'Red Wall' communities to be hit harder by coronavirus recession than the South, report finds

Communities in the North will be hit more than twice as hard by the economic impacts of coronavirus than parts of the South, a new report has found.

Thursday, 21st May 2020, 5:45 am

The recession caused by the crisis, which Chancellor Rishi Sunak this week acknowledged would be “the likes of which we have never seen” will see an average fall of 12 per cent in permanent losses in economic output over the next five years across the so-called Red Wall, the Centre for Progressive Policy found.

It means areas in the North and the Midlands would be hit harder than communities in the South East, which would see average losses of five per cent.

And the impact will also be worse than the predicted eight per cent drop nationally.

Chancellor Rishi Sunak has warned that the UK is likely to face a severe recession the likes of which we have never seen and may not bounce back straight away from the Covid-19 crisis. Photo: PA
Chancellor Rishi Sunak has warned that the UK is likely to face a severe recession the likes of which we have never seen and may not bounce back straight away from the Covid-19 crisis. Photo: PA

The think tank’s report – Back from the Brink: Avoiding A Lost Generation – also found that average annual earnings in the 20 poorest local authorities would fall from £18,580 to £17,340 in real terms in the three years after lockdown.

Henri Murison, director of the Northern Powerhouse Partnership lobbying group, said: “These projections make it even more important that the government take the opportunity to invest heavily in the Northern Powerhouse to drive forward the UK economy as we emerge from this horrendous virus.”

Government ministers have been quick to reaffirm their commitment to the North, after it was feared the spiralling cost of fighting the coronavirus could cause them to renege on election promises.

The Red Wall crumbled at the 2019 general election in the face of the Conservatives’ advance, and the party has pledged to “level up” prosperity across the UK.

The Government said it remained committed to improving life across the country despite the cost of coronavirus, with Prime Minister Boris Johnson saying: “This is a Government that is going to pursue our agenda of uniting and levelling up across the whole of the UK”.

But the Centre for Progressive Policy report also predicted that 77 per cent of local authorities will not have recovered their expected level of output based on pre-crisis trends by 2024, and earnings will fall by an average of £1,600 in real terms over the same period.

It comes as data from Public Health England showed Yorkshire and the Humber had the most cases of coronavirus in the country in a 24-hour period.

The region had 30 out of the 79 cases diagnosed nationally from tests taken on Monday, while London reported none.

Some 2,329 people have now died after testing positive for coronavirus in Yorkshire, yesterday this rose by 22. Nationally 35,341 people have now died, a rise of 545 yesterday.

Charlotte Alldritt, director at the Centre for Progressive Policy, said: “While policymakers are rightly concerned with the immediate economic shock of coronavirus, history has taught us that recessions have deep and long-lasting effects, which are rarely spread evenly across the country.

“This crisis is clearly no different, with those ‘left behind’ areas on course to bear the economic brunt.

“The Government had already signalled its intent to ‘do right’ by voters who had lent them their vote but these communities have been let down by successive governments in the past.”

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