The State of Britain

The North West performs poorly in terms of growth, the next stage in Sellafield’s 100 year decommissioning programme and will the benefits of HS2 fail to reach the region

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Growth in the North West fell by a third to 1.0% in the year to March 2019; the drop of 0.5% was the worst in the UK according to estimates from ESCoE. At 2.7% and 0.7% London and Northern Ireland had the highest and lowest growth rates in the country respectively. The East of England was the most improved region of the UK with growth accelerating from 0.9% to 1.9%. The UK growth rate for the same period was 1.5%.

Unemployment in the North West fell by 7,000 to 136,000 between January and March, a drop of 0.2% to 3.8%. At 2.4% and 5.4% the SW of England and the North East had the lowest and highest unemployment rates in the country respectively. The UK unemployment rate stands at 3.8%.

In March, average earnings in the North West increased to £575 per week. London had the highest average earnings of £762 whereas Northern Ireland had the lowest of £513. In the UK average earnings grew by 3.3% or by 1.5% after inflation.

North West average property prices fell by 1.7% to £159,471 during the month which trimmed the annual growth rate to 2.5%. In comparison UK prices dropped by 0.2% to £226,798 during March which cut the annual growth rate to 1.4% although transactions were up by 1.4%.

In its estimate of regional public spending and regional tax revenues in 2018, the ONS has concluded the North West, at £20.8bn, had the largest deficit in the UK. This compares with London which had the highest surplus of £34.3bn. On a per person basis the NW’s deficit was £2,884 whereas London had the highest surplus of £3,905 per person and Northern Ireland had the biggest deficit per person at £4,939. The only areas of the UK to run surpluses were London, the south-east of England and the east of England. At a national level, the UK had a deficit of £636 per person which splits into deficits of £106, £2,452, £4,395 and £4,939 for England, Scotland, Wales and Northern Ireland respectively.

In Cumbria, there was relief in Workington when it was confirmed that British Steel subsidiary TSP Engineering – which employs about 220 people – was largely unaffected by the collapse of its parent. Further along Britain’s energy coast, the next phase in nuclear reprocessing plant Sellafield’s 100 year decommissioning programme was announced with the award of a £770m contract to Aberdeen-based engineering services firm Wood Group. The Group will act as design and engineering partner for the Cumbria site over the next 20 years. Sellafield is the largest nuclear complex in Western Europe, covering two square miles with more than 1,000 buildings. The site includes the world’s first commercial nuclear power station, Calder Hall, which closed in 2003 after 47 years of generating electricity. Security guards, cleaning and catering staff at the site have announced a third set of strike dates in a dispute over pay. About 180 workers employed by outsourcing firm Mitie are already taking part in 10 days of action.

On infrastructure, Highways England is likely to go ahead and build a £250m dual carriageway through Rimrose Valley in Litherland, Merseyside, to ease congestion to the Port of Liverpool. The local council lost a judicial review of the project which is supported by Transport Secretary Chris Grayling. In Cumbria, there were public consultations on plans for a £102m southern link road for Carlisle and the £1bn project to turn the remaining 18 miles of the A66 between Penrith and Scotch Corner into a dual carriageway.

Apart from Liverpool’s John Lennon Airport being named as second best in the UK for flights taking off on time – an average of 10 minutes late in 2018 – regional transport was dominated by the railways. First, the Mayors of Greater Manchester and Liverpool City Region called for the government to take control of rail operator Northern, accusing the firm of failing to deliver promised improvements and cramming commuters onto smaller, delayed trains. Also West Coast main line operator Stagecoach, which owns the majority of the generally well regarded Virgin trains operation, is suing the Government over its disqualification from running services on the route from 2020. The government disallowed the bid in a row over who shoulders the liability for expensive defined benefit pensions, many of which are a legacy from the British Rail era.

A report from the influential House of Lords Economic Affairs Committee has said HS2 risks focusing too heavily on the south of England. Former Scottish Secretary, Lord Forsyth, Chairman of the Committee, said the north is being short-changed by the Government’s present plans, especially as construction on HS2 is starting in the south. He called for the plans for Northern Powerhouse Rail to be integrated with the plans for the northern section of HS2, and funding for the project to be ring fenced. A concern for the Committee was costs overrunning on the first phase of the project potentially resulting in insufficient funding for the rest of the new railway in the north. The committee, which includes former chancellors Lord Darling and Lord Lamont, also criticised the Government for not investigating potential cost savings by reducing train speeds or terminating the line at Old Oak Common rather than Euston. In response, the Department for Transport claimed that HS2 will deliver additional rail capacity, significantly improve connections and provide opportunities for economic growth – with around £92bn in benefits – for people and businesses across the North.