Of all the promises made by Conservative politicians over the past 14 years, the pledge to convincingly reduce the UK’s regional inequalities has turned out to be the most empty. George Osborne came up with the idea of the “northern powerhouse”. Theresa May talked about somehow getting “our great cities firing on all cylinders to rebalance our economy”. Boris Johnson enthusiastically inflated the same ideas with his trademark brand of hot air, and tantalisingly floated them over the kind of post-industrial places that switched from Labour to the Tories in 2019. But beyond a few promising spurts of devolution to metro mayors and tiny pots of regeneration funding, hardly anything changed. That so many councils are now facing bankruptcy compounds the sense that the “levelling up” drive was something close to a scam.
This does not, of course, invalidate the basic idea. The UK – and England in particular – remains absurdly centralised and riven by a yawning economic gap between London and the south-east, and just about everywhere else. If a new government is going to create a new kind of country, this is where a lot of its focus should fall. My advice to them is as follows:
1. Finally sort out the money
The English councils that run local services, from social care to leisure centres, are in the midst of cuts, savings and council tax rises aimed at filling a financial gap put at around £4bn. Unless something drastic changes, another austerity drive will loom next year, and the year after that. Whatever the shadow chancellor, Rachel Reeves, says about an incoming Labour government’s parsimony, the hole needs to be sustainably filled. She might find a few tax loopholes to close; she could just as easily take inspiration from the wealth tax proposed by Labour MP Liam Byrne, a 1% tax on wealth over £10m. This would hit around 20,000 people and bring in up to £10bn a year.
To ease the pain of councils’ current annual rush to balance their books, Labour seems to be seriously considering enabling councils to set their budgets over “multi-year” cycles – which is a very good idea, but only a small part of what needs to change. Reeves has spurned fiscal devolution, but letting local and regional areas keep a share of, say, VAT and income tax is an idea whose time has surely come.
There is one more change that is screaming out to be made: the radical remodelling of council tax. Outdated and unfairly regressive, a Keir Starmer/Reeves government could base any reform on the changes currently being planned in Wales.
2. Start to solve the transport mess
The greatest single success of England’s limited devolution programme has been the Greater Manchester mayor Andy Burnham’s decision to bring bus services into public control. This needs to become the norm and the same model ought to be extended to other aspects of public transport – for example, the tangle of often unreliable railway branch lines that serve cities and extend into our suburbs and shires. We should rebrand them – à la London’s Overground – and put services and stations under local control. That would open the way to a miracle that Europeans take for granted but Britons still think of as fanciful: integrated local transport. Can you imagine?
While we’re on this subject, a new government ought to symbolise its push to upgrade transport outside London by allowing at least one big city to create a new transit system, financed by a bond issue. Because I love the place but am endlessly frustrated by how maddening it is to get around, I nominate Bristol – which needs something like either Newcastle’s longstanding Metro or Manchester’s trams.
3. Build new universities
Manchester proves it: successful modern cities build their economies around thriving universities, a realisation that ought to boot aside a lot of the illusions and half-measures that have so far passed for levelling up. We ought to create four or five new institutions of higher education with a focus on technology and green industry, and situate them in places that could do with the resulting economic boost. The growing tech cluster in the north-east might make Sunderland a perfect potential site. I’d also nominate Stoke-on-Trent, ideally located as it is next to the M6 and equidistant from Manchester and Birmingham.
In Wales, Newport or Swansea would be worthy contenders. In the east of England, I’d suggest Ipswich. To celebrate Scotland’s long history of industrial innovation – and boost an area once known as Silicon Glen – why not build a university in Livingston? Then offer incentives to startups in those areas to encourage graduates to stay. If that kind of idea sounds far-fetched, it’s a measure of how meek and unambitious levelling up has so far proved to be, and why it urgently needs to be revived and reinvented.
John Harris is a Guardian columnist
