What is to become of the government’s ‘levelling up’ agenda? Between tax cuts, defining what a woman is and Claire’s Accessories earrings, the commitment to tackle regional inequality has so far got short shrift in the Tory leadership race. Timely IPPR analysis out this week indicated that since 2019, the gap in public spending per person had actually widened between the North of England and the rest of England, even once you take out covid emergency support like the furlough scheme.
Considering the demands the exchequer will be under in the Autumn due to the cost of living crisis, and the unwillingness it has so far shown to replicating, for example, the massive amount of public spending required to tackle regional inequalities in East Germany after the fall of the Berlin Wall, many are reasonably asking if the commitment to tackle regional disparities will leave Number 10 with the Johnsons.
Why does levelling up matter?
Depending on who you ask, levelling up either dates back to Serjeant Barry’s 1868 commitment to religious equality, Justine Greening’s mum in 2014, or the 2019 Conservative manifesto. Lest we forget, this is of course the manifesto which both Liz Truss and Rishi Sunak were elected on. This means that it’s unlikely that either can get away with dropping levelling up entirely, even if it is to receive less attention in their administration. On one level, levelling up matters simply because of electoral arithmetic. After all, the North / South voter coalition which gave the Conservatives an 80-seat majority at the last election is still up for grabs.
Beyond this though, the commitment to tackle regional inequalities is vital for the success of the UK. The problems of anaemic productivity growth, entrenched social issues, vast life expectancy and skills gaps across the country—which the Levelling Up White Paper correctly identified—have not been fixed. Charities who are trying to tackle these issues in so called ‘left-behind areas’ will be looking nervously ahead to how the cost of living crisis will hit families in the Autumn, and will be desperately hoping that the people who they support will not be forgotten by the new Prime Minister.
What might Liz’s levelling up look like?
Both candidates have made public commitments to continue levelling up. Looking first at Liz Truss who has been stressing using economic growth to level up the country. At the recent BBC debate she said that the agenda needed ‘urgent action’, positioning her wider low tax agenda as the solution, with low tax zones in the North of England to bring investment to different areas. Some justifiably raised an eyebrow at cutting taxes as a means to tackling inequalities, pointing out that the North is already home to some of the cheapest parts of the UK to invest in, with skills gaps being a much bigger issue. She also suggested that replacing the building targets in the Levelling Up Bill with reduced red tape could make it easier for developers to build on unused land in those areas.
Relationships and supporters matter too of course. Kemi Badenoch, previously working for Michael Gove at the Department for Levelling Up, has been rumoured to be being considered for the role of Levelling Up Minister under Truss, suggesting that the agenda may have a strong advocate in her Cabinet.
What are Rishi’s regional regeneration plans?
Sunak, on the other hand, pointed to his own record as Chancellor during the BBC debate, particularly his work funding Boris Johnson’s initiatives, and the importance of education and skills as a means to level up the country. This may come as a surprise to those who remember Sunak’s Treasury reportedly blocking new funding for people and skills until 2024 in the UK Shared Prosperity Fund.
Sunak is supported by Tees Valley Mayor Ben Houchen, who earlier in the contest outlined a five-point ‘Levelling Up Pledge’ which Sunak has signed up to. This includes keeping a Cabinet level Levelling Up Minister, ensuring every part of the UK can get a devolution deal, giving Mayoral Combined Authorities greater flexibility on business rates, and ensuring the Treasury delivers on levelling up priorities outlined in the White Paper.
However, these commitments have received little airtime from Sunak and how they interact with his goals of reducing debt and getting inflation down remains to be seen.
What about the cost of living crisis?
What we have heard much less of in this race are the social aspects of regional inequality, such as poverty, crime and homelessness. These are the issues which the public told us they would most like to see tackled as part of the levelling up agenda—but are now very likely to become much worse or more entrenched due to the cost of living crisis.
At the BBC debate, neither candidate promised immediate cost of living support for households beyond tax cuts and a promise of ‘wait and see’. Given the likely public mood when bills start soaring this Autumn, it is unlikely that any Prime Minister will be able to avoid an emergency package. Although this will be welcome, like the support announced in May, it is not sufficient to tackle deep entrenched inequalities across the country. That requires a long-term, coordinated strategy, delivered alongside businesses, local government and charities.
At NPC, we are thinking about what this would look like in reality. Over the next few months, we will be conducting further levelling up research on what effective charity sector and government pilots to tackle entrenched social inequalities should look like in different parts of the UK, and we are interested in hearing from charities who want to be involved. The aims of levelling up are too important to sink alongside the Johnson administration, and if you agree get in touch at Theo.Clay@thinkNPC.org