Jim Knight on ensuring our county towns and coastal areas benefit from the knowledge economy
Last week I bumped into a journalist from Sky News who persuaded me to do a brief interview about how Ed Balls is doing as Shadow Chancellor. Ed is a good friend and I was happy to do it, but I thought I should do my research so I looked up Wednesday’s unemployment stats.
January’s unemployment made for good headlines for the government. 450,000 more people in employment than a year ago, and 172,000 fewer unemployed. But, as a former employment minister, I also know that this bulletin has a lot more beneath the surface.
The first thing that struck me was on earnings and the cost of living. The Office of National Statistics say: “Between September to November 2012 and September to November 2013, total pay and regular pay for employees in Great Britain rose by 0.9%. Between November 2012 and November 2013, the Consumer Prices Index increased by 2.1%. Prices therefore increased by more than earnings.”
This was confirmation of the cost of living crisis and the truth that the current low levels of growth are not reaching most people. Imagine my surprise when on Friday I wake up to headlines that the government now claim the opposite to what their own stats said two days before!
But the other thing that caught my eye was the data on regional employment and unemployment. The only region where employment fell was the South West, where I live; the two where unemployment rose were the South West and the North East.
That got me wondering. Maybe this recovery is focussed in urban areas, and more rural ones are being left behind. That perhaps a reliance on trickledown economics meant the core cities would prosper, and maybe even overheat, before the peripheral rural and coastal areas feel the benefit.
This hunch was further informed by an interesting article I read over the weekend by economist Will Hutton. He used the same employment stats bulletin to find that “137,000 new professional, scientific and technical jobs were generated in the most recent 12 months”, and says that “most of them were in these new ‘knowledge’ towns” – along the M40, M4 and M3 motorways within 30 miles of Heathrow and along the M23 around Gatwick and the M11.
Hutton goes on “It is this nexus – technology rooted in great universities, innovative start-ups and small firms with loans collateralised against rising house prices, internationalisation via our great airports and all keyed into the buying power of locally sited multinational headquarters that is creating a new economy at a startling pace”.
Where does that leave those of us in rural and coastal areas? Places where broadband provision is patchy, where the big employers are councils and the NHS, and where the main sources of science jobs may be the defence sector? Our market town high streets are dying and the market economy has nothing to offer instead.
Like many others this weekend was for me the last chance to get my tax return in. That made it an interesting time for the debate about 50p taxation for high earners. I think Ed Balls is right on the need for a fairer tax system and the need to balance the books to bring the deficit down. And we must also keep reasserting the importance of regional industrial policy, driving a stronger roll out of fast broadband to peripheral areas so that the whole of One Nation Britain can benefit from the knowledge economy.
Lord Jim Knight of Weymouth is a member of the Shadow Defra team in the Lords and a founder of Labour Coast and Country. He tweets @jimpknight
Published 28th January 2014