THE BLOG

Has the Northern Powerhouse Gone Off Track or Is This Just a Delay on Route?

29/06/2015 16:03 BST | Updated 26/06/2016 10:59 BST

The Conservative Party suffered its first major set-back on Thursday in its promise to create a Northern Powerhouse. Transport Secretary Patrick McLoughlin told MPs in the House of Commons that the government would delay and cut back a number of modernisation projects as part of a planned rail-upgrade, including the electrification of the Manchester-Leeds route.

Critics of the government, along with sceptics of the Northern Powerhouse project, have been quick to criticise. But where does this leave the Northern Powerhouse? Is it as bad as some of the headlines make out?

Boosting transport infrastructure is one of the core aims of the Northern Powerhouse, so Thursday's announcement is a big blow; there is no escaping that fact. In March this year the government published its Northern Transport Strategy, building on initial proposals put forward by Manchester, Liverpool, Leeds, Newcastle and Sheffield. The government committed to "slashing journey times between major northern cities with investment in high speed rail", while introducing Oyster-style smart travel cards across the North.

To date, Chancellor George Osborne, the architect of the Northern Powerhouse, has successfully managed to avoid any major political icebergs in laying out his vision for the North. This is the first real test he has faced. It is noticeable, therefore, that in the immediate fall-out he has remained quiet, leaving McLoughlin to fend off the media and political heat.

As an enthusiast for the Northern Powerhouse I feel ambivalent about the development. On the one hand it is a big set-back, and breaks a run of good news stories for investment in the North. In addition, it's quite hard not to feel disappointed about the announcement when you consider the gulf in infrastructure investment between the North and South. Research published last year by the IPPR revealed that residents of London receive £5,203 more per head on capital investment than people in the North East.

That said, I don't believe this development wholly undermines the Northern Powerhouse. Nor do I believe it calls into question the government's commitment to the project, as Labour MP Graham Stringer suggested yesterday.

As mentioned above, transport is one of the core components of the Northern Powerhouse, but it is not the only one. As part of its landmark devolution settlement, Manchester acquired greater powers over house building, planning, skills and health. There are even suggestions that Manchester's political leaders are looking for a tranche of new powers, previously not on offer from Whitehall. The point is that there are many strings to the Northern Powerhouse bow.

Manchester will act as a test bed for new policy ideas in a range of sectors, aimed at boosting growth and improving the local economy. Good practice should hopefully spread. The unfortunate news around investment in key transport networks is a blow, but northern cities must face this hurdle, not turn away.

A solution driven approach to the problem must be the priority to sustain early momentum around the Northern Powerhouse. Cheap political point scoring is not a way to ensure a brighter future for the North. This requires a level of political maturity that political leaders in Westminster are quick to say local politicians do not have, thereby justifying their past reluctance to trust such people with greater powers.

At the Greater Manchester Chamber of Commerce Annual Business Dinner last night, Clive Memmott, CEO, told those in attendance the city region "has worked its socks off" for over 20 years to state its case for the devolution of power it has now received. As much as Thursday's announcement represents a set-back, there is a determination from those involved locally to make the Northern Powerhouse work.

Commercial Secretary to the Treasury, Lord Jim O'Neill, who is responsible for the Northern Powerhouse, delivered the keynote speech at the annual dinner. Writing in the Manchester Evening News after the event, Lord O'Neill said Manchester had "defied expectations". Those writing off the Northern Powerhouse because of the announcement made on rail investment should keep that point in mind.