Exclusive: Yorkshire's failure to agree on devolution leaves '˜empty space' in Northern Powerhouse says Osborne

The former Treasury boss said that failing to come to an agreement as to how Yorkshire’s cities could work together would mean Whitehall dictates a set of rules, something he said was “totally counter” to the idea of devolution.

Speaking to The Yorkshire Post he said that his successor Philip Hammond was totally committed to the project and that the economic uncertainty brought about by the Brexit vote made the importance of an empowered north more important than ever.

So far, devolution settlements have been reached in South Yorkshire, Manchester, Liverpool, Birmingham and the North East but a deal for the rest of Yorkshire remains mired in political infighting between the region’s politicians.

Mr Osborne said: “I think Leeds not being part of that leaves a bit of an empty space and hope it is filled. But it can be filled in the next year or two, it doesn’t need to happen overnight, and I hope Leeds and Bradford and other areas can work together and come to an arrangement.

“But the onus has to come from West Yorkshire. If you are relying on people in Whitehall or Westminster to impose a deal it is totally counter to the idea of the northern powerhouse.

“I am very sorry they will not part of the first wave of elected mayors next spring.

“If you had asked me two years ago could we possibly have persuaded Liverpool, Manchester Teesside to go ahead, let alone Birmingham, I would have been amazed but we did.

“I would have loved it to have included Leeds but it hasn’t.

““It is not that Leeds is going to be left out of the Northern Powerhouse but West Yorkshire and the rest of Yorkshire must take more control of its destiny if it went for devolution.

“It is a complicated patchwork politically here, there are strong identities here from cities that are pretty close together. Ultimately it is for the local leadership here and businesses to make it happen.

“These problems that seem intractable are solvable, if you have the will and have the right team.”

Mr Osborne, who was fired from the Treasury by when Prime Minister Theresa May took power in the summer, said that one option if the rest of Yorkshire failed to deliver a settlement would be for Whitehall to impose one on the region, but added that this was something Government remained hugely reluctant to do.

“My successors in Government now face the choice, where you either impose a set of arrangement on West Yorkshire and say ‘we want you to take more control over the way you run your affairs, and we are telling you how to do it’, or you stick with the spirit of devolution, which is ‘this is what we would like you to do but you come to us with the arrangement that works for you’.

“If I or my successor imposes a deal on West Yorkshire I don’t think it will work. You won’t get the buy in from local community and business leaders and it will be hugely acrimonious.

“So I hope what happens is that people see the success of the new arrangements let’s say in South Yorkshire and people in West Yorkshire think, we can make that work.”

The backbencher was speaking to The Yorkshire Post during a visit to Sheffield and Leeds from the Northern Powerhouse Partnership (NPP), an independent body established to represent the voice of major business and civic leaders, of which Mr Osborne is chairman.

He said that the enthusiasm for the Northern Powerhouse remained strong and that the north of England, along with the new Government, was committed to the initiative.

“Philip Hammond, my successor is someone I have worked with very closely, he was my deputy for years, and he is doing a great job as Chancellor, and he was talking about the Northern Powerhouse just last week. The Treasury is engaged and different government departments are engaged.

“The fact that we have got Chinese investment going into Sheffield for example says to me that we are able to sell the north of England collectively around the world.”

He added that the decline in the UK’s economic forecast since the vote to leave the EU made the importance of the Northern Powerhouse “even more important”.

“There is no doubt as we heard last week that Brexit from the official Autumn Statement poses and economic challenge for Britain including the north but there is no point going back over that vote. The people have spoken and we need work more closely together than we have in the past.”