The Northern Powerhouse and Midlands Engine are cornerstones for an industrial strategy designed to boost and balance sustainable regional development away from London and the southeast as the UK maps out a new vision of what it offers to the world. Jon Herbert reports.

Industrial innovation and innovative transport systems go hand-in-hand, especially in England’s North where, with active Government support, new business opportunities are being generated.

Fossil fuels powered the original northern industrial revolution. Two hundred years later, low-carbon transit networks will almost certainly be key in the next UK regional renaissance, especially when hills, winter weather and long distances separate the North’s “core cities”.

The Northern Powerhouse, drawing on a mixture of political devolution, leadership in science and advanced manufacturing is still a concept more than a reality. Creating it will mean developing a coast-to-coast community that connects Liverpool’s Atlantic Gateway to Hull’s strategic EU facing port, plus four more of the North’s well-established but fast changing cities.

A joined-up North

The idea of an integrated North of England able to compete in modern, smart, sustainable technologies against the southeast was the 2014 idea of former Chancellor, George Osborne.

More than a quarter of UK manufacturing and nearly a third of UK renewable electricity come from the North. More than 20 universities include four in the world’s top 100.

The historic divide between the North and the South is both practical and cultural. London is regarded as a powerhouse for financial services. In contrast, the northern economic area is seen to be strong in advanced manufacturing, science, technology and service sectors — as the dramatic development of the life sciences sector and graphene centre for excellence prove.

There are warnings, however, of an east-west split. It is claimed that areas of Yorkshire and the northeast — including the Tees Valley leading down to Middlesbrough — risk being marginalised.

There is also an interesting international dimension. London is recognised as one of a very small group of world megacities with the knowledge, financial and expertise base needed to attract investment from major corporations seeking intercontinental sites for global service hubs.

The balance for many English regions is to weigh the advantage of repositioning the English economy away from London and the southeast against the overseas perception that England is one well-connected business park with London as a star attraction.

Midlands Engine

The Midlands Engine, a parallel to the Northern Powerhouse designed to join up the strengths of the Black Country with the Lincolnshire Port of Grimsby and Immingham, was first announced in December 2015. For it to work in tandem with the Northern Powerhouse, the Government has allocated £392 million for investments in skills, digital connectivity and local growth, which includes £14 million for a global space technology hub in Leicester, plus £25 million to resolve traffic congestion and improve employment projects in the Black Country.

Spending plans include development of the Black Country Garden City, the regeneration of Derby City Centre, cultural improvements for Warwick, a new teaching university in Hereford and local transport improvements.

The Midlands region is home to more than 10 million people and has an economic value of £217.7 billion annually or 13% of the UK economy. Again, it represents opportunities both for sustainable development and businesses that offer sustainable goods and services regionally, nationally and internationally.

More government momentum

Prime Minister Theresa May’s Government has focused on broadening national industrial strategy equally across the English regions. March 2017’s Budget stressed the growing importance of the Midlands Engine.

However, there are still persistent North-South problems. It is reported that by gross value added (GVA), London workers are 2.3 times more efficient than the northeast, twice more than the northwest and 2.1 times the figure for Yorkshire and the Humber.

In Mr Osborne’s words, “The cities of the North are individually strong, but collectively not strong enough. The whole is less than the sum of the parts.” In contrast, many European cities are reported to compete well against their national capitals. Even so, the North is home to 15 million people and more than a million private sector businesses. As Philip Hammond points out, if the Northern Powerhouse was a country, it would rank among the larger economies of Europe. In his Autumn Statement, he announced more than £500 million in local government fund investments to enhance transport, housing and digital connectivity.

In total, £13 billion is being invested in transport for the North during the present Parliament; the Northern Transport Strategy was published in 2016. The Chancellor has also noted that 2015–2016 saw inward foreign investment to the North rise by nearly 25%.

Staying on track

It is difficult to move away from railways, even though what “rails” can deliver has changed fundamentally over two centuries.

In March 1829, George Stephenson’s famous Rocket won the competitive Rainhill Trials. It was judged the most efficient locomotive design to power the new Liverpool and Manchester railway. Stephenson’s revelation was that a fast, light locomotive of moderate hauling power was needed for passenger services. His groundbreaking engine built in Newcastle had a top speed of 28mph.

Fast forward to modern day China where the speed of Shanghai Maglev — magnetic levitation — hover trains are said to run at 267mph — making them the world’s fastest commercially-operated trains, though not the most profitable! With no rails or wheels to create friction, they ride on an electromagnetic field that also provides forward momentum.

The likelihood of a similar system underpinning the Northern Powerhouse any time soon is probably not particularly high. However, it was reported widely in March 2017 that the company behind the technology, Direct City Networks, has proposed a maglev system that would run through a tunnel beneath the Pennines between Liverpool and Hull.

If built, the DCN300+ scheme would be “the world’s fastest underground system”. Trains travelling at up to 350mph would leave every 90 seconds. A key maglev strength is its ability to accelerate quickly. If implemented, the futuristic £3.7 billion scheme would aim to cut Liverpool to Manchester transit times to just seven minutes, Manchester to Leeds to nine minutes and Leeds to Hull to 13 minutes.

For now, steel rails rather than electromagnets are expected to be the winners, even though a sub-Pennine all-weather road tunnel link has been suggested between Manchester and Sheffield to cut journey times by 30 minutes. That would be the world’s longest road tunnel.

More broadly, on the west coast HS2 has the go-ahead to provide swifter North-South rail links. Northern Powerhouse Rail, also known as HS3, is being developed in parallel with work on the Northern hub designed to end bottlenecks around Manchester.

The overall aim is to improve conventional rail services so that Liverpool to Manchester travel times are cut from 32 minutes to 20 minutes, Manchester to Leeds from 49 minutes to 30 minutes and Leeds to Hull from 55 minutes to 45 minutes. In addition, Leeds to Newcastle times should be reduced from 87 minutes to 60 minutes, plus Leeds to Sheffield from 40 minutes to 30 minutes and Manchester to Sheffield from 48 minutes to 30 minutes.

One litmus test might be for working house partners to be able to leave home in the morning, follow rewarding careers in separate cities and return home conveniently for dinner.

However, there is yet another view that the problem many regional cities face is not intercity connectivity but intracity travel routes. The logic here is that the real problem commuters face is travelling from expanding residential areas into the heart of older urban centres. Leeds is often cited as an example.

Intracity problems

Paul Swinney is Principal Economist at Centre for Cities. Having studied the economics of Rhine-Ruhr in Germany and Randstad in the Netherlands, he believes there are important lessons for the North of England. Swinney notes that parts of the UK that elected to stay in the EU have gained most from globalisation; those who voted for Brexit have gained least.

This fact makes the Northern Powerhouse, and helping every one of “our great regional cities”, particularly important, he feels. The Northern Powerhouse is about cities, he says, because his German and Dutch research shows these are fundamental to regional success. Thus far, the North of England has failed in this respect.

The main reason, he adds, is because cities need to be concentrations of jobs and businesses where people and enterprises get more out than they put in. This is called agglomeration and is increasingly important in a globalised world. Businesses benefit from “knowledge spill-overs” when working close together.

Northern cities are failing compared to their continental counterparts, Swinney believes, because they aren’t dealing with the skill challenges well. They offer too few high-paid, high-skill jobs and this comes back to inadequate transport links within city regions themselves of the Metrolink type.

It is internal city transport deficits that need correcting to ensure modern northern success and give businesses the widest choice of workers and workers the widest choice of jobs. He adds that power to make this happen needs to be in the hands of new city region mayors so that economic policies match local geographies.