An attempt to descruibe what wouold make a successful Northern Economy.
All very nice, but almost none of it is about the economy. It\’s about governance a bit, about social matters a bit, but not really about the economy. Take this nice piece of wibble for example:
A successful northern economy will build on the heritage of skills and enterprise in all places, not just in cities considered economic drivers. It will value the vernacular, rather than trying to be like everywhere else. It will invest in the necessary technologies (including high speed rural broadband) to support this and build a culture of support and facilitation among local and central government agencies.
Apart from the fact that high speed broadband (as opposed to the dial up/ broadband difference) doesn\’t make any difference at all, it\’s just the usual ritual cant about inclusiveness isn\’t it?
There\’s three things that are wrong with the \”northern\” economy.
1) The exchange rate\’s too high.
2) Wages in one sector of the economy are too high.
3) The private sector is getting crowded out.
The solution is to cut government, cut wages (and taxes) and the exchange rate, well that\’s more difficult.
The thing is, the UK is not really an optimal currency area. Interest rates are set for the needs of the economy of London and the SE. The heavy industry and manufacturing that made the North rich in the first place (yes, much, much richer than southern parts like Somerset and Dorset way back when) gets screwed by haing them set to cool the housing markets down south.
In theory a more local currency, the \”northern pound\” could be introduced to deal with this. It won\’t be and the nef style things, much more local like the Brixton pound, won\’t help.
That\’s the part of the problem that we\’ll probably not solve.
We\’ve a national pay system for those working for the government. This has to go. The £28,000 a year you get as a nurse in Esher, Surrey, is in local terms near a pittance. It\’s damn good money in those places where a house is bought out of the newsagent\’s window for £5k (yes, these places do in fact exist). And it\’s not just nursing: civil service pay rates, the low, they\’ve all got to be locally based, not nationally.
Finally, the private sector getting crowded out. There are areas where 70 % and more of the economy is government: this is close to East Germany of old levels. It didn\’t work there then, isn\’t working here now. Part of that is those wages.
Abolish national pay bargains, abolish the national minimum wage, reduce the taxes and regulatory burden in those poor areas and see the private economy grow.