WE MUST BE AT HEART OF POWERHOUSE PLAN
NOW THAT the notion of the Northern Powerhouse has progressed in Liverpool, Greater Manchester and Tees Valley, with their elected metropolitan mayors, many are asking what about Yorkshire?
Championed by former chancellor George Osborne in 2014, the concept gives the North of England the ability to take more decisions for itself to help grow local economies faster (and thereby, Mr Osborne claimed, add £56bn to the North’s economy).
There are many cogent arguments for devolution. For example, some economic policy decisions (e.g. around planning and infrastructure) are more efficiently taken at the city-region level, and creating democratic institutions at the regional level provides better representation of regional interests at Westminster and in national political debate. The North also needs a means of representing its interests at the Brexit negotiating table.
Until recently there was devolution deadlock in Yorkshire (six different plans were submitted), but now, through the ‘One Yorkshire Coalition of the Willing’, 17 of the region’s 20 councils have backed the principle of a region-wide devolution deal with one elected metro-mayor. (Wakefield has not yet backed the idea and Rotherham and Sheffield remain committed to the Sheffield City Region deal).
After the controversy this year over rail electrification, some questioned the Government’s commitment to the Northern Powerhouse. But during a recent visit to Leeds, the Chancellor, Phillip Hammond, promised that their commitment remains. He said: “As we prepare to leave the European Union, it is even more important that we support the Northern Powerhouse to reach its full potential.”
Nevertheless, the current administration’s commitment to regional rebalancing is not obvious, and while so much energy is turned towards Brexit, keeping the issue out of Westminster’s long grass is going to take some persistence.
So in the House of Lords this week I tabled several questions on the matter. First I asked “What assessment has the Government made of the Yorkshire councils’ coalition of the willing to secure a single devolution deal for Yorkshire?”, in order to increase awareness of the progress Yorkshire has made.
The Chancellor also said in his visit to Leeds:, “Getting [the Northern Powerhouse] right is a big part of our economic challenge for the next 20, 30 years, it’s that sort of timescale. We are not going to deliver this overnight.”
While taking the long view is understandable, progress needs to be expedited so that the region can drive forward the infrastructure essential to economic growth – for example improved transport, technical education and better digital connectivity, along with more affordable homes. And, most fundamentally, the Government’s stated commitment to the project will be given credibility when it invests in regional transport links.
Yorkshire doesn’t want to be the hole in the Northern Powerhouse. Not least because we need a clear voice for the advocacy of the region’s interests at the Brexit negotiations.
But all this goes beyond regional concerns, because Yorkshire devolution would be for the good of the whole country, not just Yorkshire.
The national economy would benefit from a decrease in the gap with foreign competitors, and social cohesion would benefit from a narrowing of the gap between North-South incomes.
That’s why I also asked the Government: “In the light of the IPPR report Time for Change: A New
Vision for the British Economy, what assessment have they made of the potential for the Northern Powerhouse to restructure the national economy?”
The IPPR’s report argues that the UK is the most geographically unbalanced economy in Europe. Too much power is concentrated in too few hands, and almost 40 per cent of UK output is produced in London and the South East.
It indicated that UK growth is funding business profits as workers’ wages stagnate, young people today are set to be poorer than their parents, and nearly a third of children live in poverty.
The report argues that prosperity is not currently connected to justice, but that the two can be joined in a way that enables everyone to flourish. Their suggestions include better regulation of the ‘gig economy’, better access to affordable housing and limiting growth in executive pay.
The last is a point underlined by the Archbishop of Canterbury, who worked in the oil industry for 11 years and is a member of the IPPR’s commission on economic justice. He said: “Thirty years ago, when I worked in business, company chief executives were paid on average around 20 times the salary of the average worker... CEO pay in the FTSE is now more than 150 times average salary.” He recommends “a fairer tax system where those who benefit most from the economy pay their fair share”.
The Northern Powerhouse is city-focused, but given that large areas of Yorkshire are rural, I also asked the Government what steps they are taking to promote the rural economy.
The model is based on several authorities joining together to create a combined authority under an elected mayor. But city region authorities tend to be similar and close together, so will rural areas be able to reap the same benefits with their complex combinations of several different types of councils in a large geographic area?
I also asked the Government what assessment they have made of the levels of immigration required to support the Northern Powerhouse, because alongside investing in skills, the Northern economy will need to continue attracting migrants from inside and outside of the UK if it is to prosper.
After the June election, former Treasury minister Jim O’Neill said there was now “sufficient momentum” from the Government to press ahead with the project, adding: “It is up to people locally to take that momentum and carry it on.”
So that’s my attempt this week to be Northern grit in the Westminster oyster; to maintain the momentum in the hope that the Northern Powerhouse can steam ahead.
I await the Government’s answers.