The Northern Powerhouse is dead. Long live the Industrial Strategy. That is the message that Downing Street was trying to send out yesterday when the new Economy and Industrial Strategy Cabinet Committee convened for the first time.
The new Committee – which consists of the Prime Minister, the Chancellor and nine Secretaries of State (representing the departments for Business and Energy, Environment, Local Government, Transport, Health, Education, Work and Pensions, Defence, Culture, and International Trade) – is tasked with building an economy that “works for everyone, not just the privileged few”. This has been described as Theresa May’s top economic priority.
Presumably to draw a line between the policies of the last Chancellor and the new Prime Minister, the Downing Street press release studiously avoided making any reference to George Osborne’s much-vaunted ‘Northern Powerhouse’ plan.
However, it seems that rumours of the Northern Powerhouse’s demise are greatly exaggerated. The government still includes a ‘Minister for the Northern Powerhouse’ (currently Andrew Percy at DCLG) and, even as the new Cabinet Committee was meeting yesterday, news was leaking that one of the architects of the Northern Powerhouse – Neil O’Brien – was returning to Whitehall. O’Brien, a former head of uber-Cameroon think tank Policy Exchange who worked as one of George Osborne’s most senior aides until the former Chancellor’s defenestration last month, will be joining the Downing Street Policy Unit to lead its work on the Industrial Strategy. If the themes of the new Industrial Strategy – addressing the North-South productivity gap, stimulating economic growth outside of London, and channelling investment – sound familiar it is because they closely echo the aspirations articulated for the Northern Powerhouse.
Whilst the Northern Powerhouse may have a designated junior minister, the Industrial Strategy has been given its own ministry: the Department for Business, Energy and Industrial Strategy (formed from the merger of the departments for Business, Innovation and Skills, and Energy and Climate Change). The new department’s Secretary of State, Greg Clark, will take charge of drafting the Industrial Strategy. Given that Clark was a close ally of Osborne and, as Minister for Cities, was another architect of the devolution and City Growth deals at the centre of the Northern Powerhouse, his appointment is another sign of continuity between the two policies.
Although the Government may not yet have started drafting its Industrial Strategy, it looks like the finished document will juxtapose the Northern Powerhouse’s commitment to devolution and to rebalancing regional economic disparity with a broader, national commitment to expanding equality of opportunity. In doing so it looks like the great inconsistency of the Northern Powerhouse idea – that the ‘City Regions’ and areas seeking the new powers have already expanded beyond even the loosest definition of ‘the North’ to encompass Cornwall, East Anglia, and Greater Lincolnshire – will finally be addressed. The Industrial Strategy is also expected to lead to more direct intervention by Government in key industries and business sectors (something that Conservative Governments traditionally disdain to do).
If the evolution from Northern Powerhouse to Industrial Strategy offers any lessons in public policy analysis, it that perhaps we should think of Government economic policy as being like Dr Who – one central character that periodically regenerates to allow for major cast changes, to signal shifts in direction and style, and in order to keep the franchise in business. The Northern Powerhouse is not dead, but it is under new management – and it has plans to expand nationwide.