The UK government is actively promoting the Northern Powerhouse strategy. During the UK-China Economic and Financial Dialogue in September 2015, UK Business Secretary Sajid Javid, accompanied by a delegation of government officials and business representatives from Northern England, visited various provinces in China to promote the Northern Powerhouse strategy and seek partners and cooperation opportunities. Against this backdrop, investing in the UK presents another significant opportunity.
I. Strategic Background
The Northern Powerhouse strategy was first proposed by UK Chancellor George Osborne in Manchester in mid-2014. The background is that since the second half of the last century, the economic and social development of Northern England has generally lagged behind the Greater London area. Through the Northern Powerhouse strategy, Osborne intends to build Northern England into a second economic center that rivals London.
The Northern Powerhouse strategy generally involves 11 regions in Northern England, with cities such as Manchester, Liverpool, Leeds, and Newcastle as the core. Key measures include devolution of power, administrative system reform, vigorous development of infrastructure, advancement of scientific research, and optimization of industrial upgrading. The UK Treasury's new Commercial Secretary Jim O'Neill and Minister for the Northern Powerhouse James Wharton are responsible for the specific implementation of the Northern Powerhouse strategy.
II. Specific Implementation
The Northern Powerhouse strategy provides financial support for the construction and development of northern urban areas through a combination of government fiscal appropriations and corporate investment. Currently, relevant cities have begun to focus on developing their respective advantageous industries in accordance with the strategic layout: creative industries in Liverpool, mass media in Manchester, legal services in Leeds, energy in Hull, manufacturing in Sheffield, and software development in Newcastle, etc.
The UK government's current financial support for the Northern Powerhouse strategy mainly includes: an investment of £235 million in the Manchester Institute of Innovation Materials; £113 million in the Warrington Computer Research Center; £78 million in the Manchester Factory, theater, and exhibition center; and £20 million in the Newcastle Center for Ageing.
Corporate investment projects in the northern region mainly cover fields such as ports, airports, railways, marine engineering, and organic energy. Among them, the total corporate investment in the Humber region is £1.11 billion, £1.27 billion in the Liverpool region, £1.8 billion in the Greater Manchester area, £232 million in the Northeast region, and £800 million in the Sheffield region.
In the process of implementing the Northern Powerhouse strategy, the UK government is focusing on developing the transportation sector in the northern region and has established Transport for the North (TfN) to formulate and execute northern transport development policies, intending to implement a unified smart ticketing system for northern cities to facilitate transportation across the north. At the same time, it plans to invest £13 billion to build and improve the northern railway system; invest an additional £2.7 billion for train purchases and major road upgrades in the East Coast region; and invest £50 billion to build the HS2 high-speed railway, etc.
In addition, another widely watched policy of the Northern Powerhouse strategy is the implementation of devolution. According to this strategy, Manchester will become the first city outside the London area to be managed by a directly elected mayor. The first mayoral election will be held in 2017. The future Mayor of Manchester will control billions of pounds in public funds, and the central government will devolve more power.