Piecemeal devolution deals are not the way to create a Northern Powerhouse

It will take more than warm words to get a lasting rebalancing - the north needs a clear blueprint for devolution

George Osborne ]

 

In his Budget speech yesterday, the chancellor made much of his northern credentials and set out some more small steps towards the creation of the so-called Northern Powerhouse with the promise of a Northern Transport Strategy, investment in a number of science and innovation initiatives and further details of devolution deals with Greater Manchester and West Yorkshire.

He began his speech though with the remarkable claims that economic growth and jobs growth in the north is outpacing the south. It is true that GVA growth in Greater Manchester for the one year 2012-2013 was second only to growth in the West Midlands, but there are two significant caveats to this statistic.

First, the growth rate represents a bounce back from the deep effects of a recession which has hit former industrial regions far harder than the south – growth rates are therefore from a very low base.

But more significantly, longer term trends paint a very different picture with GVA growth and jobs growth both showing significant divergence between north and south since 2010.

GRAPHONE

 

 

 

 

 

 

 

Figure 1: GVA growth in UK regions 2002-2012

GRAPHTWO

Figure 2: Workforce jobs 2007-2014

The fact that places like Manchester, Leeds and Birmingham are booming again is clearly good news, but it is important to remember that right up to the recession regions outside London were keeping pace with London in part because of an explicit regional policy.

Few now question the abolition of regional development agencies and the ascendancy of the city region and functional economic area. IPPR North has itself made the case for multi-speed devolution, allowing the core cities to drive economic growth through more radical devolution arrangements in cities that other places might yet be prepared for. But as yesterday’s Budget announcements make ever more clear, simply sticking piecemeal deals with the likes of Leeds or Manchester is no replacement for a proper process of devolution or economic development.

The devolution deal with the West Yorkshire Combined Authority is indeed another step forward for its constituent cities of Leeds, Bradford and Wakefield, but unlike Manchester with its more monocentric geography, the refusal to adopt a directly elected metro mayor has meant that the deal is much less significant than that offered to Greater Manchester. It is unsurprising that Whitehall has engineered a mechanism to stymie the English devolutionary moment, but unsophisticated to suggest that the same governance arrangements adopted in Greater Manchester (which in fact give its mayor far fewer powers than many might expect) could easily be applied across West Yorkshire – or indeed might exist in any other European polycentric metro-region, which they just don’t.

It remains the case that no political party has yet to set out a clear blueprint for devolution and economic growth in England. Labour’s pledge to devolve £30bn lacks any substantive detail other than an ring-fencing of funds that would otherwise be spent with greater central direction. The coalition’s deal-making with big cities is looking increasingly partial and piecemeal.

So too are the promises of £15bn in transport investment. Once again the chancellor has offered warm words – a Northern Transport Strategy – and there is vigorous activity going on behind the scenes. But the Budget presented an opportunity to put his money where his mouth is and once again there was nothing by way of cash promises.

If the Northern Powerhouse is ever to get lift-off and the promising signs of recovery lead to a lasting rebalancing, it will need more than a couple of AA batteries stitched up by men in sheds.

Ed Cox is the director of IPPR North. Follow him on Twitter

One Response to “Piecemeal devolution deals are not the way to create a Northern Powerhouse”

  1. David Lindsay

    The Northern Powerhouse is that great swathe of the country which is about to return almost no MPs from either of the Coalition parties, or indeed from any other party except one.

    The Powerhouse used to be the name of a gay nightclub between Newcastle Central Station and the Catholic Cathedral, with which latter’s sound system its own was periodically known to interfere.

    Perhaps that is still the case? But if so, then it is not there that I shall be seeking to save one pound by drinking one hundred pints of beer. Thank you so very, very much, George Osborne.

Leave a Reply