Brown’s flawed welfare policies real cause of North-South divide

08 August 2007

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“The proceeds of turbo-capitalist London are being used to create a level of state dependency in the British regions reminiscent of the Soviet era”

This “North-South divide” crops up from time to time in British politics – emphasising the widening prosperity gap between London, the East of England and the South East – and the rest of the country. The Institute for Public Policy Research (IPPR), a left-wing think tank, this week released a report showing the gap has never been wider – and complained that central government is not formally committed to reducing it. Touchingly, the IPPR suggested there could be higher regional economic growth if only Whitehall would set a target for it.

If only. Scotland has had such targets for years. Economic growth has been declared its top priority – yet if Scotland were an independent nation, its economy would have ranked as the fourth-worst performer in the developed world between 1997 and 2005. It grew by a cumulative 18% during those years while its Celtic cousins in Ireland expanded their economy by 69%. London’s economy expanded by 37%. But the figures were dire in the North East (17%) Wales (18%) and the North West (19%). The eurozone area grew by 22% – woeful, but a better performance than that enjoyed by most of England.

It is growing harder to talk meaningfully about a United Kingdom. A generation or two ago, these islands could be said to be culturally analogous and economically comparable. The great cities – Liverpool, Manchester, Glasgow, Birmingham – each had its own economic centre of gravity. But as the Joseph Rowntree Foundation reported last month, the rich no longer stay in such places. They head to London to enter its melting pot and grow even richer.

The allure of the South is not new. Samuel Johnson famously observed that “the noblest prospect which a Scotchman ever sees, is the high road that leads him to England”. What has changed is that this now applies throughout the UK, and the noblest prospect an Englishman sees is the path that runs to London. Household income per head was £17,200 after tax and interest in Inner London in 2005, 30% higher than the UK average and 52% higher than in the West Midlands.

So what’s going on up North? In a word, government. The normal response would be to set up tax havens in the most deprived places, a formula that makes buildings spring from the desert in Nevada and Dubai. But instead, Labour has adopted a leftist approach – it takes money from the South of England, and shovels it up North as if this righted the wrong. It does this in two ways: welfare payments and a massive expansion in the public sector payroll.

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John Lewcock

August 9th, 2007 12:28pm Report this comment

What do you expect when our current Government leaders were brought up to believe that Stalin's failure was that he didnt make Socialism work. The man from the manse and his sycophants will show how socialism works.

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