Why the Northern Powerhouse remains crucial for Yorkshire

Critics of the Northern Powerhouse view it as a triumph of rhetoric over substance. While applauding the ambition of growing the North’s economy through infrastructure investment and the devolvement of power, they point to a lack of funding and question the political will to make it happen. When George Osborne left 11 Downing Street earlier this year, they assumed that the plan would be shelved.

It was therefore mildly reassuring to read Theresa May referring to the Northern Powerhouse in an article for the Yorkshire Post. The Prime Minister also said that she would develop a proper industrial strategy for the UK. Whether the Northern Powerhouse remains a standalone project in its own right, or is diluted through being subsumed into the wider industrial strategy remains to be seen. Osborne remains interested and recently announced that he would chair the Northern Powerhouse Partnership, a not-for-profit group to pursue this agenda.

One of the big unknowns is what will happen as a result of the Brexit vote. The EU referendum has thrown everything out of kilter; yet, on the face of it, nothing has really changed and everyone is carrying on as before. British exports have benefitted from the fall in the value of the Pound. Business confidence appears good as the forecast collapse has failed to materialise.

It feels like we are in the midst of a ‘Phony War’. I would draw a parallel with the eight-month period which followed the allies’ declaration of war against Germany in September 1939. It was monumental news, yet the allies didn’t immediately begin action on land as many predicted and - as far as possible given the circumstances - everyone in the UK carried on as best they could.

The Brexit phony war will inevitably end, too. Confidence will start to evaporate. At that point, a major stimulus package will be needed, printing money to pay for a major infrastructure programme, putting people in work and delivering transport improvements. The problems with our ageing roads and rail networks are clear, as is the lack of capacity at key airports. A major programme of investment in the North which tackles these issues could make a dramatic difference.

The proposed industrial strategy is also intriguing. Some see industrial strategies as an outdated concept. Government planning and investment to prioritise growth in specific sectors and in locations away (often away from London and the South East) is good on paper but needs careful planning. What happens when the economy takes a downturn? Businesses which relied on public incentives to invest in, for example, parts of the North might rethink their plans and move to better-connected areas. The answer, again, partly comes back to investment in infrastructure and transport, which is essential to business. Manchester Airport is the third busiest in the UK yet needs more capacity and should be better connected to Lancashire, Yorkshire and further north.

Such issues were discussed at the University of Leeds when the Lord Mayor of London visited in July to learn about the Northern Powerhouse, and the challenges and opportunities for the region. The Chinese Ambassador to the UK also visited the University this summer, and he spoke about opportunities for Chinese investment in the North, and for Northern investment in China.

At these meetings, it was emphasised that we have the essentials for a thriving economy in Yorkshire. We have at least three outstanding universities of Leeds, Sheffield and York, superb innovation and ideas, a highly skilled workforce, and excellent business space. But we need to be better connected. The Northern Powerhouse has always been short on detail, but at least it got us talking about rebalancing the economy, and it remains as needed as it ever was.

Professor Peter Moizer, Executive Dean of Leeds University Business School