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.

Getty.
Show Hide image

On civil liberties, David Davis has become a complete hypocrite – and I'm not sure he even knows it

The Brexit minster's stance shows a man not overly burdened with self-awareness.

In 2005, David Davis ran for the Tory leadership. He was widely assumed to be the front-runner and, as frontrunners in Tory leadership campaigns have done so enthusiastically throughout modern history, he lost.

The reason I bring up this ancient history is because it gives me an excuse to remind you of this spectacularly ill-judged photoshoot:


“And you're sure this doesn't make me look a bit sexist?”
Image: Getty

Obviously it’s distressing to learn that, as recently as October 2005, an ostensibly serious politician could have thought that drawing attention to someone else’s boobs was a viable electoral strategy. (Going, one assumes, for that all important teenage boy vote.)

But what really strikes me about that photo is quite how pleased with himself Davis looks. Not only is he not thinking to himself, “Is it possible that this whole thing was a bad idea?” You get the distinct impression that he’s never had that thought in his life.

This impression is not dispelled by the interview he gave to the Telegraph‘s Alice Thompson and Rachel Sylvester three months earlier. (Hat tip to Tom Hamilton for bringing it to my attention.) It’s an amazing piece of work – I’ve read it twice, and I’m still not sure if the interviewers are in on the joke – so worth reading in its entirety. But to give you a flavour, here are some highlights:

He has a climbing wall in his barn and an ice-axe leaning against his desk. Next to a drinks tray in his office there is a picture of him jumping out of a helicopter. Although his nose has been broken five times, he still somehow manages to look debonair. (...)

To an aide, he shouts: “Call X - he’ll be at MI5,” then tells us: “You didn’t hear that. I know lots of spooks.” (...)

At 56, he comes – as he puts it – from “an older generation”. He did not change nappies, opting instead to teach his children to ski and scuba-dive to make them brave. (...)

“I make all the important decisions about World War Three, she makes the unimportant ones about where we’re going to live.”

And my personal favourite:

When he was demoted by IDS, he hit back, saying darkly: “If you’re hunting big game, you must make sure you kill with the first shot.”

All this, I think, tells us two things. One is that David Davis is not a man who is overly burdened with self-doubt. The other is that he probably should be once in a while, because bloody hell, he looks ridiculous, and it’s clear no one around him has the heart to tell him.

Which brings us to this week’s mess. On Monday, we learned that those EU citizens who choose to remain in Britain will need to apply for a listing on a new – this is in no way creepy – “settled status” register. The proposals, as reported the Guardian, “could entail an identity card backed up by entry on a Home Office central database or register”. As Brexit secretary, David Davis is the man tasked with negotiating and delivering this exciting new list of the foreign.

This is odd, because Davis has historically been a resolute opponent of this sort of nonsense. Back in June 2008, he resigned from the Tory front bench and forced a by-election in his Haltemprice & Howden constituency, in protest against the Labour government’s creeping authoritarianism.

Three months later, when Labour was pushing ID cards of its own, he warned that the party was creating a database state. Here’s the killer quote:

“It is typical of this government to kickstart their misguided and intrusive ID scheme with students and foreigners – those who have no choice but to accept the cards – and it marks the start of the introduction of compulsory ID cards for all by stealth.”

The David Davis of 2017 better hope that the David Davis of 2008 doesn’t find out what he’s up to, otherwise he’s really for it.

The Brexit secretary has denied, of course, that the government’s plan this week has anything in common with the Labour version he so despised. “It’s not an ID card,” he told the Commons. “What we are talking about here is documentation to prove you have got a right to a job, a right to residence, the rest of it.” To put it another way, this new scheme involves neither an ID card nor the rise of a database state. It’s simply a card, which proves your identity, as registered on a database. Maintained by the state.

Does he realise what he’s doing? Does the man who once quit the front bench to defend the principle of civil liberties not see that he’s now become what he hates the most? That if he continues with this policy – a seemingly inevitable result of the Brexit for which he so enthusiastically campaigned – then he’ll go down in history not as a campaigner for civil liberties, but as a bloody hypocrite?

I doubt he does, somehow. Remember that photoshoot; remember the interview. With any other politician, I’d assume a certain degree of inner turmoil must be underway. But Davis does not strike me as one who is overly prone to that, either.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

0800 7318496