England

Budget 2015: George Osborne sets out 'northern powerhouse' vision

George Osborne outside number 11 Image copyright Getty Images
Image caption George Osborne said jobs grew faster in the north than the south in the last year

George Osborne has outlined his vision for building a "northern powerhouse" in his final budget ahead of the general election in May.

The chancellor told MPs employment and jobs grew faster in the north than the south during the last year.

Setting out his plans in the Commons, he announced that Greater Manchester would be allowed to keep 100% of growth in local business rates.

Labour leader Ed Miliband said it was a budget that "simply won't be believed".

Mr Osborne said that Greater Manchester's decision to appoint an elected mayor from 2017 was "the most exciting development in civic leadership for a generation."

A new city deal has also been agreed with the West Yorkshire Combined Authority, he said, at a time when Yorkshire has created more jobs than France.

A transport strategy for the north was due to be published this week, he added.

'No friend of the north'

Mr Osborne said: "Over the last year, the north grew faster than the south. We are seeing a truly national recovery. And where is employment growing fastest? The North West.

"Where is a job being created every 10 minutes? The Midlands. And which county has created more jobs than the whole of France? The great county of Yorkshire.

"For our ambition for a truly national recovery is not limited to building a northern powerhouse. We back in full the long-term economic plans we have for every region."

Mr Miliband said the north had suffered under the coalition's rule with cuts to local government budgets and tax credits.

"This government is no friend of the north," he added.

Image caption The deal will give Greater Manchester a bigger say in how public money is spent

Also announced as part of the budget were plans to invest £11m in creating technology hubs in Manchester, Leeds and Sheffield.

The sites will offer co-working space, meeting spaces and educational resources to entrepreneurs working in the digital sector.

Sheffield's Olympic Legacy Park is also to get £14m from the government for a new physical activity research centre.

Analysis: Len Tingle, Political Editor, Yorkshire

There is clearly disappointment in West Yorkshire at what is seen as an inferior devolution deal to the one already in place across the Pennines.

The combined authority had been given powers to improve the economy and job creation, as well as take over training and apprenticeships and boost housing and transport.

These are broadly in line with a similar deal agreed with the South Yorkshire combined authorities before Christmas, but fall short of the latest powers being devolved over the Pennines, which includes control of health services.

The chancellor also announced that Greater Manchester will be able to increase its income by retaining all of the new business rates, but no mention of whether he is thinking of giving the same benefit to either West or South Yorkshire.

Mr Osborne said the deal would devolve powers for things like transport, business support and skills in West Yorkshire, but did not provide detail.

Councillor Peter Box, Labour leader of Wakefield Council and chairman of the West Yorkshire Combined Authority, previously said he would welcome any extra power but would reject a regional executive mayor.

Speaking about the announcement today, he said: "The deal is disappointing and doesn't match the scale of our ambition. It undermines the government's claim to want a strong northern powerhouse.

"If we are to turn that into a reality we need real devolution, including fiscal devolution, to enable us to bring about a step change in the city region's economy."

Councillor Andrew Carter, leader of Leeds City's Council's Conservative party, said he wanted to to see an elected mayor in Leeds.

"[It] will give proper public scrutiny and accountability to what will then be a Manchester style package of devolution, which has to be a good thing," he said.

More on this story