Levelling up is failing as London’s power grows

The pandemic’s repeated lockdowns have exacerbated the divide between the capital and the rest of the country

As the House of Commons prepared for Monday night’s confidence vote, Simon Clarke, the Conservative MP for Middlesbrough South and East Cleveland, appeared on a local radio station to declare his backing for the Prime Minister.

“Boris Johnson is the only person who can level up the area,” Clarke told Heart North East, prompting one Twitter user to joke that the only thing a Tory government can claim to have levelled in the region is the giant steelworks at Redcar, after it went into receivership in 2015.

It’s perhaps a bit harsh to lay the blame for something that happened on David Cameron’s watch at the door of the current Cabinet but it’s not unfair to say that the Government’s muchtrumpeted regional levelling-up agenda is in danger of being remembered as yet another overwhelmingly failed flagship policy.

The evidence is everywhere, starting with the findings of the House of Commons’ Public Accounts Committee (PAC) into the £4.8bn fund for reducing regional economic inequalities.

It paints a chaotic picture of the way the scheme was being managed, accusing the Government of “gambling” with taxpayers’ money. It also warned that the Department for Levelling Up, Housing and Communities, led by Michael Gove, still did “not yet have a strong understanding” of what delivers local growth, which you would imagine is pretty fundamental if it is to stand any chance of success.

Even more damning is the latest data showing that London is once again outpacing the rest of the UK on the economic front. Growth in the capital rose by 1.2pc in January to March, considerably faster than a national average of 0.8pc. Wales and the East Midlands were the only other regions to grow faster than average, with growth of 1pc and at 0.9pc respectively.

The North East, Yorkshire and the Humber, and the South West matched the average, while Northern Ireland posted growth of just 0.4pc, the lowest of all the regions.

Yet more worrying still are figures showing London has already bounced back to prepandemic levels, while the rest of the UK is still yet to recover from the damage of repeated lockdowns.

Meanwhile, output across all other regions, except Northern Ireland, is still significantly below where it was before Covid struck. In the industrial heartlands of the West Midlands, growth remains more than 10pc smaller than it was at the end of 2019.

London’s resurgence will come as a shock to the doomsayers and the office evangelists who predicted that working from home trends would destroy the capital as it was transformed into a barren wasteland of abandoned tower blocks, boarded up shops, and half-built developments, still stubbornly serviced by taxpayer-funded empty Tube trains and deserted buses.

But the data is a bigger blow to official hype surrounding levelling-up efforts. Far from helping to narrow regional inequalities by shifting growth from major cities to poorer areas, as some experts predicted, it suggests that the pandemic has done the opposite, exacerbating the divide between the capital and the rest of the country.

A separate report from the Resolution Foundation should be required reading for Westminster mandarins with hopes of uniting the provinces and London. By speaking to people in Leeds, Hull, Barnsley and Scarborough, the think tank gained a truer picture of what life is really like in towns far from London’s metropolitan bubble.

A proliferation of low-paid jobs brought about by casual employment and zero-hours contracts; “no-go” areas created by empty shops, unsafe public spaces and weak policing; uncertain prospects for young adults that fail to make it to higher education – these are the concerns of people in those areas.

There were warnings too about the dangers of a “one size fits all” economic model, and the risk of exacerbating inequality and pushing up housing costs by pursuing growth too aggressively, suggesting respondents were “more open-eyed than many politicians”, the report’s authors argued, not unfairly.

People north of the M25 aren’t fools. They understand where this Government’s priorities lie when they see London’s Elizabeth Line opening to great fanfare just months after the eastern leg of HS2 between Nottingham and Leeds was scrapped, or when the Northern Powerhouse rail project has been downgraded.

Critics argue that the Government needs to move away from its decentralised approach and devolve further powers to regional leaders with a much better sense of local needs. The PAC highlights an “alphabet soup” of funding pots that hinder the ability of regional authorities to plan strategically in order to drive long-term change.

The problem with this Government is not ambition. Far from it. Its Levelling Up White Paper contained that in spades. The issue time and again is that with any grand announcements, there is usually little in the way of substance to back it up.

We saw it just recently with the Prime Minister’s long-awaited energy strategy, which is apparently going to save us from Vladimir Putin’s clutches by delivering energy sovereignty powered entirely by renewable sources. At its heart are plans for a fleet of eight new nuclear power stations despite the fact that Britain has failed to build a single one for nearly three decades.

Joined-up, strategic thinking seems beyond this Government. It loves slogans but increasingly it is clear that there is little but hot air behind the big ones.

‘Output across many regions is significantly below where it was before Covid struck’