3 August 2016
How long have we been hearing the phrase ‘the Northern Powerhouse’?
How long have we been waiting for some actual action and tangible results?
It looks like the wait is now over, as our new Prime Minister has seemingly scrapped the initiative, yesterday announcing that she is to effectively turn the Northern Powerhouse into a nationwide agenda to boost productivity outside of the south east.
Careful not to mention the phrase, Theresa May undoubtedly snubbed George Osborne’s legacy of a Northern Powerhouse, doing a U-turn on manifesto promise to create it and close the so-called north-south divide.
At the first meeting of her industrial strategy committee yesterday she pledged to build an economy ‘that works for everyone, not just the privileged few’ and emphasised closing the productivity gap, casting the net further afield to all areas outside of the south east. Greg Clark, the business secretary, also agreed that the government should do more to support cities outside of London, but still no mention of the branded powerhouse initiative.
Calling the launch a ‘proper’ industrial strategy, May was no doubt sending a huge snub to George Osborne, but I hope that scrapping the initiative isn’t motivated by this.
It may be too soon to say, but the PM’s lack of endorsement of the Northern Powerhouse has the potential to lose her even more favour in northern cities, confirming, as suspected, that the Northern Powerhouse was meaningless hype. Another example of Westminster spin.
I hope that this isn’t the case, of course. I hope that we will see a real focus on cities above the Watford Gap.
Whilst reports say that productivity has stagnated in the North West, South West and Northern Ireland, I think you only need to visit some of these places to feel the energy that’s building and has been for some time. We’ve done a great job of ‘carrying on regardless’. Liverpool has amazing energy, Manchester is extraordinary and Leeds, York, Newcastle are all building extraordinary business communities to help one another without Westminster’s promises.
We have been doing our own thing for a long time, making our own waves with little to no help other than a buzzword – where are the tangible benefits of Northern Powerhouse other than column inches and conversations? What’s different now that May has effectively dismissed it?
In my eyes this could be seen as cementing the notion that the north is low on the agenda. Energy has been building around the powerhouse concept and, although there have been many sceptics, having some of Westminster’s attention has boosted business communities.
I hope that the rhetoric around what happens now doesn’t become another distraction. We’ve had more than enough of those already this year; especially as we continue to roll towards Brexit, with rumour and a leaked report obtained by the BBC showing Greater Manchester is to miss out on £320 million of EU funding including £176m from the European Regional Development Fund (ERDF).
The Financial Times also reported a week or so ago that funding for small businesses in the north provided by ERDF could be delayed. On top of this, David Gauke, the chief secretary to the Treasury, recently told parliament that he was unable to guarantee the future of EU funds – contradicting a statement given by the Treasury to the BBC just days earlier. “We will be making an announcement in the not-too-distant future. Let me be absolutely clear – as a Government we remain committed to doing everything we can do to strengthen the Northern Powerhouse, to ensure that the north of England fulfils its full potential.”
So what is actually happening with the economy outside of London? What can we expect? It’s more uncertainty, more distractions and more negativity. Thank goodness for northern grit!
What’s the answer? Devolution? Whatever it is, something needs to happen to rebalance the British economy. Early in July a report revealed that London pays almost a third of UK tax. If that’s not a sign that we urgently need to rebalance things what is?
Is the growth of the capital sustainable? Surely we need to prepare for growth in other areas of the country or London will burn out.
Ultimately we’ve continued to grow without this and will continue to do so. As business owners, entrepreneurs and leaders, we need to carry on doing what we’ve been doing. Keep growing, keep pushing and keep driving the economy ourselves.
What did you take away from May’s announcements? What are your thoughts on the Northern Powerhouse?