THE BLOG

The Northern Powerhouse: Why It's the Real Deal

21/05/2015 22:02 BST | Updated 21/05/2016 10:59 BST

In May 2010, shortly after being appointed Chancellor of the Exchequer, George Osborne delivered his first major post-election speech to the CBI Annual Dinner, in which he set the course for the next five years, a private sector led recovery able to absorb the retrenchment of the state.

Fast forward five years and Osborne delivered a very different speech, in a different city. Using his first major speech following the Conservative election victory on 7 May, Osborne stood in front of an audience in Manchester and spoke about how the Government intends to build a Northern Powerhouse over the course of the new Parliament. The symbolism, as well as the content, is significant.

It is easy to be cynical about the Northern Powerhouse. Critics have already labelled it as tokenism, or an afterthought from the Conservative Party to appease concerns that it does not think beyond its traditional strongholds. But it is more than that. Furthermore, criticising the vision before it has even got off the ground is actually counter-productive in the long run.

On the tokenism charge, such criticism is unfair. Osborne first launched the Northern Powerhouse agenda back in August last year, again with a speech delivered in Manchester. Politicians are often criticised for launching a scheme or initiative only for it to fall by the way side. Osborne hasn't allowed that to happen with the Northern Powerhouse.

During the Autumn Statement last year, Osborne mentioned Manchester a total number of six times during his speech. In contrast, London was mentioned only twice. Osborne followed his Autumn Statement announcement of devolving major new powers to Greater Manchester by reaching an agreement to allow Greater Manchester to keep 100% of the additional growth in local business rates at the Budget in March.

Given that we know the Queen's Speech next week will contain a new City Devolution Bill, this will make it three major political events in a row which have contained initiatives to help develop the idea of the Northern Powerhouse. Even critics of Osborne must now realise he is committed to the idea.

This is not to say Osborne is not thinking about the real politick of his Northern Powerhouse agenda, he clearly is. The picture of the new electoral map on 8 May provided the clearest insight into Osborne's calculation; large waves of blue across England are broken by dense clusters of red across the North. There is little dispute that the Conservative brand still acts as an electoral disadvantage across large areas of Northern England. The Northern Powerhouse is Osborne's attempt at re-branding the party. Given that the Conservatives picked up three seats in Greater Manchester at the general election, it seems it could already be working.

Should Osborne be criticised for his efforts? I don't think so. Growing up in Lancashire I cannot remember a time when the North was the focus of so many positive news stories emanating from Whitehall. If a by-product of the Northern Powerhouse is a more competitive political environment, one where Labour is in genuine competition with the Conservative Party, then in an odd way it could be in Labour's long term interest too.

A lack of competition in any environment can lead to stagnation, or worse, complacency. Large urban areas in the North vote Labour because they have traditionally identified as Labour, in as much a cultural as political way. Identity comes about through a sense of belonging. Sadly for Labour as shown by the recent general election, this sense of belonging has been challenged by the rise of UKIP. Too many traditional Labour voters have felt abandoned by the party, the left behind generation in a global race.

The Northern Powerhouse agenda caught Labour on the back foot. For example, the party opposed greater devolved powers over health spending, before making a u-turn when the local party in Manchester rejected the criticisms levied from head office in London. Labour now faces the prospect of an increasing electoral challenge from the Conservatives as a result of the Northern Powerhouse agenda, and from UKIP as a result of voters who feel Labour no longer understands their concerns.

This is ultimately why people of all political persuasions should support the Northern Powerhouse agenda. The enthusiasm demonstrated for it in places like Manchester means that Labour will have to respond and formulate new ideas to boost economic growth in the North. This new cities agenda offers space for innovative, collaborative and inclusive ideas, changing the way cities are governed and how the people who live in them can benefit as a result. Labour should embrace this challenge.

A healthy debate about how to address the geographic imbalance in Britain's economy, lifting the burden off the shoulders of London, has the potential to be an exciting one over the next five years. There will undoubtedly be issues and implementation problems along the way in creating the Northern Powerhouse, but these should not detract, as doing nothing is simply not an option.