High speed 3: vision for the North or vanity for Osborne?

Driving northern economic development requires more than just transport connections.

Driving northern economic development requires more than just transport connections

The chancellor’s announcement on an additional high speed line between Manchester and Leeds may have come four years too late but it is welcome all the same.

Alongside previous announcements of £600m investment in a myriad of local improvements which go under the banner of ‘Northern Hub’, Trans-Pennine electrification to York, and the advent of Rail North – a rail body established to negotiate new northern rail franchises – there is finally some momentum behind efforts to turn our third world northern transport infrastructure into something which will one day approach what we already see in most other OECD nations.

It harks back of course to John Prescott’s ideas of a Northern Way, but as in the past there is little practical detail. No idea of cost or timetable. No clear plans as to whether it might run to Liverpool or Sheffield. No clarity about its integration with HS2. And a worrying sense that the North East is somehow peripheral to ideas of a northern ‘supercity’.

But the ambition is right and politicians need to get behind councils, businesses and universities who have come out in its praise.

But driving northern economic development requires more than just transport connections. In the report of the Northern Economic Futures Commission, Northern Prosperity is National Prosperity, we identified five ‘pillars’ for northern economic growth, of which infrastructure is just number three. According to the OECD, enhancing our skills base and investing in innovation are both more important for sustainable long-term improvement.

And on the latter the figures look woeful. Government currently spends over two-thirds of the government R&D budget in London and the South East and Osborne indicated that there would be no change in the process for distributing it in the future.

Government R&D spend by region, 2011 (£m)

IPPR Osbornej

Alongside transport and innovation announcements, he praised the way in which northern cities had used the arts and culture to drive regeneration and name-checked several projects but his message was clear that world class arts will be developed “not at the expense of our capital city’s great institutions but as a complement to them”. As IPPR analysis makes very clear, any rebalancing will face quite a challenge.

Arts and culture funding by region and by source

IPPR Osborne 2j

But perhaps his most bold announcement was also the most vague: elected mayors for city regions with the powers of the Mayor of London. When questioned by Joe Anderson, the elected mayor of the city of Liverpool, it was clear that it was up to the cities themselves to bring forward the kind of ‘deal’ they might like to strike between new forms of local democracy and greater freedoms from the centre.

Fortune should favour the bold, for it is indeed ironic that when it comes to England’s great cities it requires the chancellor to come and have to make today’s announcements. In a mature, progressive democracy decisions about transport, skills, innovation and culture would be the preserve of city-regional leaders in the first place, backed with the fiscal powers to pay their own way to support economic growth.

Some will say that this is too little too late, and for that reason lacks credibility and authenticity, but the onus is now on Andrew Adonis to deliver a Growth Review for Labour that marries both ambition and grist.

Ed Cox is director of IPPR North

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