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CBI: 50 YEARS OF BUSINESS INNOVATION | UK SPOTLIGHT


CONQUERING THE GREAT DIVIDE REGIONAL GROWTH


Angst about an economic divide between the North and South of the country is as old as the CBI itself. But one lesson from the past five decades is that policymakers should focus on maximising the potential within regions rather than trying to close the gap between them.


In 1962, three years before the creation of the CBI, Prime Minister Harold Macmillan warned that Britain needed to “prevent two nations developing geographically, a poor north and a rich and overcrowded south”. Concern over a North–South divide has always been with us. Policymakers and the CBI have long


been aware of a gap between the south of England – often seen as falling below a line drawn from the River Severn near Bristol to The Wash in East Anglia – and the rest of the UK. Whether measured by rates of economic growth, levels of unemployment, house price rises or social indicators such as the different levels of longevity between different regions, there are marked differences. Successive Westminster governments


have sought to even out growth between the South and the rest of the country. There has been a series of moves by central government to ensure that regions benefit from government policies. These have included the Enterprise Zones of the 1980s, the Government Offices for the Regions established in 1994 and abolished in 2010, the regional development agencies created in 1998 and abolished in 2010 and more recently the local enterprise partnerships (LEPs). Government has also sought to close


the gap directly by relocating civil services units to other parts of the country. For instance the review in 2004 by Sir Michael Lyons led to the move of more than 20,000 civil service jobs out of London and the South East. However, this mostly affected executive agencies and arms- length bodies rather than the core activities of Whitehall departments.


LONDON CALLING More recently the North–South divide has been recast as London versus the rest. London is one of the few genuinely global capitals and is often referred to as a city-state. By far the largest city and home to parliament, the civil service and the


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