The key test for the new Northern Powerhouse minister is ensuring the north-south divide doesn't widen further - and that the north generates inclusive economic growth, says Ashwin Kumar.
The tour of Liverpool, Manchester and Hull by Andrew Percy, the newly appointed Northern Powerhouse Minister, this week makes one thing clear: the Northern Powerhouse as an idea will outlive its creator, George Osborne. In her first speech as Prime Minister, Theresa May rightly called attention to those parts of Britain left behind. It is welcome that she is following up on that promise with an appointment that draws attention to the gap between north and south.
But as Andrew Percy embarks upon his tour, now is the right time for us to ask: what should be the test of success in his new role? It is obvious that economic activity in London is far higher than elsewhere – for example 60% higher per head than in the South East – the next region in the list. But what is less well known is that this gap has been growing. Between 2010 and 2014, every nation and region of the UK grew slower than London.
New analysis by JRF shows if the South West of England had grown at the same rate as London since 2010, it would have been £1,675 per person better off in 2014. For Northern Ireland, Yorkshire and the Humber, and the North West, the gap was of the order of £1,500 per person. Not only do we have a huge divide between London and the rest of our country, but the gap is growing.
JRF has two proposals to test the success of the Northern Powerhouse:
- Arrest the growth in the divide: ensure that growth in other regions of the UK is equal to or better than that of London. Of course, this won’t mean that we’ll have made any progress towards levelling up, but at least the problem won’t be getting worse. This may sound unambitious, but it leads to a crucial, second test.
- The second is to make sure that people and places outside of our cities feel the benefits of growth. The results from the vote to leave the EU show we must look again at how prosperity is shared within regions. While regions on the whole may have voted to leave the EU, look at the district-level results and it becomes obvious that Bristol, Cardiff, Leeds, Liverpool and Manchester voted in favour of remaining. Regions are not monolithic blocks in which there is one experience. This applies equally within city-regions. The fortunes of Oldham and Ashton-under-Lyne are very different to Didsbury. Yet how good are we at acknowledging these differences? If the variation in the Brexit vote between cities and their hinterlands tells us anything, it is that thinking simply about growth in big cities is not enough.
As JRF’s forthcoming work on disconnected neighbourhoods will show, the challenge for the government and mayors is to ensure the growing Northern Powerhouse cities share the proceeds of economic growth with people and places that for too long have been left behind. Mayors with substantial new powers and business across the north will play their role in helping the Northern Powerhouse thrive too. But if the Minister can pass these two tests, he can help ensure Theresa May’s vision of prosperity reaching all parts of the country becomes a reality.