Whither the powerhouse? The Government minister with relevant responsibility, James Wharton, above, is grilled by Mike Cowley.
What is the Northern powerhouse? There seems to be confusion about what it encompasses…
Over a long period of time, the economy of the North has consistently underperformed compared to the UK average, but there is a significant opportunity to enable it to reach its potential as a driving force in the UK economy through the creation of a Northern powerhouse. We are supporting a single Northern economy which will become more than the sum of its parts, so that it can compete effectively on the international stage.
The Northern powerhouse is about devolving powers and investing across the region in science and technology, transport, digital and innovation, and culture and tourism. To support this investment we are devolving powers to local people through groundbreaking devolution deals. This gives the North a powerful new voice, and the investment and decision-making powers to meet these ambitions.
Our vision for the Northern powerhouse covers all aspects of the North: from cities to the most rural villages, from global businesses to SMEs [small and medium-sized enterprises] and start-ups. This provides a challenging but exciting opportunity – to make a powerful Northern economy which can create jobs, prosperity and security for Northern regions and for the UK as a whole.
How does it differ from the issue of devolution, which involves the core cities but not the entire North?
Devolution is a core pillar of our approach. The Northern powerhouse is addressing significant structural challenges in the North to allow it to reach its potential, including passing powers from Whitehall to local people.
Devolution is not exclusive to core cities: we are clear that we are open to discussing proposals from all areas, including towns and counties across the country. Some city regions such as Greater Manchester and Tees Valley include large rural communities, while Sheffield has rural communities within and around it, including the Peak District.
Devolution deals and the introduction of directly elected mayors have already been agreed with Manchester, Sheffield, Liverpool, the North East and Tees Valley in exchange for local control over transport and skills as well as significant funds for long-term investment. I hope many more places will follow.
Would it be better if the Northern powerhouse had one spokesperson?
The Government recognises that businesses and local people are best placed to shape the Northern powerhouse depending on what is most appropriate for their own economies. It is not for the Government to dictate to the North what the Northern powerhouse should be and who should speak for the North.
Is there a case for a regional assembly for the Northern powerhouse? The Northern powerhouse is leading the way, following the trailblazing Greater Manchester devolution deal and subsequent deals in Liverpool City Region, Tees Valley, the North East and Sheffield City Region. Local leaders in five Northern areas will now see new powers handed to them from Westminster and I’m sure they will continue to work closely with each other and bang the drum for the North.
If, as suggested at the Forum, the North should focus on becoming a global leader in certain sectors with the most growth potential, what should these be?
The Northern powerhouse is about building on the North’s key strengths. The Government has committed significant funding in science and innovation, including £20 million to Health North and major new projects including the National Graphene Institute. Enterprise and SMEs have been supported by the establishment of 17 Enterprise Zones and the Northern Powerhouse Investment Fund.
We want to make sure we build on all the North’s strengths, however, which is why Transport for the North has commissioned an independent economic review. Initial findings identified Northern capabilities in advanced manufacturing, energy generation, health and digital – but the work is ongoing and I look forward to seeing its findings later next month.
Infrastructure is seen as a major stumbling block. What is the Government currently doing to help and what is in the pipeline in terms of priorities for the future?
We have launched an ambitious new transport devolution package for the North, including setting up Transport for the North. In total, we will spend £13 billion on transport in the North over this Parliament.
High Speed 2 is the first new rail line north of Birmingham in 120 years. The Cities and Local Government Devolution Act created Transport for the North, which brings together local transport authorities and has been awarded £50m of operational funding over this Parliament.
We have also committed £150m to support the delivery of smart and integrated ticketing across transport services in the North. The Northern Transport Strategy will be published in March and Transport for the North is pushing forward with plans on east-west connectivity, including a prioritised list of scheme options for TransNorth and the trans-Pennine tunnel.
What is the Government doing in terms of the skills required to support increased economic activity in the region? Through devolution deals, we have agreed to devolve the adult education budget in 2018-19 (subject to readiness conditions) to Sheffield City Region, Tees Valley, the North East and Liverpool City Region. This is another step in the journey towards greater local influence over skills provision, as local people know best what skills are required in their areas.
Ahead of this, the Government will work with local areas to undertake area reviews to reshape post-16 education and training, setting it on an efficient and financially resilient footing.
Through Growth Deals, the Government has made £330m of skills capital funding available to Local Enterprise Partnerships as part of the Local Growth Fund in 2015-16, providing local areas with a powerful lever for increased influence over the further education and skills sectors.
It has been suggested that the Northern powerhouse is simply a sop to the North by the Government – or merely a way of offloading some of their problems. What do you say to this?
The Government’s long-term economic plan seeks to rebalance growth across the regions and nations of the UK, and building a Northern powerhouse is a fundamental part of this.
The Northern economy has, historically, underperformed compared to the UK average, but there is a significant opportunity to enable the North to reach its potential. The opportunity is huge – if the North grew at the same rate as is forecast for the rest of the UK, we could add £37bn to the economy by the end of the next decade.
The Government has already made significant commitments to rebalance the economy. Revolutionary devolution deals have been agreed with five Northern areas, 17 Enterprise Zones have been announced and we have committed to spend £13bn on Northern transport.
Successful Northern powerhouse trade missions have already been carried out in China and South East Asia, and the 2015 spending review provided £15m for further missions.
What are the lessons learned from the Northern powerhouse to date?
Our approach has been based on real local economies, rather than artificial regions. That’s one reason we have made real progress, signing landmark devolution deals with Greater Manchester followed by agreements in Sheffield, Liverpool, the North East and Tees Valley. The Northern powerhouse is about putting power into the hands of local people, and it’s already working.
Our approach is also about growing the private sector, so that we have sustainable growth for the long term. The role for Government is to create the conditions for private sector growth: making record investments in transport to allow the great cities and towns of the North to pool their strengths and investing in the North’s strengths in science and innovation.
How can the North make a better case for the Treasury to endorse billionpound infrastructure projects needed to attract significant overseas investment such as from the Chinese?
We are already seeing significant interest from China and elsewhere to invest in the North, with new companies and investors taking a renewed interest in the North as they see the huge opportunity there is. Transport for the North brings together local transport authorities and combined authorities across the North of England to allow the North to speak with a single voice to the Government on transport issues.
UK Trade & Investment is carrying out a programme of Northern powerhouse trade missions, with the Spending Review committing £15m to carry on this programme, including running trade missions to emerging economies. A further £7m has been committed to the Northern Powerhouse Investment Taskforce, which will bring the authorities and businesses of the North together to present a single internationally competitive offer to the world.
Where next for the Northern powerhouse? The Government has an ambition for devolution to extend right across the North, and discussions with local areas are continuing at pace. We will continue to build the Northern powerhouse in partnership with local people, including encouraging collaboration between areas to identify where the greatest impact can be made.
We will build on the findings of the Independent Economic Review and Northern Transport Strategy and continue to invest in science and innovation, transport, enterprise and quality of life.