The North East and other regions are falling behind London in a key measure of regional economies, the country’s leading investment group has said.
Investment group Legal and General (L&G) has released its eighth Rebuilding Britain Index report, which includes scores for the various regions and nations of the UK on a range of measures. In the latest version of the Index, the North East has the joint highest score outside London, and is ranked highly on measures including education, digital, and energy and the environment.
But the region’s is ranked lowest in the country on jobs and economic prosperity, with the North East’s score in this area considerably lower than almost all other parts of the country.
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L&G - which is led by North East-born chief executive Sir Nigel Wilson - has invested around £250m in the North East in recent years, mostly in the Newcastle Helix and Riverside Sunderland developments. The report highlights L&G’s backing of new office blocks near City Hall in Sunderland as an example of its ability to help create jobs and improve cities around the UK.
The report says: “This, the eighth report in the Rebuilding Britain Index series, sometimes makes for grim reading. Our findings are based on survey responses from 20,000 UK households and a range of UK-wide quantitative secondary measures.
“These findings reveal that, outside of improvements to unemployment rates, very little has changed across jobs and economic prosperity compared to previous quarters. While this makes the Spring Budget focus on growth a welcome one, such growth across the regions can only be achieved with holistic local-led investment in other areas like housing and health - with the former notably absent from Budget announcements.
“It remains our view that, while the public purse will be a vital component in addressing these inequalities, far more needs to be done to put the weight of private capital to work in support of those ambitions. Legal & General have already invested over £30bn in towns and cities across the UK as part of our approach to inclusive capitalism – which takes a place-based approach to where and how we invest. These investments are having a demonstrable and positive impact on the communities in which we invest.”
The L&G report said that “efforts to level up the UK have, thus far, failed to have a material impact” and added that “inequalities across the UK have widened”. In an interview with the FT, Sir Nigel - who announced earlier this year that he intends to retire - said that efforts to ‘level up’ the regions of the UK were not currently working.
The Index also found that 95% of working households in the UK have taken a real-terms pay cut over past 12 months. Lower income households have been more severely affected, with 99% of households with income under £20,000 having taken a real-terms cut. Meanwhile, around 83% of those with an income of more than £100,000 were better off over the past year.
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