Will The Smith Commission Boost the Northern Powerhouse?

The cross-party agreement hammered out by the Smith Commission has already spurned some Labour MPs in north England constituencies to claim that Scotland will have tax and development advantages over England. The differential, will, they say, lead to reductions in investment and job creation in the north, especially at regional airports.

The comments are timely. The Smith Commission report comes only 8 weeks after the Scottish Referendum, and 4 weeks after the announcement by the Treasury of the agreement to decentralise powers to Greater Manchester. The Treasury announcement was made with the aim of promoting an economic renaissance across the North, and so the question arises as to whether the constitutional reforms flowing from the Smith Commission will reduce the prospects of successfully regenerating the northern cities?

The answer would almost be an emphatic no. It may be that the nature of economic growth will now change. If Scotland's major cities benefit from tax advantages there could be a rebalancing of job creation and economic influence across the whole region between Manchester and Edinburgh. There is a distinct possibility that the concept of the Northern Powerhouse that was limited to the string of English cities from Liverpool to Hull via Manchester and Leeds will now become a wider entity encompassing both the Glasgow and Edinburgh city regions.

Enhanced economic sovereignty for Scotland, coupled with decentralisation in England will create new structural relationships between northern England and Scotland. As the debate about reforming local government in England, and the northern cities in particular, gathers pace, and the reality of new governmental structures come into being, there will be an increased focus on how northern England will work with a new Scotland.

Both Leeds and Manchester are well placed to take significant advantages of the new relationships to emerge. The cities are already internationally focussed, and Manchester especially has distinctly positive outlooks to being a significant European city. There are similarities of outlook, scale and desire for self-determination that can act as a bond to the cities as they take advantage of the political, economic and financial tools that are being handed over to them.

*Disclaimer: The views and opinions expressed in this article are mine and do not necessarily reflect the official policy or position of any part of Savills plc or any of its associated companies, nor are any assumptions made reflective of the position of Savills plc and its associated companies.