ABSTRACT
This chapter shows that the recent transformation of the economy of northeast England is reciprocally related both to the changing position of the United Kingdom (UK) economy in the international division of labour and to the restructuring of the UK state. Regional changes were both a product of and a condition for wider projects of restructuring the UK state and its relation to economy and society within and beyond the UK. In the immediate post-war period there was a significant, though selective, extension of the scope of state involvement in economy and society in the UK as a central element in the Post-War Setdement (PWS) and an emergent 'One Nation' national political project. Deregulation of outward foreign direct investment (FDI) from 1979 led to a massive outflow of capital from the UK in the first half of the 1980s.
