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Powerhouse strategy targets productivity

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The government’s Northern Powerhouse strategy will focus on closing a huge productivity gap between the region and the south, chancellor Philip Hammond has said.

Measures confirmed in the strategy, published after today’s Autumn Statement, include £13bn for the region’s transport during this Parliament, £3.3bn for northern local enterprise partnerships in growth deals, a £400m investment fund to support smaller businesses and £60m in development funding for Northern Powerhouse Rail.

The strategy noted that the north’s economy was roughly the same size as that of Belgium but “productivity is a longstanding problem in the north, where value added per worker is 13% lower than the UK average and 25% lower than the south”.

Problems include poor connectivity that limits the size of labour markets, lower skill rates than other regions and foreign direct investment at 66% less than in London and the south east.

Areas that have formed combined authorities to be led by elected mayors in devolution deals will get new borrowing powers to invest in economically productive infrastructure, subject to agreeing a borrowing cap with HM Treasury.

Specific projects committed to by the government in the strategy included the Manchester M60 North West Quadrant and dualling the A66 to improve trans-Pennine connectivity.

There will also be support for the A1079/A164 Jocks Lodge Junction in East Riding of Yorkshire, east-west connection in Tees Valley, the Sheffield Supertram renewal and the Warrington Waterfront Western Link.

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