Powering the Northern Powerhouse
31st January 2020
Mikael Sandberg, Chairman, VX Fiber
On 23rd June 2014, the then Chancellor George Osborne stood up in Manchester’s Museum of Science and Industry, surrounded by Manchester’s illustrious industrial history, and announced the country’s need for a ‘Northern Powerhouse’.
Northern success is not just reserved to museum shelves, it’s a large part of its present. In just five years the Northern tech sector grew by some 619%, making it the fastest growing region for the industry in the whole of Europe. High profile corporations continue to open northern bases, joining the likes of Channel 4, the BBC and KPMG. And in 2019, Manchester was ranked the top city in the country for business, begging the question: what could the north truly achieve with the right ‘tools’ in place?
As of late, the focus on the north has been sharpening into high definition. Partly as Boris Johnson’s path to a majority government was definitively through northern soil, and partly due to his post-election promise to reward the northern regions that adopted blue. The reward: billions in to the infrastructure pot and a push for ‘one nation’ conservatism. However, it appears that Boris’ real challenge might not have been demolishing large sections of Labour ‘red wall’ but rather facing up to the reality of his promises as the costs for his infrastructure revolution spiral widely out of control. In essence, the Northern Powerhouse rail programme (HS2) – a plan to completely transform northern rail services and link the major cities of Manchester, Leeds and Newcastle together – is back under review.
Lord Berkeley’s minority report said the high-speed rail line is likely to cost over £108 billion, a massive £53 billion more than the original projection set in 2015. However, the report does not necessarily make the case that HS2’s drawbacks outweigh its substantial benefits, supported by the fact that the government is still committed to building the network. Connecting Britain campaigner, Sir Richard, calls the programme a ‘once-in-a-generation chance’ to transform capacity and connectivity in the north. Bringing its cities together to help compete both nationally as a rival to London and helping put the UK back on track as a global power force.
It’s no secret that a disproportionate share of investment is put in to London. For example, transport spending in London is two and a half times more per person than in the north of England. The investment into London’s infrastructure has been critical to its success. It’s therefore not unreasonable to assume that a comparable scheme in the north could emulate similar results and bring economic benefits to, not just the north, but the UK as a whole if spending is more evenly distributed.
However, in our digital era, it’s arguable that connectivity means more than closing the distance gap, but also bridging the digital divide and ensuring the UK has the technology to keep up with the rest of the world. Transforming northern rail is a massive infrastructure project but we must also consider beyond surface level infrastructure change – we must look under the ground.
Putting fibre infrastructures into the ground, and replacing copper networks, needs to be our main priority to achieve the HS2 dream. With the installation of full-fibre, we will achieve better connectivity – which should be just as big a priority as HS2. Because, the Northern Powerhouse is so much more than the rail network, but about the economic, digital and social prosperity of this part of the UK. For that to really take flight, a full-fibre infrastructure underpins all of this.
Indeed, the advent of new technologies – such as 5G and IoT – is constantly evolving. With our current infrastructure, it would be impossible for any region to keep up and even harder to be labelled a ‘powerhouse’. Full-fibre is essential in helping businesses adapt to and prosper from the onset of the digital or Industrial 4.0 revolution. Without it, the UK will be severely left behind and the north-south economic imbalance left unaddressed. We must ensure that we have the right tools for both today and tomorrow by future-proofing our economy and ensuring that we will be able to access cutting edge technology.
Making new technologies accessible to us will enable smarter ways of working, better public services and greater opportunities for the north and the UK as a whole. A report conducted by Openreach found that the installation of full-fibre in the UK could boost GVA by £70 billion, 400,000 additional people could be enabled to work from home and a further 500,000 new workers could join the workforce. In fact, the north stands to benefit massively from its deployment with predictions for GVA impact at £2 billion and 43,000 more people likely to move up north. In terms of workforce, the largest relative gain of the country is in the North East – where a 1.7% increase in employment could be produced through bringing in new entrants. Implementing full-fibre could ensure that the north – and the UK in general – continues to develop as a booming and prosperous economy.
We still need to prioritise the north but the potential powerhouse lies beyond just the highly coveted HS2, we must also consider the power of our digital future. Osborne said that northern cities combined could ‘take on the world’. By combining these two forms of connectivity, it very well could be a feasible reality.