What Powers “the Northern Powerhouse”?
The Northern Powerhouse: It’s not just about trains (although they do help a bit.)
The “Northern Powerhouse” is was first proposed by David Cameron and George Osbourne. Originally slated as “a collection of Northern cities sufficiently close to each other… that combined can take on the world”. The hub of: Leeds, Newcastle, Liverpool, Manchester, Sheffield and Hull – remains uniquely positioned for growth.
The NP premise was to invest in the Northern hub to create an economy to rival London’s. (Currently, London generates the wealth of the next 30 cities combined). Bolstering the North would benefit the whole of the country. This would be achieved through already initiated devolution deals, which would give each city more financial autonomy.
Yet, after Cameron’s resignation; many think formal Northern Powerhouse plans have been derailed. Whilst the Northern Powerhouse Partnership has been continued by Osbourne and key figures (such as HSBC, Barclays, and the Mayor of Liverpool) – Westminster commitment is needed for optimum growth.
Allegedly, the main indicator of this will be if the North sees transport investment with HS2 and electrification of northern rail lines. (Recent updates suggest the government moving away from these plans to “double-down” in London with Crossrail 2.) Currently the North gets £1 for every £6 spend in London and the South East. So, this u-turn is not out of character as far as Westminster commitments to the North go. By spending billions to update the Northern transport network – the government would be putting its money where its mouth is (…or indeed, was!).
Whether this is the case remains to be seen and is the subject of a lot of discussion and column inches.
Lessons from Leeds
What do we know is: Leeds, Manchester and Liverpool’s economies continue to boom.
Did you know, for example, Leeds’ economy has grown 8% since 2014? “So what!?” you say? Well, what if I told you that this is a faster rate of growth than London. (Sorry, but it’s true)!* Moreover, it’s forecast to grow 12.8% over the next 10 years. (Manchester is set to grow 22%!) Since 2010, the significant North/South divide in private sector job creation has been all but eradicated. What’s more, the stock exchange states that 80% of the fastest growing listed companies are headquartered in – you guessed it – Leeds and Manchester.
At the core of Leeds’ growth is emerging tech business sectors; and more jobs flowing north from the capital. TMT (technology, media and telecom) business has grown 96% in Leeds over the past year. (Notably, this is significantly more than other “Northern Powerhouse” cities. Furthermore, Leeds also continues to see its highest rate of construction ever – with new districts popping up continually to house this growth. This growth also looks set to continue. In fact, there are plans in place to double the size of the city. So strong is the desire to build here.
All of this whilst “Northern Powerhouse” funding hangs in the balance. Regardless of dilly-dallying down south. The north seems to be going from strength to strength.
What is powering the Northern Powerhouse?
So, what might be driving this unstoppable growth?
For many young businesses, the overhead cost of operating in London is now too high. Rent costs in The City have been recorded at £67.50pqf. In Manchester the relative cost of £39psf provides frees up a lot of resources for growth. In startups – where risk is always a factor – unnecessary cost is exactly that… You need to spend on what’s most important. This may be why Leeds is being mooted as a new hub for UK fintech.
Before, the best young talent might only have been found in London. Now, the prohibitive cost of London living also means fewer graduates make a beeline there. So, there is a greater pool of talent in regions all across the UK. This has been, and will continue to be a profound benefit to the North. It’s simply a case of when Westminster realises this – and provides the support than would take the North to the next level.
We’re on the brink of a boom
So regardless of whether new transport infrastructure is on track… the North is set to continue to exceed expectations. At the heart of this will be a new wave of innovative TMT companies and more established corporate names bringing business up the M4.
So what powers “The Northern Powerhouse”? The North does. Whilst it would be better to have Westminster on board – the North continues to go full steam ahead.
Whilst Virtuoso Legal are IP boutique with: national reach, an office in London and international reputation – our roots are firmly in the North.
Many of the attributes we are praised for are distinctly “Northern”. Our: straight-forward no-nonsense advice. The approachable accessibility of our top teams of solicitors. Our grit.
We are proud of this, and believe wholeheartedly that this is what sets us apart from many of our competitors. It’s certainly what our clients talk about.
It’s vindicated much of what we have said all along. You don’t have to have a London focus to be a successful business in 2017.
What’s more there’s clearly unmined potential in the North – which is only set to grow as a platform for business in the coming years.
We cannot wait to see how new northern knowledge and expertise shapes the future of the country. Common sense thinking may be just the ticket (especially with Brexit looming…)
Moreover, we can’t wait to support the next generation of Northern business succeed by protecting and growing the big ideas behind this boom.
To talk to any of our world-class intellectual property solicitors, call:
0113 237 9900
*Virtuoso Legal has offices in Leeds and London. As such; any perceived northern bias in this article is vigorously denied!