THE North must attract more private investment for economic recovery and reduce its reliance on the state, the Chancellor warned on the eve of a key "beat the recession" meeting.
Alistair Darling, who will chair a “Regional Economic Council” of ministers and regional leaders, said parts of the North had a "large public sector" and badly needed to diversify.
The comments come ahead of a widely-predicted “decade of austerity”, with big spending cuts likely to hit the North particularly hard, because so many workers are employed by the state. Meanwhile, the Chancellor also denied that Scotland had grown far wealthier on much higher public spending – under the notorious Barnett Formula – insisting: "It's more complex than that."
Speaking to the Daily Post, at Westminster, Mr Darling said the North's economy was changing, because "the heavy industry is going, although it has got a large public sector".
And he added: "I think the key for the whole of the north of England, is that it has got to look at encouraging more private sector involvement.
"The public and private sectors complement each other, but the main thing must be to get more private sector firms ready to come into the North – because that is the best way of increasing the amount of wealth."
Mr Darling insisted there would be "massive opportunities" for manufacturing in the future, not least because of the growing economies of China, Brazil and India.
