The government is guilty of disproportionate economic vandalism in the North

January 30, 2013 10:47 am

Monday’s announcement on High Speed Rail is good news for the North. Fast, frequent trains will be an economic lifeline and improve connectivity between our key cities and that is why the last Labour government first suggested the idea. Yet, while we know the benefits will be great, we also know that they will take time to appear. The first high speed train will reach the North in 2032 and there are huge economic challenges for the region which need to be confronted now.

Speaking in Leeds on Monday, David Cameron seemed to forget that his government’s actions are hurting the Northern economy disproportionately. He failed to mention the 228% increase in the number of young people on out of work benefits in the city over the last year, or that over 300,000 working families across Yorkshire and the Humber would be worse off after George Osborne has cut their tax credits. He did not mention that his government is overseeing spending cuts worth £81 per person in Leeds, more than double the amount of the Prime Minister’s own local authority of West Oxfordshire.

It is not only those living in the North that will pay the price for the government’s disproportionate economic vandalism in the North. Last week’s GDP numbers are a reminder that the economy is shrinking again, but some areas are hurting more than others. The lessons of the last few years are that Britain can’t rely on just one sector, or one corner of the country to deliver growth, overseas trade and tax revenues. It’s essential that we harness the energies and ideas of people, businesses and industries from across the North, if we really want to rebalance our economy and ensure that future growth is stable and sustainable.

That’s why Ed Miliband’s call for a One Nation economy – in which growth is more broadly based and rewards more fairly shared – represents such an exciting opportunity for the North. It is clear that delivering it will require a revolution in vocational education, a more active industrial policy, and reforms to our banking system – all of which are key to unlocking the North’s economic potential.

In a speech I made on Monday at IPPR North in Leeds, I argued that the next Labour government needs a radical agenda to rebalance our economy, to redistribute power from the centre, so we can empower businesses, working people and communities of the North to rebuild our economy from the bottom up.

We have already called for the wider use of the City Deals model that is creating quality jobs and apprenticeships and to give more power and resources to Local Enterprise Partnerships. It’s why Chuka Umunna, Ed Balls and I are exploring proposals for a British Investment Bank that could support entrepreneurs and innovators across the North, offering them appropriate access to finance while the banks are starving small businesses of the cash they need.

Labour has also called for accelerated investment in infrastructure now. Half-way through the Tory-led government, private and public sector investment in infrastructure has collapse and few of the major projects promised in the much trumpeted National Infrastructure Plan have even started. That is why we have commissioned Sir John Armitt, chair of the Olympics Delivery, to look at how we as a country can get better at deciding on and delivering the infrastructure we need.

HS2 cannot be a fig leaf for a proper strategy from the government for the North of England. The government is systematically sucking resources and demand out of the North and many parts of the North are seeing economic activity decline. We need action now to support the North, for the good of the whole of Britain. Regional growth is not an optional extra, it is essential if we are to see the whole of Britain grow.

You can read Rachel Reeves Speech to IPPR North here.

  • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

    We need a northern assembly with clout. Too many decisions consider London as first priority. Far too much money is spent there.
    HS2 worries me as the record of such schemes suggests they take investment away from the regions left to the market

  • uglyfatbloke

    Are you really suggesting that poverty in the north is not a fair price for prosperity in the south? That would go against the policies of every government since…well…always. Governments like to spread largess fairly across the whole country; from Reading in the South to Watford in the north.

  • Dave Postles

    White elephant. The £32bn could be more profitably deployed in the regions. There are, moreover, absurdities: what’s with the station at Toton for Nottingham/Derby? How much time will be saved by taking HS2 via Birmingham to Toton and then taking a connecting service to Nottingham or Derby? What’s with saving £5bn p.a. from the other service lines?

  • volcanopete

    I.m afraid if you live in the East the whole North South thing is irrelevant.Must be the same in the West.A phrase such as poorer communities across the UK would encompass everyone.

  • Alexwilliamz

    Also the basic principle seems to be we can regenerate the north by connecting it to London a bit quicker. Great. Meanwhile transport between regional cities and centres is a slow, difficult or uncomfortable as ever. Just do a quick search about train travel between Manchester and Liverpool for an obvious case (50 mins to travel 35 miles). Also not sure what it does for those in the genuine North of the country (Newcastle, scotland etc). Perhaps creating alternative hubs and an infrastructure that does not get clogged up in London might help?

  • AlanGiles

    Even IF this gets built, even IF it costs “only” £32Bn, the only people who will be able to afford to use it will be very wealthy businessmen, who, I am sure, will leap off the train on their way to London to buy their Financial Times or Telegraph at some remote corner shop.

    There will be a great fight to get stage one built let alone stage two, with many varied groups trying to stop the decimation of large tracts of countryside. If there is money floating about of this size that can be miraculously discovered at a moments notice, then it needs to be spent on something that will help deprived communities today, not in 20/30 years time

  • David Parker

    The Labour Party must revisit the whole question of regional government for the North of which it made such a mess last time. Regional government in France, despite fears that central government was just pushing off its responsibilities, has undoubtedly benefited the solidly socialist south.

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