The Spending Review will widen the north-south divide

Squeezing disproportionate amounts of public spending out of the regions will leave the country fiscally unbalanced and with regional disparities on the scale of most developing nations.

At Budget time we are now familiar with tables setting out the impact of announcements – particularly tax and benefit changes – on different household types. The Treasury Green Book now publishes a familiar bar chart showing the net effect of each Budget on different household deciles in order that we can judge how progressive its measures have been.

But what is less common is any analysis of how big fiscal decisions affect different areas of the country. At the last Budget, the Financial Times created an ‘Austerity Map’ of Britain showing how benefit changes were affecting different local authority areas but it is possible to go further than this and to map how changes across nearly all aspects of government spending affect different regions.

As part of a wider piece of work on government spending, IPPR North has carried out an analysis of yesterday's Spending Round announcements. Assuming that broad spending patterns in 2015/16 are similar to those today, in aggregate, departmental cuts will reduce public expenditure in the North East by £57 per person and in the North West and Yorkshire and Humber by £50 per person, compared with £43 per person in London and £39 per person in the South East.

Perhaps most significantly, though, when we look at the impact of departmental cuts as a proportion of the size of the regional economy (as measured by gross value added) the Northern regions are – once again - hardest hit with the North East suffering three times as much as London. 

Consider this alongside announcements concerning capital spending and the picture is compounded further with spending in London more than ten times that of the North East. As a nation we are already spending more than 500 times as much on transport infrastructure in London than we are in the North East, 25 times more than in the North West, but with the announcement of a government commitment to a further £9bn for Crossrail 2, it is likely that the capital city will swallow up more than 90% of all regional transport infrastructure investment in the coming decade.

Government will argue that its commitment to local growth comes in the form of the Single Local Growth Fund – the pot of unringfenced funding which will be bid for by business-led Local Enterprise Partnerships (LEPs). But given that Michael Heseltine proposed a £49bn fund over four years, the announcement is less than one-fifth of what LEPs might have hoped for, only going to prove once again how hard Whitehall finds putting the rhetoric of decentralisation into practice.

If government is serious about rebalanced growth then it must recognise that national prosperity depends upon regional prosperity. Squeezing disproportionate amounts of public spending out of the regions may well have a political and ideological logic to it, but it will leave the country fiscally unbalanced and with regional disparities on the scale of most developing nations. Mercifully, this is only a single year Spending Round, but it is beholden upon any incoming government to reverse this shocking pattern of public expenditure and ensure that northern prosperity is national prosperity once again.

Ed Cox is Director of IPPR North

@edcox_ippr

The Angel of the North sculpture overlooks the match between Gateshead and Esh Winning on May 2, 2013 in Gateshead. Photograph: Getty Images.

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

Photo: Getty
Show Hide image

The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

0800 7318496