Mark Casci: Drop off in foreign investment shows Tories have no interest in Northern Powerhouse

Later this month, on June 23 to be exact, the concept of the Northern Powerhouse will turn five years old.

Prime Minister Theresa May makes a statement outside at 10 Downing Street in London, where she announced she is standing down as Tory party leader on Friday June 7. PRESS ASSOCIATION Photo. Picture date: Friday May 24, 2019. See PA story POLITICS Brexit. Photo credit should read: Yui Mok/PA Wire
Prime Minister Theresa May makes a statement outside at 10 Downing Street in London, where she announced she is standing down as Tory party leader on Friday June 7. PRESS ASSOCIATION Photo. Picture date: Friday May 24, 2019. See PA story POLITICS Brexit. Photo credit should read: Yui Mok/PA Wire

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Investment into North plunges

Launched by then Chancellor of the Exchequer, George Osborne, it was an ambitious plan to rebalance the economy away from the South East by empowering Northern cities with increased devolved powers and investing in the infrastructure of the region.

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3 February 2017...... The Rt Hon George Osborne MP launch the first report from the Northern Powerhouse Partnership at AQL in Leeds Picture Tony Johnson.

Exactly two years on however the movement was stalled by the EU referendum result.

The backing of Theresa May’s doomed administration for the project was lukewarm at best. One of the Northern Powerhouse’s chief architects, Lord O’Neill, quit Government in protest at the lack of enthusiasm for the process and since then it has been left chiefly to business to continue the project’s original mission statement, led gainfully I should add by the Northern Powerhouse Partnership.

The back peddling from Westminster on empowering the North has been laid bare for all to see. Last summer’s chaos on the railways showed how little the North meant to the current Conservative leadership, which by then had become paralysed by the Brexit psychodrama and complacent due to the absence of a general election before 2022.

The latest manifestation of how the North South divide is worsening under the current political leadership comes today from some worrying research from professional services giant EY.

TOPSHOT - Britain's Prime Minister Theresa May leaves after announcing her resignation outside 10 Downing street in central London on May 24, 2019. - Beleaguered British Prime Minister Theresa May announced on Friday that she will resign on June 7, 2019 following a Conservative Party mutiny over her remaining in power. (Photo by Tolga AKMEN / AFP) (Photo credit should read TOLGA AKMEN/AFP/Getty Images)

In terms of foreign direct investments into Yorkshire, the region has had its worst year since 2013.

The total number of FDI projects in the wider Yorkshire & Humber region was down on the previous year with the number of jobs secured by investments in Yorkshire & Humber in 2018 at 1,345.

There were some crumbs of good news, with Leeds ranked as the third best performing city in the UK (outside of London) for attracting foreign direct investment (FDI) projects, with 21 FDI projects locating in the city in 2018, according to EY’s 2018 UK Attractiveness Survey.

However, Leeds was home to 43 per cent of all projects locating in Yorkshire in 2018 and it was the only town or city in the region to make the Top 10 for FDI.

The performance from our brothers and sisters across the North West and North East was little better and shows once again that reversing more than a century of neglect and short-sightedness is going to be far harder to achieve than we thought, especially given the absence of political support.

Brexit is for sure to blame for distracting the Government’s focus. It has done very little since the general election of 2017 other than tear itself to pieces on the issue.

But the fact remains that the UK remains the number one destination for foreign direct investment in Europe, ahead of Germany and France, with 1,054 projects, its third-highest number of FDI projects in 20 years.

However, larger and more southerly centres are seen as safer bets by overseas investors.

There will be many who will rush to blame the malaise in Northern activity on Brexit, and with some small degree of justification.

According to the report, 15 per cent of global investors say they have paused one or more UK projects due to Brexit, nearly double the figure from last year.

But the fact is that only six per cent of businesses plan to move assets out of the UK in the future and five per cent of investors say they have increased investment in the UK due to Brexit,

Brexit is not the problem here, it is a distraction at best.

The real factor at play is that there is a painful, myopic and deeply unfair lack of understanding of what an empowered and supported North could achieve.

Next week the Tories will set about electing a new Prime Minister. Much of the debate will consist of vacuous promises on Brexit. The reality is whoever emerges on top will face the same Parliamentary arithmetic as Mrs May.

Meanwhile a General Election in 2022 looms. If the Tories want to have any sort of political future in the North they must embrace the Northern Powerhouse like never before.