Top-down rebalancing won’t work

Photo: Andrew Parsons/Number 10 (CC BY-NC-ND 2.0)

Has levelling up been flattened? asks Paul Salveson

There are growing concerns up North that the Government’s ‘levelling up’ agenda will be abandoned. Several Northern newspapers published a joint statement addressed to then-leadership contenders Liz Truss and Rishi Sunak calling on them to commit themselves to continuing with the policy which has seen some new investment going into projects north of Watford.

Last month, they put a number of questions to Sunak and Truss, urging them ‘don’t turn your backs on the North’. They asked:

  • What will you do to make sure the commitments made to the North by your predecessors as prime minister are kept?
  • The average worker in the North is 50% less productive than one in London. What will you do to address this widening gap?
  • What will you do to address spiralling rates of child poverty in parts of northern England?
  • How far will you go to give Northern leaders control over education and skills, transport and health budgets currently held by Westminster, and will you give them more powers to raise or lower taxes to boost local economies?
  • Will you retain a Government department responsible for tackling regional inequalities with a Cabinet-level minister for whom this is their main job?

The two contenders responded quickly and reassuringly. How could they not do? Yet the questions reflect growing unease across the North among business leaders, local authorities and even Tory MPs that the ‘levelling up’ agenda was going to be a casualty of the leadership change. Things were not helped by Michael Gove having ministerial responsibility for ‘levelling up’. For some reason, nobody seems to like him.

Despite Sunak’s protestations, he was filmed in that well-known deprived town Tunbridge Wells telling a slightly different story. He told party members how he had shifted money from “deprived urban areas” to fund projects in the Kent commuter belt. The FT reported that the “former UK chancellor’s comments, made in a sun-drenched garden, appeared to cut across the Government’s rhetoric about ‘levelling up’ Britain and spreading wealth beyond the south-east. Sunak said he had changed Treasury funding formulas to ensure areas such as Tunbridge Wells received ‘the funding that they deserve’, in a video clip obtained by the New Statesman magazine that quickly went viral.”

He went on to say that, “We inherited a bunch of formulas from the Labour Party that shoved all the funding into deprived urban areas…  That needed to be undone. I started the work of undoing that.”

Jake Berry, chair of the Northern Research Group of Tory MPs and a supporter of Sunak’s then rival, Liz Truss, said he was not impressed. He commented that “in public, Sunak claims he wants to level up the North, but here he boasts about trying to funnel vital investment away from deprived areas”.

Liz Truss has had the sense to be more careful about what she says, playing on her younger days in Leeds, despite slagging off the school which managed to get her dispatched to Oxford to read PPE.

What all this really demonstrates is how regional rebalancing will never work if it is just about top-down largesse from central Government that can be given, and just as quickly taken away, on a political whim.

Truss and Sunak have both said they want to see more powers devolved to cities and communities. But what are they planning to devolve to in practice? In England, we do not have functioning regional government. What we have got is a half-baked system of mayoral authorities in which one person is elected with precious little accountability. This contrasts with Scotland, Wales and Northern Ireland, which have well-established devolved governments elected by PR. Until the English regions have something like this, devolution is meaningless.

Clearly, there are big opportunities for Labour here. As the party edges closer to an accommodation with the Liberal Democrats, who, traditionally, have been far more open to democratic devolution than Labour, perhaps there is a possibility that change might be on the agenda. I’m not holding my breath. If Starmer thinks that all he needs to do is hand a bit more money and power to Andy Burnham and other city mayors, he is much mistaken. What is needed is a much more deep-seated shift from our centralised state and underfunded mish-mash that is local government to a new regionalism that can work with empowered local government. It needs new regional assemblies that build on the city regions but take in a wider area, with members elected on a proportional system. If we took Greater Manchester as an example, it could extend northwards to take in Lancashire and west to include Warrington. Call it ‘Lancastria’ – regionalism should reflect people’s historic identities rather than a planner’s idea of what works. A region the size of Lancastria makes sense in terms of a viable regional economy and a sustainable transport network.

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