The real ‘Northern Powerhouse’? A collaborative relationship between Scotland and the North East and Cumbria holds real potential

Many progressive voices in the border regions of England were nervous about Scottish independence and continue to be so about new powers due to the potential for their region to lose out due to potential cross-border differences such as tax rates. However, Keith Shaw argues that increasing collaboration between Northumberland and Cumbria and the Scottish border counties could represent the real ‘Northern Powerhouse’.

This post originally appeared on Democratic Audit – Scotland

Gone are the days when the Anglo-Scottish border was a relatively unimportant internal boundary within the UK, of more interest to tourists and writers of historical novels than to politicians and the public. The result, and fall-out, of the 2014 Independence referendum, coupled with then SNP’s astounding performance in the May 2015 General Election will both ensure greater powers for Scotland and that the option for a second independence referendum has not – despite the Prime Ministers insistence – been removed from the political agenda for a generation.

Nowhere is the external impact of greater Scottish autonomy more keenly felt than in the North East of England and Cumbria – Scotland’s nearest neighbours and close cousins.

Clearly, many in the North are concerned about the negative economic implications for the region of a more powerful Scotland competing for investment, jobs and visitors. One particular concern revolves around how Newcastle Airport will be affected by any reductions in Air Passenger Duty north of the border. The Chief Executive of Newcastle Airport has recently estimated that 1,000 jobs could be at risk in the region and £400 million drained from the region’s economic output in the next ten years.

Adding to these concerns about the region losing out economically, is the noticeable level of political hostility towards the SNP in particular, as the virtual wipe out of Labour MP’s in Scotland in May’s General Election has left many North East Labour politicians (in the party’s one remaining heartland) uncertain about their own political future. In this context, a strong sense of uncertainty about the future still stalks the North East. On the one hand, the region is squeezed between a resurgent Scotland and a dynamic, ‘Boris-led’ London, and could well be excluded from the, increasingly Manchester-dominated, Northern ‘Powerhouse’. Even with the ink still drying on the recent ‘Devolution Deal’ between seven councils in the ‘north’ of the North east and the Treasury, much remains to be settled in the North East: a region where historical enmity and competing territorial agendas have made collaborative working very difficult.

However, others view the growth of a more powerful Scottish neighbour, as an opportunity to promote economic growth on both sides of the Border.

So far, the main collaborative vehicle for collaboration has been the Borderlands Initiative (Figure 1). The approach, led by the five border local authorities (Carlisle, Cumbria, Dumfries and Galloway, Scottish Borders and Northumberland) is a clear recognition of a common bond which is not just a product of geography, including the daily cross-border flows of people for work shopping or family visits, but also reflects shared experiences of economic and industrial change and what some have seen as a common commitment to economic and social justice. There is also a strong shared sense of being on the periphery: a long way from the centres of economic and political power in London (and Edinburgh). The economies covered by the councils also faces common challenges, such as low GVA and wage-levels, an ageing population, and – in some areas – a dependence on declining sectors (such as public sector employment). However, there are also real assets to develop collaboratively. Borderlands has a population of over 1m, covers 10% of the UK’s land area, has a healthy SME sector, strengths in advanced manufacturing and real growth potential in sectors such as renewable energy, forestry and tourism. There was also support from the UK Parliament’s Scottish Affairs Committee in their 2015 report, ‘Our Borderlands, Our Future’.

As part of their inquiry into the economic future of the Scottish borders, the committee gave its support to joint-working across the border and recommended that a inter-ministerial forum (comprising both Scottish and UK Governments) should be set up to add further support to the work of the Borderlands Initiative.

Figure 1: The Anglo-Scottish Borderlands

The approach, which has its roots in the 2013 report, Borderlands: can the North East and Cumbria benefit from greater Scottish Autonomy ? has now moved beyond initial discussions to encompass the development of an economic strategy focussing on promoting sector-based collaboration in areas of mutual benefit, such as energy and renewables, tourism, forestry and connectivity. Over and above collaboration to promote economic development, there is also the importance of strengthening a Borderlands ‘voice’, where the North of England could join with Scotland to ensure more effective lobbying and marketing. The Borderlands approach involves a practical emphasis on going to Governments in both Edinburgh and London with a clear ‘ask’ and then being able to demonstrate how this will add value to economic development across the Borderlands.

There are a number of challenges facing the Borderlands Initiative. Joint-working will be challenging in areas where there are major cross-border differences in terms of regulatory systems, legal frameworks, or variations in funding regimes. Where programmes are already up and running, it is important that any separate Borderlands approach does not lead to overlap or have a ‘displacement’ effect. The Borderland authorities are – necessarily – leading on their own, council-specific, developments and other collaborative initiatives which would clearly impact upon their use of the vehicle of ‘Borderlands’.

At the present time however, there is genuine political commitment on both sides of the Border to pursue opportunities for a collaborative cross-border approach. This emphasis echoes the direction of travel in Europe, where the OECD have emphasised how the focus for cross-border economic growth and innovation is moving away from competing with neighbouring areas for particular opportunities, to co-optition which involves collaborating across borders to highlight propositions for investment: ‘The real competition is global; therefore neighbouring regions may need to engage in ‘co-optition’ – co-operation for competition’.

On balance then, there are real opportunities in viewing the Anglo-Scottish border more as a ‘bridge’ than as a ‘barrier’. The impetus behind these initiatives – finding common causes and collaborative opportunities – is likely to continue in the short-term, particularly if political support is offered from both sides of the Border. Rather than George Osborne’s focus on the North West and North East of England, perhaps the real ‘Northern Powerhouse’ should comprise an increasingly collaborative relationship between Scotland and the North East and Cumbria? The success of such an approach will depend heavily on trust, effective networking and political leadership and crucially, on the outcome of any UK referendum on EU membership in 2017.

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This post originally appeared on Democratic Audit – Scotland.

To see the full article in Scottish Affairs, click here.

Note: this piece represents the views of the author and not those of Democratic Audit Scotland or any organisation associated with it. Please read our comments policy before posting.

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Keith Shaw is Professor of Politics at Northumbria University. His main area of research interest is sub-national governance with particular reference to the North East of England. He was the lead author of the ‘Borderlands’ report in 2013 and is the principal organiser of the ESRC Seminar Series, ‘Close Friends’? Assessing the Impact of Greater Scottish Autonomy on the North of England’. He has recently published articles on the Anglo-Scottish borderlands in the journals Scottish Affairs and Local Economy.