Tagged: Northern Powerhouse

The Chancellor spoke more about Mars than he did about the North East

George Osborne insisted his plans to boost the North were “at the heart” of his Autumn Statement, as he announced plans for a science centre in Newcastle, a centre for advanced manufacturing in Sedgfield and a “Great Exhibition” to celebrate the great art, culture and design of the North.

But his key statement on the nation’s finances also confirmed that local councils face years of further deep cuts.

And the Chancellor’s big surprise, changes to Stamp Duty leading to lower bills for many buyers, will have limited impact on the North East because low property prices in the region mean many home buyers don’t pay the duty anyway.

The Autumn Statement also confirmed that outdated Pacer trains still in use on some routes in the North East will be replaced.

Mr Osborne told the Commons that his goal was to create “a more balanced national economy” and that meant creating a northern powerhouse “as a complement to the strength of our capital city, where we bring together our great cities of the North.”

He announced £20m for a Ageing Science centre in Newcastle, to “back the brilliant work on ageing being conducted at Newcastle University”.

There was also £28m for a world-class research and development centre, to be called the National Formulation Centre, that will specialise in the development of products such as medicines and chemicals, based in Sedgefield.

And documents published by the Treasury also revealed plans for a Great Exhibition in the north.

But local authorities face at least five more years of further dramatic cuts in spending, the Autumn Statement confirmed. Funding from the Treasury for local services is to be cut by more than a fifth by 2019-20.

The figures are included in forecasts published by the Office for Budget Responsibility, the official Treasury watchdog, as part of the statement. It predicted that the main grant provided to local councils will fall from £60.3bn in 2014-15 to £50.5bn in 2019-20.

Mr Osborne insisted: “I do not hide from the House that in the coming years there are going to have to be very substantial savings in public spending.”

This would mean cuts of £13.6bn in 2015-16, as previously announced, and “two further years where decisions on this scale will be required”.

He added: “We’re going to have to go on controlling spending after those years if we want to have a surplus and keep it.”

Another key announcement was a change to stamp duty, previously charged on homes costing more than £125,000.

Buyers eligible for the tax paid one per cent or more of the purchase price. In future, stamp duty will only be paid on the portion of the price which is above the threshold, leading to significant reductions for some properties.

However, an analysis of house prices shows that average prices in the North East are below the £125,000 threshold anyway, which means many buyers will not be affected as they pay no stamp duty.

Average house prices are £120,545 in Newcastle, £124,338 in North Tyneside, £123,766 in Northumberland, £99,837 in South Tyneside and £85,438 in Sunderland.

Nonetheless, buyers of more expensive homes will make savings as long as the property is worth less than £937,000.

Responding to questions from Conservative MP Guy Opperman, MP for Hexham, and Labour Sedgefield MP Phil Wilson, the Chancellor also said there would be help for airports in the North if they were hit by a potential cut in air passenger duty in Scotland, following the announcement that aviation duty will be devolved to the Scottish government.

Responding to the statement, Newcastle East MP Nick Brown pointed out that the Chancellor had announced Britain was awarded the lead role in the next international effort to explore the planet of Mars, adding:

“The Chancellor spoke more about Mars than he did about the North East of England. His Northern Powerhouse is located over 100 miles to the South of Tyne and Wear.

“His statement contained no commitment to any type of workable regional policy in the context of further Scottish Devolution. This is grotesquely one-sided. Even his stamp duty changes were focussed on London and the South East.”

But Liberal Democrat MP Sir Alan Beith, who represents Berwick, said:

“The Autumn Statement sticks to our strategy to deal with the deficit, enabling us to release funds for key Liberal Democrat priorities that bring fairness and a stronger economy.”

Source –  Newcastle Journal,  03 Dec 2014

George Osborne’s plans for the North East are stuck in the slow lane

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