Yet again, the budget pushes the North a little further from the South

It's two nation Britain.

With growth forecasts halved to 0.6 per cent this year, and unemployment rising again in the north of England, this needed to be a budget for growth across the UK. Instead, the headline measures will do more to further inflate house prices and childcare costs in London and very little to boost regional economic opportunities. Meanwhile, further public spending cuts – not least in pay and benefits - will have a continued deflationary impact on many Northern towns and cities.

The budget has come on a day when unemployment figures show the North-South divide widening further – up by 10,000 people across the north of England in the past quarter compared with a 17,000 fall in London.

Measures such as the increase in the income tax threshold and the National Insurance allowance for small businesses will be welcomed by many but won’t have the effect of rebalancing the economy – rather, they will tend to benefit those areas where wages are higher and the business base is broader.

More significantly, measures to increase new house building are to be welcomed but there is a significant risk that making it easier for borrowers will simply prop up prices – indeed, inflate prices – rather than getting additional homes built. It is not clear that Help to Buy will generate additional new housing starts, beyond what would have been undertaken anyway (which will certainly not be the case for mortgage subsidies that are not linked to new-build) and the 15,000 new homes promised in the budget go nowhere near most estimates which suggest we need to build an extra 250,000 new homes a year to meet rising demand. Similarly, childcare changes will soon be wiped out as providers inflate costs with little additional provision.

Of those measures that will stimulate growth it is too little too late. It is encouraging news that the Chancellor has broadly endorsed the Heseltine report but with government sources suggesting that resources going into the "single pot" will be in the “lower billions” rather than the £49 billion Heseltine recommended – and even then not until April 2015 – this will hardly be a short-term stimulus.

The £3bn boost in infrastructure spending is something that IPPR North and many others have been calling for many months but will do little to help us catch the levels of capital investment spent in other nations and once again won’t land until 2015/16. Furthermore, we cannot hope this will boost regional growth when we currently plan to spend £2,595 per person on transport in London compared to just £115 per person in the north. Transport spending must be devolved more fairly to have a real impact.

With much evidence pointing towards the critical role regional economic development is playing in stimulating national economies across the developed world, this budget – however populist – will do little to restore the economic health of the nation and will ultimately be regarded as a missed opportunity.

But perhaps the bigger tragedy than this missed opportunity is the fact that regional prosperity hangs so much on central government decision-making at all. With greater fiscal decentralisation economic growth could be better tailored to the particular needs of local and regional economies and less dependent upon the big levers so clumsily wielded by chancellor after chancellor. Such reform is long overdue.  

Photograph: Getty Images

Ed Cox is Director at IPPR North. He tweets @edcox_ippr.

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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.