The Northern Powerhouse is already reshaping Britain but has the potential to go further - Lord Jim O’Neill

The real growth story lies in the heart of the Northern Powerhouse, what I would define more precisely as the Northern Corridor that stretches from Liverpool and Manchester to Leeds and Sheffield. This area of 8–9 million people that I often call “ManSheffLeedsPool” has achieved productivity growth close to 1 per cent per year between 2004 and 2023. That might not sound spectacular, but significantly better than London and the UK average and within this period growth has accelerated more in recent years.

If this region’s share of the national economy, currently around 15 per cent, were to grow, its improved productivity performance could really start to make a national difference. If that could be coupled with London, which currently make up just short of 25 per cent of the economy, returning to its 90s era glory days, then we could meaningfully shift the dial on the UK’s woeful growth and productivity performance.

I should stress that this piece is not about London’s challenges, but it seems the various global shocks and the self-inflicted shock of Brexit are hitting them harder than many expected. What is more interesting is that, contrary to popular wisdom, parts of the North are not just resilient to these shocks, they’re outperforming expectations.

The Northern Powerhouse concept, introduced and adopted by George Osborne, centred on connecting key northern cities through better infrastructure. The idea: treat Manchester, Liverpool, Leeds, and Sheffield as one integrated economic zone, just as London functions thanks to its extensive transport network. I am not the first to point out that the distance between these cities is comparable to many London tube lines, a project like what I call Northern Powerhouse Rail, an Elizabeth Line for the North, could finally realise that vision.

Within this core area, the GVA data shows some clear pockets of strength, and as is becoming better known, but still nowhere near enough, Greater Manchester is the urban star. Its productivity has grown almost 1.5 per cent annually over the whole of this 20 year period. Importantly, it is not just the city centre, but also in several southern and northeastern boroughs. With better connections, we could lift the entire “ManSheffLeedsPool” corridor to this level, which would again be more than enough to meaningfully boost the national growth rate.

This is not just wishful thinking. Amongst the other pleasing evidence from the recent annual data, South Yorkshire has been revealed to have been enjoying its own quiet success story: Rotherham. This may surprise those aware of its difficult recent history having been affected by the post-Southport riots, but the data shows a near 3 per cent rise in its productivity over the 20-year period. This is most likely largely thanks to the Advanced Manufacturing Centre there (AMRC) which is providing high value added work and the presence of some of the world’s most sophisticated manufacturing companies.

There are still far too many areas that still lag behind, but with each year and as new data emerges, there are signs of the improvements spreading.

These gains have all come with the help of some devolved responsibilities and in spite of inconsistent and erratic attention from Whitehall. With that in mind, can you imagine what could happen if we decided to take the opportunities of the Northern Powerhouse seriously?

Lord Jim O'Neill is a former Treasury Minister.