The problem the government is trying to solve with its “Leveling Up” agenda is clear – the fact that the UK is one of the most geographically unequal major economies in the world. Not only that, disparities in the economic performance of UK regions have increased significantly over the past three decades.
While having one of the world’s fastest growing regions – Greater London – was an inevitable side effect for many in politics during this period, this white paper marks a new consensus that this injustice was a choice.
Other nations around the world have developed intensive strategic plans to close regional disparities like these, for example Spain and Germany.
The origins of the Prime Minister’s use of the phrase ‘leveling up’ lie in his 2019 election pledge by the Conservative leadership to equalize spending per pupil in English schools and in some work by former Education Secretary Justine Greening on social mobility.
But Leveling Up is not about doing the same for the disparity in public spending, such as on transport, between London (£882 per capita in 2019/20) and North East England (£315 per capita). Or even spending on science and technology in the North West (£76 per capita) and the South East (£122 per capita).
In fact, the spending commitments in the Leveling Up white paper are quite limited, reflecting budgetary constraints. But there were some surprises that there is no new money beyond existing resources, nor are there new commitments beyond the existing spending review, for what the Prime Minister describes as his “defining mission”.
Where a mission like this has been accomplished, for example in Germany after reunification, there have been massive tax transfers worth £70 billion a year, or nearly £1.5 trillion in total.
The result has been that a productivity gap between East and West Germany has shrunk from 40% to 15% and the stark fact is that per capita GDP in some East German regions now exceeds that in some Northern England regions.
Can entrenched patterns of economic geography really be changed without paying a very significant score? The answer to this question concerns not only the prime minister’s professed “mission”, but also the coherence of his political coalition of 2016 and 2019. It seems to require an enduringly larger state doing more.
Regional differences in the UK are artifacts of our economic history and also the result of the decisions of successive governments.
The end result of all this was a concentration of political, economic, and cultural power in and around the capital on a scale not found in most great nations. This has impacted other regions, draining them of capital and talent.
Reversing this, “Level Up” as the Prime Minister puts it, is a very long-term and persistent mission. It’s not particularly new. Decades ago, the government promised to move departments out of London – some even made it as far as Croydon.
The renewal efforts of the new Labor governments following the late Lord Roger’s Urban Taskforce report saw billions poured into big cities, development agencies created, attempts to attract foreign capital into property-oriented renewal programs and decisions taken by elected assemblies. One of the main differences in the new announcements is the focus on smaller cities as well as larger cities.
So the white paper contains 12 missions. They all aim to show progress in closing gaps in productivity, education and transport. For example, the “local transport links” will be “significantly closer to the standards of London” within eight years. Does this mean a metro or tram system? How much closer exactly?
All of this makes it clear that leveling up is a series of processes rather than a set of defined actions or goals. Crucially, all of these missions are scheduled for 2030, and as such it will be difficult to assess fulfillment at the next election. But the mission is indeed very ambitious.
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