Powerhouse will depend on policy, not posturing

THE NORTHERN Powerhouse is now almost five years old. And in 2018 the North feels very different to when George Osborne first used the phrase during a speech at the Manchester Science and Industry Museum. Most notably, the North now has an emerging system of devolved governance and the country’s first subnational transport body.

While much has changed, and the process has been positive, the Northern Powerhouse agenda still feels disconnected and somewhat remote from the everyday challenges that people, businesses and communities experience across the North.

It doesn’t reflect people’s day to day concerns and experiences of poor health, poor employment conditions and poverty. With the prospect of Brexit, the need for a more relevant and comprehensive approach to Northern Powerhouse is even more important as the debate around the UK’s exit continues to consume the capacity for policy makers to think beyond March 29, 2019. IPPR North’s 2018

report, published today, tells the story of the Northern Powerhouse agenda to date and argues that now is the time to move forward to a new chapter in its evolution.

First and foremost, we need a Northern Powerhouse that will deliver economic justice by helping to address the long term challenge of poverty, skills and educational attainment as well as some of the lowest levels of healthy life expectancy in England.

Investing in, and improving the quality of Northern lives, is just as important as our big ticket transport infrastructure if we are to make the most of our northern promise. A fairer North is a stronger North.

If we are to make the most of the North’s potential, we need to deliver more than returns on productivity. Economic growth, typically measured using GDP and or GVA, has become a convenient proxy for human welfare. But as is clear from our research, the idea that the benefits of growth ‘‘trickle down’’ to people is far from automatic. The way that the North grows, and who gets to benefit, is just as important as the gains to productivity which we use to judge our success.

Similarly, the economic agenda for the North needs to focus on the importance of our existing economic strengths; the economy of today, and of tomorrow. When it comes to grand economic visioning, there is sometimes a temptation to be dazzled by the bright lights of the high-growth, high-skilled, frontier sectors.

While there is no doubt that the North has real sectoral strengths, particularly in digital tech and life sciences, these industries employ comparatively few people when compared with the ‘‘everyday’’ economy such as retail, hospitality and tourism.

In addition, frontier sectors do not sit in isolation from the rest of the economy. It is the enabling qualities of these industries, particularly digital tech, which have the potential to support innovation and productivity across the whole of the North.

But as we have seen with Northern Powerhouse to date, a ‘‘whole North’’ approach has not always at the forefront of the agenda. The Northern Powerhouse was originally based on the idea that future growth would be driven by the combined power of the North’s largest cities.

However, one of the consequences of this emphasis upon scale was that it meant that the agenda had little to offer to the smaller cities, towns and rural areas which make up the North’s rich diversity of places.

In our report, we argue that the Northern Powerhouse needs to commit to ‘‘whole North’’ approach which recognises the value and contribution of our many different types of places and the connections therein.

One of the clearest outcomes of the Northern Powerhouse agenda to date has been the election of mayors in Tees Valley, Liverpool City Region, Greater Manchester and Sheffield City Region.

It is crucial that during the next phase of the Northern Powerhouse, the Government commits to rolling out devolution in other areas and the highly anticipated devolution framework should provide some much-needed clarity.

It must also be led by the people of the North who have the opportunities to engage directly with the decision-making process.

The Northern Powerhouse has helped ‘‘put the North on the map’’ in the context of an otherwise centralised state. Progress has been made and the scale of the North’s potential is becoming increasingly apparent.

But the shallow reach of the Northern Powerhouse agenda to date means that there is a danger that it is seen as political posturing rather than policy substance. The time is now right for a new commitment, from both Government and Northern leaders, to a long-term vision for the area’s economic future.