Chancellor Philip Hammond has been urged by political and business leaders to commit the Government to re-balancing the economy in next week’s Budget by delivering ‘real and focused investment’ in Yorkshire and the North.
Ahead of Mr Hammond’s speech on Monday, the metro mayors of South Yorkshire and Teesside were joined by leading experts in the region in their call for extra funding for transport, skills and jobs in the region.
Teesside mayor Ben Houchen said his fellow Tory was in the “unenviable position” of continuing to try and balance the books while fulfilling the Prime Minister’s pledge to end austerity amid the uncertainty of Brexit.
He said: “With our economy now almost 20 per cent bigger than it was in 2010, the Government now needs to use this Budget to show that the hard work was worth it, and that fiscal restraint can now pay dividends.”
Sheffield City Region mayor Dan Jarvis said: “The Chancellor must not miss the opportunity to show people in the Sheffield City Region and Yorkshire that this is a Government that listens.
A Government that is committed to rebalancing the north-south divide. A Government that will empower us to use our strengths to grow our economy, create jobs and drive prosperity for all.”
Ian Warren of the Centre for Towns said Philip Hammond has used his last three statements to pursue a model of growth based on city regions, as shown by the £1.7bn allocated to the Transforming Cities fund last year.
He said: “We have shown the effects of an ageing population over the last three decades, most powerfully in recent stories carried by The Yorkshire Post. We have shown how our cities and towns are moving apart; cities like Leeds are getting much younger whilst outlying towns are getting much older.
“Mr Hammond’s choice to focus on cities as the engines of growth risks further widening this process. Under this choice, towns around Yorkshire should expect to continue to lose their young people to cities. At the Centre For Towns we ask that the Chancellor, and the city-regions now provided with hundreds of millions of pounds to deliver his vision, reflect on this process.”
Mr Hammond’s third Budget as Chancellor, setting out out the state of the nation’s finances and the Government’s proposals for changes to taxation, will be delivered at about 3.30pm on Monday.
Henri Murison of the Northern Powerhouse Partnership called for the Chancellor to make a commitment in principle to the £100bn of funding needed in transport spending to transform the North’s economy.
He said he hoped to see progress on developing the Government’s industrial strategy, unveiled last November, given the opportunities to support sectors such as health sciences and carbon capture and storage.
The Yorkshire Post asked leading figures from across the region to spell out what they wanted to see in Monday's Budget. Here's what they said.
Sarah Longlands, IPPR North
Nearly five years after the ‘Northern Powerhouse’ went live, the 2018 Budget is an opportunity for the government to signal their future commitment to the North of England.
Now is the time for the Northern powerhouse to evolve beyond the rhetoric; into a plan for the North’s future which puts the welfare of the North’s people at its heart. Whilst investment in hard infrastructure, particularly transport, is to be welcomed, if people do not have the opportunity to participate in the jobs and businesses which are created in the economy, then the new trains will simply bypass the communities who could benefit most.
At IPPR North, we are exploring a blueprint for a northern industrial strategy which prioritises good quality jobs along with business growth and investment.
IPPR North have argued that the North needs a long-term vision for skills and education which enables people to reskill and retrain in a rapidly evolving jobs market.
Adult education is a particularly relevant issue for a Chancellor concerned about welfare reform. If we don’t support people to make the transition to new opportunities in the economy, like low carbon energy, the costs of welfare will continue to rise. The Chancellor could propose the development of a new ‘skills for the North’ Taskforce, charged with supporting Colleges and LEPs to work together with businesses across the North to identify key gaps in provision.
As IPPR North have previously argued, putting people at the heart of the powerhouse also means broadening the geographical scope beyond the cities to build a fairer North. With the political momentum around the towns agenda now growing, the Chancellor could use the budget to recognise the value of the North’s diverse network of towns and in doing so, pioneer a new approach to regional prosperity.
Dorothy Fairburn, CLA Director North
I would like to see the Chancellor’s Budget recognise that making a long-term funding commitment is essential to achieving the Government’s aspirations for farming and the environment. I fully support the ambition for a profitable farming sector that provides high quality affordable food as well as a greater range of public goods for society, from enhancing the environment to the highest standards of animal welfare. But Government plans must also recognise that farmers and land managers are long-term investors and they need to be able to plan ahead with confidence.
Right now many farmers are needing to make financial commitments for 2023 and beyond, but this is very challenging without the much-needed certainty from Government about how gradually acreage-based payments will be reduced or the design, make up and start date for a new scheme.
Secondly, I would like the Budget to show recognition that only profitable farms will be in a position to deliver both food for our tables and wider public goods, and so supporting farms’ stability and productivity must not be a secondary concern to environmental aspirations.
The Budget would be a good opportunity for the Government to demonstrate its commitment by spending on support improvements in farm productivity which should begin now, particularly on advice, skills training and investment support. This spending should go hand in hand with capital allowances that encourage construction to bring on-farm infrastructure up to date. The under-spend on current stewardship schemes should be reallocated to productivity spending.
Finally, an increase in funding for the police would be welcome, especially in rural areas where resources are currently stretched. In addition, the continuing the freeze on fuel duty would lessen the financial pressure on a sector, that is heavily dependent on it due to its remote rural nature.
Suzanne Robinson, Yorkshire managing partner, EY
The ongoing saga of Yorkshire devolution and the question of what that will look like might not fall directly under the Chancellor’s remit of responsibility but if I’m making a wish list, anything that can be done to help resolution and progression on this agenda has to feature.
Devo aside, Yorkshire and the wider North needs real and focused investment if business growth is to be fostered and inward investment encouraged, regardless of the uncertainty around Brexit.
Transport is arguably one of the biggest levers to pull on to drive regional economic growth and significant investment in road and rail is vital in achieving that and remains the big ask.
Northern Powerhouse Rail or HS3 – whatever the name the requirement is the same: a commitment from Government to put real money into delivering much improved rail links and services across the North.
EY’s own Regional Economic Forecast shows that in Yorkshire we are predicted to have an annual GVA growth rate of 1.4% to 2020, and investment in tech skills will be vital to maintaining this trajectory.
The digital revolution is something that touches every business, regardless of sector or size, so ensuring the roll out of 5G beyond test beds and across the North would be an enabler for the growth of all businesses here.
EY recently held an innovation sprint in Leeds to gain insight into what Northern businesses want and need to succeed in the rapidly changing digital landscape. The answers from technology entrepreneurs, investors and representatives from some of the North’s largest companies are to be published in a report of recommendations before Christmas.
One point that struck me was businesses desire for structured support and clear signposting in order to navigate the digital landscape – something that wouldn’t be particularly expensive to implement but, if done properly, would garner a huge return on investment for Hammond and the Government.
Jo Miller, president of Solace and chief executive of Doncaster Council:
When 300 senior public service leaders tell you that their councils will be struggling to deliver even the most basic of core services in future, it’s time for the Government not just to listen, but to act. And make no mistake about it – that is the warning that came out loud and clear when I was with my local government colleagues last week in Brighton.
When Solace surveyed council chief executives recently, over half said that they would have to reduce universal services if cuts continue. What we are talking about here are the services that matter to everyone because they make our communities decent places to live: roads, parks, streetlights, libraries, lollypop ladies, youth clubs, sports pitches. If Budget 2018 gives us another set of one-off emergency measures, the government will only be delaying the inevitable.
What we need in the next Budget is a commitment to work with us on a long-term plan for local services. In our new call to action, we have offered a credible basis for a future plan to help secure the certainty, stability and flexibility that is needed in order to enable effective planning, just like any business requires.
Some will say that that is not what the Chancellor of the Exchequer is meant to deliver in the Budget. But if not now, when? A statement next week about making local services sustainable would send a powerful signal to people and places across the country that they matter, that their wellbeing lies at the heart of decisions about public spending.
Everything cannot be about Brexit. There has to be room in this Budget for the issues that touch people’s lives on a daily basis, be it access to decent affordable housing, care for our more vulnerable residents or shared spaces that bring us together.“
Ben Houchen, Conservative mayor of the Tees Valley
At this Budget, the Chancellor will be in an unenviable position, having to both take steps to balance the books and fulfil the Prime Minister’s promise to end austerity.
Deficit reduction is still the right thing to do. The £50billion we spend each year on debt interest would be far better used for health and regional growth, not lining the pockets of our international creditors.
With our economy now almost 20% bigger than it was in 2010, the Government now needs to use this Budget to show that the hard work was worth it, and that fiscal restraint can now pay dividends.
This means backing the grafters who work hard get on in life by freezing fuel duty, raising the National Living Wage, increasing the tax-free personal allowance, and lowering taxes for businesses to spur job creation. Because if we back our innovators, wealth creators, entrepreneurs and risk-takers, everyone benefits.
We also need to see a real show of commitment from Government to develop regional transport infrastructure - such as Northern Powerhouse Rail. Connecting the North’s great cities is an absolute no-brainer.
In the Tees Valley, we have an ambitious £500million plan to build a new A19 crossing over the River Tees, a new bypass around Darlington linking the A66 to the A1(M), and to entirely transform Darlington railway station - the gateway to the North East. A vow to back our plan, in this Budget or the Spending Review next year, would be warmly welcomed the people I represent, and those coming here to work, invest or visit.
Last year the Chancellor earmarked £123million to aid my plans to completely regenerate Redcar’s former SSI steelworks site. We aim to create 20,000 high-quality jobs for local people over the next two decades, adding £1billion per year into the economy.
Now I want Government to go even further and commit to an ambitious package of tax breaks and financial incentives for businesses wanting to move on to the site.
Richard Sheriff, President, Association of School and College Leaders and CEO of Yorkshire’s Red Kite Learning Trust
The Chancellor simply must address the shortfall of funding in our schools and colleges in the Budget on Monday. The government’s often-repeated claim that it is spending record sums on schools is terribly misleading. The total amount spent on schools has risen only because the number of pupils has increased by more than 600,000 over the past eight years.
What is important is how much funding is provided for each pupil, and when we look at those figures it is a very different picture. Recent analysis by the Institute for Fiscal Studies shows that total funding per pupil has fallen by eight per cent in real terms over the past eight years, including cuts of over 20 per cent to school sixth-form funding.
Behind these statistics is an increasingly heartbreaking human story. The majority of school spending is on staff, so it is inevitable that budget cuts mean fewer teachers and classroom assistants. That, in turn, makes it more difficult to provide additional support to children who need that extra help. And, for all pupils, it is harder to provide the range of courses, options and enrichment activities that parents rightly expect for their children.
Ultimately, education standards, which have been hard-won over many years, will suffer unless the funding situation improves. The government is due to conduct a spending review next year, which needs to result in improved funding for education in the long term. But we also need immediate action in Monday’s Budget.
This is particularly so in respect of our woefully funded sixth forms and colleges, where the basic rate of government funding is just £4,000 per student, compared to university tuition fees of up to £9,250. The crisis is now and the solution cannot wait. The Chancellor owes it to our young people to do the right thing."
Dan Jarvis, Labour mayor of the Sheffield City Region
An affordable, reliable and environmentally-friendly transport system, made fit for the 21st century with Transforming Cities funding. An education system that ensures all young people achieve their potential and provides people with the skills to succeed -whatever their background.
Businesses that innovate, create jobs and create economic growth.
These things are crucial to driving prosperity for Yorkshire's communities. And that's why I've called on the Chancellor of the Exchequer, Philip Hammond, to prove through Monday's Budget that the Government is committed to rebalancing our country's economy.
Here in the Sheffield City Region, we're experiencing a renaissance in advanced manufacturing and engineering. Just this week I opened Boeing's first production facility in Europe, and in November we'll see another clear sign of investor confidence, when McLaren opens its new centre.
But to continue this growth story, we need Government to play its part. That's why I've called on Philip Hammond to use his Budget to give the green light to short-term, deliverable schemes in the Sheffield City Region.
The first is an East Coast Mainline station at Doncaster Sheffield Airport. If we want to tackle national aviation capacity issues, unlock significant economic growth and deliver our Global Innovation Corridor vision then national rail links to the airport are crucial. And, unlike Heathrow, it can happen quickly.
Two other projects that should be urgently prioritised are delivering the agreed funding for the upgrade of the Hope Valley railway line between Sheffield and Manchester, and committing to renew Supertram from 2024.
The South Yorkshire Futures programme, led by Sheffield Hallam University, is helping to create the best early years system in the country. That's why I've asked the Government to secure the long-term sustainability of this programme, as well as unlocking the Early Intervention Employment Support pilot for jobseekers, which is currently stalled.
Finally, I've pushed Government to respond to our bid to the Strength in Places Fund. We've submitted a detailed proposal seeking funding to supercharge our most innovative businesses with cutting-edge research to help them grow. An indication of our bid's success would enable us to start work.
The Chancellor must not miss the opportunity to show people in the Sheffield City Region and Yorkshire that this is a Government that listens. A Government that is committed to rebalancing the north-south divide. A Government that will empower us to use our strengths to grow our economy, create jobs and drive prosperity for all.
Dr Nick Scriven, Calderdale medic and President of the Society for Acute Medicine
I am president of the Society for Acute Medicine - this represents over 1,000 healthcare workers in the UK (a mix of doctors and nurses predominantly) who look after people who are admitted to hospital either via their GP or via emergency Department with medical conditions (i.e. things that do not need an operation). We will be the initial team looking after the vast majority of adult patients admitted as emergencies to hospitals across the NHS.
What do I hope for from the Budget? I would hope the budget goes some way to alleviating the year-on-year need to top up the finances to deal with all the extra patients we look after over the winter months but saying that the pressure has been steadily increasing month on month for the last 12-18 months with no relief.
I know that a large sum was put in last year (£337 million) as an almost emergency top-up but with roughly half of that earmarked for this winter despite warnings from many areas that it will be as tough as ever seem unheeded. My wish would be that the budget makers communicate with those working under pressure in our hospitals so they see the reality of their actions and plans are then put in place to proactively get the needed cash in the areas it will do the most good over the next six, 12 or 24 months.
The most obvious area involves the so called 'moth balled' wards that are lying empty mainly because of a lack of suitable skilled staff. If we had the sustained finance to go out and recruit, train and retain these people it would be a step forward. Regardless of how much money is put in, the NHS has a massive role to play on seeing that this is spent wisely on things that will make a difference to how we care for our patients now and in the short term.
Given the current severe pressure we are under to keep up with the ever increasing burden of sick, frail people and the obvious finite resource available we must prioritise their current and ongoing needs both in hospitals but also in the community above those projects that might have impacts 10, 20, 30 years down the line. We need an NHS that is fit for purpose today and the next 12 months to look after all those who depend on us now.
Ian Warren, Centre for Towns
In his three statements as Chancellor Mr Hammond has name-checked cities and city-regions dozens of times whilst only mentioning the word ‘town’ three times.
The Chancellor has used his last three Budget statements to pursue a city-region model of economic growth. Revealingly, last year’s Budget documentation revealed how GDP growth would be boosted by “increasing the productivity of the five biggest city-regions so that they matched UK productivity”.
The choice has clearly been made: cities and city-regions are this government’s preferred priorities for growth. No surprise then, that last year’s Budget saw almost £2 billion provided to the Transforming Cities Fund, whose primary purpose is to “focus on intra-city connectivity, making it quicker and easier for people to access jobs in some of England’s biggest cities”.
At the Centre For Towns we have shown the effects of an ageing population over the last three decades, most powerfully in recent stories carried by the Yorkshire Post. We have shown how our cities and towns are moving apart; cities like Leeds are getting much younger whilst outlying towns are getting much older.
Mr Hammond’s choice to focus on cities as the engines of growth risks further widening this process. Under this choice, towns around Yorkshire should expect to continue to lose their young people to cities.
At the Centre For Towns we ask that the Chancellor, and the city-regions now provided with hundreds of millions of pounds to deliver his vision, reflect on this process. That unless we dedicate resource to the challenges faced by our towns we risk constructing a twin-track economy.
One where, in Yorkshire, an overheated Leeds gets younger and more prosperous but takes on most of the economic growth for the region while outlying towns face a battery of age-related social crises and diminishing influence."
Paul Darwin, Skipton Building Society’s Director of Intermediary Relationships
The housing market continues to dominate debate. Keeping people moving along the property ladder is key; and the lifeblood of our housing market remains first time buyers.
But recent research shows a significant number of first time buyers dismissing the reality of owning their own home. Almost a third of millennials see travelling the world as a top life goal, rather than home ownership. And with house prices having increased by over 15 times in the last 40 years who can blame them?
So what can Philip Hammond do to keep Yorkshire moving?
One option is to support the building of more affordable homes. But also ensuring enough of the new housing stock is both suitable and affordable for first time buyers. More capital funding could be used to incentivise housebuilders to develop more property suitable for shared ownership and rent to buy schemes, while also providing housing associations with much needed grants to increase their own supply.
A focus on new build opportunities with stamp duty incentives for older house owners to downsize in their local communities would also help. This would increase Yorkshire’s volume of housing stock available on the market and help create movement up and down the property ladder.
The market is expectantly awaiting confirmation that the hugely successful Help to Buy scheme is extended beyond 2021. Nobody wants a cliff edge finish to the scheme. The likelihood is we will see it extended, but the format may change both in terms of eligibility (probably first time buyers only) and financially.
Home-ownership isn’t for everyone, and the private rental market has had it tough for some time. The introduction of new taxes, controls and restrictions for landlords has really squeezed this market. Our region needs responsible landlords, high quality rental property, protection for renters and above all, competitive and affordable rents. We hope not to see any similar new initiatives in the budget - taxing landlords to the point of destruction won’t solve the housing crisis.