Levelling up isn’t happening – London is once again getting more than the North

Recent analysis shows the capital has got £7bn more in policy initiatives and Covid responses than the North East and the North West

James Moore
Thursday 25 March 2021 15:12 GMT
Sunak accused of ‘naked pork barrel politics’ as ‘levelling up’ cash handed out

Levelling up is the government’s favourite slogan and a safe harbour to retreat into when things are getting sticky. Rows with the EU over vaccines and unemployment surging? Look at what we’re doing to level up Britain.

But will the blizzard of announcements designed to put meat on the bones do anything to achieve the lofty, and laudable, aim of fixing the north-south divide? Which, incidentally, previous Tory policies did so much to help create in the first place.

An analysis by the Centre for Progressive Policy, a think tank, suggests not. To the contrary. The Centre argues that the biggest beneficiary of current, and pending, policy initiatives is, in fact, London.

First off it looked at the various pandemic support measures; the furlough scheme, cheap loans for businesses with government guarantees, self-employment support and the universal credit uplift.

These, it says, have delivered £7bn more to London than the North East and the North West combined.

Now that’s justifiable when you consider the greater economic hit the capital has taken from the pandemic and the need to prevent the levelling down of the UK’s economic engine. It should also be remembered that London contains pockets of fairly dire poverty itself. Nowhere else is inequality within a region so stark.

It’s once you get past that and look at the announcements of future spending where things get interesting.

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The most costly policy the government has unveiled is its attempt to stimulate investment by offering companies super generous tax reliefs for pumping money into upgrading their plants and equipment and suchlike. This could be worth up to £25bn to them.

“Based on pre-crisis rates of business investment in machinery and equipment by sector, London is likely to receive the largest tax breaks per head of any UK region, £510, in comparison to just £280 in Yorkshire and the Humber and £320 in the North East,” the report says.

This is because of the capital’s large economy and “a concentration of investment in sectors like business services where investment tends to be in machinery and equipment”.

The report also looks at the Levelling Up Fund and the Community Renewal Fund, which, together with the Towns Fund, are supposed to support left-behind local authorities. It argues that 6.5m people living in some of Britain’s most deprived areas risk missing out, in part because of the criteria used for divvying up the cash.

There’s evidence from multiple sources that suggests these funds are not levelling up, but creating a party political advantage through funding pork-barrel projects of dubious benefit.

The Yorkshire Post, for example, recently highlighted the example of Stocksbridge, the former steel town on the edge of Sheffield which just happens to be where I was born. It was a key Tory target during the last election and received visits from Boris Johnson and communities secretary Robert Jenrick. They were rewarded. It is now a marginal Tory seat.

The (apparent) quid pro quo? Stocksbridge picked up £24m from the Towns Fund to pay for a funicular railway and a town centre spruce up despite being rated as “low priority” by the government’s own criteria. With the commendable honesty that is a feature of that part of South Yorkshire, Mark Dransfield, who co-chairs the Stocksbridge Towns Fund Board characterised the decision as “a political thing”.

Or how about the prosperous North Yorkshire constituency of Richmondshire, which boasts the sort of bucolic scenery tourist boards like to use for their brochures. It’s somehow rated as more deserving of levelling up cash than are Barnsley or Salford, where the backdrop is more likely to attract someone like Ken Loach in search of a location for his latest slice of gritty social realism.

Pumping levelling up cash into Richmondshire, which is represented in Parliament by one Rishi Sunak, makes any controversy over Stocksbridge disappear like the steel industry which used to sustain it.

If levelling up ends up garlanding the sort of places where they’re more concerned by what the builders will charge to put in an extra bedroom than they are about the bedroom tax, it’s going to be about as successful as betting on Kim Jong Un in a 100m race.

The Centre asks: “Has the government given up on levelling up?”

It’s understandably sceptical over the way the government is spending taxpayers’ money and doesn’t think putting white elephants in Tory seats or forcing a few hundred civil servants up north (and leaning on the BBC to do the same with some of its journalists) is going to help much.

It goes on to suggest some ideas that might actually deliver some benefit – your starter for ten would be funding local government in deprived areas properly.

But the ideas, and the question it asks, presuppose that levelling was ever something more than a slogan to dangle in front of northern voters. The evidence suggests it wasn’t.

The multi-million pound, funicular railway powered question, however, is whether the government can sustainably convince people I’m wrong, or at least distract them from the failure of this “policy” by doing something like, I dunno, waving the union flag a lot?

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