Money wasted helping region, say economists
Aug 13 2008 by Adrian Pearson, The Journal
Our bad luck
THE controversial think-tank report claimed there are a number of factors for the North’s failure, ranging from pure bad luck to terrible transport links.
Citing historical factors for the current demise of the North, the report states: "The North was simply less lucky than the South in that its source of economic power disappeared for exogenous reasons – competition from much lower wage countries – about which it could do nothing."
The report notes that "south- ern productivity is inherently higher than northern productivity, not because southerners are more quick-witted, harder-working or intrinsically smarter, but because southerners have the advantage of being well-connected" and states that geographical reasons are behind the region’s decline.
Troubled city
THE Policy Exchange pulled no punches as it dismissed efforts to revitalise Sunderland.
The report’s authors said the reason for their rather extreme suggestions were to be found in Wearside and other former heavy industry cities, including Liverpool.
Their case, they say, is very simple: "If direct investment of £2bn, a plant employing 5,000 directly and a further 7,000 indirectly, cannot revitalise the city, we need to ask whether it can reach the national average level of wages and living stand- ards while remaining its current size."
And the authors cite Roy Keane’s trouble attracting players to Sunderland as an example of the allegedly undesirable nature of the city.
Sunderland instead lives in Newcastle’s shadow and the situation is unlikely to be reversed, they said, adding: "It is slower to take the direct train to Sunderland than to take the train to Newcastle, walk to the Metro stop, and take the Metro to Sunderland.
"By that time the Newcastle train will have reached Scotland. In terms of connectivity to London, Sunderland is not so much south of Newcastle, as north of Berwick."
Sunderland Council leader Paul Watson said the authors had not even bothered to accurately describe Sunderland.
"They clearly haven’t done their research as if they had they would find that Sunderland has been a city since 1992.
"Since the 1980s, the city has reinvented itself as a centre for high-quality automotive industry, as a new office base and more than 10,000 jobs have been created every decade to replace the jobs lost in Sunderland’s traditional industries."
Cameron a fan
DAVID Cameron is no stranger to the staff at Policy Exchange, which might well explain the report’s references to new policies for a future government to consider.
The think-tank has been described as a favourite of the Conservative leader, who has frequently spoken at Policy Exchange events.
A national newspaper has described it as the largest, but also the most influential think- tank on the right.
The report makes clear reference to the Conservatives when it states: "Different sets of priorities offered by an opposition party may well involve lower levels of spending on urban regeneration funding, with inevitable consequences for the fortunes of these towns."
But Conservative frontbencher Chris Grayling, shadow minister for Liverpool, said: "This independent report does not reflect Conservative Party policy and we do not agree with its conclusions.
"We wholeheartedly support the regeneration of northern cities."
