The economy of Leeds faces losing billions of pounds to the south over the next 10 years, a new report has warned.
The economic gap between Yorkshire and London will widen by £49.9bn in the next decade, the joint UK Powerhouse report by law firm Irwin Mitchell and the Centre for Economic and Business Research (Cebr) forecasted yesterday.
This is despite Leeds recording a year-on-year rise in output in growth of 2.2 per cent in the second quarter of 2016.
Mike Cartwright, policy and representation executive at the West and North Yorkshire Chamber of Commerce, said: “If the prediction is correct, this would be very damaging to the Government’s commitment to empowering Yorkshire and the rest of the North through the Powerhouse concept.”
The report claims that by 2026 London’s economy will expand by 16.3 per cent and that southern cities such as Milton Keynes and Cambridge will grow by 22 per cent.
Meanwhile, it predicts the economy of Leeds will experience growth by the end of the next decade of 13.1 per cent.
Managing economist at Cebr Nina Skero said that one reason why the South could outpace the North in its growth rate is because a lot of 33 to 40-year-olds are moving to London for its wealth of IT and finance jobs.
“That skills drain makes it all the more difficult for different parts of the country to catch up,” she said.
She added that the region has had a dependency on the public sector for jobs – which there had been on going efforts to cut over the last five years.
Leeds City Council warned in July that upto 2,000 of its jobs are at risk up until 2020.
But the council’s leader Judith Blake said: “We work hard with both private and public sectors, along with Government, to maximise our infrastructure, investment and jobs opportunities. This approach has paid off as we’ve seen big growth in our digital industries in the past couple of years and our financial sector continues to go from strength to strength.”
A Treasury spokesman said the Government is “determined to rebalance the economy”.
He added: “But we are clear the job is not finished and there will be no let-up in our commitment as we push on with our plans to build an economy that works for everyone.”
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