The North’s next revolution

The Northern Powerhouse is hampered by austerity and the looming impact of Brexit.

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From the steel that mechanised production to the coal that fed the fires, it was northern blood, sweat, and tears that powered the first industrial revolution. The wealth that it generated, however, went to Whitehall and the privileged few. What benefit the North won was fought for over centuries by the Labour movement, until Margaret Thatcher’s premiership.

Her enforced deindustrialisation was not matched by a countercyclical investment in people, skills or infrastructure, and we suffered the consequences. There was some encouragement given to foreign investment. The North East got Nissan and gave the Japanese car maker its most productive workforce in the world, enabling a regional supply chain on which tens of thousands of jobs depended.

The renaissance of manufacturing in the North is an underappreciated success story which we may only come to recognise when it is too late, as Boris Johnson’s government dismantles the European integrated supply chain on which it depends. This success was limited to a few sectors, such as automotive, and lack of infrastructure prevented the region from benefitting as much as it could have done – workers in Ashington, for example, could not commute easily to Sunderland on public transport.

Then in 2010 the new Conservative-Liberal Democrat coalition abolished the Regional Development Agencies and the limited regional industrial strategy there had been was gone. The Northern Powerhouse was born in 2014, an initiative of former chancellor George Osborne. For a while no one could say what it was – a speech, an initiative, an agenda, a brand? Eventually it became a partnership, lobbying structure, government strategy, series of independent commercial conferences, and a ministerial title, all of which are independent from each other. Now, as Johnson seeks to consolidate himself as “King of the North”, does the Northern Powerhouse have any impact on or meaning for the lives of the people he claims to represent?

Last year the IPPR North think tank concluded that austerity has held the Northern Powerhouse back. As a northern MP and shadow minister for industrial strategy, my assessment was more critical – austerity was the pre-eminent political ideology of the Cameron-Osborne-Clegg government, regional renaissance was not, and the Northern Powerhouse proves it. It is the hallmark of Conservative governments to meet “Grand Challenges” with small solutions whose failure reinforces the belief that governments can do nothing but get out of the way.

The current government’s spending plans show that austerity is far from over, even though Theresa May pronounced it dead in 2018. Funding for North East councils has been slashed in half since 2010. Newcastle Council has to find a further £60m in cuts by 2022. Labour councils in the poorest areas of the
North have faced cuts five times larger per household than in other areas of the country, according to the Centre for Cities think tank. The number of jobs paying less than the living wage rose by 150,000. This against an austerity backdrop that saw £3.6bn removed from the North in public spending cuts, though the South East and the South West between them saw a £4.7bn rise. That money taken out of our economy is the day-to-day cash flow of small businesses and the bus fare to get people to job interviews or college. 

Since 2010 my constituents have not seen a Northern Powerhouse, they have seen a steep rise in food bank usage, poverty, and infrastructure frozen in time. Child poverty has increased in 22 out of the 29 constituencies in the North East since 2016/17.

As major Northern Powerhouse achievements, the IPPR report cited the fact that half the people living in the region are now governed by mayors and that Transport for the North has a £70bn investment blueprint. But to my constituents looking to retrain while juggling two low-paying jobs and no childcare, it is not the structure of local government that matters but its effectiveness in changing her life. It certainly has not improved her public transport options – bus journeys are down by 17 per cent in the North East and late trains on northern franchises have more than doubled over the lifetime of the Northern Powerhouse. At the same time, transport spending has risen by more than twice as much per person in London as in the North. 

All this before the real impact of leaving the European Union hits, although it has chilled investment for three years now. Hitachi recently lost out on the tender for new Tyne and Wear metro trains, in part because its bid was inflated by Brexit risk contingencies. The government’s decision to reject regulatory alignment gives it the “freedom” to abandon the integrated supply chains on which our advanced manufacturing depends. And we still have no concrete commitment to replace the investment that once came from the European Fund for Strategic Investments, consisting of the European Regional Development Fund, European Social Fund, European Agricultural Fund for Rural Development and Horizon 2020.

And then there is the Green Industrial Revolution, which the Convention of the North last year concluded the Northern Powerhouse should be powering. The opportunity to bring green jobs to the region while saving the planet and revitalising our engineering base should be a no-brainer.

The Northern Powerhouse has had six years of marketing strategy. Until it delivers on a green industrial strategy it will be a spectator in our Northern economy.

Chi Onwurah is the Member of Parliament for Newcastle upon Tyne Central

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