Coffee House

George Osborne: I want to create a Northern powerhouse

23 June 2014

8:21 AM

23 June 2014

8:21 AM

Ever since George Osborne took on Neil O’Brien as one of his advisers in the Treasury the Chancellor has shown a growing interest in the need to heal the North/South divide and the difference between Planet London and the rest of the UK. Today Osborne will underline that concern about the way the country’s economy is lopsided by announcing his intention for a third high-speed rail link to connect Leeds and Manchester.

At a speech in Manchester, Osborne will say:

‘We need a northern powerhouse too. Not one city, but a collection of northern cities – sufficiently close to each other than combined they can take on the world. Able to provide jobs and opportunities and security to the many, many people who live here, and for whom this is all about.’

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Osborne is already impressed by the strong civic leadership that Manchester shows: I wrote about his admiration for the Labour-run city here. But he clearly wants cities to have even stronger leadership. He told the Today programme that ‘I think there is a strong case for elected mayors in places like Greater Manchester to make sure they have the same powers and the same clout as the Mayor of London does in our capital.’

The problem is, though, that voters may well appreciate the benefits brought by a locally accountable mayor who acts as an advocate for their city, but they don’t support these mayors when asked to through referenda. Only Bristol narrowly supported an elected mayor in its referendum in 2012. Salford, Doncaster, Liverpool and Leicester have also adopted directly-elected mayors. But the appetite for devolution is limited across the country. This is the conundrum that Osborne knows he must address if he wants to create a northern powerhouse.


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Show comments
  • Laur

    Just wants to put in a false stooge like Boris to suppress white working class discontent, elite class London people like Osborne hate our own national people than they do terrorists and foreign criminals because we have more rights and entitlement which they resent and try to suppress. The London Emirate has officially renounced Britishness and wants to declare war on our regions.

  • TruthBeatsLies

    “…a powerhouse linking the four great cities of the north”…? Which “four great cities” I wonder…?

    This whole HS2 and HS3 thing is getting to look remarkably like a Mancunian conspiracy…! The way things are going, Manchester will very soon be at the heart of just about everything that moves in Britain…!! Hardly surprising, is it – when all this springs from repeated pestering by the leader of Manchester city council…?

    The leaders of several other cities may not know it yet, but I suggest they’ve already been duped into complicitly witnessing the birth of Osborne’s “Single Global City” of the North.

    Clearly, Manchester’s ambitions know no bounds… And at this breakneck rate, even London’s days of supremacy look numbered…!!!

  • TruthBeatsLies

    “…a powerhouse linking the four great cities of the north”…? And which “four great cities” can they possibly be – I wonder…?

    This whole HS2 and HS3 thing is getting to look remarkably like a Mancunian conspiracy…! The way things are going, Manchester will very soon be at the very heart of just about everything that moves in Britain…!!

    Hardly surprising, is it, that all this springs from repeated pestering by the leader of Manchester city council…?

    The leaders of several other cities may not know it yet, but I suggest they’re already being duped into complicitly witnessing the birth of a “Single Global City”…! And at this breakneck rate, even London’s days of supremacy are numbered.

    Clearly, Manchester’s ambitions know no bounds…!!!

  • Rhoda Klapp8

    A train will do it, just as it did in the nineteenth century. A couple of dark satanic mills wouldn’t go amiss.

    • Stephen Green

      The ‘satanic mills’ referred to by Blake were Oxford and Cambridge Universities. Will the Universities of Manchester and Leeds do for a start?

  • William Haworth

    The country needs this alternative more than it needs the existing HS2 proposal. This idea creates an alternative to London; HS2 just turns Birmingham into a commuter dormitory for London.

  • Kaine

    There’s an interesting Catch-22 with that sort of reform I suppose. Where there is a local administration that has displayed high levels of competence and co-operation such that Westminster wishes to give it more powers, it’s citizens are going to wonder why they should change the arrangements that have served so well up to now.

    • Stephen Green

      One thing is sure – the salaries for all the council workers will go up by leaps and bounds even if their job responsibilities ( if not the job descriptions) remain the same. Just look what happened in 1974.

  • Mark McIntyre

    NO2 HS3 !

  • Mynydd

    The most important point made by Mr Osborne was that the market is not working, and in respect to the North and the government will intervene by a massive injection of tax payers money. Of course he didn’t say if this would come from borrowing or by welfare cuts. I had to ask myself if it was Mr Osborne or Mr Balls talking?

    • HookesLaw

      The markets to not create transport infrastructure – they never have. Did markets create the M1? markets do not run the country gopvernemnts do. ‘markets’ are just a socialist bogeyman.

      • the viceroy’s gin

        Spoken like a true LibLabCon socialist.

      • Mynydd

        Not correct, free market capitalists built the rail network in the 1800s. and before that they built the canal network.

        • the viceroy’s gin

          …and they invented airplanes and runways and airline terminals, too. Much like they invented steamships and dockworks and shipyards.

          • Alexsandr

            aeroplanes.

      • Alexsandr

        read you history, coleslaw. I think you will find over 90% of the UK rail infrastructure was built by private companies. Including the underground. (The underground was private till 1948, same as the mainline railways.)

  • Mynydd

    Following on from Mr Cameron/Isabel’s comments about Wales, If you want to know how Labour will govern the country just look no further at Manchester’s Labour council. Even Mr Osborne want all councils to be Labour run just like Manchester.

  • you_kid

    Curious how we already have an elected Mayor in Liverpool who is just moaning whilst Manchester doesn’t and he doesn’t.

    • TruthBeatsLies

      Manchester has got it all sewn-up…! Liverpool has been ducked from the beginning – but have you noticed how we now seem to be hearing less and less about Birmingham lately, don’t we…?

      Don’t take my word for it. Read every article, and every comment on HS2 or HS3 – and take a look see which city gets mentioned most often…!

      I rest my case…!!!

  • Jimmy R

    I rather suspect Osborne ought to get out of London a little more often. Lumping the invented county of Greater Manchester into one Council Area was tried forth years ago and failed miserably so why he thinks a dictatorial Mayor will be any more successful the Devil only knows.
    If he thinks Manchester and Liverpool can be persuaded to form one single city he is living in Cloud Cuckoo Land or more likely cloud Loopy Land, so how he thinks that would work with Manchester and Leeds on opposite sides of the Pennine Divide one can only imagine.
    Oh, but guess what. The Liverpool-Leeds High Speed Rail Link just happens to be part of the proposed Pan European High Speed Rail Network, but surely that couldn’t be the real reason behind Osborne’s sudden fixation with creating a single Trans-Pennine city? Naturally, if the people of Britain can be persuaded to swallow the short Trans-Pennine High Speed Rail that can then be used as leverage to force HS2 and other money swallowing Pan-European High Speed Rail Networks for which the EU has already laid down fully detailed specifications.

    • HookesLaw

      You need to study English comprehension a bit more – creating ‘one city’ is not what is proposed.
      What is wrong with co-ordinating rail netwoks in Europe? Where has the EU proposed a high speed link between Manchester and Leeds?
      The so called TEN-T proposals do not include high speed link between Manchester and Leeds. It included electrification of Liverpool Manchester as part of a link with Belfast onward to the south. The work in electrifying and speeding up the Liverpool manchester line is already underway.
      http://www.liverpoolecho.co.uk/news/liverpool-news/improvements-railway-lines-slash-journey-7071274
      The Northern hub of projects is underway (first mooted in 2009) and expected to be complete by 2019.

      • Alexsandr

        because the EU say any new high speed lines have to conform to EU rules on interopwerability. Trouble is the trains for high speed wont fit on the classic infrastructure. Simple matters like in cab signalling and platform heights. Any sensible country would make any new infrastructure compatible with the old.
        The GW electrification is having to be over-engineered to fit some possible maybe euro train some time in the future. They should electrify for the current needs with reasonable future proofing.
        Like the paisley canal electrification. Just electrify as simply and cheaply as you can. no unnecessary bells and whistles.

      • TruthBeatsLies

        Just ask yourself, which city stands to gain most from all this HS2 stuff…? Which one is destined to become the real new Global city…? If you ask me, the whole exercise is a Manchester-led conspiracy.

    • Kaine

      All counties are ‘invented’. If Lancashire didn’t have a cricket team most Mancunians wouldn’t even know it existed.

  • HookesLaw

    I do not see what mayors have got to do with improvong infrastructure in the Norths big cities. Certainly they would benefit from good local government, but whats that got to do with it?

  • swatnan

    What we really need is elected Regional Parliaments. That would go a long way towards addressing the issues of Norrthern decline. And City Mayors working together.

    • HookesLaw

      More parliaments more talking shops? Don’t make me laugh. Local government is too big and bloated as it is. Reform of local government always makes it worse.

      • Kaine

        Except all four areas of the UK where elected regional governments exist rather like them.

    • Mynydd

      There was Regional Development Agency’s until Mr Cameron/Osborne scrapped them.

    • Alexsandr

      another layer of government? No thanks, I have 5 already.

  • MirthaTidville

    So he finally acknowledges the North…..Why? has London actually run out of space or something?

    • telemachus

      He is just down the road in Tatton from Salford Quays, the site of the English Parliament

    • Mynydd

      No its just that Mr Cameron’s Conservative party lost councils, councillors, and MEP’s at the resent elections, so much so, that Mr Osborne has been reduced to praising Manchester’s Labour Council, now who would have thought that.

  • Colin

    Why? You could give everyone north of Doncaster a gift of £15k per year for life and they’d still not vote for you. Give it up. Unless there’s a miracle and you manage to rid “the north” of the dead hand of socialist control, you and the private sector taxpayer are on a hiding to nothing.

    Save our money – spend it by shoring up your core vote.

    • the viceroy’s gin

      That won’t help either. Their core vote is headed over to UKIP now.

  • awilliams66

    If he really wants to create a Northern Powerhouse then why not start moving more Government Deartments out of London, better yet move the Bank of England and the Chancellor of the Exchechers Office to a Northern City such as York.

    • HookesLaw

      Lots of govt departments have been moved. I do not see any sense in moving the bank mof england away from the natiions financial centre.

    • Reconstruct

      Leeds is clearly the place for the Treasury – as hard a city of bean-counters as you’ll find West of Eden.

      • Kaine

        And south of Scotland. 😉

    • Mynydd

      Leave the Bank of England in London, just create Regional Development Banks as per Labour’s long term plans.

      • Reconstruct

        Regional Development Banks are the surest means to encourage corruption known to man. They will inevitably become dominated by, and in hock to, local political bosses. Who will profit mightily.

        In short, a truly dangerous and corrosive idea.

        • Kaine

          How do the German Landersbanken avoid that issue? Or do they not?

          • Reconstruct

            They don’t – they are spectacularly bust. This isn’t a particularly well-kept secret.

        • Inverted Meniscus

          Well it does come from Labour the party of lies, lying and liars.

  • Blindsideflanker

    ‘I think there is a strong case for elected mayors’

    Labour tried to balkanise England by regonalising it, the Cameron Conservatives are trying the same by creating city regions as Mayoral fiefdoms.

    Cameron Conservatives have learnt from Labour, for while Labour tried to get some democratic legitimacy for their break up of England, Cameron’s lot is trying to do it by the back door.

    And with their friends in the media there will be NO debate about the policy at all.

    • HookesLaw

      What is Cameron doing by the back door then. Where is england being broken up. How for instance does HS2 signal any desire to break up England? Its designed to bring it closer together.

      • Blindsideflanker

        Please try reading the post, I said nothing about HS2 I did say something about Cameron seeking to impose City regions.

        • HookesLaw

          Please read my post – which cited an example of bringing the country together rather than regionalising it.
          Where is Cameron trying to impose City Regions? What do you mean by that? We certainly have city unitary authorities but that is not the same as city regions. There seems to me to be certainly an argument for more unitary authorities – but that is not balkanisation it’s local government.
          Where is the tory proposal for regional governments? The closest we came to city regions was Ted Heaths attempts to reorganise local govt. It was the tories themselves who eventually undid that.

          • Dicky14

            He’s pushing forward with the city regions stitch up after breaking the regional development authorities. It’s under Pickles and isn’t totally daft on paper but in practice is just horse trading by council leaders and very few punters even know they exist.

            • HookesLaw

              Its not supra regional govt. Its not breaking up or balkanisation of England.

              • Blindsideflanker

                I beg to differ. From what I have heard Cameron say on this, he sees city regions as an answer to devolution in England, therefore he is using the set up of city regions as a means to deny English people a Parliament.

    • Kaine

      We had strong local government all through English history until they were demolished via successive governments. The centralised British state where everything is decided in Westminster is a thoroughly post-war invention. Heck, less than two hundred years ago we had locally controlled militia!

      • Mynydd

        Mrs Thatcher didn’t like strong local government, they upset her spending plans. For example Mrs Thatcher determine that locally raised property rates were far to high, her solution was the Poll Tax. I wonder what happened to that.

        • Blindsideflanker

          The problem we have with local Government is that it has been put on welfare, where the link between spending and taxation was broken with the block grant.

          In light of mass immigration there are more than a few Labour councillors who regret they don’t have a source of revenue that follows the growth in demand from population increase, like the Community Charge, rather than waiting for the Government statistics to catch up to make adjustments to the block grant.

        • Inverted Meniscus

          The Poll Tax that was Where Labour’s client state of benefit scrounges etc were required to make a contribution to society.

  • JoeDM

    HS3 should have been part of HS2. It makes HS2 look much more viable.

    • HookesLaw

      HS2 already has a proposd link to Leeds as well as Manchester. The govt has already announced months and months ago a £600 million investment in a Northern Hub of railways.
      As ever this post just gives the usual bunch of loony tunes a chance to spout off and show how ignorant they are.

      • Alexsandr

        but you never replied to my poast elsewhere about the mismatch between London, with Crossrail, Thameslink Upgrade, longer trains projects south of London, london overground, all accounting for many many billions. £600 million just sounds like a sop in comparison to me.

    • Blindsideflanker

      What the north of England requires isn’t an elitist HS3, it is a general upgrading of all the rail services.

      • HookesLaw

        And the govt have already committed £600 million to the Northern Hub of railways.
        There is nothing ‘elitist’ about a proposed and so called HS3.
        As ever all we see here is a policy announcement which simply encourages the usual nutjobs to spout their prejudice and show their ignorance. No interest in or recognition of a good policy or even a reasoned discussion about it – just a bunch of saddos with chips on their shoulders.

        • the viceroy’s gin

          It’s amusing to watch you LibLabCon socialist nutters planning even MORE spending madness.

          You’d think you whackjobs would be sated by now… but no. You’re back for even MORE.

          It doesn’t matter to you socialists how much debt is created. It simply doesn’t register with you dolts.

        • Mynydd

          If HS3 was a serious proposal, Mr Osborne would have produced a map showing the proposed route, a construction time table backed up by a spread sheet of estimated costs. Until this happens its all pre-election hot air.

        • Alexsandr

          bot 600 million is woefully inadequate. and the DfT has plans for cutting northern rail services at the next letting of the franchise.

          1 line for trans pennine wont cut it. Think of the major towns you need to connect and try and draw a straight line
          Blackpool, Preston, Burnley, Liverpool, Warrington, Manchester, Rochdale, Tameside, Calder Valley, Huddersfield, Halifax, Bradford, Wakefield, Sheffield, Barnsley,Dewsbury Leeds, York. What we need is a general upgrade and capacity improvement, and speed increases right across the whole network in that area. And decent trains that can accelerate. Its hilly in them there parts so that means most lines need electrification. There is more to the problem than just fixing Leeds-Manchester. And ther4e are 3 transpennine lines no serving different markets. The Manchester-Sheffield line is woeful.

        • andagain

          And the govt have already committed £600 million to the Northern Hub of railways.

          Which is a start. But there are plenty of other rail lines between Manchester, Leeds and Sheffield to electrify, not to mention the M67 (or lack of it), which was abandoned thirty or forty years ago, or the Manchester Northern Relief Road… There are lots of infrastructure projects waiting for money.

          And they won’t get it, because they are not High Speed Rail, and High Speed Rail is fashionable.

      • realfish

        What’s elitist about HS3? If your building a new railway, because the existing Victorian ones are inadequate, you use the latest proven technology, surely?

        • Mynydd

          The latest proven technology is that British by any chance. Or will Mr Cameron/Osborne have another, cap in hand, trip to China for the money and technology.

        • Alexsandr

          the stops are too close to benefit from high speed. You need trains with enough oomph to get to line speed quickly after stops and that means electrification.
          manchester- leeds there are stations at stalybridge, Huddersfield and Dewsbury. without the traffic from those stations there is probably not enough business.

    • awilliams66

      Why wasn’t HS2 part of HS1? Oh yes because only London needed a high speed connection to the Channel tunnel, the rest of the UK is presumably considered irrelevant.

  • Reconstruct

    If Mr Osborne is truly interested in healing the North/South divide, he needs to slap heavy heavy transaction taxes on real estate transactions in London and Southeast, and be quick about it before Mr Carney puts up interest rates for all the country.

    Just the facts dude: ONS’s latest survey of house prices shows London prices 37% above their June 2008 levels, whilst outside London and the Southeast, prices are still below June 2008 levels.

    And yet, on the present course, the whole economy is going to be sacrificed once again on the alter of London’s property prices. And that, of course, will pointlessly, foolishly and irresponsibly exaggerate once again the North/South split.

    So spare me the rubbish about HS3, and get real on London’s property market before it’s too late.

    • HookesLaw

      Interest rates have been 0.5% for years, they are going to rise as the economy grows again, little of it is to do with house prices where only parts of London and the South are affected by the demand you claim.
      If the problem was as you state then rates would have started to rise months ago.

      House prices is just a convenient peg for ignorant journalists to hang their stories on because they cannot think of anything better.

      Meantime ‘HS3’ is not rubbish its a sensible proposal – but even sense is just used as an excuse for thickos to spout out their prejudice. Lets not bother with the actual point of it eh?

      • Reconstruct

        The fact remains that outside the London / Southeast speculative bubble, there are literally no grounds for thinking the UK economy is overheating.

        Inflation is at its lowest since Sept 2009, and will be at the lower end of that Bank’;s 90% confidence range this year; there’s no sign at all of wage inflation (real wages are still falling); there’s no sign of an investment spree (capital stock is probably rising about 1% a year – that’s slower than employment!); there’s no sign of credit growth (bank credit to the private sector shrank 3.5% yoy in April!), and our trade balance is improving not deteriorating.

        And to cap it all, for most of the country, house prices have not recovered from their post-crisis lows.

        So altogether, I’m baffled that we’re being threatened with rising interest rates.

        Perhaps a useful innovation might be to ensure that the monetary policy board includes representatives from the different regions of Britain, as is the practice in the US etc, in order to get a balanced view of what’s actually happening in the economy. At the moment, it seems both the MPC and, of course, the commentary, is hugely and ignorantly dominated by the view from inside the M25. It is, I think, an outrage in the making.

        • HookesLaw

          Interest rates will generally always rise earlier rather than later – this seems wise if it prevents massive jumps when it is already too late. I repeat, if what you say was true then rates would have risen earlier. As it is they are speculating about a rise (from absurdly low levels) in possibly November as oppoesd to February.

          From what I read companies are hoarding a big cash pile and are themselves in the main not pestering banks for loans. So I am not sure how relevant the issue of credit growth is.

          • Reconstruct

            First, nothing I have said can be thought to be in any contentious – these are the only fact that are out there. Second, yes, of course we’d all like interest rate movements to be pre-emptive rather than reactive, but, to emphasise once again, none of the classical signs of incipient overheating are present.

            What has not been understood, but what is absolutely plain from the data, is that in this cycle, employment has turned out to be the leading indicator, not the lagging indicator it usually is. There are multiple reasons why this unlikely development as emerged, including large-scale immigration from the Eurozone, the crushing of pensions, and the ‘reforms’ of the welfare system. They are resulting in a recovery which is noticeably supply-led.

            The proposed interest-rate rises would be appropriate if we had a normal demand-led recovery. But we haven’t.

        • Kaine

          Your words intrigue me and I would like to subscribe to your newsletter.

      • Mynydd

        If HS3 is a sensible proposal, why was it not part of the original HS2 plan? Who is going to pay for it? with interest on my savings account below the rate if inflation I can’t, maybe Mr Cameron/Osborne will once again visit the magic money tree.

        • Inverted Meniscus

          Would that be the same magic money tree that Gotdon Brown used to construct a £168 billion structural deficit?

    • Mynydd

      Mr Carney will only put up the bank rate when Mr Cameron/Osborne give him the go ahead, and that will not be this side of the election. Each time Mr Carney has laid down the conditions, like unemployment below 7%, he has been instructed by Mr Cameron/Osborne to change them. The Bank of England is no longer independent.

      • Reconstruct

        Do you have any evidence to support this charge? If so, please feel free to share it.

        • Inverted Meniscus

          No he is just lying as usual.

      • Inverted Meniscus

        You have absolutely nothing to substantiate that ridiculous assertion. Just another lie from a Labour Troll and stooge.

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