Levelling Up: A Slogan or a Comprehensive Economic Revitalization Plan?

Strategic Insights -

Regional disparity is a critical economic and political challenge in the UK, with productivity differences among the widest in Europe. Prime Minister Boris Johnson's rebranded "levelling up" agenda, aiming to revitalize left-behind regions, must be accompanied by concrete policies to tackle this complex issue. The government's focus on infrastructure investment is a step in the right direction, but it is insufficient to bridge the vast gap between regions. A comprehensive approach, including education, cultural amenities, environmental improvements, and high-quality job creation, is necessary to unlock regional potential.

Key Takeaways:

  • The UK's regional disparity is an economic and political challenge that requires more than one stimulus package to tackle.
  • The places suffering the biggest decline over recent decades were also likely to vote to leave the EU in 2016 and switched their Labour MPs for Conservative ones in Mr Johnson's December landslide election victory.
  • The bulk of the "levelling up" effort focuses on investment in infrastructure, with a promised £640bn spend over five years, but this is a big hole to fill, and the pandemic has made the need more urgent.
  • High-value-added activity requires a certain level of density, and a critical mass of knowledge jobs makes it attractive for others to move there.
  • Improving the quality of life for residents, including pleasant town centres, helps retain and attract talent that the most productive businesses seek.
  • A government that listens will have to find money for schools, cultural amenities, and the environment, and combat the scourge of low pay and unpredictable incomes.
  • Regeneration will not come from routine clerical jobs or call centres, but from high-quality jobs, including private research institutions and knowledge-intensive services.
  • Local ownership and knowledge about where advantages lie are key to success, and a better balance between local and national decision-making is needed.

Statistics:

  • £640bn to be spent on infrastructure investment over five years. (Source: [1] March Budget)
  • Productivity differences in the UK are among the widest in Europe. (Source: [2] European Commission)
  • The places suffering the biggest decline over recent decades were also likely to vote to leave the EU in 2016. (Source: [3] EU Referendum Results)
  • 2016 EU Referendum Results: Leave 17,410,742 votes, Remain 16,141,241 votes. (Source: [3] EU Referendum Results)
  • December 2019 election results: Conservative Party 365 seats, Labour Party 203 seats. (Source: [4] Election Results)

Sources:

[1] March Budget, UK Government

[2] European Commission, Productivity Differentials in the EU

[3] EU Referendum Results, UK Electoral Commission

[4] Election Results, BBC News