Autumn Statement: Yorkshire "at heart" of new Northern Powerhouse

CHANCELLOR George Osborne used the Autumn Statement to reiterate his plan to create a “northern powerhouse” that has Leeds, Sheffield and Hull at its heart.

His statement made clear that a rebalanced UK economy – which makes full use of HS3 – will thrive through a commitment to business support and investment in science and infrastructure. 

A fundamental part of this will be the creation of a £250m Sir Henry Royce Institute for Advanced Materials Science in Manchester with branches in Leeds and Sheffield as well as Liverpool.

In addition, Mr Osborne announced his intention to create a new “Sovereign Wealth Fund” for the north of England, so that the shale gas resources of the north are used to invest in its future. 

The chancellor referred to the recent devolution deal with Manchester and – while he did not suggest any other deals were in the pipeline – he said: “the door is open to other cities”. 

Mr Osborne said: “It’s our intention to continue rebalancing the economy and ensuring strong regional growth by building a northern powerhouse  with major investment in the roads of northern England, new rail franchises and the Sir Henry Royce Institute for advanced materials research and innovation.

“We also intend to take forward city deals and local growth deals, with support from the Regional Growth Fund.”

The report produced to accompany the Autumn Statement commits the government to:
– £1.1bn investment to improve the conditions of roads in Yorkshire which includes an upgrade all remaining sections of the A1 in Yorkshire to motorway as well as improvements to other trans-Pennine road networks – including the M62, A57, A61 and A628;
– More than £260m to support more than 190 flood defence schemes;
– The extension of the broadband connection voucher scheme to Leeds, Bradford and York.

The report states: “The government is committing to a transformative package of over £6bn of investment in the northern road network.

“Cities including Sheffield, Newcastle, Hull, Sunderland, Leeds, Manchester and Liverpool will benefit, including through a £640m investment in the A1 north and west of Newcastle and a £170 million of improvements to trans‑Pennine roads.

“The government will deliver, through the new franchises and the £1bn
infrastructure investment already underway, new trains, faster journeys, more seats and more services.

“Invitations to tender for the next Northern and Trans-Pennine Express rail
franchises will be published shortly.

“The new franchises, subject to business case development will: deliver at least a 20% increase in capacity to reduce overcrowding; include new rolling
stock fit for the 21st century; encourage bidders to replace the outdated pacer trains with modern, better quality trains; bring all the trains that remain up to modern standards; provide additional services across the network; provide faster services on some of the busiest routes; and deliver substantial upgrades of station facilities across the network.

“International connectivity is also crucial.”

As part of the Autumn Statement, the government is also encouraging West Yorkshire Combined Authority to develop further the plans to improve connectivity to Leeds Bradford International Airport.

Richard Wright, executive director of Sheffield Chamber of Commerce, told TheBusinessDesk.com Yorkshire that it was a “broadly positive” statement for business.

He explained: “In terms of flood defences, the debate in some areas suggests it could cost twice as much for the Thames, for example, as the Government has allocated.

“In Sheffield – albeit on a smaller scheme – the city got a much bigger proportion of the costs and pioneered the BID for a capital project which gives business a real chance of pay back.

“The £1.5bn roads projects in England include proposals in our area for improving the A628 Woodhead Pass and the A57 Mottram bypass as well as a possible tunnel under the Peak National Park – also a positive step forward in linking Sheffield with Manchester.

“However, as our transport forum commented earlier this week, we must not think that creating additional road capacity is the only solution.

“Moving freight off the roads would also be an enormous boost, while a combination of road and rail infrastructure investment will help create the Northern Powerhouses the government has spoken of.

“As a result, we also welcome the announcement that old pacer carriages on Northern Rail and the Trans-Pennine Express will be replaced with new and modern trains.

“Devolution remains a key issue.

“If the Chancellor does grant similar powers to cities including Sheffield to become these northern powerhouses we welcome it – but point out the responsibility that comes with it.

“Can we deliver more by doing it ourselves than we would by central control?

“We need to fully understand as well that we are the net beneficiaries at the moment so the transition will be crucial.”

Andy Tuscher, Yorkshire and Humber region director at EEF, the manufacturers’ organisation, said: “Today’s announcement on devolution of power to Greater Manchester provides a structured blueprint to allow other areas across England to develop their own plans to pursue growth at a local level.

“The plans minimise disruption to the local business environment that other proposals, such as tax raising powers, would bring, but the governance structures would need to be appropriate for each area – one size won’t fit all.

“More broadly, businesses want to see growth not internal displacement hardwired into the devolution debate; this is something which has been lacking in the cacophony of calls for more power to be devolved.

“Local businesses, as employers, must play a vital role in the new structures developed for English devolution if these are to be successful in spurring local growth.” 

Wright also whole-heartedly welcomed the chancellor’s announcement that he intends to extend business rates relief for small businesses.

He added: “We couldn’t agree more about the need to review business rates – this has been needed for a long time and we’ve been saying it for equally as long.

“Money could be collected in a much fairer way and more efficiently spent than it currently is.

“Getting an overall reduction is desirable but the Treasury is already faced with insufficient income and hence a large Public Sector Borrowing Requirement so this may well be a long way off.

“We must also divorce the mentality and culture in the public sector around budgets for services from the need to invest to deliver wealth in the economy. 

“The big issue remains the earnings of individuals and the knock-on effect on business, in particular retailers so it is interesting to note the increase of the personal tax allowance to £10,600 from next April and abolishing National Insurance on young apprentices.

“But in the long-term the only real route out of this is to trade at a surplus with the rest of the world.

“International trade has to be a priority so we are pleased to note the £45m package of support for exporters.” 

Tim Halstead, managing partner at law firm Shulmans, said: “It’s great to see a recognition of the value of Northern cities.

“I do worry though about the implication that we need to “bring together our great cities of the North” to make a difference, when cities such as Leeds and Manchester are already thriving cultural and business centres in their own right.”