The North of England receives one of the lowest levels of investment among advanced economies, a think tank has said.

If the region were a country, Greece would be the only OECD nation to see less public and private investment, according to the IPPR North’s State of the North report.

The researchers found that the UK as a whole ranks 35 among the 38 OECD countries in terms of receiving the least investment.

States including Slovakia, Poland and Hungary all enjoy more investment than the UK.

Read more: Levelling up cash 'favours south over the north' as County Durham bids fail

Were the OECD average applied to the UK for 2017-2020, some £397 billion more would have been invested.

The UK and the North are being held back by “vast inequalities” and “systematic underinvestment” in research and development, social infrastructure and transport, IPPR North said.

The report highlights the extent of regional disparities, including that productivity is around £7 lower per hour worked in the North than the England average, and hourly pay is £1.60 lower than in the rest of England.

Report author and IPPR North research fellow Marcus Johns said: “Of all the advanced economies around the world, ours is the most regionally divided and getting worse – the North is at the sharp end of these divides and that’s a barrier to prosperity.

“But what’s even more unacceptable is that our country is divided by design. It is the result of decisions.

“The North’s strengths are national strengths. Northern prosperity can be national prosperity. It’s up to the Government to unlock this potential, by acknowledging that it has to change, and by enabling empowered, well-resourced local government to coordinate and deliver long term local visions for change.”

The report points to other floundering places in the world that have turned their economies around, such as Leipzig in Germany, which has become the fastest-growing city in Europe through industry and investment.

IPPR North director Zoe Billingham said: “The international evidence is clear: governments that let go of power and collaborate positively with local places can succeed in levelling up…


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“Political leaders need to ‘zoom out’ and learn lessons from our international neighbours to achieve regional growth and narrow our aching divides. We know that private investment follows public investment.”

Last week, the Government faced accusations of favouring relatively affluent South Eastern seats in the allocation of the latest round of levelling up funding at the expense of deprived northern areas.

A Government spokesperson said: “This report fundamentally misrepresents the clear steps we are taking to level up the region and we are committed to spreading opportunity across the whole of the UK, including the North of England.

“This includes investing £3.19 billon through our levelling up funds for regeneration, transport and cultural projects and £3 billion to transform local transport networks. The government has also helped secured inward investment, such as Credera in Manchester, Nissan in Sunderland and Equinor in the Port of Tyne, creating thousands of highly skilled jobs.

“We have also launched Freeports in Teesside, Liverpool City and the Humber to drive investment and signed new devolution deals in York and North Yorkshire and the North East, giving more powers to local leaders.”

John McCabe, chief executive of the North East England Chamber of Commerce, said: “There is a clear divide between the level of investment the North East receives from government compared to the level we attract from private investment. Last year, the North East created more jobs from inward investment than any other English region outside of London.

“This shows what a great region this is for the creation and growth of business. We need to make the same case to government, to show that for every pound it invests we can attract so much more privately.

“We know how to make investment work in this region. If government backs the North East properly we will create the jobs, grow the businesses, improve the public services and create a stronger economy. The North East can be at the forefront of national economic recovery but it needs government to switch from seeing investment as a cost burden to seeing it as a down payment on future growth and prosperity.”

Simon Clarke, Conservative MP for Middlesbrough South and East Cleveland, said: “The Government’s policy of investing in the infrastructure in most impoverished areas of the United Kingdom, such as the North East, is Levelling Up in action.

“Regardless, it is absolutely crucial that we do everything we can to bring jobs and investment to Teesside and that is precisely why the Government has committed enormous investment in the Teesworks site and that’s why the Government has created the Teesside Freeport.

“By attracting the companies that can bring those jobs to our region, we attract all the prosperity that comes with them.

“Creating high-quality, well-paid jobs is truly the key to changing the fortunes of our region.

“Labour should know that too which is why their recent cynical attacks on the work being carried out at our freeport are so damaging and so shameful.

“We want poverty to fall. We want people to prosper. Ultimately, we want Teesside to succeed.”

Andy McDonald, MP for Middlesbrough, said: “I have repeatedly remarked on the stark inequalities within our country – one of the wealthiest nations in the world. The North of England, including constituencies like Middlesbrough, is too often forgotten by this Government.

“If we are to survive and thrive we absolutely need investment, both in our public services and our infrastructure. It is a deliberate, political decision to cut services and funding to places like Middlesbrough while boosting the coffers of Tory seats in the South.

“Only yesterday, figures from the Child Poverty and Cost of Living Crisis report from the All-Party Parliamentary Group, Child of the North, showed that in Middlesbrough, relative child poverty after housing costs has reached 45 per cent or higher. That is a shameful indictment of where we are as a country – it is simply not acceptable.”

Alex Cunningham, Stockton North MP, said: “The findings of the IPPR North report are predictably unsurprising. You only have to look at the latest roll-out of so-called “Levelling Up” funding to see that the North and the North East are being failed by the Tories when it comes to giving our region the investment it deserves.

"Rather than level up the country like the Tories promised in 2019, they’ve given cash to their Tory strongholds and crumbs to the rest. Meanwhile in the North East and Teesside child poverty is rising."