Misplaced fears of a two-tier North

The ‘future of the North’ has risen to the top of the political agenda in 2014, with each of the major parties engaging in a race to the top on regional and cities policy, re-balancing, and creating a ‘powerhouse economy’ outside of the Greater South East.

No doubt fuelled by the prospects of a General Election in 2015 and the fallout from the Scottish Independence Referendum, the Coalition parties have sought to seize the initiative from Labour on devolution and investment in the North in what remains of this Parliament, with the Chancellor’s Autumn Statement showcasing a new devolution deal for Manchester, and a raft of other infrastructure funding commitments.

And yet at a number of events I have spoken at or attended in recent weeks, participants have expressed strong concerns that the current approach to boosting the North through concentrating on its best-performing cities risks leaving too much of the region behind.

The theory goes that by pursuing a programme of “asymmetrical devolution” focused on major urban areas – and Manchester in particular – other Northern towns, smaller cities and rural areas will not benefit from additional investment or government support, but will still face significant reductions in spending on key public services, and could therefore risk declining further in the years ahead. So while Government may succeed in creating its ‘Northern Powerhouse’, the majority of the region will be left out in the cold.

The preferencing of some places over others clearly does present challenges to politicians and policy-makers nervous of being seen to create a “postcode lottery”, and it is perhaps understandable that those living in parts of the North not currently singled out for investment or devolution are sceptical that they will benefit in the long-run.

But in this period of constrained public spending, and when the benefits of strong city economies are so well understood, there is a compelling case for prioritising decentralisation and investment where it is most likely to have the biggest impact on creating jobs and leveraging private sector investment in the North, both now and in the years ahead – in its cities.

All over the world, economic activity is clustering in cities, as businesses find it increasingly beneficial to locate in areas where they can access the critical mass of consumers, skilled labour and ideas they need to thrive. Cities are increasingly spearheading regional and national growth, and yet too many of ours are lagging behind the national average – let alone the strongest global performers – on key economic indicators.

We all share an interest in the prosperity of our cities; as London has clearly shown, the benefits of growing strong city economies are not be confined to the cities themselves. The halo of the London economy stretches far beyond the GLA boundary, providing jobs for surrounding rural areas in Surrey, Hertfordshire and others, as well as having a positive impact on business investment in surrounding cities like Reading, Milton Keynes and Cambridge.

These kinds of economic links can also already be observed in the North: 15 per cent of those working in Greater Manchester today actually live outside of the city-region, and proposed investment in strengthening its transport connections with Leeds and other cities could strengthen and expand the commuting pool even further.

This is why we should be much less concerned about the creation of a ‘two-tier North’, than the risk that national politicians fail to hold their nerve, and give in to political pressures to offer “something for everyone”. Doing so would threaten diluting the impact of growth policies in the North by providing support and investment packages that are so small and generic, that instead of benefiting everywhere, they actually benefit nowhere.

The truth is that regions, sub-regions and cities have always, and will always, grow and contract at different paces. The lesson of London’s growth over the last 25 years is surely that prioritising scarce public investment in a single geographic area can have a substantial economic impact – so why not apply this logic to those places with strong growth potential in the North? If we are to grow the region’s economy, then we must first make the most of its economic strengths, and that means making the most of Northern cities.

Ben Harrison is Director of Partnerships at Centre for Cities