Government must ‘go big or go home’ to tackle widening regional inequality in UK, report warns

Independent inquiry claims UK is now the most unequal large country in the developed world

The UK is home to some of the richest and poorest regions in Europe (Rex)

Government intervention on the scale of HS2 is needed to address the widening gaps between the richest and poorest parts of the UK, an independent inquiry claims.

The UK2070 Commission said regional inequalities were “serious” and growing, with the UK home to some of the richest and poorest regions in Europe.

Its report said the UK must adjust to life beyond Brexit and the impacts of climate change over the next decade, warning that a “business as usual” attitude will lead to further decline and division.

Commission chair Lord Kerslake, the former head of the civil service, said the government now needs to “go big or go home” on its promises to “level up” Britain, claiming that only a large-scale and long-term approach will address the issue.

The commission carried out an 18-month study into regional inequality, claiming the UK is now the most unequal large country in the developed world.

It found that between 2007 and 2017, London’s economy grew by 6.75 per cent – almost twice the UK average rate – compared with the Northern Powerhouse regions, which grew by 0.72 per cent.

There was also an increase of 1.27 million more jobs in London and the southeast, compared with 330,000 in the north.

The Northern Powerhouse covers areas including Cheshire, Cumbria, Greater Manchester, Leeds, Liverpool, north Wales, Sheffield, North Yorkshire and the northeast.

The report said growth in London and the southeast was now creating “major pressure” on the region in regard to development and cost of living, which impacts the quality of life of residents.

The commission’s report calls for:

- The devolution of powers and resources from central government to local communities.

- Better transport connectivity within cities and to poorly connected towns, with infrastructure investment increasing to at least 3 per cent of GDP per year.

- Tripling the new Shared Prosperity Fund – the post-Brexit successor to EU funding – to £15bn per year for 20 years, an increase of £200bn over what is already planned.

- Creating new “Networks of Excellence” in regional research and development, similar to those in London, Oxford and Cambridge.

The commission’s findings are the culmination of research carried out by six UK universities, supported by specialist research organisation the Lincoln Institute for Land Policy.

The commission said the UK will need to double the rate of jobs growth and keep it there to rebalance the UK economy by 2070.

It said the government will have to make interventions of a “similar magnitude” to HS2 across the UK-wide economy to reverse decline.

The report said while London is recognised as the richest region of Europe, six of the 10 poorest regions also lie within the UK.

It found that average household wealth fell by 12 per cent in the North East and the East Midlands between 2006 and 2018, but grew by nearly 80 per cent in London and more than 30 per cent in the southeast.

Lord Kerslake said: “Many people in Britain feel left behind by growth elsewhere and that has contributed to an acrimonious debate about Europe.

“We now face a decade of potential disruption – leaving the European Union, confronting the impact of climate change and adjusting to the fourth industrial revolution.”

He said research shows inequalities in the UK reflect an “over-centralised system” which “consistently comes up with policies which are either under-resourced, too fragmented or too short-lived to make a difference”.

Lord Kerslake added: “Time is not on our side and we cannot afford to keep on repeating those mistakes. Government must therefore think big, plan big and act at scale. Bluntly, if it can’t go big, it should go home.”

Press Association