Historically speaking, it makes total sense for the South East of England to be far wealthier than the rest of the country. The South East was the closest to the rest of Europe and thus inevitably became the trading hub of the country throughout the Roman period till the late 1960s. Even when Bristol was a major trading hub and the second largest city in the 17th Century, London was so wealthy control of it gave the Parliamentarians a major advantage in the civil war. However, this has left us with an unsustainable economic model in our country.
The South East and London provide a subsidy to the rest of the country which is run at a deficit as high as 22% of income in the North East. Now that we have a global movement of capital and services, we must make an effort to change this inequality within Britain as the model now is a drain on the economy. It makes areas outside London essentially small groups of people stuck on low income service jobs subsidised by the economic giant of London. George Osborne’s northern powerhouse is a necessary step building on good work done by New Labour and the coalition to address this inequality and create a far healthier economic structure.
There has been some progress already to addressing this; KPMG has offices in Birmingham, EY has them across the country, some factories have been set up in the North like Nissan’s but this is not enough. We need a modern infrastructure able to facilitate the movement of people and capital which promotes growth; there is an untapped resource of 15 million people that if used “combined… can take on the world” as Osborne said.
HS2 is an important development to help ensure the ability of people to move into the North, devolving powers and creating Mayors in the North is important in meaning the North can develop its own policies and agenda and build away from a London centred policy; Manchester now has control of its own health budget. Promoting growth, investment and the spreading of wealth and industry is only going to help the region and the country.
If this plan can work, we will be looking at a country where the majority oprofits rather than is subsidised, where there will be more internal competition leading to better business and better growth and where no longer will the North be viewed as a place of poverty and illiteracy but a place of economic strength with its own identity and landmarks. Labour may have devolved political power but it is Osborne who is really trying to devolve business and growth.
On all sides, we should be at least embracing the idea of the northern powerhouse for we have for too long merely redistributed rather than empowered and tampered rather than instigate meaningful change. Let the North be unleashed.