The Northern Powerhouse: What does it mean?
Much has been made in recent months, especially in the run up to the General Election, about the Northern Powerhouse; but what does it really mean? Following the Scottish Independence Referendum there has been discussion on the devolution of certain fiscal powers to regional authorities in England, most notably Greater Manchester. Giving certain fiscal powers to local authorities does not create an economic stimulus, merely the opportunity to enjoy increased buying powers. Furthermore, the identification of Manchester as a lead for this English devolution creates animosity in Yorkshire, the North East, Cumbria and on Merseyside. The creation of locally elected mayors does not generate fiscal stimulus, but it does create additional overhead and expense whilst affording a single point of accountability.
The government has published ‘The Northern Powerhouse: One
Agenda, One Economy, One North’ the focus is on transport links supporting the
city regions. This provides some detail
of what will generate the economic power but there needs to be a strategy for growing
the specific areas this paper identifies.
A transport strategy is important; becoming truly important when
supporting business, trade, local enterprise, effective regional government and
health services. The creation of three
business incubators in Manchester, Sheffield and Leeds goes someway to addressing
the economic expansion question but greater detail is required.
Since the economic downturn of the late 2000s there has been
frequent discussion on re-balancing the economy: a move away from services and
a return to manufacturing. The over
dependence of the financial services sector is seen by many in terms of bonus
and hindrance. The North of England has a long and esteemed history in
automotive, science and technology, natural resources and manufacturing which
complement the newer media and creative industries. Whilst these traditional sectors have all had
their challenges and some have almost disappeared, there is an opportunity to
focus again on these sectors and generate an economic stimulus.
Automotive expertise in Cheshire, Merseyside and Sunderland
continues to boom with demand not only in the UK but worldwide being satisfied
from these facilities. Longer standing science and technology industries such
as nuclear have a presence in Cumbria, Cheshire and South Yorkshire. Aviation centred on Chester and Preston
sustains the region’s reputation as a centre of excellence. More recent developments such as graphene and
the square kilometre array strengthens the science and technology sector. Natural resources in terms of gas, off-shore
wind energy, North Sea oil and the potential, albeit recognising its
contentious nature, of shale rock fracking make the North of England rich in
natural resources to help power the booming economy. The era of mills and heavy engineering are
long since gone the links to manufacturing are now very different and less
obvious. The creative industries and
professional services now prevail and these new industries bring a new found
appeal to the North of England.
The sectors mentioned above are sustained and developed
through outstanding educational institutions and some of the world’s best
universities can be found in the North of England. Recognising the wide array of sectors that
have links and networks across the North of England provides the opportunity to
harness the output of 15 million people.
Challenges are readily apparent and the causes of these challenges need
to be addressed. The rise of internet
shopping and out of town shopping facilities coupled with business rates
threaten the fabric of many towns.
Providing these businesses and the wider economy with a balanced cost
basis to move forward on an equal footing. A review of business rates to
sustain current businesses and the potential for incentivising industries to
re-locate to the North should be considered as a tangible impetus to kick
starting a Northern Powerhouse that treats all areas equally and acts in the
interests of all the population rather than just a few select city regions.
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