‘Levelling Up’ Regional Policy under a New Name?

The first thing ministers should do with their newly free bandwidth after the conclusion of the Brexit negotiations is to work out what “levelling up” really means. They all have slightly different definitions, which suggests that if Johnson knows what it means, he hasn’t shared it with his senior ministers….Levelling up is in danger of becoming the sort of nebulous political catchphrase like the “big society” that David Cameron waffled on about. “It is an utterly meaningless, meaningful-sounding phrase,” complains one senior backbencher.

Isabel Harman Guardian

No it isn’t. How is it anything different for example than regional policy, or the definition of it by the EU which terms it ‘‘Cohesion policy‘.

Cohesion policy is the European Union’s strategy to promote and support the ‘overall harmonious development’ of its Member States and regions.

Enshrined in the Treaty on the Functioning of the European Union (Art. 174), the EU’s cohesion policy aims to strengthen economic and social cohesion by reducing disparities in the level of development between regions. 

Spatial economic disadvantage needs to be seen through the lenses of competitiveness and the economics of agglomeration. Agglomeration economies has two components. Industrial – cost advantages of industries locating close to each other, and urban – innovation spillover effects from concentration.

Across Europe the areas which saw the greatest agglomerations were mainly coal mining areas. It is sometimes claimed the locational decisions of industrial pioneers were arbitrary, for example Wedgewood did not locate at St Austell where his clay came from. However that was not the main transport cost – that was coal. After all the Lancashire cotton mills were not located on the Missisipi.

Regional policy has had its ups and downs in the UK but is now on a resurgence. Its focus and policy tools have shifted. For a while the focus was ‘levelling down’ forcing relocation via tools such as development certificates and wrong headed policies such as preventing the growth of Cambridge or even Birmingham. Elements of this even persisted recently, for example John Prescotts disastrous view that you you shouldn’t plan for 20 years housing in the South East as by then people would be moving north. In the event the Blair Government has highly successful in reviving the economies of the Core Cities but this simply generated more housing need in the North and has done nothing to create a flow of South-North migration.

The term ‘levelling up’ does not mean ‘squashing down’ so it implies a rejection of policies to restrict housing or employment growth in the South. I’m not sure MPs in the south see it that way.

At a time of deindustrialisation it made sense to concentrate on urban economics of scale. There has been some cluster development in the North – for example financial services in London and Leeds, but other attempts at cluster development – such as for Culture and sports in Sheffield, have been less successful.

The core cities do not have a housing problem which is all the more odd why housing targets policy are concentrating on them. Apart from Bristol and Brum/Wolverhampton they are all exceeding their targets even the new ones. Therefore the new standard method will do nothing towards levelling them up, rather it is maintaining the cap on authorities in the South East with high affordability problems.

The real problems are in the rings of mill and manufacturing towns in the north around the core cities. It should be noted that most of England does not have the problem prevalent in Europe of depopulation in remote areas and rural hinterlands of industrial conurbations. This is because few areas in England are truly inaccessible and the ability of many to set up business in rural areas, often from home. In England its often escape to the Country rather than escape from it.

Expanding urban economies of scale will be difficult with the centrifugal shifts exacerbated by covid. However many northern towns are poorly connected to Urban Cores and cities to each other.

Two issues stand out – the lack of a rapid transit system in Leeds /Bradford – easily the largest conurbation in Europe to lack one, and of course the core Northern Powerhouse goal of better connecting Leeds and Manchester. There are also a number of potential ‘quick wins’ such as the potential to kick off Wirral waters through restoring the Birkenhead Docks branch as a streetcar system. Here the DOT should do a deal, we will fund it for a share of land value uplift on sales.

Across Europe the plan for most ‘peripheral’ deprived towns has been planned decline of population with considerable public monies spend on scrubbing up form coal and steel areas. England is unusual in having a number of good practice cases of reversal of population decline. Most notably Corby -aided by its central location and many shovel ready inward investment plots made by the former New Town Development corporation, as well as European Money to restore the former steel site. This does suggest that public intervention at key locationally attractive sites can make a difference.

For areas lacking in connectivity there are opportunities to make new links. I am not one normally to argue for new Motorway Links but the M65 was cut short and stops at Colne having crossed the Pennines and doesn’t get to Bradford. It was extended in the 1990s then momentum ran out. The DOT is now studying a link.