The north could have growth aspirations on a scale not seen since the Victorian era of municipal development, according to a new IPPR North report – but only if key investments in the region are made in the upcoming Spending Review and beyond.
The report from the think tank shows the massive potential for businesses in the North West, North East and Yorkshire and Humber to grow and drive the nation’s prosperity and productivity.
It found that the economy of the three northern regions is worth £289 billion: twice the size of Scotland’s, and bigger than all the devolved nations’ economies combined. If it were a national economy, the north of England would rank as tenth largest in the EU.
If the North was able to halve the gap between its own economic output per head and the national level, then its economy would be £34 billion (11.9 per cent) bigger.
The economies of the five biggest cities together grew by 38.8 per cent in the 10 years to 2013 – more than the UK outside London (38.3 per cent). Their populations grew by over half a million (5.4 per cent) in the 10 years to 2014, which is more than live in the city of Manchester.
The rate of job creation in the North equalled the national average (1.9 per cent), with some LEP areas soaring ahead: North Eastern (4.8 per cent), Leeds City Region (4.0 per cent) and York, North Yorkshire and East Riding (3.1 per cent) all saw job creation rates well above the national average.
But the prize,a rebalanced economy and a virtuous circle of investment, prosperity and wealth, can only be attained by the investment in the region’s infrastructure and drivers of growth. This means overcoming significant barriers which hold back the North’s potential, including low productivity, under investment in transport infrastructure spending, poor connectivity between its towns and cities and a weaker skills base.
The forthcoming spending review, says the authors, must make a step change in commitment to the north of England. Otherwise, the agenda risks being added to a long list of failed ‘regional policies’.
The report suggests the Northern Powerhouse is better placed than past initiatives to succeed, but that hinges on making investments in the Spending Review which can drive long-term increases in productivity of the North.
Ed Cox, Director of IPPR North, said:
“The historical economic underperformance of the north of England is not natural, nor is it inevitable. We have seen past attempts at ‘regional policy’ fall by the wayside, but the Northern Powerhouse has momentum and has galvanised leaders in the North. But investment, leadership and urgency are the key ingredients for turning northern powerhouse rhetoric into national economic prosperity. The momentum is building, the benefits are great – the opportunity is there to be seized for Northern prosperity to create national prosperity.”
