Britain’s Economic Divide Could Yet Be Mended

If the north of England is revitalized, it would become less dependent on both the south and public spending.

The Royal Liver Building in Liverpool, England, February 18, 2006
The Royal Liver Building in Liverpool, England, February 18, 2006 (Peter Morgan)

Since the recession hit in 2008, Britain’s north-side divide has become a “chasm,” with the split growing at its fastest rate since the Second World War. The divide does not stop at politics. It transcends through living standards, education and economics.

Take, for instance, the news that for this year’s round of university admissions, more Cambridge and Oxford applications were accepted from Surrey than the whole of North East England and Wales combined. One home county had more students sent to the two most prestigious universities in the United Kingdom than a region and constituent country together.

Not all students who attend the two universities are from the most affluent parts of the south of England but if things continue as they are, the only accent you will ever hear on the Cambridge and Oxford quads will be that generic southeastern brogue with no lilting Welsh or friendly Yorkshire.

There has always been a divide in the United Kingdom. For instance, in 1914 Northern Cotton Mills and Iron Foundry’s ensured the income per head in the north was higher than in the south. Britain’s poorest regions were East Anglia and Kent. Scotland had the second highest living standard after London.

The divide has since switched. London and South East England have an income per head that is 70 percent higher than the national average while in the north, it is below national average.

It can be argued that as the north deindustrialized, it has had to rely more on government spending; that austerity is hitting it harder than the more affluent areas in the south. This is due to numerous reasons. For instance, more people are out of work so demand for local services is higher. Northern councils, strapped like others by cuts of 25 percent and more, have also had to cope with the disappearance of special funds that previous Labour governments provided for deprived areas. And because property prices are lower in the north, so is the revenue its authorities collect from council tax.

Economic success breeds economic success and since the recession this has become particularly evident. The economy in the south has grown while the north’s has shrunk. As a result, investment and money is slowly filtering out of the region, where over the long term its benefits are greater to all concerned, and moving southeast. Consequently, while the north is stationary in terms of economic activity, the south is moving ahead and only widening the divide.

Before deindustrialization, the north had its industries and in some respects they were profitable. They only needed to tame the unions and rationalize the way they were doing business. A combination of politics, narrow self-interest and union strongmanship, however, caused many industries to desert the region altogether, leaving the south as Britain’s breadwinner.

In 1900, John Hobson, an economist, described a southern “Consumers England” of leisurely suburbs and a northern “Producers England” of mills and mines. In the north, they depended on those mills, factories and mines for jobs, wealth and economic success. They are no more and neither are the jobs, wealth and economic success.

Now the north has higher unemployment than the south and job opportunities and investment are scarce. This, along with the geographical imbalances in British higher learning, keeps the north, to some extent, dependent on the wealthier part of the nation.

To fix this imbalance, the government would have to direct investment to the north. The country can still do manufacturing. There is Airbus in Bristol, Jaguar-Land Rover in Birmingham and Rolls Royce in Derby. They still turn a profit. There needs to be an open debate on the economic imbalance Britain has. Beyond jobs, the north has to be seen as a region going through the pains of rebirth, not its final death throes.

Such an economic revitalization would take time, money and government involvement. Ultimately, the benefits, though, would be more government revenue from prospering districts in the north, less welfare spending and a more stable country, one that isn’t reliant on one region for its success.

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