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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The biggest divide in politics is not left against right, but liberals against authoritarians

My week, including a Lib Dem membership rise, The Avalanches, and why I'm putting pressure on Theresa May over child refugees.

It is a boost for us that Nick Clegg has agreed to return to the front line and be our Brexit spokesperson. I hadn’t even had a chance at our meeting to make him the offer when he said: “Before we start, I’ve been thinking about this and want to take on the fight over Europe.”

With Labour apparently willing to give the Tories a free pass to take us out of Europe, the Liberal Democrats are the only UK-wide party that will go into the next election campaigning to maintain our membership of the EU. The stage is remarkably clear for us to remind Theresa May precisely what she would be risking if we abandon free trade, free movement, environmental protection, workers’ rights and cross-border security co-operation. More than a month on from the referendum, all we have heard from the Tories is that “Brexit means Brexit” – but they have given us no clue that they understand what that means.

 

Premature obituaries

Not long ago, the received wisdom was that all political parties were dying – but lately the supposed corpses have twitched into life. True, many who have joined Labour’s ranks are so hard left that they don’t see winning elections as a primary (or even a desirable) purpose of a party, and opening up Labour to those with a very different agenda could ultimately destroy it.

Our experience has been happier: 20,000 people joined the Liberal Democrat fightback in the wake of the 2015 general election result, and 17,000 more have joined since the referendum. We now have more members than at any time this century.

 

Breaking up is hard to do

Journalists have been asking repeatedly if I want to see the break-up of the Labour Party, with moderates defecting to the Liberal Democrats. I have been clear that I am not a home-wrecker and it is for Labour to determine its own future, just as I focus on advancing the Liberal Democrat cause. Yet I have also been clear that I am happy for my party to be a home for liberals of whatever hue. I enjoyed campaigning in the referendum with a variety of progressive figures, just as moderates from different parties shared platforms in 1975. It struck me that far more unites us than divides us.

That said, not all “moderate” Labour figures could be described as “liberal”, as John Reid demonstrated as Labour home secretary. The modern political divide is less left v right than authoritarian v liberal. Both left and right are looking increasingly authoritarian and outright nasty, with fewer voices prepared to stand up for liberal values.

 

What I did on my holidays

Time off has been virtually non-existent, but I am reading A Wilderness of Mirrors by Mark Meynell (about loss of trust in politics, the media and just about everything). I’m also obsessively listening to Wildflower by the Avalanches, their second album, 16 years after their first. It’s outstanding – almost 60 minutes of intelligently crafted dialogue, samples and epic production.

During the political maelstrom, I have been thinking back to the idyllic few days I spent over half-term on the Scottish island of Colonsay: swimming in the sea with the kids (very cold but strangely exhilarating ­after a decent jog), running and walking. An added bonus is that Colonsay is the smallest island in the world to have its own brewery. I can now heartily recommend it.

 

Preparing for the next fight

The odds are weirdly long on an early general election, but I refuse to be complacent – and not merely because the bookies were so wrong about Brexit. If we have learned one truth about Theresa May as Prime Minister so far, it is that she is utterly ruthless. After her savage cabinet sackings, this is, in effect, a new government. She has refused to go to the country, even though she lectured Gordon Brown on the need to gain the endorsement of the electorate when he replaced Tony Blair. Perhaps she doesn’t care much about legitimacy, but she cares about power.

You can be sure that she will be keeping half an eye on Labour’s leadership election. With Jeremy Corbyn potentially reconfirmed as leader in September against the wishes of three-quarters of his MPs, Mrs May might conclude that she will never have a better chance to increase her narrow majority. Throw in the possibility that the economy worsens next year as Brexit starts to bite, and I rule nothing out.

So, we are already selecting candidates. It is vital that they dig in early. As we are the only party prepared to make the positive case for Europe, such an election would present us with an amazing opportunity.

 

Sitting Priti

David Cameron pledged to take an unspecified number of unaccompanied children from camps across the Continent. I am putting pressure on Theresa May to turn that vague commitment into a proper plan. Having visited such camps, I have been fighting for Britain to give sanctuary to a minimum of 3,000 unaccompanied children, who are currently open to the worst kinds of exploitation. We have heard nothing but silence from the government, with underfunded councils reporting that they are not receiving the help they need from Whitehall.

Meanwhile, it remains government policy to send refugees to Turkey – whose increasingly authoritarian government has just suspended human rights protection.

As if all of this were not grim enough, we have a new Secretary of State for International Development, Priti Patel, who has said that she thinks aid should be used largely to promote trade. As someone who wants our country to be respected around the world, I find this plain embarrassing. Actually, it’s worse. It’s shaming. As with Europe, so with the world: the ­Conservative government is hauling up the drawbridge just when we need more than ever to engage with people beyond our shores.

Tim Farron is the leader of the Liberal Democrats. To join the party, visit: libdems.org.uk/join

Tim Farron is leader of the Liberal Democrats.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue