George Osborne to GMCC: Success of Northern Powerhouse is critical in response to BREXIT vote

George Osborne, in Manchester today to attend the Somme 100 National Commemoration, took the opportunity to speak to an invited audience of members of the Greater Manchester Chamber of Commerce in the wake of the BREXIT vote last week.

In stark contrast to that of Michael Heseltine in Birmingham, Osborne’s message was about as upbeat as the economic circumstances allow and his mantra was “Realism and Reassurance”.

He took the damaging economic impact of the vote to leave the EU head on and reassured the audience that he and the Bank of England were prepared for it and have already begun to roll out the contingency plans in the form of increased lending availability to the Banks and other measures. He stressed that UK banks are far better capitalised than they were in 2008 and are much more able to continue to provide liquidity in the markets to mitigate the shocks.

Fiscal prudence continues to be key and he made it very clear that the rules to which the Government works permit a reassessment of the desirability of seeking to meet his deficit targets by 2020.

He touched on re-shaping the relationship with Europe too, but the most interesting comments were those on the Northern Powerhouse, in his capacity as the central government architect of that concept.

Mr Osborne acknowledged explicitly that the BREXIT vote carried with it a clear message that vast swathes of the UK population felt disenfranchised from both UK and European politics. A critical response to that disenfranchisement in the North of England was, in the Government’s opinion, to continue to drive forward with work towards establishing the Northern Powerhouse and delivering economic growth with all of its attendant commerce, community and cultural benefits.

He swerved a direct answer to a question about previous comments of his to the effect that BREXIT would take the impetus out of the Northern Powerhouse project. He simply re-stated – under the “realism” element of today’s mantra – that there was no hiding from the challenges.

His closing message, though, was that the Northern Powerhouse is still and will continue to be a key plank of a Conservative Government’s plans for economic growth in the North.

As ever, the proof of that partciular pudding will be in the eating. Manchester City Council has already, in the aftermath of the referendum vote, given the go ahead to over £5m of funding for the development of a digital and creative hub on part of the Centeal Park business site in Manchester in a clear signal of “business as usual” and as a rallying cry to maintain focus on driving forward. It remains to be seen if/when central government will make the same commitment…..

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