Roger Liddle on tackling the long-term structural issues that drive regional and local inequality within England
While the Prime Minister has made ‘levelling up’ the centrepiece of his post-Brexit agenda, The Financial Times’ Robert Shrimsley described Mr Johnson’s recent speech to the Conservative Party Conference as “all destination, no plan?”
We have, as the PM put it, “one of the most imbalanced societies and lop-sided economies of all the richer countries”. No world beating status here – one of the worst records for regional inequalities in western Europe, worse than Germany’s despite the incorporation of its Eastern Laender, worse even than Italy with its Mezzogiorno.
The ‘Decline of the North’ has been with us for a century or more. But since the 1980s the regions of England, including now large parts of the Midlands, had their economic heart torn out of them. In part victims of inevitable change as new technology replaced low skilled manufacturing jobs in the shift to a knowledge and service economy. Margaret Thatcher’s economic policies led to a much bigger and more sudden loss of manufacturing jobs than should have occurred.
The social consequences have been profound. Take the case of Barrow shipyard in my native Cumbria, which lost thousands of jobs in 1980s. The shipyard now enjoys a brilliant hi-tech recovery with many fewer jobs but much higher levels of skill. However, too many families that suffered job losses in the 1980s have got stuck in a cycle of generational deprivation and worklessness, where a culture of low expectations makes a mockery of educational opportunity; and where health and life expectancy is shockingly poor.
After ten years of austerity, our public services are badly stretched in addressing these problems: too thin on the ground, too siloed, too focused on crisis, too defensive and resistant to change. To speak the language of New Labour, they need “investment and reform”.
Deindustrialisation was accompanied by radical change in UK labour markets – the loss of trade union power, the disappearance of heavily unionised sectors, the emergence of an hourglass economy populated by low paid service jobs at the bottom. This went along with the reassertion of short-termist shareholder capitalism which discouraged long-term investment in new technology and skills.
The Prime Minister in his conference speech asserted that “no government has had the guts to tackle the long-term structural weaknesses in the economy”. But these weaknesses have been apparent since the 1980s, well before, in Mr Johnson’s rewriting of history, uncontrolled immigration became our main structural problem. Immigration is not the cause of our structural weaknesses, nor will controlling it provide any kind of permanent solution.
The Labour governments of 1997-2010 have many proud achievements to their credit and I am now overjoyed that our party is at long last prepared to celebrate them. Huge fiscal transfers to the regions massively improved public services, and raised children and pensioners out of poverty. Yet this has not proved a lasting change. After 2010, it was put into reverse by an austerity that bore most harshly on the poorest parts of the country. And the recent £20 a week cut in Universal Credit takes out more spending power than levelling up puts in.
We should have done more in government to restore a self-sustaining economic backbone to our weaker regions. The Regional Development Agencies did a great job, and the great northern cities were reborn. In the old industrial towns and mining districts, however, people looked to us to reverse the damage Thatcher had wreaked. Too many felt we had let them down and that contributed in my view to the strength of their Brexit vote.
But where now is the government’s plan? There are lots of different funds, including the High Streets Fund, Towns Fund, the Levelling Up Fund, Shared Prosperity Fund, Environment Fund, and a Bus Improvement Fund – for all of which local authorities make bids to Whitehall departments. London based civil servants who know little about each area, make recommendations to Ministers who then consult the local MPs.
England’s regions, therefore, end up rather like Oliver Twist standing in the workhouse queue, begging for whatever doles our London masters are prepared to spare us.
This top down but fragmented approach is not a coherent regional policy. We need place-by-place to build on existing economic strengths and identifies where new ones can be created. With his new responsibility for the levelling up agenda, Michael Gove should initiate a fresh start. The keys will be twofold. First, stronger local government structures based on credible unitary authorities – with elected mayors to offer clear accountable metropolitan and sub-regional leadership. Second, a new fair funding settlement based on a transparent independent assessment of need, not the good fortune of a strong revenue base.
Local government and mayors must be trusted to draw up their own rolling plans for economic development. Each authority should make a single annual capital bid to central government to determine investment priorities. High aspiration and lofty rhetoric are not good enough. We need a plan, and we need it now.
Lord Roger Liddle is a Labour Peer. He tweets @liddlro
Published 13th October 2021