The country has passed a “tipping point” in devolution, chancellor Philip Hammond has said, as he pledged the Treasury would “continue to drive the Northern Powerhouse project” under his leadership.
In his speech to the Conservative party conference this lunchtime, Mr Hammond also extended assurances over EU funding and repeatedly stressed the need to tackle low productivity.
The chancellor told delegates “one of the central missions” of Theresa May’s government was to tackle the divide exposed by the Brexit vote “between those who believe they have a stake in the success of our economy and those who do not”.
He said key to this was “harnessing the economic power of our cities” through the Northern Powerhouse and Midlands Engine – projects he said could be “emulated across Britain”.
On Thursday, LGC revealed the West Midlands Combined Authority was discussing a second, beefed-up devolution deal with ministers. Mr Hammond said this could include additional powers on transport, criminal justice, data, planning and skills.
However, the chancellor stressed the government wasn’t just focused on the Northern Powerhouse and Midlands Engine but wanted to “create the conditions for success in the north, the south, and everywhere in between”.
He joked that only limiting factor may be “our ability to think up snappy titles for new regional projects”.
He added: “But be assured – we have passed a tipping point in devolution in this country.
“A decisive and irreversible shift in economic and political power, and Britain’s economy will be the better, and the bigger, for it.”
In a speech which contained few announcements and little in the way of new policy, Mr Hammond did announce he would be extending the protection for EU funding beyond those projects signed before the autumn statement, as previously announced.
He said: “The Treasury will offer a guarantee to bidders whose projects meet UK priorities and value for money criteria that if they secure multi-year EU funding before we exit we will guarantee those payments after Britain has left the EU.”
The guarantee includes the social fund and regional development fund. However, no further detail was offered on what criteria projects must meet.
On future public spending plans, Mr Hammond confirmed the government would no longer be targeting a surplus at the end of this parliament.
He said: “The fiscal policies that [former chancellor] George Osborne set out were the right ones for that time.
“But when times change, we must change with them.”
However, he said delegates should “make no mistake… the task of fiscal consolidation must continue” and he would be setting out a plan to deliver long-term fiscal sustainability, recognising the “need for investment”.