Chancellor on the long term economic plan for the north-west
Chancellor talks through the six-point long term economic plan for the north-west.
As the Prime Minister says, the economy of the north-west is growing, creating jobs, and doing so more quickly than other parts of the country.
That has not, frankly, been the case over much of the last thirty or forty years, as our economy has become more unbalanced, and the gap between the economic performance of the north of England has lagged behind that of London and the south.
Our message today is that is not inevitable, it is not something we should accept; it is instead something we have in our power to overcome.
Rebalancing our national economy, ensuring that the economic future of the north is as bright, if not brighter, than other parts of the UK, is the ambition we should set ourselves.
We achieve that not by pulling down our capital city, or diminishing its success. Having one of the greatest global cities on earth, located two hundred miles to our south, should be an asset, not a weakness.
No, we achieve this rebalancing of our economy by pursuing a clear, consistent and sustained plan to bring up the whole of the north of England, including the north-west. Creating a northern powerhouse of jobs, investment, prosperity and bright futures: that is the objective of our long term economic plan for the north-west that we set today.
The Prime Minister has set out the key points of the plan. Let me take you through each of the components of that plan in more detail.
First, we should explicitly commit ourselves to increasing the long term growth rate of the north-west to at least the expected growth rate of the whole UK.
Over the last four decades the growth rate of the north-west has lagged behind the UK as a whole.
We are determined to change that.
Previous governments of all colours have tried, but failed.
I believe that’s because their plans essentially revolved around scattered individual capital investments in individual places, married to some relocation of some government jobs.
What has been lacking is a broader, more coherent approach that includes the whole of the north of England, and is rooted in a successful, dynamic private sector, flourishing alongside our public sector.
That is what the commitment to a northern powerhouse involves.
It is based on the solid economic theory that the city areas of the north are collectively stronger than their individual parts, and that connected together they can rival any global city.
This is the thinking of Jim O’Neill’s City Growth Commission. It is the thinking behind the collaboration for the local authorities here that produced the One North report.
It is building this northern powerhouse that provides the means of raising the long term growth rate of the north-west.
If we achieve that, we can add over £18 billion in real terms to the economy of the north-west by 2030.
That means a real terms increase in average incomes here of £2,000.
The second part of our long term economic plan for the north-west is to raise the employment rate to the UK average. That will ensure over 100,000 more jobs are created by backing business growth, business investment and business start-ups.
I want to see nothing less than full employment in the north.
The north-west has particular strength in aerospace, creative industries, pharmaceuticals, finance and chemicals, and – of course – high value manufacturing.
We should unashamedly say: these are our strengths; we back them.
We’ve got enterprise zones thriving at Manchester Airport, at the innovation hub in Daresbury, at the BAE site in Lancashire, in Wirral Waters.
We are going to look at expanding these zones further.
We’re going to back our start-ups and the emerging tech sector – such as here in this new St. John’s Quarter in Manchester.
We’ve got more new apprentices here in the north-west than anywhere else in the country – so we’re going to expand apprenticeships further.
We can’t have a strong north-west economy without strong north-west businesses. That is central to our plan.
How will we expand these businesses, and attract new investment?
That’s where the third part of our plan comes in.
We will deliver the largest, most sustained, investment in transport infrastructure the north-west has ever seen.
This is because better transport connections, within cities, between cities, and across our counties will help bring about that economic connectivity that lies at the heart of the northern powerhouse concept.
This is not some vague or general promise.
I have committed specific sums to a whole range of specific road and rail investment.
The Northern Hub improvements to the region’s railways – you can see the development of Manchester Victoria Station taking place.
The Mersey Gateway Bridge, under construction now.
The A556 in Cheshire, happening.
The Metrolink to Trafford, now agreed.
The new commitments to road links to the Port of Liverpool and Ellesmere Port.
The work on the future of the north Pennine roads, A66 and A69.
The new train services from Carlisle to Lancaster.
We’re committing £4.5 billion to new trains, new road improvements and new urban transport here in the north-west over the next few years.
Let’s not put this plan at risk in the coming months – let’s make sure we have the economy and the public finances to afford it, which we do with our national economic plan.
And then let’s make the really big, long-term investments that will transform the economic geography of the north-west – and the whole of the north.
HS2 is the first new railway that will be built north of London for 120 years.
It brings jobs, it brings higher speeds, more capacity, it could make Crewe a connection capital, it will help regenerate Manchester and Liverpool…. Above all it will help transform the economic geography of the UK, linking up north and south in a way no project has achieved for decades.
The civic leaders of the north and we in Downing Street have, together, seen off short-sighted efforts to kill off HS2. Now let us make this economic game changing north-west railway a reality.
And let’s fill in the missing link to the project – the route across the north, from Liverpool to Manchester, to Leeds, to Hull, by developing the idea of HS3.
By March we will have the next stage report on that vital investment.
And today we take further the work on improving the road links across the north. I have asked the Chairman of the Highways Agency, Colin Matthews, to look at the technical feasibility of building a road tunnel, or tunnels, across the Pennines and Peak District.
It is the sort of project underway in other countries thinking long term about their future prosperity and jobs, and we raise our ambition here in the north to achieve the same.
Transport is a central part of our plan – so too is science. It has always been part of the heritage of the north-west. Now it must become integral to its future.
So the further part of our long term plan is to make the north-west a global centre of outstanding scientific innovation, with a particular focus on material science, biomedicine, supercomputing and energy.
That means major investments in the excellent universities and NHS teaching hospitals of the region – and making sure its energy resources are used to the benefit of local people.
Four years ago I remember, here in this city, receiving calls from Howard Bernstein and Nancy Rothwell, telling me about the brilliant scientists who had won a Nobel Prize for their graphene discoveries and asking me to step in and help Manchester fend off foreign competition – so what was discovered in this city could be developed in this city, and create jobs in this city.
Now, four years on, the new National Graphene Centre will open here later this year. And graphene is already attracting inward investment from Abu Dhabi.
Now we go further on science. In the last few weeks we have made major commitments to a quarter of a billion pound Sir Henry Royce Institute for Advanced Materials.
We’ve committed over £100 million to super-computing and big data at Daresbury.
We’re promoting bioscience in Alderley Park.
We’re planning billions of pounds of investment in a new generation of nuclear power in Cumbria.
We’re going to make sure the shale gas resources of Lancashire and the north benefit local people, with a new college in Blackpool and a new wealth fund so future revenues made here, stay here.
One of the greatest resources of the north is the human resources in our great NHS teaching hospitals.
We should make the best of the very best – so we create jobs and better healthcare for decades to come.
I’m delighted that Professor Ian Greer, Chair of the Northern Health Science Alliance, has agreed to work with us to develop major new investment in health research in the north through the ‘Health North’ initiative.
Great transport and science and healthcare will attract businesses. We want the people who work in those businesses, and their families, to have a great quality of life too.
Look at the economic centres of the world. They have great culture, great sport, good housing and good schools too.
The north-west has all these potential ingredients – and we can make them better still.
So the fifth part of our long term economic plan is to raise the quality of life in the north-west. That means supporting its great cultural and sporting strengths, and improving the rural environment too.
That better quality of life is being delivered. Whether it is supporting the future of Liverpool’s International Festival of Business, or regenerating Barrow’s waterfront, or the new money we’re putting into local football facilities, or the fantastic new theatre and exhibition space to be built right here on this site. I’ve committed almost £80million on the wonderful project, and what else could it be called than “The Factory”.
But today we raise our sights still further.
There are today over 100,000 more children in good or outstanding schools in the north-west than five years ago. But we can do better.
If we increase education performance here to the very best in the country, we’d have 75,000 more children in outstanding schools. Today we commit to achieve that with new free schools and new academies, and more rebuilt schools.
And we will improve housing too. We’ll see 25,000 homes built over the next two years and today we shortlist three sites in the north-west – in Preston, the Wirral and Pennine Lancashire, for new national Housing Zones.
The final part of our long term economic plan is to give the north a stronger voice. And here in this city, the north-west had led the way.
Great global cities have strong mayors and real control over their affairs.
The deal I’ve concluded, across party lines, to deliver an elected Mayor for Greater Manchester gives this city real control over its future – and will give an even stronger voice on our national stage.
I commit again that the Prime Minister and I will honour that deal for an elected mayor, and deliver it in partnership with you over the next three years.
When it comes to other places, let me say this. I’m not going to impose any deals, or mayors, on cities that don’t want them.
But my door is open to anyone who wants to have that conversation about the future.
So let me be clear.
We have a long term economic plan for the north-west. It is called the northern powerhouse.
It will bring tens of thousands of jobs and homes.
It will mean world-beating science and healthcare and education is secure here.
It could raise average incomes here by over £2,000 in real terms.
It will reverse the decades long gap between north and south.
It is a commitment to you – and to your future.
And, with your help, we will deliver it.