Dave Hill: London still props up UK economy as ‘levelling up’ balloon deflates

Dave Hill: London still props up UK economy as ‘levelling up’ balloon deflates

The Observer reports that a backlash is brewing among “red wall” Conservative MPs. They fear that “levelling up” is winding down. A micro clause in the accounts of the Government Property Agency, responsible for managing the civil service estate, says “two hub projects” have been dumped, one in Newcastle, the other in Birmingham. The Goliaths of the Northern Research Group have expressed alarm. The government has called for calm – fear, not, the hubs are coming! But what difference would they really make?

“Levelling up” has always been more of a “Boris” balloon than a serious attempt to reverse decades of economic decline in the north of England and elsewhere and, in the process, to reduce national dependency on London. We can debate the public finance case for spending less on office space in central London and investing in Tyneside instead. We can accept that some good has come from building a Treasury block in Darlington. There has even been some decent devolution to the West Midlands and Greater Manchester under deals struck earlier this year. But have foundations been laid for a long-term, regional rebalancing act that would strengthen city economies across the country beyond the capital?

Not terribly. Moving departmental jobs around the map has been tried many times before but, as the Institute for Government has confirmed, the benefits are limited. And a Commons committee has criticised “a boosterish approach” by the current administration, with no evidence to back up boasts about achievements or estimates of the effects of closing offices in smaller towns “where the economic impacts are likely to be more acutely felt”. The Levelling-up and Regeneration Bill is still plodding through Parliament. The further north you go, the further behind London top grade A-level achievement falls.

Meanwhile, here in the big, bad capital, two large themes have endured through all the traumas since the 2019 general election and before. One is that without our resilience and power, the rest of the country would be struggling even more. Buffeted by Brexit, hammered by the pandemic, and hurt by the cost of living just like everywhere else, London is nonetheless bouncing back. The latest indicator, from the National Institute for Economic and Social Research, is that “real wages” here will rise faster than anywhere else. Visitors are returning, office space is in demand and public transport use continues to revive. Even before the end of Covid, London’s economic output was back on the up while everywhere else it was still down.

All that is in spite of the other large theme – national government’s deliberate degrading of London out of arrogance and electoral expedience. The impoverishment of poorer boroughs has been going on since 2010, as the Institute for Fiscal Studies has shown – a long-running background story whose importance dwarfs the higher profile “levelling up” pork barrel performances that have discriminated against London too. When the pandemic plunged Transport for London into crisis, PM Johnson’s most dedicated creeps and control freaks made emerging from it more difficult. Showboating interventions in the London Plan have enjoyed a revival, with Michael Gove signalling his intention to save Tory marginal seats if he can.

This meddling and posturing does no one any good: not London, especially poorer Londoners, and not the rest of the country either. The government now seems interested in London only as an aspect of managing its own decline. The likely next one might not be London’s friend either. But the old mantra is still true – you cannot “level up” this country by bringing its capital city down.

X/Twitter: On London and Dave Hill. If you value On London and its writers, become a supporter or a paid subscriber to Dave’s Substack for just £5 a month or £50 a year.

Categories: Comment

Leave a Reply

Your email address will not be published. Required fields are marked *