Opinion: A Northern Big Bang

It’s been four decades since Margaret Thatcher’s premiership but in many ways, we are still living in the country she created. This week (February 15), the think tank she co-founded released a report positing how the current Government could capture the spirit of the 1986 Big Bang and unleash billions in private sector investment across the North of England. Richard Dawson explores

Some historians believe the North/South divide goes back as far as the ancient feuds between the Anglo-Saxon kingdoms of Wessex and Northumbria, a time before William the Conqueror arrived in 1066.

In its modern guise though, we need only go back to the 1980s when Margaret Thatcher ruled Britain to understand the divergence.

Mrs Thatcher was the chief architect of the sudden deregulation of financial markets in 1986 now referred to as the Big Bang.

The abolition of fixed commission charges and the switch to electronic trading led to a massive increase in market activity on the London Stock Exchange, establishing the city as a global financial centre.

Few people in the North of England benefitted from the City of London’s meteoric rise, but in the South, it is difficult to overstate how much prosperity the change brought.

Across the North’s industrial towns and cities, the Big Bang coincided with mass unemployment and deprivation.

And while it would be wrong to suggest that the Iron Lady was the architect of de-industrialisation, it’s clear she did little to address the decline.

So, in the same decade we see London become a depository for the world’s money, delivering huge benefits to the surrounding regions, we also see the North of England ravaged by the systemic collapse of its industrial and employment base, sending whole communities into a depression.

This is the crux of the North/South divide as we understand it today.

It wasn’t all bad news for the North East though.

When the shipyards of the Tyne and Wear rivers and the mines of the Durham coalfield were closing, Mrs Thatcher’s Government was also signing a deal with a Japanese car manufacturer to build a plant in Sunderland.

Ever since the first cars rolled off the production line in 1986, Nissan has been a beacon of hope for the North East. It is the region’s largest employer and the most productive car plant in the UK – the best example of how private sector investment can deliver regeneration on a large scale.

It’s also the rationale behind a new report from the think tank Mrs Thatcher herself co-founded on how to tackle the North/South divide and get the North of England back to its best.

‘A Northern Big Bang’ is a new piece of research from the Centre for Policy Studies (CPS), making the case for deregulating the business environment to unleash a “torrent of investment into the Northern economy”.

Written by former Northern Powerhouse Minister Jake Berry MP and CPS research fellow Nick King, the report looks at some of the problems facing the North today and makes a number of proposals for reform.

It says: “The North of England was once the powerhouse of the British economy, with its industrial heartlands among the most advanced local economies on the entire globe.

“Today, it has some of the most deprived areas in the Western world and its economy is among the least productive in Europe.

“There are still brilliant people in the North, as well as many brilliant companies, universities and centres of innovation – but it is undeniable that, taken as a whole, it has fallen behind.

“This is not because of any natural economic law but because the British economy – just like British politics – has been built around the needs and demands of London and the South East, which have monopolised investment, talent and attention.”

The report also highlights recent analysis from the Institute for Fiscal Studies (IFS), which shows the UK to be the most geographically unequal economy of all 27 OECD member countries, with the largest gap between its most and least productive areas.

The answer to this problem is private sector investment, according to the CPS.

Proposals for stimulating investment on the scale that is needed across the North include a new Initial Investment Incentive – a cash payment to attract domestic and global capital to the region – and the creation of a new Northern Infrastructure Bond aimed at attracting global investors.

The report also calls for automatic approval for planning applications which create more than 100 permanent new jobs and a new fast-track planning process for investors planning to plough £20 million or more into the local economy.

These investment incentives and planning changes should be targeted towards driving the UK’s green industrial revolution, the report says, something which the North of England is particularly well placed to lead on given its manufacturing strengths.

Finally, the report calls for the establishment of a new ‘Growth Board for the North’ to help steer investment into the right projects and encourage local decision-making and local investment.

It is highly significant that the think tank founded by Margaret Thatcher is now turning its attention to solving some of the regional inequalities that arguably she created.

What it speaks to is just how unequal the UK has become and just how much opportunity there is to make the North an industrial superpower once again.