WHAT should Labour do to revitalise the towns of northern England? Well, let’s take an analytical approach to this: some don’t need revitalising. 

There’s affluent towns, like Alnwick and Morpeth, that are among the least deprived places in Britain.  

There’s pockets of poverty even in these places, of course, but they’re very different from towns like Blyth, where there’s a 45 per cent incidence of multiple deprivation. So it’s the old industrial towns that are struggling.  

The market towns aren’t. Why? It’s about money flows.  

Money flows into the wealthier towns, not primarily because they have lovely old stone buildings and more tourism, but because they are attractive places to live for people with significant private assets.  

There’s often lots of landowners, people who are privately wealthy from share ownership, and people with large pensions.  

And, combined, that keeps enough money flowing into a town to make its economy buoyant and house prices high.  

That creates a positive feedback effect that supports the boutique stores, the independent cafes, and creates enough appeal for a few professional services like estate agents, lawyers and vets to locate in these towns.  

Contrast that with former industrial towns, where the population never held many assets, where their industries were typically closed with no just transition, but a brutal economic shock.  

These towns were wealth creators, but the assets and profits they created were never owned by the people who did the mining or the welding or the work on the production lines. Often, all they have left are the chronic diseases from a lifetime of hard graft. 

So when we look at a place-based approach to economic development, we have to recognise that capital is global, and asset ownership has no loyalty to the workers who created the wealth.  

I’m not saying anyone earning a couple of hundred grand a year is evil, or exploitative, I’m saying that our current economic model makes this inevitable.  

I’m saying that neoliberalism by its very definition is uncaring about people or places. And I’m saying it’s a massive problem that is devastating sustainability in all its forms: it’s environmentally unsustainable — an incessant growth model is burning the planet, it’s economically unsustainable — asset bubbles and market volatility are the enemies of patient innovation, and it’s socially unsustainable. Wealth inequalities lead to a plethora of health, crime and social ills.  

So there are two possible solutions. Either get wealth that’s generated from outside flowing into these towns, or keep the wealth that’s there from leaking out. I’d say we need to do both.

One way to get wealth flowing into a town is to look for inward investment.

The wealth from around the world comes to pay workers here, buying the products of their labour, and hopefully paying them wages.  

If you can get them, great — and we should pursue them. But we can’t hold our breath for inward investors in an unstable world with Brexit, trade wars and global recession on the cards. 

And it doesn’t solve the problem in the long term: unless those workers develop an asset base, most of the wealth is still extracted by wealthy people elsewhere.  

The other go-to solution is state funding. Transfer wealth into a town by paying for benefits, public services, or various kinds of development corporations.  

These do work, but we have to question their sustainability. We’ve seen what’s happened with austerity: libraries closing, towns where the nearest hospital is now an hour away, and people turning wholesale to the black economy just to eat.  

If we’re serious about sustainability, we need to create local asset bases.  

This has a few simply stated pillars. One — give small businesses a level playing field in public-sector procurement.  

Small businesses are part of that asset base that keeps towns alive. The biggest killer of small businesses is late payment — well, outlaw it. 

I can do a little bit with contract clauses, but a Labour government should legislate for it.  

Use social value clauses. And do it like you mean it: employ local people, train people, give in-work progression, and of course, the real living wage so the clauses extend to subcontractors.  

Two — boost the co-operative and community ownership sector. I’m setting up serious support for co-ops to get started, and looking to establish a co-operative investment fund. 

Co-ops are extraordinarily resilient compared with other ownership models. A big part of this is business transition — family-owned businesses often get sold.  

Well, support them to become worker co-ops. That keeps those asset bases strong.  

Three — set up a bank. A publicly owned, mutual bank, to operate on a regional footprint, specifically to support the local economy, because at its heart, capitalism is all about money. And if you can’t control the money, you can’t control the economy. Reversing neoliberalism requires embracing system change.  

And, yes, there’s transport, and housing, and skills, and all the other contributors to local wealth. But unless we change the asset base by changing the ownership model, it will always be transitory.  

So what we need is a 3D Britain — decentralise, decarbonise, democratise.