‘London to benefit as regions lose’

The CRESC Research Centre at the University of Manchester argues that London’s financial sector operates like a “city state” and sets the political agenda.

The study also reveals that from 1997 to 2008 the North East, North West, Scotland and Wales were almost entirely dependent on state-supported jobs while the West Midlands was entirely dependent. It claims that UK governments saved London finance “but fatally undermined the UK social settlement, particularly in the regions”,

It states: “London both benefits from, and contributes to, the weakening of the larger national entity. The coalition government favours ultra-loose monetary policy.

“They are kind to the working rich in London finance because low interest rates and quantitative easing keeps the banking sector going and rebuild finance sector balance sheets, profits and bonuses.

“Ultra-tight fiscal policy is vicious for many in the West Midlands or North East when £81bn of public expenditure cuts are planned by the coalition.”

The report also calls for a reinvention of regional government for the delivery of broad social objectives, such as housing and care for the elderly.