Autumn Statement: Hammond sets out Northern Powerhouse plan

The plan includes commitments to attract skilled workers to the North, improve school standards and attract overseas investment.

It contains specific commitments to fund the development of the business case for the renewal of the Sheffield Supertram and almost £50m to help support Yorkshire host the 2019 Cycling Road World Championships and the 2021 Rugby World Cup.

The Chancellor confirmed the North would receive £556m from a £1.8bn pot of funding previously announced to help support regional economic growth plans.

However, critics are likely to question the Government’s ability to deliver its Northern Powerhouse Strategy when it has struggled to meet existing commitments, such as rail electrification.

The Northern Powerhouse was a concept championed by former Chancellor George Osborne who argued the North could only compete on the world stage, and close the gap with the South-East, through better connections and closer working between its towns and cities.

Following his sacking from the Treasury by incoming prime minister Theresa May, the idea appeared to lose favour in Government.

But Mr Hammond used his first Autumn Statement to underline the Government’s commitment.

He said: “This government recognises that for too long, economic growth in our country has been too concentrated in London and the south east.

“That’s not just a social problem, it’s an economic problem. London is one of the highest-productivity cities in the world and we should celebrate that fact.

“But no other major developed economy has such a gap between the productivity of its capital city and its second and third cities.

“So we must drive up the performance of our regional cities”.

The Northern Powerhouse Strategy promises work will continue on plans for high speed trans-Pennine services - dubbed HS3 - with more details next year.

The A66 between Cumbria and the North-East will be dualled and the Government will look at the case for investment in other trans-Pennine roads.

Ministers will work with the North to produce “innovative proposals for attracting skilled workers”, the plan said.

It includes proposals to improve careers advice for young people in the North and to increase the number of people taking up the most skilled apprenticeships.

The Northern Powerhouse will be promoted as an idea to foreign investors with a portfolio of opportunities worth £5bn.

Chris Hearld, Leeds-based chairman for business advisory firm KPMG in the North, said: “The Chancellor couldn’t have given businesses and citizens in the North a clearer message that the Northern Powerhouse remains a government priority than he did today, with a focus on productivity, the publication of a Northern Powerhouse Strategy and a reaffirmed commitment to Northern Powerhouse Rail.

“With productivity in the North significantly lower than the UK average, the Chancellor was spot on to talk about addressing the UK’s own internal productivity gap as a key part of his ambition to raise our national productivity to competitive levels on the world stage. Without improving the North’s record in this measure, he won’t be able to achieve a significant boost nationally.

“As businesses across the North have been vocal in stressing, and as the new Northern Powerhouse Strategy references, a key barrier to pulling up our productivity socks is the lack of connectivity on patch. So, it was nothing less than a relief to hear the Chancellor reaffirm his commitment to Northern Powerhouse Rail, which is a much needed piece of the transport infrastructure jigsaw required to address this challenge.

“The additional borrowing powers for Mayoral Combined Authorities is a further, welcome, green light to a more devolved future for the UK city regions, albeit, it keeps the pressure on them to develop in the form the government has specified.”