It was argued recently that the Labour government is making a serious error in trying to bring down the welfare bill, without seriously trying to close the divide between the wealthy regions of Britain and the poorer areas. As Larry Elliott put it: “If the government was serious about reducing the growing welfare bill, it would be starting here and in the other parts of the country blighted by deindustrialisation and poverty. It would identify the parts of the country most in need – Wales, Scotland and large swaths of northern England – and love-bomb them”.
It is then noted that ministers are happy to do the opposite of devoting more money to regional economic development. In a move that has not been well publicised, Labour has quietly hollowed out a scheme inherited from the Conservatives, a fund set up to create jobs.
This destruction job on regional policy, so harmful to us in the Northeast who have struggled so long with an uneven playing field, is also “laid bare in a new report by Steve Fothergill, national director of the Industrial Communities Alliance, an umbrella group for the local authorities worst affected by the hollowing out of Britain’s industrial base and the closure of the coalfields”.
Fothergill has noted that incrementally, British regional policy is being taken to pieces. Fothergill goes on to note that, “this hasn’t been the result of an explicit political decision, certainly not one that has been articulated by ministers. It is happening nonetheless as a result of choices made over the last few years by Conservative and Labour governments”.
He goes on to note that pressures such as the budget deficit, Brexit, and funding other priorities have resulted in British regional policy now being weaker than at any time since the 1950s.
Policy for the North being ‘held back’
Many of these concerns are echoed in a report published in November 2024. which argues that the “policy ‘pendulum’ holds back attempts to reduce regional inequalities”
Professor Andy Pike further argued that shifting resources and constant institutional change had created decades of inconsistency and uncertainty in regional policy delivery.
The lack of consistent regional policy over the last century, has resulted in attempts to reduce inequalities fluctuating and could be “likened to a pendulum swinging between arrangements”.
Instead of this lack of consistency, the government should attempt to widen the focus of regional policy to include environmental and social concerns and “understand that a commitment spanning 20-30 years is required in order to stand any chance of success of reducing regional inequalities”.
Professor Pike is said to recommend that more integrated governance structures and more meaningful decentralisation of powers and resources, operating to much longer timescales, could “address persistent imbalances across many parts of the country”.
Approaches to regional development and policy in the UK over the last century have been in constant flux, and although there have been some attempts at decentralisation, this has been done in a “piecemeal and short-term way”.
At the same time, regional institutions have been starved of enough power and resources to adapt policies to the needs of the places they serve. This has meant that the country has remained highly centralised, with “most decisions made by politicians in Westminster and civil servants in Whitehall, and support concentrated in London and the South East”.
Andy Pike
Professor Pike, Henry Daysh Professor of Regional Development Studies, Newcastle University, commented: “Attempts to reduce regional inequalities across the UK have been hindered by decades of changing regional policy governance structures, and could be likened to a pendulum swinging from one set of arrangements to another. In addition, regional policy over the last hundred years has had a predominantly economic focus in addressing regional inequalities.
“The new Government has promised further devolution and local government reorganisation and funding reform, with Mayors responsible for Local Growth Plans that will deliver locally-led responses as part of the national strategy for growth. This suggests that the pendulum swing might be less severe than on previous occasions.
“Working more closely across public policy areas such as education, health, social care and welfare, and giving a wider set of people and places a greater voice, is vital for a just transition to a net zero carbon and post-pandemic future.
“The Government should continue to broaden the focus of regional policy to include social and environmental concerns and understand that a sustained commitment spanning 20-30 years is required in order to stand any chance of success in reducing regional inequalities.”
A fair share
Then in early December another report came out, this time from the Fairness Foundation.
The report notes that this country has been described as the “most regionally unequal country in the developed world” There are wide variations between its sub-regions in levels of deprivation, economic productivity, and living standards, as highlighted recently in NE Bylines. The report also notes that the UK is “one of the most centralised countries in the OECD, with few fiscal powers devolved to its regions, and a very high proportion of taxation collected centrally”.
In response to this, the report calls for dedicated work on extending fiscal devolution across the UK, and also says that “the Government should review the degree to which current training for the Civil Service affords an adequate understanding of devolved arrangements across government”.
Meanwhile, the Ministry of Housing, Communities and Local Government should “work with local authorities to map fiscal powers in each area and report on the gaps in local capacity”.
In the longer-term the report recommends that the government “establish a firm commitment to longer-term fiscal devolution through a Tax Devolution Commission. The aim of the Commission should be to undertake a review of the tax code, with the objective of examining which taxes could be considered as candidates for devolution in the longer-term, and which should remain with the central government”.
At the same time when future legislation is being considered in the future, the role that the legislation can play in helping to close the North-South divide should be factored into the discussions.
Closing the North-South divide should be a priority
Andy Burnham and Steve Rotheram point out in Head North: “The North-South divide is no historical accident. It is in fact the product of long-term national policy. It is only when there is clarity about this stark truth that everything else starts to fall into place.
“Look closely at the British Parliament today. You can still clearly see the influence of the feudal society from which it evolved. Wealthy families granted large land interests in centuries past are still making laws in your unelected House of Lords.”
It is clear that any government from London claiming to be a truly national government, must start to address the huge North-South divide and begin to develop a serious long-term regional policy.
Part of this policy must include greater fiscal devolution to regions like the North East and must also ensure that we no longer have to rely on a civil service that seems to be marooned in a London bubble and unable to understand or cater properly for people outside of it.
It is regrettable that the present Labour government seems to want to turn its back on its heartlands in the North and not develop a robust regional policy, which could start to deal with the many economic and social problems which are consistently thrown at us.
We can only hope that changes at the top of the Labour party will bring in people with more experience of life outside London, who have a more enlightened approach to helping regions like ours, which have great potential, but are currently being held back.
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