The day began with expressions of dismay from London in response to a story in the Sun claiming the government has been pondering greatly delaying building the HS2 High Speed rail link all the way to Euston or even ending it at Old Oak Common. By lunchtime Chancellor Jeremy Hunt had told the BBC that, in fact, it definitely will be coming all the way to the London Borough of Camden – where some large structures have been felled to make way for it – though he didn’t provide a date. Time will tell.
While we kill time in the waiting room we can fine comb today’s actual main event – Hunt’s speech at Bloomberg, described by the Treasury as setting out his “vision for long-term prosperity in the UK”. What was and wasn’t in it for London or anywhere else?
In line with the government’s post-Liz Truss reversion to the 2019 election manifesto there was plenty in the speech about “levelling up” delivered under a long section sub-titled “everywhere” – meaning everywhere in the country. Hunt said: “Structural issues like poor productivity, skills gaps, low business investment and the over-concentration of wealth in the South East have led to uneven and lower growth.” He added: “It is socially divisive if young people feel the only way to make a decent living is to head south. But it is also economically damaging.”
He then made some big claims for the progress of the enigmatic “levelling up” agenda, which he unequivocally characterised as a programme for strengthening areas outside of the capital and its surrounding region. Hunt said that since February 2020 “70 per cent of new employed jobs have been created outside London and the South East” – implying, of course, that 30 per cent weren’t, which is perhaps what you would expect given that Greater London alone produces 24 per cent of all UK economic output.
Hunt also said: “Every region has seen pay grow faster than London since 2010, which shows that our approach to regional growth is working.” Paul Swinney, Director of Policy and Research at Centre for Cities, who was in the front row, responded: “What he didn’t say was that this happened because wages in London have stuttered rather than [those] elsewhere growing strongly. Also known as: levelling down.”
Also promised by Hunt were “investment zones”, described as “mini-Canary Wharfs” to be “focused in high potential but underperforming areas in line with our mission to level up”. Here was a strong echo of the Icarus rhetoric deployed by Truss during her short spell too close to the sun. Her notion of “investment zones” was, as Jack Brown wrote for On London, really Geoffrey Howe-style deregulated “enterprise zones”. And in the end Canary Wharf only happened because huge sums of public money were shovelled into it.
What else? Some optimistic talk of Brexit being “an opportunity”, which it is hard to interpret as anything other than a sop to Tory backbenchers and activists whose gaze remains firmly averted from the writing on the wall. But there was one thing to bring a bit of cheer.
In line with what he said to the Financial Times the other day, Hunt said “we need to move decisively towards fiscal devolution” so that “local leaders” have “the tools they need to deliver for their communities”. However, he specified only Tory Mayors Ben Houchen and Andy Street. And the FT told us that government officials had the West Midlands – Street’s patch – and Great Manchester at the top of their lists.
Swinney shared his understanding that the Treasury “pushed back on this” when the levelling up white paper was published last year, which sounds like everything anyone has ever heard about the Treasury when it comes to devolving power. Hunt’s backing for it is therefore a “big deal” in Swinney’s view. Yes. But where does London figure in the Chancellor’s plans?
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