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The Bottom Line Expert Opinion: The Northern Powerhouse

Updated Friday 16th October 2015

What does the Northern Powerhouse policy mean for the UK? Peter Bloom explores the potential impact that it may have on the UK.

Road to The North Creative commons image Icon Buh Snarf under CC NC-ND 2.0 under Creative-Commons license A key issue facing the UK is how to ensure that all its regions are equally economically developed. While London is rightfully celebrated, the prosperity of the nation depends on the country’s modernization as a whole. This episode of the Bottom Line discusses the government’s new “Northern Powerhouse” policy. It explores the potential and wider implications of this announced strategy for businesses and society generally.

Almost everyone throughout Britain would support – regardless of region or politics – a strategy to further develop Northern England. However, what exactly is George Osborne’s “Northern Powerhouse” initiative? While concrete details are still emerging, its overriding aim is to attract capital to Northern cities through tapping into its collective potential as a region. This means in practice improving its transport links, devolving fiscal authority locally and pooling regional resources together. Nevertheless, these still ambiguous plans are raising as much concern and questions as they are excitement.  The BBC provides an overview of this policy in their article “What is the Northern Powerhouse”.

Indeed this is not the first time that the Conservative government has announced a huge initiative. Previously the government introduced the concept of a “Big society” to combine its conservative economics with a sense of social cohesion. However, that initiative has largely been either derided or forgotten. The “Northern Powerhouse” concept has similarly not fully captured the public’s imagination yet. For many this signals that the strategy could be destined to fail even before it has been fully outlined or launched. The BBC explores this possibility in their article “Northern Powerhouse could end up like Big Society”.

There are also growing concerns that this policy would overly prioritize the city of Manchester at the expense of the region as a whole. Much of these initial worries are linked to the creation of a so-called metro mayor for Manchester in 2017 to help manage regional policies and growth. Broadly, some object on democratic ground to the concentration of too much power in a single city executive rather than councils. It also appears to make Manchester the centerpiece of the strategy instead of broadening it to encompass other Northern cities and areas. This devolution also threatens to lead to a “race to the bottom” competition between these cities in terms of lowering tax rates and regulations in an effort to attract businesses. Peter O’Brien explores these issues in his article “Building a Northern Powerhouse doesn’t Stop at Manchester”.

These policies are, moreover, challenged for being more rhetoric than reality in terms of their potential to help the region and its citizens. This critique goes beyond traditional economic development - it also encompasses cultural investment. The government has promised to invest in millions of dollars in new cultural centers in Manchester. Yet this gesture may be more a public relations exercise than an actual commitment to expand the arts in the city and region. The investing in building rather than increasing “home grown” culture points to the need for a more integrated and substantive policy. Ben Walmsley discusses these concerns in his article “Is the northern ‘cultural powerhouse’ an empty bribe?

Fundamentally, a number of experts and policy makers are increasingly wondering whether this initiative is well conceived or even desirable. It is questioned in terms of its over-emphasis on market solutions and prioritization on attracting financial capital rather than achieving other social objectives around health and welfare. By contrast, new Labour leader Jeremy Corbyn has introduced a more public oriented “Northern Future” plan. This would focus on state ownership of the rail system, publicly backed schemes to improve worker retention in the North and the creation of a National Investment Bank. Geraint Johnes looks at these alternatives in his article “Northern Powerhouse: Cruel Deception or Cool Conception?

This article was written to accompany the Autumn 2015 series of The Bottom Line. For more information on the series, visit the series page.

 

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