Dave Hill: Liz Truss regional pay cut pledge underlined feebleness of ‘levelling up’

Dave Hill: Liz Truss regional pay cut pledge underlined feebleness of ‘levelling up’

There was a bleak sort of logic in Liz Truss’s Conservative leadership campaign pledge to link the pay of civil servants to local cost of living standards – a pledge she comically U-turned away from this morning – despite the embarrassing fact that the policy would reduce incomes for areas outside the capital, thereby heroically producing the exact reverse of “levelling up”.

When, as Chancellor, her rival Rishi Sunak announced he would be creating a new “economic campus” in Darlington as part of moving Treasury jobs out of London – that bad and horrid place that bankrolls public services across the rest of the country and must, therefore, be punished – it was pointed out, not for the first time, that relocating bits of Whitehall to “left behind’ cities and towns doesn’t them much good, as it drains employees and energy out of the local private sector rather than fostering productivity and growth.

Perhaps making decentralised civil service posts less financially attractive would reduce that perverse outcome, but it’s hard to see it helping with the other half of the problem that arises when chunks of Whitehall are sent to Swansea or Newport or, for that matter, when London-based broadcasters are made to decamp to Salford or Leeds – the problem of Londoners who work for those employers not wanted to leave London or the wider south east and taking jobs with private companies in the capital instead.

The favourite to become Britain’s next Prime Minister promised to make that difficulty greater while, at the same time, making it harder to recruit locally. The risk with such an approach is of creating regional civil service centres offering jobs nobody wants. Could “cutting waste” be any more wasteful?

Although now seemingly abandoned, the Truss wheeze, like Sunak’s Darlington ploy, further illuminated how thin and feeble the Tories’ vaunted “levelling up” agenda is. The desirable goal of lifting the economic power and productivity of other cities to levels closer to those of London cannot be achieved on the cheap or by weakening the capital, on which the whole of the country is so heavily and unhealthily dependent. As a former Greenwich councillor (2006-2010) with a pedigree in London politics that goes back to 1998, Truss is surely aware of that reality.

Along with greater devolution, “levelling up” the other regions will need sustained and shrewd public investment for many years to come, especially, as a recent Institute for Government report concludes, in transport infrastructure and skills. As things stand, and whether we like it or not, the scope for that investment will not exist unless London recovers and resumes flourishing. As the Big Bopper rightly said, it’s only the truth, Ruth. But it is a truth neither Truss nor Sunak dares to utter and that the Tory selectorate does not want to hear.

This article was updated at 13:30.

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