This articlewas written by Patrick Butler, social policy editor, for The Guardian on Thursday 18th December 2014
Poverty charities and councils have warned that the government’s refusal to guarantee funding for local welfare schemes will force low income families in crisis to turn to food banks and loan sharks.
The government announced in January that it would no longer provide £180m central funding for local welfare assistance schemes operated by English local authorities after April 2015, triggering a cross-party revolt by Conservative MPs and council leaders, Labour councils and charities.
It is believed that the communities secretary, Eric Pickles, attempted to secure £70m for local welfare to announce in Thursday’s local government finance settlement, but was blocked by the chancellor, George Osborne.
The local government minister Kris Hopkins told the Commons on Thursday that there would be no additional funding for local welfare, although he encouraged councils to make further formal representations, raising faint hopes that the government may revisit the decision in February.
Local welfare provision offers emergency help for a range of vulnerable people who fall into unexpected crisis, including women fleeing domestic violence, homeless people, pregnant mothers, care leavers, pensioners and people suffering from chronic physical and mental health problems.
Some in Whitehall are understood to be concerned that cutting local welfare will provide additional fuel to critics who argue the government does not care about poverty. A cross-party report on food banks this month urged the government to protect local welfare assistance, saying food bank referrals would increase if it was not reinstated.
Hopkins said that although there would be no new funds for local welfare, ministers would outline a notional figure of £130m in the overall grant allocations to councils – a cut of £50m – although this would not be ring-fenced, meaning councils can spend it on other services.
Cllr Andy Hull, Labour-run Islington council’s executive member for finance, called the decision not to provide local welfare funding “an early Christmas present from the government for loan sharks and payday lenders.”
He added: “This safety net supports families to stay together, helps people sustain their tenancies and keeps kids out of care. It is a lifeline, not a luxury. Now, thanks to the government, it lies in shreds.”
The Local Government Association said almost three-quarters of local authorities will abandon or scale back local welfare schemes unless they receive government funding. Two county councils, Nottinghamshire and Oxfordshire, have already closed their schemes.
Alison Garnham, chief executive of Child Poverty Action Group, said:
“In the long-run tax payers will foot a higher bill if low-income families can’t stop a one-off, unforeseen expense from becoming a full-blown crisis – and the human cost will be high. For mothers leaving violent partners or youngsters moving on from homelessness or care, the schemes can make the difference between managing or not.”
Helen Middleton of the Furniture Reuse Network, whose member charities work closely with councils on helping low-income families, said the decision showed the government had “no real understanding of the levels of poverty in this country”.
Homelessness charity Centrepoint said young homeless people used local welfare schemes as a vital safety net:
“It’s completely unacceptable that young people who have fought to turn their lives around after facing homelessness are once again left to sleep on floors for lack of something as basic as a bed.
“Ministers must look carefully at responses from councils to this announcement and consider whether their proposal really reflects the level of poverty in many of our communities.”
Matthew Reed, chief executive of the Children’s Society, said:
“The government’s decision to reduce annual funding from £172m to £130m will make it harder for councils to support vulnerable families facing a crisis. The requirement that town halls fund their schemes from within existing budgets may create a postcode lottery for many families in poverty.”
Source – Welfare Weekly, 18 Dec 2014
A vote will take place later this month that will affect everyone in the UK – but only a tenth of us will actually get the chance to go to the polls.
Whether the Scottish Independence referendum results in a yes or a no vote – and the latest reports are that the vote could still go either way – the decision taken by 5.2m Scots will have implications for the other 58m people who live in England, Wales and Northern Ireland.
After trailing for most of the concern, the SNP appears to be gaining momentum ahead of the vote on September 18. A yes vote would make the North East a border region for the first time in hundreds of years, and even a vote to retain the union is likely to be so close that it will be followed by calls for greater devolution to the nations of the UK.
Any move in that direction would inevitably result in new calls to consider the essential contradiction of the devolution agenda followed by the Labour Government of the late 1990s: giving the Scottish and Welsh, and later the Northern Irish, the power to run their own affairs, but still having English matters decided by MPs from the UK as a whole.
The Scottish independence debate has also revived calls for greater power to be devolved from Whitehall to the regions. The North East decisively voted against a regional assembly in a referendum held in 2004 but all the main political parties will go into the next election promising to give more powers to the different corners of England.
In the latest poll run by Other Lines of Enquiry North, using their in-house Panelbase service, they asked people both in the North East and nationally for their thoughts on Scottish independence, whether England needs the same devolved powers as the other home nations and whether the regions should have more say over their affairs.
When asked whether people were worried about the impact of a yes vote in the Scottish Independence referendum, our respondents seem fairly relaxed:
57% of people nationally and 54% in the North East were not worried and only 33% both nationally and locally were concerned.
(Interestingly, the 18-24 age group – those thought to be most in favour of independence in Scotland – were the most concerned, while the next age group up (25-34) were the most relaxed.)
The strongest vote of the three questions in our poll came when people were asked: “Do you think England should be given the same devolved powers as Scotland, Wales and Northern Ireland?”
Here 60% of people nationally and 58% of people in the North East voted yes, compared to only 14% nationally and 13% locally voting no.
Such strength of feeling suggests a problem for the Government after the Scottish referendum. Even a no vote is likely to result in more devolved powers going to Edinburgh, but that would increase the calls from English activists for Scottish MPs to lose the power they currently have to pass legislation affecting England.
Finally, we asked people whether the regions of Britain should be given more devolved powers from Whitehall. Both Labour and the Conservatives have made great play in recent months of boosting the North, though cynics have suggested that all political parties are good at promising more to the regions when elections approach and less keen when the people in Whitehall is them.
Nationally 46% of people want more devolution to the regions, beating the 26% who don’t.
But this final question is the one where a significant gap emerges between our national and local respondents: in the North East the call for more local powers was much stronger, with 55% in favour of greater local accountability and only 17% against.
The poll also showed a big divergence in different age groups, with younger people in the North East almost exclusively in favour of the region getting more power from Whitehall while opposition grew among older people from the North East who responded to the poll.
Source – Newcastle Journal, 04 Sept 2014
The full challenge facing George Osborne’s plan to create a “Northern Powerhouse” is today highlighted by a former global banker who points to years of transport failures in the region.
Jim O’Neill, former chairman of asset management at Goldman Sachs, has published a report from his City Growth Commission in which he describes how the UK economy is being held back as officials in Whitehall keep control of local transport and infrastructure decisions.
The call to hand the North a bigger say over its own future comes weeks after the Chancellor said he wants to rebalance the economy away from the South East, with a major new high speed rail network linking up the likes of Manchester and Leeds among the projects proposed.
But without handing city leaders a say over improving outdated infrastructure, the commission says, the Chancellor faces a tough task in matching that ambition with real change.
In his report Mr O’Neill warned that meeting Mr Osborne’s ambition would require “significant change” from Government.
The report, based on hearings in Newcastle and other cities, says Metropolitan areas like Tyne and Wear must be given a bigger say over their own future. The commission found that the UK loses billions of pounds every year as a result of poor, overly-centralised decision-making that fails to encourage greater links between cities.
Plans for a new high speed rail network must be improved so links from the North are prioritised, the commission said.
Talking of the need to strengthen Northern “metro” areas, Mr O’Neil said: “We recommend the Government considers making two bold decisions regarding its infrastructure policy. The first is to provide metros with a strong, powerful voice that can influence and guide decision making at a national level.
“For too long, our cities have not had a seat at the table, and this has been to the detriment of Northern metros in particular, as well as the economic growth of the UK economy as a whole.
“The second is to place connectivity between metros at the heart of any infrastructure investment, in particular via multiple transport links between cities and better broadband technology.
“Whilst the UK is starting to move in the right direction – with the creation of Infrastructure UK and the Chancellor’s recent proposal for a connected ‘Northern Powerhouse’ – there is still some way to go.”
Those transport concerns were last night backed by Gateshead MP Ian Mearns, vice-chair of the All Parliamentary Rail in the North group.
He said: “The difference in spending on transport between London and ourselves is about 520 to one, and even just changing the funding system now will not address the historic deficit we face. Time and time again we have lost out, and will continue to do so while the Government makes spending decisions based on congestion rather than on helping us grow.”
The lack of a Northern advocate in Government has again been highlighted after yesterday’s Government reshuffle.
Former regional minister Nick Brown warned: “The position of the English regions is weaker now than before the reshuffle. The surprise announcement of William Hague and the dilution of Greg Clark’s City Minister responsibilities leaves the English regions even less represented than they were before. This is a Home Counties reshuffle.”
The Government recently went some way to addressing the transport issues facing the region with its local growth fund announcement. With local contributions, the Government decision paved the way for £95m of infrastructure improvements. A “Provisional Allocation” of £78.7m was also announced for a number of further schemes due to start in 2016.
Ministers have also recently signed off on a new North East super council, the Combined Authority, which they say will be used to devolve new powers down to city regions.
Source – Newcastle Journal, 16 July 2014
This article was written by Toby Helm, political editor, for The Observer on Saturday 14th June 2014
The Condition of Britain study by the IPPR thinktank, to be launched by Ed Miliband on Thursday, will also contain proposals to devolve large amounts of power and funding out of Whitehall, including the control of housing benefit to councils, in order to stimulate innovative housing policies and more housebuilding.
The project was set up in February 2013 as part of Labour’s policy review to consider how institutions and policies need to respond to today’s needs – including more childcare and better care for the elderly – within the confines of tight budgets and inevitable further cuts.
A key theme is expected to be that early intervention at every stage of life can prevent society having to continue “paying for the costs of failure”.
> “early intervention at every stage of life” – now isn’t that an ominous phrase ?
The report will argue that a stronger society can be built on the three “pillars” of shared power, contribution (through changes to the national insurance system) and strong institutions. While some proposals, such as a plan to freeze child benefit to fund a network of children’s centres, are likely to be rejected by Miliband, many of its central ideas will be considered by the party’s national policy forum in July.
The report is expected to look at whether benefit payments can be linked more closely to levels of contributions through changes to the national insurance system.
Senior figures believe that Labour must counter the impression that it supports a “something for nothing” benefits system by looking at radical change.
> Oh great – so it’s all about image and trying to appeal to those sectors of the electorate who wouldn’t vote Labour anyway. And once again those at the bottom of the pile will get a kicking… just so Labour look tough, just like the Tories.
Not a single original thought among them, is there ?
Writing on theguardian.com, the chair of the policy review, Jon Cruddas, suggests that such ideas could form a major part of Labour’s manifesto at the 2015 general election.
Looking ahead to the report’s publication, Cruddas says: “It sets out three broad strategies for social renewal: spread power and responsibility to build democracy and strengthen society; foster contribution and reciprocity to re-establish a sense of fairness and justice; and strengthen our shared institutions to help tackle social problems for good. These establish the foundations on which we can build a competitive wealth-creating economy.”
The report will contain proposals for a one-off levy of £450m on Britain’s £180bn consumer credit industry which the IPPR says could create enough affordable lenders to take on Britain’s legal loan sharks.
It says that, as well as a new legal cap on the total cost of credit, Britain needs a new generation of not-for-profit lenders with enough capital to compete with firms like Wonga, Quick Quid and Payday Express.
The IPPR launch will be followed later in the summer by Andrew Adonis’s growth review, which will focus on developing the economic potential of cities. Richard Leese, the leader of Manchester city council, will then publish work by his local government innovation taskforce setting out plans to redistribute power across England and reform public services so that they can be tailored better to meet local needs.
Source – Welfare News Service, 15 June 2014
Whitehall officials have been accused of trying to delay £760m of North East investment in a bid to find ‘election ready only’ spending projects.
Businesses and council leaders have jointly submitted a plan for growth as the region looks for a share of the Government’s £10bn local growth fund.
But after months spent compiling a wish list of jobs projects, including new railway lines and regeneration sites, ministers have now tried to force local enterprise partnerships to pick just a few priority schemes.
Cities minister Greg Clark has been told he risks setting back long term economic growth, with the leader of Newcastle Council Nick Forbes among those suggesting the move looks like an attempt to find an election boost.
If the Government insists on only funding schemes which are almost ready to go it would hand itself a list of ‘shovel ready’ projects that prioritise ministerial photo opportunities, city leaders have said.
Mr Forbes was among those who challenged the Government over its cash policy at a meeting with Mr Clark.
He said: “I raised the concerns when I met with Greg Clark last week. The Government haven’t just set a virtually impossible timetable for bids to the Local Growth Fund, they’ve changed the goalposts several times.
“Asking us, at the last minute, to prioritise schemes that are ‘shovel ready’ implies they are more concerned with projects that can be announced in the run-up to the election rather than those in the longer term interest of the region.”
The North East local enterprise partnership has refused to go along with the Government request, saying that it is wrong of the Government to ask businesses to spend months putting together a list of projects only to then change the criteria and ask for a new list with no clear indication as to how projects will be judged.
The region’s strategic economic plan will for now remain unchanged. Under the partnership’s preferred option, the Government would put £70m into a North East pot and let the region get on with building roads and clearing space for new firms. It would add to other cash for a North East Development and Investment Fund, handing the region £245m over five years to major developments.
If successful, the partnership says the overall plan could pave the way for an 11% increase in employment by 2024, suggesting some 10,000 jobs a year could be created.
Some £23m of local transport improvements are requested, including addressing traffic issues on the A185 and A19, work on the Lindisfarne Roundabout in South Tyneside and a Central Station Metro refurbishment.
Another £25m is asked for to pay for projects such as improvements to the A1 Scotswood Bridgehead, more work on the A19 near the Silverlink junction in North Tyneside and new funds to clear the way for roadworks behind Newcastle’s Central Station.
From 2016 onwards another £125m of funding is requested to help pay for the likes of a reopened Ashington, Blyth and Tyne railway, a new relief road for Durham City Centre, a link road for Newcastle Airport and Gateshead Town Centre regeneration.
Source – Newcastle Journal 12 May 2014
Until seven years ago, there was a secret room at Darlington station. Just off one of the platforms, between the standard-class waiting room and a cleaners’ storeroom, and set back behind three successive doors, it was small and plain: a desk, a grimy extractor fan and two windows made opaque to passing travellers by reflective material.
Tony Blair used this room when he was prime minister. His constituency, Sedgefield in County Durham, was a short drive away. When he needed to get to London, 260 miles south, he and his entourage would often catch the fast Darlington train, which can take less than two and a half hours.
More usefully still, many other key New Labour figures took the same line, among them Peter Mandelson, Alan Milburn and David Miliband. Altogether, the north-east of England, which contains about a 25th of the UK population, was represented by “a third of Blair’s first cabinet“, noted the veteran anatomist of British power networks, Anthony Sampson, in 2004. (Sampson was himself born in County Durham.) Rarely before had our remotest and often poorest region been such a hub of political influence.
> Of course it could be argued that their only real interest in the region was that it provided safe Labour seats – Mandelson got elected in Hartlepool ! Atriumph of blind devotion over common sense if ever there was one.
When Blair arrived early or his train arrived late, it was felt by Whitehall that the increasingly controversial premier could not just stand on a platform, waiting. Hence the secret room. Now, it is just the station manager’s office. The building around it has gone back to being a market town station with flaking paint and a fragile roof, where isolated passenger footsteps echo in the long middle-of-the-day lull and trains for Scotland and the south of England rattle through without stopping. No current cabinet minister has a north-east seat – only two of its MPs are Tories. Labour’s power base is now in London, Yorkshire and the north-west.
Since the Blair era, the area has slipped in other ways. Between 2007 and 2012, unemployment rose faster than in any other UK region, to more than 10%, the highest in the country. Throughout 2013, as joblessness receded in most of the UK, in the north-east it carried on rising. This year, it has begun to fall a little but remains the worst in the nation.
> And how much of that fall can be attributed to sanctions ? Quite a chunk, I’d guess.
Since 2007, the area’s contribution to national economic growth, measured as gross value added, has shrunk from an already weak 3% in the Blair years to barely 2%. The Northern Rock building society, with roots in the region going back a century and a half, has suffered a humiliating meltdown. The north-east has been, and will probably continue to be, especially harshly treated by the coalition’s spending cuts.
According to the Special Interest Group of Municipal Authorities, a typical council in the region will lose £665 in government funding per inhabitant between 2010 and 2018, the biggest national fall. Meanwhile, public sector employment in the region – the highest in England at more than one job in five – has been falling since 2009, a year before the coalition took office.
At Newcastle United, one of the north-east’s disproportionate number of fiercely followed, rarely successful football clubs, the recent sponsorship of the team shirt tells a similarly dispiriting story: Northern Rock from 2003-2011; Virgin Money, Northern Rock’s current, Edinburgh-based owners, from 2012- 2013; this season, the payday loan company Wonga.
Between 2011 and 2012, child poverty rates in Middlesbrough and Newcastle Central rose to 40% and 38% respectively.
“For as long as anyone alive will remember, this has been a ‘problem region’: a special case, a sick man,” wrote the Newcastle-born novelist Richard T Kelly in a 2011 essay, What’s Left For The North-East?
In recent years, some rightwingers have begun to throw up their hands. “It is at least as hard to buck geography as it is to buck the market,” said the influential Tory thinktank Policy Exchange in 2008. “It is time to stop pretending that there is a bright future for Sunderland.”
And last year the Tory peer Lord Howell suggested the region had “large uninhabited and desolate areas… where there’s plenty of room for fracking“. Weeks later, the Economist described Middlesbrough and Hartlepool as part of “Britain’s rust belt“; “Despite dollops of public money and years of heroic effort… [these] former industrial heartlands are quietly decaying.“
The magazine concluded with an unlikely but ominous comparison: “The Cotswolds were the industrial engines of their day. One reason they are now so pretty is that, centuries ago, huge numbers of people fled them.”
From Darlington, an old and scuzzy two-carriage train chugs east along a branch line towards Middlesbrough. Along the way, it stops at Thornaby-on-Tees, an ex-industrial town beside the river Tees. From the 1840s until the 1980s, the Head Wrightson ironworks here made everything from parts for bridges to parts for nuclear power stations; then foreign competition closed it.
In 1987, Margaret Thatcher visited the site and took a much-photographed walk across a yellowing wasteland of weeds and factory remnants, wearing an inappropriate smart suit but looking unusually pensive. Shortly afterwards, her government, seeking to soften its reputation as the hammer of the north, created the Teesside Development Corporation, and the wasteland was turned into the Teesdale Business Park, a US-style landscape of corporate lawns, car parks and low office blocks.
The blocks are still there, neat and anonymous except for the corporate logos: Barclaycard, the NHS, the privatised services firm Serco. The car parks are full of mid-range vehicles. For three decades, the north-east has been a centre for modestly paid clerical work, such as call centres and the “back office” administrative processes of companies based elsewhere. But at the Teesdale Business Park, “To Let” is the most common logo; some are so old, they have rotted and snapped off.
As with Thornaby, Middlesbrough is a flat riverside town that once grew fast because of iron foundries: from only 25 inhabitants in 1801 to 165,000 in the 1960s. The Victorian centre was built to a grid pattern, like a US boom town, with docks just to the north for exporting iron and coal.
But in 1980 the docks closed, the population began to fall, and a void opened between the town and the river. It is still there, starting a few yards from the town centre; a great windswept triangle of rubble and rust, boarded-up houses, Dickensian wall fragments and roads to nowhere. Derelict waterfront warehouses stand in the distance. A middle-aged security man in a peeling wood cabin guards them. “There’s lots of steel cable in those sheds,” he says. “And lots of people try to steal it.” When asked how long it has been so run-down, he shrugs and says without emotion: “As long as I can remember.“
The town’s population is around 138,000. To a visitor, the long, straight streets of the town centre seem eerily empty of pedestrians. At the sizable railway station, the weekday rush hour sometimes barely exists: at 8.30 on a Friday morning, I counted fewer than a dozen other people on the platforms. The station cafe had not bothered to open.
“If things carry on as they are now,” says Alex Niven, a leftwing writer from Northumberland, “in five years the situation will get somewhere like Detroit.” Several other authorities in the north-east that I interviewed invoked the long-imploding American city, unprompted.
He left the area 10 years ago, aged 18, and now lives in London. “Almost all my friends from school live in London now. When you go back to the north-east, the landscape’s kind of crumbling. There is this sort of sadness. It feels like a people who’ve been weakened, who’ve just been cut loose.”
Geography does not help. “The north-east is at the far corner of the country, but it is separated by more than just miles,” writes Harry Pearson, born near Middlesbrough, in his 1994 book The Far Corner.
“There is the wilderness of the Pennines to the west, the emptiness of the North York Moors to the south, and to the north, the Scottish border… Sometimes the north-east [seems] more like an island than a region.”
It is an island that the HS2 rail project is not currently intended to reach. Meanwhile, the prospect of Scottish independence and the near-certainty of more Scottish devolution threatens to marginalise the region further. “Scotland can already do more to attract inward investment than we can,” says Chi Onwurah, Labour MP for Newcastle Central. “More power for Scotland, in that sense, would not be a benefit for us.”
Pinned to a board in her constituency office is a list of Newcastle food banks. Outside, contrastingly, the grand city centre streets are much busier than in Middlesbrough, full of prosperously dressed people and big branches of the same upmarket chainstores as in richer places.
“Newcastle is the economic capital of the north-east,” she says, “but the centre, especially, is not representative of the region.” A few minutes’ walk farther out, cheap cafes offer soup of the day for a pound, and other scruffy businesses have long ceased to offer anything. “Every time I see a building boarded up,” Onwurah says, “it strikes fear into my heart.”
Onwurah grew up on a Newcastle council estate in the 60s and 70s. It was then a smoky, clattering centre for shipbuilding and other heavy industry, but these were in terminal decline. In 1984, she left to study electrical engineering, then worked away from Newcastle for a quarter of a century, until she was elected as MP in 2010. In the interim, the city reshaped its economy around tourism and nightlife, as an internationally hyped “party city“; around sport, with the 90s resurgence of Newcastle United; and around culture, with the opening in Gateshead of the Baltic art gallery in 2002 and the Sage music centre in 2004.
“It was a very heady time,” says Niven, who supports Newcastle United and as a teenager often travelled into the city from rural Northumberland. “The north-east has a brash, confident side. There’s also often a sense of slumbering potential, that one day a messiah or a revival will come.”
In the 90s and noughties, optimism was most concrete along the river Tyne, which separates Gateshead and Newcastle. Decaying canyons of quayside buildings filled with flash new bars, expensive flats, high-end office space and public art. It was easy to visit Newcastle – which I often did then – and think it was becoming a swaggering, economically self-sufficient provincial city, such as those you find in less centralised countries: another Marseille or Hamburg.
The quaysides are slightly less uplifting now. On the Newcastle side, several bars have shut down. Bridge Court, an enormous, empty office block, has a plaque that reads, “The foundation stone was laid by Mr Eddie George, governor of the Bank of England, on 22 September 1994“; another sign says, “Demolition. Keep Out“.
Niven sees the north-east’s revival under the Blair government as “largely superficial. In the long term, it didn’t lead to better jobs and infrastructure. You can’t base the revival of a region on nightlife and football.“
Onwurah, whose grandfather worked in the shipyards and whose mother grew up on the quayside, is less scathing: “Labour did a lot in the north-east, to stop the concentration of economic power elsewhere getting much worse, but we didn’t overcome the underlying issue. We haven’t got the previous sources of economic growth. And we haven’t got enough skills and entrepreneurs.” A successful region, she says, has a “critical mass” economically. “If you don’t have critical mass, to attract people and investment, you go into decline. We’re on the edge of that.” She holds up her hands and makes a flat, wobbling gesture: “We’re teetering.“
In Middlesbrough, the riverside wasteland has been earmarked for regeneration – as a new area called Middlehaven – for almost 30 years. Recessions, anxious developers and the town’s wider economic struggles have confined most construction to the area’s fringe. Yet there is one exception: an incongruous silvery curve of a building in the centre of the emptiness. Middlesbrough College opened in 2008; it houses engineering workshops, training kitchens, hair and beauty salons, and other vocational course facilities for 16- to 18-year-olds. In 2011, it was rated “good with outstanding features” by Ofsted. Walking down the college’s bright and warm internal street, seconds after being out in the dereliction, and seeing students at work in the glass-walled rooms or rushing back and forth, it seems absurd to think that Middlesbrough does not have a long-term future. But in the window of the in-house Jobs Shop, only half a dozen positions are offered. One is at a local seaside care home for the elderly: the successful applicant will earn £107.20 for a 40-hour week.
Further education is one of the north-east’s few growth industries. “Without it, I dread to think what some of the cities would be doing,” says Andy Pike, director of Newcastle University’s Centre for Urban and Regional Development Studies. “A lot of people want to come and study in the north-east” – academic standards are high, living costs low and the nightlife boisterous. But, Pike adds, “We have a problem with graduate retention: not as many stay as could do. It’s a thin labour market. The people who stay typically will not end up in graduate jobs. And then local non-graduates will be bumped out of the labour market altogether.”
> But the influx of students also puts a strain on rented accommodation. Certainly in Sunderland (which seems to be ignored in this article) its noticable that streets near to the university appear to becoming student-only ghettos – private landlords presumably looking to maximise profits by packing them in.
In the north-east, the increasingly de-skilled, low-paid labour market of Britain under the coalition is at its meanest. Full-time wages are the lowest of any UK region.
In 2007, the Middlesbrough Institute of Modern Art, or Mima, cheekily echoing New York’s Moma gallery, opened on a redeveloped square in the town centre. It looks the part: slick, glassy exterior; high-ceilinged interior; dozens of attentive young staff in Mima T-shirts. It offers an ambitious programme of community events and exhibitions – currently, Art And Optimism In 1950s Britain. Yet a gallery cannot make a town centre vibrant by itself. On Thursday evenings, it opens late, but on the Thursday I visited I saw four other visitors in half an hour.
Since the 1930s, governments have tested regeneration projects in the region. Edward Twiddy is one of the latest reformers to be despatched from London. Since 2012, he has been head of the North-East Local Enterprise Partnership (Nelep), a typically optimistic coalition creation, which aims to get business and local councils – almost all Labour – to work together for the area’s economic benefit.
Twiddy previously worked at the Treasury and for the Foreign Office in Iraq. He is slight and cerebral-looking, and speaks mostly in fluent Whitehall jargon. “The region’s still going through some fairly big structural changes,” he tells me. “The north-east was over-specialised – in coal, for example. Nowadays, people need to be able to approach life differently. You’ve got to be able to travel, to be competitive… Economic activity will move [away] if you cannot convince the market that yours is the right place to work.” But even Twiddy is off: he is set to leave Nelep for Atom, a new digital bank to be based “in the north-east“.
I ask how many staff Nelep has. Twiddy pauses: “The core is four. Then there are people doing discrete pieces of work for us, people loaned to us, people I’ve scrabbled around for, got a few pennies for… There are about 11 or 12 of us in all.” Nelep replaced One North-East, a regional development agency created by the Blair government that had 400 staff.
Yet there is a more economically independent side to the region. A few miles east of the centre of Newcastle, a side road leads steeply downhill to a half-hidden stretch of the Tyne. In the early 1980s, the quays here were a rotting ladder of derelict docks and slipways. Then two local property developers, Freddy and Bruce Shepherd, began to buy the land, clean it up, reuse the old cranes and rent out the quaysides: first to companies involved in North Sea oil, then to others involved in undersea cable-laying and offshore wind power.
Shepherd Offshore now stretches along the Tyne for miles. In its riverside boardroom, with giant reels of cable as tall as tugboats looming outside the windows, Twiddy makes the introductions over coffee served in Versace mugs. The Shepherds are heavyset men with fierce handshakes and slightly loose tongues. “We are the raggy end of the couch up here in the north-east,” Bruce says. Freddy interjects: “We get nothing easy. Not off the government. Without us, there would be nothing here but two abandoned shipyards.” “Up and down the river, we’re close knit,” Bruce says. “There are more than 2,500 jobs. We’re a manufacturing base. We train people. But we’re forgotten down here.”
How many jobs were there in the days of the shipyards? “Six and a half thousand,” Freddy says. “I was an apprentice in the shipyard here. You’re never going to get back to those numbers.”
Bruce offers a tour of the quay in his spotless Range Rover. As we drive, he points out other cars parked nose to tail at the roadside: “There’s never enough parking. The number of people working here keeps growing.” We leave the road and enter a muddy construction site, scheduled to house a new national research centre for offshore and undersea technology, a collaboration between the Shepherds, Newcastle city council and Newcastle University. Bruce ploughs through puddles, his property developer’s patter in full flow, then stops his spattered Range Rover at a fence that faces the famous old Swan Hunter shipyard. It is still a wasteland, but new developments are encroaching from all directions.
Another sign of entropy reversed would be to attract more southerners; not just to study but to work. Twiddy is one. Tony Trapp is another. Raised in London, he has been one of the area’s handful of legendary entrepreneurs since the 70s. Then, he helped invent an undersea plough for laying seabed pipes and cables by driving a specially adapted tractor up and down a beach in Northumberland. Several companies and clever products later, he now runs Osbit Power, which makes self-stabilising gangways to connect offshore wind turbines to maintenance vessels.
The enterprise is based in a previously derelict hotel in sweeping Northumberland countryside. Behind its unkempt walls, purposeful-looking young employees cluster at desks or in front of whiteboards, while Trapp, a creased man of 68 with a murmuring voice but an intoxicating can-do aura, briefs them and holds court. “I’ve always based my businesses on clever graduates,” he says later. “I’ve taken on hundreds, some from Newcastle University, from Northumbria University. For offshore engineering, the north-east is the best place in Europe.“
But in other ways he sees the local economy as still underpowered. “Persuading clever people from the south to come here is quite hard. It’s not just the image they have of the north-east – it does have the worst statistics, in health, in booze… If you look at many CEOs of big companies here, they don’t live up here. They live in Surrey, London. It’s insulting, in a way.” For a second, he looks his age. “I don’t have the solution to the north-east.”
It is not Twiddy’s job to voice such doubts. Instead, he takes me to the coast, not far from where Trapp tested his undersea plough. It is a brilliant blue day, and the often luminous north-east light is at its most seductive. We drive into the small town of Blyth, where there has been a port since the 12th century, which suggests the region has more staying power than the doom-mongers claim. We approach a cluster of shiny, towering blue-grey sheds, where the National Renewable Energy Centre tests blades for offshore wind farms. In December, the government increased its subsidy for this source of electricity, a rare gift from Whitehall to the north-east in the age of austerity. Twiddy sounds like a small boy for a moment: “The crane for lifting the blades is just amazing!“
We walk to one of the windowless sheds. Inside, spot-lit, suspended above an expanse of polished concrete floor, a single pale grey blade, with weights and cables attached to it, flexes slowly up and down, vast and stately as the tail of a whale. The only sound is the hum of the air-conditioning. In a space the size of a small cathedral, but clean and tidy as a science lab, only two employees are visible: distant, purposeful figures in dust coats.
Working here looks much better than working in a chilly shipyard, a call centre or a nightclub, or for most of the region’s previous economic saviours. But Mill says the centre has a staff of 69. The north-east will need an awful lot more workplaces like it this if it is going to stop teetering.
Source – The Guardian 10 May 2014
A Labour Government would appoint a Minister for the North East to ensure the region has a strong voice at Westminster, it was revealed today.
Ed Miliband would appoint a Minister for each English region in a bid to ensure the entire country received a fair deal from Government, and to help businesses in their regions attract investment from across the world.
The manifesto commitment came as Miliband also announced plans to divert £20bn in funding from Whitehall to local councils, to spend on improving transport links, building houses, providing training and creating jobs.
To qualify for the cash, councils would need to work together to create a “combined authority” – giving the North East an advantage, as it is one of the first regions to create such an authority.
They would also need to work closely with the local business community and draw up showing how they would use the money to create jobs in the private sector.
The North East had a regional minister under the last Labour government, with the post being held by Newcastle MP Nick Brown.
A Labour government would appoint nine regional ministers, who would sit on a new Regional Committee chaired by the Minister for the Cabinet Office.
Their duties would include helping local councils, central government and Local Enterprise Partnerships, the economic development bodies led by the business community, to work closely together.
They would also champion their area in Whitehall and ensure that the impact of policy proposals on every part of the country is considered.
Regional ministers will work with other Ministers such as the Business Secretary to implement an industrial strategy to create jobs in every part of the country.
And they will encourage tourism and act as a visible representative of their region at major events.
Speaking in Birmingham, Mr Miliband set out plans to strip national government of billions of pounds and send the cash directly to the regions of England for local politicians to spend.
But warned that funding will go to “city regions” and “county regions” where authorities have come together to create a combined authority.
So far, councils in the Greater Manchester area, South Yorkshire, West Yorkshire and Greater Liverpool regions have created combined authorities – and the North East is about to create its own combined authority bringing together Durham, Gateshead, Newcastle upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland.
Mr Miliband is announcing that plans to devolve £20bn over the course of the next Parliament to combined authorities will be included in Labour’s General Election manifesto.
He said: “Labour’s message at the next election will be clear:
“Devolving power from Whitehall to our towns and cities is essential to generate the new jobs we need.
“We propose a new bargain: Cities and towns that come together with local businesses will be given historic new powers over transport, housing, skills and economic development.
“We are determined to make our great cities and towns the powerhouses for the creation of good jobs.”
> But he still seems set to continue on the same lines as the Tories regarding unemployment and benefits, so for most of us it’ll probably just be a case of “meet the new boss, same as the old boss.”
Source – Newcastle Journal 08 April 2014
This article was written by Larry Elliott, economics editor, for The Guardian on Monday 17th March
The scale of Britain’s growing inequality is revealed today by a report from a leading charity showing that the country’s five richest families now own more wealth than the poorest 20% of the population.
Oxfam urged the chancellor George Osborne to use Wednesday’s budget to make a fresh assault on tax avoidance and introduce a living wage in a report highlighting how a handful of the super-rich, headed by the Duke of Westminster, have more money and financial assets than 12.6 million Britons put together.
The development charity, which has opened UK programmes to tackle poverty, said the government should explore the possibility of a wealth tax after revealing how income gains and the benefits of rising asset prices had disproportionately helped those at the top.
Although Labour is seeking to make living standards central to the political debate in the run-up to next year’s general election, Osborne is determined not to abandon the deficit-reduction strategy that has been in place since 2010. But he is likely to announce a fresh crackdown on tax avoidance and measures aimed at overseas owners of high-value London property in order to pay for modest tax cuts for working families.
The early stages of the UK’s most severe post-war recession saw a fall in inequality as the least well-off were shielded by tax credits and benefits. But the trend has been reversed in recent years as a result of falling real wages, the rising cost of food and fuel, and by the exclusion of most poor families from home and share ownership.
In a report, a Tale of Two Britains, Oxfam said the poorest 20% in the UK had wealth totalling £28.1bn – an average of £2,230 each. The latest rich list from Forbes magazine showed that the five top UK entries – the family of the Duke of Westminster, David and Simon Reuben, the Hinduja brothers, the Cadogan family, and Sports Direct retail boss Mike Ashley – between them had property, savings and other assets worth £28.2bn.
The most affluent family in Britain, headed by Major General Gerald Grosvenor, owns 77 hectares (190 acres) of prime real estate in Belgravia, London, and has been a beneficiary of the foreign money flooding in to the capital’s soaring property market in recent years. Oxfam said Grosvenor and his family had more wealth (£7.9bn) than the poorest 10% of the UK population (£7.8bn).
Oxfam’s director of campaigns and policy, Ben Phillips, said: “Britain is becoming a deeply divided nation, with a wealthy elite who are seeing their incomes spiral up, while millions of families are struggling to make ends meet.
“It’s deeply worrying that these extreme levels of wealth inequality exist in Britain today, where just a handful of people have more money than millions struggling to survive on the breadline.”
The UK study follows an Oxfam report earlier this year which found that the wealth of 85 global billionaires is equivalent to that of half the world’s population – or 3.5 billion people. The pope and Barack Obama have made tackling inequality a top priority for 2014, while the International Monetary Fund has warned that the growing divide between the haves and have-nots is leading to slower global growth.
Oxfam said the wealth gap in the UK was becoming more entrenched as a result of the ability of the better off to capture the lion’s share of the proceeds of growth. Since the mid-1990s, the incomes of the top 0.1% have grown by £461 a week or £24,000 a year. By contrast, the bottom 90% have seen a real terms increase of only £2.82 a week or £147 a year.
The charity said the trends in income had been made even more adverse by increases in the cost of living over the past decade. “Since 2003 the majority of the British public (95%) have seen a 12% real terms drop in their disposable income after housing costs, while the richest 5% of the population have seen their disposable income increase.”
Osborne will this week announce details of the government’s new cap on the welfare budget and has indicated that he wants up to £12bn a year cut from the benefits bill in order to limit the impact of future rounds of austerity on Whitehall departments.
Oxfam said that for the first time more working households were in poverty than non-working ones, and predicted that the number of children living below the poverty line could increase by 800,000 by 2020. It said cuts to social security and public services were meshing with falling real incomes and a rising cost of living to create a “deeply damaging situation” in which millions were struggling to get by.
The charity said that starting with this week’s budget, the government should balance its books by raising revenues from those that could afford it – “by clamping down on companies and individuals who avoid paying their fair share of tax and starting to explore greater taxation of extreme wealth”.
The IMF recently released research showing that the ever-greater concentration of wealth and income hindered growth and said redistribution would not just reduce inequality but would be economically beneficial.
“On average, across countries and over time, the things that governments have typically done to redistribute do not seem to have led to bad growth outcomes, unless they were extreme”, the IMF said in a research paper. “And the resulting narrowing of inequality helped support faster and more durable growth, apart from ethical, political or broader social considerations.”
Phillips said: “Increasing inequality is a sign of economic failure rather than success. It’s far from inevitable – a result of political choices that can be reversed. It’s time for our leaders to stand up and be counted on this issue.”
Landed gentry to self-made millionaires
Duke of Westminster (Wealth: £7.9bn)
Gerald Grosvenor and his family owe the bulk of their wealth to owning 77 hectares (190 acres) of Mayfair and Belgravia, adjacent to Buckingham Palace and prime London real estate.
As the value of land rockets in the capital so too does the personal wealth of Grosvenor, formally the sixth Duke of Westminster and one of seven god parents to the new royal baby, Prince George.
The family also own 39,000 hectares in Scotland and 13,000 hectares in Spain, while their privately owned Grosvenor Estate property group has $20bn (£12bn) worth of assets under managemenSpaint including the Liverpool One shopping mall, according to leading US business magazine Forbes.
Reuben brothers (£6.9bn)
Simon and David Reuben made their early money out of metals. Born in India but brought up in London, they started in local scrap metal but branched out into trading tin and aluminium.
Their biggest break was to move into Russia just after the break-up of the Soviet Union, buying up half the country’s aluminium production facilities and befriending Oleg Deripaska, the oligarch associate of Nat Rothschild and Peter Mandelson.
The Reuben brothers are still involved in mining and metals but control a widely diversified business empire that includes property, 850 British pubs, and luxury yacht-maker Kristal Waters. They are also donors to the Conservative party.
Hinduja brothers (£6bn)
Srichand and Gopichand Hinduja co-chair the Hinduja Group, a multinational conglomerate with a presence in 37 countries and businesses ranging from trucks and lubricants to banking and healthcare.
They began their careers working in their father’s textile and trading businesses in Mumbai and Tehran, Iran but soon branched out by buying truck maker, Ashok Leyland from British Leyland and Gulf Oil from Chevron in the 1980s, while establishing banks in Switzerland and India in the 1990s.
The family’s London home is a mansion on Carlton House Terrace, overlooking St James Park and just along fromclose to Buckingham Palace, which is potentially worth £300m. They have links with the Labour party.
Cadogan family (£4bn)
The wealth of the Cadogans family is built on 90 acres36 hectares of property and land in Chelsea and Knightsbridge, west London.
Eton-educated Charles is the eighth Earl of Cadogan and ran the family business, Cadogan Estates, until 2012 when he handed it over to his son Edward, Viscount Chelsea.
Charles, who is a first cousin to the Aga Khan, started in the Coldstream Guards before going into the City.
He was briefly chairman of Chelsea Football Club in the early 1980s and his family motto is: “He who envies is the lesser man.”
Mike Ashley (£3.3bn)
Ashley owns Newcastle United football club and became a billionaire through his Sports Direct discount clothing chain which he started after leaving school.
He was the sole owner of the fast growing business, which snapped up brands such as Dunlop, Slazenger, Karrimor and Lonsdale, until it floated on the stock market in 2007. He now owns 62%.
Ashley is a regular visitor to London’s swankiest casinos but is famously publicity-averse
Source – Welfare News Service, 17 March 2014
A new super council will be formed on April 1, allowing the North East to compete for millions of pounds in Government funding.
After months of internal rows and territorial battles, the North East’s seven council leaders have secured Government backing to form a Combined Authority.
The move means, for example, that decisions over major transport and jobs investment in Northumberland or Newcastle must be made only after the views of the other council leaders have been taken into account.
There will be no changes to local councils, with voters still electing their local councillor and the same group collecting bins and looking after those in care.
> But we won’t get to vote in matters directly involving this super council ?
But behind the scenes the North East Combined Authority will be seen as the lead voice for the region in Whitehall.
The seven leaders, and their chief executives, will share decision making over skills, transport and investment, have the chance to secure control over any devolved Government budgets and a say in how the region bids for the £2bn Government Growth Fund.
> And no doubt they’ll also share an extra wad in their pay packets.
Cities minister Mr Clark has told MPs he thinks it is “a huge advance in the North East” and called for council leaders, MPs and other jobs groups to come together to formally discuss with him the next steps for the region.
> And will we – those most affected by any decisions – have any input ?
Former regional minister Nick Brown recently secured a series of regular meetings with the cities minister amid concerns the region’s case was not being heard in parliament.
Last night he told The Journal: “If we want access to the money we have to comply with the Government’s preferred structures, and it is very important that members of parliament are involved and can represent their constituents.”
The combined authority sees Durham County Council, Gateshead Council, Newcastle City Council, North Tyneside Council, South Tyneside Council, Northumberland County Council and Sunderland City Council form a legally binding structure with the power to borrow cash and the responsibility to share risk.
Simon Henig, the Durham council leader set to chair the combined authority, said: “Working together is the best way to promote jobs and growth and to secure devolution of funding, powers and responsibilities from Government.
“We share ambitious plans for the future of our area and we are determined to work together to deliver them.
“We are therefore delighted to receive today’s news from Cabinet Office and look forward to the necessary formalities being progressed so that we can launch on April 1 this year. This is an important and exciting moment in our history and we are ready now to deliver on our ambitious plans.”
Hopes of forming a combined authority had appeared slim earlier this year when Sunderland Council had halted the process amid concerns that Newcastle would hold too much influence.
Ministers, civil servants and council officials put pressure on Sunderland to drop its objections, but it was only once leader Paul Watson secured a stronger negotiating hand on the leaders’ board that it could go ahead.
There were then further delays when Sunderland decided to hold out for a multi-million pound investment package from the Government for Wearside before going ahead.
This Sunderland City Deal, set to see some £50m spent on a new business park based around Nissan, is now in the final stage of negotiations.
> So it’s all decided, signed, sealed and delivered. You had no input, it doesn’t appear you’ll ever get the chance for meaningful input… but then, this is all about the really important people, like councillors and businessmen. Business as usual, in fact.
Source – Newcastle Journal, 06 March 2014
Alarm bells should sound for the region’s economy as the North East drops behind Wales for average pay.
For the first time in years people in Tyneside, Northumberland and County Durham are taking home a lower average salary than those in Wales.
The drop in pay is proof that the region needs a dedicated economic steering group, argues policy experts from the Trade Union Congress.
“The figures are significant because Wales is better equipped as a region economically. I do worry about the North East with what’s going on in Scotland in that we will be left with no real tools to make the level of difference that we need and that people in this region deserve,” said Neil Foster, policy and campaigns officer for the TUC Northern Region.
Figures from the Office of National Statistics (ONS) show that the North East was the worst paid region in the UK in 2013 with an average salary of £24,084. In London pay is £35,238 a year, and the UK average is £27,017.
Average pay in Wales is just £100 more a year on average at £24,182, however the country has regularly been used as an economic indicator to judge the North East’s progress.
Mr Foster said: “There’s lots of similarities between the North East and Wales so the fact that we have gone behind them should ring alarm bells.
“The fact that we have slipped behind Wales is significant because they have got an assembly with the economic powers to stimulate the economy and provide good quality jobs in the most productive sectors.
“The fact that we don’t have a Regional Development Agency means we should be saying to Whitehall that they must devolve economic powers to our regions. If you are given the tools you can create economic prosperity.”
The TUC said the latest pay figures show a rise on paper, however inflation meant a real terms cut.
The statistics show that in the North East the average wage was £17,430 in the year 2000, rising to £24,084 last year. This 38.1% increase in wages was the slowest percentage increase anywhere in the UK.
In 2000 a North East resident earned £1,418 less than the national average, but by 2013 this had grown to £2,933, demonstrating a cut people’s spending power.
Pay in London has continued to rise faster than almost anywhere in England, however Scotland has risen the fastest with their average annual wage up 46.8% from £18,029 in 2000 to £26, 472 in 2013.
Reintroducing a regional economic governance body is the only way to put the North East back on track, Mr Foster argues.
“I don’t think it’s inevitable the North East has to be the lowest paid region but unless there is change, it will be very difficult to predict with any confidence that things will be getting better soon,” he said.
Earlier this week TUC Northern Secretary Beth Farhat said ONS figures also revealed a worrying trend for women in the North East as there has been a 20% rise in female unemployment in the last 12 months – from 49,000 up to 59,000.
Source – Newcastle Journal, 28 Feb 2014