Northern leaders raise pressure on Chancellor to deliver for region in Budget

Business and political leaders from across the North are making a concerted effort to lobby Chancellor Rishi Sunak for funds to transform the region’s economic fortunes in next month’s Budget.

The North was a major part of the Government’s ‘levelling up’ promise in the campaign for the 2019 General Election and the Conservatives’ victories in many ‘red wall’ Northern seats has added pressure to deliver for the region.

But many in the region say Government action has failed to live up to the rhetoric in the year since then, and rumours that plans for the eastern leg of the HS2 in the North and budget cuts to the Transport for the North organisation have raised tensions between ministers and regional leaders.

Many northerners will also be waiting eagerly to see how the Chancellor maintains support for businesses in the region which have been hard hit by the coronavirus pandemic, with parts of the North in longer lockdown than most other parts of the country.

Pandemic support

Local and national lockdowns have affected parts of the North East, North West and Yorkshire for longer than most other parts of the country, causing serious problems for local businesses.

A number of business groups have called for the furlough scheme to be extended until the country comes out of lockdown and for the business rates and VAT holidays to be extended. There is general agreement in the region too that the temporary £20 uplift in Universal Credit should be continued.

Prime Minister Boris Johnson last week indicated that the Government is unlikely to return to the tiering system that caused so much conflict between Westminster and the North last year, but business groups have called for targetted support if new local restrictions are put in place.

There have also been calls for pandemic support to be extended to the many freelancers and small businesses that have missed out on existing packages.

Economic recovery

Many northern communities went into the pandemic with higher levels of unemployment and lower rates of entrepreneurialism than London and the South East.

The North-South economic divide has been widened during the last year and there is pressure from both Conservative backbenchers in the North and the Labour Party for specific measures to boost the region’s economy. Suring up the new ‘Blue Wall’ may be an option.

Labour has called for £1 billion to be invested in 100,000 start-ups across the country in the next five years, focussing on areas outside the South East, while the Northern Research Group of Tory MPs wants a Northern Recovery Bond to create billions of pounds worth of private investment.

Business groups also want action to help businesses negatively affected by the Brexit deal, saying that many exporting firms in the region have been hit by new trading arrangements with the EU.

Transport

Investment in transport in the North has become a major source of tension in recent months after the Government’s Infrastructure Commission recommended scrapping plans for the eastern leg of the HS2 line in the North.

Business and political leader have come together to call for both the HS2 and the Northern Powerhouse rail project to be funded in full, arguing that the region has been underfunded when compared to London and the South East for decades.

Improvements to the East Coast mainline have also been called for, along with support for the North’s airports, which have suffered hugely in the pandemic.

Electrification between Hull and Selby and a focus on the East to West corridor from Liverpool to the Humber ports for freight are long-running rail asks, with work afoot to ease congestion and improve punctuality around Manchester

Treasury North

One of the most anticipated decisions expected to be announced in next week’s Budget will be the location for the Treasury’s Northern campus.

Mr Sunak has previously pledged to re-located around half of the Treasury’s staff to new offices in the North, saying it will help make the department’s decision making less London-centric, as well as providing an economic boost to the chosen location.

Reports this week suggested that the Treasury has whittled down the shortlist for the site to Newcastle, Leeds, Darlington and Bradford, with policiticans in those areas lobbying for the 750-job site.

But there is also pressure to ensure that the Northern campus has real power and it not simply a gesture to the North.

Freeports

It is not clear at this stage whether Mr Sunak will mention freeports in next week’s Budget, with submissions for the scheme having only closed a few weeks ago.

Ports in the North East, Tees Valley, Humber, Cumbria and Merseyside are all hoping to take advantage of the freeports scheme, which could create thousands of jobs in tax-free centres.

But the Government is unlikely to approve all bids at this stage and there are likely to be disappointed areas in the North.

Energy & Decarbonisation

Boris Johnson has already raised the target for offshore wind capacity installation as part of his green recovery plans, with funding for ports and factories outlined.

This may be firmed up, with wider Net Zero pledges in the UK’s COP 26 hosting year also. Indeed we could be on for the greenest Budget yet.

A carbon capture and storage competition is running with results imminent, could they slip into the Chancellor’s red case?

Projects in the Humber, North East and North West are vying for support, with a minimum of two anticipated to succeed.

Business Live – North West