Proposals to create a so-called 'Northern Powerhouse', covering the towns and cities of northern England, first hit the headlines a year ago - and were a small but significant element of the Conservative party's successful general election campaign. Now that the new government has the majority it needs to bring these proposals into being, we will take a closer look at what the Northern Powerhouse actually is and what it could mean for investors.
A quick look at the origins of the Northern Powerhouse might provide a clue as to its future focus - and reveal a few interesting coincidences. The government first broached the idea at a speech (actually in the Power Hall at the Museum of Science and Industry in Manchester) by Chancellor George Osborne - whose Cheshire constituency is just outside the city. However, the idea of combining the economies of Manchester and Liverpool is widely credited to Jim O'Neill, former economist at Goldman Sachs and chairman of the City Growth Commission (and a native of Manchester), who has since been appointed by the government (and given a peerage) to help progress city devolution.
Indeed, there are actually two separate but inextricably linked issues here: The Northern Powerhouse and city devolution - the purpose of which is to offer devolved powers to English and Welsh towns and cities.
What's the idea behind Northern Powerhouse?
The broad idea behind Northern Powerhouse, at least on the face of it, is economic development. In that some of the individual cities in the north may in themselves have successful local economies, they are too small to compete effectively against London and other large world cities. It is suggested that linking them up will help boost their individual economic strength and also give the UK a broader less London-centric economic base.