The UK faces a “tipping point” in its economic performance irrespective of what happens with Brexit because of its deep-rooted regional inequalities, a major report warns today.
The UK2070 Commission chaired by Lord Kerslake, the former head of the Civil Service, says economic divides across the UK will worsen unless government addresses failings in regional policy going back 50 years.
The warning comes as new research by Labour suggests the richest 10 per cent of Londoners have more than one-and-a-half times more wealth than the entire Yorkshire and the Humber region.
Jeremy Corbyn said the analysis of Office of National Statistics data, released before his party's conference this weekend, lays bare the “dramatic scale” of inequality in the UK.
In its second report, ‘Moving Up The Gears’, the commission says Ministers must urgently develop a long-term vision for the UK.
Lord Kerslake says it must decisively address deprivation, unlock regional economic potential and confront the challenges presented by climate change and new technologies.
The commission's independent inquiry into city and regional inequalities has identified seven national priorities for action which it says to avoid the UK's divisions widening further.
These include handing decisions about regional economies to local leaders across the board, not just those with government devolution deals, and changing Treasury investment rules to level the playing field for local funding.
Lord Kerslake, the head of the Home Civil Service between 2011 and 2014 and a former Sheffield City Council chief executive, warned: “Time is not on our side. Successive governments have spent the last 50 years
trying to rebalance the UK economy and create a fairer and stronger nation.
"Those efforts have failed and the hard evidence uncovered by our inquiry shows that we remain one of the most unequal and divided nations in Europe.
“If we continue our current approach those division will worsen, potentially to a serious degree."
He added: "Regardless of the impact of Brexit, we have gone way beyond the point where simple policy change is the appropriate response.
"We need a new model for delivering regional policy, one armed with the right resources and the right tools and working towards a long-term goal."
Northern Powerhouse Minister Jake Berry said: “The Prime Minister has made clear his commitment to levelling up every part of the UK to fuel economic growth and provide opportunity.
“We want to make sure local communities have more control over the decisions that really matter to them, including giving greater powers to existing mayors and delivering a new wave of devolution deals.
“We are backing businesses to thrive, investing billions of pounds in transport and digital connections, and supporting our towns to flourish through 100 multi-million pound Town Deals so everyone is ready to seize all of the economic opportunities that come with leaving the European Union on the 31st October.”
Shadow Chancellor John McDonnell, who earlier this year outlined plans to move a large section of the Treasury to the North, said: “This report sets the challenging agenda that Labour in government will respond to.
"There is a need for a dramatic reorientation of government thinking which recognises the scale of change needed in investment and devolution of decision making."
Lord Kerslake said the Power Up The North campaign led by The Yorkshire Post and other northern titles was "a reflection of great ambition and untapped potential".
He added: “But there are parts of Yorkshire where the lives people lead and the fabric of the world around them is disturbingly deprived.
“That pattern is repeated in other parts of the country and no government with a meaningful vision for the UK’s future can afford for that to continue.
“The Power Up the North campaign pointed to a real appetite for progress and the need for a more effective way of unlocking that potential.
"Too many decisions about Yorkshire and the North are being taken in Whitehall when more progress would be made by regionally-owned solutions.”
Labour leader Jeremy Corbyn has called for economic reform to tackle wealth inequalities between different parts of the UK.
He said: “The system is broken when it inflates the wealth of the richest, while failing to invest in our future.”
Luke Raikes of the think-tank IPPR North said: “Today’s figures are further evidence that our economy is broken.”
But Tory party chairman James Cleverly said: “Corbyn’s plans would leave the economy on life support. Every Labour government has left office with unemployment higher than when they came in. Labour would wreck the economy and, just like last time, working people would pay the price.”