Does Yorkshire get a fair deal from the Treasury?

Dr Peter O’Brien, Executive Director

On Tuesday, most children, including my two daughters, went back to school following the summer holidays. The same day, I was at Westminster, where a new term had started for parliamentarians about to embark upon one of the most crucial periods in the UK’s recent history, as the county leaves the European Union at the end of March 2019.

I was in London to attend a meeting of the All Party Parliamentary Group (APPG) for Yorkshire and North Lincolnshire, which had been called to discuss the balance of public investment made by central government in Yorkshire, compared to the rest of the country, and in particular London, and whether Yorkshire receives a ‘fair deal’ from the Treasury.

Setting out the case for the ‘uneven’ nature of government funding was Sarah Longlands, Director of ippr north, while the task of responding to the question of ‘unfairness’ fell to Robert Jenrick MP, the Treasury’s Exchequer Secretary. There is insufficient space here to outline all the arguments made at the APPG meeting, but in summary ippr’s case centred on a body of research evidence they had gathered to illustrate stark disparities in transport, education, research and cultural spending between the north and London, whilst the government admitted that, although there has been a long-standing geographical funding gap, overseen by governments of different political persuasions, that difference was narrowing under the current administration.

Two issues arose from the APPG meeting that are worth exploring further. First, is the importance of accepting the fact that, in total and on a per capita basis, London has received higher levels of investment in part for specific reasons – i.e. an increasing population that has driven and sustained a buoyant economy has also put pressure upon existing infrastructure and other services, and has therefore fostered demands for additional investment to release new capacity and mitigate what economists call the (negative) externalities of urban-centric growth. Public investment in London has also been complemented by significant private investment, as financiers have followed in the wake of government spending and identified projects that can best deliver higher and longer-term returns on investment in London, compared to other places. This does not undermine the valid case that there should be more investment in Yorkshire or other parts of the country, but as Andy Burnham, the Mayor of Greater Manchester said at the inaugural Convention of the North gathering yesterday, it can be a false choice to be forced to choose between investing in London or investing in the north of England as both areas need investment in the foundational assets of economy and society that are crucial to realising improved prosperity and well-being for current and future generations, especially in a post-Brexit era. And we should not ignore the symbiotic relationship that exists between London and other regions, which means that more investment outside London is beneficial for the capital in that it can create new demand for labour, goods and services. Second, some of the so-called ‘innovative’ mechanisms by which public and private sectors have determined and ultimately deployed infrastructure investment in London have been contingent upon specific national and local economic, social and institutional conditions. This means that certain funding and financing approaches that work in London may not be applicable elsewhere in the country. This requires government at all spatial levels, other public actors and the private sector to not only direct more investment outside London, but to also recognise the value of ‘place’. Fundamentally, we need more planning, governing and devolving decisions on where and how to invest resources that are based on evidence and an acute appreciation and understanding of the latent opportunities and untapped economic potential that exists in Yorkshire and other parts of the north of England, and how this contributes to the success of the UK as a whole.

  • Share this post: