The British political class loves a comforting fairy tale, and right now, the favorite script is Andy Burnham’s "Power to the North." The narrative is seductive. It tells us that if we just hand local politicians the keys to the bus network, build a few tram lines, and grumble loudly enough about London, the economic engine of the North will roar back to life.
It is a fantasy. It is an expensive, bureaucratic distraction from a uncomfortable truth: the current model of regional devolution is designed to fail. You might also find this related coverage useful: The Gravity of the American Dollar.
For a decade, I have watched regional authorities pour hundreds of millions of pounds into localized transport infrastructure and regional marketing campaigns. The results are always the same. A temporary spike in construction jobs, a shiny new brand identity for local buses, and absolutely zero movement on the core metric that actually matters: productivity per hour worked.
The consensus among metropolitan mayors is that the North is starved of infrastructure. Fix the trains, they say, and the economy fixes itself. This is backward. Infrastructure is a lagging indicator of economic vitality, not a leading driver. You do not build a transit network to create an economy; you build a transit network to service an economy that already exists. Burnham’s big idea is putting the cart before a horse that has been missing for forty years. As discussed in recent reports by The Wall Street Journal, the effects are widespread.
The Fiscal Mirage of the Metro Mayor
Let us look at the structural flaw nobody in local government wants to discuss. The UK has the most centralized tax system of any major OECD economy. When a mayor demands "more power," what they are actually begging for is a larger pocket money allowance from the Treasury in Whitehall.
True devolution requires fiscal autonomy. If you cannot set your own corporate tax rates, if you cannot retain 100% of your local property and business taxes, and if you cannot issue municipal bonds without central government sign-off, you are not a governor. You are a high-paid branch manager.
Consider the numbers. In Germany, states (Länder) control their own tax revenues and compete fiercely with one another to attract global businesses. Munich did not become a tech juggernaut because Berlin handed it a grant for buses. It happened because Bavaria created a distinct, competitive economic environment. In contrast, Greater Manchester, the Liverpool City Region, and West Yorkshire are entirely dependent on central government handouts disguised as "devolution deals."
When Burnham celebrates a new funding package for the Bee Network, he is celebrating a system where Northern taxpayers send their money to London, only for a fraction of it to be returned with strict strings attached. It is a humiliation masquerading as a victory.
The Productivity Trap: Shuffling Poverty Around
The core argument for the "Power to the North" agenda is that better regional connectivity will narrow the economic gap between London and the provinces. The Centre for Cities has repeatedly pointed out the stark reality of the UK’s productivity gap. The problem is not that people cannot get from Bolton to Manchester city center 10 minutes faster. The problem is that the economic activity waiting for them at the end of the journey is not high-value enough.
Investing billions in localized public transport while leaving planning laws untouched does nothing but inflate housing costs around transit hubs. It shuffles existing economic activity from the periphery of the region to the center. It does not create new wealth; it aggregates it into a smaller space so politicians can take photos in front of crane-filled skylines.
Imagine a scenario where a regional authority spends £500 million upgrading a rail link between two post-industrial towns. If both towns suffer from a lack of private sector investment, low skill levels, and a regulatory environment that strangles new business formation, what does that £500 million actually achieve? It allows the unemployed in Town A to look for low-wage retail jobs in Town B. It is an expensive way to manage decline.
The Infrastructure Obsession Is a Post-War Relic
The obsession with physical connectivity belongs in the 20th century. We are living in a digital-first economy, yet the political debate in the North is still dominated by iron, steel, and tarmac. The collapse of the northern leg of HS2 was treated as a national tragedy. In reality, it was a mercy killing for a project based on an obsolete premise: that the only way to generate economic value is to move human bodies physical distances at high speeds.
The real deficit in the North is not digital infrastructure or physical tracks; it is human capital and regulatory freedom.
- Human Capital Stagnation: The North produces world-class graduates from universities like Manchester, Leeds, and Sheffield. The problem is retention. They leave not because the buses are late, but because the corporate ecosystem cannot compete with the sheer density of high-paying capital market and technology roles in the South-East.
- Planning Strangulation: The UK’s 1947 planning system is a relic designed to prevent growth, not facilitate it. Mayors talk about building "innovation zones," but the moment a developer wants to build a laboratory or a data center on a piece of scrubby greenbelt land, the system grinds to a halt under a mountain of bureaucratic consultations.
If we want the North to thrive, we must stop trying to turn Manchester into a mini-London. London's dominance is built on financial services and global capital flight. The North cannot replicate that model through public transport upgrades.
What Radical Regional Autonomy Actually Looks Like
If the current model of devolution is a dead end, what is the alternative? It requires a complete abandonment of the "begging bowl" mentality. It means stopping the demands for more infrastructure cash and instead demanding total regulatory and tax exemptions.
Instead of fighting for the right to regulate bus fares, Northern leaders should be demanding the creation of a Total Enterprise Zone covering the entire M62 corridor. Within this zone, the national planning framework should be suspended. Give regional leaders the power to grant automatic planning permission for any commercial or industrial development that meets basic environmental safety standards. Eliminate corporate tax for the first five years for any business establishing a global headquarters north of Crewe.
This approach carries massive risks. It would mean localized revenue shortfalls in the short term. It would mean parts of the countryside would be built on. It would mean unequal outcomes between different northern towns. But it is the only mechanism that has ever successfully rebalanced a regional economy.
Look at Shenzhen in China or the Research Triangle in North Carolina. These hubs did not emerge because central governments carefully coordinated public transport timetables. They exploded because governments stepped out of the way, slashed taxes, and allowed capital to deploy at maximum speed.
The current "Power to the North" strategy is comfortable because it keeps everyone in their lane. London civil servants get to manage the cash flows, northern mayors get to give speeches about regional pride, and the underlying economic stagnation remains completely untouched. It is time to stop celebrating the illusion of power and start demanding the reality of economic freedom.
