Partner Article

£40bn of Northern potential must be unlocked

The UK economy is losing out on up to £40 billion pounds each year by failing to fully utilise the economic potential of Northern England.

According to research by the Northern Economic Futures Commission, narrowing the difference in output by only 50% between the North of England and other English regions would be the equivalent to over £1,600 per English worker.

The Commission, which is made up of a number of high profile business figures, academia and the public sector, argues that a greater focus on the North’s economic potential would bring benefits to the whole of the UK.

Their findings indicated that the value of export goods, business investment in Research and Development and entrepreneurship rates are all growing faster in the North than in the South. Furthermore, business survival rates in the North have been significantly better than anywhere else in the country since 2008.

According to Geoff Muirhead, chair of the Northern Economic Futures Commission, the North South divide has existed for too long, and is having a negative effect on the national economy which is desperate for growth.

He commented: Our Commission is convinced that we can unlock potential for vital growth in the North of England if government creates a more level playing field.

“So-called ‘spatially blind’ policy-making has simply favoured short-term returns in London and the South East.

“The North doesn’t need more hand-outs but a long-term economic strategy which recognises the differences between places and the need for more local approaches to skills, innovation and infrastructure.”

The report has also argued that if the Government were to properly address the unemployment problem in the North and brought it down to the England average, the Government could be £1.2 billion better off.

Unemployment in the North currently sits at 9.9%, in comparison to 7.9% across the rest of England.

Ed Cox, Director of IPPR North and Deputy Chair of the Commission added: “In terms of sheer scale the North cannot be ignored.

“Twenty seven per cent of England’s working age population lives in the north but only contributes 23 per cent of national economic output.

“If the North was a country then it would rank as the 8th biggest economy in the EU, twice the size of Scotland and bigger than countries like Sweden and Denmark. If the national economy is to prosper the North needs to be performing strongly – it’s in all our interests.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .