Hobbling into the future

Jeremy BeechamJeremy Beecham on the cruel hand being dealt to the North East by the Cameron government

This evening in the Lords, Conservative Peer Lord Bates will initiate a debate on industry and economic developments in the North East of England. He will no doubt attempt to defend the government’s record in a region with the highest unemployment rate in the UK and sustaining the highest level of cuts in local government funding – all of which is having dire consequences for the economy. 

When the Public Bodies was enacted, Lord Bates voted for the abolition of the Regional Development Agency, One North East. This was pushed through, despite assurances that there would be proper consultation beforehand – a piece of pre-legislative implementation before the Bill passed into law. I suggested that the Constitutional Committee should look into the process, which clearly could have wider implications. They now propose to do so.

RDAs have been replaced by the Regional Growth Fund, with a much truncated budget, while government’s links and two way channels with the regions have been weakened by scrapping regional offices – originally introduced by a previous Tory government.

In a debate in 2009 Lord Bates complained, not unreasonably, that public expenditure on transport in the North East at £577 per head compared poorly with £1637 per head in London. What will he make of the latest figures in the Autumn Statement showing planned per capita expenditure in London as £2731 against all of £5 for the North East? This is .04% of the total spend on transport, against 84% for London and the South East?

It isn’t just a matter of money. As the Town and Country Planning Association pointed out some time ago, there is no Planning Framework for England and no coherent view of what is required to redress the imbalance between London and the South East (both of which of course have their own marginalised communities) and the rest of the country. 

The government’s abject failure to promote renewable energy policies – in which the North East is a leader – illustrate vividly its failure to promote economic growth and its diversification. And other policies will no doubt have unintended consequences of weakening the region’s prospects. Just look at the earlier debates in the Lords today. On Europe, the threat of opting out is hardly likely to help attract overseas investment, where RDA support for the region has worked well in the past. On migration policy meanwhile, in so far as the government is discouraging overseas students from coming to the UK, will threaten North East universities’ ability to attract students from the Far East and emerging economies.

There has been some progress. City Deals have been agreed or are being negotiated; although the main benefit, the possibility of tax increment financing, looks to be limited and in any case amounts only to permission to borrow against anticipated future business rate income. But in the absence of a proper national growth strategy, aimed at rebalancing the economy structurally and geographically, as advocated by Lord Heseltine, the North East seems doomed to hobble into the future.

Lord Jeremy Beecham is a Shadow Local Government Minister in the Lords and long serving councillor on Newcastle City Council

31st January 2013

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