North’s economy worth billions more than Scotland, Wales and Northern Ireland

Ed Cox is director of IPPR North

Ed Cox is director of IPPR North

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The multi-billion pound value of the North to the UK’s economy is revealed today to eclipse the combined contribution of Scotland, Wales and Northern Ireland as the drive for devolution from Westminster intensifies.

Increased infrastructure spending, devolution of power and strengthened local democracy are needed for the region to “fulfill its untapped potential,” influential think tank IPPR North said, as it revealed the north contributed £83bn more to the economy than the three devolved nations.

Its new report examined growth over ten years, and found that the north contributed 19 per cent - £266bn - of the national economy in 2012, compared to 13 per cent for Scotland, Wales and Northern Ireland combined. Yorkshire and the Humber alone was responsible for 6.7 per cent - a staggering £93bn.

While the north grew at a slower rate over the decade than the devolved nations, the report showed that government spending on economic affairs had been highly skewed towards London and Scotland. Manufacturing remains keys to the north’s economy, but new growth has come from the financial, professional services and property sectors.

Last week, deputy prime minister Nick Clegg announced that Leeds, Sheffield and the surrounding areas would be next in line for major devolution of powers and budgets from Whitehall, and could be set for major transport improvements.

Ed Cox, Director of IPPR North, said evidence showed northern cities could bring “significant economic benefits” for the whole nation.

“The North’s potential is starting to be recognised,” he said. “In 10 years’ time, with the right leadership and with a revitalised local democracy, there is no reason why the north of England shouldn’t take its place alongside the most prosperous Northern European regions.”

Sheffield was highlighted as one of the fastest growing local economies in the north, expanding by 41 per cent over the last decade, and its Local Enterprise Partnership (LEP) was applauded from driving jobs growth - up 4 per cent since 2010.

James Newman, chairman of the Sheffield LEP, said, the region had a “central role” to play in the revitalisation of the North and rebalancing the national economy.

The LEP plans to create 70,000 new private sector jobs and 6,000 new businesses over the next ten years.

Wakefield Council leader, and chairman of the West Yorkshire Combined Authority, Coun Peter Box said the report added further support to the case for devolution of spending powers and decision making.

“By having more power to use money and resources where they are needed most, we can encourage growth, jobs and investment far more effectively than if those decisions were taken 200 miles away in Westminster.”

Leeds City Council leader, Coun Keith Wakefield said Whitehall decision-making “held back” the northern economy, taking decisions “that directly reduce our ability to grow”.

He said: “English devolution to the north has got to happen.

“We’ve shown we can produce twice the results at three times the speed with the resources under the City Deals, and we now need genuine control over transport, skills, housing and jobs without any strings attached so the Leeds City Region can become a net contributor to the UK economy in five years.”

A Government spokeswoman said it was working to “maximise the economic potential of the North” and build a more balanced economy.