Regional industrial strategies can help combat growing divide

The TUC has called for local government spending power to be used to help create jobs in every community.

In a report published today, called Great jobs in great places: New approaches to regional industrial strategy, the TUC warns children in the north east of England are twice as likely to live in workless households than in the south east and calls on both local and central government to overcome regional inequalities.

The report warns the UK economy is ‘too reliant on consumer spending’ and ‘suffers from chronic lack of investment’.

It says certain parts of the country are ‘bearing the brunt’ of weak pay, slow economic growth and council spending cuts.

According to the report, almost half of all new jobs created in the north west and two-thirds of jobs in the north east of England are insecure (i.e. agency, temporary hours or zero-hours).

It says that prosperity is not evenly shared across the south of England, traditionally seen as the more economically successful part of the country.

For example, inner west London’s gross value added (GVA) as a share of UK output is 10 times that of Suffolk.

But the report adds the current devolution agenda could bring ‘significant new opportunities’ to redress the economic imbalance, as combined authorities and directly elected mayors get new powers relating to the economy, transport and skills.

It also looks at specific issues in the Liverpool city region, Tees Valley and Norfolk and Suffolk.

According to the document, unemployment and lower wages have returned to ‘worrying levels’ in Liverpool and the surrounding area, while the neighbouring counties of Norfolk and Suffolk continue to suffer from ‘low wages, low productivity and high inequality’.

‘Its population is aging, and the two counties are characterised by the worst income inequality in the UK,’ the report states.

In order to address these issues, the report calls on councils to use their spending power to ‘drive up jobs, skills and conditions’ through an ‘innovative use of procurement to bring jobs to the most deprived communities’.

‘Local leaders should prioritise social impacts and community economic development when appraising all investment and funding decisions,’ the report says.

It calls on the government to set out a plan in the forthcoming budget to increase spending on infrastructure to at least 3.5% of UK gross domestic product.

And it adds the government should ‘fundamentally change the way the economy works’, by ‘shifting power to people in their workplaces, and to their communities’.

‘In the places we looked at, there was no shortage of opportunities to create stronger industries and great jobs,’ said TUC general secretary, Frances O’Grady.

‘But to unlock the potential of every part of England, we need to change how the economy works. That means devolving power and funding back to working people and their local communities,’ she added.

‘The government has talked a lot about industrial strategy. Now’s the time to act. We need new investment to bring infrastructure, skills and great jobs to the parts of the country that need them most.’

• Read the full report here