Last November’s referendum on an elected regional assembly for the North East gave the people in the region the opportunity to “have their say”. Throughout the referendum period, the government made it absolutely clear that the choice of whether to have elected regional government rested with the people. Of course we were disappointed with the result of the referendum vote – but we always said it was a matter for the people to decide, and we respect their decision.
But whether or not an elected assembly is established, the regional agenda remains important. We need to do things at the right level to deliver economic growth – our aim continues to be strong economies in all regions, offering opportunities for everyone to share in increased prosperity. For a decade or more, it has been recognised that there are issues which must be dealt with at a regional, rather than a national, level – but which need to be co-ordinated over an area larger than any single local authority. We continue to believe that decisions about the needs of regions are most effectively made in the regions themselves.
We’re not starting from a blank sheet – there’s already been a lot of progress, thanks to sustained economic growth, low inflation, low unemployment and low interest rates. We are proud of our achievements – since 1997 there are 33,000 more people in work in the North East, and long term unemployment in the region is down by 80 per cent. Building on this, a recent £16.5 million DTI grant will see a new state-of-the-art chemical facility on Teeside, with the prospect of securing existing jobs and creating more new ones. And Nissan has recently announced its continuing investment to manufacturing in Sunderland to the tune of £223 million. The North’s got richer, just as the nation has got richer.
But the South has continued to pull away, so a gap remains that must be closed.
An economic differential between North and South has built up, year in, year out, for over 50 years. The truth is that the economy of the North has been running a lap behind the South, and the gap’s widening.
The North pays the price for that differential in higher unemployment, lower skilled jobs, fewer business start ups, and a “brain drain” of some of its most talented young people. Northern people on average even have shorter lifespans and poorer health. It’s completely unacceptable. We all know that there is tremendous potential in the North. It’s a market of 15 million people – twice the size of London. Bigger than Scotland, Wales, and Northern Ireland put together.
Just think, if we could bring the three Northern regions up to the national average, the country would be £29 billion a year better off. If the level of employment was the same in the North as the South, a quarter of a million more people would be in work.
So to address these challenges, the North East now has strong regional economic leadership in the Regional Development Agency, OneNorthEast. In addition to this, the North East voluntary assembly has an important influence on housing, planning, transport, economic development and skills and training in the region. It plays a co-ordinating, strategic role with the full involvement of local authorities and other representatives of the region. And the RDA, the voluntary assembly, the Regional Housing Board, the Learning & Skills Council and other bodies will continue to play a vital role in creating sustainable communities. For example, the North East Regional Housing Board will channel a share of £65 million investment to tackle low-demand housing in the Tees Valley.
Building on the work within the North East, we also recognise that sometimes action is needed across more than one region. One of the best examples of regions working together is the Northern Way – a long term growth strategy to boost prosperity across the North and close the £29 billion prosperity gap with the South.
At the recent Sustainable Communities Summit we unveiled the latest phase in the action plan to drive forward the Northern Way. Some £10 million will be invested in pilot schemes to help get thousands of long-term unemployed people back into work, and finance other innovative projects to boost the North’s economy. In particular, we need to capitalise on the recent revival of our northern core city regions, harnessing the assets of areas like the Tees Valley and Tyne and Wear in a collaborative way, to drive the growth of the North as a whole.
This sort of activity shows real momentum to the regional agenda, and this government’s agenda for reform, change and modernisation means we will continue to decentralise and devolve power wherever we can. This government believes that regions are an essential part of the governance framework, and that it is vital that people engage in the decision-making process in order for this to be effective. We have already brought economic stability, lower unemployment and lower inflation to the country as a whole, but there’s always more to do – and our commitment to delivering the best possible future for all the regions remains as strong as ever.
