An almighty shot has been fired across the bows of Lord O’Neill of Gatley ahead of a major business conference on The Northern Powerhouse (TNP) next week.

Jim O’Neill as he’s better known up here is now a Treasury Minister on the back of writing a highly influential report identifying cities rather than regions as engines of growth.

He’s coming to Manchester next week to give a boost to the two year old project that’s beginning to attract critics. One is Jen Williams, the talented political correspondent of the Manchester Evening News. In a recent article she claimed NTP was just a slogan, if one cared to look at the record rather than the rhetoric of Lord O’Neill and his boss the Chancellor, George Osborne. She cited the flagrantly biased recent award of extra cash to southern councils while northern authorities like Lancashire made massive cuts with talk of the Red Rose council withering altogether. She went on to say that these cuts damaged attempts to solve deep seated social and poverty problems engrained in the North for so long. The NTP’s emphasis on building things was not enough. Finally there was the unbelievable closure of the government’s skills department in Sheffield with the loss of 250 jobs..

The attack clearly went home because Lord O’Neill didn’t wait to get to Manchester to hit back claiming employment was growing faster in the north than elsewhere, power was being devolved through elected mayors, Transport For the North would deliver connectivity improvements and good things could be expected from the Infrastructure Commission shortly.

But the criticism isn’t just from journalists. Jim McMahon was the leader of Oldham Council and tipped to run for elected mayor of Greater Manchester until he unwisely took the Westminster route by becoming MP for Oldham West. He has been closely involved in the devolution negotiations and recently told MPs of his deep unease over TNP. He feels it does not empower communities, a criticism felt by many who say all the deals have been stitched up by councillors and ministers with no public consultation. McMahon called for a national framework for devolution rather than the highly complex and differentiated pattern of powers that have been handed out across the North. The government call it responding to local factors. I call it a dog’s breakfast.

Next week’s UK Northern Powerhouse International conference aims to tell ministers what northern business leaders think has to be done to really rebalance the UK economy. There is a feeling that TNP is not yet scaled up to do this. I would argue this has been the flaw in the strategy of both the Coalition and Conservative governments. They broke up the large development agencies which were in the process of creating the Northern Way to really counter the powerful London economy and we have been struggling ever since with a patchwork of Local Enterprise Partnerships, Combined Authorities and Growth Funds.

There is also the haunting question “will it last?” When George Osborne ceases to be Chancellor will the London centric civil servants start to unravel the project with a weaker politician in charge? Regional policy has been notoriously at the whim of ministers. I asked Manchester Council leader Sir Richard Leese about this at a recent Downtown event. He replied that that was why Manchester was grabbing as much power as it could while the policy is intact. Wise man.




If Merseyside councils outside Liverpool are recognising the power of George Osborne, they won’t be alone. The concerns of Wirral, St Helens, Sefton and other councils that an elected sub regional mayor will mean domination by Liverpool are valid and need to be addressed. But the Chancellor restated in the Summer Budget that the only way to substantial devolution for city regions is by accepting the new role.

The Tories and George Osborne are at the zenith of their power. The Chancellor gave a confident performance as he set out his vision for a higher wage, lower welfare economy. It was more than the annual stock keeping on the country’s economy. It was a statement of the Tory vision, the like of which we have not seen since Chancellor Geoffrey Howe began implementing Mrs Thatcher’s economic architecture in the eighties.

Leaderless Labour see their policy of a living wage shamelessly pillaged by a Tory government that now seems to believe it’s the government’s job to meddle in what private firms pay their employees. The Scottish Nationalists are challenged by Osborne to use their powers instead of bellyaching for more and the Lib Dems, who used to have Danny Alexander at Osborne’s side as Chief Secretary to the Treasury have become an irrelevance.

In these circumstances it is unlikely that concerns about the governance of the Mersey City Region are going to get much of a hearing. The chair of the Combined Authority, Phil Davies, says they will be setting out their demands next week. However Treasury Minister Jim O’Neill tells us the councils have agreed on an elected city region mayor in principle and the talks will be about the timetable and powers.

George Osborne also made clear that similar talks are under way in South and West Yorkshire so there is a real prospect that in 2017 elections will be held for powerful city region mayors across the North.

So it is full steam ahead for the Northern Powerhouse? By no means. A government that reneges on a promise to electrify the Leeds- Manchester rail line can’t be trusted. Liverpool Mayor Joe Anderson complained that the Budget contained no commitment to HS3 connecting Hull to Liverpool, “we could end up with a house without power.” Indeed we could. By their deeds we will know them.


The Chancellor wants to cut drastically the welfare state and abolish tax credits but he was careful to avoid the criticism that his measures were totally unbalanced in favour of the rich. So whilst we had a four year freeze on benefits and a 1% public sector pay rise over the same period we also had measures against Non Doms, tax evaders and wealthy car owners.

But Osborne has not taken a balanced approach to the young. They will be losing housing benefit and tax relief on pensions, not getting the £7.20 living wage, and maintenance grants for the poorest students are being turned into loans. A dangerous gap is opening up between how poor young people and wealthy pensioners are being treated.


Tax credits were allowing some firms that could afford to pay better wages to get state subsidies but the planned increase of the living wage by 10% next year and up to £9 by 2020 is going to put a strain on some smaller businesses that genuinely can’t afford it.

It is a big increase at a time when inflation is at 1%. Politically it is an extraordinary move by a Tory government. In the seventies Harold Wilson’s government loved its Prices and Incomes Board. The state meddled in companies’ affairs for a pastime. Margaret Thatcher wanted the market to decide these things. But George knows best.





It’s the first wholly Tory Queen’s Speech since 1996 and David Cameron is in a hurry to get things done. That’s sensible politics because the grim reaper and rebel backbenchers may erode his fragile majority. Also after the EU referendum, the clamour will rise for him to depart. The downside is that the 20 odd bills are rammed through without proper scrutiny in the first session of the parliament in contrast to the zombie session that is likely in 2019-20. Our poor legislative calendar leads to poor laws.

The programme reflects the Conservatives breaking free from the Lib Dems and business will welcome many of the proposals. The Enterprise Bill promises to cut red tape (where have we heard that before?) and sets up a conciliation service to deal with disputes between firms. The “Tax Lock” Bill has been criticised by former Chancellor Nigel Lawson, and quite right too. Passing a law to stop rises in income tax, VAT and National Insurance is unwisely restrictive. It shows how low political credibility has shrunk and there are ways round the income tax pledge anyway. The bill to let housing association tenants buy their homes will do nothing to deal with the underlying problems of the housing market. There are already signs of overheating in the South East now that the threat of a mansion tax has gone away.

One had hoped that in, what is effectively a second term, the Conservatives would have introduced wide ranging constitutional reform to deal with ending two tier local government and the House of Lords amongst other things. Instead a piecemeal approach is being adopted. Scotland will get devo max whilst Ministers hope to make low key changes to parliamentary standing orders to introduce English votes for English laws. Then we will have a bill to give power over transport, housing, planning and policing to northern cities. And that’s it. The interim elected mayor for Greater Manchester is due to be announced this afternoon. It may be a close vote between current Combined Authority leader Peter Smith and Police Commissioner Tony Lloyd.

Trade Union members are going to have to opt in to contribute to the Labour Party in a bill that also raises the threshold for calling strikes. We now need a bill to allow customers to deduct an amount from the price they are charged by companies that fund the Tory Party.

It is good news that the EU Referendum Bill will define the question to be asked, “Should the UK remain in the EU?” That gives those of us supporting our continued membership the opportunity to be on the bright positive “yes” side whilst the better off out brigade will be associated with the negative “no” proposition.


Manchester University is on a roll under the leadership of Vice Chancellor Nancy Rothwell. The institution is embracing the Northern Powerhouse with all the opportunities for business and the academic world to work together.

Now Lord Peter Mandelson wants to lend his shoulder to the wheel by becoming Chancellor. It is an honorary position but one where he could use his worldwide contacts to benefit the university. In government he had responsibility for higher education policy and was a northern MP.

He obviously brings some political baggage but he would be a high profile successor to Urban Splash boss Tom Bloxham.

Mandelson is opposed in the election by writer and broadcaster Lemn Sissay and the Music Director of the Halle Orchestra Sir Mark Elder.







Now we see more clearly what we are going to have to contend with as we try and bring power to the North.


We knew about Boris land in the South East and London with its power to drain the brightest talent southwards and its vastly disproportionate transport spending.


Now we see the full dimension of the challenge north of the border. The Scottish Government will retain all the income tax raised in Scotland, a share of VAT and power over areas of welfare. Air Passenger Duty will be a devolved power and expect it to be cut. APD is an issue that Manchester and Leeds airports have been campaigning on for years without success. Now they face a competitive disadvantage which could be significant in the border region, particularly Newcastle.


The city regionalists have written to The Times along the lines of what’s right for Scotland is right for the cities. Quite right but even our northern cities are not fit for purpose in the new economic landscape. We need to build on the Rail North and One North concepts, adding functions that apply across the North and make it a democratically elected body so that ordinary people have a say.


Meanwhile, as I write, we await the Combined Authority deals for Leeds and Sheffield promised by Nick Clegg before the Autumn Statement. On Merseyside the problems continue. Phil Davies, the leader of Wirral and the City Region has now stated that the concept of an elected mayor should be put to a referendum. That is unlikely to please Liverpool Mayor Joe Anderson.




Business leaders usually recoil when it is suggested they become involved in politics. But with an elected mayor for Greater Manchester on the horizon, it is interesting to see some of the non political names coming forward. For instance Scott Fletcher of ANS Group, and lively contributor to Downtown events, has not ruled himself out.


Another man who impressed me this week with his wider skills and vision was Juergen Maier, Chief Executive of Siemens UK. He is also Chairman of the North West Business Leadership Team, an organisation that takes a region wide view on the big issues facing business.


It published its business manifesto this week. It calls for action in the areas of skills, transport, world class science and emphasising our energy resources.


Speaking to MPs at Westminster Maier made a number of key points including the fact that there are too many skills initiatives for business to cope with. He said devolution had to operate within a national framework to preserve coherence (that is why a constitutional convention is essential). He also showed how far behind we are in only now arguing for HS3. Essen, Dortmund and Cologne were linked 25 years ago. He also hoped the autumn statement might bring economic catapults in precision medicine and energy to the North West.


The North needs leaders like Juergen Maier.




Next week’s statement by the Chancellor will be important for northern business. With the election looming we can expect further measures in connection with the “northern powerhouse” as George Osborne seeks to confirm his position as a friend of the north.


But we mustn’t be distracted from some hard underlying truths. There are signs that the fragile recovery is stalling, the government has missed its deficit reduction targets by a wide margin and all these city region councils that are going to get devolved powers are facing remorseless cuts in their budgets.