The full challenge facing George Osborne’s plan to create a “Northern Powerhouse” is today highlighted by a former global banker who points to years of transport failures in the region.
Jim O’Neill, former chairman of asset management at Goldman Sachs, has published a report from his City Growth Commission in which he describes how the UK economy is being held back as officials in Whitehall keep control of local transport and infrastructure decisions.
The call to hand the North a bigger say over its own future comes weeks after the Chancellor said he wants to rebalance the economy away from the South East, with a major new high speed rail network linking up the likes of Manchester and Leeds among the projects proposed.
But without handing city leaders a say over improving outdated infrastructure, the commission says, the Chancellor faces a tough task in matching that ambition with real change.
In his report Mr O’Neill warned that meeting Mr Osborne’s ambition would require “significant change” from Government.
The report, based on hearings in Newcastle and other cities, says Metropolitan areas like Tyne and Wear must be given a bigger say over their own future. The commission found that the UK loses billions of pounds every year as a result of poor, overly-centralised decision-making that fails to encourage greater links between cities.
Plans for a new high speed rail network must be improved so links from the North are prioritised, the commission said.
Talking of the need to strengthen Northern “metro” areas, Mr O’Neil said: “We recommend the Government considers making two bold decisions regarding its infrastructure policy. The first is to provide metros with a strong, powerful voice that can influence and guide decision making at a national level.
“For too long, our cities have not had a seat at the table, and this has been to the detriment of Northern metros in particular, as well as the economic growth of the UK economy as a whole.
“The second is to place connectivity between metros at the heart of any infrastructure investment, in particular via multiple transport links between cities and better broadband technology.
“Whilst the UK is starting to move in the right direction – with the creation of Infrastructure UK and the Chancellor’s recent proposal for a connected ‘Northern Powerhouse’ – there is still some way to go.”
Those transport concerns were last night backed by Gateshead MP Ian Mearns, vice-chair of the All Parliamentary Rail in the North group.
He said: “The difference in spending on transport between London and ourselves is about 520 to one, and even just changing the funding system now will not address the historic deficit we face. Time and time again we have lost out, and will continue to do so while the Government makes spending decisions based on congestion rather than on helping us grow.”
The lack of a Northern advocate in Government has again been highlighted after yesterday’s Government reshuffle.
Former regional minister Nick Brown warned: “The position of the English regions is weaker now than before the reshuffle. The surprise announcement of William Hague and the dilution of Greg Clark’s City Minister responsibilities leaves the English regions even less represented than they were before. This is a Home Counties reshuffle.”
The Government recently went some way to addressing the transport issues facing the region with its local growth fund announcement. With local contributions, the Government decision paved the way for £95m of infrastructure improvements. A “Provisional Allocation” of £78.7m was also announced for a number of further schemes due to start in 2016.
Ministers have also recently signed off on a new North East super council, the Combined Authority, which they say will be used to devolve new powers down to city regions.
Source – Newcastle Journal, 16 July 2014
Families will be forced to pay out a staggering £250bn to modernise Britain’s creaking water, gas, electricity and rail industries, a Teesside MP has warned.
Most of the massive cost of replacing the country’s ageing infrastructure is being added to household bills.
It means energy bills, which have already shot up, are set to increase by a fifth by 2030, on top of the effects of inflation.
Redcar MP Ian Swales was part of a Commons inquiry which looked at the way improvements to the nation’s utilities and transport networks were funded.
He warned that Government red tape was making it difficult for new businesses such as energy companies to get started – making it easier for the existing energy giants to charge sky high prices.
Speaking as MPs quizzed Government officials, he said: “Based on all the investors to whom I have talked – none of whom are the big six, which is an important point – we want to try to break the pseudo-monopolies.
“If we have people who want to invest, surely we should be making it as easy as possible for them.”
The so-called big six energy firms include E.On, EDF, SSE, Scottish Power, British Gas and Npower.
But Government rules made it almost impossible for new firms to enter the market, he said.
He urged civil servants in the Department of Energy and Climate Change to take action, telling one official: “In my constituency there are four potential power station investments right now, three of which are for fossil fuels.
“If you talk to all those investors, they will tell you that they feel like giving up because the system is almost impossible to deal with.”
The MP is one of the authors of a report which warns the UK is set to spend more than £375bn to replace infrastructure.
This includes replace assets such as rail track or waterworks which are simply too old; replace assets which don’t comply with EU regulation; introducing new facilities which cause less pollution, and catering for a growing population.
Around two-thirds of this will be paid for by private companies – but that really means consumers will pay through higher utility bills and rail fares, MPs said.
They warned: “Energy and water bills have risen considerably faster than incomes in recent years, and high levels of new investment in infrastructure mean that bills and charges are likely to continue to rise significantly.”
The Government should act by ensuring there is real competition, which would encourage companies to keep prices down, and in some cases by simply setting the prices consumers can be charged, MPs said.
Source – Sunday Sun, 06 July 2014
It’s the sort of headline you could take in several contrary ways…
The Lost Generation: Conservatives say their plan is working
… but in this case its a mission statement from Rebecca Harris, the Conservative party vice chairman for young people’s issues, so we may suspect it’s not humour or irony….
Even before Labour’s great recession hit in 2008 things were tough for young people. During the 13 years of Labour Government half a million people lost their jobs and youth unemployment rose by 45%. It’s a longstanding problem.
This isn’t good enough.
> You noticed ?
Jobs really do matter. Giving people the feeling of a wage in their pocket every month is the best way to help people plan for a secure future.
> Really ?
That’s why we have a long term plan to get the economy of Britain, and the North East, working again.
> Long term = “we may get around to the North East eventually. Say, 2050 ? But you’ll have to vote Tory first, of course.”
We are creating more jobs by backing small business and enterprise with better infrastructure and lower jobs taxes. Already there are 13,000 more businesses in the North East than there were three years ago.
> Yeah ? But what are they ? One-person self-employed start-ups ? What’s more noticable is that are far more empty shops, offices and factory units than there were three years ago.
We’ve cut Labour’s jobs taxes to make it easier for those businesses to create jobs.
> And added a whole raft of new problems to make creating jobs look like too much hassle… and that’s before Universal Credit lurches onto the scene (if its wheels dont fall off first…)
That means more jobs for young people, as well as greater prosperity for the entire region.
> Why does it mean that ? Proof ?
Once young people find work they now get to keep more of their income as well. By raising the level at which people start to pay income tax we’ve taken 2.4m of the lowest earners out of tax altogether.
> No-ne is ever “out of tax” – there’s VAT for a start. And you’ve made them accountable for Council Tax and, in some cases, the Bedroom Tax too. Give with one hand, grab back with the other.
Ed Miliband used to claim that a million jobs would be lost under this Government – but in fact the private sector has created 1.6m new jobs. Our plan is working.
We’re also making reforms to schooling to increase young people’s skills. Under Labour, rampant grade inflation meant their GCSEs and A Levels did little to help them get a job.
> More GCSEs and A Levels do not equal an increase in skills. They don’t create jobs either.
We’re reforming exams so that young people gain an education that is actually worth something to employers.
> Er, dont you mean: “so that young people gain an education that is actually worth something to them“ ? No, you really dont, do you ?
At the same time we’ve created 1.5m new apprenticeships so that people can learn while they work.
By giving young people decent skills we can help them get jobs, and get jobs that pay well. It’s a long term plan for the future.
> A very, very long term plan. About 2050 ?
The signs are encouraging. There are 7,500 more young people off Job Seekers Allowance in the North East than a year ago. We’re committed to getting even more get off benefits and on to that important first step of adult life.
> Off JSA does not necesserily equal someone getting a job, as we all know too well.
The economic damage Labour did to the economy caused unforgivable harm to the life chances of young people. Even now they offer only short term gimmicks that would do more harm than good. Young people deserve better than that.
> Maybe if that old hag Thatcher hadn’t… oh, I see – you’re revising history here, it was Labour who killed off what was left of industry. Nothing to do with Thatcher at all.
Our long term economic plan is working and young people are working for a secure future once again. Let’s stick to the plan.
> I could suggest somewhere you might stick it…
Interestingly, the original article was illustrated with a photo of Smilin’ Dave Camoron getting down with a couple of apprentices in a factory… in, er, Oxford. Probably as far north as a Tory likes to go…
Source – Newcastle Journal 01 Feb 2014