The North is no Soviet-era relic. It’s time for central government to recognise our region’s integral place in the UK whole and let it come back in from the cold
By Mark Cantrell
WE shouldn’t really be surprised that Government boasts ring a little hollow, but it’s certainly sobering to the point of dismay to hear the North of England compared to a dilapidated former Soviet vassal state.
That was, effectively, Lord Kerslake’s comparison. He chairs the UK2070 Commission on regional inequalities in the UK, which published its first report back in May, offering a sobering analysis of the state of the nation.
Fairer & Stronger: Rebalancing the UK Economy, as the report is called, warned that regional inequalities are blighting economic performance and ruining the life chances of people throughout the UK. What’s more, the situation is only going to get worse unless drastic action is taken.
The East Germany reference is no mere metaphor, but the nearest and clearest case study for a United Kingdom that has become bitterly dislocated and in danger of drifting apart.
Evocative, it may be, but it also implicitly makes us aware that it doesn’t have to be this way. All it needs is the will in Westminster and Whitehall to really mobilise for the reunification of Britain.
“Germany has moved towards becoming one country. But we’ve moved from being one country towards being many,” Lord Kerslake told The Yorkshire Post newspaper (13 June 2019). “Some parts of the North now have lower productivity than in some parts of East Germany when unification happened. But Germany made a conscious effort to bring the two parts together.”
As the UK2070 report noted: “Post reunification in 1990, Germany faced major challenges in the divergent economic performance and life chances between east and west.
“In the years immediately following unification, the former East German economy went into ‘freefall’. Every third job was lost. Infrastructure was decrepit. Few railways were electrified, and many ran on single lines, much of the telecommunication networks stemmed from the 1930s, 20% of the housing was uninhabitable.
“There was a consensus in Germany that a decisive public response was needed to stabilise the ‘new’ Germany, with substantial investment in regenerating and renewing cities, towns, regions and infrastructure described as ‘the fortunate helping the less fortunate’. By 2014 something like €1.5 trillion in public money was spent to support rebuilding, with some €500 billion invested in infrastructure and regeneration.
“The legacy of division between East and West Germany meant that during the 1990s Germany was much more spatially unequal than Britain. Now the situation has reversed, and the UK is regionally more unequal than Germany. There was consensus in Germany that this required a decisive public response to stabilise the ‘new’ German Länder.”
There’s the key factor: that the West German government of the time was determined to stitch east and west together; whether the UK Government – Brexit or no – is interested in following that example, rather than delivering anything more than lip-service is open to question.
“Germany has moved towards becoming one country. But we’ve moved from being one country towards being many” – Lord Kerslake
The Government maintains that it is indeed committed to the regions beyond London and its south east hinterland (or indeed to those deprived areas on its own turf). In June, the Northern Powerhouse reached its fifth birthday; a milestone used to praise government efforts.
“We launched the Northern Powerhouse to support a thriving Northern economy and ensure this country works for everyone. Five years on, our pledge is stronger than ever,” said Prime Minister – at the time of writing – Theresa May. Among its boasts, the Government said that the North’s economy is now worth more than £339 billion, a £10 billion increase in “real terms”. Furthermore, our regions have seen an added 287,000 people in employment.
Other claims include:
- Government spending of a “record” £13 billion to invest in transport
- Almost half the people of the North now represented by a directly elected metro mayor, with control over local spending plans
- A renewed focus on education and skills, with a £70 million Northern Powerhouse schools strategy
- Support for Northern businesses with £20 million of funding for a ‘Made Smarter’ pilot in the North West to support SMEs to adopt new digital technologies
- An enhanced role for Northern Powerhouse minister, Jake Berry MP, whose role now cuts across both the Ministry for Housing, Communities & Local Government and the Department for Business, Energy & Industrial Strategy
“I’m proud that communities across the Northern Powerhouse are so vocal and ambitious for the future. The Government shares their vision, and no one is ignoring them anymore,” Berry said. “The Northern Powerhouse is more than a plan for the future, it’s a story of success. From record investment in transport to more than £5 billion in devolution and growth deals across the North, we are making progress towards rebalancing our economy, but we are determined to do even more to ensure the whole of the North can reach its full potential.”
That’s all very well, but IPPR North argues that given the impact of austerity, the Government has effectively undermined what the thinktank says remains an “important agenda”.
Since 2009/10 the North has seen a £3.6 billion cut in public spending, while the south east and south west saw a rise of £4.7 billion. Although, the analysis points out, London did also see a cut – more a trim, really – with a reduction in spending of £256 million.
What’s more, since 2014 public sector employment fell in the North by 2.8% compared to 1.2% in London, 1.6% in the south west, and 1.7% in the south east. Total foreign investment in jobs fell by 23.7% between 2015/16 and 2017/18 in the North, compared to a 21.5% fall nationally over the same period.
Meanwhile, since 2014, IPPR North says that an extra 200,000 Northern children are now living in poverty, bringing the total to 800,000; wage growth has lagged, rising 2.4% in the North while nationally it has risen 3.5% (that’s £12 versus £19).
There are some positives: economic growth has been marginally higher than the national average between 2014 and 2017, with the North showing 10.7% growth compared to 10.6% for the UK as a whole. The North’s productivity gap with the rest of the country has also narrowed slightly, with productivity growing by 8.5% compare to 6.6% nationally.
“The Northern Powerhouse agenda has helped build momentum around the need to address the UK’s unacceptable regional inequalities,” said Sarah Longlands, director of IPPR North. “But it’s clear from our independent analysis that it has failed to tackle fundamental challenges like child poverty, insecure work and poor health.
“If the agenda is to survive, and we are to build a region and a nation of prosperity, then the next phase of the Northern Powerhouse must go beyond the rhetoric. A better North is possible, but it requires a proper long-term, resourced plan for change, which works in the interests of people right across the North.”
And on that note, we’re back to the UK2070 Commission report, which was launched at a national symposium in Leeds back in June. Attended by a wide spectrum of politicians, policymakers, experts, business chiefs and civil society leaders, it was made clear the North wants to see fundamental change.
The report proposes much greater devolution of powers and funding, including the creation of four new ‘super-regional’ economic development agencies; a spatial plan to guide the future development of the whole UK; action to harness new technologies and strengthen local economies; and long-term investment through a 25-year National Renewal Fund to rebalance the economy.
“As a Commissioner on the UK2070 board, it has been both fascinating and at times depressing to see just how deep-rooted geographical inequalities are across the UK,” Councillor Judith Blake, leader of Leeds City Council, said at the symposium.
“If powers and funding can be given back to local government, we can steer a course which can improve the aspirations, opportunities and lives of our citizens and make a difference… Behind this economic story lies a human one. This is about people. It’s about lives.”
The North needs more than a little détente. You might say it needs its own Velvet Revolution.
This article first appeared in the print edition of Northern Housing magazine, #5 July 2019