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Analysis

Labour's 拢150bn aims to 'shift centre of gravity' in UK

Evidence shows disparities from household income to life expectancy among English regions - can a big spending boost resolve them?

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Sky's business correspondent Paul Kelso examines Labour's pledged to spend 拢150bn closing the north-south divide
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Labour's big announcement on day two of the election campaign centred on economic policy, and a pledge to increase borrowing by 拢150bn over five years to help shift the "centre of gravity" from London to the North, and help close the north-south divide.

Shadow chancellor John McDonnell announced this Social Transformation Fund, part of a £400bn public spending programme, will be used to upgrade and expand schools, hospitals, care homes and council houses.

Part of the Treasury will also move to the north of England to oversee a National Transformation Fund and ensure that "decisions about investment in the North are made in the North".

The aim, Mr McDonnell says, is to deliver "an irreversible shift in the centre of gravity in political decision making and investment" from London to the North.

There is no question there is a north-south divide in England and it can be measured in many ways.

The simplest economic indicator is household income.

Figures from the House of Commons library show that households in the South East had the highest median income between 2014-15 and 2016-17, of £544 a week.

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London is the second-best paid region, followed by the East, the South West and the East Midlands.

Figures show London has the greatest level of public spending per person in England with the South East
Image: Figures show London has the greatest level of public spending per person in England with the South East

Incomes decline further as you go north, with median weekly income in the North East 18% lower at £447.

The figure is lower in Wales (£440) and Northern Ireland (£439).

Life expectancy follows the same pattern and provides an even starker measure.

Men living in the South East can expect to live 80.6 years from birth, women for 84, according to the Office for National Statistics.

Both figures reduce by more than two years in the North East, the region with the shortest life expectancy, 77.9 years for men and 81.6 for women.

The impact of austerity over the last decade is also reflected in data for cities compiled by the Centre for Cities.

A report published earlier this year showed that cities in the North had faced larger public spending cuts than those in the South.

Barnsley saw the largest real-terms cut of 40%, with Liverpool, the venue for McDonnell's speech, down 32%. In contrast the smallest real-terms cuts came in the South, with Luton receiving 21% more public spending, and Oxford an extra 15%.

Overall public spending by region is more nuanced however.

London is the largest recipient of public spending in the UK, with £10,323 spent for every person in the capital in 2017-18.

Figures show men born in the North East on average live nearly three years less than those born in the South East
Image: Figures show men born in the North East on average live nearly three years less than those born in the South East

But the affluent wider South East received the lowest figure in the same period, £8,190 per-head.

The North East and North West both received more than £9,000 per-head followed by Yorkshire and the Humber and the West Midlands.

This distribution appears to reflect the greater need of more deprived regions, and suggests that the spending announced by Mr McDonnell will need to be closely targeted if it is to overcome the historic, structural inequalities in the UK economy.

It will also take time, not just to build the promised schools, hospitals and houses, and the new infrastructure to serve them, but also to see whether this attempt at fundamental economic rebalancing bears fruit.

Luke Raikes, senior research fellow at the think-tank IPPR North, said: "There are some practical challenges for any government to build infrastructure on the scale that's needed but they are not insurmountable.

"If you do invest in skills as well as invest in infrastructure then we could have a workforce that delivers some of those projects

"It is not a small challenge but it is something that can be met."

Campaign Check scrutinises election claims made by political parties, examining if they are true or false, and the context. Sky News is working with Full Fact - the leading independent fact-checking charity.

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