North has suffered from ‘government focus on southeast’

The government has been accused of neglecting the north of England because it is spending billions of pounds around London and the southeast despite severe regional inequalities.

Alan Harding, co-director of the Institute for Political and Economic Governance at Manchester University, said huge projects like the 2012 Olympics, Crossrail, Thameslink, Thames Gateway and the expansion of Heathrow would create further imbalance in the economy.

Speaking at this week’s Northern Way summit in Gateshead, Professor Harding said continued concentration of government funding in the southeast would result in the area becoming ‘overheated, expensive and unpleasant’.

The disproportionate focus on the capital would also make the country more liable to economic meltdown, he added.

He told New Start: ‘There is more insurance against economic collapse in an economy that’s more decentralised like the US, Germany and Australia.

‘We must have a serious debate about whether we want to be completely determined by a relatively small area of the country in terms of the future of our economy.

‘The government has taken the management of the growth of the London super-region extremely seriously in a way that has no parallels with the rest of the country.’

Professor Harding said the north must invest in Manchester and Leeds, its most valuable assets, to create viable alternatives to London.

‘Our economy is about knowledge now rather than manual processes. We must think about where the most talented workforce want to be – they want to be in London.’

Mark Gibson, director-general at the Department for Business, Enterprise and Regulatory Reform, denied that the Northern Way, the government’s strategy to reduce the north-south wealth divide, was not a priority.

‘The research and ideas [from the Northern Way] have influenced government policy,’ he said.

‘When you have the Northern Way backing their priorities it’s easier for central government to make decisions. We welcome analysis and we want it to influence government policy.’

He added the three northern regional development agencies had been given more funding than their counterparts in the south because they were more disadvantaged.

Meanwhile, speaking via a video link, business and enterprise secretary John Hutton said £3m would be invested in boosting research and policy analysis to create innovative ways of bridging the north-south divide.

He also announced the launch of the Northern Private Investment Commission, which will investigate the key barriers to greater private sector investment in the north.