George Osborne's plan to create a single 'city' in the North to rival London

The Chancellor has set out a timetable for creating a "Northern Powerhouse" bringing together the cities of the North, but will he deliver?

George Osborne MP
George Osborne MP

BBC journalist Evan Davis, the new presenter of Newsnight, came up with a bold idea earlier this year.

Presenting a documentary about London’s economic dominance, he suggested creating one giant city in the North which would be able to compete with the capital on something like equal terms.

This didn’t mean concreting over the entire North of England. Rather, it meant creating a transport network fast and efficient enough that Leeds, Manchester, Newcastle and Liverpool effectively became a single place, at least as far as the economy was concerned. This would “turn the great cities of northern England into one large travel-to-work area,” in Mr Davis’ words.

It was an interesting idea. What nobody foresaw at the time was that it would be adopted wholesale by the Government.

That, however, is what’s happened.

George Osborne, the Chancellor, set out his vision for a “Northern Powerhouse” earlier this month. Fuller details will be a centrepiece of his Autumn Statement but the outline is already clear. Success could mean that the economy of the North, and therefore the UK, grew by an extra £43bn, he said.

But failure meant “our whole country will not only fail to reach its potential, but will become increasingly unbalanced and unhealthily dependent on the success of that undisputed global city, London”.

Mr Osborne set out five key milestones to make the plan a reality:

  • The publication earlier this month of a report by local authorities in the North calling for investment of up to £15bn to improve transport links, including a new railway between Darlington and Newcastle. Mr Osborne said the Government would take the report and “work on delivering its component parts”.
  • Government Chief Scientist Mark Walport is currently working with North universities to determine a scientific field which the region can become a world leader in, such as nuclear technology or materials. He will report his findings in September.
  • High speed rail chief executive Sir David Higgins is looking at the prospect of building a high speed line across the Pennines, linking the North East and North West, and he will report his findings in October.
  • In November, Mr Osborne will set out proposals to give cities in the North more autonomy and cash - in return for them agreeing to transform local government and introduce directly-elected mayors.
  • And the Autumn Statement, likely to be in late November or early December, will bring all these elements together in a “long term economic plan for this Northern Powerhouse.”

The region’s city councils, all Labour-run, are fully on board, although it remains to be seen how many will go along with Mr Osborne’s plan to create directly-elected mayors.

But of course, their role is to get the best possible result for their populations from the government of the day, whoever that may be - not to pick a fight.

Other Labour politicians are less enamoured with the Chancellor. Lord Beecham, the former leader of Newcastle City Council, has obtained figures showing that the Government’s flagship Regional Growth Fund has paid out £138m in the North East so far.

By contrast, One North East, the former regional development agency which was abolished by the Coalition government, invested £227m into the regional economy during 2010-11 alone, its last full year of operation.

So the Government’s record of backing industry in the region has not been good so far, he says.

Labour shadow treasury minister Shabana Mahmood said: “Only Labour will properly back our city and county regions with ambitious plans to devolve more funding and economic power to them.”

The Government had only partially implemented plans drawn up by Conservative peer Lord Heseltine to devolve funding from Whitehall to local bodies, she said.

George Osborne will be judged on his actions, not his words. He is failing to back the Heseltine report or Labour’s plans to devolve billions of pounds of funding.

Northumberland Conservative MP Guy Opperman welcomed the report by councils in the North calling for improved transport links.

He said: “It is genuinely great news that the five cities in the north of England have come together with one aim, to improve their economic prosperity by working together. Manchester, Liverpool, Newcastle, Sheffield and Leeds have responded to a challenge set them by the Chancellor to begin competing more effectively with London.

“There is no doubt that the cities of northern England are powerful individually but better as one force.”

He added: “This report and the progress made will ensure we are competitive and prosper in the global economy, and this investment in infrastructure will improve the links between all the major northern cities.

“The Government have listened and built on the success of City Deals and devolved funding. The local authorities are now working together ever more closely and this can only be a good thing.

“Among the many major successes proposed are a new rail line using faster trains between Newcastle and the Darlington area designed to save 10 minutes journey time, plus speeding up and making more reliable services to London from Newcastle on the East Coast mainline before HS2 is completed; this coupled to the measures to enhance and grow Newcastle airport are good things.”

Whether Mr Osborne really will provide the investment the councils say they need remains to be seen. We may find out in December.

But he certainly talks the talk. And at least one good thing has definitely come out of this for the region - because both Labour and the Conservatives will go in to the next election competing to prove who has the most to offer for the North of England.


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