Economic success in north and south is not a zero-sum game

(Photo by Peter Byrne – WPA Pool/Getty Images) – Prime Minister Boris Johnson (right) talks to William Wilson, CEO of Siemens Mobility Limited, during a visit to the Siemens Rail factory construction site on July 6, 2020 in Goole, England.

The government is currently embroiled in disagreements on multiple fronts over transport investment.

In the north, there is disappointment at the decision to cut £36 billion from HS2’s Eastern Leg and Northern Powerhouse Rail, meaning no new line from Leeds to Manchester via Bradford across the Pennines. In the south, London Mayor Sadiq Khan has been fighting tooth and nail to save Transport for London from going into ‘managed decline’.

The failure to invest in London’s transport infrastructure has serious implications far beyond the borders of the M25. By not putting the Mayor in charge of the situation, and Whitehall  pulling the strings instead , the government has totally misjudged what is needed.

Economic success is not a zero-sum game. We want the north to act as a genuine counterweight to London, working together on shared priorities such as skills, transport and innovation to drive up productivity for the whole of the UK.

This requires empowered local leadership that can work alongside businesses to deliver real change for regional communities, not central government dictating our economic future from Westminster. 

Back in 2019,  as then CEO of Siemens UK – I outlined our plans to open a new £200m train factory in Goole, Yorkshire. We had a vision to transform the region into a future railway village, where local people could access opportunities in this vital R&D intensive industry.

The factory is expected to open in 2023. Its first order? Tube trains for the London Underground.

Up to half of the new Piccadilly line train fleet will be built there, employing up to 700 people in engineering and manufacturing roles, 250 in the construction phase and 1,700 in the broader supply chain. Renewal of the Central and Bakerloo line trains could secure jobs in the Goole factory for a generation. It’s an example of investment in London’s transport translating to jobs and prosperity in the north – but this is dependent on TfL and Government reaching a long-term funding settlement.

For every £1 invested on the London Underground, 55p is paid to workforces located outside London, with TfL contracts contributing around £7bn to the economy overall.

Around 43,000 jobs across the country rely on work currently provided through TfL’s extensive supply chain that pumps billions of pounds into areas outside of London, including Bolton, Derby, Liverpool and Yorkshire.

Recently Sadiq Khan visited Yorkshire business Switch Mobility in Sherburn-in-Elmet, which is making electric buses for London’s new zero-emission fleet. Switch Mobility estimates that around 50 per cent of their revenue last year was from TfL contracts and around 85 per cent of their order book this year is with TfL.

As the Northern Powerhouse Partnership will explore in our upcoming report, we can only close the north–south divide by driving up productivity across northern cities and towns such as Goole – not by holding London back.  

A few days ago, Sadiq Khan wrote in the Yorkshire Post that cuts to HS2 and Northern Powerhouse Rail will damage the whole country. He was right – decades of centralised decision-making and underinvestment in the north has left the UK one of the most imbalanced countries in the developed world.

What Northern leaders – and the London Mayor – want is the ability to make local decisions themselves, and to be able to implement what is best for the communities that elected them.

With the Levelling Up White Paper expected in the coming weeks, calls for greater devolution of powers and funding are growing louder and louder, with voices from across the political spectrum, including George Osborne and Lord Mandelson, all agreed that metro mayors and local leadership must be trusted with more responsibility. Levelling up cannot be done from Whitehall.

The north needs Whitehall to let us make our own choices, to control and retain more of our taxes. We want the tools to drive up UK prosperity ourselves through unlocking a green fourth industrial revolution powered by R&D and world-class skills provision.

The narrative which pits London against the north is not only unhelpful, it’s fundamentally wrong.

What’s good for the north is good for London, and vice versa. The levelling up agenda cannot and will not be built on London’s failure. It will be built by Government working in partnership with metro mayors and local leaders to deliver a long-term, ambitious vision for our future economy.