Levelling Up

In post-covid-19 UK, ‘levelling up’ is an economic and political imperative.

The politics of the last General Election, just six months ago, now seems like a lifetime ago. Since then, an international health crisis has claimed hundreds of thousands of lives and triggered an economic crisis that is continuing to gather momentum. Pressure for a credible, long-term exit strategy mounts with every day that passes. The urgency and anxiety of Brexit seems a distant memory, and with it the government’s pledge to ‘do right’ by voters in traditional ‘Red Wall’ territory who helped it secure an 80-seat majority.

But it has become clear that it is the same Red Wall communities who are likely to be hit hardest by the coronavirus crisis over the long-term. Our own research published last month revealed that places in the North and Midlands set to suffer more than double the projected losses in economic output compared to the South East. Average earnings in Red Wall areas (already comparatively low) are set to fall from £18,580 per year to £17,340 by the time of the next General Election – enough to push many households into poverty.

Thankfully, there is still a way of avoiding the worst of the damage. Firstly, immediate action must be taken to reduce the risk of unemployment and incentivise good jobs. From a practical perspective, this would mean extending the furlough scheme for key sectors beyond October, and providing targeted support to employers with conditions attached, like the payment of a real living wage. Our recent polling shows that the public clearly supports these measures, but would like the government to go further to not only save jobs, but also to ensure employers live up to their responsibility and provide good jobs. Once short-term support is in place, it is critical the government revitalises its levelling up agenda. Signs from No.10 suggest the Prime Minister understands this, but so far policy ambition and promises and have been vague.

At the Centre for Progressive Policy (CPP), we have set out a series of five tests the government needs to meet in order to have truly delivered on levelling up – including on skills, halving the gap in health and life expectancy between regions, and reducing inequalities between places by urgently reviewing the definition, rights and pay of key workers. A critical part of the process will also be greater coordination between local and central government. Mayor of Greater Manchester, Andy Burnham, has recently called for regional representation at Cobra meetings, but CPP calls for this principle to be extended through a National Mayoral Council, so that all strategic economic and social policy decision making reflects the real needs of the whole country.

If the government is able to implement these changes, it will be righting decades of economic injustice. But clearly this is no easy feat. Covid-19 has made what was an already daunting task even harder. Whether the government is motivated only to holds onto its seats in 2024 or driven by economic or moral imperative, the case for an inclusive recovery and broad-based prosperity – is more critical than ever before.

 

PSE Aug/Sept 20

PSE Aug/Sept 20

Minister for Investment: The tide of International Trade

Click here to read the Aug/Sept issue of PSE magazine, looking ahead at life post-pandemic. With the Investment Minister, Mayor Dan Jarvis and MP Darren Jones steering us towards economic recovery.

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