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Northern post-Brexit strategy needed to fend off emerging ‘dark clouds’

The government’s industrial strategy must boost northern regions in order to soften the economic dangers of Brexit, IPPR North has argued in a major new report.

The ‘State of the North 2016’ report warned that “dark clouds” are gathering for the north as it faces a potential economic downturn at a time when the Northern Powerhouse and devolution deals are stalled.

Launching the report at the annual State of the North conference on Friday, Ed Cox, director of IPPR North, criticised the Establishment’s attitude to northern residents, the majority of whom voted to leave the EU.

“In June the people spoke,” he said. “But in the north, they shouted. It has made me very angry that since the referendum, when it has become clear that the northern economy could suffer significantly as a result of the Brexit decision, that some in the metropolitan media have presented northerners as foolish or simple.”

Despite voting for Brexit, northern regions are more than twice as dependent on EU trade as London, are more likely to suffer from it.

Cox also warned that they would suffer from the loss of EU funding for universities and deprived areas, and a shortfall in immigrants to meet the social care needs of an ageing population.

“Whatever kind of Brexit we end up with, it looks a pretty challenging place from here,” he added.

The IPPR has categorised northern LEPs by how resilient they are to an economic downturn, revealing that those most likely to be affected are those with the highest rates of votes to leave.

In Cheshire & Warrington and York & North Yorkshire, both of which were categorised as ‘resilient’ and ‘prosperous’, Leave voting rates were 52% and 54%.

In contrast, Humber and Tees Valley, which were 65% and 64% in favour of leaving, were among those classified as ‘vulnerable’ because of reliance on a single industry and lack of industry.

The think tank urged all 11 of the north’s LEPs, working with their local and combined authorities, to conduct an audit of their economic resilience, and then launch a new round of devolution deals with the government, which would be tailored to meet the threats to their area.

In addition, the IPPR said that the new government’s promised industrial strategy could provide a comprehensive economic boost to the north compared with the “partial, piecemeal and parochial” approach favoured by former chancellor George Osborne.

It called for the strategy to be based around regional differentiation, co-ordinate investment and devolution.

Luke Raikes, report author and research fellow at IPPR North, added: “It is clear from this analysis that an industrial strategy will be vital for the north. But this strategy can’t just invest in small clusters of activity, it must also connect these up across the north, with the transport infrastructure that’s now long overdue.

“And most important of all, the north will need to develop a stronger, more inclusive labour market, so that both people and businesses can thrive from northern economic growth.”

The IPPR also repeated the idea of the north forming its own Brexit negotiating committee.

(Image c. Owen Humphreys from PA Wire and PA Images)

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