A hundred yards from Newcastle station, restored but not particularly well signposted, stands the shed where George Stephenson built the world’s first commercial train engine, Locomotion No 1, in 1825. From the trains that revolutionised transport to the steel that mechanised production to the coal that fed the fires, the north literally powered the first industrial revolution and the wealth it generated. Two centuries on, and the “northern powerhouse” has just turned five. Not the north as a powerhouse but George Osborne’s 2014 “ambition” for the north.
In its birthday assessment, IPPR North concludes that the northern powerhouse has been held back by austerity. As a northern MP and shadow minister for industrial strategy, my assessment would be more critical – austerity was the pre-eminent political ideology of the Cameron-Osborne-Clegg government, regional renaissance was not, and the northern powerhouse proves that.
I am a member of the all-party parliamentary group for the northern powerhouse, I have attended its events and will continue to contribute constructively in any way I can. I value its ambition, its voice, its research. But without real investment, powers and accountability, it can never be more than a marketing ploy with a little money attached.
That change is needed is not in doubt. The forced deindustrialisation of the north and the financialisation of the economy under Margaret Thatcher shifted capitalism’s focus from things to derivatives of things, and sucked resources, talent, skills and prosperity into the south. The 2010-15 Conservative/Liberal Democrat coalition prioritised cutting public spending in the short term over all other objectives, including regional equality and long-term social cohesion. One of their first acts was to abolish the regional development agencies – economic regional liberalism meant every region fending for itself.
After a few years they realised that even as a fiction, one nation Toryism/Liberalism required some policies, and so we got the northern powerhouse. For a while no one could say what it was – a speech, an initiative, an agenda, a brand? Eventually it became a partnership and a ministerial title. The question now is what it has it done for the north.
The IPPR report cites as major northern powerhouse achievements that half the people living in the north are now governed by mayors and that Transport for the North has a £70bn investment blueprint. But to my constituent 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. The transport blueprint is great, but IPPR’s figures show that transport spending has risen by more than twice as much per person in London as in the north and late trains on northern franchises have more than doubled over the lifetime of the northern powerhouse. Moreover, 200,000 more northern children are living in a poor households, and 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.
When it comes to research and development, so essential for driving a high-skill, high-wage, high-productivity economy, it is the Golden Triangle of London, Cambridge and Oxford that attracts over half of all research funding – more than £17bn. A mere £0.6bn goes to the north east. Cambridge, with a population of 285,000, has as many private R&D jobs as the whole of the north, with a population of 15 million.
It is a characteristic of neoliberal politics to respond to large problems with small solutions. The northern powerhouse is an example of this. The north has the potential to drive a true, green, reindustrialisation that will help create good jobs, save the planet and rebalance our economy to deliver a more united country. But this is not a trivial challenge to be solved with a nice name and a few conferences. This is a structural change to the economy that requires real investment to deliver real return.
That is why Labour’s industrial strategy is built on a £250bn national investment bank, comprised of a network of regional development banks with real decision-making power. We would invest £250bn in our national transformation fund to transform our infrastructure, from better transport links and faster broadband connections to cheaper energy. Our national education service would deliver free education from the cradle to the grave and our innovation nation mission the highest proportion of high-skilled jobs anywhere in the OECD.
George Stephenson focused his energy on bringing together the funding to build Locomotion No 1, the engine, not the brand. George Osborne should have done the same for the northern powerhouse. As he turns his attention to supporting fellow former Bullingdon Club member Boris Johnson for leader of the Conservative party he should remember that real success is measured not in grandiose pronouncements but real lives changed.