AMBITIOUS plans to create a ‘Northern Powerhouse’ are gathering pace George Osborne claimed yesterday, as he unveiled a raft of measures for the region in his Autumn statement.

The Chancellor pledged cash for new manufacturing and innovation centres in the North-East and vowed the North would grab the rewards from the shale gas revolution.

And, for the first time, he acknowledged the threat from likely cuts to air passenger duty in Scotland, after devolution, telling MPs: “We will have to look at it.

“We will have to consider the impact, particularly on the airports in the North-East of England, which are geographically close to some of the Scottish airports.”

But, delivering his last statement before the election next year, Mr Osborne was forced to admit that talks to deliver a dramatic devolution of powers to ‘city-regions’ have stalled.

And one senior Labour MP argued the Chancellor cared “more about Mars than about the North-East”, after he pledged £95m for a space mission to the Red Planet.

As expected, Mr Osborne stepped up his audacious pitch to Labour’s heartlands by promising a ‘Northern Powerhouse’ across the Pennines, including:

  •  £28m for a new ‘high value manufacturing centre’ in Sedgefield, County Durham.
  •  £20m for an ‘Innovation Hub for Ageing Science’ in Newcastle.
  •  A ‘sovereign wealth fund’ for the North so its shale gas resources “are used to invest in the future of the North”.
  •  £3m towards arts projects focussed on Northern cities, to commemorate the centenary of the First World War
  • A £1m Great Exhibition in the North to “celebrate the great art, culture and design”.
  • Confirmation that the new Northern Rail franchise will replace “the ancient and unpopular Pacer carriages with new and modern trains”.

Mr Osborne rejected the “caricature” that London was leading the dramatic cut in unemployment, saying: “Where are the jobs being created fastest right now? In Scotland and the North.”

But Nick Brown, the Newcastle East MP and former ‘Minister for the North-East’ said: “The Chancellor spoke more about Mars than he did about the North-East of England.

“His Northern Powerhouse is located over 100 miles to the South. His statement contained no commitment to any type of workable regional policy in the context of further Scottish devolution.”