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In the Today Programme’s coverage of last week’s announcement of the Levelling Up Fund, presenter Nick Robinson introduced the chair of the North East Local Enterprise Partnership (LEP) in the piece by saying:
“You represent Newcastle itself, but lots of much poorer places frankly around Newcastle as well”.
Implicitly this statement assumes that big cities are automatically successful, and small towns are automatically struggling, an assumption that carried through the rest of the interview. The data shows this to be a dangerous assumption, and one that will do more harm than good to the levelling up agenda.
The table below shows data for the local authorities for the North East LEP. It shows that Newcastle local authority has the highest median workplace wages in the area. But it also has the lowest resident wages. And while it doesn’t have the highest claimant count in the area, it is higher than the more rural local authorities of Northumberland and County Durham.
|Local authority||Average median weekly workplace earnings, 2020 (£)||Average median weekly resident earnings, 2020 (£)||Claimant count, October 2020 (%)|
|Newcastle upon Tyne||465||422||7.5|
This data tells us three things:
Now let’s compare Newcastle to the national average. Even on workplace wages, its best performing of the three indicators here, it is below the national average. Given that the data above shows Newcastle (and Sunderland) to be important for providing prosperity for its wider area, this should be the most troubling statistic for anyone concerned about making people living in the North East more prosperous.
And it’s not just limited to the North East either. This pattern of wages is seen in and around most large cities in the north of England. It’s reflective of the underperformance of Britain’s large cities after London, which lag well behind their European counterparts. This underperformance costs, on conservative estimates, the UK economy just shy of £50 billion per year. This is bad for the people who live in these cities, for those who live round them, and the national economy as a whole. And given the size of this figure, it will be impossible for any government to level up if it does not address the under performance of the UK’s largest cities.
What this doesn’t mean is that there should be no investment in towns. Each place is likely to have its own specific challenges. And in principle the £4 billion in the Levelling Up Fund may help to address a selection of these challenges. This would be a good thing.
What would be bad for towns though is to assume that cities are already prosperous and the focus of levelling up should be on investing in towns. For those towns that are struggling (and many aren’t), while this argument may bring more investment, it will likely leave them worse off if the challenges of their nearest larger cities aren’t also addressed. And this will make levelling up even harder.
Newcastle is a poor place in a poor wider area. A key reason why the wider area is poor is because of the underperformance of its biggest city.
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