It’s going to take a lot more to ‘level up’ the UK

Brian Groom is a former assistant editor at the Financial Times and is the author of “Northerners: A History, from the Ice Age to the Present Day” (HarperNorth).

Northern England, where the textile mills, coal mines, shipyards and steelworks once led the world in the Industrial Revolution, is in the spotlight once again.

Now a key testing ground for regeneration — which the developed world still grapples with — the region’s future will have important political and economic consequences for Britain.

Countries have, for decades, been trying to breathe life into former industrial regions, with mixed results. According to the International Monetary Fund, regional disparities within advanced nations have been creeping up since the late 1980s. In the U.K. in particular, schemes to revive northern England date back to the 1920s. And while some of the programs have had partial, temporary benefits, overall they have failed to stem the region’s relative decline.

The North’s share of Britain’s economic output has shrunk from 30 percent after World War I to about 20 percent today — the flip side of London and the southeast’s advancement. Despite this, the North’s economy remains bigger than that of countries like Argentina, Belgium, Denmark, Ireland, Norway and Sweden, and if it underperforms, the whole U.K. economy is held back.

Prime Minister Boris Johnson has promised, amid some skepticism, to “level up” the U.K.’s economy, which is home to some of the biggest geographic disparities in productivity, pay, skills and health of any major nation. A difficult task amid rising inflation, a squeeze on living standards and the fallout from the Ukraine war — and all as the U.K. attempts to forge a future outside the European Union.

Along these lines, Johnson’s government has set ambitious medium-term targets. In a recent white paper, it proposed 12 “missions,” including a pledge that “by 2030, employment and productivity will have risen in every area of the UK, with each containing a globally competitive city, and the gap between the top performing and other areas closing.”

The paper’s aims were broadly welcomed, but critics have warned that a lack of detailed implementation, a shortage of funding and a cautious approach to devolution would make them hard to achieve.

Johnson’s Conservatives made a major breakthrough in the traditionally Labour-voting North at the last general election in 2019 — almost half their gains were in so-called “red wall” seats in the north, midlands and northeast Wales And to keep those seats, Johnson now needs to persuade northern voters that the economic tide is turning.

But being able to do that will also  be complicated by the U.K.’s withdrawal from the EU.

The EU’s regional programs have helped fund a multitude of projects, including Liverpool’s Echo Arena and the National Football Museum in Manchester, as well as enterprise centers, technology centers, job training, improved housing and broadband, environmental and renewable energy projects. And though the government is replacing the money with a Shared Prosperity Fund, northern think tanks still complain of a shortfall over the next three years.

In truth, however, while valuable, neither the EU schemes nor the U.K. government’s regeneration efforts have narrowed the economic divide.

Could other European countries perhaps offer useful lessons?

Undoubtedly, the most spectacular regeneration effort of modern times has been East Germany’s revival.

At the time of reunification in 1990, output per worker was around 60 percent of former West Germany’s level, but is now at 85 percent. Implemented programs have included welfare spending, infrastructure and business support. Crucially, there was cross-party backing, and schemes were designed to last decades.

German reunification was, of course, exceptional. The cost is estimated to have reached €2 trillion, met partly by a solidarity tax on German adults. The U.K.’s £4.8 billion Levelling Up Fund and £3.6 billion Towns Fund look puny by comparison. And it seems unlikely that resources will be available on anything like Germany’s scale.

Another question is whether sufficient powers and funding will be devolved to mayors and councils. The white paper invites nine English areas to apply for devolution deals, and some current mayors in places such as Greater Manchester and the West Midlands will be offered further powers, similar to those in London.

However, little fiscal autonomy is on offer here. According to the Institute for Government think tank, over the past decade, central government grants to councils have been cut by 37 percent in real terms.

It is not entirely a bleak picture for the North, however. Its main cities, notably Manchester, Leeds, Newcastle and Liverpool, have revived to a degree that few would have predicted in the 1980s — though they still have problems of deprivation.

These achievements have all involved partnership between local politicians and businesses and also, to a degree, the central government. And though former mill towns, coalfields and seaside towns are harder to revive and may require different policies, the same type of partnership seems essential.

To date, regeneration policy in England has been deviled by half-hearted schemes that have chopped and changed with every change of government, and even of prime minister. Johnson’s “leveling up” follows “rebalancing” and the “Northern Powerhouse” under David Cameron.

But people who live and work in an area really do know best what it needs. And a successful revival of the North must involve public-private partnership, significant investment, long-term schemes, cross-party support, central government buy-in and local autonomy.

Northern England has contributed so much to the global economy and culture, whether through engineers like Richard Arkwright, inventor of the water frame for cotton spinning and developer of the factory system, and George Stephenson, father of the railways, or social reformers such as Josephine Butler, women’s suffrage campaigners such as Emmeline Pankhurst and writers such as the Brontës and William Wordsworth.

The North knows what’s best for it, and it also knows not to place its future solely in the hands of national politicians. A true revival is unlikely to happen unless it involves the talents, energy, enterprise of Northerners themselves.

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