North East infrastructure spending still dwarfed by London's, says IPPR report

Newcastle North MP Catherine McKinnell believes there is 'no chance' of rebalancing the economy if situation continues

Labour Party politician Catherine McKinnell
Labour Party politician Catherine McKinnell

Hopes of rebalancing the economy will be dashed if a huge gap in infrastructure spending is not addressed, a MP warned in the wake of a new report.

Spending per head on projects in the North East stands at £223, the lowest rate in the country and completely dwarfed by that of London (£5,426).It means that for every £1 per person that is spent in the North East, London receives £24.33 per person.

The centre-left think tank the Institute for Public Policy Research (IPPR) says while the capital is benefitting from huge investment for projects like Crossrail and Thameslink, the gulf left in other areas is staggering.

The North East’s figure is also less than half of the figure for the South East, which spends £502 per head.

Ed Cox, director of IPPR North, said: “Effective infrastructure is the bedrock of an effective and efficient economy. Transport connections, flood defences and high-speed broadband networks all allow people and goods to move quickly from place to place and for business to flourish.

“It is widely recognised that the North of England loses out as government spending on infrastructure is continuously skewed towards London.”

Yesterday, Chancellor George Osborne backed the £15bn One North plan, which sees councils in Newcastle, Manchester, Liverpool, Leeds and Sheffield form an alliance to form an infrastructure plan which boosts growth and connectivity between cities in the North.

Ed Cox of IPPR speech
Ed Cox of IPPR speech

Mr Cox added: “The One North plan published this week provides a vision for the North, and George Osborne’s promise of more resources in the Autumn Statement is also welcome.

“But more must be done in order to tackle imbalanced investment and deliver the rebalanced economy that the government wishes to see.”

Catherine McKinnell, MP for Newcastle North and Labour’s Treasury spokeswoman, said the latest figures were shocking - but not a surprise.

“It’s no surprise the North East is losing out on infrastructure investment compared to other parts of the country, and particularly London – but these shocking figures show just how wide that gap is,” she said. “There’s absolutely no chance of genuinely rebalancing the UK’s economy if this continues.

“Cities like Newcastle need their fair share of funding and, crucially, the power to invest it as they see fit not as dictated by Whitehall.

“That’s why Labour has pledged to devolve significantly more funding and economic power to local areas, to invest in crucial areas such as transport, housing business support, employment and skills. The North East can deliver jobs and growth, but it needs the right support and tools to do so.”

A Treasury Spokesperson said: “A key part of the government’s long term economic plan is reversing the decades of under-investment in this country’s infrastructure.

“As the Chancellor has made clear, we have an opportunity to build a northern economic powerhouse by better connecting the cities in the North of England.

“This will be a centrepiece of the Autumn Statement, working with city leaders to deliver new infrastructure, new transport, and new local powers.”


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