Latest news with #NorthernPowerhouse
The Independent
26-05-2025
- Business
- The Independent
Rachel Reeves should invest extra money in economic growth, not U-turns, former adviser warns
Rachel Reeves should spend any extra money in the Budget on investment — such as on major rail schemes — to help drive economic growth rather than funding policy U-turns, a former adviser has said. As the chancellor scrabbles to find billions for a potential hat-trick of benefit U-turns, Jim O'Neill, a former Treasury minister who quit the Conservatives and later advised Ms Reeves, told The Independent that moves to fund policy reversals were driven 'by the politics' of the situation. 'I would like to see any money available in (next month's) spending review or Budget to be spent on positive multiplier investments,' he said. These are projects that generate multiple pounds for the economy for every £1 spent. These would include the Northern Powerhouse Rail scheme, Lord O'Neill said. It is designed to link major cities in the North, following warnings it takes longer to travel between them than it does to get to Paris. His call will pile pressure on the chancellor and the prime minister not to prioritise U-turns at the expense of economic growth. Ms Reeves and Sir Keir Starmer have pledged to make growing the economy their number one priority. Since they entered office, however, the country's finances have struggled. However, unexpectedly good GDP figures this week mean Labour has potentially more wiggle room. Announcing a partial U-turn on fuel bill payments for pensioners, the prime minister said he wanted to look at widening eligibility 'as the economy improves '. But Ms Reeves is under increasing pressure to find up to £5bn for pensioners' fuel bills and to scrap the two-child benefit cap, hated by many Labour MPs since it was brought in by the Tory chancellor George Osborne as one of his 'austerity' policies. To add to her woes, moves designed to slash billions from the welfare bill could also have to be watered down in the face of a backbench revolt among her own MPs. The chancellor is due to set out her spending review, which allocates funding to government departments for the next few years, next month, with £113 billion of capital projects to transform the country's housing and infrastructure. On what could be 'positive multiplier investments' for the economy, Lord O'Neill said : 'The point of NISTA (the National Infrastructure and Service Transformation Authority) and Infrastructure Strategy, is it is for them to show which ones. But my personal clear favourite, and I'm pretty sure it would pass NISTA sniff test, is Northern Powerhouse Rail. ' On Monday health minister Karin Smyth said the government was 'listening" to calls for reversals on its policies. She told BBC Radio 5 Live: "The chancellor and the Treasury will have to review all of these in light of the key mission, which is to grow the economy and maintain economic stability. "We know government is hard, and I think listening, looking at policies, how they impact, weighing up those costs and benefits, is exactly the right thing to do." But Labour MP Stella Creasy said lifting the two-child limit would take "350,000 children out of poverty overnight". It emerged on Friday that the government's flagship child poverty strategy, due to be published in the spring, is now set to come in the autumn in time for the chancellor's budget. Meanwhile, the PM is reported to be considering "tweaks" to plans to slash £5bn from the welfare bill, amid a threated backbench revolt. Benefit claimants could be given longer "transitional periods" which they could use to apply for other benefits, according to the Times. Peter Lamb, the Labour MP for Crawley, told BBC Radio 4's Westminster Hour he would be "voting against anything which is going to restrict access to (disability benefit) Pip further than it's currently restricted". The row comes as Reform UK leader Nigel Farage is expected to commit his party to restoring the winter fuel payment in full and scrapping the two-child benefit cap this week, as it attempts to woo Labour's traditional working-class voters. There has also been confusion over when a U-turn on winter fuel would happen. Asked on Sunday with Laura Kuenssberg about whether the cap would be abolished, Labour deputy leader Angela Rayner refused to be drawn on the reports. 'I'm not going to speculate on what our government is going to do,' she said.
BBC News
09-05-2025
- Business
- BBC News
Rachel Reeves must revive Northern Powerhouse rail plan
Reviving projects linked to the Northern Powerhouse should be one of Chancellor of The Exchequer Rachel Reeves' main priorities, her predecessor George Osborne has said. In an interview with BBC North West Tonight, Conservative Osborne - formerly the MP for Tatton in Cheshire - said if he were Reeves he would focus on a new high-speed rail system and boosting the region's universities' research high speed rail link was one the key elements of the Northern Powerhouse plan to boost growth in the North, but the infrastructure project was shelved during Boris Johnson's first spending review settlement is planned for June. Osborne, who was Chancellor of the Exchequer between 2010 and 2016, said: "There have been lots of promises to upgrade the existing TransPennine Service, but fundamentally we want a new high-speed rail system of the kind you'd get elsewhere in the world."I think if I was her I'd also sought of double down on the science of the universities in the North West as that's a big strength of the North West of England."I'd get behind those big research institutions, those big places where students gather because those are power houses for our cities in the North West."The schemes have previously been backed by the city region mayors of Greater Manchester and Andy Burnham and Steve Rotheram have said government backing would be key to improving rail links and maximising the potential of sectors like life sciences and the Atom Valley manufacturing zone in Greater Manchester. The Northern Powerhouse project was proposed by Mr Osborne in aim was to end the UK's economic reliance on London by investing in northern England, including plans for the the northern leg of HS2 was cancelled in October 2023 by then-Prime Minister Rishi Powerhouse Rail from East to West had been downgraded under Johnson the year said: "I think it was a really bad decision and I said so at the time and I'll say so again.""I think those two things have been big missed opportunities and a succession of governments that came after me said they were going to do them and haven't."And I guess now the pressure is on the current government to deliver." Sceptical Osborne, who quit politics in 2017 to become the editor of the Evening Standard newspaper, a role he held until 2020, also told the BBC he was "really sceptical of anyone who says there may never be another Conservative government".He said: "When I started off in politics there were very few Conservatives in the North and people said 'there may never be another Conservative government'."Then we've just had 14 years of Conservative government, and there were loads of Conservative MPs in the North of England."And now, of course, it's swung right back."So I'm really sceptical of anyone who says there'll never be another Conservative government, just as I was sceptical of people who said a few years ago that there'd never be another Labour government." Listen to the best of BBC Radio Manchester on Sounds and follow BBC Manchester on Facebook, X, and Instagram. You can also send story ideas via Whatsapp to 0808 100 2230.
The Independent
05-05-2025
- Business
- The Independent
Density of new start-ups soars across north of England, says research
The North of England has recorded rapid growth in the number of small business being launched, according to new research. Analysis by GoDaddy UK and Ireland shows that 40% of the areas with the fastest growth in the density of start-ups and small business were in the North. Andrew Gradon, head of GoDaddy UK and Ireland, said it highlighted that investment through the Northern Powerhouse initiative appears to have boosted regional growth. The Northern Powerhouse was an initiative started by the coalition Government from 2010, using local enterprise partnerships across the regions to help drive growth. Of the 50 constituencies with the fastest growing number of small businesses, 20 came from 'Northern Powerhouse' areas, according to the Venture Forward report. This compared with nine in the south of England and was twice the figure across the region last year. Towns such as Barrow-in-Furness, Cumbria, Burnley in Lancashire, and Birkenhead, Merseyside, have seen a significant increase in small business growth compared with last year, of more than 70%. Mr Gradon said: 'While small businesses flourish across the nation, the North has proven to be a hub of entrepreneurial spirit. 'A decade on from the introduction of the Northern Powerhouse Investment Fund, the investment is clearly having an impact on the start-up economy. 'Importantly, it proves that being a small business doesn't mean having small ambitions, nor does it mean small impact. 'Small businesses will have a key role to play in unlocking the North's longer-term potential, benefiting the region hugely by providing new jobs and opportunities. 'However, the same can be said for all areas, because when local entrepreneurship thrives, we all thrive.'
Daily Mirror
03-05-2025
- Politics
- Daily Mirror
BRIAN READE: The North does not need Northern Arc gimmicks... the South will soon come begging
Northern leaders were in London this week armed with begging bowls and arguments about why their people hold the key to growth. Metro mayors like Andy Burnham and Steve Rotheram told parliament of their plan for a 'Northern Arc' in which Liverpool, Manchester, Sheffield and Leeds are joined up via modern transport links to form one huge economy, which would bring an extra £90billion in growth by 2040. But don't expect much of a response as we've been here before with John Prescott's 'Northern Way' and George Osborne's 'Northern Powerhouse' and it all went south. Literally. As the North hobbles along on Victorian railway lines and HS2 hits the buffers at Birmingham, London's airports, Tube and Overground systems have had billions lavished on them. And it feels that this perpetual sidelining of the North will only get worse, especially as a Labour government decides a growth corridor between Oxford and Cambridge is the nation's priority. But ever the optimist, I see some hope. In Mark Carney's victory speech, when the Canadian PM warned America to keep its sights off 'our land, our resources, our water'. Think about that final word. Canadians realise that as the world continues to boil, and Donald Trump continues to dig, baby, dig, water will become the new liquid gold and Washington will need to see it gushing down south in pipelines from rainy Canada. Following the premise that what America does today Britain does tomorrow, how soon before London, currently baking in its hottest ever start to May, thinks the same. The Environment Agency this week predicted that South East England faces a 2.5 billion-litre daily shortfall in its water supply within 25 years, which is nearly half of its current daily consumption. Can you imagine the havoc that will cause in Weybridge and Sevenoaks (where all the nation's decision-makers reside) as they stare at brown, lifeless gardens, debating whether to tell the staff to use up emergency supplies of bottled Acqua Panna? Think of the horror in Ascot kitchens as the barista machine, like the outside Jacuzzi, cannot function. How will the people of Tring get rid of bird crap on their BMWs? How will Surrey golf courses cope if bores can't tell the difference between the fairway and the green, or access ice for their 19th-hole G&Ts? Imagine the shame when the drought police make dawn raids in Tunbridge Wells to round up those found filling their swimming pools? Of course, we know what will happen. Westminster will sanction the emergency laying of pipes from Scotland, Snowdonia, the Lakes and the Pennines, to get water to the people who really matter. Which is when Northern leaders, who will finally hold all the cards, should refuse to comply and threaten to sabotage any pipelines. Then demand that if the South wants their liquid gold they should come and get it. By moving up here, bringing their wealth, investment, firms, jobs, transport systems and yachts. By relocating Westminster, Whitehall, the BBC, the City, even the King. Then finally our leaders won't need to go to London with begging bowls selling gimmicks like the Northern Arc to the permanently disinterested. Because the North will be one huge arc floating on our God-given water and we can tell Southern decision-makers if they accept our demands we'll let them climb aboard, two by two. The future's dry. The future's Northern.
The Independent
10-04-2025
- Business
- The Independent
Starmer urged to accelerate global trade deals after Trump tariff chaos
Keir Starmer has been warned he must 'accelerate' co-operation with other leading economies in the wake of Donald Trump's tariff wars and that it would be 'naïve' to believe the damage is over. The US President was forced to announce he would delay tariffs above his base rate of 10 per cent, which affects the UK, for 90 days, in the wake of days of market turmoil that sparked a fire sale of US government bonds. The exception is China, where Mr Trump instead raised his levy on Chinese imports to 125 per cent. Economists warned the prime minister must now look to other allies to stabilise the economy as the events of the past week showed the US was 'not a reliable' trade partner. A former adviser to Rachel Reeves told The Independent there was 'some relief' at the president's U-turn. But Lord O'Neill, himself a former Treasury minister, said the UK could not isolate itself from the effects of the ongoing trade war between the US and China. He added: '50% of all global growth and 55% of all global demand since 2000 has come from (the US and China) alone. So while there is some relief, the idea that the damage is behind us, is kind of naïve.' He called on the UK to 'accelerate... working increasingly closely with key G7 allies', which make up some of the most advanced economies in the world, to cut tariffs within the group, especially on services instead of goods, where they have an advantage. He also urged the chancellor to borrow to invest, including on infrastructure, develop greater trade links with China and India and double down on the 'Northern Powerhouse' economic project in the north of England in a bid to boost growth. Jonathan Portes, an economics professor at King's College London and the former chief economist at the Cabinet Office, agreed with Lord O'Neill both on accelerating co-operation and the need not to be 'naïve' about the effects of a China-US trade war. He added: 'But would also add that while we have to continue dealing with the US we have to assume that, under Trump, the US is not a reliable economic trade partner so we should be prioritising the EU reset as well as India, etc. Far better to 'concede' something on migration/mobility to India for a deal which actually yielded some real long-term benefits than to give away taxpayers' money to Meta and Amazon for what? A "deal" with Trump?' That sentiment was echoed by trade expert David Henig, who told the Independent: "The UK should be one of the countries trying to protect global rules and norms which we benefit from. So we should be a little less desperate for a US trade deal, and rather more open to working with others." Earlier, former prime minister Gordon Brown called for an 'economic coalition of the willing' to tackle the impact of Mr Trump's sweeping global tariffs, arguing the UK should go much further in its post-Brexit cooperation with the EU. Mr Brown, who still has close ties to Sir Keir Starmer, called for world leaders to draw on experiences of the 2008 financial crash, arguing they should offer extended credit to firms, lower interest rates and mobilise both the World Bank and International Monetary Fund to protect poorer countries which could see their industries severely damaged by tariffs, in a piece for the Guardian. Home secretary Yvette Cooper said ministers would not 'keeping a running commentary' on different trade negotiations or the different approaches of other governments. 'What we are doing is just being really steady about this. We have made clear our principles and our approach. We want to see a reduction of trade barriers and we want to negotiate good arrangements that are in the UK's interests,' she said. Ministers still hope an economic agreement with Washington can be reached to soften the blow of some of Mr Trump's tariffs, which also include a 25 per cent charge on cars and others on steel and aluminium. Chancellor Rachel Reeves will seek to negotiate with the US when she visits Washington at the end of April for the International Monetary Fund's spring meeting of global finance ministers. She has also said a UK-EU summit on May 19 would be a chance 'to refresh our relationship and make it easier for businesses to trade'.
