1pm analysis

North-south divide gapes ever wider

As a new report shows increasing disparities in regional wealth, Guardian analysis editor David Walker calls for an energetic revival of subsidies

- David Walker
- guardian.co.uk, Monday 10 April 2000 13.24 BST

It's Kilfoyle's revenge. Since the Liverpool MP resigned in January a succession of reports and surveys have confirmed that there are hard, enduring and structural differences in the prosperity of the English regions, Scotland, Wales and Northern Ireland. The Cardiff report on competitiveness, released today, is the latest. What distinguishes it - and probably makes it all the more dismaying to read in Manchester, Swansea or Gateshead - is its future orientation. The northern regions, Wales and Northern Ireland are losing out in precisely those technologies and areas of knowledge from which the jobs and incomes of the 21st century are to come.

Peter Kilfoyle accused the Blair government of neglecting its "heartlands" - the parts of the United Kingdom from which it draws its traditional support. Blair's response was that within every region there are successful towns. He is right but it is a politically weak answer. The poverty and lack of opportunity on Merseyside and Tyneside are too physically apparent to be wished away by reference to growth in Chester or Newcastle's undoubtedly successful revival as a tourist destination.

What Kilfoyle has managed to do is put "regional policy" back on the map. He has revived an issue that had been consistently downgraded during the Tory era, on which Labour too had been none too keen when it took office. Whitehall is now hurriedly listing all the ways in which regional assistance is provided and Blair has become a convert to the possibility of transforming John Prescott's regional development agencies into embryonic democratic assemblies, allowing the regions to assert themselves.

Yet the Cardiff report is a chilling reminder of the size of the gap between north and south. Central intervention on a huge scale is going to be needed to boost productivity and introduce the new communications technology into the economic bases of Wales, Yorkshire, Humberside and the northeast. The report also shows that the government is going to have to swim against the economic tide which is washing so luxuriously around London's towers.

But there are ways in which the government can channel investment: if it invests in skills and infrastructure even the most southern-oriented company directors can be persuaded to relocate or set up a new shop in the north.

First, however, the government is going to have to concede the truth of the Kilfoyle critique. Labour's heartlands are suffering and only the most energetic revival of regional subsidy is going to help.