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North West reactions: George Osborne’s Northern Powerhouse plan

Chancellor George Osborne’s used his first post election speech to speak about the plans for the Northern Powerhouse.

Businesses in the North West have been keen to comment on what the suggested devolution of Northern cities means to them.

The plans will see English cities get powers over housing, transport, planning and policing with a particular focus on cities in the North of England.

George Osborne said that a new job was created in the North every three and a half minutes, meaning the North is growing faster per person than London.

Employment in the North is up by 151,000 in just a year, with unemployment falling by over 20%.

Read below to hear from some of our North West businesses:

BDO LLP, Emma Suchland

Tax Partner at accountants and business advisors BDO LLP in the North West, Emma Suchland, said: “Devolution of taxing powers to big cities will not be as broad ranging as Scottish devolution and the taxes likely to be devolved are stamp duty land tax and council tax rather than income tax, corporation tax or VAT.

“Giving big cities more power over local property based taxes would allow them to react to local economic conditions and, in the case of stamp duty land tax, local property prices. In Manchester for example property prices differ considerably to London where the stamp duty land tax rates and bandings have historically been set.

“As more cities obtain these taxing and spending powers it will be interesting to see whether cities begin to compete with each other on setting tax rates and whether they will direct the funds they raise to attract businesses and encourage start-ups or focus on local residents - who will of course vote for the next mayor!”

IoD, Mike Perls

North West Chairman of the IoD, Mike Perls, said: “The political momentum behind devolution has been incredible, and these new plans could be one of the most radical shake-ups to local government in living memory.

“This is an exciting opportunity for businesses in the North West to lead the ‘devolution revolution’, and blaze a trail for other cities to follow.

“Businesses across the country back the plans to give local authorities more power on issues including skills, housing, transport and taxes.

“In the North West, the appetite for devolution is particularly strong.

“Politicians of all parties and businesses from all sectors have recognised the need to make sure every corner of the UK benefits as the economy continues to grow.

“Giving businesses in the region a greater say in addressing skills shortages, infrastructure requirements and on local planning decisions is one of the best ways this can be achieved.

“The eyes of England’s cities will now turn to the North West. The IoD will be working with local and national politicians, civil servants and businesses in the region to make sure we make the most of this unique opportunity.”

Monitor Deloitte, Andy Tong

Andy Tong, director, Monitor Deloitte based in Manchester said: “Greater control over what, when, and where to invest means a greater influence for the North over its economic destiny. Increasing and more targeted investment in long-term drivers of growth such as skills, housing and hard infrastructure in transport and digital, should work to boost the North’s competitiveness.

“If successfully executed, devolution can be a net win for the UK as a whole, as one of a broader range of national-level policies interventions tackling the UK’s well-documented productivity puzzle.”

Pinsent Masons, Chris Hallam

Infrastructure partner at Pinsent Masons in Manchester, Chris Hallam, said: “The thinking between what has been dubbed “the Northern Powerhouse” remains admirable – local empowerment and economic regeneration. Devolution could boost Northern economies making Britain stronger economically.

“Jim O’Neil appointment as the Commercial Secretary to the Treasury is encouraging news in terms of long-term infrastructure strategy and planning for devolution and the Northern Powerhouse. “Elected mayors could further support this initiative but devolution will not be an easy transition and will require a degree of political buy in from local government.

“It is this political subtext which may end up getting in the way of delivering on infrastructure improvements, given potential local resistance as to the terms of any deal to be done with the Treasury in terms of releasing local autonomy. “The need to rebalance the economy is a national need – it is for the benefit of those in London and the South just as much as those in the North.

“Devolution will assist local transport and housing but the very largest nationally significant infrastructure schemes such as HS2 need approval by government “hybrid bills”, which are examined in parliament by a mix of public and private bill procedures.

“For example if HS3 — the east-west rail link to complement HS2 — were to go ahead it would certainly need the involvement of parliamentary agents, probably both to promote and oppose. So, devolution would work only to a certain point. Central government will always need to be involved especially on economic and social nationally significant infrastructure projects.

“However, the bigger issue is how this is going to be achieved given that the plans will necessitate massive long-term investment in the region’s infrastructure, at a time when public spending will be significantly cut. “Longer term international finance conditions – including potential Chinese investment – would seem to offer good opportunities, but our policymakers need some innovative thinking in order to attract that cash to the North of England.”

Do you have an opinion on the latest speech by George Osborne? Comment below or email sophia.taha@bdaily.co.uk

This was posted in Bdaily's Members' News section by Sophia Taha .