Chancellor's new interest in regional policy hasn't got beyond Manchester

Journal Regional Affairs Reporter Rachel Wearmouth's provides her overview of Budget 2015

PA Wire Labour leader Ed Miliband responds to Chancellor of the Exchequer George Osborne's Budget statement
Labour leader Ed Miliband responds to Chancellor of the Exchequer George Osborne's Budget statement

Exactly where the North starts and ends has always been a thorny subject.

And yesterday, after Chancellor George Osborne stood down from the House of Commons dispatch box, the debate started to rage all over again.

In his hour-long speech, the Chancellor was magnanimous in offering more support to Greater Manchester and Yorkshire, and it is something local politicians here in the North East have begun to feel a tad uncomfortable about.

Handing more devolution (Greater Manchester will now be able to keep 100% of its business rates) is all part of a grand plan to create a “Northern powerhouse”.

Mr Osborne hopes to transform the region into a force that will rival the economic dominance of the South East. And, of course, he wants to win votes in North marginals.

The polls will open in less than 50 days and battle commenced yesterday on this issue.

There was much to be welcomed in the Chancellor’s speech. Around £10m will reach Newcastle University for its Science Central project – though the money was announced earlier this month – £1m will be handed to the chemical industry, for the Centre for Process Innovations, which has bases in Teesside and County Durham’s science and technology park Netpark.

New powers for North East councils, however, were missing and Nick Brown, Labour MP for Newcastle East, was one of the first to wade in.

He said: “This is a Tory pre-election budget – plenty of mention of marginal seats, nothing for the North East. His new-found interest in regional policy hasn’t got beyond the Leeds/Manchester powerhouse.

“He gave no details of where the £25bn in extra spending cuts will fall, but we know £12bn of it comes out of working age benefits.”

It was hoped the Chancellor would back the Transport for the North plan, which would see a Transport Commissioner introduced.

This did not happen, but the Chancellor did commit to working more closely with TfN, which wants an integrated and smart ticket system to connect northern cities.

Devolving the £15bn transport budget should be a priority for whoever holds power after the next election, said Ross Smith, the North East Chamber of Commerce’s Director of Policy, if the “Northern powerhouse” is to work.

He said: “While there have been promises made around business rate reform, annual investment allowances and northern transport, we are yet to see action.

“Actions speaking louder than words and these issues need to be addressed as a matter of urgency by whoever is in the Treasury after the election.”

Newcastle Airport – the country’s most northern airport – may also have felt a bit left out of the “Northern powerhouse” party.

Since Holyrood was given the power to vary the Air Passenger Duty levy last year, chiefs at the airport have feared how this freedom could impact on the region.

Catherine McKinnell, whose Newcastle North constituency houses the airport, had this to say yesterday: “We hear about a Northern Powerhouse, yet Osborne remains completely oblivious to the fact the North stretches some way beyond the Pennines – despite what our fantastic region has to offer the rest of the country. Today’s announcements on this include just one token reference to Newcastle.

“People in the North East won’t be taken in by this Budget – they know that ministers have spent the last five years deliberately shifting funds away from Northern cities to wealthier parts of the country, that wages here are down and unemployment in our region remains the highest of anywhere in the UK.

“And – particularly concerning for our region – is that we still have no further details on how the Chancellor plans to mitigate the impact of devolving Air Passenger Duty to the Scottish Government. This threatens to have a major impact on Newcastle Airport and the North East’s economy and, despite a vague promise of a ‘review of potential options’ last month, there is not a single mention of this in the Budget.”

Conservative Guy Opperman, who represents Hexham, insisted measures in the Budget, which includes tax breaks for people on low pay, was actually targeted at the North East.

He said: “We saw a series of measures aimed specifically at the North East. Support for our off-shore industries, support for car manufacturing and support for our exporters. This was a budget to secure jobs and deliver a truly national recovery.

“Unemployment is down in every single area of the North East compared to when Labour was in power.”

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