The EconomistAugust 1st 2020 Leaders 11L
ike anygoodjournalist,BorisJohnsonisamasterofthe
snappy phrase. “Get Brexit done” won him the general elec-
tion in December 2019. But the slogan that is supposed to define
his premiership is “levelling up”. Those two words express a
complex set of economic and political ideas and grievances.
Much of Britain is lagging behind London and south-east Eng-
land; often it feels looked down on by the smug metropolitan lib-
erals who run the country from there. Levelling up means bring-
ing everyone up to speed.
Even at the best of times, Mr Johnson struggles to give sub-
stance to a slogan, and these are not the best of times. The gov-
ernment’s poor response to the covid-19 pandemic has dented
the prime minister’s popularity and crowded out other matters.
But regional inequality is a burning issue, for two reasons.
The first is political. Having won lots of seats in the Midlands
and north of England, including some in former coal-mining ar-
eas where Tories used to be as rare as snowflakes in summer, the
Conservative Party needs to hold onto them. It now faces a La-
bour Party led not by the dismal Jeremy Corbyn but by Sir Keir
Starmer, a disciplined politician from a working-class back-
ground. The Tories cannot run on a platform of bringing about
Brexit, because it has happened. They need another story to tell.
The other reason is that regional inequality really is a blight
(see Britain section). Take the 10% of small re-
gions with the highest gdpper head and the 10%
with the lowest. In Britain the ratio between the
two is 4.3—higher than in any other oecdcoun-
try. Male life expectancy in Glasgow is more
than a decade lower than in Westminster. Al-
though it is too early to be sure, covid-19 could
widen the gap. If offices, factories, schools and
transport are disrupted, the places that will cope
best are the ones where most people can work remotely. That is
London and the south-east.
It is neither possible nor desirable to distribute wealth per-
fectly across space. But Britain’s geographical inequalities seem
to be reinforcing themselves. Some places, mostly in south-east
England, have enjoyed a virtuous spiral of rising productivity,
rising investment and rising aspiration. In others, the spiral is
downward. The fact that 41% of disadvantaged London 18-year-
olds go on to higher education, while only 15% do in Barnsley,
hints at how much talent is being wasted.
Ideally, barriers that prevent migration to thriving places
would fall—the main ones are the planning rules that make it so
hard to build homes in and around cities like Brighton, Leeds
and London. Still, people are seldom as footloose as economists
think they should be, and they have become less so. Moreover,
they dislike being told to move. The perception that their corner
of the country is being left to die is dangerous, because it makes
people more inclined to support political charlatans and de-
structive policies. The Brexit vote showed that.
Although Mr Johnson has an idea and a slogan, he has little
clue about how to go about levelling up. Downing Street has
flung some money at small cities and towns. It promises to
spend more on public transport in the north of England. It hasbriefedaboutwinklingcivilservantsoutofLondon, and even
about moving the House of Lords to York (though it may have
been joking about that). A devolution plan is promised.
The government is muddled partly because its analysis is
faulty. Ministers often suppose that the places being left behind
are towns and villages, and that big cities are fine. Last month
Michael Gove, the government’s in-house thinker, complained
that previous governments had favoured cities like Sheffield;
John Whittingdale, the junior minister for media and data, ar-
gues that the bbcpanders to Manchester’s “metropolitan elite”.
In fact, the problem lies precisely in cities like Sheffield and
Manchester. Britain has 40 metropolitan regions, of which only
nine are wealthier per person than the national average. Outside
London, the metropolitan elite is too small.
A good way of making big cities and their hinterlands more
productive is to upgrade their infrastructure. Even on the basis of
the Treasury’s narrow cost-benefit calculations, which take too
little account of projects’ potential for boosting growth, the
south-east gets an unfair share. Transport projects have been ap-
proved in London while others in the Midlands and north with
better benefit-cost ratios are nixed. That needs to change.
More important, though, is to relinquish control. Economists
find that, in the developed world, more devolved systems tend to
be more equal, probably because public services
are more efficient when run by those who use
them. Measured by the percentage of total tax
revenue raised centrally, regionally and locally,
Britain is by some distance the most centralised
country in the g7. The failing is not so much that
the Treasury favours the capital; it is that, if you
want to widen a major road or electrify a railway
line anywhere in England, you must first con-
vince the Treasury to find the money.
David Cameron, who ran a more urbane government than Mr
Johnson, began to build metropolitan institutions that can serve
as a counterweight to Westminster. Some 37% of English people
now live in places with combined authorities and “metro may-
ors”. These have little formal power but much clout; to judge
from the experience of London (which got its first elected mayor
in 2000) their powers will grow. Unfortunately, they still depend
on the Treasury, so can be pushed around. In 2018 the govern-
ment cut funding for Greater Manchester because it planned to
build 11% fewer homes than it had promised.
To make metropolitan government more independent, it
should be given greater power over taxation. Britain is overdue a
reform of local property taxes, which are too low and not very
progressive. Local and metropolitan authorities could also re-
tain business rates, as some already do. There is even a good case
for allowing them to levy income taxes, although within strict
limits, to avoid tax competition. Scotland already has that pow-
er. There will need to be a balancing mechanism to prevent the
poorest areas from losing out in the short term.
Britain has been so politically and fiscally centralised for so
long that such changes would be a wrench. They should be tried
all the same. Mr Johnson has taken risks before, and won. 7Levelling up Britain
The prime minister has a big idea, but no plan to achieve it. The trick is to relinquish powerRegional inequality