The North East and The Basque Country
Common Sense Policy Group
published 12th June 2026 by Anna Frances Thew
Industrial background and history
The North East of England and the Basque Country of northern Spain are remarkably similar. Historically both regions are known for their former industrial base, regional distinctiveness and strong prideful identities. After the 1970s onwards, both the North East and the Basque Country experienced a period of deindustrialisation characterised by steep declines in traditional industry like steel, coal and shipbuilding, causing high unemployment and economic crises.
In the North East, deindustrialisation started in the 1960’s and accelerated in the 1980’s driven in large part by an ideological, neoliberal project that took hold under Thatcher. The North East is still recovering from losing its industrial base. The shift from stable, heavily industrialised employment to increasingly insecure, low paid work, continues to pose significant economic challenges for the region.
In stark contrast, the Basque Country has become an industrial transformation success story. It now scores highly on OECD regional wellbeing indicators including income, education, jobs and health – relative to other regions in Spain and even featured as a comparator case study for the North East Evidence Hub back in 2023. So what did the Basque Country do differently, and what can the North East learn from it?
Jobs and the economy
The North East ranks 12th out of 12 UK regions for jobs, scoring 7.8 out of 10 on the OECD regional wellbeing index. It struggles with poor productivity, economic inactivity and a lack of well-paid, secure work. Yet despite the various approaches across different administrations over the years to bring more opportunity to the North East, there has been little to no improvement in these labour market outcomes. Only within the last year has the North East Mayoral Strategic Authority developed a regional industrial strategy, with a plan to create tens of thousands of new good jobs for local people. It is an ambition worth having, but a significant challenge to overcome given sustained skills issues in the region, with a higher than average percentage of working age adults with no formal qualifications.
By contrast, the Basque Country leveraged its strong autonomous status to drive a rapid and successful industrial transition. They experienced decline, anticipated the effects and used effective policy to change direction quickly. Starting their industrial strategy in the 1990s, they developed a cluster policy towards specialised industries including energy and advanced machinery. Control over their own decision-making meant sustained investment following deindustrialisation, with a focus on skills and education that helped to diversify the labour market and shape its long-term trajectory. The ability of the Basque Country to raise its own taxes has also helped to retain a greater share of its wealth within the region itself. The Basque Country now boasts the highest productivity and lowest unemployment rate in the entire Spanish State, and ranks in the top 25% for income across all OECD countries.
Public health
A key difference in outcomes between the North East and the Basque Country is down to health. The Basque Country invested early in preventative public health. By 2010 they had introduced an integrated care strategy focused on addressing population health and disease prevention. In 2023 the Basque Parliament went further, passing a landmark public health law grounding their entire health system in the social determinants of health, coordinating prevention, protection, and health promotion across communities. These reforms are credited with the development of one of the most successful integrated care strategies in Europe. The Basque Country now ranks the top 6% of all OECD regions for health with a life expectancy of 84.4 years.
The UK spends less on preventative public health than comparable nations and the North East bears the cost. The North East of England sits in the bottom 45% for health across the OECD regions, with a life expectancy of just 79.2 years. Across the North of England, poor health is estimated to cost the economy billions per year in lost productivity yet despite the recognised health inequalities, the North East faces many challenges securing adequate preventative health funding. Only as early as 2016 were key actors like The North East Commission for Health and Social Care Integration identifying the link between poor health and the region’s economy. An increasing number of voices continue to make the case for preventative, place-based interventions but without the investment to tackle social determinants of health, nothing changes.
Breaking the Cycle
The Basque Country’s success was not a result of just one policy area. Decent jobs, good health, and a strong industrial base reinforced each other over decades. The North East faces the opposite dynamic, poor health limits productivity, low-paid insecure work drives poor health, and underinvestment in prevention means we spend more on fixing problems than stopping them. It’s a vicious cycle, and difficult to break precisely because the solutions aren’t cheap or quick. To shift reactive policy towards prevention means confronting the root causes, poverty, poor housing, and insecure work. That requires bold, systemic policy intervention, not just tinkering at the edges. The Basque Country shows it can be done.
For all media enquiries please contact Anna Thew at anna.thew@northumbria.ac.uk