Article Published February 26th, 2021

by Joyce Quin

Photo credit: UK Parliament/ CC BY 3.0

The Rt Hon. Baroness Joyce Quin is a member of the House of Lords.  She previously served in both the European Parliament and the House of Commons where she was MP for Gateshead. She was a government minister between 1997 and 2001 including being Minister for Europe.  She currently chairs the Board of Tyne and Wear Archives and Museums and is the President of the Federal Trust.

 

 

The North East of England has a population of 2.6 million people. This is less than Wales (3.1 million) but more than Northern Ireland (1.8 million).  The region is at the heart of the ancient kingdom of Northumbria which in its heyday stretched from the Firth of Forth in the north to the Humber in the south.  Even today the region is distinctive in a number of ways and is geographically more clearly delineated than many “regions” of England given that the populous area is surrounded by large tracts of national parks and areas of outstanding natural beauty – the Cheviot hills to the north, the North Pennines area to the west, and Tees Valley and the north York moors to the south.  The region has cultural distinctiveness too through its extraordinarily rich folk song tradition and its regional instrument the Northumbrian smallpipes.

The area, as is well-known, also has a distinct industrial history.  Coal mining occurred from the 12th century onwards and shipbuilding from at least 1400 – an industry celebrated by Daniel Defoe when he visited Newcastle and the Tyne in 1724 in his tribute ”they build ships here to perfection”.  Coal and shipbuilding was followed by steel from the eighteenth century onwards.  The region has an identifiable capital in the city of Newcastle upon Tyne.  Often thought outside the region of as just another Victorian industrial city the truth is that Newcastle, like London, goes back to Roman times and has had a history of continued importance ever since.  Like London it had a Mayor from the beginning of the 13th century onwards.  It was also a fine medieval walled city – a city, whose walls were described by John Leland, Royal Antiquary to Henry VIII, in the words “the strength and magnificence of the walling of this town passeth all the walls of the cities of England and most of the towns of Europe.”  However, unlike many other prominent medieval cities Newcastle also played a significant role in the industrial revolution and the railway age, and has some fine planned late Georgian streets to show for this period of prosperity.

While the  prevalence of the three industries of coal, steel and shipbuilding gave the North East a particular economic character it also, sadly, made the region uniquely vulnerable during the industrial decline of the early 1980s.  That period, when unemployment reached 25% in some of the populous areas left a legacy of economic difficulties whose effects even now have not fully dissipated.

Indeed from a powerhouse of inventiveness – think George Stephenson, William Armstrong, Joseph Swan and Charles Parsons – in the 19th century where the region witnessed waves of immigration particularly from Ireland and from England’s rural areas, the twentieth century became largely a period of slow economic decline and emigration.

In the latter part of the twentieth century efforts were made – by the region itself and by sympathetic governments – to attract new investment, and investment in new industries, to the region with partial success.  However, British investment, from other parts of the UK, proved particularly difficult to attract – seemingly because of the region’s image, the “grim up north” syndrome, a misconception which the region’s inhabitants aware of the landscapes and countryside on their doorstep, and the many historic towns and villages, not forgetting the stunning coastline, have always found mystifying and galling.  This negative perception perhaps helps to explain too why so few British firms have their headquarters in the region and explains why when forced to contract the region’s plants have often been at risk of closing first.  As we know too it has been notoriously difficult to get public bodies or government departments to move anywhere outside of London or the South East.

Investment from outside the UK, particularly from the Far East, has become a success story however, led by the investment by Nissan in the 1980s in its world beating Sunderland car plant.  Nissan approached the region with a fresh eye, seeing a willing workforce, excellent road, sea and air communications, and a welcoming, can-do attitude.

The success of Nissan fostered the creation of a number of ancillary industries supplying the car plant.  Other non-UK concerns were also attracted to the region.  Hitachi, Komatsu, LG and others.  While British investment continued to be small scale some of the existing skills in the region – in manufacturing and shipbuilding – did find important new outlets particularly in the offshore sector.

One of the strengths of the region was also the willingness for the most part of industry and local authorities to work together to raise the region’s profile and promote economic activity.  The conservative government pre-1997 was not attracted to the idea of a Regional Development Agency and this lack of action led the region’s businesses, the regional trade unions and the regional local authorities to set one up through their own initiative.  This meant that when Labour came to power in 1997, committed to setting up RDAs, the North-East could hit the ground running, and the resultant organisation One North East had a number of achievements to its credit.

The availability of European Structural Funds has also been important in helping the region recover from the 1980s decline and most local authorities in the region grasped those opportunities enthusiastically working with government agencies, the RDA and business sectors in exploiting them fully.

In recent years the North East has been particularly successful in exporting and has regularly been one of the few UK regions with a positive trade balance.   The northern east’s exports go for the most part to the EU.  Geography makes this not surprising as our ports face East towards the European continent and because of this the North East has a long and positive trade history with Europe.  However, in recent years the fact of the UK belonging to and indeed forging the European single market and the customs union has allowed this traditional trade to greatly expand and diversify.  As James Ramsbotham points out in his article “approximately 60% of our region’s exports are sent into the European Union, the highest of all English regions and significantly higher than the UK average (48.2%)”.

The North East has also been one of the most innovative areas in exploiting the importance of culture in economic revival.  An outstanding example of this is in Gateshead where the local authority  – whose Councillors interestingly mostly came from a traditional industrial background – showed imaginative and courageous cultural leadership. The Council sponsored the Angel of the North Statue (despite being ridiculed at the beginning for this initiative) resulting in the creation of a symbol of the North East as instantly recognisable as the Tyne Bridge or even the Roman Wall.  Gateshead, also in its partnerships with private industry and public bodies, created the Baltic Contemporary Art Gallery and the nationally and internationally acclaimed Sage Music complex, in key adjacent sites on the banks of the Tyne.  More widely Gateshead also established an international Athletics Stadium, hosted a hugely successful National Garden Festival, transformed a derelict industrial site into the Metro Retail and Entertainment Complex and realised another national icon with the completion of the unique Gateshead Millennium Bridge.  These were astonishing achievements for a medium sized authority – and an authority moreover which also delivered high quality local educational and environmental services to its residents.  These are achievements which should be recognised along  notable local government achievements of the past such as in Joseph Chamberlain’s 19th Century Birmingham.

The North East has a number of important assets.  It has five universities of which two, Newcastle and Durham, are in the Russell Group of leading Universities.  The universities of Northumbria and of Sunderland have also shown key strengths in a number of disciplines and Sunderland has an enviable record in securing educational opportunities for under-privileged or disadvantaged groups with some great successes as a result.  The Universities have a long-standing cooperative relationship with each other and do work together in various North-East business and other fora.  Alastair Balls in his article writes of the desirability of building on the links between Universities and business to better resource the mechanisms needed to transfer technology into the market place.

There are however educational weaknesses and challenges.  A fact greatly remarked on has been that at primary school level the North East does as well or even better than other parts of the UK.  By the end of secondary school however that position has changed and school pupils under perform at A level compared to other areas.  While the reasons for this are not entirely clear it seems to be linked to lack of aspiration and a perception by school pupils that the region does not offer exciting or well-remunerated employment opportunities. Alastair Balls’ article expands on this in pointing out how educational and skills deficiencies hold back regional growth and productivity gains.

How far the weaknesses in the regional economy identified by Alastair Balls and James Ramsbotham can be addressed depend on the success of some of the initiatives they highlight, such as the creation of the North East Institute for Technology, and in finding ways of building on our innovation in green energy, digital, health and life sciences.  Government macro-economic policy however will also affect our future development and whether or not opportunities for economic success can be realised and the ongoing relationship between the UK and the EU is an important part of this.

Brexit Challenges

As has been noted, given the region’s dependence on EU trade and exports, Brexit presents arguably greater challenges for the North East than for any other part of the UK. James Ramsbotham points out that although the UK Government’s deal with the EU was welcomed as an alternative to “No Deal” it compares very poorly with full EU membership.  He points out how many new non-tariff barriers have been created.  He also stresses that adapting to new Rules of Origin is causing many EU and UK businesses to reconsider their supply chain arrangements, as well as the problems of VAT costs and greatly increased red tape.

Certainly since the last minute deal negotiated by the Government which came into force on January 1st this year, businesses in the region have begun to face considerable difficulties and the examples of problems have multiplied.  One such example quoted to me is that of a specialised brewery exporting a quality product where on top of a reduction in 2020 of 50% in its sales because of COVID another 50% of its remaining business is in jeopardy because of Brexit.  Consignments to the EU are stuck in customs a month after being sent whereas previously the whole process would take no longer than 5 days.  It is businesses like this in the food and drink sector which are particularly affected by such delays.

Nationally by mid-February 2021 exports to the EU had dropped 68 per cent.  Given the importance of EU trade to the North East not surprisingly the region’s businesses have in turn been hugely adversely affected and at the time of writing these problems have in no way been resolved.  Firms risk liquidation because of being unable to export to long established customers and face the alarming prospect that those customers will  permanently place their orders elsewhere.

The Government has made much of its commitment to levelling up and eliminating the North-South gap  but unless it tackles effectively the problems caused by its Brexit deal in the short term, and helps to address the region’s underlying structural problems in the mid and longer terms, the economic challenges the region faces looks very daunting.

The North East and Regional Devolution

While for many years local authorities have taken their economic roles very seriously as noted above and often agreed to joint initiatives, the region as a whole has not had a single political voice.  With the push to devolution in other parts of the UK seen particularly from the 1980s onwards in Scotland, Wales, and then London, many in the North East began to feel even more disadvantaged by the lack of a voice to represent the region’s interests in Whitehall and, given the clear sense of identity of the region, began to feel that political devolution was a desirable way forward.  In fact, the Regional Labour Party, which was the dominant political force, had been in favour of an elected regional assembly and a powerful economic Agency going back some 80 years!  Labour in the region therefore strongly supported John Prescott’s “Alternative Regional Strategy” calling for regional assemblies where there was demand for them and this was Labour Party policy nationally from 1983 onwards. Awareness of successful models of regional devolution (such as the Federal system in Germany, ironically fostered by Britain and the Allies in the aftermath of World War 2) also played a part in stimulating interest in regional approaches to governance.

When Labour came to power in 1997 however, regional devolution in England was given less priority and did not benefit from the first devolutionary  push which resulted in the creation of the Scottish Parliament, the Welsh Assembly  and the London Mayor and Assembly.  It was relegated to a second term issue and so it was not till 2003 until concrete proposals emerged for regional government. Given that Labour felt that the North East was the area in which interest in devolution was most developed it was chosen as the area where the first referendum on the establishment of a Regional Assembly would be held.  This was not such a risky enterprise as hindsight would indicate.  Opinion polls in the region in the 1990s had consistently shown a belief that the North-East did not get a fair deal from Whitehall and also showed strong support for creating a special “something for the North-East”.  There were a number of pro-regional groupings and campaigns not only from Labour and Liberal Democrats but also from trade unions and business interests.  The regional media too was supportive of regional government for a considerable period of time prior to 2004.  However, the result of the referendum, held on 4th November 2004 was a huge vote against an Assembly by 72% to 28%.  Why?

Firstly, the timing was far from ideal.  The government was unpopular through the Iraq war and other issues, and the vote gave electors a classic opportunity to give government the proverbial “bloody nose”.  Secondly the government appeared half-hearted about the idea.  Prime Minister Blair, a North-East MP, had never pushed it and was absent from the campaign.  While John Prescott provided wholehearted support it seemed odd that he had to be drafted in from outside the region.  He also did not get much support from Labour nationally in terms of resources for organising and campaigning.  Given that at that time 28 of the 30 MPs in the region were  Labour this failure was highly significant.

Crucially important was the fact that what was offered to the region was a much more limited form of devolution than Scotland, Wales or even London had been given.  This paved the way for a de facto “unholy alliance” between those who did not support devolution at all and those who did but felt what was being offered was quite inadequate.

The “No” campaign, which seemed to be motivated by a belief that regional government was a EU plot to destroy the nation- state (perhaps this is why Brexiteers such as Dominic Cummings were key figures behind the scenes), concentrated on a couple of easy to understand issues, principally alleging that an Assembly would be a costly White Elephant and that the last thing the region needed was an extra tier of useless overpaid politicians.  A large eye-catching plastic white elephant was regularly paraded around the region to reinforce the point.

In the end two events helped the “No” campaign probably beyond its wildest dreams.  In the middle of the campaign for the very first time MPs expenses were published and many newspapers added together all the expense allowances (including staff salaries) and implied – or even stated – that all this money was MPs massive personal perks.  Then it was announced that the Scottish Parliament Headquarters were going to be far more costly – by a factor of ten – than at first envisaged, fuelling a belief that a  North East regional Assembly would involve palatial premises for overpaid and greedy politicians.

The result killed off any further attempt to introduce English Regional Government with only now, 15 years later, some renewed interest becoming evident.  The only solace for pro-devolutionists was that people in Wales had voted in similar proportions against an Assembly in the 1970s although eventually – after a gap of some 20 years – changed their minds.

Reflecting on the failure of the North East regional referendum, Nick Forbes, in his article, argues persuasively that the language of devolution is important and stresses that in future discussions it will be important to avoid giving the impression to people that devolution is “something that is going to be done to them, not for them, or with them.”  He also stresses the continuing vital role of local government which is complementary to, not in conflict with, regional devolution.  Local government’s role during the Covid crisis has been vital in supporting the most vulnerable, enabling the roll-out of the vaccine programme (particularly successful in the North-East), and ensuring grants reach local small and medium sized businesses.  Local government too has the local partnerships and relationships which are crucial for public service delivery and Nick Forbes feels these can be strengthened by an innovative approach “that matches assets and resources to need in a smart, more efficient way.”

While governments since 2004 have turned away from the regional approach there has been a gradual and increased interest in devolving power through elected Mayors and today there are a number of examples of how this is working throughout the north with Greater Manchester, and Merseyside perhaps the most recognisable.  The population of Greater Manchester alone is bigger than that of Northern Ireland and of the North East and therefore does have a regional dimension.

The issue of whether to support elected mayors or not has had a chequered history in the North East.  This was seen as imposing something on local authorities from outside particularly by a national government of an opposing political persuasion.  The idea was defeated in local referendums in both Sunderland (2001) and Newcastle (2012), the region’s biggest cities.

Proposals for elected mayors in Combined Authorities put forward by the Conservative government from 2015 onwards perhaps not surprisingly therefore provoked disagreements among local authorities which had previously worked very well together, with some feeling that the spending powers on offer could help the region, with others feeling this was an unfair inducement to foist an unwelcome new structure which reflected central government rather than local priorities.  The result was an unfortunate split between the authorities north of the Tyne – Northumberland County, North Tyneside and Newcastle – on the one hand and the south of Tyne areas – Gateshead, Sunderland, South Tyneside and County Durham – on the other.  Elected mayors already existed in North Tyneside and – for a while – Hartlepool, and had more recently also emerged in Tees Valley creating a patchwork without any real consistency.   The north-south split between both banks of the Tyne was felt by many to be particularly regrettable since so much had been accomplished by Newcastle and Gateshead working together.  However, despite the disagreement on Combined Authorities and elected Mayors, the local authorities concerned did keep day to day cooperation on a number of issues and participated together in a number of joint organisations and affirmed a determination to work together whenever possible.

There are new signs now of a rethink.  The Elected Mayor of the North of Tyne authority in a recent letter to North East MPs and Peers describes moves to bring all the seven local authorities listed above into a wider Mayoral Combined Authority arguing that “we are one economic area after all and it would benefit the region greatly to be able to operate strategically and collaboratively through one organisation.  Plus having transport powers would supercharge our ability to connect up inclusive economy programmes and build a prosperous region”.

There is more optimism now that new negotiations with government might lead to a new and united way forward.  The profile of elected mayors during the Covid Crisis in Manchester, Merseyside, Rotherham and Sheffield has stimulated that process of rethinking and renewed interest.  Certainly if the area from Berwick in the north to the whole of County Durham in the south became such a Combined Authority the region would find itself having a single and hopefully powerful voice for most of the areas it comprises.

This could help in raising the region’s profile, giving it more of a say in the affairs of the nation and showing too that devolution is not just about national identity but about good governance, a message which might help in tackling some of the problems in the current UK devolution settlement.  Such a way forward might also help in informing the work the Labour opposition is currently planning to undertake on our Constitution, work which Keir Starmer is reportedly taking forward in harness with former Prime Minister Gordon Brown.