North and South

I remember a friend at the UN telling me that some countries – Western Sahara was the example he used – are deemed unviable. This means that they can never earn enough to support themselves and industry will never go there because the lack of population and infrastructure would make any project uneconomic. I found it a terribly depressing thought – a people simply doomed to failure and welfare dependency.

Now, we learn, the same is true of some British cities. Billions have been poured in to northern regions over the years, and the think tank Policy Exchange says, rightly in my view, that it has all been wasted. Liverpool, we are assured by Edwina Currie in the Mail, has lost half its inhabitants in the last half century (normally one wouldn’t believe a word Mrs Currie wrote but in this case she is correct and actually the article is quite good).

The Policy Exchange document draw the rather odd conclusion that the people of northern cities should migrate south, to find work. David Cameron has, correctly, rejected this noisily (he wants the odd MP north of the Midlands at the next general election) but I hope it makes him think a bit. Bribing the north has been going on for years. I remember the car plants at Speke and in Scotland, Grey Areas, Development Areas, Economic Areas, all kinds of things. The new term is Regional Development Areas and since 1999 they have blown £15bn – largely for nothing. The income disparity between north and south has grown.

But if the northern towns are not to be emptied of their brightest and best, leaving an unemployable, welfare dependent rump, we have to do something, and something which does not involve chucking money at the problem. The Taxpayers’ Alliance suggests a reduction in small business tax rates, but whilst this would be welcome I am not sure how much of an incentive it would be. Regional tax holidays tend to attract weaker companies which depart as soon as the holiday runs out.

I think local solutions are the answer to local problems and these northern towns would benefit from localisation of decision making, beginning with directly elected mayors who have control of the business rates. The electorate would soon begin to vote for new thinking, realising, as the Labour Party does not, that the old thinking hasn’t done them any good.