Levelling-up: The Blair-Osborne Project

There have been many attempts in the past to reduce the gaps between richer and poorer parts of the UK. But despite progress on some measures (most notably employment and pay), geographic disparities remain substantial and stubborn, particularly when it comes to productivity. The gap in typical pay between Kensington and Chelsea and Scarborough has fallen by around 11 percentage points over the past two decades, but it is still the case that the average worker in the Chancellor’s workplace, Westminster, produces three times as much economic value as someone in his home area of Richmondshire.

The 400-page Levelling Up White Paper published today should be applauded for setting these geographic problems at the heart of the Government agenda. Levelling up is no longer just a slogan: we now know that it is a two-part argument with strong echoes of both George Osborne and New Labour.

How so? The White Paper combines the devolution of the former Conservative Chancellor with the bigger and more activist state focused on deprived areas of the last Labour government. To begin, every part of England is set to get “London-style” mayors and powers if they so choose. But alongside this, the Government has announced 12 “national missions” that will drive policy as well, and which by 2030 will be used to judge the success of the levelling-up agenda. All this is reminiscent of the child poverty targets of the 2000s, but with the focus switched from poor families to poor places.

Both approaches are clearly desirable. Visible local leadership is important both for outcomes and as an end in and of itself, as is the accountability and focus that comes from measurable targets to improve outcomes and close gaps across a range of essential economic, public service and social metrics.

There are, however, significant challenges to this marriage of ideas. The lack of any new money has received the most attention so far, but almost as important is that the approach lacks regional infrastructure (think of the Regional Development Agencies of the New Labour years), lacks integration with wider central government decision making like Spending Reviews, and comes on the back of ten years of doing the opposite in terms of which areas were prioritised for funding. Promises of prioritising capital investment in poorer regions via R&D and housing spend will not swiftly offset the legacy of poorer areas having received much deeper cuts to day-to-day public spending (think schools and local government) over the past decade.

Bringing back George Osborne’s devolution mantra has the advantage of going with the grain of recent progress and doing a better job of explaining how more areas can fit within that framework. The experience of the existing mayors should make us confident that visible leadership can emerge, but this also highlights that the long game here isn’t about electing any old Tom, Dick or Harriet, but about building new political institutions that truly stand the test of time.

Levelling-up has now got a shape that builds on different political strategies of the past 20 years, but whether that agenda becomes a governing project very much remains to be seen. We know from post-reunification Germany that (partially) successful attempts to close regional gaps take time and huge sums of public investment. The key point stands: the devil will be in the delivery and not just the details of the 400 pages published today.