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In-depth study urges northern leaders to move the Northern Powerhouse into a new phase to tackle threats and opportunities ahead – amid “Westminster’s Brexit chaos”.

Published today by IPPR North, the leading think-tank for the North of England, State of the North 2018 is a comprehensive analysis of the North’s economy and a plan to realise the real potential of the North. It finds that:

Weekly pay has fallen by £21in the North since 2008 in real terms – more than the national fall in pay, and half a million people work in accommodation and food services jobs where weekly pay is half the national average.
Since 2009/10 total public spending in the North has fallen by £6.3 billion in real terms– more than any other region, while the south east and south west together received a £3.2 billion rise in public spending during this period.
Average household wealth is more than twice as high in the south east compared to the north east, while the increase in property wealth has driven up London’s wealth at twice the rate as in the North since 2006/08.
2 million working-age adults and 1 million children live in poverty in the North– women and those from an ethnic minority backgrounds are disproportionately affected.
England has some of the worst health inequalities in Europe and the very lowest life expectancies in England are found in northern neighbourhoods. In one neighbourhood in Blackpool the average male life expectancy at birth is 68, compared to the English average of 79; and the lowest healthy life expectancy* in England is 46 in one Salford neighbourhood, compared to the English average of 63.
But the North has significant potential. Its economic strengths include advanced manufacturing, energy, health innovation and digital. Productivity in these sectors is forecast to grow by 38 per cent by 2030.

The report argues that, almost five years since George Osborne coined the term, the next phase of the Northern Powerhouse needs to move beyond its initial premise.

George Osborne’s original vision for the Northern Powerhouse had a narrow and almost-exclusive focus on increasing productivity, and on transport and major city regions. Since then the Northern Powerhouse story is already beginning to evolve; now it needs to move into a new phase.

The report challenges both Government and Northern leaders to commit to a more comprehensive approach to transforming the North’s economy during this next phase.

Most importantly the next phase of the Northern Powerhouse must be “of the North, by the North, for the North” according to report author Luke Raikes, who argues that comprehensive devolution to the North of England can sustain this agenda and could begin to address the economic and democratic imbalances within the UK.

IPPR North has called on leaders to pledge that they will embrace five opportunities for the next phase of the Northern Powerhouse:

1. Commit to a ‘whole North approach’: The original Northern Powerhouse agenda focused almost entirely on the major city regions of the North. In the next phase, the Northern Powerhouse agenda must draw on all assets and focus on a diverse range of places – including towns, cities, rural areas and natural assets.

2. Support job creation and productivity in the high-growth and large-employment sectors of the economy: The original Northern Powerhouse agenda focused on supporting technologies and some frontier industries. In the next phase, the Northern Powerhouse agenda must see improvements in productivity go hand-in-hand with economic justice across all priority sectors.

3. Invest in both infrastructure and people: The original Northern Powerhouse agenda was focused on transport infrastructure. In the next phase, the Northern Powerhouse agenda must continue to prioritise transport investment, but also improve social infrastructure including education, skills and health in the North to connect people to the opportunities of the economy.

4. Deliver economic justice: The original Northern Powerhouse agenda focused on productivity and saw every new investment or upward tick in output as a sign of success. In the next phase, the Northern Powerhouse agenda should focus on economic justice.

5. Lead from the North: The original Northern Powerhouse agenda was led by the chancellor and delivered by central government agencies. The next phase of the Northern Powerhouse agenda must be led by the North.

Report author Luke Raikes and Senior Research Fellow at IPPR North said:

"The Government is so consumed by Westminster’s Brexit chaos that it has deprioritised the Northern Powerhouse agenda at the very time it is needed most. This cannot continue.

“All our regional economies face severe challenges– including London’s. Brexit threatens to make this much worse and the Northern Powerhouse agenda is the best chance we have of fixing this national economic crisis. In the national interest, the North needs to thrive.

“The best way to take this important agenda forward is for the North to take the lead. The next phase of the Northern Powerhouse must be of the North, by the North, for the North”.

Director of IPPR North, Sarah Longlands said:

“The North has started to see the impacts of the Northern Powerhouse agenda most noticeably with the elected mayors, the growing recognition of the North’s external profile and the creation of Transport for the North. The growing confidence and appetite for economic change is something to be celebrated and built upon.

“However too many of the North’s people and places are yet to feel the benefits. One million of northern children live in poverty. Many families depend upon precarious and poorly paid jobs and levels of healthy life expectancy in many areas constrain the opportunities of people to play an active role in their local economy.

“But there is a better way. Now is the time to develop the Northern Powerhouse agenda in to a plan which works for the people of the North providing them with opportunities to share in the potential economic opportunities of the future”.

ENDS

Contact: Rosie Corrigan, Media and Campaigns Manager for IPPR North, on 0161 694 9685 or r.corrigan@ippr.org.

Notes:

Luke Raikes, Senior Research Fellow at IPPR North, and Sarah Longlands, Director of IPPR North are available for interview.

IPPR North is the leading think-tank for the north of England, developing bold ideas for a stronger economy and prosperous places and people. For more information, visit ippr.org/north.

*Healthy life expectancy is the the age up to which you can expect to live in good health.

The North in numbers:

The North of England consists of the three previous government office regions of the North East, North West and Yorkshire and the Humber:

It is home to 15 million people
It has an economy larger than that of Wales, Scotland and Northern Ireland put together
If it were a country it would be the 8^th largest in the EU
It has a diverse geography that includes:

-Five major city regions, 265 towns and 1,000 villages and smaller communities

-29 Universities

-Eight major ports

-The UK’s largest airport outside of the South East

- five national parks, 6 Areas of Outstanding Natural Beauty (ANOBs) and over 60 National Nature Reserves.
Find last year’s State of the North report online here.