David Cameron is letting down the North, where the reality gap is greatest


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The Independent Online

The country needs a One Nation government, but David Cameron is letting down the North. When George Osborne finishes delivering his Budget in the House of Commons on Wednesday, expect David Cameron to give him a celebratory pat on the back with all the smug complacency we’ve come to expect from this Government.

The picture the Chancellor paints of an economy that is recovering and a society that is prospering, however, masks the truth about the economic failure that continues to engulf much of the country.  And the reality gap between the Britain of Cameron and Osborne and the day-to-day lives of people across our country is particularly stark in the North.

Despite the Government’s  claims, the good news isn’t being felt by working people.  Families are £1,600 a year worse off because this Government’s decision have delivered a recovery which is weak and imbalanced.  From the turn of the millennium to the financial crash in 2007, the regions and nations of the UK grew by an average of almost 40 per cent.  In the first two years of this government they grew by an average 4 per cent. Even at the height of the crash between 2007 and 2010, exports from across the regions grew by almost 20 per cent, compared to 13 per cent since this government took office.

Today, the employment rate in is highest in the South East and lowest in the North East. The only regions with above-national-average weekly earnings last year were London, the South East and East.  The North East, North West and Yorkshire still have amongst the highest proportions of people living in poverty.

Across Britain there are currently more than 900,000 young people still unemployed and over 250,000 young people have been unemployed for over a year. Long-term youth unemployment is up in each region, yet the rate is highest in the North East, followed by Yorkshire and the West Midlands.  In my own area of Barnsley, long-term youth unemployment has increased by 106 per cent since January 2011.

Some 21 of the 25 worst-performing retail centres are in the North, the Midlands or Wales, with 22 of the 25 best performing south of the Watford Gap.  We are all champions of London’s growth, but we want it to be joined by prosperous regions and nations of the UK.

Added to this, the Government's cuts are falling harder on poorer areas. The ten most deprived local authorities in England will lose ten times the amount compared to the ten least deprived local authorities between 2010 and 2015.  The Prime Minister says “we’re all in this together”, but his local authority of West Oxfordshire – one of the least deprived areas in the country – is getting an increase in spending power of 3.1 per cent in 2013/14, while most places faced significant cuts, like Liverpool City Council, which is seeing a cut of 27 per cent over this Parliament.

An analysis of the capital value of this Government’s infrastructure programmes shows that London and the South West are the biggest beneficiaries, whilst the North East and East Midlands have received the least.  According to the IPPR, the Government’s National Infrastructure Plan delivers £4,893 per person in London in contrast to just £246 per person in the North East and £303 per person in Yorkshire and the Humber.  The flagship Regional Growth Fund - a potentially valuable contributor to re-balancing the economy - has millions of pounds left gathering dust in government coffers.

Aspiration is not confined to one region or another, which is why Ed Miliband’s One Nation Labour is basing our programme for government on a plan to mobilise all our nation’s resources and talents to deliver a future in which everyone can prosper and participate. Labour will deal with the cost-of-living crisis with a ‘race to the top’, with investment-led growth, higher skills, dynamic markets which work for consumers and wider opportunities for all.

By contrast, the Conservatives cannot tackle the cost-of-living crisis because they cling to their vision of ‘trickle down’ economics, in which the growing prosperity of a few at the top eventually benefits others in spite of growing inequalities between social classes, different age groups and different parts of the country.  This “race to the bottom” is based on a low-skill, low-wage economy, with a proliferation of part-time and zero-hour contracts, stubbornly high long term and youth unemployment and a cost-of-living crisis for millions.

David Cameron is a divide and rule politician who has inherited and accelerated a collapse in support for the Tories up North and who runs a party which simply does understand Northern voters.

In 2015, it will be down to Labour to lead the change for every part of our country, because we know that the cost-of-living crisis is national and not confined to any one region. That is why we are highlighting how David Cameron is letting down the North while launching our Southern Taskforce report that set out very clearly the cost-of-living crisis hitting much of the South of England.  But just at the point when Labour is winning back political support in the South, it looks like the Conservatives are politically giving up on the North.  When you look at what is happening to the North economically, you can perhaps see why.

Whether the Chancellor corrects or compounds this will be one of the key tests of this Budget.

Michael Dugher is shadow Minister for the Cabinet Office and Labour’s  vice chair