Economist article5 Apr 2019 13:15
The “Northern Powerhouse” may not be as dead as it looks
George Osborne’s pet project has languished but may soon get a reboot
Two years ago, Doves Nest Farm, with its drystone walls and views of heather-covered hills, was as idyllic as any in the North York Moors National Park. Now its fields are the site of something less pretty: the first deep mine to be sunk in Britain since the 1970s. A company, Sirius Minerals, is about to dig up the area’s vast underground stash of polyhalite, an ingredient in fertiliser. So as not to wreck the scenery it is constructing a tunnel to carry the stuff all the way (37km, or 23 miles) to Teesside. The cost will be £3.2bn ($4.2bn), one of the north’s biggest-ever private-sector investments. Sirius says it will deliver billions of pounds of exports and good jobs for the next half-century.
But a big setback came in January when the Treasury’s Infrastructure and Projects Authority reduced a £1.5bn loan guarantee it had extended to Sirius by £600m, to minimise risk to taxpayers. The company will probably still be able to raise the money it needs but the reduction has meant some uncertainty for a landmark project.
It was the latest blow for the “Northern Powerhouse”, a concept launched in 2014 by George Osborne, the then chancellor, and Jim O’Neill, an economist. The idea was to boost northern cities and rebalance the economy from perceived overdependence on the south and the City of London. Upgrading rail, devolving power to new regional mayoralties and attracting Chinese cash were important elements of the plan.
Before long, however, the Northern Powerhouse suffered a power cut. Following the Brexit referendum of 2016 Mr Osborne left government. Theresa May, the prime minister, showed her disdain for his pet project by appointing a new minister for the Northern Powerhouse, Andrew Percy, but banning him from using the phrase, even on trips to the north. Meanwhile the government started promoting the “Midlands Engine”, a rival regional plan. Brexit then drained attention in Westminster from either scheme.
Nowadays, complains Andy Burnham, the Labour mayor of Greater Manchester, China’s government talks more about the Northern Powerhouse than Britain’s does. China sees northern England as part of its Belt and Road Initiative (bri), a series of infrastructure investments across Eurasia, the Middle East and Africa. Its president, Xi Jinping, has talked about the Northern Powerhouse in descriptions of the bri.
Neglect by central government has not quite finished off the Northern Powerhouse, however. Northerners, for their part, quickly bought into the concept: by 2015 over half of them knew the term, according to ippr North, a think-tank. The scheme’s main achievements are devolution deals to give power to new metro mayors in Greater Manchester, Liverpool city-region, Sheffield city-region and Tees Valley, with more to come; and the establishment of Transport for the North (tfn), a statutory transport
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