The gap between the North East and richer regions of the UK has widened over the last decade, causing problems in all parts of the country, a new report says.
The report from the Fabian Society calls for new policies on jobs, transport and centralisation of power in what it describes as a ‘whole country approach’ to levelling up. The Society’s Commission on Poverty and Regional Inequality was led by former Newcastle City Council leader Nick Forbes and highlights how 46% of net job growth in England since 2010 was in London and the South East, while the North East only accounted for 2%.
The report says that “UK regional inequality is without parallel in the developed world” but points out that the current inequalities between regions are bad for both London, where the economy is overheating, and poorer regions like the North East.
Read more: North East unemployment falls to record low
It has called for a major switch of powers to give local leaders the ability to take control of important services such as public transport, affordable housing, childcare and support for people seeking work.
The report has come at a time of contrasting data over the state of the North East economy. This week the region recorded a record low unemployment for the second month running, and now has lower rates than London, the South East and England as a whole. But the region also has the lowest average wages of any region in the UK, while child poverty levels and the use of food banks is also higher than any other part of the country.
The Government’s flagship levelling up policy aims to reduce inequalities between UK regions but the Government has faced constant criticism over its failure in regions like the North East, as well as the suspicion that the policy started under former Prime Minister Boris Johnson is less of a priority for current PM Rishi Sunak.
Mr Forbes said: “The North East of England, my home region, has much to be proud of. But we also have one of the highest poverty rates in England. There just aren’t enough well-paid jobs to go round. And poor transport, inadequate training and costly childcare stop people accessing what opportunities do exist.
“There is a root cause to our everyday challenges that many of us know deep down: our region is governed from afar, by Whitehall. We haven’t had the power in our hands, in our region, to adapt to the vast, global economic changes that have buffeted our region’s economy, and central government has consistently let us down by underinvesting and failing to set out the long-term industrial and regional strategies that would help us prosper once again.
“But astonishingly, London’s poverty is almost as high. Our supposedly prosperous and booming capital has a poverty all of its own. In that case, the main problems are high housing costs, while many of the jobs created are out of reach for its citizens. However different our problems, we share a root cause: London’s mayor and its councils have also lacked the power they need to tackle the problems their city’s prosperity has generated.
“Poverty is inexcusable, wherever in the country it is entrenched. We cannot shrug off low regional economic growth, like that of the North East, as inevitable. And nor can we allow high regional growth to have such consequences for our poorest, as it does in London.”
Graeme Miller, leader of Sunderland Labour Group, said: “The findings from the Fabian Society lay bare just how little this Conservative Government cares about regions such as the North East. Over the past 13 years, we’ve had five different Conservative Prime Ministers, each one of which has stood on a platform of promising to ‘Level Up’ and address regional inequality.
“Yet, despite each and every one of them making it a key pledge, this report just reiterates what we already knew. It was never anything more than a soundbite."
The Fabian Society report highlights what it calls “eyewatering” differences in the productivity of different parts of the UK. It adds that the inequality in disposable incomes for different parts of the country fell slightly between 2009 and 2011 but has risen significantly between 2011 and 2019.
It adds that cities like Newcastle have “truly come to life” over the last 20 years but that success hasn’t translated into other parts of the region.
A spokesman for the Department for Levelling Up, Housing and Communities said: “Levelling Up is a long-term programme of reform that sits at the heart of our ambition to radically transform the United Kingdom and reverse this country’s regional inequalities. Whether it’s investment in town centres and high streets or devolving more money and power to local leaders, we are determined to spread opportunity everywhere.
“We have allocated almost £10bn from levelling up funds since 2019, in addition to the £7.5bn commitment to the nine city-based Mayoral Combined Authorities in England. This includes providing bespoke funding packages for areas in greatest need of levelling up and establishing Investment Zones to further drive growth across the country.”
