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Northern economy could boost UK economy by £41bn

North needs powers to stop being squeezed between Alex Salmond & Boris Johnson

Boosting the North of England is central to rebalancing the UK economy, according to the final report of the IPPR North think tank’s 18-month-long Northern Economic Future Commission. The commission was comprised of leading business people, voluntary sector and local government leaders. The report is published ahead of the Chancellor’s Autumn Statement and will be launched at a conference in Leeds, which will be addressed by Chief Secretary to the Treasury Danny Alexander MP.

The report shows that Germany has seven cities in the top 20 European cities, Spain has two, the Netherlands has two but the UK has just one: London.

The Commission report includes a twelve point plan to boost northern economic prosperity over the next decade. The report argues that Manchester should be the UK’s second international hub airport and should have flights to Beijing, Shanghai, Moscow, Sao Paulo, Mumbai and Delhi.

The report shows that halving the output gap between the North and the national average would increase the UK’s national economic output by £41 billion. It says that an extra 500,000 new jobs would raise the North’s employment rate to 75% by 2022 and that raising household wealth to the OECD regional average would mean every household in the North would be £500 better off each year.

Geoff Muirhead CBE, Chair of the Northern Economic Futures Commission, said:

"In this, our final report, we have brought together a strategy for growth that can unlock much of the potential in the north of England which currently lies untapped. Now is the time to act decisively: to prevent our fiscal crisis from deepening, to set our local economies free to drive growth, and to give the North its voice on a national and global stage."

Ed Cox, Director of IPPR North, said:

“The prevailing narrative about the economy of the North is most often a negative one. The ‘north/south divide’ is a stock-in-trade and ‘it’s grim up north’ is a familiar refrain. Like all clichés, there is more than an element of truth in this characterisation but the North is capable of taking its place in the ranks of successful northern European economies, with competitive companies trading in global markets, a fully employed and well-skilled workforce, and strong civic leadership that supports growth and shared prosperity.

“Far from lagging behind the rest of the country, if the north of England was to emulate its northern European neighbours then it might just lead the UK economy out of its present lopsided doldrums and towards a more progressive and sustainable economic future. Then and only then will the national debate move on, and the nation as a whole will accept that northern prosperity is national prosperity.”

The report recommends:

  • Full employment: 500,000 extra jobs in the private sector, on the way to a long term goal of an employment rate of 80%. 
  • Innovation: A ‘Northern Innovation Council’ endowed with £1bn of the proceeds of the sale of the 4G Spectrum should be established.
  • Investment: A Northern Investment and Trade Board and a Northern investment capacity within a new British Investment Bank.
  • Transport: Manchester Airport become the second international airport hub for the UK and a reduction in the rate of Air Passenger Duty in Northern airports to the lowest (Band A) levels for all flights for an initial period of 3 years. Creation of a new body - Transport for the North - to take power over the Northern Rail Franchise, major hub stations, rolling stock and smart ticketing.
  • Skills & apprenticeships: Double the number of young people in advanced apprenticeships by 2015 from 30,000 to 60,000 and a major expansion of pre-apprenticeship training programmes in Northern FE colleges; and a radical decentralisation of skills policy to local employer networks
  • Housing: Decentralisation of housing finance – Housing Benefit and capital funding for building homes - into Sub-regional Housing Funds through the transfer of £13billion a year out of Whitehall into the three Northern regions.
  • Localism: A single funding pot for economic growth in Local Enterprise Partnership areas, including major local transport funds, HCA funds, skills funding and CLG regeneration and economic development funding such as Kick Start and the Regional Growth Fund. The adoption of directly elected “Metro Mayors” or a suitably named rural alternative.
  • Leadership: An annual ‘N11’ Leaders’ Summit involving each of the 11 LEP areas in the North, headed up by a Northern ‘chair’ to serve for a period of 4 years.

Notes to editors:

The full report of IPPR North’s Northern Economic Future Commission will be published on Thursday and launched at a conference in Leeds on Friday and will be available here: http://bit.ly/IPPRN9949. For more, see www.ippr.org/north

The Northern Economic Future Commission comprised of the following Commissioners:

  • Geoff Muirhead CBE, Former Chief Executive Officer, Manchester Airports Group (Chair)
  • Ed Cox, Director, IPPR North (Deputy Chair)
  • Bill Adams, Regional Secretary, Yorkshire & Humber TUC
  • John Anderson, Regional Director, BT Yorkshire & Humber
  • Rhiannon Bearne, Group Assistant Director - Policy, The Cyrenians
  • Paul Callaghan, Chairman, Leighton Group
  • Adeeba Malik, Deputy Chief Executive, QED-UK
  • Professor Philip McCann, Chair of Economic Geography, University of Groningen
  • David McKeith, Chairman, Greater Manchester Chamber of Commerce
  • Rodger McMillan, Therapy Area Head, AstraZeneca
  • John Mothersole, Chief Executive, Sheffield City Council
  • Peter Nears, Strategic Planning Director, Peel Holdings
  • Ann Pittard, Large Business Development Lead, Leeds City Region
  • Professor Philip Shapira, Professor of Innovation Management and Policy, Manchester Business School
  • Bill Tompson, Head of Rural and Regional Development, OECD
  • Julia Unwin, Chief Executive, Joseph Rowntree Foundation

Contact:

Mavis McKenzie Cecil, 07929 132 716, m.mckenzie-cecil@ippr.org

Richard Darlington, 07525 481 602, r.darlington@ippr.org


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