At any other time - without Brexit, Covid, the war in Ukraine and the cost-of-living crisis - the Government’s Levelling Up agenda would surely be generating more headlines.
Improving regional economies to provide more opportunities for people living in places like the North East, while stopping London and the South East from overheating, is a prize that has eluded Governments for decades.
There has been a feeling among many that, like the Northern Powerhouse before it, levelling up was a good slogan but not much more - wheeled out by Ministers when anything positive happened in the North and used as a stick to beat them with when things went wrong.
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February’s Levelling Up White Paper at least added some substance to the soundbite, outlining 12 national “missions” that define levelling up and take in everything from local pride and the economy to skill levels, public transport and devolution.
Though delivered by Levelling Up Secretary Michael Gove, the White Paper is generally regarded to be largely the work of Andy Haldane, former chief economist at the Bank of England who can claim North East roots through a Geordie mother and a father from Sunderland.
And in a recent talk at Sunderland Univerity, Mr Haldane revealed how his background in the North East had influenced his thinking on the UK’s regional inequalities.
“Places like Sunderland are the reason why in the early 1980s, a time of deep entrenched recessions, when de-industrialisation was in its final throes: that was the point that made me want to study economics. That was reason why I went on to be a public servant for 32 years and that was the reason I took up Boris’ challenge last year to help out on Levelling Up. And there hasn’t actually been a single day of my working career when I wasn’t thinking of trying to improve the lot and expand the opportunity of places across the UK, lots of places like Sunderland. That’s why this agenda is so important.”
In his lecture, Mr Haldane said the UK had deep and entrenched inequalities that were impossible to justify morally or economically. But he said that despite places like London having greater levels of pay and better health than places like the North East, people in the capital were often more unhappy, in part because of the effects of its overheating economy.
“The UK’s spatial disparities don’t work for places for places doing poorly in pay terms or for those doing well,” he said. “So if we close those disparities, it will be a twin win - good news for those financially in poor shape and also for those in good financial shape but where everyone’s having a miserable time.”
Closing regional inequalities, he said, would be worth “tens of billions of pounds each year on a permanent basis,” adding: “The size of the prize from levelling up, that two-sided win from shrinking differences across the UK, is huge.”
But he said it was important to recognise that that gap had to be closed in a number of ways, hence the 12 missions in the White Paper.
“I would have loved it if I’d captured the levelling up mission in a single way but the truth is if you look at the key ingredients of success in a place they’re not single, they’re multiple. They’re economic and financial, they’re social and cultural, they’re about leadership. Each and every one of those is crucial in the recipe for success of a place.
“That’s why when it came to defining what levelling up success might look like, we couldn’t go singular, we had to go plural, and that plurality was reflected in 12 levelling up missions.”
Mr Haldane rejected the main criticism that has met the Levelling Up White Paper since its publication, namely that it is strong on ambition but low on actual financial commitment from the Government. That evaluation has only been heightened by the recent Government Spring Statement, which made little reference to Levelling Up, but Mr Haldane believes much of the backing for his ambitions should not be coming from public sources anyway.
“The key here is not that the Government writes a cheque then walks away,” he said. “The key is provide just enough money to de-risk projects sufficiently to attract private finance. That’s the way you go about levelling up the UK. There is a huge pool of private sector capital out there seeking returns. The returns are here. Connect that big pool of capital with local projects and great things will flow from that.
“People say: ‘Rishi’s given you no new money.’ I don’t need new money. I’m hoping most of it will come from the private sector. That’s the secret sauce of levelling up success and that requires a different role from Government to one its played in the past.”
Whether Mr Haldane’s optimism for the Levelling Up agenda is bear fruit is yet to be seen. The Government has set a date of 2030 for its missions to be achieved, meaning at least two General Elections will be held before Ministers can be properly held accountable on them.
Last week the influential Institute for Government raised doubts over the abilities of programme to properly reduce regional inequality, however, saying that only four of the 12 missions are clear, ambitious and have appropriate metrics. The other eight all need to be recalibrated if they are to deliver on the government’s promises to level up the UK.
It also argued five of the missions are not ambitious enough, meaning that little or no change would be needed to meet them, but three missions are too ambitious to be realistic.
Mr Haldane’s optimism on Levelling Up remains undimmed, however.
“If I’m even half right with my diagnosis, he said, “this is just the moment for Sunderland to realise that latent energy and fulfill its potential, Then what has been my life’s work will have been fulfilled and I can retire a happy man.”
