North East Devolution and Levelling Up

Nissan’s £1bn announcement helps government gain interim levelling up ‘pass’ mark

Yesterday’s announcement by Nissan and its partner Envision AESC that they are to invest £1bn in Sunderland for the manufacture of electric vehicles and the batteries to power them, creating over 6,000 jobs, is truly ‘fantastic’ news, to use the word of Business Secretary Kwasi Kwarteng. It was a day for unreserved celebration in Sunderland and the region.

When the new week begins on Monday, however, the hard work of making the most of this opportunity must begin. For the plans just announced are only the start of a much greater green revolution in which the North East has potential to play a leading role. It must not let this opportunity slip away.

As the switch of global production to electric vehicles accelerates, there will be increased demand for the cars and batteries coming out of Sunderland. Britain is going to need more gigafactories like that to be developed by Envision AESC, one of which is being planned by Britishvolt at Blyth.

There is good reason to hope that the region will indeed grasp this chance. Advanced manufacturing, including in the automotive sector, is already the No. 1 priority of the North East Local Enterprise Partnership, while in Tees Valley the strategic economic plan identifies both advanced manufacturing and the low carbon economy for investment.

So our leaders and their economic advisers are aware of the opportunities and the challenges.

But more needs to be done, and two areas in particular stand out. Firstly, we need to ensure that our people have the skills to take advantage of the new jobs. That means both improving pupil attainment in North East schools, currently second bottom of the national league table; and the North East Combined Authority (NECA) needs to take control of the adult education budget, as has happened in North of Tyne and Tees Valley under their devolution deals.

Secondly, we need improvements in the local transport network so that people can easily reach the new jobs wherever they are. That is starting to happen with new, more reliable trains due to start running on the Tyne and Wear Metro in 2023 and the Northumberland Line linking Ashington, Bedlington and Blyth to the Metro due to open in 2024. Now bus franchising, not currently available in the North East, in spite of years of trying by local councils, should be pursued afresh as quickly as possible so services can be improved everywhere. The government should facilitate this development.

If these steps are taken, making the good new green jobs of the future readily available to people throughout the region, the lack of incentive to learn which holds back young people in some deprived communities can be overcome. That would be a huge contribution to levelling up.

There would be a much better chance of taking these necessary steps if the four south of Tyne councils had a devolution deal. They should act as quickly as possible to secure one, preferably by re-uniting with the three north of Tyne councils from which they split three years ago.

It is an irony that Sunderland City Council, which played such a positive role in attracting the Nissan and Envision AESC investments announced yesterday, is one of the four still apparently doing nothing proactive to rectify the damage they did by voting against devolution in 2016.

And while there is justification for Kwarteng’s claim that the Nissan investment will help turbocharge the government’s plans for levelling up the North East, we should not forget that the government has been lucky that Brexit, against most expectations, has created the right conditions for the company’s decision.

So it is the private sector in the shape of Nissan that is mainly responsible for this levelling up opportunity for the North East. Central government deserves some credit for riding its luck and providing some (unspecified) financial contribution. This, combined with its support for the Northumberland rail line, means that the government can be given an interim ‘pass’ mark at this early stage of the levelling up process. But the local authorities, particularly the four south of the Tyne, have still to convince that they are fully playing their part. Notwithstanding Sunderland’s contribution to yesterday’s announcement, they must do more.