One Yorkshire devolution could add £30bn a year to region's economy by boosting exports and businesses, says landmark report

Handing powers and funding to a One Yorkshire mayor could add as much as £30bn a year to the region's economy by boosting its low level of exports and creating more businesses, a landmark report reveals today.

Thursday, 4th October 2018, 6:17 pm
Updated Friday, 5th October 2018, 4:58 am

The dossier commissioned by Yorkshire’s council leaders sets out how its 5.3 million population could benefit by an average of £5,400 a year if Ministers agree to the widely-supported devolution proposals.

Saying there is strong evidence that Yorkshire and the Humber is a “coherent economic area”, the independently-produced document seen by The Yorkshire Post says there are “potentially considerable advantages from devolution to the Yorkshire level”.

Its authors argue that the complex interactions between the region’s smaller economies and its administrative boundaries have held back efforts to set up a political system that it as “economic, efficient and effective” as it could be. According to the report, the region’s performance on exports is the worst in the UK “by some way” and current arrangements are not working well.

It adds: “There is clearly potential to try something different and to intensify work to promote exports (which devolution could allow) and the case for this is magnified in a post-Brexit era.”

Plans for substantial powers and funding to be handed over from central government to a Yorkshire combined authority, led by a single mayor, were outlined last summer and are now backed by 18 council leaders and the region’s only metro mayor.

But they have met resistance from Ministers, who insist the beleaguered Sheffield City Region deal must be fully implemented first, and critics who say Yorkshire is too diverse to function as one economic entity.

The report by consultants Steer Economic Development says that rather than being a weakness, Yorkshire’s diversity “will support economic resilience and can be presented and connected to present a rounded offer that assists in attracting investment, skills and tourism”.

Having a region-wide structure would allow it to make better use of assets across Yorkshire, such as its ports, as well as providing better promotion and support for business and “capitalising on the Yorkshire brand to raise ambitions and promote exports”.

It says that depending on the levels of ambition and activity, Yorkshire-wide devolution could increase the region’s gross value added, equating to the value of goods and services produced in an area, by between £9bn and £30bn a year over two decades.

The independent report, commissioned by Hull City Council on behalf of 18 local authorities in Yorkshire, has been welcomed by Labour and Conservative leaders.

Sheffield City Region mayor, Labour’s Dan Jarvis, said the report will “draw a line under the false assumption that all we have in common is a shared identity”.

And Conservative Carl Les, who leads North Yorkshire County Council said Yorkshire needed a metro mayor to strengthen its hand in negotiations with government.

Leeds City Council leader Judith Blake said the 120-page report supported the belief of a cross-party group of leaders, supported by leading business groups, about the “benefits this will bring for the people of Yorkshire”.

Only Sheffield and Rotherham, who are pressing ahead with a more limited Sheffield City Region deal, refuse to back One Yorkshire.

The Ministry of Housing Communities and Local Government said it would only discuss wider devolution once the Sheffield City Region deal was up and running.

Case for devolution 'now cannot be ignored'

The landmark report detailing the economic arguments for One Yorkshire devolution sets out a case “that must not be ignored”, according to the region’s only metro mayor.

Sheffield City Region mayor Dan Jarvis, a vocal supporter of a devolution deal covering the whole region of 5.3 million people, said the independent report “should draw a line under the false assumption that all we have in common is a shared identity”.

The 120-page document by consultancy firm Steer, a response to fears that Yorkshire and the Humber is too diverse to be administered by one mayor, says there is strong evidence of the region being a “coherent economic area”.

Arguing that there are “potentially considerable advantages from devolution to the Yorkshire level”, it says region-wide arrangements could boost the region’s economy by up to £30bn a year by allowing previously distinct areas to work together to create more businesses and boost exports.

Earlier this year, supporters of One Yorkshire submitted a ten-page document painting a picture of how having one mayoral authority for the region would work.

A major strand would be the creation of an investment fund worth more than £3.75bn over 30 years, funded in part by a ‘gainshare revenue stream’ agreement where the Government provides £125m a year in return for accountability about how it is spent.

If agreed by the Government and local leaders, an incoming Yorkshire mayor could also potentially have the option of increasing business rates, up to a certain level and with the smallest firms excluded, to pay for major infrastructure projects. Skills funding for adults would be devolved to the mayor.

The Steer report, which will be presented to government in the coming days, is designed to “independently test the economic rationales for introducing devolved Yorkshire-level powers and budgets”.

Mr Jarvis told The Yorkshire Post: “The key test for any proposed devolution agreement is that it makes good economic sense. This comprehensive independent analysis demonstrates that Yorkshire is a coherent and interconnected economic area, which can make a much greater contribution to the prosperity of our nation.

“It should draw a line under the false assumption that all we have in common is a shared identity and demonstrates that a Yorkshire devolution agreement could add tens of billions of pounds to the UK economy every year.

“That would make a real difference to the lives of our residents, the health of our businesses and the strength of our country after we have left the European Union. It is a case that must not be ignored.

“Yorkshire is ready to rise to the challenge and the Government must now engage constructively in the Yorkshire devolution discussion.”

Plans to create powerful local metro mayors to represent their areas were outlined by then-Chancellor George Osborne in 2015. But while devolution deals have been signed around the country, similar powers have yet to be handed over to Yorkshire.

The Sheffield City Region deal signed by Mr Osborne collapsed last year after Doncaster and Barnsley’s leaders backed the One Yorkshire arrangement, meaning Mr Jarvis was elected in May with virtually no powers or funding.

The current stalemate on devolution has prompted fears that Yorkshire is getting left behind as government policy increasingly favours areas with fully-empowered metro mayors, such as Manchester’s Andy Burnham or Teesside’s Ben Houchen.

Carl Les, the Conservative leader of North Yorkshire County Council, said the independent report showed Yorkshire “can be a functioning economic entity with an extremely important brand”.

He said: “The overall conclusion is that although there are some regional differences, and some that leap out at you at like the coast being concerned with fishing, there are a lot of common threads that run across the whole region.”

He added: “Having been at the Conservative Party Conference in Birmingham one thing that became extremely evident to me as the position of an elected mayor, where they are the main point of inward investment and they are at the front of the queue with the negotiations with government.

“It confirms even more to me that we need to be in that game. We need to have an elected mayor to be that single point of contact because the single point of contact appears to get on better.”

Mayor boosts 'Midlands Engine'

In a sign of the influence wielded by metro mayors, the Mayor of the West Midlands Andy Street is accompanying a Cabinet Minister on a visit to India this week to promote the so-called ‘Midlands Engine’.

Mr Street, a Conservative and former managing director of John Lewis, will join Communities Secretary James Brokenshire in talks with state and industry figures.

They will aim to strengthen a partnership between the Midlands and the state of Maharashtra. Mr Brokenshire said: “By bringing these two great regions together we are strengthening our technological and economic ties to the benefit of our people and businesses.”