Ed Cox is the Director of IPPR North.
Those in the Westminster commentariat who continue to cast doubt on the Prime Minister’s commitment to the idea of a Northern Powerhouse need to look a little more carefully at the evidence before indulging us with their wishful thinking. Both at Prime Minister’s Questions and in her Yorkshire Post letter Theresa May has explicitly affirmed her commitment to driving forward the Northern economy.
The demise of George Osborne does of course provide scope to question the future of a project with which he was so closely associated, but there were more pressing reasons why the former Chancellor had to go, not least his support for remaining in the EU. In terms of the North, the new Government has far more signs of continuity than change: the appointment of Andrew Percy as Minister for the Northern Powerhouse tells a story in itself, with the new incumbent a far more effective player than his predecessor. The retention of Jim O’Neill as Financial Secretary to the Treasury is also a sign of commitment to the big Northern cities which he has so effectively championed, and behind the scenes, Neil O’Brien, a key Osborne aide, has deftly moved from Number 11 to Number 10.
But perhaps most significant ministerial move is the elevation of Greg Clark to the new department for Business, Energy and Industrial strategy. As Cities minister, Clark laid the foundations for the city-centric narrative that has driven the Northern Powerhouse, and at CLG he has been the architect of the devolution deals that are unlocking growth plans in many of the Northern city regions. The broadening of his remit does, though, point to some broader thinking about the drivers of Powerhouse potential.
Some have seen the switch to the language of industrial strategy as a dilution of the former Chancellor’s preoccupation with the cities of the North. On the contrary, Greg Clark has always recognised that far from creating a new London in the North, as Osborne might have wished, a Northern city system needs to be more inclusive, recognising that many of the prime economic capabilities of the Northern Powerhouse – its energy industry, its advanced manufacturing parks, its health sciences hubs, for example – lie outside of the core cities. Twenty-first industrial strategy is no longer spatially blind, nor does it prop up dying industries. As Clark knows very well, it supports and invests in the businesses and the places where economic potential is ripe, within cities and beyond them. If Osborne’s Powerhouse was rather partial and piecemeal, Clark’s will adopt a more coherent approach.
Many rightly argue that the real test of the new Government’s commitment to the Northern Powerhouse will come at the Autumn Statement. For too long, ministers have announced and reannounced the £13 billion planned investment in current Northern transport priorities – one sixth of the amount being ploughed into the capital. But Transport for the North is well on the way to scoping out vital new schemes to the tune of £50 billion. Not all of this will come from the public purse but, as with Crossrail, government investment will be vital as seedcorn for private and overseas investors.
So far, Philip Hammond has made all the right noises, knowing that there has come a point when government must put its money where its mouth is, but also recognising that widespread investment in more modest transport projects can be just as transformational for local economies as the high profile grands-projets. This is especially true in the North. The new Chancellor’s assurances with regards to plugging EU funding gaps have also offered initial succour to universities and others fearing the worst consequences of Brexit.
It is with regard to devolution that Northern Powerhouse naysayers have the greatest credence. Devolution has only ever been one strand of the Powerhouse programme but, fundamentally important as it is, the decision by some North Eastern leaders to reject a devo deal, and Yorkshire’s inability to get one off the ground, both weaken the potential to unlock regional growth.
Once again, though, if May has doubts about metro mayors then so she should. Osborne’s insistence on a particular form of city governance betrayed the principle that devo deals would be tailored to local circumstances. Metro mayors, while an important development, do not necessarily work well outside monocentric city regions and Sajid Javid now has an opportunity to liberate a devolution project that has lost sight of its true purpose in a bid to drive through local government reform on the sly. Reform there must be, but it can be done in a more adult fashion
Perhaps the most important reason why the Northern Powerhouse is alive and kicking is that it was never a government programme anyway. Osborne coined a phrase, but he was simply naming developments that have been in train for some years. Manchester, Leeds and Newcastle have long shown signs of regeneration, with confident local government and business leadership and a raft of evidence supporting regional resurgence.
The formation of Transport for the North in the vanguard of pan-Northern collaboration has further bolstered the sense that the North of England can soon have many of the institutions that so capably articulate and represent the needs of London or Scotland – and no amount of Government wavering will turn this back. With Brexit negotiations high up the agenda, now more than ever a Team North approach is vital, and businesses are demanding it. Whether or not it receives the Prime Minister’s imprimatur, the Northern Powerhouse powers on.