Fiscal policy in Northern England & COVID-19

Amid a £1 billion seaside regeneration, COVID-19 presents an unprecedented threat to an economy continuing to recover from previous tough times. As I write this article, the current R-value of the Blackpool area sits at 1.6, significantly higher than the estimated national average of between 0.7 and 0.9. This poses a credible threat to human life as well as the health of local businesses’ as a consequence of prolonging this extended period of reduced income. 2019 marked the 4th consecutive year of growth to Blackpool’s economy, representing a 4% growth within this period to a value of £1.58 billion, this momentum mustn't be lost.

With no fixed date of when normality will resume, in conjunction with the threat of continued regional lockdowns for areas at higher risk to COVID-19, Blackpool, and other global tourist destinations must look to alternative forms of income aside from tourism. Presently, according to a recent study, Blackpool offers 25,400 full-time jobs in tourism and hospitality, receiving 18.2 million visitors in 2018. Many small independent businesses are surviving the steep reduction in income thanks to Government-funded job retention schemes, discretionary grants, and loans. Such measures are vital in ensuring the short term prevention of business closures; however, more significant dangers lie ahead. Upon the official end of lockdown, the furlough and loan schemes will begin to end. Many are anxious that the rate of reduction in aid will fast outpace any increase in income due to less restrictive policies, leaving business’ with gaps to fill, which may prove too costly for some already wounded from the past few months.

Despite the reopening of attractions in the resort, such as the renowned Blackpool Tower and “The Pleasure Beach,” there is no guarantee that people will choose to visit in the same
volume they once did. The tourist board is now offering virtual tours of the main attractions to maintain momentum in the growing interest over recent years. Additionally, a holiday voucher scheme provided by the government would also encourage visitors to bring in critical trade by subsidizing holidays within England. A reduction in tax on alcohol or suspension of the 20% VAT on food would make holidaying within England much more affordable, encouraging larger audiences to visit coastal resorts such as Blackpool. Combined, these changes could help reduce the initial slump in revenue experienced within the immediate period post-COVID and could be the much-needed lifeline to many in the world of hospitality.

It is feared that such an economic slump could prove fatal for destinations in the north of England due to the current southern focused budgeting employed by the government. Between 2009-10 and 2018-19, public spending in the north of England saw a reduction of £3.6 billion sharply contrasting an increase of £5.1 billion in the south over the same period. Furthermore, in just the previous five years, the number of jobs paying less than the living wage rose by 11% in the north while the average weekly pay increased by £12 compared to a national average of £19. In a time where we all must unite to overcome a pandemic, a similar approach must also be applied throughout the global and national economy to allow all areas to have the same chance of survival. An equal approach to public spending and resources must be used, or the more deprived areas will simply be unable to cope with the growing financial pressure caused by the virus and to prevent business survival, becoming merely a postcode lottery.