Londoners confident of future economic prospects but Northerners despair as public sector job cuts bite

Published on Monday, 07 November 2011 16:04
Posted by Scott Buckler

More than a third (36 per cent) of people living in London think the capital’s economic future will be ‘better’ than the rest of the UK, compared with just 3 per cent of people living in the North, according to new polling published by think tank, IPPR North


The polling has been carried out by the think tank IPPR, the Wales Governance Centre (Cardiff University) and the Institute of Governance Edinburgh University).

When asked to compare the current economic situation of their region with the rest of the UK, 67 per cent of Northerners say it is ‘worse’, but only 19 per cent of Londoners think the same of the capital’s economy.

A new briefing by IPPR North points to the reason for the stark differences in levels of economic optimism. It shows that the pace of public sector job cuts is too fast for the Northern economy and that the private sector is failing to fill the gaps left behind, causing the North’s unemployment rate to accelerate at levels not seen for 16 years.

The briefing shows that public sector jobs in the North are being cut at an increasing rate, but public sector employment is growing in the South East.  Meanwhile the number of private sector jobs actually declined in the North East over the year June 2010 to June 2011.

In the public sector in June 2011 compared to June 2010 there were:

·        47,000 fewer jobs in Yorkshire and Humber

·        42,000 fewer jobs in the North West

·        41, 000 fewer jobs in the East

·        32, 000 fewer jobs in the North East

·        8,000 more jobs in London

·        24,000 more jobs in the South East

The North East and Yorkshire and Humber are the top regions for increases in unemployment in England. Over the last quarter compared with the previous quarter unemployment rose by:

·        1.5 per cent in the North East

·        1.1 per cent in Yorkshire and The Humber  

·        0.7 per cent in the South East

·        0.4 per cent in the West Midlands    

·        0.2 per cent in London          

·        0.1 per cent in the South West         

During the same period unemployment stayed the same in the East Midlands and East of England and fell slightly by 0.3 per cent in the North West.

The briefing also reveals that the number of 18-24 year olds claiming unemployment-related benefits in the North is now higher than at any point during the recession. The briefing argues that abolition of the Future Jobs Fund has resulted in more young people being long term unemployed in the North.

The percentage of 18-24 year olds claiming unemployment related benefit for over a year is:

·        1.10 per cent in Northern Ireland      

·        0.80 per cent in the West Midlands  

·        0.70 per cent in the North East         

·        0.50 per cent in Yorkshire and The Humber

·        0.50 per cent in the East Midlands   

·        0.50 per cent in Wales          

·        0.50 per cent in Scotland      

·        0.40 per cent in the North West        

·        0.40 per cent in the East       

·        0.30 per cent in London        

·        0.20 per cent in the South East        

·        0.10 per cent in the South West       

IPPR North argues that to help bring unemployment in the North down, the government should introduce a Northern Jobs Guarantee, applied on a targeted basis for all young people living in areas of high long-term unemployment in the North.

Ed Cox, Director of IPPR North, said:

“This new polling shows the huge gulf in economic confidence between London and the rest of England and highlights the need for a greater balancing of our economy so that the economic divide doesn’t grow.The national economy might still just be growing but for workers in the North the labour market already feels like it is back in recession. The government needs to do more to support young people in particular into work and should introduce a Northern Jobs Guarantee for those that have been unemployed for over a year. The government’s decision to abolish job guarantees for young people may leave a generation of young people scarred for many years to come.”

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