The dangers of ignoring this recession's bitter regional edge

The north of England and many of the other English regions are enduring a daily squeeze that is seld

As we all know, northerners are made of stern stuff and historically have seized any opportunities thrown their way. Nonetheless, with regards to recent economic trends north of The Wash, we all have ample cause to feel miserable.

Consider recent form: that the north-east and Yorkshire and Humber were the top regions in the country for increases in unemployment in the last quarter. Unemployment in the whole north now stands at 9.45 per cent (compared to a national average of 8.2 per cent) a rate the north has not had to endure since 1995. Manufacturing, a sector with more clout in the north of England than the rest of the UK, shrank by 0.6 per cent in from June to August. Worse, recent business surveys suggest that while the private sector in the north is recovering from a difficult business environment over the summer, the flow of new orders coming in to northern businesses looks precarious.

The north of England and many of the other English regions are, day in day out, enduring a daily squeeze that is seldom acknowledged. Whitehall's apparent ill-regard to northern concerns was exemplified by last week's public sector unemployment figures. Latest research shows that in one year, 121,000 public sector jobs have been lost up north while 32,000 have been gained down south. This sits uneasily with the government's apparent aim to make cuts as "fair" as possible. As the accountancy firm Begbies Traynor reported recently, companies in the north-east, north-west and Yorkshire are being hit hardest by public sector retrenchment, with many small and medium sized enterprises disproportionately squeezed. Likewise, large companies like Boots have noted the stark impact cuts are having on their sales and consumer confidence in the north. We expect the labour market numbers, issued this Thursday, to reaffirm this glum picture.

Were it needed, this is all yet further proof that this great recession has a bitter regional edge. Through recent events in Europe, we have seen how one country's economic situation and performance can drastically differ from others. So it is in the English regions. Without a greater focus on spatial rebalancing and the significant decentralisation of central government functions away from Whitehall, both employment and demographic patterns are unlikely to shift. This matters to everyone: recent research from the OECD confirms that it is in a country's "lagging" regions (which make up 56 per cent of UK output) that the economic future lies. We must get growth in these regions in order to achieve growth and prosperity nationally. Positive growth figures in the north-west and Yorkshire in recent days are to be welcomed, but overall, there is still much with which to be greatly concerned.

Though we talk of a "UK economy" it is, largely, a falsehood. We need a more a nuanced understanding in our discourse as to how this great calamity is affecting the ordinary lives of those outside the greater south-east. Many of the wider iniquities that exist are seldom discussed. We in the north want to get out of this hole ourselves. To that end, IPPR North's Northern Economic Futures Commission is currently considering a wide array of proposals to kick start northern growth and make the north one of UK PLC's great success stories. But so long as we approach England and Britain as one economic bloc, with one set of economic priorities, we can never succeed -- it's time for Whitehall to recognise that.

Lewis Goodall is Researcher at IPPR North

 

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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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