Is it possible to bridge the North-South divide?

BACK in 2013 when Vince Cable said that London was “becoming a giant suction machine draining the life out of the rest of the country”, he re-opened an old wound.

The then Business Secretary was talking about expansion plans for Heathrow Airport which sparked a renewed debate about the so-called North-South divide.

The vexed issue has long been entrenched in the UK’s economic landscape, but since the 1970s the gap has progressively widened. And there’s no sign of that reversing any time soon.

A report published earlier this month by the Centre for Economic and Business Research for the law firm Irwin Mitchell warned that London’s economy will continue to outperform Yorkshire’s cities for the next decade despite George Osborne’s Northern Powerhouse plan to close the gap.

This was followed last weekend by a study from the Federation of Small Businesses (FSB) which revealed the growing North-South gap was starting to affect business confidence in the North, with firms concerned about being “left behind” when it comes to job creation and greater productivity.

It’s not only the economy where there’s a growing gulf. Last month Ofsted warned that England was “nothing short of a divided nation after the age of 11 when it comes to education” in its annual report on standards, saying about a third of secondary schools in the North and Midlands weren’t good enough.

Despite all the talk of the North and South pulling in the same direction and flagship projects like HS2 in the pipeline, the issue of a North-South divide refuses to go away.

Dan Jarvis, Labour’s Barnsley Central MP, says it is deeply damaging. “Britain’s economy is more regionally unbalanced than any other on 
the Continent and too much of our region’s potential is being wasted. 
From poverty to productivity – the North is still lagging behind the South,” he says.

“The tragic floods, the Federation of Small Business study on small business confidence and Ofsted figures on school performance are just the latest evidence of this. The Conservative Government must do much more if they are truly serious about tackling the North-South divide.”

But the Conservative MP for Selby and Ainsty, Nigel Adams, says the Government is making a difference. “Historically there has been a North-South divide with too much power focused on London and the South East. But this Government recognises that this needs to change and I’m cautiously optimistic about devolution for Yorkshire.”

He believes that this, along with plans for the creation of a Northern Powerhouse, will boost the region’s economy, although he says “it won’t happen overnight”.

And he disagrees with those who claim there has been a regional bias when it comes to flooding defence spending. “This Government is spending two-and-a-half to three times more per capita in Yorkshire than it is in the South,” he says.

The North-South divide remains a hot topic, one that forms the basis of a conference being held at the University of Huddersfield next month in which experts from around the world will discuss its impact alongside globalisation.

Professor Nicholas Temple, director for the university’s Centre for Urban Design, Architecture, and Sustainability (CUDAS) and one of the organisers of the event, says London and the South East’s monopolisation of wealth isn’t good for the rest of the country.

“There is a rule of thumb for measuring degrees of economic stability and equality in a country that suggests when the ‘second’ city is less than a third of the population of the biggest city it can lead to irretrievable socio-economic, political and cultural divisions between regions,” he says.

“London is not just our capital city, it’s also the financial capital and cultural capital.” He points out that this is not the case in some other countries where wealth is spread more evenly. “In Italy there’s a North-South divide but Milan is the financial capital, Rome is the capital of the government and Florence is the cultural capital.”

What makes Britain’s North-South divide all the more galling is it didn’t always exist. Rewind to the mid-19th Century and cities like Bradford, Leeds and Manchester were economic powerhouses. At one time Bradford was the world’s wool capital and among the richest places in Europe.

Not so today. Sheffield University’s Dr Craig Berry, deputy director of the Sheffield Political Economy Research Institute, says part of the problem now, and the reason London’s economy and that of the South East is in much better shape than those of the North, is that the country’s economy is fixated on a narrow range of sectors which revolve around the capital.

There has been much talk about boosting manufacturing, once the historic heartbeat of Northern economies, but looking at the woes that have befallen the British steel industry recently this appears to be faltering. “Manufacturing is the worst performing sector in the UK despite all the rhetoric,” he says.

High profile schemes like HS2 – the high-speed rail network from London to Birmingham and to Manchester and Leeds – are seen as a tangible sign 
that politicians understand the the need to recalibrate our economy, but Dr Berry questions the impact in the long run.

“It’s a massive construction project which will be good in the short term, but in the longer term it could just make it easier for people to commute to London. What we need to see is large scale private investment in the northern regions.”

The Government hopes the recent devolution deals will help kick-start regional economies by boosting investment and long-term growth in key cities. But Dr Berry believes it needs to go further.

“It’s more about combining powers that already exist in the North rather than devolving powers from the South. Corporate governance and high levels of investment need to be devolved to all political authorities if we want Britain to return to its former glory as an industrial-led economy.”

He is sceptical, too, about the impact the Northern Powerhouse may have. “The Northern Powerhouse is a drop in the ocean. We need to restructure the way the nation is governed from the centre out,” he says.

All of which suggests the North-South divide is a long way off being consigned to history and that closing it remains a daunting challenge. But it’s one that needs to be met.

George Osborne’s dream of creating a Northern Powerhouse to rival London is seen by many as a step in the right direction, but it will need to be underpinned by more than rhetoric and good intentions if the North-South divide really is to become a thing of the past.