Some analysts have questioned whether those recent productivity figures are reliable, in part, because some of the high growth spots are in residential areas, and that they could be explained in part by errors in the data, external.
Nevertheless, many economists do think Greater Manchester has performed better than other UK city regions over the past 15 years – and they argue it’s justified to partially attribute this to the devolution of powers, particularly on transport, planning and housing.
Devolution has helped to deliver this record on housing because the Greater Manchester mayoralty is empowered to set the city-region’s housing strategy, direct housing investment funding and co-ordinate affordable housing programmes. Devolution has enabled the increase in investment because one of the devolved roles of the mayor of a city region is to encourage companies to invest in an area, particularly multinationals, to create jobs and drive local growth.
Some economists also point to the Bee Network of buses which brought the system under control of the mayoralty, and the encouragement of private sector investment in Manchester city centre.
“There’s been a recognition [among the Greater Manchester leadership] that the future of Manchester is a big city that is offering lots of different opportunities, but particularly to higher value added activity,” says Andrew Carter of the Centre for Cities think tank.
“They’re prepared to do what is required – build the housing, support the expansion of the university, support research and development, try to introduce a transport system which really supports all of that kind of stuff. And as a result you become more attractive to investment, whether it’s foreign or domestic.”
Would devolution help the wider UK economy to grow faster?
Many economists argue that one of the things that has held the overall UK economy back over many decades has been the fact that economic activity has been heavily concentrated in London, while cities in the Midlands and the North of England – such as Manchester, Birmingham, Leeds and Newcastle – have been relatively weak.
Evidence suggests that in other European economies such as France, Germany, Spain and Italy, their second-tier cities are closer in terms of their economic productivity to their capital cities.
For instance, the output per worker in French cities such as Toulouse and Lyon are considerably closer to the levels in Paris, than Birmingham and Manchester are to London.
The productivity of big Germany cities such as Munich and Frankfurt and Spanish cities such as Barcelona and Madrid are also relatively similar, avoiding the kind of extreme inequality between London and other UK cities. Analysts point to the much greater level of devolution, external in those countries as a reason for this.
The Resolution Foundation has argued, external that closing these gaps between London and big UK cities would not just boost jobs, incomes and prosperity in those regions, but would improve the performance of the national UK economy, both by lifting the overall level of economic activity and increasing its long-term potential growth rate.
How much would devolution cost?
Burnham is not the first politician who has sought to boost growth in the North and Midlands.
Boris Johnson’s Conservative government had an objective of “levelling up” the UK economically.
Some analysts say that Johnson’s project failed in part because it did not put sufficient state resources and investment into achieving it.
That government established a £5bn levelling up fund, external to, among other things, regenerate high streets and upgrade local transport.
But analysts pointed out that the post-reunification plan to bring up East Germany closer to the productivity, external of West Germany after 1990 had cost around €2 trillion in state spending between 1990 and 2014, or the equivalent of £70bn a year.
Burnham on Monday pledged “to strive for equivalent living conditions in all parts of Britain” and said that this would borrow from Germany’s “basic law”, which has a similar wording.
However, he also said that he would stick to the “current fiscal rules” and the existing Labour manifesto, which would likely limit how much his government would be able to borrow or raise tax to finance devolution.
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