North East Devolution and Levelling Up
Penshaw Monument

Battle lines form over new North East devolution deal

Battle lines are starting to form over the North East’s proposed new devolution deal, before the public have even officially been informed what is in the deal.

The region’s business leaders have issued a joint statement, reported in Bdaily News, in support of the new deal reportedly being negotiated between ministers and representatives of the six councils in Northumberland and Tyne & Wear.

But almost simultaneously, in an address at Newcastle Business School today, one of the region’s Labour MPs made clear his opposition to the new deal.

The North East England Chamber of Commerce, CBI and Federation of Small Businesses have welcomed the outline of a proposed new devolution settlement for the norther part of the region.

The new expanded deal would replace the existing North of Tyne deal covering Newcastle, North Tyneside and Northumberland with an expanded deal also taking in Gateshead, South Tyneside and Sunderland. County Durham is pursuing it’s own go-it-alone deal.

Following recent news reports that an expanded deal could deliver billions of pounds of additional investment, creating thousands of new jobs, the business leaders have expressed their support for greater autonomy for the area.

Based on consultations with members’ throughout Spring, they say, the three business bodies have renewed their commitment to supporting more powers and funding for the region driven by local priorities.

John McCabe, chief executive of the North East England Chamber of Commerce said: ‘We recognise the huge amount of work from leaders across Northumberland and Tyne & Wear to get discussions to this advanced stage and are grateful for it. Positive partnership working has already paid real dividends for our businesses and communities, especially as we recover from Covid.

‘An extended deal which delivers more funding and powers over transport, skills, jobs and homes would be a welcome next step on the region’s devolution journey.’

Sarah Glendinning, North East director of the CBI said: ‘The CBI is keen to see local leaders empowered to make the big decisions which address regional challenges and deliver economic growth.

‘Businesses tell us that devolution in the north and south of the region [a reference to the Tees Valley deal] has already delivered tangible benefits – that is why our members are really positive about conversations so far and support regional leaders to get this next phase of work over the line.’

Reshma Begum, North East development manager of the Federation of Small Businesses, said: ‘For small and medium sized businesses in particular, we know that wider devolution could make a real difference to creating the conditions for success in the North East.

‘They are really supportive of the opportunities a new deal could open up, especially in areas where we have unique regional assets, such as the rural economy or green industries.’

But speaking today at Newcastle Business School, Northumbria University, Kevan Jones, Labour MP for North Durham, made clear his opposition to the present model of devolution deals.

He said he was opposed to mayors, believed devolution was a government distraction from the much greater sums taken from council budgets since 2010 and argued that the benefits of devolution, if any, could be just as well delivered by the North East’s 12 local authorities (including Tees Valley) working in collaboration.


The views set out by both sides in this argument closely echo those voiced during the 11 months of wrangling before the previous North East devolution offer from the government was eventually rejected in 2016.

Business leaders wanted a deal on that occasion too, but a majority of council leaders thought the funding on offer was insufficient compared to what they had lost during the years of austerity. And they were opposed to having a mayor.

The result then was that the northern part of the region – already separated from Tees Valley – split again along the line of the Tyne, dividing the Tyneside economy and depriving the area of an optimal public transport system.

Mr Jones’s criticisms of devolution in its present form are fair enough and correspond with those expressed on this website on previous occasions. Nevertheless, this site does not agree that the expanded new deal should be rejected. It is all that is available at the moment and does at least offer some benefits which are not negligible – mainly in transport funding and control of the adult education budget.

These issues call for an open public debate and it is worse than unfortunate that there is still no proper official information available to the public – just media reports and ad hoc statements by North of Tyne Mayor Jamie Driscoll.