Economic fallout could hit Red Wall areas hardest

New research has suggested that so called ‘Red Wall’ communities are most vulnerable to permanent economic scarring as a result of the coronavirus pandemic.

The Centre for Progressive Policy has warned that communities across Northern England and the Midlands are set to suffer more than double the permanent losses in economic output projected for the South East. The so called ‘Red Wall’ areas are likely to see economic output fall by 12 per cent over the next five years, compared to the national average of eight per cent. The projected losses in regions like the South East sit at five per cent.

The research shows that 77 per cent of local authorities will not have recovered their expected level of output based on pre-crisis trends. The think tank is therefore urging the government to financially support the worst affected local economies and then return to a revitalised levelling up agenda.

Charlotte Alldritt, director at the Centre for Progressive Policy, said: "While policymakers are rightly concerned with the immediate economic shock of coronavirus, history has taught us that recessions have deep and long-lasting effects, which are rarely spread evenly across country. This crisis is clearly no different, with those ‘left behind’ areas on course to bear the economic brunt. The government had already signalled its intent to ‘do right’ by voters who had lent them their vote but these communities have been let down by successive governments in the past. If this administration can fulfil its ambition to level up successfully, it would be righting decades of economic injustice. Covid-19 has made this daunting task even harder, but success is now both a political and economic imperative."