Planned infrastructure investment heavily favours London over the North, according to research that calls into question the Government’s commitment to rebalancing the economy.
The analysis by Sheffield Political Economy Research Institute (Speri) suggests that George Osborne’s promises of a northern powerhouse are pie-in-the-sky. The study reveals that London is set to receive more public funding than all the other English regions combined.
Infrastructure investment in London is about to reach £45bn, or £5,305 for each person in the capital, compared with £1,946 per head in the North-west, £851 per head in Yorkshire and Humberside, and £414 per head in the North-east – the lowest of any English region.
The report comes amid growing concern about the Government’s announcement in June that the electrification of the Midland Mainline and Manchester to Leeds railway lines – a key piece of the Northern Powerhouse jigsaw – had been ‘paused’.
The Speri report says: “The bias towards investment in London suggests the Government’s commitment to geographical rebalancing of the UK economy is highly questionable, and will continue to inhibit private sector growth in other regions.”
Gordon Millward, South and East Yorkshire chairman of the Federation of Small Businesses (FSB), said: “There is clearly a major disparity between the UK’s investment plans for the north compared to those for London. Moreover, this report shows the government has no plans to remedy this any time soon.
“Rather, by offering City Deals to northern cities, the Chancellor appears to have taken a ‘divide and conquer’ approach to northern devolution which sidesteps any real commitment to economic rebalancing.
“Until the great cities of the north come together with a concerted plan for the northern regions we will remain at the bottom of the pecking order. The FSB has therefore invited the leaders of all the major councils, Local Enterprise Partnerships and Combined Authorities in Yorkshire to meet with business leaders in October, with the aim of eliciting a common accord for the furtherance of regional investment.
“Yorkshire has a larger population than Scotland and an economy twice size of the Welsh; but the powers of neither.
“Our members expected greater investment and greater powers to influence the destiny of Yorkshire folk; they see genuine devolution of the north as the vital key to achieving this.
“By reneging on rail electrification, Westminster has demonstrated its lack of commitment to a Northern Powerhouse. We therefore call upon the leaders of Yorkshire’s towns and cities to speak with one voice on securing public investment in Yorkshire’s future.”