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Tuesday 9 May 2017

General Election 2017: The Economic Arguments Considered (Part I)

When we talk of a divide within society, we usually assume it’s between rich and poor. But can a geographical divide, as well as a rich and poor, exist in Britain?

From the rise of UKIP, to the victory of the SNP in 2015 and the ‘Yes’ vote in the EU referendum, we as a country have experienced a radical change in the political landscape. At the beginning of the century, we would never have contemplated such radical changes. Now we have the delights of potentially another radical change, due to the calling of another general election by Prime Minister Theresa May.

With such radical changes happening over the past few years, the people of the UK, and it may appear the rest of the Western World, feel marginalised and tired of the status quo. For this election, an appeal to the ‘ordinary working man’ will be the sole focus of the competing political parties. However, a feeling of marginalisation and the apparent differences between the North and South of England, has potentially become the unofficial campaign slogans.
   
The difference between the North and South of England has become a key aspect in past elections. The difference in terms of living standards, income distribution, allocation of state funds, and public services has created a divide or ‘two countries’. Although, of course, Brexit will loom like a large shadow over the election, the causes of the dissatisfaction of many throughout the UK will still be present. Therefore, the political parties will have to take this into consideration on the campaign trail.
When comparing the funding for the North and South, it’s clear that this effects not only the feelings, but also the per capita income of the people living in the regions. According to the Office of National Statistics (ONS), London was the highest preforming region with an on average £42,666 being contributed per person. By contrast the North of England and the West Midlands contributed under £21,000 on average per person.  It is clear from these statistics that the underfunding of the North and Midlands has created an ‘income gap’ between the North and South. To further illustrate my point the South-East England contributed just over £27,000 on average per person. 

The disparity between the funding of the North and South has been developed under the previous Conservative government’s flagship policy ‘The Northern Powerhouse’. Although this policy seeks to address the divide, it has fallen short of producing real change for the vast populations of Northern England. According to the Northern Powerhouse website, £3.4 billion has been allocated to North growth deals, £70 million for school strategy and £13 billion on transport. But has this figure done enough to satisfy the Northern electorate?

It is difficult to determine whether this has. However according to former Treasury Minister Lord O’Neill (ex-Goldman Sachs banker and recruited by the former Chancellor George Osbourne to help with the project), May’s government has not “embraced” the project; rather Mrs May’s stance towards the project has been “disappointing”, stating “they seem to be tolerating, rather than embracing it”.

Although this may appear to be the case, the current government has pledged £556 million of new funding into the project. New funding, although welcome by politicians of the North, doesn’t necessarily mean it will be distributed fairly. According to the Guardian, Greater Manchester will receive £130.2 million whilst Liverpool and the surrounding areas will only be receiving £72 million in new investment. It concludes “Greater Manchester, which has a population of 2.6 million people, will benefit from nearly twice as much funding as Liverpool, which will receive £67.5m for its population of 3 million people”. Funding for the North of England, although a good thing, can still put the Conservatives at an electoral disadvantage if it is done unevenly. Not only will a deprived or underfunded region of England still be funded less, in comparison to the South, but unequal distribution of fund can lead to still lead to the electorate feeling marginalized, within a region that already is.


If May’s government does not appeal to these voters she could potentially find it difficult to take seats from Labour in the North, or prevent those seats from switching to the Liberal Democrats or turning Green. It is further clear (and this will be the subject of my next article) that Labour too must present policies in the general election that will present a clear and coherent industrial strategy to the Northern electorate, which not only encapsulates the growing desire for change but also for secure economic futures. 

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