It was 1069. The new king, William The Conqueror, launched the Harrying of the North, a scorched-earth punishment to subjugate the locals after their uprising. The population fell by 75% according to records from the 1086 Domesday Book.
Cynics would say that the northern economy never recovered.
A Victorian boom in iron and steel which provided low paid work for many and fabulous wealth for a few, was joined in the 20th Century by a cluster of chemical manufacturers. The region’s economic death knell rang with Thatcher’s destruction of the heavy industry sector, and the Blair and Brown years saw little to restore Tees Valley’s fortunes.
The austerity of Cameron and Clegg brought a renewed attack on public services. Overall core funding since 2010 has fallen by 9% in real terms nationally, according to the Institute for Fiscal Studies (IFS). In the most deprived tenth of councils per-person funding has fallen by 35%.
That loss has brought a decline in local buying power.
Redcar and Cleveland councillor Carl Quartermain posted on Twitter/X:
“Under the Tories, Redcar & Cleveland received £40m less on average every year for 14yrs. That’s the equivalent of a Town Deal (£25m) every yr plus change (£165m) to focus on social care, child poverty, homelessness and crime.”
So where are we now? Some money was directed up north – the Levelling Up and Town Funds among them – but they were project specific financing that wasn’t aimed at a joined-up regeneration strategy.
Given that Labour is supposedly the sure-fire candidate for the next government what would they do differently, given the lack of cash in the treasury coffers?
Here are a few suggestions, a magpie-collection of policies raided from governments across the political spectrum. And also a few ideas of my own from a former life in export development.
Let’s also look at the potential for bringing money into the local economy. It’s estimated that £1,000 paid to a local supplier is worth up to four times that as it is used to buy more local products or services.
The new government should in addition aim at tackling inequality and improving housing. An increase in baseline wealth, when so many are living below the poverty line, would fuel more buying power.
The spending
What local authorities have never had is funds for infrastructure investment, for example in transport. Central government should direct public investment away from the Home Counties and to regions that historically have been starved of money – like the Tees Valley.
If we can’t expect a tidal wave of new money (Austerity is replaced in the rhetoric with “tough choices”), some finance should still go to cleaning up the area’s pollution. Some of the finance could come from the sources of the contamination – at least those who can be identified.
Business support
Small and Medium Enterprises (SMEs) account for 99% of Britain’s businesses, generating 25% of the nation’s total GDP. The North East has 156,000 businesses, the fewest of any English region. Yet most of the government advice for SMEs was scrapped with austerity: advice, training, premises, help with patents and exports.
Aha, I hear you say, there is council advice. And yes there’s a few pages on, for example, Middlesbrough’s website. But the Tees Valley Business Hub that is listed no longer exists, and their phone number goes straight through to the SME Centre of Excellence, a private, fee- charging firm.
The ultimate owner of the Innovation Super Network that’s listed is Umi Employee Ownership Trustee Co Ltd. No Person in Significant Control is reported and they have posted dormant accounts since incorporation in 2010.
At the Tees Valley Combined Authority (TVCA), a company is contracted to run business support services, but they assume some knowledge from their clients. Where is the help for the sole traders, blue-collar business, the market sellers, the side-hustlers?
In-house support would avoid duplicating the work or paying the profit mark-up.
Central government information does exist on the gov.uk website. But they could re-introduce regional development boards and work with Tees Valley councils to provide an online one stop shop as well as face-to-face help at shop-front offices in each of the five towns.
They could also support market reports and joint marketing events, like stands at trade fairs, export missions, promotions, procurement events. I did all this for developing country exporters to the UK in the British Aid Programme under Thatcher: why couldn’t a Labour government do the same for British SMEs?
Smaller scale
The government could use two Thatcher policies to help start-up businesses. Her TOPS grants paid for specialist training. That’s how a friend of mine financed her qualification to start her riding stables.
At the same time there was the Enterprise Allowance grant, a £40 weekly payment that transitioned would-be entrepreneurs from the dole to running their own business. More recently we had the New Enterprise Allowance for Universal Credit claimants already self-employed, but that closed in January 2022.
A minor stimulus for local demand would be more benefits.
The IFS concludes that removing the two-child allowance cap would raise 4% of children out of poverty, nationally. Imagine what it could do for Middlesbrough’s Ayresome Ward where the child poverty rate is a staggering 84%, the highest in England.
Their parents won’t be sending the extra money to offshore trusts, they’ll spend it immediately and locally, providing an impetus to the micro-economy.
Housing policy
Without spending anything, the new government could encourage more social housing. They should scrap the ideologically driven right to buy, as it removes the incentive for councils to build new homes.
Finding the money
But where would the money come from? The first port of call should be the super-rich, and it wouldn’t be for the first time. Franklin D. Roosevelt imposed a 94% levy in 1943 on the very-well-heeled; Wilson imposed taxes totalling 98%.
The tax office could also shift focus onto chasing the top-earning tax-dodgers. There should be an end to Non Dom status as promised by Starmer.
The rich might threaten to take their wealth from the country – but they already have. How can the Isle of Man, Channel Islands and Britain’s Overseas Territories thrive as tax havens? Stricter laws on, for example, Trusts and Limited Liability Partnerships together with tax-free investment offers should be aimed at bringing the money back home.
There’s also what’s left of the North Sea oil and gas bonanza. Norway taxed the oil companies and set up their own company, creating the world’s largest sovereign wealth fund at US$1Tn. Thatcher squandered ours on privatisation and the costs of a deep depression of her own making.
To find more money, the government could rethink its own departments, like the Crown Estates. Established in the reign of George III, it was the result of a swap of the monarch’s assets for a regular income, an arrangement that has lasted to this day.
The Crown Estate’s £16bn portfolio includes rural land, the seabed and urban centres like Regent Street and St James’s. The agency reports that it sent net profits of £3.2bn to the Treasury over the last decade – despite the sum that’s just a modest 2% annual return on managing Poshland.
It could make more profit by liquidating some of its premium portfolio and investing to make a social difference – social housing, small companies, environmental projects to name but a few.
Then there’s the charities, they don’t pay tax. How can they justify occasionally huge reserves? Like the British Legion with £109.1mn in free reserves in 2022. A fraction of that could pay for a veterans’ housing project, adapting cheap properties and hiring vets to do the work. Could there be a ceiling cap on charity reserves?
The government could attract more private investment. In the 1990s John Major launched the Enterprise Investment Scheme (EIS) – tax-free investment for selected projects. Peabody successfully used it to regenerate their social housing stock across London.
But the current EIS bars property development. Why not extend the policy to social housing?
A recent development in private finance is Impact Investment. Where Ethical Investment aimed to do no harm, Impact Investment also tries to do some good. For instance, under the Impact Investment umbrella, North Star Ventures offers its Social Investment Fund which helps local charities to grow.
Local authorities
The councils of the five towns are now devoid of spare cash and some are on the edge of bankruptcy. How could they help revive Tees Valley economy?
Recent years have seen town halls across the north supporting economic growth at scale. It’s a process often called Community Wealth Building. The UK pioneers are Preston Council, with ideas turned into action by leader Matthew Brown. His book Paint Your Town Red details their journey.
Legislation by the Cameron-Clegg coalition allowed councils to spend money on projects that yielded a social value. Some councils have made procurement and planning permission conditional on apprenticeships and wages above the minimum for example. Among a raft of wealth-building measures, they have also supported workers’ co-ops and brought local business into public ownership.
It’s an approach favoured by the Labour left. But some of its leading proponents have been cast by Starmer into the outer darkness. Can the policy survive the loss of its pioneers?
Here’s a laundry list of some possible actions by the five towns that need not break the bank.
- 1. Set up a working party to brainstorm how to grow each sector of the local economy. What are the bottlenecks? The opportunities? (Chinese tourists anyone?) How can council policy assist with growth? Set up business networks.
- 2 Build the brand – the Green Industry Revival. A premium certification mark for Net Zero Carbon compliant businesses.
- 3. Assist green industry start-ups, eg conversion to electric vehicles.
- 4. A website carrying ads for small business
- 5. A buy local, hire local campaign.
- 6. Urgent housing repair squads across the 5 towns.
- 7. Cheap old properties converted into flats with charity help.
- 8. More markets and bands in parks and town centres
- 9. Qualifications conversion for immigrant teachers, engineers etc.
- 10. Five Towns accreditation mark for businesses that get involved.
- 11. Breakfast and homework clubs with snacks, using spare food from local businesses.
- 12. Ensure all pupils eligible for free school meals actually get them and that their status is kept secret. Children can go hungry due to their parents’ misplaced pride
13. Expand access to food banks. Include clothing donated from the public plus pre-landfill ends of lines.
- 14. A Five Towns volunteer scheme. Individual accreditation after so many hours wins a badge and automatic fast track for jobs.
15. Local Economic Trading System (LETS) group, a barter exchange using credits, in each ward.
I could go on.
No mention here of Baron Houchen, the Metropolitan Mayor of Tees Valley. A Middlesbrough planning application for the relocated Live Well Centre was submitted to Houchen’s Middlesbrough Development Corporation Planning Board for approval as required for any council application in the town centre. Lord Houchen kicked it out.
It seems that to Houchen, bad politics is more important than good policy. It’s hard to evaluate his contribution to the area until the National Audit Office completes an investigation.
All this is based on the assumption that Labour will win the General Election. If Labour voters think it’s a done deal and don’t bother to vote, who knows what could happen- a Sunak-Farage pact? Heaven forfend.
CLICK HERE TO DONATE TO OUR CROWDFUNDER
HELP US BECOME STRONGER SO THAT WE CAN CONTINUE TO DELIVER POWERFUL CITIZEN JOURNALISM!
