Developing England’s North

George Osborne’s Northern Powerhouse agenda was based on the idea that Northern cities are ‘individually strong but collectively not strong enough. The whole is less than the sum of its parts’. Few would probably disagree with the basic intent and aspiration behind this declaration, or that the UK economy has become too dominated by London, but this chapter argues that both the dominant diagnosis of the problem, and the main policies being advanced to solve it, are more debatable. It is in fact questionable whether Northern cities are as economically strong ‘individually’ as Osborne’s claim suggests. There is more to a city’s economic success than just size and density, and the argument that greater connectivity to London promised by the High Speed 2 rail project will benefit Northern cities is highly contestable. Moreover, devolution could even intensify economic and social disparities both among Northern cities themselves and in relation to the more advantageous position of London with regard to fiscal devolution. The lagging performance of Northern cities (and regions) and the challenge confronting their catch up with London need to be understood in terms of the historical development of the national political economy, and how that development has favoured a certain disposition towards and role in the evolving process of globalisation.

This chapter argues that the political economy of England’s ‘Northern Powerhouse’ cannot be understood in isolation from that of its ‘Southern Powerhouse’ neighbour. The UK’s relative decline, especially manufacturing in the North, is frequently allocated to the absence of a state-led technocratic industrial modernisation programme. This paper challenges that analysis, contending that public policy and governance arrangements in contemporary England are the outcome of the long-term strategic priorities of the English (latterly British) developmental state, fashioned by its pilot agency, the Treasury. George Osborne’s ‘Northern Powerhouse’ should therefore be understood not as something novel or a departure, but as simply the latest political narrative in a long-standing tradition of British statecraft which has subordinated the interests of development in the North of England to those of the global financial and commercial interests of the City of London.

This chapter considers the recent history, and likely future, of manufacturing in Northern England, with reference to the potential impact of initiatives related to the Northern Powerhouse agenda in this area. The chapter is structured around ‘the three Ds’ of the Northern Powerhouse: deindustrialisation, devolution and de-development. Contesting the view that the Northern Powerhouse can be understood primarily as a process of institutional or constitutional reform, it instead locates the agenda within the long (but limited) history of UK industrial policy. It argues that regional policy has always substituted for industrial policy in the UK state’s ‘horizontal’ support for manufacturing, and that devolution to Northern city-regions is therefore the ultimate expression of laissez-faire industrial policy. However, the agenda touches upon post-crisis concerns around place and empowerment, even while it serves to reduce the control of Northern citizens over their own local economies by offering only a narrow understanding of how economies develop.

Science and innovation are increasingly seen by the UK government as central to regional economic development policy, with a new emphasis on ‘place’ a prominent feature of related policy initiatives. This is reflected in debates over the ‘Northern Powerhouse’, most visibly through the £235 million investment in the ‘Crick of the North’ Royce Institute for Advanced Materials Research and Innovation, which is the largest single investment in science in the North of England in a generation. At the same time, public investment in science and innovation is ever more focused within the South-East ‘Golden Triangle’, with concentration driven by the Research Excellence Framework and by the pulling power of the labour market in London and the South East. This chapter teases apart the rhetoric from the reality of science and innovation investment in the North, ask what decision makers in the North can do to harness science and innovation in support of economic development, and examining the changing role of universities in local political economies.

A policy canon has emerged over recent years which contends that decentralised arrangements are a primary means to address long-standing spatial inequalities. This new conventional wisdom, which frequently portrays cities and metropolitan areas as ‘economic engines’, has gained substantial national and international traction. Often encapsulated by the UK Government’s amorphous Cities and Local Growth agenda, but sometimes positioned as a standalone approach, the Northern Powerhouse is the most high-profile policy episode in a fast-developing story of decentralisation in pursuit of (city-centric) economic growth. This chapter draws upon empirical work to consider whether the current approach to subnational development represents a serious, coherent and sustained attempt to begin to close the economic gap between the North and the South. We examine the evolution of Cities and Local Growth and the Northern Powerhouse in the context of current debates around agglomeration economics, looking specifically at ambiguities of scale around the Northern Powerhouse, the kind of policies emergent at the local level, and local perceptions of central government intentions for subnational development policy.

The devolution deals and Northern Powerhouse agenda were presented by George Osborne as the making of a ‘devolution revolution’ in the North of England. But while the signing of the ‘Devo Manc’ agreement has followed a rather smooth path, the Chancellor’s plan is developing in an uneven way across other parts of the North. In Yorkshire the situation seems to be particularly complex, and local authorities are taking very different approaches to devolution deals—none of which is without controversy. Drawing on the findings of interviews with key stakeholders, this chapter seeks to explore the emerging, complex and uneven governance of devolution deals in Yorkshire, assessing the prospects and challenges of the model of devolution currently on offer, and the implications this could have for the Northern Powerhouse.

The proposal for a Northern Powerhouse and the development of combined authorities are inextricably connected. In both cases, Manchester plays a pivotal role which is not challenged by the May Government’s focus on national rather than simply Northern regeneration. Manchester’s leadership of the combined authorities initiative is based on its institutional maturity and its central role in the promotion of the Independent Economic Review to develop an economic strategy for the Northern Powerhouse. There is evidence that in the existing governance vacuum of the Northern Powerhouse, the leadership of the GMCA will provide a fulcrum, although there remains uncertainty about the long-term sustainability of both combined authorities and the Northern Powerhouse, until both are tested by the decisions to be taken about Northern transport interconnectivity and the impact of the metro-mayoral elections.

Current debates about Northern English cities and their role in national economic strategies cannot be read simply through the lens of contemporary politics. We therefore take the Northern Powerhouse as our starting point to trace a long history of policy and planning discourses about the North of England. We use Russell’s chronology of key historical moments in which Northern English cities hold a particular charge in cultural narratives of the nation to guide our analysis of contemporaneous tensions in debates about planning and governance. A focus on representations about the North of England over the last two centuries reveals four interlocking themes: the role of London in directing debates about the North; a tension between political and spatial approaches to planning; the characterisation of cities in the North as intrinsically problematic; and the continued issue of poverty in these cities.

Within the UK and further afield, the spatial delineation of the ‘city-region’ has seen a renaissance as the de facto spatial political unit of governance driven by economic development. This spatial realignment has been central to the construction of the Northern Powerhouse and has rested alongside other agendas such as devolution, localism and austerity. The chapter presents original case study empirical research from two city-regions (Manchester and Sheffield), looking at the ways in which the city-region is being constructed differently and the different ways in which ‘civil society’ is negotiating its way through this changing governance landscape. The chapter considers the ways in which city-regions are being built and the ways in which this process is being limited or undermined through austerity.

This chapter examines how the Northern Powerhouse agenda will be financed, in part, through the Government’s Business Rate Scheme (BRRS). It begins with a brief summary of local government finance in England, describing the transference from a centralised model to one based on the parallel rubrics of localism and local economic growth. The central findings are structured around three interrelated themes: liability and growth potential, demand divergence, and the nature of local commercial property markets. It concludes that the BRRS has begun to roll out the conditions that will provoke parts of the Northern Powerhouse to enter an era of civic financialisation and entrepreneurial activity. However, asymmetries between commercial property markets, economic conditions and welfare need could result in a defined set of winners and losers—those that can take part in autonomous civic financialisation and those that remain reliant on a system of redistribution and equalisation.

The tax and investment reforms justified through the Northern Powerhouse discourse have set in place the foundations of a new tax settlement in England. Yet, this chapter argues that these reforms will concentrate capital available for reinvestment in those local economies which are already affluent and growing, and in all likelihood further disadvantage Northern regions. The recomposition of the tax system inaugurates a ‘race to the bottom’ between polities who will be encouraged to offer increasingly ‘business friendly’ tax environments. This is being discursively rationalised as part of a strategy to address the UK’s uneven development, but instead is likely to exacerbate regional inequalities by impeding the flow of much-needed capital for investment to the North.