Getting down to levelling up

It is often assumed that Britain’s Conservatives are on the same journey as the US Republicans, shifting their voter base and political priorities downwards from the comfortable to the coping. There are certainly overlaps but the Republican shift seems driven more by culture, even ethnicity, than it is here. Indeed, the difference can be summed up in those two words Boris Johnson keeps repeating: levelling up.

Trumpism, the erratic billionaire populism, did not seek to level. Leaning left on economics was briefly a plausible direction in the Steve Bannon era. But it never materialised. By contrast, the Tory tilt towards Brexitey, just-about-managing Britain, appears to be led as much by economics as by commitments to national sovereignty and mainstream values.

But the levelling up agenda is not Conservative in the sense that conservatism has generally been understood for the past 40 years. A serious levelling up strategy is not compatible with rigorous free market economics, balanced budgets, and a small state. It is, indeed, a quintessentially social democratic idea. It leans against many of the spontaneous outcomes of market transactions including the ‘Matthew’ principle of rewarding the already successful places and people. It implicitly rejects trickle-down economics and requires a huge, coordinated intervention from a smart state, locally and nationally.

Moreover, levelling up also means a rethink of Britain’s Thatcher-era economic growth strategy, which Blair and Brown largely persisted with. That is a strategy based on London, professional and financial services, and low regulation/flexible labour markets to pull in inward investment. It means rethinking, too, the social policy that accompanied that growth model, which amounted to ‘saving the bright ones’ from declining places via higher education and salving the wounds of left behind places with welfare spending and well-funded public services.

Given what a change of tack this all amounts to it is not surprising that the left do not believe that the Tories are serious about levelling up. And the liberal commentariat duly scorned Boris Johnson’s (admittedly somewhat rambling) levelling up tour d’horizon in July. But few in Labour or the commentariat have understood that the post-2019 Tory party, led intellectually by the Gove-Cummings axis, really are not the ‘same old Tories’.

And fortunately the Tories are taking it very seriously with three of their brightest stars (Michael Gove, Neil O’Brien and Kemi Badenoch) freshly reshuffled into position to run with this over-arching post-Brexit, post-Covid, policy behemoth.

It is obviously not the case, as its detractors maintain, that levelling up is just a slogan. But it certainly is the case that even starting the process of tackling Britain’s extreme regional inequality will be a many-generation enterprise and the project has so many moving parts, reaching into almost every aspect of public policy, that the drafters of the white paper due this autumn must have wondered where to begin.

It is not as if no one has tried to crack the problem of diverging life chances before. Hundreds of billions of pounds have been spent on regional policy in various guises over recent decades and not all of it has been wasted.

Both Labour and previous Tory governments (remember the ‘Northern Powerhouse’?) have agonised over regional inequality. But they have also promoted other policies which have tended to exacerbate it: a London-centric growth policy and human capital policies based on residential higher education that has stripped declining places of their brightest young people.

The previous big idea for tackling the problem was so-called ‘agglomeration theory’ — the idea that reviving metropolitan centres outside London via higher education, professional services and high-tech all clustering together, would ripple out to the surrounding towns. This has happened to some extent, where transport links allow, and aspects of it should live on in the levelling up strategy. But there are too many places, such as Oldham, where the rippling has just not happened, despite a tram link that delivers you into the heart of Manchester in 30 minutes. (This has been of special interest to Munira Mirza, head of the No. 10 policy unit, who comes from Oldham and has been one of the main champions of levelling up inside the Government.)

Levelling up can be looked at from a myriad of angles but is probably best sub-divided into three big boxes. The first is infrastructure, incentivising business and planning. The second is human capital, vocational training, graduate retention. And the third is the efficient devolving of power locally and establishing pride in place.

Each box throws up its own policy and political dilemmas.

On infrastructure and business, for instance, how much scarce public investment should flow into transport links compared with, say, promoting high-tech manufacturing?

On human capital, how can further education colleges that have been rundown in the shadow of the expanding university sector be expected suddenly to produce the technicians and skilled construction workers that are needed to make levelling up work?

On devolving power, how much should the Government collaborate with or try to bypass the often hostile Labour/SNP local authorities that still govern most of ‘left behind Britain’ and retain the relevant convening and coordinating power?

There are some innovative public-private agency role models such as the Docklands Development Corporation in London or, more recently, the Tees freeport.

The government's forthcoming white paper on levelling up is likely to focus on recreating some of the same conditions of a freeport for depressed inland regions.

Another theme will be locating virtuous circles, for example northern towns such as Barnsley or Grimsby tend to have a high proportion of homes lacking insulation and low carbon heating and a high proportion of people who would benefit from reskilling into green jobs.

There are also a couple of recent trends that should work with the grain of levelling up. The pandemic-related spread of home working means that successful professionals from left behind areas can stay in their home town if they wish and yet still work as a business analyst or consultant. They do not always have to ‘leave to achieve’.

The roll out of superfast broadband connectivity, something that Boris Johnson was on to before most other politicians, is key here. It will also allow more affluent people doing well paid professional jobs that can be done remotely to move to places where property is relatively cheap and beautiful countryside just a 10-minute walk away. That could stimulate a positive chain reaction of employment.

The other trend that goes with the grain of levelling up is the diminishing returns to higher education and the growing feeling among many parents and some young people that a vocational apprenticeship is at least if not more valuable than a degree.

Linked to this is a new approach to social mobility with less of a focus on the ‘long’ mobility of getting disadvantaged young people to elite universities, though that remains desirable, and more on the incremental steps that almost everyone can take if they have the right basic education and training and retraining opportunities.

Meanwhile, the relative downgrading of higher education and upgrading of further education in the government’s affections has to be achieved without alienating the university sector which has a central role to play in the new focus on research and development and the regional innovation needed to power the economics of levelling up.

But the biggest dilemma of levelling up as a macro-political strategy is also the most obvious one: how can the shift in policy concern and resources be achieved by a Conservative government without alienating the party’s southern middle class base?

The Tory defeat in the Chesham and Amersham by-election had some local factors but it was also a loud alarm bell for those more traditional Tory MPs, mainly quiet so far, who are uncomfortable with the leftward shift of the party represented by the levelling up priority.

There are real conflicts of interest between poorer northern voters and affluent southern ones on everything from housing and planning to taxation and public spending. This was after all the traditional Labour-Tory divide. But we are in new political territory with old allegiances weakened and a battered country that could benefit from a unifying, even idealistic project. Levelling up could be precisely that.

Perhaps Boris Johnson’s defining mission is to sell levelling up to the great British middle class. He should tell them straight — maybe in his conference speech? — that there will be short term costs for those most able to pay. But at relatively little personal disadvantage to themselves they can now play their part in a moment of national renewal just as their grandparents accepted, no doubt grudgingly in some cases, paying for the welfare state in the 1940s.

Politics is usually about managing conflicts of interest but there are also moments when an overriding common interest presents itself. Levelling up is a case in point and should also surely be a cross-party project. Johnson should reach out to Labour and invite them to collaborate as they will be doing in any case at a local level. The left prefers to talk about the everyday economy and mobilising the so-called foundational economy of local public services, retail, construction, and so on, to keep more money in poorer regions. But this is at best a small corner of the bigger levelling up story.

There remains the important matter of how we can measure progress in this great national mission. Politicians generally avoid making rods for their own backs but if the white paper is not serious about what metrics it is using to judge progress — is it longevity? Income per head? Regional added value? Well-being indicators? — it will not deserve to be taken seriously.

As a politician with a proven ability to reach out across class divides, the Prime Minister is well-suited to be cheerleader for a galvanising project such as levelling up.

Let’s hope his lieutenants have the imagination and focus to deliver on the detail and learn from past mistakes. Johnson has nailed his post-Brexit premiership to the levelling up mast, he should give it his best shot. And if he cannot show after a few years that some of those regional chasms are beginning to close, he should go and give someone else a chance.