Like any good politician, Boris Johnson is a master of snappy phrases. “Get Brexit done” may have won him the general election in December 2019, but the slogan he may want to define his leadership now is “levelling up”. With much of Britain lagging behind London and south-east England, it often feels like one corner of the country is driving growth, while the other is left to wither. Although Mr Johnson has an idea and a slogan, it is unclear whether he can deliver on his promise of reducing the regional inequalities faced by the country.
Regional inequality is a burning issue in the UK for two main reasons. The first is political: having won many seats in the Midlands and North of England from Labour in 2019, Boris Johnson’s Tories are under pressure to justify many new voters’ trust for them. With Brexit being arguably the most significant driver of these votes, the Conservatives will need to tell a new story to retain “red wall” seats where political disenfranchisement, a feeling of being ‘left behind’ has long been growing.
In the 2020 Spending review, Rishi Sunak, the Chancellor of the Exchequer, announced that he would spending £4.8bn on a Levelling Up Fund, which would be devoted to improving infrastructure like town centres and local transport in less developed areas of the UK, claiming that this will have “a viable impact on people and their communities”.
At the same time, many existing problems have been perpetuated by the COVID-19 pandemic. With the richest region of the UK already being 30 times richer than the poorest, the pandemic is expected to widen the gap between the North and South. One of the many causes of this has been that areas which are developed enough will be able to work remotely with ease, but those dependant on the secondary sector may struggle to grow due to lockdowns and subsequent job losses in the hospitality sector among others.
Research from the Institute of Financial Studies (IFS) found that “regional disparities in the UK are greater than in most comparable countries”, with the UK being more regionally unequal than 28 out of 37 OCED (Organisation for Economic Co-operation and Development) countries. This is thought to be caused by China’s large comparative advantage over the UK since the 1990s, which led to 1.5m British manufacturing jobs being lost between 1997 and 2009. Areas like West Midlands and Sheffield were well known for their vehicle and steel manufacturing industries but due to the decline, are now areas in need of help the most.
The fact that 41% of disadvantaged 18-year-olds in London go on to higher education, while only 15% do in Barnsley, hints at how much talent is being wasted in many poorer parts of the nation. It is clear that areas concentrated around London are given more opportunities than those in the North of England, highlighting the issues with attracting half of the foreign direct investment projects to the London and South-East. Hence, the government needs to intervene and implement schemes like the Levelling Up Fund to grow job opportunities in the North where unemployment rates have persistently been 2-3% higher the rest of the country.
At the same time Torsten Bell, director of the Resolution Foundation, says “We’ve got levelling down happening” and that “London’s had the worst of the crisis.”. London has had the highest increase in universal credit claims during the pandemic and, according to the Department for Work and Pensions, it now has the highest proportion of people on UC of any British nation or region which, according to the IFS, has complicated the levelling up agenda.
There are many growing criticisms of the Levelling Up Fund. Miriam Cates, Tory MP for Penistone and Stocksbridge (a constituency just outside Sheffield which the conservatives won for the first time in 2019), claims that “If we only look at spending and not tax, there is a risk we are trying to level up with one hand tied behind our backs”. She believes that as well as spending, the government should change the way they tax, with firms and households in richer areas of the UK being taxed more than the areas needing most support. Even though the North of England receives £3,000 to £4,000 more in spending than is paid in tax per head (mainly reimbursed by taxpayers in London and the South East), the North East, one of the poorest areas, pays 2 times more Value Added Tax (VAT) as a percentage of GDP than London. However, this may be because the North East’s GDP is 6 times lower than London.
The Good Law Project, a campaign group, contends that the design of the Levelling Up Fund is unlawful as the amount of funds given to local authorities, based on a ranking, appears to favour the Tories’ newly won constituencies.
Several experts have attacked the ranking system, which placed local authority areas in Great Britain in three tiers of deprivation. Rather than relying on the official government index of deprivation (based of measures like income and crime rates), it used a bespoke set of measures such as commuting distance to work, empty housing and productivity levels. This favours wealthy rural areas as they are dependent on tourism and farming, which are low productivity sectors, so they are placed in top-priority tiers.
Barnsley and Salford, the most deprived parts of the country, were ranked as second-tier priority (both have labour MPs) but Newark, the home of government secretary Robert Jenrick, was given first-tier priority even though it is not very deprived. In England, 14 areas that were wealthier than average were ranked in the neediest category, with each of them having at least one Conservative MP. While criticised by the opposition, Tory pork barrelling could help steer more votes towards the Tories in a future election.
Regional inequality is an issue that needs to be solved by the government to allow the country to prosper. However, it is clear that as Tom Forth, head of data at the non-profit Open Data Institute Leeds says, “success of this strategy will take decades to become obvious, and without a clear vision and strong leadership, people will struggle to wait.”
