Osborne vows a Northern focus

The Chancellor told delegates in Birmingham that his idea of a Northern powerhouse was key to continuing the economic recovery, including the possibility of offering extra powers for directly elected majors.

Mr Osborne said the UK faces another £25bn of spending cuts after the General Election, but insisted the Government could build up a surplus, rather than just reducing the deficit, if it continued to put in place the measures needed for economic growth.

Instead of new taxes a series additional spending cuts will be introduced, including the newly announced two-year freeze on household benefits, bringing in £3bn a year by 2017.

Pensioners and the disabled will avoid the freeze but elsewhere some 10 million households, working and unemployed, will see a freeze on state handouts such as child benefit, tax credits, housing benefits and Job Seekers’ Allowance.

In a sometimes blunt speech Mr Osborne said it was only right that families not working saw a freeze in what they get paid for by those who are working.

He told the conference that he was sticking by his plans to link up the Northern cities, hinting at new devolution powers.

He said: “People know that disparities between different parts of the country have grown up over many decades under Governments of all colours.

“Let’s treat people as adults and not pretend we can reverse something like this overnight. But, equally, let’s not give up and say it can’t be done.”

He added: “Successful business, modern high speed transport, big science investments, top universities and strong leadership that comes with powerful elected mayors.

“Those are the ingredients of a Northern Powerhouse. That is how we deliver prosperity and security for families across the nation.

“And it is one of my driving missions to do everything we can to build it.

“Let us choose today to make reducing the gap between north and south, London and the rest, one of the central ambitions of the next government.”

Treasury minister David Gauke later said that while directly elected majors had already been rejected in referendums across the UK, the Chancellor believed that with new and clear powers the public would back them.

He added that reducing the North South divide would most likely be a target built around reducing the GDP gap between the two.

Mr Osborne’s Northern message was last night welcomed by Conservatives set to campaign in the North. David Skelton heads up the renewal group looking to expand the party’s appeal in the region.

He said: “It’s hugely welcome that the Chancellor has announced that narrowing the North-South divide will be a priority for the next Conservative government. There’s already been great progress since the election, with 140,000 more people in work in Yorkshire, 16,000 more businesses and an increase in the number of apprenticeships of almost two thirds.

“It’s crucial that this progress is continued over the next few years to create an even more dynamic, private sector led economy, with even more power being devolved to the people of Yorkshire.”