In July, prime minister Boris Johnson visited a new battery factory in Coventry that would provide the backdrop for a speech on “levelling up”. Many hoped that he would seize the opportunity to provide substance to a slogan that has been repeated endlessly since the 2019 election campaign, when it was used to woo voters in the Labour-held “red wall” in the North and Midlands, but there was little clarity on its practical implications.
The speech diagnosed several long-term problems plaguing the UK. There was rightful condemnation of the huge inequalities in wealth, productivity and health outcomes between different areas of the country. There was an acknowledgement that the UK was not just “the most economically unbalanced”, but also that it was “the most centralised” country compared with its neighbours. And there was an admission that “for many decades” governments in Westminster had “crushed local leadership” and stripped local councils of their powers (although this was, the PM claimed, absolutely necessary to combat “irresponsible municipal socialists” and the “loony left” – ghosts from the 1980s who had led fights against the budget cuts of the Thatcher government).
But the prescriptions offered to remedy these maladies never came, and the speech was criticised from several quarters. Immediately afterwards, Dominic Cummings, the PM’s former chief adviser, described the whole levelling up agenda as “a vacuous slogan”. The House of Commons Business Committee said it needed to be linked with “coherent and specific initiatives” lest it become “an everything and nothing policy”. And, after Boris Johnson had bemoaned the fact that the per capita GDP of the North East was lower than in what was formerly communist East Germany, the Centre for Cities think tank calculated that the true cost of a real levelling up strategy that closed the disparities between North and South would likely meet £1.7 trillion, or around 350 times the amount currently allocated to the government’s Levelling Up Fund.
Talk of levelling up grates when local authorities have had their budgets slashed under a decade of austerity imposed by Conservative governments
The £4.8 billion levelling up bidding pot that local authorities will compete over to spend on infrastructure projects in their areas is dwarfed by annual government spending on debt servicing, which costs around £38 billion a year, about eight times as much. And a lot of the funding is going to strange places. Several prosperous Conservative-held areas – including the Chancellor Rishi Sunak’s own constituency of Richmond – contain priority one zones for Levelling Up Fund money, whilst much poorer but Labour-held Salford will only be priority two, and Sefton, a council that contains some of the most deprived wards in the country, is labelled priority three.
Talk of levelling up grates when local authorities, which are responsible for delivering services including transport, housing, planning and social care, have had their budgets slashed under a decade of austerity imposed by Conservative governments. Cities like Liverpool have seen the amount they receive from central government fall by £816 per person, and northern towns have been much harder hit than their southern counterparts.
But it doesn’t have to be this way. If the government is serious about levelling up it has a chance to change the narrative when it releases a levelling up White Paper this autumn. The ideology that committed states to budget cuts and small, non-interventionist government is receding. Governments are now borrowing at record-low interest rates, and so spending to boost growth and productivity in the future pays for itself. In the US, Joe Biden is attempting to guide trillions worth of infrastructure spending through Congress. The European Union is also handing out cash for member states to “build back better”.
Johnson has already shown he’s more willing than some predecessors to spend and invest public money, so he should commit the funding needed for projects like Northern Powerhouse Rail, which would connect the great cities of the North with high speed railways.
Local authorities could be given the money and powers to build social homes in places where they’re needed most, to re-regulate their bus services, to improve skills and training according to the specific needs of their areas, and to help solve the crisis in social care. Investment in green technology, renewable energy and advanced manufacturing could be targeted at areas of high deprivation and unemployment, with local residents upskilled to work in the high-wage, high-productivity jobs that will play a key part in any green industrial revolution. To accompany all spending commitments from councils and national government, locally owned companies and suppliers that pay the living wage could be given priority in all public contracts.
There’s an opportunity now for the UK to embrace a form of levelling up that isn’t just a piece of Johnsonian bluster but a truly transformational agenda. Whether or not it happens could decide the outcome of the next election, and could change the shape of British politics and the country’s economic and social geography for years to come.
Jonny Ball is a special projects writer at the New Statesman and a PhD student at the Centre for Urban Research on Austerity in Leicester. On 9 September, the New Statesman is holding a free conference on regional development and levelling up in Manchester. For more information visit events.nsmg.live/regionaldevelopment. Photo: Boris Johnson at the Coventry battery factory where he spoke about levelling up (David Rose/AP)