Speaking in Leeds as Scottish voters decided whether they should remain part of the UK, the Deputy Prime Minister said people in the North were right to ask where promises of further devolution to Edinburgh in the event of a ‘no’ vote left regions such as Yorkshire.
Mr Clegg was asking for ideas for his Northern Futures initiative which aims to bring together proposals for the future of the economy in the North and the powers and funding which will be needed.
The project will lead to final proposals to be unveiled in Yorkshire in November, but the Deputy Prime Minister said it was clear that removing the Treasury’s vice-like grip on public spending will be key.
“I’ve always thought any move towards further decentralisation that doesn’t include greater control over money is slightly hollow.
“There is a big issue about how we decentralise our highly overcentralised tax system.”
The Sheffield Hallam MP said the Government had already made moves in the right direction through measures such as allowing councils to keep a share of the business rates they collect and freedoms to borrow but acknowledged that they represented “small steps”.
He said the major cities in the North needed to do more to put aside their rivalries and work together so they can compete in the global economy.
And he identified transport as a major obstacle to Yorkshire’s prosperity.
“We have three cities, Manchester, Leeds and Sheffield, all within sort of 45 miles of each other and it can be some great adventure to get from one to the other sometimes on some of that old creaking rolling stock.
“That just can’t last. If we are really going to create a travel to work space of sufficient scale we need to invest in transport infrastructure.”
But Mr Clegg dismissed as unworkable the idea of building a new high speed transpennine link, known as HS3, which was floated by Chancellor George earlier this year.
“I think simply imagining that we are suddenly going to find billions and billions of pounds to build HS3 from a standing start, I’m afraid that’s just not the world we live in at the moment,” he said.
He also expressed caution about the creation of a new layer of local government in Yorkshire to oversee money and powers moved out of London.
“I think anything that has new talking shops for politicians imposed on people will I think will create quite a hostile public reaction, I think quite rightly by the way.
“We have got the building blocks of a landscape people are familiar with, the counties and cities and increasingly counties and councils are working together much more effectively.
“I think there’s a danger of reinventing the wheel creating castles in the sky rather than working with the architecture we’ve got but granting that architecture significant new powers.”