The Prime Minister is on a two-day tour of the North-west to prove poverty and prosperity were "neighbours in every part of Britain". Mr Blair, launching a Government report into regional inequalities, said recent speculation about the extent of the North-South divide was an "over-simplification".
In an attempt to head off criticism that Labour had done little to reduce the nation's wealth gap, he also announced a drive to bring skills and aid to the most deprived communities.
Mo Mowlam, the Minister for the Cabinet Office, will lead the Downing Street Social Exclusion Unit and the flagship New Deal programme for the unemployed will be extended into the next parliament, Mr Blair said. She will tour the country trying to reassure voters and MPs in Labour's traditional heartland that the party was still committed to tackling poverty and deprivation.
The Prime Minister said research in a Joseph Rowntree Foundation report, which is expected to claim tomorrow that the North-South divide is as wide as ever, was out of date.
The charity's study would not take into account the impact of recent policies such as the New Deal, the Working Families Tax Credit and the national minimum wage, he said. It would also miss record increases in child benefit and the pounds 100 winter allowance for pensioners. Mr Blair admitted the data suggested that on standard measures of prosperity, such as life expectancy and wages, the South-east was doing best.
But the Government's report, titled Sharing The Nation's Prosperity, also showed unemployment was higher in Kent than in Cheshire, house prices were rising as fast in Edinburgh as London and the capital contained five of England's 10 most deprived authorities.
The report, compiled by civil servants in all regions in Britain, was a "snapshot" that confirmed differences within regions were just as significant as differences between regions.
Mr Blair said the averages "hide more than they reveal" and variations within the UK were less marked than in many other European nations, including the former West Germany and Belgium.
"Poverty and prosperity are neighbours in every part of Britain," Mr Blair said at the launch of the report at Manchester town hall. "There are important differences between North and South, but the greater divide which exists is between the haves and the have-nots. That is the divide that our policy seeks to close.
"This is my politics, this is what I believe in, I am a One Nation politician. This is a One Nation government and a One Nation agenda."
The report was evidence that Labour's policies were making "real progress" and improving the lives of millions of people, he added.
Mr Blair said his policies were "based on need, not on region", and pledged to address inequality, wherever it arose. Histour continues today in Liverpool.
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