Region's rise reversed

8 Feb 2012

The North of England hosts a quarter of the British economy, according to the respected Institute for Public Policy Research in the North. Yet the north-south gap is widening with job losses four times higher here than down south. The current Government's economic strategy could destroy our past success and threaten our future and, therefore, the chances of national revival.

Take our Gross Value Added - a technical term that measures the real value of investment and productivity. Under Labour, GVA in the North East was second only to London with decent increases in the numbers of people in work and self-employment as well as VAT registered companies.

We were not a region in decline but one that was developing its place in the economic infrastructure of the UK through genuine partnership working.

The rise that we witnessed as we came out of recession has been slammed into reverse by the coalition's disastrous economic strategy. Thousands of construction jobs have gone, 19,000 fewer women are in work and youth employment has fallen by nearly one-third. In 23 out of 30 parliamentary constituencies in the North East more children are living in poverty than the national average with a shocking 38% in Middlesbrough alone.

Sadly the impact of the Coalition government's determination to throttle the public sector harms everyone. And only a minute percentage of the Government's cuts in public spending and benefits have so far taken place.

Even those fortunate enough to stay in work will see their living standards fall by as much as 16% during this Parliament.

These statistics hide widespread and needless misery. They also highlight a huge economic and social cost on the nation as welfare costs spiral, tax receipts go down, people's self esteem and confidence evaporates and we fall even further behind the rest of the country.

The government compounds our problems by continuing to treat local authorities in the North East unfairly in comparison with others. For example, Gateshead lost £88 per head of funding last year where those lucky folk in Basingstoke saw an increase of £14 per head. Plans to change business rates could see Westminster Council receive a whopping £950 million a year extra whilst Durham County Council could lose £86m. It mocks the shallow mantra that we are 'all in this together.'

We should stop pitching private against public. We need more fairness and genuine partnerships with good use of targeted public funds. We face a huge housing crisis but thousands of construction workers languish on the dole. Put the two together and let's build our way out of recession.

The growth plans of the present government haven't only stalled but are in reverse. As a minimum we could boost the construction industry by reducing VAT on building materials to 5%.

This government says we can't borrow our way out of a debt crisis. Yet they are borrowing an additional £158 billion to keep people on the dole. History teaches us that we should invest to grow.

At the end of World War Two we were in a much worse state than today. Yet Labour built a million council houses, nationalised failing private sector industries vital to national needs, founded the NHS and embarked on a path of growth and continually increasing living standards and life expectancy that is now being reversed.

There's also increasing support for devolved regional institutions that can galvanise our political weight against a central government that thinks it can ignore us. That tendency will be accelerated as our near neighbour, Scotland moves towards either independence or greater devolution.

I wouldn't rule out northern devolution if it could allow us to make a better case for a fair strategy of renewal that reduces and closes the north-south gap.

It's difficult to avoid the sense that the Government is neglecting the North East - it has been the historical pattern before. This paper's campaigns for a new industrial revolution are a part of this crusade for the North and there is a pressing need for a united response by politicians, councils, unions and employers and others to put our issues firmly on the agenda.

Newcastle Chronicle and Journal

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