The north is still falling behind the rest of the UK – what can we do?

With the right leadership and support, the north of England can return to its former status as a leading economic and social force for change.

With the right leadership and support, the north of England can return to its former status as a leading economic and social force for change

Last week the ONS released a series of figures showing that the north of England is still being largely outperformed by the rest of the UK across most indicators. Employment, productivity, wages, and economic activity in the north of England are all lower than the UK average.

The north was also shown to be behind across other measures; people there have shorter life expectancies, worse health problems, and appear to be less happy. Furthermore, while house prices have recovered in London and the South East to their pre-crash levels, no such recovery is evident in the north of the country.

In Hartlepool and Middlesbrough prices remain a third below their pre-crisis peak in February 2008. This has a clear impact on levels of negative equity, which are at their highest in the three northern regions.

This week, as IPPR North celebrates its tenth birthday, it has published further analysis showing that the last decade, particularly the period since the recession, has across many measures been a challenging one for the northern regions. In this time period the gaps between the performance of the north and that of the capital and south east have widened markedly.

However, there are some key areas, as highlighted by IPPR North’s report, where the north is keeping pace and even giving the rest of the country a run for its money.

For example, despite the long running disparities, employment rates in the north east and Yorkshire and Humber are now higher than they were in 2007 before the onset of the great recession, although the north west has further work to do to get back to pre-crisis levels.

City regions are key in the story of northern prosperity. Indeed, the north west has important pockets of growth. For example, much of job growth in the north of England is coming from the city regions – workforce jobs in Greater Manchester are up by 3.4 per cent since 2010 – twice the rate of jobs growth in the north as a whole which is at 1.8 per cent.

New sectors of employment, beyond manufacturing, are emerging to support this new work. Although manufacturing still remains key in the north, making the largest contribution to the economy, industries such as property and financial and professional services have been growing faster in the last decade.

Living in the north is also much less expensive than living in other parts of the UK. ONS data on consumer prices and JRF analysis on the draw of housing costs on household incomes shows that while incomes are lower, the cost of living in parts of the north of England is such that it offers a better standard of living for lower take home pay.

As these key areas show, there are many positive stories coming from the north. But the north needs support on the scale seen in other parts of the country, if it is to have the same chance of making economic gains as the rest of the country.

One essential area of support comes from connectivity across key infrastructure, such as roads and rail, which still remain below par in the north, as recently highlighted by Nick Clegg.

The share of publicly backed infrastructure investment to improve this connectivity continues to disadvantage the north – the capital’s cut of this investment is 62 per cent, while the north’s is as little as 17 per cent.

Alongside infrastructure, underinvestment in other areas of regional economic affairs, such as skills and research and development will only reinforce the weak productivity of the north, which in turn will continue to constrain employment and wage growth.

All of this has occurred under a highly centralised state, where short-term decisions made in Whitehall have driven these investment gaps.

The next decade must be different, with local governments in the north given a fairer cut of the cake and more control over their economic destiny. The right to a fairer cut of investment money must be matched with responsibility to levy and retain local taxes that would help pay long-term investments.

With this we will need cleaner government structures – the combined authorities model showcased in the north is clearly a way forward for big city regions, blending the scale for joined-up action while retaining the necessary accountability to local electorates.

With the right leadership, and sufficient responsibility to forge its own path in the dynamic UK economy, the north of England can become once again what it once was, a leading economic and social force for change.

Bill Davies is a Research Fellow at IPPR North. Follow him on Twitter

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