Think tank claims regions imbalance

A THINK-TANK report has highlighted a “profound” economic imbalance between the UK regions, with areas such as the East of England acting as a “productive hub”, while other areas suffer from high welfare dependency.

A THINK-TANK report has highlighted a “profound” economic imbalance between the UK regions, with areas such as the East of England acting as a “productive hub”, while other areas suffer from high welfare dependency.

Whitehall's last colonies - breaking the cycle of collectivisation in the UK regions, published by the independent think tank Reform, claims that the heavy public spending increases of this decade have not helped challenged regions in the North-East, Wales and Northern Ireland in particular, where there is high welfare dependency and large public sectors.

The east of England has the lowest level of government spending per head of population, it says.

The report, by Professor Nick Bosanquet of Imperial College London, argued that the public spending increases may have increased the regions' dependence on southern taxpayers and further reduced their attractiveness to talented young people.


You may also want to watch:


It says the coming period of public spending slowdown gives an “opportunity” for a new policy direction for the UK north and Wales, based on private sector initiative and lower tax rates.

It argues that the trends in economic performance are worrying for both north and south, with the north facing further migration of young people and slower business formation, while the south faces greater congestion and rising living costs.

Most Read

The think tank says that the east of England, along with London and the south-east, is part of a productive hub of the UK, with a high population growth rate of 7.2% between 1991 and 2004, and many new young people migrating there each year.

It says it is second only to London in terms of the number of 20 to 29-year-olds moving to it each year. It was the fastest-growing region between 1998 and 2004 and ranks third in terms of new business formation. It has the second-highest level of research can development spending in the country, Reform says.

It also has a relatively low number of welfare dependents, with 13% of households with one or more members on incapacity benefits, with the lowest level of per head government spending in the country. Public spending is 30% of regional output, it says. The region pays 10.6% of UK personal tax, but only received 7.8% of UK public spending, it adds.

“The regional imbalance of the UK economy is already stark,” said Professor Bosanquet. “The danger is that it will become self-perpetuating, with some regions increasingly starved of talent and investment and reliant on income transfers from the south east, to the detriment of the UK as a whole.

“Public spending discipline and reduced taxation should make a major contribution to breaking the cycle of dependence.”

Become a Supporter

This newspaper has been a central part of community life for many years. Our industry faces testing times, which is why we're asking for your support. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community.

Become a Supporter
Comments powered by Disqus