Talking Point: Time to tip the balance

Levelling-up must mean more than a mayor for the North East

• Peter Matejic, Chief analyst Joseph Rowntree Foundation

Much can happen over the course of a parliament.

Optimism for a new model of governance, that would tackle regional inequality headon through the ‘levelling up’ agenda of Boris Johnson, was on the tongue of many in local government and politics at the end of 2019.

The Conservatives had just returned an 80-seat majority in the General Election on the back of a string of wins in seats outside their traditional southern England strongholds.

The phenomenon of the ‘Red Wall’ dominated the news cycle, describing historically Labour-voting constituencies like Sedgefield and Bishop Auckland that had swung to the Tories amid the deadlock over Britain’s withdrawal from Europe.

Fast forward to 2024, with local elections and the prospect of a General Election by the year’s end, and these grand narratives of change appear to have fallen dramatically flat on their face.

Citizens in the North East are experiencing understandable political fatigue as the Westminster soap opera trudges on, and the prospect of meaningful ‘levelling-up’ progress in this parliament moves further and further away from reality.

In January this year, the Joseph Rowntree Foundation published its annual UK poverty figures, showing in stark detail that it has now been almost 20 years and six Prime Ministers since the last prolonged period of falling poverty.

Latest data for the North East shows 600,000 people in the region in poverty, equating to around one in every five people.

The report also showed the local authorities of Middlesborough and Newcastle had staggering child poverty rates of 41 per cent and 38 per cent, respectively.

It is hard to look past such bleak figures that, in practice, mean the next generation in the North East living out their childhoods hungry and cold.

With a watershed devolution deal, it’s time for all political parties to commit to a re-think of what ‘levelling-up’ truly looks like for the people of the North East.

From our perspective, this means designing hardship out of the social security system through an Essentials Guarantee, baked into Universal Credit, to ensure nobody is going without life’s essentials. It means the creation and fair distribution of good quality, secure and inclusive employment, where workers are treated well.

It also means housing solutions focused on the needs of the community – be that tenure types, size or affordability.

These policies are not a panacea; but they are a starting point to deliver real change for an agenda that to date has offered very little.

It’s time for the North East to make its own luck

• Henri Murison, Chief executive Northern Powerhouse Partnership

It’s been nearly ten years since George Osborne promised a Northern Powerhouse – a long-term strategy to fundamentally transform the Northern economy, by transferring power to places through devolution and on specific issues such as transport.

Then, five years later, Boris Johnson put his own spin on the concept. In his first speech as Prime Minister, he promised to “answer the plea of the forgotten people and the left-behind towns”, unleashing “the productive power” of every corner of the country.

‘Levelling-up’ was born. But with a General Election looming, voters will likely be asking, what has – and has not – been achieved since then? Here in the North East, where I started my career as a councillor at Newcastle City Council, it’s been a mixed picture.

In 2012, the council negotiated with Greg Clark, then Cities Minister, to secure one of the most generous ‘city deals.’ Unlike most of the country, increased revenue from business rates would now go straight to the local authority instead of the Treasury, providing a much-needed long-term revenue stream worth millions every year.

This would create a virtuous circle by allowing the city to invest in unlocking what has become the Helix site and wider regeneration that is driving more economic growth, generating even more business rates revenue.

This has been such a resounding success that many, including we at the Northern Powerhouse Partnership, are calling for other areas to get more of the same – what is called fiscal devolution. Less reliance on Treasury funding would protect local government from shifting sands in Westminster, and allow them to plan more strategically for the long term.

That said, there’s no denying the North East continues to struggle with some of the most difficult challenges. Workers here earn less than any other part of the country, roughly £27,600 in 2021 – almost £10,000 less than the average salary in London.

This region also has the highest rate of child poverty of anywhere in the UK, meaning education and health outcomes are worse as a result.

It is now time for the North East to make its own luck, unleashing untapped economic potential through investing in manufacturing and wider clusters alongside re-opening the Leamside Line as a Metro extension, then the full rail link between Washington and County Durham.

There are no quick fixes but, with the right investment, the North’s productivity will rise, and we’ll contribute more to the UK economy with more high-quality, well-paid jobs for Northern workers.