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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Grandpa was ill and wasn’t keen on climbing the volcano – but we forced him up all the same

I squinted. Apart from a gleam of turquoise, the view was of one big cloud. Slowly the words started to form in my head. Just. Like. Scotland.

At first, Grandpa was sceptical about the volcano. “I used to be into that kind of thing,” he said, “but not now.” He did not mention that he was 88.

The guidebook to Indonesia – which he disdained – described how, once you got to the crater, the mist would rise to reveal a shimmering lake. His fellow travellers, my sister and I, often joked about our family’s tendency to declare everything to be “just like Scotland”. This was a living, breathing volcano. It would be nothing like Scotland.

But as Grandpa reminisced about his childhood in the Dutch East Indies, he began to warm to the idea. We set off at 7am and drove past villages with muddled terracotta roofs and rice paddies spread across the valleys like glimmering tables. We talked excitedly about our adventure. Then it began to rain. “Perhaps it will blow over,” I said to my sister, as the view from the windows turned into smears.

Our driver stopped at a car park. With remarkable efficiency, he opened the doors for us and drove away. The rain was like gunfire.

To get to the crater, we had to climb into an open-sided minibus where we sat shivering in our wet summer clothes. Grandpa coughed. It was a nasty cough, which seemed to be getting worse; we had been trying to persuade him to go to a pharmacy for days. Instead, we had persuaded him up a cold and wet mountain.

Five minutes passed, and the minibus didn’t budge. Then another bedraggled family squeezed in. I thought of all the would-be volcano tourists curled up in their hotels.

“Look,” I said to the attendant. “My grandfather is not well. Can we please start?”

He shook his head. “Not till all seats are full.” We exchanged a glance with the other family and paid for the empty seats. The driver set off immediately.

The minibus charged up a road through the jungle, bouncing from puddle to puddle. Grandpa pulled out his iPhone and took a selfie.

The summit was even colder, wetter, rainier and more unpleasant. We paid a small fortune to borrow an umbrella and splashed towards the lake. My sister stopped by a fence.

“Where is it?” I said.

“I think . . . this is it,” she replied.

I squinted. Apart from a gleam of turquoise, the view was of one big cloud. Slowly the words started to form in my head. Just. Like. Scotland.

I thought remorsefully of the guidebook, how I’d put my sightseeing greed before my grandfather’s health. Then I noticed the sign: “Danger! Do not approach the sulphur if you have breathing problems.”

Grandpa, still coughing, was holding the umbrella. He beckoned me to join him. I didn’t know it then, but when we made it back to the car, he would be the first to warm up and spend the journey back telling us stories of surviving the war.

But at that moment, in the dreich rain, he gave me some advice I won’t forget.

“If anyone tells you to go and see a volcano,” he said, “you can tell them to fuck off.” 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution