UK needs northern prosperity to boost growth - report

Tyneside The report says growth is needed in northern cities like Newcastle

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Those of us who live and work up north know that it's far from grim.

Apart from having some vibrant cities and amazing countryside, it also has economic success stories.

But a new report suggests more needs to be done to unlock its potential - not just for the benefit of people who live there but also for the good of the UK as a whole.

Return to growth

The Northern Economic Futures Commission has spent 18 months gathering evidence and considering what's going right and wrong.

But above all it was concerned with how the north could help the British economy return to significant levels of growth.

Over the last decade the three northern regions - the North West, Yorkshire and Humber and the North East - have been responsible for a fifth of the UK's prosperity, but London alone contributed more than a quarter.

And while countries like Germany, Holland and Spain have several economically-powerful cities, the UK just has London.

Why, the report asks, can't the likes of Newcastle, Leeds or Manchester be as economically significant as Stuttgart, Rotterdam or Barcelona?

Barcelona skyline The commission says it wants northern cities to be as economically significant as Barcelona

The commission's solution is to move power and funding north.

It has come up with an action plan to increase the northern contribution to UK plc.

Direct flights

The commission wants air passenger duty cut significantly for northern airports for a three-year period.

It believes that could be vital in ensuring there are direct flights from Manchester, Leeds and Newcastle to the new international economic powerhouses of Beijing, Shanghai, Sao Paulo, Delhi and Mumbai.

The report also says a new body - Transport for the North - should be formed to oversee the northern rail network.

But the power and money grab wouldn't stop there.

The commission also says huge pots of government money should also be handed directly to the north.

It says a single fighting fund for economic growth should be created by handing local transport, housing, skills, regeneration and development funding directly to the north's Local Enterprise Partnerships (LEPs).

Under the recommendations £13bn of housing benefit and funding for house-building would also be transferred out of Whitehall and into the north.

Start Quote

Ed Cox, director IPPR North

If the north of England was to emulate its northern European neighbours then it might just lead the UK economy out of its present lopsided doldrums”

End Quote Ed Cox Director, IPPR North

Local employers would get a greater say over skills policy and the number of apprenticeships would double to 60,000 by 2015.

A Northern Innovation Council could get £1bn from the proceeds of sale of 4G mobile licences, and there would be a special northern section of a UK investment bank.

Elected mayors

The commission also wants to see powerful northern leaders emerge. It says the 11 LEPs should hold an annual summit and elect a chair.

In addition, directly elected metro mayors would take charge of urban areas such as Tyneside, Merseyside and Greater Manchester. The north, it believes, needs its own Boris Johnson.

The commissioners believe that could create 500,000 extra jobs in the north, close the economic divide with the south and boost the British economy by £41bn.

The commission was brought together by Newcastle-based think tank IPPR North.

Its director Ed Cox said: "The 'north south divide' is a stock-in-trade and 'it's grim up north' is a familiar refrain.

"Like all clichés, there is more than an element of truth in this characterisation.

"But the north is capable of taking its place in the ranks of successful northern European economies, with competitive companies trading in global markets, a fully employed and well-skilled workforce, and strong civic leadership that supports growth and shared prosperity.

"Far from lagging behind the rest of the country, if the north of England was to emulate its northern European neighbours then it might just lead the UK economy out of its present lopsided doldrums and towards a more progressive and sustainable economic future."

Rebalancing the UK

Some of the report does echo some of what Lord Heseltine recently recommended in his report, and harks back to a Victorian age when northern cities played a huge part in the UK and global economy.

Boris Johnson The report suggests the north needs its own version of London mayor Boris Johnson

The government has also repeatedly talked about rebalancing the UK and stimulating private sector growth across the north.

So some of these ideas may be welcomed.

But they also require the sacrifice of control by Whitehall - something successive governments have been reluctant to do.

So is a change of culture possible?

And does the government really want a northern Boris Johnson knocking on the door of Downing Street?

I can also imagine politicians and businesses in the West Midlands being taken aback by the idea that northern flights could be taxed at a lower rate than those leaving Birmingham.

Campaigners in the south west might also question why the north qualifies for special treatment.

But the commission is clear, the north as a whole has a population of 14.5 million people and a large chunk of its manufacturing base.

And it believes that without a focus on northern prosperity, there's less chance of the UK as a whole emerging from its current economic difficulties.

Richard Moss Article written by Richard Moss Richard Moss Political editor, North East & Cumbria

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  • rate this

    Comment number 50.

    It is convenient for people happy with the status quo to overlook the fact that significant numbers of people from all over the UK currently head to London where opportunities lie, thereby perpetuating this situation.

    Were London to have to rely on its home grown 'talent' the UK's economy would be quite a different position.

    It is right that money be spent in the North to reverse this pattern.

  • rate this

    Comment number 49.

    @44 jgm2
    wages should be half what they are in London.

    To an average working man,in the north,they already are.

  • rate this

    Comment number 48.

    But why would a company move for worse weather, a militant workforce and still have to pay the same wages?"

    Quite. If that was their attitude who would want to work for them!

  • rate this

    Comment number 47.

    Having lived in Middlesbrough my whole life I have to partially agree with the sentiment that the people of the North must take some responsibility. Too many of us expect the government to provide for us.

    Having said that, I have little doubt that when I finish my Engineering Degree I will have to leave the region to find work. Hard work and qualifications are useless without opportunity.

  • rate this

    Comment number 46.

    Handing pots of money out is not a good idea. Whose money? 'Statist' solutions have not worked so far. Would bankrolling local enterprise partnerships do any better? Some things can be done to 'rebalance' - the reduced taxes for Northern airports help. Moving Parliament might help. So long as we don't defy economic reality. London may lose out Hong Kong, Singapore, New York: what then?

  • rate this

    Comment number 45.

    People in 'The North' look at all these jobs darn saaf and whine 'It's not fair.'

    But what they're really doing is looking at the salary of those jobs down south. Then they figure that if they had that kind of money 'Up North' they'd live like kings - like the public sector does 'Up North'.

    But why would a company move for worse weather, a militant workforce and still have to pay the same wages?

  • rate this

    Comment number 44.

    @42 Jules

    'We simply need a way to discourage firms from shifting jobs south.'

    Not at all. You need a mechanism to encourage firms to shift jobs North.

    Houses in 'The North' are much cheaper so wages should be half what they are in London.

    The problem is standardised public sector wages keeping a floor under northern house prices and creating upward pressure on northern wage rates.

  • rate this

    Comment number 43.

    Thatchers mob sold off everything worth owning, desytroyed industry in the Midlands & North, they don't care about anyone north of Watford or west of Windsor.

    Down here in Cornwall, no trains due to landslides, the M5 was closed for a while, we were cut off apart from flights to MAN & LGW at £100 - We make Pasties, that's it & even they are taxed to the hilt, no jobs in winter, we need help too.

  • rate this

    Comment number 42.

    Why do most medium to large firms have their bases in the south east?
    Simply because the bosses of large firms live in London. I see it frequently. Firms merge , and management roles are relocated in London until the north, is left with little more than the call centre.
    We simply need a way to discourage firms from shifting jobs south.

  • rate this

    Comment number 41.

    "Those of us who live and work up north know that it's far from grim."

    You obviously don't live and work in Darlington.

  • rate this

    Comment number 40.

    @8 My Feet Ache

    'I cannot understand why the Government is even considering, cutting public sector pay in depressed regions.'

    By paying the public sector like London you are artificially increasing the cost of living in (say) Liverpool to the point where any manufacturer now has to compete with the local public sector pay.

    Might as well build your new factory somewhere with a better work ethic.

  • rate this

    Comment number 39.

    The idea of local parliments was rejected years ago. Newcastle wanted all the power and money but voted to prevent others having power. The other areas wanted Newcastle to lose its totalitarian control. Local power systems will always fail with this distrust and Newcastles xenophobia.

  • rate this

    Comment number 38.

    Why does everyone forget the Thatcher lies and deliberate destruction of jobs. The lie which prevents Sunderland re-opening or demolishing the Pallion shipyard. The destruction of Swan Hunter by preventing the MoD paying money owed until receivers were in charge. Telling the country we could survive on banks.

  • rate this

    Comment number 37.

    To move prosperity north could be done in one fell swoop by moving Parliament North. (Manchester? /Birmingham) and many headquarters will move too from London taking employment to where there is unemployment.. There is a motorway connecting Palace and Parliament and an airport(with room for expansion) for foreign travel. High speed trains soon and everything is on hand. No excuse to stay in SE.

  • rate this

    Comment number 36.

    Perhaps the 45,000 people a week that were migrating from the North to the South East during the eighties need to take the blame for overheating the local economies in the South and making them so overcrowded and expensive to live in. I might have wanted to be able to afford to live in the town I was brought up in but unfortunately was priced out by a massive influx of Northerners.

  • rate this

    Comment number 35.

    Wealth creation, based on manufacturing, is the only way out for many northern cities. In order to create real, new jobs (not a series of supermarket jobs) requires commitment and leadership from the top. Vince seems isolated from the two who matter: PM and Chancellor. Without such engagement, any initiative, however well-intentioned, is likely to go the way of the rest.

  • rate this

    Comment number 34.

    The suited gentlemen of the south, who for a long time ignored the very existence of the North, created a financial disaster which Northerners have to put right with hard graft.
    The Northeast, especially, has been left to rot since the last time the tories were in. No jobs, no investment. Now they want to create jobs to save the South's behind? How's that fair? Southern self preservation as per..

  • rate this

    Comment number 33.

    Richard, this looks like a pretty politicised analysis from a supposed "unbiased" BBC. It would appear that you are endorsing Labour's plans to promote the concept of a Northern Parliament and try to split England into North and South. Frankly, that idea is not only highly divisive but plays back into Europe's plans to divide and rule.

    The BBC should not be trying to form political policy!!

  • rate this

    Comment number 32.

    One thing that will help is a return to the dispersal of non-EU immigrants to the north from the SE.

    That will ease the burden on housing, health & education in the SE, will make use of those 1000s of empty properties in the north, it will aid the integration of the newcomers by removing the 'enclave' mentality, and (hopefully) the entrepreneurial attitude of immigrants will aid regeneration.

  • rate this

    Comment number 31.

    This is the answer to the housing issue as well. Stop focusing on London and the South East corner of the UK, make one of two of the other cities in the UK at least semi prosperous, business will flourish and the housing issues will largely disappear!


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