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What is the Northern Powerhouse?

Motorway sign says "The North" Image copyright ALAMY

A minister for the "Northern Powerhouse" has been appointed. But where exactly is this powerhouse of northern England to be based, asks Chris Stokel-Walker.

Nearly a year ago Chancellor George Osborne stood up in Manchester's Museum of Science and Industry and announced the country's need for a "Northern Powerhouse".

This would be an attempt to corral the North's population of 15 million into a collective force that could begin to rival that of London and the South East. It would be "a collection of northern cities sufficiently close to each other that combined they can take on the world", he said.

Since then Northern Powerhouse has entered the political lexicon. Google searches for the term have steadily risen. And Stockton South MP James Wharton is the minister for the Northern Powerhouse. Prime Minister David Cameron's first post-election visit was to Stockton-on-Tees.

Image copyright PA
Image caption The minister for the Northern Powerhouse, James Wharton, in Downing Street

But what exactly is the Northern Powerhouse?

"It's a concept, rather than any actual, physical thing at the moment," explains Ed Cox of think tank IPPR North, who lives and works in Manchester.

The hope is to redress the North-South economic imbalance, and to attract investment into northern cities and towns. While the capital is perceived to be driven by financial services, northern economies boast strong manufacturing, science, technology and service sectors.

The choice of Manchester for the Chancellor's first speech was telling - it has since been the focus of a series of major announcements by the government.

Greater Manchester will be run by an elected mayor from 2017, as part of plans announced in November to devolve fiscal power closer to the point of spending - though not everyone welcomed the plan. The city was given power over its health budget in February.

"The assumed capital of the north is in Manchester," says Herb Kim, founder of the Thinking Digital Conference, who splits his time between Liverpool and Gateshead, and has hosted TEDx conferences in Liverpool, Manchester, Sheffield and Newcastle.

Image copyright AFP

Some people object to placing the locus of the Northern Powerhouse so definitively over Manchester. They believe by focusing the Northern Powerhouse on the north's biggest urban area, the government is simply propagating a smaller-scale version of the current imbalance between the north and London.

"What might be right for Manchester is definitely not right for Yorkshire," says Richard Carter, the leader of Yorkshire First, a political party that campaigned for devolution to Yorkshire in May's general election. "Trying to transplant and create a mini-London in the north is not the answer."

Manchester and Liverpool have an intense rivalry that goes beyond simply the football pitch, while little love is lost between Sunderland and Newcastle.

Some Yorkshire towns and cities, including Hull, York and Sheffield, are often overlooked in favour of Leeds. Corralling these disparate business communities and people together could prove difficult - but it's necessary, believes Tom Forth, an associate at ODILeeds, part of the Open Data Institute.

Image copyright Getty Images
Image caption The Angel of the North, Gateshead

"To win business and public investment, I too often have to go to London," he says. "It's insane. Each city in the North is too small to fight against that. We can only drag some of that investment northwards if we work together.

"If the people of Wigan, Pontefract and County Durham are better off commuting to Manchester, Liverpool, Leeds, and Newcastle then that's what has to happen. So many young people in those places currently leave. A Northern Powerhouse gives them an option to stay."

For Rob Johnson, of Cumbria's Chamber of Commerce, a focus on Manchester is better than a focus on London, and the northern economies can collaborate regardless of distance. "We're looking at world markets here," he says. "When you put it in the context of travelling worldwide, Manchester's not that far away."

While some have eagerly embraced the positive potential of a more powerful north, others have dismissed the phrase as "another gimmick" without substance.

"I'm not sure what 'the North' is," admits Hilton Dawson, leader of the North East Party, which campaigned for a regional parliament in this year's general election. "The only time I've heard people in the South talk about the North is to tell us how grim it is up here."

For the Northern Powerhouse's proponents, the plan is an attempt to make sure the "grim up north" stereotype doesn't ring true.

One measure of regional economic output, gross value added (GVA), shows that per person, London's total output is 2.3 times that of the North East, two times the North West, and 2.1 times that of Yorkshire and the Humber. In one area of inner London, GVA per head of £135,888 is more than 10 times greater than that in the Wirral.

Though the Chancellor fired the gun on the Northern Powerhouse around a year ago, the concept has been the subject of conversation at conferences for longer. The highest-profile public proclamation - a proposal to merge the economies of Liverpool and Manchester - was suggested in February 2014 by Jim O'Neill, a former Goldman Sachs economist and present chairman of the City Growth Commission.

"The cities of the North are individually strong, but collectively not strong enough," the chancellor said last year. "The whole is less than the sum of its parts."

This is unusual. In many European countries, other major cities outside a country's capital have healthy economies and compete well. In England, according to IPPR North, seven out of eight "core cities" outside London have GDP per capita below the national average.

GVA £ millions GVA per head
Inner London 237,356 71,162
Greater Manchester South 38,645 25,950
Leeds 20,362 26,741
Greater Manchester North 17,620 14,375
Tyneside 17,181 20,514
Sheffield 11,199 19,995
Liverpool 10,646 22,613
Bradford 8,735 16,595
Wakefield 6,470 19,623
Kingston upon Hull 4,869 18,902
York 4,754 23,483
  • GVA measures the contribution to the economy of each individual producer, industry or sector in the UK
  • Greater Manchester South includes Manchester, Salford, Stockport, Tameside and Trafford
  • Greater Manchester North includes Bolton, Bury, Oldham, Rochdale, and Wigan
  • Tyneside comprises Newcastle upon Tyne, Gateshead, North Tyneside and South Tyneside local authorities

Source: ONS

Bringing the major northern economies together might help bridge that gap, but it may be difficult for regions, cities and towns with distinct regional identities to band together into one cohesive unit. The distance is physical, as well as cultural.

Traversing the disparate northern economies of the North East, North West and Yorkshire and the Humber is easier said than done. Travelling the 60 miles between Carlisle near the west coast and Newcastle near the east takes one hour 37 minutes on a dilapidated train service.

For that reason, one of the Northern Powerhouse's main planks is an improvement in transport links between the North's major cities, to allow them to compete together as one major economy, rather than competing against one another.

Image copyright © Crown copyright / DfT
Image caption The fastest train journey times between northern cities

"You couldn't possibly say that an exact amount of money could be set aside, but at the moment there is still no actual money set aside for those transport schemes," says Cox. "Some actual cash should be pledged to get those proposals on the road."

Rob Johnson welcomes the Northern Powerhouse. "I think it's absolutely right in that it gives a focus outside the South East." Manufacturing, one of Cumbria's biggest and best industries, could benefit from the planned infrastructure that will help build the Northern Powerhouse.

"I want to stand on my own two feet," says Forth. "The North of England lives off southern money. I believe that the Northern Powerhouse will create growth, will let us stand on our own feet, and ultimately will let us create a better place to live."

Others feel differently. Planning for a Northern Powerhouse is misguided, says Richard Carter. "If you invest in London, you're going to get growth. If you invest in Yorkshire or the North East, you'll get growth," he says.

Image copyright Getty Images
Image caption Manchester: The challenge is to convince that the Northern Powerhouse extends elsewhere

And subtle rivalries will continue to colour proceedings.

"There is a task now for James Wharton, Greg Clark and George Osborne, to be absolutely clear that the Northern Powerhouse does extend to all parts of the north and it isn't just a Manchester thing," explains Ed Cox.

Doing so could decide whether the Northern Powerhouse fulfils its potential, or stalls near the start line.

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