North and South - a tale of two countries?

A decade of regeneration policies has failed to stop the inequality of opportunity between towns and cities in the North and those in the South East increasing. In their third report in the series on regeneration in the UK, Cities Unlimited, Tim Leunig and James Swaffield recommend a series of radical proposals that would reverse the trend and inject a much needed momentum back into regeneration policy. The key recommendations from the report are to increase the size of London by allowing landowners the right to convert industrial land into residential land in areas of above average employment; expand Oxford and Cambridge dramatically, just as Liverpool and Manchester expanded in the 19th century and for the Government to roll up current regeneration funding streams and allocate the money direct to local authorities.

Policy Exchange said 'hard-headed analysis' showed regeneration was 'impossible' in places that now found themselves in 'the wrong place at the wrong time'.

It said mass migration to areas around London and a massively expanded Oxford and Cambridge was the only answer to decades of failure.

The report said Manchester - while doing relatively well - lacked the economic clout to lift former mill towns like Oldham, Bolton and Rochdale. Even Liverpool, it said, was suffering 'in the shadow' of its great north western rival and could not realistically hope for revival.

The 'brutal' truth for people in such areas, it concluded, was that staying put would mean higher chances of unemployment and the prospect of relatively low wages.

"The North-South divide is not a transient problem that reflects a short-lived hiatus as manufacturing declines and service sector economies take its place," said the authors. "Nor does it reflect a failure of government policy to do what is needed.

"Rather, it is evidence that the North, the powerhouse of the industrial revolution, is now a less desirable location for business for reasons that are geographical and entirely outside its control or that of central and local government.

Wearsiders have reacted with fury at suggestions they give up on Sunderland and move south because the city can never have "a bright future."

A report released today says efforts to regenerate Sunderland are in vain and building a million new homes in London, Oxford and Cambridge to house northern workers is the only way to offer them the same opportunities as their southern counterparts.

The study by think-tank Policy Exchange – which uses Sunderland as its main example – says poorer towns and cities will continue to get poorer if regeneration policies do not change.

"It is time to stop pretending that there is a bright future for Sunderland and ask ourselves instead what we need to do to offer people in Sunderland better prospects," it says.  "The evidence strongly suggests that there is no chance of people in Sunderland having the same opportunities as the people in Birmingham or Portsmouth, let alone the same chances as those in London or Oxford."

But the report – entitled Cities Unlimited – has been condemned by Wearside's business leaders, politicians and public figures.

Coun Paul Watson, Leader of Sunderland City Council, said Wearside had reinvented itself as a centre for high-quality car manufacturing, as a new base for offices and more than 10,000 jobs had been created each decade to replace those lost in traditional industries.

"In the last year alone Sunderland attracted 1,000 new residents. Successful places such as Sunderland provide a counterbalance to the overcrowded South East.

"More people are now working in the city of Sunderland than ever before and this economic rebirth has catapulted the city up the national business league."

He added that Sunderland had been identified as the most digitally connected city in the UK, and that Wearside and the North East had seen a 50 per cent rise in the number of inward investment projects.

Speaking on a visit to Carlisle, he said: "This report has got nothing to do with the Conservative Party, this is an independent think tank, it has charitable status, I think this report is complete rubbish."

"When I think of urban regeneration and city regeneration I think of things like the Albert Dock in Liverpool, the canal work in Leeds, the SAGE centre in Gateshead.  I think the idea that cities can't regenerate themselves, they were built for one purpose and can't do another purpose, is just nonsense."

"Regeneration of our northern cities has been a key Conservative theme over the past three years, and one of the first things I did as leader was to set up the Cities Taskforce to look in to how we can further renew and regenerate our great cities."

Labour minister Vera Baird, MP for Redcar, said the report was "exactly the sort of vindictive, anti-northern thinking that led to the widespread industrial decline of swathes of the north under Thatcher".

"Cameron can distance himself from this all he wants but he needs to explain why his friends have no faith in the North," she said.

And former deputy PM Mr Prescott said: "To state that northern cities like Bradford, Liverpool and my home town of Hull have no hope of being regenerated in the 21st Century and that people should move to London, Oxford and Cambridge is the most insulting and ignorant policy I've ever heard... [The Conservatives] still see people as economic units to be moved around, not as people with families who want to live and work in the cities they were born in".

The government said it did not agree with the report's conclusions and said since 1997 cities like Liverpool and Newcastle had benefited from thousands of new jobs, lower crime and better living standards.