The promise that Osborne made in 2010 to ensure balanced growth in all parts of the country has gone the same way as his promise to balance the books.
The promise that Osborne made in 2010 to ensure balanced growth in all parts of the country has gone the same way as his promise to balance the books
Today’s Autumn Statement showed that the Tories are increasingly worried about their record in parts of the country beyond the home counties – and in particular what one Tory MP this week called the “dog end voters in the outlying regions”.
Today George Osborne added to his speculative commitment to a HS3 rail line with announcements on new trains for the north, more science investment in northern cities and a new arts space in Manchester.
They are right to be worried. Next week people will still feel intense pressure from weak wage growth. Working people will still be worse off. The promise that Osborne made in 2010 to ensure balanced growth in all parts of the country has gone the same way as his promise to balance the books – shot to pieces.
This matters because the spatial distribution of our national income is not peripheral to our economic debate; it is at its heart. Just as growth in GDP output is a hollow success without gains in living standards across the income distribution, so the economic recovery will still simply benefit the fortunate few if it is not spread across the country.
The government needs to be held to account for their record. While under Labour our drive on regional development meant that all regions of the country enjoyed growth, under the Tories output is stagnant in our poorer areas. Overseas investment may be back at pre-crisis levels in London but it is still lagging in the North West. Productivity in Wales is 20 per cent below the UK average.
Wages have fallen across the country, but the deficit of decently paid jobs being created is felt particularly acutely in some areas of the country – in our part of South Yorkshire the real average wage has fallen by over £3,000 since 2010.
And the Tories aren’t just at fault on their failure to deliver balanced growth, but also for the way they have actively channelled funding away from the areas that would benefit from it the most. Councils in the poorest areas have been hit with much larger cuts to their central government funding than councils in less deprived areas. There remains a huge gulf in the level of publicly supported infrastructure investment in London compared to the rest of the country.
There is a Labour alternative: a £20bn funding boost to local budgets for transport, housing and job creation. Re-creating regional ministers to give a voice for all the parts of the country in government. And as I set out in a report last year, revamping the role and boosting the powers of the feeble Local Enterprise Partnerships to create fewer, stronger, more independent bodies that can drive local growth in their areas.
The UK is amongst the most regionally unequal countries in the developed world, and this has been getting worse. But the Tories don’t have the answers. They have failed on regional rebalancing for the same reason they have failed on living standards.
An ideological worldview that says, against all the domestic and international evidence, that government can’t play a strong role in equalising life chances: shaping markets not just following them.
After today’s Autumn Statement, the conclusion on balanced growth is clear: only a radical plan will reduce the inequalities between the parts of our country, and only a Labour government can deliver it.
John Healey is Labour MP for Wentworth and Dearne
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