TACKLING poverty in the Leeds City Region could boost the economy by £1 billion, according to a new report by the York-based Joseph Rowntree Foundation.

The report urges business leaders and local government officials from across the region, which includes York, to work closely together to ensure the benefits of growth are shared widely.

It raises the possibility of a ‘two tier recovery’ unless action is taken, and estimates that halving unemployment and moving people into jobs paying the Living Wage of £7.65 per hour would strengthen the regional economy by nearly £1 billion a year.

The estimates are based on research carried out by experts at the Centre for Economic and Social Inclusion, whose full findings are due to be published next month in the context of the Northern devolution debate.

The foundation entered a partnership earlier this year with the Leeds City Region Local Enterprise Partnership to find ways to connect people and places in poverty to opportunities generated by economic growth.

The research found that 130,000 people are unemployed in the region, but 81,000 new jobs are likely to be created by 2020, and between 275,000 and 343,000 people are paid below the Living Wage.

Josh Stott, Policy and Research Manager for Cities at the foundation, said the local economy would never reach its full potential with so many people living in poverty.

"The report makes clear the economic benefits of taking action to address the root of causes of poverty in the form of unemployment and low pay," he said.

"We are concerned that the economic recovery we face will still have too many people living in poverty.

"The Leeds City Region needs more and better jobs to connect people and places in poverty to the benefits of economic growth.”

Roger Marsh, Chair of the Leeds City Region Enterprise Partnership, said there would be significant economic gains if the imbalance of poverty was addressed.

"If we halve unemployment in our region, the overall gain to the local economy could be worth £952m per year," he said.

"That is why the LEP is committed to investing in businesses which offer skills and training for their workforce, to ensure we sustain good growth for the future."