The Northern Powerhouse is a well coined phrase, but what does it actually mean for the firms, businesses and people of the North?
The concept championed by UK Chancellor George Osborne, has steadily gained momentum. The idea is becoming more tangible and there has been some early success. PwC data reveals that Northern areas are already benefitting from falling unemployment rates and above average ratings for housing affordability (the Business Desk). In fact, Northern Powerhouse cities are developing faster than other areas, with Manchester and Liverpool experiencing “good growth”(PWC) and the North East and Leeds City region showing job creation rates of more than double the national rate. However, the aspiration to develop a Northern hub is not new; it was John Prescott who first had a vision for the “Northern Way” back in 2003, whilst in his role as deputy prime minister and of course the North was the beating heart of the industrial revolution.
The Northern Powerhouse means investment; and that is something which is overdue in the North. London benefits from £5,203 more per head on capital investment than the North-East. If the government invested the same proportion of its total research and development budget in the North as most businesses do, it would spend £179 million on the North. Key areas for investment are skills, innovation and infrastructure. The North is disconnected; for example there should currently be 40% more commuters between Leeds and Manchester, given their physical proximity. With the necessary funding, the North can be more connected, efficient, productive and therefore, more successful.
At Squire Patton Boggs we see a unified Northern economy as an opportunity. Having offices in Manchester and Leeds, we are excited about benefiting from better connectivity between our offices and with our clients. We feel that the regions and major cities which make up the North are stronger together. If the North of England were a national economy it would be the tenth largest in the EU. Reduced dependency on London, through the creation of a second strong economy in the country, will lead to a more balanced distribution of business and wealth.
We believe that Northern businesses, authorities and other bodies should collaborate to ensure that the Northern Powerhouse has presence on a national and international stage. Once Northern development is underway the hope is that the area will become a magnet for new business and overseas investment. As an international firm with local connections and expertise in sectors such as construction and projects, manufacturing and the chemical industry, we are in a great position to work with businesses as they grow within the context of the Northern Powerhouse.