Paul Linford: Is George Osborne's Northern Powerhouse simply hot air?

Journal columnist Paul Linford says critics of the Chancellor's commitment to devolution to the North East have a point

Hannah McKay/PA Wire Chancellor of the Exchequer George Osborne
Chancellor of the Exchequer George Osborne

SO, after all that, did it live up the hype? Did the Chancellor’s Autumn Statement on Wednesday and the week’s assorted announcements around it demonstrate that the North really is at the heart of the government’s economic strategy?

Well, in one sense, yes. There is now a firm commitment from the Conservatives to dual at least part of the A1 north of Newcastle if they win the next election, and it is inconceivable that Labour will not see fit to match the pledge at some point in the next four months.

Okay, so it falls short of dualling the road as far as the Scottish border – some 25 miles short in fact – and in that sense, the campaign will go on.

But as I wrote recently, the failure of successive governments to progress the scheme had become emblematic of Whitehall’s neglect of region’s infrastructure needs, and in this context, the decision to dual the road up to Ellingham in Northumberland has to be seen as a step forward.

Yet it is important not to get carried away. Vital as the A1 dualling is in terms of improving safety and forging closer economic links with Scotland, it is and never has been a panacea for the wider economic difficulties of the North East.

And to be fair, Chancellor George Osborne has appeared to acknowledge the need for a much broader economic and transport strategy for the wider Northern region, “bringing together the great cities of the North” as he put it on Wednesday.

Single carriageway section of the A1 in Northumberland
Single carriageway section of the A1 in Northumberland
 

But for all his talk of a ‘Northern Powerhouse,’ there was always a fear that much of the activity around this would be centred on the so-called ‘Golden Triangle” of Manchester, Leeds and Sheffield, and Wednesday’s statement did little to disabuse this.

As Labour’s former Minister for the North-East Nick Brown was not slow to point out, “The Chancellor spoke more about Mars than he did about the North East of England. His Northern Powerhouse is located over 100 miles to the South of Tyne and Wear.”

There were compensations. The A1, of course, a “Great Exhibition” to celebrate the art, culture and design of the North, and confirmation that outdated Pacer trains still in use on some routes in the North East will be replaced.

The Chancellor also announced £20m for an Ageing Science centre in Newcastle, and £28m for a National Formulation Centre, specialising in the development of medicines and chemicals, to be based in Sedgefield.

But the statement also confirmed that local councils face years of further deep cuts which may very well serve to undo some of the progress being made in other areas.

And while the Chancellor’s rabbit-out-the-hat on stamp duty will doubtless help many housebuyers in the South, it may well have the reverse impact on the North East where average property prices are significantly lower.

But coming as it did at the end of an autumn dominated by the aftermath of the Scottish independence referendum, the single biggest omission in Wednesday’s statement was any coherent strategy for English regional devolution.

The Chancellor promised the full devolution of business rates to the Welsh Government, and pledged to implement the Smith Commission’s proposals to devolve income tax rates and thresholds to Scotland.

Nick Brown MP
Nick Brown MP
 

But as far as England is concerned, all he had to say was that the scale of the devolution to Scotland “now makes the case for English Votes for English Laws unanswerable.”

While this is an argument in support of an English Parliament-within-a-Parliament, it is not in any sense a recognition of the need for a corresponding devolution of power to the regions or cities of England.

Once again Nick Brown hit the nail on the head saying: “His statement contained no commitment to any type of workable regional policy in the context of further Scottish devolution. This is grotesquely one-sided. “

Or as South Tyneside council leader Iain Malcolm pointed out: “It is important to highlight that although Osborne has announced full business rate devolution to Wales, there is no business rate devolution to England.”

What this demonstrates is that there is a fundamental disconnect between the Chancellor’s aspirations for the Northern regions and the tools he is prepared to put at their disposal in the cause of re-balancing the UK economy.

And until he makes that connection, the much-vaunted ‘Northern Powerhouse’ will remain so much hot air.

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