The Northern Powerhouse

The Northern Powerhouse is a proposal to boost economic growth in the North of England by the 2010-15 coalition government and 2015-20 Conservative government in the United Kingdom, particularly in the “Core Cities” of Liverpool, Manchester, Leeds and Sheffield. The proposal is based on urban agglomeration and aims to rebalance the UK economy away from London and the South East.

The proposal involves improvement to transport links, investment in science and innovation, and devolution of powers in City Deals. Last month saw the release of a blueprint by the government which details how £13bn will be spent on transport links, helping to create infrastructure for the ‘Powerhouse’, as power is devolved from the south to the north of the UK. The government are planning to connect the north to create the largest financial hub outside of London, allowing businesses to connect more freely, and helping the region to realise its full trading potential.

The Northern Powerhouse is now at a stage of ‘when’ and not ‘if’ the transfer of powers away from Whitehall, to local authorities, according to Phil Jones, who is chairman of CBI’s (Confederation of British Business) Yorkshire and the Humber Regional Council and chief executive of Northern Powergrid. The government will also announce an independent review by leading entrepreneur and businesswoman Michelle Mone OBE, to encourage further business startups and entrepreneurship, encouraging, guiding and supporting business minds in the more deprived areas of the North.

Andy Clarke, CEO of Asda, based in Leeds and employs 70,000 people across the North of England has been appointed as part of a new business advisory group. Mr Clarke said “As the leader of a UK business based in Leeds, I understand that creating the right environment for businesses to invest and expand in the north of England is vital to creating a balanced economy.” “Businesses need the right infrastructure and the confidence that government is supporting, not thwarting, their ambitions. Linking our great cities will help to fuel this engine for growth while creating more jobs and opportunities, and the transport schemes being announced today are welcome progress.”

National business groups have generally been positive, albeit cautious, about the devolution agenda. In principle, the idea of greater powers at the regional and city level to boost local economies has been welcomed, in particular where it involves investment in infrastructure. There is less enthusiasm for devolution of tax-raising powers, however, it is perceived as creating further complication for business. There is also concern about accountability and governance at the sub-national level.


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