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North of England sees lowest investment of advanced economies – think tank

North York Moors National Park (Danny Lawson/PA)
North York Moors National Park (Danny Lawson/PA)

The North of England receives one of the lowest levels of investment among advanced economies, a think tank has said.

If the region were a country, Greece would be the only OECD nation to see less public and private investment, according to the IPPR North’s State of the North report.

The researchers found that the UK as a whole ranks 35 among the 38 OECD countries in terms of receiving the least investment.

States including Slovakia, Poland and Hungary all enjoy more investment than the UK.

Were the OECD average applied to the UK for 2017-2020, some £397 billion more would have been invested.

The UK and the North are being held back by “vast inequalities” and “systematic underinvestment” in research and development, social infrastructure and transport, IPPR North said.

The report highlights the extent of regional disparities, including that productivity is around £7 lower per hour worked in the North than the England average, and hourly pay is £1.60 lower than in the rest of England.

Report author and IPPR North research fellow Marcus Johns said: “Of all the advanced economies around the world, ours is the most regionally divided and getting worse – the North is at the sharp end of these divides and that’s a barrier to prosperity.

“But what’s even more unacceptable is that our country is divided by design. It is the result of decisions.

“The North’s strengths are national strengths. Northern prosperity can be national prosperity. It’s up to the Government to unlock this potential, by acknowledging that it has to change, and by enabling empowered, well-resourced local government to coordinate and deliver long term local visions for change.”

The report points to other floundering places in the world that have turned their economies around, such as Leipzig in Germany, which has become the fastest-growing city in Europe through industry and investment.

IPPR North director Zoe Billingham said: “The international evidence is clear: governments that let go of power and collaborate positively with local places can succeed in levelling up…

“Political leaders need to ‘zoom out’ and learn lessons from our international neighbours to achieve regional growth and narrow our aching divides. We know that private investment follows public investment.”

Last week, the Government faced accusations of favouring relatively affluent South Eastern seats in the allocation of the latest round of levelling up funding at the expense of deprived northern areas.

A Government spokesperson said: “This report fundamentally misrepresents the clear steps we are taking to level up the region and we are committed to spreading opportunity across the whole of the UK, including the North of England.

“This includes investing £3.19 billon through our levelling up funds for regeneration, transport and cultural projects and £3 billion to transform local transport networks. The government has also helped secured inward investment, such as Credera in Manchester, Nissan in Sunderland and Equinor in the Port of Tyne, creating thousands of highly skilled jobs.

“We have also launched Freeports in Teeside, Liverpool City and the Humber to drive investment and signed new devolution deals in York and North Yorkshire and the North East, giving more powers to local leaders.”