Is the Northern Powerhouse Becoming Powerless?

Is the Northern Powerhouse Becoming Powerless?

24th August 2016

Nobody here in the UK could fail to be aware of the North South divide which cuts through the English Midlands and refers to the economic and cultural differences between Southern England and the rest of Great Britain.  Although there’s no exact line and some people claim that this divide does not exist, a report in 2001 revealed that the North East and North West of England, together with Scotland, have poorer levels of health that in the South.  Property prices are higher in the South East, as are average earnings.  

Following the shock Brexit vote in June, we’ve seen British politics in turmoil with Theresa May replacing David Cameron as Prime Minister, followed by a swift Cabinet reshuffle leaving us to deal with new faces, new ideas and new directions.  The new government’s economic approach has been rather unclear and business commentators have been wondering just what the future is likely to bring – will things carry on where David Cameron left off or will things be moving in a new direction.  

One of the overriding questions is “What is happening with the Northern Powerhouse?” the proposal to boost economic growth in the North of England, particularly in the core cities of Manchester, Leeds, Liverpool, Sheffield and Newcastle, in a bid to reposition the UK economy away from London and the South East.   The North East business community, including the thousands of small construction companies, is in a state of flux right now, and many have had to adopt a “wait and see” attitude in the wake of these unprecedented changes.  

Last week saw the Financial Times reporting that Theresa May “pulls the plug” on the Northern Powerhouse, a worrying headline for business and industry in the North.  It seems that the Northern Powerhouse initiative has been demoted under May’s wider industrial strategy vision to become a cog, rather than the overall focus.  However, a couple of weeks ago the new Northern Powerhouse Minister, Andrew Percy and Commercial Secretary to the Treasury, Lord O’Neill toured the major Northern cities, demonstrating the government’s reaffirmation of its commitment to building a Northern Powerhouse.  

Mr. Percy signed six new Humber growth projects and the region has been urging the government to commit to boosting the region but a major sticking point is the lack of progression in regards to local authorities.  A lack of agreement will stifle progress and business leaders are wondering how the North East can play a role in the Powerhouse as it refuses to get on board.  Some wonder whether the new government is actually neglecting the part the North East has to play in the Northern Powerhouse and, until the region confirms devolved local powers it will always be on the edge of the wider initiative.

Businesses in the region, particularly SMEs which form the majority of businesses, will have trouble attracting investment unless the North East can realise its potential.  Here at Safety Fabrications, we’ll be keeping an eye on progress in order to keep our readers fully informed on any new developments that may arise.