To solve Britain’s problems, we must solve the north’s problems

The same narrow economic focus that created our over-dependence on finance and the property bubble is also responsible for the north/south divide. We need a new strategy for regeneration.

Jubilant jeers from the government benches and bold growth forecasts thinly disguised an inconvenient truth in last week's Autumn Statement: this apparent recovery too often isn’t being felt far beyond the Square Mile of the City.

In places like Hull, which I represent, there isn’t any recovery at all for families seeing their budgets being squeezed ever tighter. For them, prices are rising faster than wages month after month, leaving people an average of £1,600 a year worse off in real terms. Unemployment is still higher now than it was in March 2010. People forget that by 2005, under Labour, unemployment in the north was the same as the national average of 5% - it’s now 9.6%, set against a national average of 8%.

These are headline statistics for a much broader regional disparity: there is a bias in favour of the south when it comes to council funding cuts, transport and infrastructure spending and even – in spite of Hull’s recent winning bid for City of Culture – arts funding. Cities like Hull still haven’t recovered from abandonment under Thatcher: fewer northerners go to university; more are in low-skilled, lower-paid jobs; and northern graduates, unable to find work at home, move south in vast numbers. Others have to work in part-time or temporary work despite longing for full-time, permanent labour – Yorkshire and Humber, where nearly half the workforce reports this problem, is the worst region in the country for this.  

But this is more than just a parochial, regional issue. The north’s problems are Britain’s problems: the same narrow economic focus that created our over-dependence on city finance and the property bubble is also responsible for the north/south divide, and we all lose out from leaving one vast swathe of the country behind like this. Last year, a study of over 150 European cities of various sizes found that continued over-investment in capital cities, coupled with under-investment in second tier cities, was linked with broader economic underperformance on a national scale. Common sense tells us why: a recent Observer article reported that London, too expensive for young interns to live in, was losing the race to become Europe’s digital hub. It is to Germany – all 14 of her second-tier cities recording higher productivity growth rates than Berlin – that these new opportunities risk going if Britain doesn’t wean herself off the noxious toxin of a southern-focused strategy for growth.

Britain’s salvation won’t lie in following the Economist’s recently-stated mantra and pushing further migration into a capital city whose quality of life satisfaction, as the IPPR noted, is already "significantly and consistently lower than anywhere else in the country" thanks to years of large scale internal migration. A broad-based strategy for growth, building the institutions for northern regeneration and giving localities the breathing space to build on their own natural economic advantages, is the surer route to success. Below are just three policies that could help make this happen.

First, we need a skills and education policy that works for northerners. The north’s competitive advantage compared to other regions of the UK still, to some extent, lies in manufacturing and exports, with northerners 70% more likely to take apprenticeships than the rest of the UK. But Britain’s skills policy, often decided from the centre, fails to leave room for local flexibility in gearing their populations to meet local labour market needs, and only 7% of year ten pupils name apprenticeships as a post-GCSE option. A broad devolution of skills policy away from the centre is needed that gives employers more control over apprenticeships funding, but also more responsibility to drive up the numbers of high quality apprenticeships. That is the idea at the heart of Labour’s forgotten 50% agenda. It’s about bringing employers, educationalists and job centres together in drawing up plans to meet local needs.  We need greater local involvement in getting the right back to work schemes delivered in each area and to ensure increased linking of schools with the employment options available. It’s an approach that has worked on the continent and would pay dividends here.

Second, we need to address the north’s transport divide. Just four of the 50 best-connected local authorities in England are in the north, with 35 in London and the south east. HS2 is the exception that proves the rule, with 84% of the government’s £5bn infrastructure spending going south. The Treasury’s decision process for infrastructure projects inherently benefits richer areas and, indeed, the whole planning system is biased in favour of south-eastern over-development rather than regional rebalancing. This needs to change. We also need to explore the greater devolution of transport spending, so northerners can decide what spending would best drive forward their own areas development.  

Finally, it’s time to end northerners’ deficit in access to finance. The south east, where 32% of Britain’s businesses reside, takes up to 41% of all business investment. Northern firms are suffering hugely now the coalition has pulled the plug on projects like Sheffield Forgemasters. A British Investment Bank would help redress this imbalance, but we need to consider bolder measures. That’s why Labour is developing plans for a regional network of banks, each with a clear remit to serve their local businesses rather than the City. In Germany, regional and local banks or Sparkassen, provide 70% of all bank lending and are legally obliged to concentrate their investments in the local economy. By default, the German banking system is thus built to redress regional imbalances. In Britain, where 80% of our lending comes from the big six London banks, this just isn’t possible. Improving access to finance for northern individuals and firms is thus a vital tool for addressing the north/south divide.

Britain wasn’t always this divided. International comparisons with other OECD countries show the UK has had the worst rate of regional divergence since 1985. But turn the timescale around and a different picture emerges: Britain had the highest rate of regional convergence from 1950-1985. In the nineteenth century, the whole country – north and south – fired on all cylinders as Britain enjoyed unprecedented economic success. All that’s needed to revive this lost diversity is an alternative, One Nation approach to tackling the cost of living crisis. Rather than hoping for growth to trickle down from the top, that approach understands that sustainable growth for the many comes from all levels. Labour is the party to deliver it.

The Humber Bridge is seen after the City of Hull was announced as the 2017 UK City of Culture on November 21, 2013. Photograph: Getty Images.

Diana Johnson is the Labour MP for Hull North.

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.