Osborne makes pledge to grow North economy

George Osborne insisted the coalition had learned the lessons of the past and was not content to see an economic recovery driven by growth in the South.

“I’m the first to say look we should learn the mistakes of what went wrong in the past and I think it would be a tragedy if this country again, as it did a decade ago, gambled all of its fortunes on the success of the City of London 200 miles to the south and think the rest of the country can just sit on the coat-tails of the City.

“That’s what Labour chancellors did and it was a disaster for our country and we are still paying the price.

“So I want to see manufacturing and other businesses grow across the United Kingdom and I also want to make sure all parts of the UK, especially the North and I speak as a North-Western MP, share in the prosperity.”

Former Deputy Prime Minister Lord Heseltine produced a report for the Government last year suggesting the best way to kickstart the economy outside the South-East was by devolving control over large sums of Government cash from Whitehall to the regions so decisions could be taken locally.

The Chancellor created a “local growth fund” in the wake of the report but has since faced repeated criticism for not being more ambitious, most recently from Labour leader and Doncaster MP Ed Miliband who said the Government had gone along with it “about one per cent”.

But Mr Osborne yesterday rejected portrayals of him as a roadblock to devolution.

“I don’t think the Labour Party are in much of a position to lecture anyone. They ran the entire country out of the square mile in the middle of Westminster and didn’t trust anyone else to take any decisions and then drove the economy into the wall.”

The Chancellor said the North needed “powerful voices saying we can grow our local economy and we don’t want to have, as I say, a relationship with London where all the decisions are taken in London or indeed an economy where we’ve put all our bets on the City of London as my predecessors did.

“I see a lot of progress in this direction but there’s further to go.”

He added: “Whether its city deals, creating local enterprise partnerships, now bidding for this money that was never available before in the Heseltine pot – by the way the clue’s in the title, this was a Conservative, Heseltine, who came up with this idea – all of these things I think show a willingness not just to trust local communities but to understand our country as it recovers should not repeat the mistakes of the past and should trust local people and trust to the growth of the local economy.”

Improved transport links are often held up as one of the keys to unlocking the region’s economic potential but there are huge disparities in funding, with London’s Crossrail project alone costing almost £15bn.

But Mr Osborne insisted the Government’s transport plan for the North was about more than high-speed rail.

“High Speed Two is not crowding out other key bits of transport spending and when you look at the investment going into transport in the North, when you look at not just the Northern Hub, the electrification of the trans-Pennine route, you look at some of the new road schemes – people have seen roadworks on the M62 as evidence of that – that is investment going in.

“I think it’s a mistake also to think that the way you deal with the disparities in our country is simply by investing in transport – I wouldn’t see it’s not important – but what you really want to see is our great universities in the North flourishing too.”

Mr Osborne was speaking during a visit to the region which included a stop at Dean Clough Mills in Halifax, a former carpet factory now home to 150 businesses, where he met apprentice chefs at The Cooking School.

The Government yesterday set out how businesses can apply for a new allowance which will allow firms to cut their national insurance contributions by £2,000.

“I was talking to some of the small businesses in Halifax and they were telling me how it would make a real difference to them, how they would be able to take on some new members of staff which was good to hear because our long term economic plan is all about helping businesses grow and providing us with the jobs and prosperity we need as a country.”

He also visited Silsden-based engineering business Advanced Actuators, one of only a handful of firms in the world that can produce devices capable of moving huge pieces of metal with a very high degree of accuracy.

Director Chris Woodhead welcomed Mr Osborne’s visit and took the opportunity to ask for more help exporting.

“Exporting is fine but you’ve got to support that product. You need engineers in that country which costs money. We need to train engineers in the country with the facilities for after sales service and that will cost us £60,000 per country.”