Money wasted helping region, say economists
Aug 13 2008 by Adrian Pearson, The Journal
A LEADING think-tank, said to be a favourite of Conservative leader David Cameron, has told MPs that the next government should consider giving up on parts of the North and instead focus on relocating families to the South.
Economists and researchers at the Policy Exchange have said the billions of pounds spent on cities such as Sunderland have been wasted and people in the North East will never get the standard of living they dream of – unless they move south.
The report’s authors said the money spent in the North was only made available because of pressure from Labour MPs from poor urban areas and suggested any Conservative government with largely southern support would want to rethink its spending commitments.
They recommend helping a significant percentage of the North relocate to southern cities.
Last night regeneration bosses from across the North said the suggestion of investing in the South East and encouraging a massive north to south population shift was economic madness.
As well as the decline of the shipyards, the think-tank economists blame the poor transport links in the region which have effectively prevented Sunderland from benefiting from the "moderate" success of Newcastle.
And Tyneside is singled out as being a victim of the UK’s economic geography, with Newcastle especially vulnerable to the fall of just one institution such as Northern Rock.
The report notes that since it would be impossible to move Deutsche Bank to Sunderland, it would be better for the next government to consider incentives for people to move to London.
Policy Exchange, a Conservative-leaning think-tank, has warned that as government funds dry up, Northern cities will be worse hit, adding that the Labour Government has already spent billions of pounds for no real benefit.
The economists behind the report singled out Sunderland as an example of why any government should give up on trying to save Northern cities.
Their report said: "The evidence strongly suggests that there is next to no chance of people in Sunderland having the same opportunities as the people of Birmingham or Portsmouth, let alone the same chances as those in London or Oxford. It is time to stop pretending that there is a bright future for Sunderland and ask ourselves instead what we need to do to offer people in Sunderland better prospects."
Minister for the North East Nick Brown last night said: "These stupid people do not know what they are talking about.
"Our region has the fastest growth rate in England, no region has worked harder to help itself than the North East of England.
"If these half-wits really are advising David Cameron, then God help us if we ever get another Conservative government."
He was joined in his outrage by Andrew Lewis, director of research group the Northern Way, who said: "The report is just plain wrong in its description of the growth potential of the Northern cities.
"At a time when the UK needs to use all its assets to compete in a global economy, writing off the contribution of the Northern cities would be economic madness."
Margaret Fay, One NorthEast chairman, said: "Some of the conclusions of this report are, as its authors admit, barmy. They demonstrate a clear lack of understanding of the North East and Sunderland in particular, its value to the regional economy and the pride of its people in their city."
Sunderland Council boss Paul Watson said: "As a city in the middle of an ongoing multi-million-pound transformation, Sunderland continues to win the confidence of international developers and businesses and in the last year alone attracted 1,000 new residents.
"Successful places such as Sunderland provide a counter-balance to the overcrowded South East."
Co-author Tim Leunig, from the London School of Economics, admitted the findings might seem barmy but said taxpayers’ money must stop being spent on unrewarding regeneration schemes.
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