Invest now to boost North's productivity

That’s according to Stephen Boyle, chief economist for the Royal Bank of Scotland Group, who was referring to the Stanford marshmallow experiment, a series of studies on delayed gratification in children in the 1970s.

It found that those who refused to take one marshmallow now, on the promise of two later, were more successful in life.

The lesson for business, according to Mr Boyle, was that investment and sacrifice now pays dividends later.

And investment - in better quality people, tools and technology - was the key to improving productivity and catching up with the South.

People in the South were £5,000-a-year more productive than those in the North, on average, he said.

Mr Boyle, who spoke to business people on a meeting in Sheffield which included MP Nick Clegg, added: “It is due to investment decisions over a very long period of time in people, physical assets and innovation.

“You get the highest rate of return when you invest in people at a very young age – the evidence is very clear.

“You also get higher returns when you invest in local infrastructure, such as local roads, since most journeys are over very short distances.

“Investing means sacrificing now for a better tomorrow.”

Craig Gray, NatWest director of commercial banking South Yorkshire, said: “It was particularly interesting to hear Stephen and Nick’s view on the importance of business and government investment in creating a thriving local and national economy.

“They both urged the businesses in the room to think long term and invest in the future, whether in skills, capital expenditure or infrastructure.”

Mr Boyle also said a vote to leave the EU would lead to uncertainty for an unknown period of time - and that would mean consumer and investment spending would grow more slowly.

In the medium-to-long term it could create an uncertain future for huge manufacturers that were based in the UK so they could access the EU.

He added: “It is crucial for Nissan in Sunderland. What certainty have they got about being able to sell into the market? Will there be tariffs?”