We make things in the North East.
It is, of course, a museum. The team that created Beamish Museum, the region’s most popular paid tourist attraction, scoured the north-east looking for preserved remnants of the industrial past. They were taken apart and erected in the Durham countryside to make a northern street that never was.
Quietly, however, there’s another aspect of the region’s past that has made a return: manufacturing. Dozens of small and mid-sized manufacturers have been prospering. Typically with 50 to 250 employees, they’re often hi-tech engineers who have found a global niche in areas such as offshore engineering, hi-tech coatings, or speciality chemicals.
They’re never household names. But manufacturers in the area last year increased their workforce by approaching 10%. Their export success means the north-east is the only UK region to have a positive balance of trade with the rest of the world, with more than half its exports outside the European Union.
On the banks of the Tyne, next to the now-closed Swan Hunter shipyard – which employed thousands of people in its heyday – is an example of this new breed of local manufacturers. Soil Machine Dynamics makes remote-controlled vehicles that can dig a trench in an ocean floor for a fibre-optic cable or help build an offshore wind farm. The specialised nature of the work means the average salary of its workforce is in excess of £40,000.
When bought by its management and buyout group Inflexion in 2008 it employed 107 people. Now it employs around 400, with Brazil and Asia the biggest export markets.
To be sure, that doesn’t mean the region is yet booming. A high reliance on government jobs means it has been hard-hit by spending cuts. The unemployment rate of 9.3% is the highest in Britain and much higher than the national average of 6.9%. The region’s premium retail areas such as Newcastle city centre and the Metro Centre – the UK’s largest shopping centre – are bustling but secondary centres struggle. Some areas haven’t recovered from pit closures two decades ago.
A recent report on the region by Lord Adonis identified an urgent need for more highly paid, highly skilled jobs, which represent a relatively low percentage of the region’s workforce.
For this to happen there’s a need to train up today’s youngsters before those trained in the 1970s retire. Local apprenticeship schemes did not exist in the 1980s and 1990s.
Toby Heintz, managing director of Pinnacle RE-Tec, which makes specialist parts for industrial pumps in former steel town Consett, says the region’s young people are up for the challenge. “They’re realistic people. They don’t all want to go on Britain’s Got Talent and earn millions in a week.”
There’s also the risk of a spike in interest rates. Bank of England governor Mark Carney said last year that “we don’t make policy at the Bank of England for inside the Circle Line, we make policy for the entire United Kingdom”. But there are still fears rates may be raised sharply to pop London’s housing bubble, which would be a blow as it would strengthen the pound, making the region’s exports less competitive.
And then there are the Scots, 60 miles to the north. It’s difficult to assess the impact of any breakaway, but on a practical level the north-east, the smallest of England’s regions and the one most distant from London, isn’t connected to the motorway network and if the Scots break free it seems even less likely a link will be built.
On the other hand, several Scottish businesses have said they could leave, or at least set up English operations. With Newcastle just 90 minutes from Edinburgh by train, the north-east might be an ideal base for these refugees.
Quietly, however, there’s another aspect of the region’s past that has made a return: manufacturing.