The 2020 budget: Is it doing enough for the North?
Last December, the conservative party won the biggest majority since the 1930’s and this was largely credited to the party gaining traditional labour seats in the North of England and Wales. It’s easy to see why - not only did they promise to deliver Brexit once and for all in their 2019 manifesto, but they also promised to finally level the playing field between the North and South and provide more funding for smaller communities outside of London and the South East.
Fast-forward to this month and it was time for the newly appointed Chancellor of the Exchequer, Rishi Sunak, to present the spring budget. This was the opportunity for the conservatives to prove that they were going to deliver on what they promised during their election campaign. To say that the government need to do more to address the North-South divide is a huge understatement - since then-chancellor George Osborne’s famous ‘Northern Powerhouse’ speech in 2014, foreign investment into Northern regions has plummeted and according to research by the thinktank IPPR North, there had been a £3.6bn cut in public spending in the North since 2010, compared to a £4bn increase in the south.
It’s fair to say that Rishi Sunak had his work cut out when coming up with the new budget and to his credit, there was a particular emphasis on the North of England when the budget was announced. In his announcement, the chancellor confirmed that the conservatives were finally taking the North-South divide seriously and that they were committed to ‘levelling-up’ the resources and infrastructure in Northern regions. Sunak also vowed to review the Green Book, which is parliament’s mechanism that determines how government investment is allocated - unsurprisingly, it has been criticised for disproportionately favouring growth in London and the South East for decades.
Infrastructure and public transport were pressing issues for a lot of people in the North. Many rural communities outside the South have poor infrastructure and the number of cancelled and delayed rail services has more than doubled since 2014. As a way to tackle this, the government proposed the High Speed 2 rail link that will connect London and the North of England. This was welcome news at first, however, the project ran into a number of issues and there was a big question mark over whether the project would go ahead at all - particularly the second phase between Birmingham, Manchester and Leeds. In his budget, the chancellor reassured the British public that HS2 will be going ahead as planned and he confirmed that the bill would be split to ensure that both the Manchester and Leeds leg of the rail link will be complete. Additionally, the Chancellor said that he was ‘committed’ to deliver a high-speed rail link between the North West and the North East coast - also dubbed as the ‘Northern Powerhouse Rail’. However, he only addressed the route between Manchester and Leeds and not the full route between Liverpool and Hull. Many critics believed that this response from the chancellor did not show enough commitment to deliver this much-needed rail link.
On a more positive note, the chancellor promised that investment in the national infrastructure will be the highest it has been since 1955. In total, the government will spend around £640 billion of gross capital investment on roads, railways, communication, schools, hospitals and power networks across the country by 2025. Sunak also highlighted that the government will be allocating more money for rural areas to improve transport networks and connectivity.
The chancellor also spoke about the government’s commitment to improve opportunities and innovation in Northern Regions. As a way to tackle both environmental pressure and a shortage of opportunities, the government has proposed to spend £800m on two or more ‘carbon clusters’ which will create 6,000 jobs in Merseyside, Humberside and Teesside and will bring skilled workers to these areas. The new facilities will be supported by the creation of a new £800m Carbon Capture and Storage (CCS) Infrastructure fund. The budget will be finalised in the ‘Comprehensive Spending Review’ later this year. The government will also provide an immediate funding boost of £400m for universities and other educational institutions to improve research, equipment and infrastructure.
While the budget does look promising on paper, there are some concerns about whether the government has allocated enough resources to help regions in the North and Midlands. Andy Burnham, the Mayor for Greater Manchester, rated the budget announcement a mere 6/10 and said that although it was a promising start, the chancellor still failed to address a few highlights that were promised during the general election, including funding for social care in the North of England and public transport in cities like Manchester and Liverpool.
There is also the glaring issue of Coronavirus and the devastating effect it’s having on the public’s health and the economy. The outbreak has now been upgraded to a pandemic and the Chancellor has been forced to allocate an extra £1bn for emergency funding. Overall, the government will have to spend around £30bn to help the country recover from the effects of the virus. Naturally, it’s going to take longer to put everything that was promised in place and the jury is still out on whether the government will need to fork out more money should the situation worsen. This would obviously need to be a priority over anything else, but it will be interesting to see if the extra funds will be allocated wisely.
To summarise, the budget looks promising for the North of England, but then again it needed to be because a large chunk of the population chose to vote for the Conservatives on the basis that they will provide more for those up North - it wouldn’t be wise to not honour this if they wish to keep all those seats in Parliament. Will the allocated budget be enough to deliver what was promised to Northern Regions? Only time will tell, but it is now more important than ever for them to prove that they are, in fact, committed to closing the North-South divide.
