fear most: the local rival or the company in far-off China and India?

A panel of experts including Mike Whitby (above right), leader of Birmingham City Council, Professor Michael Parkinson (above middle) of Liverpool John Moores University and Jonathan Guthrie (above left), the FT’s Enterprise editor and lead writer of the Doing Business in Birmingham report, will answer your questions today from 12-1pm GMT.

Post a question now to ask@ft.com or use the online submissions form below.


Could you please advise what funding is available for small businesses in my area? I’m currently having difficulties with cash flow. I run a company of law costs draftsmen.
Lee Zeverona, Liverpool

Jonathan Guthrie: I’d try your local Business Link or the North West Development Agency for advice on grants. The Small Firms Loan Guarantee Scheme has helped a lot of firms that lack collateral against which to secure loans.


How does Birmingham justify its claim to be second city, a title Manchester also claims?
Jill Hearn, Knutsford

Mike Whitby: We are a global city with a local heart, second to none. But you don’t have to take my word for it.

We are a city of a million people with the largest professional services sector outside London. In October, the Cushman and Wakefield UK Cities Monitor ranked Birmingham as the best place in the UK to site a business after the capital, above Manchester.

We were recently named as the European City of the Future, and the international Mercer report, which gauges quality of life, out Birmingham as the 54th best city to live in the world, and the only English city in the UK outside the capital in the top 100.

Substantiating the Mercer accolade is the recent announcement that Birmingham is the safest Core City in the United Kingdom, recognising that cities are not just bricks and mortar and iconic buildings.

The NEC, owned by the city of Birmingham, has hosted 46 per cent of all major international sporting events hosted in the UK over the last ten years, and our Symphony Hall is considered by many of the world’s top conductors as second to none. Every major orchestra has wanted to play here, and we’re equally pleased that the CBSO, our own orchestra, is invited to play throughout the world too.

Birmingham’s global status was reaffirmed yet again only last month, following my visit to Beijing, Guangzhou, Nanjing and Hong Kong, by a return visit of Chairman Jia, the fourth most powerful member of the Chinese Government, who chose Birmingham as the first stop in his visit to the UK, stopping going on the visit the Prime Minister in London.

As the Leader of Birmingham City Council, to be recognised by the fourth most powerful economy in the world, again underlines Birmingham as a city second to none.

Jonathan Guthrie: Birmingham, as defined by its council area, has around 1m inhabitants. Manchester by the same measure is much smaller. But the conurbations with each city at their hearts are roughly the same size.


How can Birmingham improve its poor image? Or is it just something Brummies have to learn to live with?
Lawrence Allen, Birmingham

Jonathan Guthrie: Image lags reality so regeneration in Brum is gradually raising perceptions. However being a crossroads city means many visitors only see transport infrastructure, whose ugliness will always defeat promoters’ hopeful comparisons of Brum with Venice and other beauty spots.


I am looking to set up a back-office operation/BPO company in Stoke-on-Trent. In term of place (office), staff (lots of graduate students), and location, are there other more economical places to start up a business in England?
Ernest, Stoke-on-Trent

Mike Whitby: Well, naturally I would suggest that Birmingham is a location you should consider. But do not take my word for it. We have recently been named European City of the Future, we are one of the top cities in the world for quality of life according to the international Mercer report, and this year the Cushman and Wakefield UK Cities Monitor ranked Birmingham as the best place in the UK outside the capital to site a business. The excellent value for money our office space represents was something the Cushman and Wakefield report highlighted.

We have 58,000 students at our three universities, which collectively conduct £80m of research, and we are at the heart of national and international transport networks.

So, I look forward to meeting you to create what should be a mutually advantageous partnership.

Jonathan Guthrie: The complex series of trade offs (local skills v local property prices, for example) implicit in this question make it difficult to answer. Wales is probably cheaper for BPO purposes, partly because of its access to European grants. But having said that, John Caudwell, who just sold his telecoms group for £1.4bn, based most of his operations, including a lot of IT and contact centres, in Stoke. You could be sitting pretty where you are.


Why are there so few British Asians at the top of organisations in Birmingham, a city with a big Asian population?
Simon Cummings, Birmingham

Jonathan Guthrie: This troubles me too. About one-third of Brummies are black or Asian (I’m holding out against the term BME for the moment) rising to a half in a few years time. But they are not strongly represented yet in power circles in the city, although they have created some important businesses (including East End Foods and Claremont, the property business).

I do see a bit of change afoot - more Asian lawyers, for example - but the city needs to make faster progress. Forget political correctness. It is relatively expensive for professional services firms, for example, to hire outside the city rather than recruit local talent, a growing proportion of which would need to be from the black or Asian communities.

Mike Whitby: Within Birmingham City Council, a major employer in Birmingham, the number of BME people in our top 5 per cent of earners increased by a fifth last year, and the proportion of our total workforce made up of BME people increased by 4.2 per cent.

Recently, I was delighted to announce the successful appointment of Paul Thandi, an exceptional man, for the role of Chief Executive of the NEC Group, which attracts half of all the UK’s conference trade. This role that attracted excellent candidates from throughout the UK, and the right man chosen for this demanding role is also a Sikh.


Will the big cities outside ever get an elected mayor? Would an elected mayor be a good thing?
Rob Coleman, Oxford

Jonathan Guthrie: It depends entirely on who the elected mayor is.

Organisational structures work well or badly because of the people within them. Changing the structure will not necessarily improve delivery. Ken Livingstone, who, whatever you think of his politics, is a shrewd man with a lot of experience, is a good candidate to run a big city. A football mascot may be weaker one.

Mike Whitby: As the Leader of the city of Birmingham, I firmly believe that the issue for cities wanting to punch their weight is not so much one of governance but of the central government giving us the funding streams necessary to deliver what our American and European counterparts can deliver.

At the moment we are weighed down by the need to create complex partnership arrangements and then use small parts of each partner’s budget to take schemes forward. Government needs to stop being obsessed with the structure of local government - and actually give us the tools to deliver. In realistic terms this means giving us the funding streams necessary to get big projects off the ground.

An organisation called Core Cities - made up of the UK’s largest cities - are unanimous in their belief that the title of the Leader is less important than the real power and influence that the government devolves down to us.


Without locally based manufacturing industry to pin it down, economic growth has shifted to London, thanks to its superior critical mass. Aren’t regional capitals increasingly a sideshow compared with the national capital?
Francesca Moretti, London

Mike Whitby: Ultimately if the UK is to meet its growth agenda, it must understand the role that its major cities can play. It becomes self-prophetic if too much of our nation’s wealth is invested in one place - i.e the capital.

A progressive approach needs to be adopted and here in Birmingham we clearly understand and accept the challenge of becoming globally relevant, accepting the economic challenges this brings and are confident that - in partnership with the government and colleagues in London - that we can play a vital role in the UK’s growth agenda which underpins the prosperity and quality that all of our citizens - no matter where they live should receive and benefit from.

Jonathan Guthrie: Businesses tend to have a better chance of success if they have a big, wealthy market on their doorstep. There are all kinds of other advantages to large cities: economists call these “the positive externalities of clustering”.

But at the same time, with 2.5m inhabitants, the West Midlands conurbation has some big city advantages of its own, and is also doing reasonably well in catching some of the spillover from the South East. Comparisons with London are also pretty invidious, because the capital boasts an international financial centre that is a unique generator of wealth within Europe.

If you compare the West Midlands with the North West, the stats suggest it has done rather better in recent years. Brum should nevertheless keep a eye on Manchester, which on the PR front at least, does brilliantly.


There is just too much red tape involved in running any business, let alone setting up a new one. I’d be interested in hearing what the panel thinks the government should do to address this.
Judith McCarthy, Sussex

Jonathan Guthrie: It could start by doing less. But the impulse to demonstrate political virility through new legislation is irresistible for governments. The recently announced plans to set deregulation targets for individual government departments have merit, therefore


Other European countries have successfully devolved power to the regions. Why can’t the UK?
Rachel, Hampshire

Mike Whitby: I agree with those sentiments. The UK is exceptionally epicentral and governments of any political hue must be truly honest - do they believe in local government, do they trust local government and will they fund local government adequately; as well as devolving more power to our cities?

Jonathan Guthrie: I’m not an expert on this, but I guess you could theorise that within England at least, our history has been one where there has been little relatively tension between the capital and the provinces, and where national identity has always outgunned regional identities. There is therefore very little popular pressure for devolution even if it is something local politicians like the idea of. This was illustrated by the North East’s rejection of a regional assembly.

In contrast some European countries (Germany, Italy) unified relatively recently, and others (Spain) have a history of suppressing regional identity, which tends to be counterproductive.

The problem also has a chicken and egg element to it, since the government appears to like the idea of English devolution providing it does not involve handing over any meaningful powers, a stance which reduces the enthusiasm of the ordinary punter.


Background

Doing Business in Birmingham and the Midlands is the first in a series of special reports on the business of doing business in Britain’s premier cities and their regions.

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