In October, many northern citizens were told to pack their bags and move elsewhere for work. This latest call came in The Economist, who asserted that “governments should not try to rescue failing towns” such as Hull, Middlesbrough, Burnley and Hartlepool. Ambitious residents should migrate to more prosperous places.
As reprehensible as this argument is, it expresses one undeniable truth: despite some recovery nationally, after three needless years of flat-lining, swathes of the north remains in recession. All the cities The Economist mentions have unemployment above the national average – higher now than in March 2010.
Private sector employment rose by 1.4 per cent in the south east in the second quarter of 2013, but only rose by 0.1 per cent in the rest of England. It declined by 0.6 per cent in the north west. Britain needs a balanced recovery across all regions. Halving the output gap between the north and the national average would increase Britain’s output by £41bn – not an insignificant contribution to deficit reduction.
I see the economic damage in Hull. With thousands of private and public sector jobs gone, we have more people not in education, employment or training – so called ‘neets’ – busy food banks and loan sharks occupying empty shops.
Britain wasn’t always like this. Northern manufacturing powered Britain through the industrial revolution. By the 1970s, London had declined and for a time was poorer than the rest of the country, with the closing of east London’s Docks a classic example.
Rather than pursuing free market neglect and abandonment, in 1980 Michael Heseltine started 30 years of London Docklands regeneration, primed by massive and continuing public and private investment. Hull, facing similar decline in traditional marine industries, wasn’t so blessed. Contrary to Economist remarks about northern towns being “propped up on piles of public money”, Greater London has had a fatter slice of public investment and more political weight put behind attracting private investment than the north.
Even without northern migrants, London and the south east are already overcrowded, with unaffordable housing and a creaking transport network. A southern recovery based on financial services, private consumer debt and a new property bubble will not last.
We currently have the bizarre situation where those caught out by the lack of affordable housing and benefit cuts in the south east are encouraged to move north for cheaper housing, while those in the north struggling with the lack of jobs are told to move south for work.
We need only look to the continent to find a positive alternative vision for our northern cities. Dresden, for example – formerly the eastern ‘sick man’ of a reunified Germany – grew faster than most other European cities in the early-2000s by creating a bustling technological sector: ‘silicon Saxony’. Although the remedies used in such areas are as diverse as the cities themselves, one common thread runs through all success stories: giving local authorities the power and money to pioneer their local solutions for local circumstances
The coalition has deployed localist rhetoric on regeneration, but it’s uncertain whether the reality will be more localist than 1980s Tory governments, and their urban development corporations.
Labour should delegate more powers to local authorities, particularly in employment and training, which is better delivered locally. Labour councils such as Newham have worked with businesses and the unemployed to match workers to jobs, boosting local job acceptances from 2 per cent to 80 per cent.
By opting schools out of council control en masse, the coalition’s education policy undermines the successes of councils like Camden in bringing educators and employers together. Newcastle’s alternative co-operative schools model could trigger a skills revolution in the way our young people are prepared for work. Giving local schools and universities places in local enterprise partnerships, and businesspeople positions in school governors’ boards, is also essential.
Finally, we should enhance councils’ borrowing powers further and back calls for a regional investment bank, possibly financed through a one-off levy on commercial banks.
However, devolving power – not just blame – is only effective in regenerating cities like Hull if coupled with a strong central government commitment to reducing regional inequalities. The coalition has used the rhetoric of decentralisation and ‘rebalancing the economy’ as a smokescreen for cuts to the north. Hull’s recent success in being named 2017 City of Culture is a welcome move, but Rotterdam’s Kop Van Zuid – a similarly neglected port area – required solid funding commitments to transform itself into a ‘Manhattan on the Maas’.In the cities the Economist mentioned, local authority spending cuts range from £184 to £268 per head between 2010 and 2015 – well above the national average of £125.
In the digital age the case for so many industries clustering in the south east is less compelling than in the past. The north is well-placed placed to be a hub for many sunrise industries, with sufficient long-term government backing.
In 1997 Labour started to rekindle growth in northern cities. We must continue where we left off. Free market neglect has been tried in the north. We now need ‘one nation’ regeneration.
Diana Johnson is Labour MP for Hull North