Case for northern investment as growth and jobs gap revealed

As Nick Clegg prepares to set his vision for the future of the North, and Chancellor George Osborne builds on his Northern powerhouse theme, the Office for National Statistics has produced a detailed look at how the North compares to the rest of England, making clear that on many measures there has been little sign of success in years.

Last night shadow chancellor Ed Balls told The Yorkshire Post the coalition was hoping “warm words” would cover its economic record, with the report clearly setting out a challenge.

On unemployment alone, the ONS revealed the north has since 1992 enjoyed just one three-month period in which its number out of work was below the English average.

In a stark assessment of health and economic life in Yorkshire, the North West and North East, the ONS said: “Its shares of economic output, jobs and household income fall below its share of the population. It has lower labour productivity. Life expectancy is shorter and average reported happiness is slightly lower than the rest of England.”

Household income per head is below the English average almost everywhere in the North, with only families in North Yorkshire enjoying above average levels of disposable income.

The region’s manufacturing sector, at 15% of its economy, is a key strength, but overall “the north of England lags behind the rest of England, however, in terms of economic output from private sector services.”

The region also continues to lose its youth.

While northern universities do draw students from the rest of England, this is outweighed by those heading southwards in their twenties.

In the 21-30 age group, 23,831 more moved southwards than northwards. This is likely to reflect less favourable labour market conditions and, in particular, fewer graduate opportunities in the North.

Competing visions for the north have been set out by the Conservatives and the Liberal Democrats over the last year, while Labour has maintained a steady backing for a region it counts as a homeland.

Mr Balls said: “As a local MP I know that we need to do much more to deliver more good jobs, attract investment and back working people.

“That’s what Labour’s economic plan is all about. We will devolve more power and funding, secure a stronger and more balanced recovery and earn our way to higher living standards for all, not just a few.

“All the warm words from George Osborne and Nick Clegg cannot hide their record. They abolished the successful regional development agencies and have cut funding for local councils like Leeds and Wakefield more deeply than wealthier parts of the country. Across both Yorkshire and the North West wages have fallen by even more than the national average. Labour’s plans to devolve more power and £30bn of funding to city and county regions are more radical than George Osborne’s attempts to play catch-up.”

In Parliament yesterday Prime Minister David Cameron defended the coalition’s record on securing economic growth outside of London.

He said: “It is notable when we look at things like small business creation, exports and investment that growth is coming from around the country.

“That is a huge contrast with 13 years of Labour when in our economy, for every 10 jobs created in the south only one was created in the north. That is the record of the last Labour Government.”