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13.11.14

North of England contributes more to economy than devolved nations

The north of England contributes more to the economy than Scotland, Wales and Northern Ireland combined but is losing out on investment because government spending is skewed towards London and Scotland, a think tank has claimed.

In a report published today IPPR North renewed calls for increased infrastructure spending in the north and the devolution of powers to city and country regions so that the north can “fulfil its untapped potential”.

According to the report, which examined growth over 10 years, the north (comprising the North West, North East and Yorkshire & Humber regions) contributes 19% to the national economy while Scotland, Wales and Northern Ireland only contribute 13% combined.

While the north grew at a slower rate over the decade than the devolved nations, the report showed that government spending on economic affairs had been highly skewed towards London and Scotland. Manufacturing remains keys to the north’s economy, but new growth has come from the financial, professional services and property sectors.

The report also notes other success stories in the north of England over the last 10 years, including economic growth of more than 40% in Cumbria, Cheshire and Warrington, Greater Manchester and Sheffield. Since 2010, jobs in Sheffield have increased by 4.0% and in Greater Manchester by 3.4%, it says.

Ed Cox, Director of IPPR North, said evidence showed northern cities could bring “significant economic benefits” for the whole nation.

“The north’s potential is starting to be recognised,” he said. “In 10 years’ time, with the right leadership and with a revitalised local democracy, there is no reason why the north of England shouldn’t take its place alongside the most prosperous northern European regions. But if that is to happen more needs to be done to develop good policy ideas which can be taken up by the politicians.”

Last week the chancellor announced cities could be given greater freedoms and more powers under plans being set out by the government, with Greater Manchester the first to benefit.

Ministers hope the reforms, which include an elected "metro mayor" for the Greater Manchester region and a multi-billion pound package of devolved powers, will allow cities in the north to become an economic powerhouse to rival London.

(Image: c. Andy Davis and licensed for reuse under this Creative Commons Licence)

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