The State of Britain

Greater Manchester the second region to launch a local industrial strategy, the Northern Powerhouse five years on and the North-South divide likened to the Berlin Wall

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Unemployment in the North West increased by 2,000 to 133,000 between February and April, an uplift of 0.1% to 3.7%. At 2.7% and 5.7% the SW of England and the North East had the lowest and highest unemployment rates in the country. The UK unemployment rate stands at 3.8%.

North West average property prices increased by 0.6% to £161,981 during the month which uplifted the annual growth rate to 2.6%. In comparison, UK prices increased by 0.7% to £228,903 during April which held the annual growth rate at 1.4%.

Greater Manchester has become the second region to agree a local industrial strategy with the government. The 97 page document was designed by the Greater Manchester Combined Authority and Greater Manchester Local Enterprise Partnership in collaboration with businesses and was signed off by Business Secretary, Greg Clark. The strategy is to become the UK’s first city-region to achieve carbon neutral living by 2038 as well as plans to enhance the city-region’s position in manufacturing of advanced materials such as graphene, health innovation, and digital and creative sectors.

As part of the plan, a new biomanufacturing hub has opened at Manchester University to further develop biotechnologies and clean growth. Based at the Manchester Institute of Biotechnology, the new Future Biomanufacturing Research Hub is underpinned by £10m in government investment and will develop new technologies in manufacturing processes of chemicals, using plants, algae, fungi, marine life and micro-organisms. The Institute will collaborate with Imperial College London, the University of Nottingham and the University College London. The Universities of Swansea and Sheffield will also host similar hubs, each also benefiting from £10m from HMG.

Other projects include upgraded facilities for advanced materials development, including £38m for the National Graphene Institute, £25m for the Graphene Engineering Innovation Centre, and £235m of funding for the Sir Henry Royce Institute. There is also £23.8m in digital infrastructure investment which should lever in c£200m from the private sector. As part of the infrastructure plan, £312.5m was flagged through the Industrial Strategy’s Transforming Cities Fund for projects like the Metrolink.

Growth in the North West was 1.0% in the year to March 2019 with the UK growth rate for the same period at 1.5% and London’s growth rate at 2.7%.

Research by the think-tank, the Institute for Public Policy Research North, showed the North West lost most public sector jobs in the last decade with 133,000 less employees. This represented an 18% drop but the North East saw the biggest percentage cut at 24%. With northern regions of the UK more dependent on the public sector than other parts of the UK, the Government’s austerity programme has had more of an impact. The think tank also compared the Northern Powerhouse’s performance over its first five years with the UK average, citing successes in economic growth (10.7 % v 10.6%), productivity (11% less productive v 12%) and employment (6.9% v 6.2%.) However, weekly pay across the north has risen by £12 (2.4%), against a national average increase of £19 (3.5%) in real terms. Housing has remained more affordable than in the south of England. Overall the report provides some evidence that greater devolution is starting to work.

Echoing the North-South divide, during the month 33 newspapers across the north of England including the Manchester Evening News, Liverpool Echo and Lancashire Evening Post, jointly demanded the government accelerates devolution to help deliver economic growth. The campaign, labelled Power up the North, also targeted more funding for Northern Powerhouse Rail.

Also, Northern Powerhouse minister, Jake Berry, had his brief expanded to include the Department for Business, Energy and Industrial Strategy this month. Commenting on the Greater Manchester local industrial strategy he said ‘Our refreshed Northern Powerhouse strategy will complement this approach and other Local Industrial Strategies across the north.’

On this theme, at the UK2070 symposium in Leeds, Lord Bob Kerslake, the former head of the Civil Service, likened the inequality of the North-South divide to Germany at the fall of the Berlin Wall 30 years ago. The UK2070 Commission recommended in its report more effective devolution, more integrated national and sub national transport networks and a 25 year £250bn renewal fund.

The Treasury Committee has launched an inquiry into regional imbalances in the UK economy. The Committee will examine regional imbalances in economic growth and what regional data is available in the UK, how it could be used more effectively in policy development, and whether there should be official regional economic forecasts produced.

On transport, control of Greater Manchester’s bus network could be taken back into public control. In the UK, only in Northern Ireland are bus services state-owned but in London services are more regulated than in the North West. Transport for Greater Manchester (TfGM), like Transport for London, would be given powers to set routes, ticketing, timetables and quality standards. Private bus companies would compete for contracts, given by TfGM, to operate services on specified routes on a franchise basis. TfGM would receive the revenue from tickets and subsidise less busy but necessary routes.

On the trains, a survey by the Northern Powerhouse Partnership (NPP) found companies believed a Crossrail of the North or HS3 would boost productivity and investment. The East/West project running from Hull to Liverpool with a spur from Leeds up to Newcastle would cost £39bn.

On interventions, Tata Chemicals Europe has been given a £4.2m government grant towards a £16.7m project to build the UK’s first major carbon capture plant. The Northwich facility will recycle 40,000 tonnes of waste carbon dioxide when it begins operating in 2021.

A new economic partnership between Barrow, South Lakeland and Lancaster Councils targeting growth around Morecambe Bay has been launched. It is not clear how the new partnership will work with the Cumbria and Lancashire LEPs.