Osborne’s Northern Powerhouse risks being all fur coat

6th October, 2015 4:20 pm

George Osborne Budget Commons

It’s a movement that shows no sign of slowing down. As cities and counties line up for devolution, the Chancellor is casting himself in the role of Commander in Chief.

It took the Labour Party too long to recognise that after years of debate about Scottish independence and Welsh devolved government those of us who remain might rightly ask as well, what about us?

Whatever your political view it is hard not to credit Mr Osborne and the many local leaders who have helped frame the debate about what an empowered England might look like. But the consequence is that the Northern Powerhouse brand is quickly becoming toxic: seen by many as a vehicle to simply secure Mr Osborne’s selection as the next Tory leader; the man who can reach parts of the UK which evade other candidates.

Devolution is only genuine if powers and freedoms are handed down – and if funding is sufficient to readdress the economic and social imbalances which exist. It doesn’t take much scrutiny to see that devolution as it stands goes little further than the Chancellor giving away other people’s power; namely his fellow cabinet colleagues.

The consequences are clear. Firstly, some are kicking back – most noticeably the housing minister, who wants a firm hand to be kept on the Greater Manchester Land Commission.

Let’s face facts. It’s much easier to give away that which doesn’t affect your own power. If anything the power is already shifting from No. 10 to No. 11 with the Chancellor effectively becoming the domestic PM.

But the real test of government letting go is whether we will see proper fiscal devolution. I fully expect more money will follow any devolution deals announced this week, but that isn’t devolved power. It simply makes the Treasury into a National Commissioning Unit that creates programmes of funding, bound by tight rules and obligations.

Getting local areas to deliver the Work Programme for instance isn’t devolution, it’s just recommissioning. Taking over £78m from stamp duty income in Greater Manchester and giving back just £30m to boost housing development isn’t really devolution either.

The freedom to generate and vary taxation across the board – alongside freedom to then choose the best way to spend the money on public services and economic growth – is the very least we should be demanding as a test to the Northern Powerhouse.

If the Chancellor is preparing his plan to secure the Tory leadership and eventually occupy No. 10 he needs to fully consider the underfunded and demoralised state of public services which will support the weight of devolution.

In my own town of Oldham we’d call this all fur coat so far. Mr Osborne may need one of those when he visits Manchester because his rhetoric could get a frosty reception in the heart of the Northern Powerhouse unless he delivers the goods.

Cllr Jim McMahon is leader of Oldham Council

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