The State of Britain

The North-South divide in focus and the tale of two gas projects

Reading Time: 4 minutes

Unemployment in Yorkshire & The Humber decreased by 10,000 to 134,000 between February and April, a drop of 0.3% to 4.9%. At 2.7% and 5.7% the SW of England and the North East had the lowest and highest unemployment rates in the country. The UK unemployment rate stands at 3.8%.

Yorkshire & The Humber’s average property prices increased by 0.3% to £161,443 during the month which uplifted the annual growth rate to 2.5%. In comparison, UK prices increased by 0.7% to £228,903 during April which held the annual growth rate at 1.4%.

Research by the think-tank, the Institute for Public Policy Research North, showed Yorkshire & The Humber lost 112,000 public sector jobs in the last decade. This represented a 19% drop but the North East saw the biggest percentage cut at 24% and at 133,000 the North West lost most jobs. With northern regions of the UK more dependent on the public sector than other parts of the UK, the Government’s austerity programme has had more of an impact. The think tank also compared the Northern Powerhouse’s performance over its first five years with the UK average, citing successes in economic growth (10.7 % v 10.6%), productivity (11% less productive v 12%) and employment (6.9% v 6.2%.) However, weekly pay across the north has risen by £12 (2.4%), against a national average increase of £19 (3.5%) in real terms. Housing has remained more affordable than in the south of England. Overall the report provides some evidence that greater devolution is starting to work.

Echoing the North-South divide, during the month 33 newspapers across the north of England, including the Yorkshire Post, jointly demanded the government accelerates devolution to help deliver economic growth. The campaign, labelled ‘Power up the North,’ also targeted more funding for Northern Powerhouse Rail.

On this theme, at the UK2070 symposium in Leeds, Lord Bob Kerslake, the former head of the Civil Service, likened the inequality of the North-South divide to Germany at the fall of the Berlin Wall 30 years ago. The UK2070 Commission’s report recommended more effective devolution, more integrated national and sub national transport networks and a 25 year £250bn renewal fund.

On the trains, a survey by the Northern Powerhouse Partnership (NPP) found companies believed that a Crossrail of the North or HS3 would boost productivity and investment. The East/West project running from Hull to Liverpool with a spur from Leeds up to Newcastle would cost £39bn.

Events like the Tour de Yorkshire and World Triathlon Series are enticing foreign tourists to Yorkshire according to the latest government figures. A record 1.4m overseas visitors arrived in the county – up 4% on the previous year – adding £600m to the local economy. Also on tourism, Kirklees Council has unveiled plans for a new cultural area in Huddersfield, including a new library, art gallery, museum and live music venue, have been unveiled. The £250m development is part of a 10-year strategy to attract more visitors to the town.

Network Rail is interested in buying part of British Steel and other bidders have until the early July to put in offers for all or part of the firm. State-owned Network Rail wants to take over the British Steel division responsible for the welding, finishing and storing of rails for the UK’s train network. More positively, in North Lincolnshire, Wren Kitchens plans to create up to 1,200 new jobs at a new £120m factory at its headquarters in Barton-upon-Humber.

In Hull, electrical engineering company Heeco – which was founded more than 100 years ago – has entered administration with the loss of 47 jobs. Heeco specialised in electrical design for customers like the Ministry of Defence. Also in the city, about 300 council jobs will be brought back into the city centre in an effort to keep the area viable. Workers will have to allow extra time for their commute though, after data collected by navigation technology company TomTom found the city has been ranked the third most congested in the UK, with a 30 minute commute likely to take about an hour during peak times. Only London and Edinburgh were more congested.

In West Newton, a few miles north east of Hull, three firms have discovered what could potentially be the UK’s largest onshore gasfield. Initial analysis suggests the site could house some 189bn cubic feet of gas – enough energy to power 3.4 million homes for an entire year – and would be the biggest land-based hydrocarbon discovery in the UK since 1973. The site is well positioned in infrastructure terms with major pipelines and a North Sea gas import terminal close by. Most onshore gas fields in the UK are in sandstone rock, but the West Newton discovery is in more unpredictable but efficient carbonate.

A public inquiry has begun into plans by energy firm Ineos to drill a test hole for shale gas at a site near Rotherham. The local council turned down an application last year to drill a test hole on a site at Woodsetts. Ineos told the inquiry the initial works were to test the geology and the firm provided details of a planned 270-metre-long earth wall to protect the village from excess noise. Rotherham Council has already faced an appeal from Ineos against its decision to turn down exploratory drilling at nearby Harthill.

On development, the government will not hold a public inquiry into a £650m development in York. The York Central scheme will see up to 2,500 homes and 86,600 square metres of office space built near the city’s railway station. At 45 hectares, the project is one of the largest regeneration sites in England and
involves Homes England, Network Rail, City of York Council and the National Railway Museum. Work is expected to start later this year and take 20 years.