When it comes to inequality don’t forget the regional dimension

Much has been said and written since the EU referendum on under-served places in Britain and the predicament of many of England’s towns.

There is good reason for this. Economically, many of these places have fared badly over some decades, particularly outside of the southeast. This economic decline has been accompanied by reduced opportunity for those who live there and, in some instances, by deep rooted social issues. A symbol of all this in recent years has been the rapid and visible deterioration of town centres, with a rise in the number of charity shops or vacant buildings.

Coastal towns such as Grimsby and Blackpool have fared especially badly as their traditional businesses have faced rapid change. There has been a spirited fightback by local leaders who have made a difference, despite the limited resources available to them.

But in May of this year the UK2070 Commission, of which I am chair, published its first report into regional inequality. It found that the UK is the most unequal large country in the developed world in this respect. To turn this around will require concerted effort over a long period of time.

For anyone familiar with England’s towns, the challenges they face has been evident for some time. The surprising thing has been how long it has taken some national politicians to wake up to them. What has brought the issue to a head, of course, is that in many of these towns, large majorities voted for Brexit. This in turn led the main political parties to look more closely at the voting intentions of those living there—and how they might impact on their own political fortunes.

This renewed focus should be welcomed by anyone who has watched the decline and wanted to do something about it. However, there are real risks in the narrow way in which the arguments are being made that could endanger the very thing that people are seeking to achieve.

First, while much can be done in the individual towns themselves—and I have seen this for myself in the excellent Greater Grimsby development initiative—the economies of towns do not sit in isolation. They form part of—and critically depend on—the success of the wider economy of their surrounding areas. So towns do need their own plans to improve education and skills, attract new investment, and renew their centres. More government support is certainly required through regeneration and investment initiatives such as “Town Deals.” But good connections to much stronger regional economies will also be vital.

Second, we must avoid the temptation to see this debate as “towns vs cities.” There have been some undoubted successes in revitalising our major regional cities. Anyone who has seen the new developments in the centres of Birmingham and Manchester, for example, will testify to that. It is therefore not surprising that the contrast is made with the condition of many of our town centres. However, you don’t have to go that far out of central Birmingham and Manchester to see areas of great deprivation. In reality, the economic gap between our towns and cities is less than in many other European countries.

Cities do have the potential to play a powerful role in driving economic growth for their regions. But an Economic and Social Research Council-supported study has shown that those outside London and the southeast have at best kept up with economic growth when compared to the national average. They are still some way short of their full potential.

This brings me to my third and perhaps most important point. The real issue that we need to focus on is the economic gap between different regions. Our report findings drove this home. Just look at the problem in the UK relative to elsewhere. In a comparison of 30 countries across a range of 28 indicators, done for the commission by Philip McCann of Sheffield University, the UK comes 28th. This inequality is bad enough, but the report finds that the gap has widened and will continue to widen in the future unless we do something about it.

So what must be done? The 2070 report calls for much greater devolution to the regions, a proper plan to guide investment to where it is needed, a focus on new economic opportunities, and a renewal fund of £250bn to be invested in rebalancing over a period of 25 years. These are ambitious proposals but nothing less is likely to reverse the trend. This is as much in the interest of citizens in London and the southeast, who will face increasing housing costs, longer travel times to work and environmental degradation unless this imbalance is tackled.

Investment in our towns is certainly required. But this will not be enough unless we also have strongly performing cities and regional rebalancing to match. Then, and only then, will all areas of the UK be in a position to reach their full potential.

 

This article features in “All about towns,” Prospect’s new report in partnership with the Joseph Rowntree Foundation