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The paper examines the anatomy of manufacturing change in the regions by focusing on the political economy of restructuring in the North East region. The broad context of change in the manufacturing sector in the regions at the national level is outlined. The remainder of the paper deals with the issues in more detail through examining the recent experience of the North East region. The paper argues that the somewhat ad‐hoc mixture of market‐led and ‘neo‐interventionism’ of UK government policy toward the manufacturing sector has had particular effects on the nature of restructuring in the regions which has constrained the framework within which industrial adjustment and regional renewal could be undertaken.

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