What Britain’s New Prime Minister means for reducing Regional Inequality
By Noah Hebbs, Head Editor
The defenestration of Boris Johnson, and his replacement by Liz Truss, initially appears to have dented the hopes for a reversal in the level of regional inequality within the United Kingdom. The cause of this pessimism is a significant change in policy direction by the new government, driven by a shift in economic thinking that suggests a movement away from redistributive reforms and government intervention in the economy.
Regional inequality is one of the worst in the developed world according to a 2019 study, a fact unlikely to be reversed given the regressive impact of the Covid-19 pandemic. Johnson sought to address this growing “north-south” divide, and the political anger that it cultivated, in his promises to Northern “Red Wall” voters during the 2019 election campaign. Promising a more interventionist state that would curb growing inequities whilst pursuing a broadly socially conservative agenda, the Conservatives enjoyed great success, winning masses of historically-Labour seats in the Midlands and the North that paved the way for their best election result in decades.
A consequence of this was that a core tenet of Johnson’s domestic plans, and arguably his flagship political proposal, was that of “Levelling Up,” a socio-economic programme governed by government investment and decentralisation of power away from Whitehall. A reduction in regional inequality driven by infrastructure spending that was no longer directed solely to the Southeast was the aim of “Levelling Up.” The accompanying rise in living standards that would result was hoped to consolidate the new voters that underpinned the Conservative’s broad electoral coalition, guaranteeing the party’s future success.
While the “Levelling Up” agenda has spurred much bombastic rhetoric, the Johnson administration has delivered few concrete projects. A much-anticipated White Paper was subject to widespread criticism for its purported lack of detail an adequate funding, with the responses summed up in a previous blog.
That said, at least the previous government had an explicit commitment to tackling the issue of regional inequality, thus allowing them to be held accountable electorally. Similarly, the appointment of Michael Gove, a political heavyweight with a reputation for enacting radical change as the intellectual architect of Brexit, to the role the Secretary of State for Levelling Up (among other duties), at least signified that the government took the issue seriously.
The question thus emerges of what course Truss is likely to chart regarding the “Levelling Up” agenda and addressing the broader political and economic hegemony of London within the United Kingdom. Thus far, the signs do not look promising.
Whilst some change in approach is necessary for Truss in order to signal a clean break from the previous regime, with Johnson acrimoniously toppled by scandal and sleaze, indicators suggest that Truss intends to take a radically different path comparative to her predecessor. Yet, although Truss faces a daunting in-tray of economic problems and political crises, she has attempted to launch a positive vision of her governance programme.
Instead of rooting any plan for economic development and growth in reducing regional inequality, for example by funnelling investment into deprived areas, Truss takes an alternative, more laissez-faire approach. This is because Truss is fundamentally a free marketeer, a stark contrast to Johnson’s “have your cake and eat it” political ideology that had no qualms about increased government spending. Evidence for this desire for state retrenchment and a return to a broadly Thatcherite paradigm abounds (without the fiscal conservatism and concern for the National Debt).
The clearest case for Truss’s economic position can be found in “Brittania Unchained,” a 2012 treatise Truss co-authored with other rising stars of the Conservative party, all of whom have gone on to have prominent positions in government. Notorious for its account on the perceived decline of Britain, which it blames upon excessive regulation, taxation and state intervention, the tract is perhaps most famous for its view that ‘the British are among the worst idlers in the world.’ Such disparaging comments suggest that regional inequality and the relatively dire productivity levels of certain areas in the United Kingdom are a consequence of indolent workers, and thus the onus for reversing this trend lies with the individual, not the state.
Such a view has been reinforced by recent leaked audio recordings, revealing that Truss has claimed in the past that British workers need ‘more graft,’ whilst also suggesting that the productivity and inequality gap between London and the rest of the country was ‘partly an attitude or mindset thing.’ The new Cabinet, stuffed with allies and loyalists who backed Truss’s campaign for Leader, share this outlook, with her closest ideological ally in the cabinet, the new Chancellor Kwasi Kwarteng, also an author of “Brittania Unchained.”
With Gove relegated to political wilderness on the backbenches, Truss’s replacement Simon Clarke, a young and relatively unexperienced figure, does not evince hope that “Levelling Up” will be taken seriously as a key component of the Trussian domestic agenda. Similarly, recent hostile briefing in the right-wing press, claiming that Gove planned to ‘waste £1.5 billion’ on “Levelling Up” suggest that the groundwork is being laid for reducing spending committed to tackling regional inequality. Such fears are echoed by comments made by Ian Duncan Smith, Tory grandee and a key figure in directing Truss’s leadership campaign (and who was offered as a reward a senior Cabinet rule), who claimed in a Channel 4 interview that the phrase “Levelling Up” ‘has come to be used for almost anything.’ It is thus no surprise that Truss failed to mention “Levelling Up” in both her post-leadership victory speech and her first speech as Prime Minister.
What does this mean for the broader project of tackling the glaring regional inequality evident in the United Kingdom?
Some sympathetic to the new Prime Minister may claim that she is merely attempting to ditch the phrase, rather than the ideal of reducing regional inequality that it represents, given its corrosive attachment to the irrefutably tarnished Johnson regime (at least in the eyes of voters). Such an argument was invoked by Duncan Smith in his interview, where he pointed to Truss’s continued commitment to the Northern Powerhouse project, or the special economic zones of deregulation and enterprise she has promised in the North, to suggest that Truss prefers action over lofty expressions.
Unfortunately, there are three reasons to believe that this is not the case. Firstly, Truss’s fawning remarks over Johnson, claiming that he was ‘admired from Cardiff to Kyiv,’ suggest that she is not overly keen to signal a clear rupture from the previous government, especially given the “buyers-remorse” that many now discuss as pervading the Conservative party. Secondly, Truss’s verbal assurances unfortunately account for very little, coming from a republican-supporting Liberal Democrat in her youth that vehemently opposed Brexit as a Conservative until after the referendum, with the current Premier more than happy to renege on her word as a now royalist and ardent Brexiteer. Further evidence can be found in Truss’s recent U-turns: first on the energy crisis, where unsustainable political pressure prompted a reversal in opposition to state “hand-outs” with an unprecedentedly expensive prize cap on energy bills, whilst also retreating from a policy of cutting civil servants pay in regions outside of the Capital – a move that would undoubtedly worsen regional inequities.
Finally, a potentially inevitable right-ward shift post-Johnson renders her administration extremely unlikely to directly engage in any meaningful state-driven reductions in regional inequality. Truss is firmly in thrall to the right-wing of her party, owing her position to Conservative members that are much further right-wing than the average voter, and MPs that sit largely on the Thatcherite wing of the party – see Suella Braverman backing Truss after being ousted from the leadership contest, or her early support from John Redwood and David Frost. To such people government intervention is anathema, and Reagan’s creed about the nine most terrifying words in the English dictionary rules supreme. As such, she is much less likely to engage in the redistribution and active intervention that “Levelling Up” would require, instead preferring a series of supply-side reforms and tax cuts predicated upon a misguided belief in the progressive effects of “trickle-down economics,” a doctrine now widely refuted by the vast majority of modern economists, with Patrick Minford (the ardent Brexiteer and former adviser to Thatcher) ostensibly the sole dissenting voice.
Whilst “Levelling Up” may have been a fantasy of the Johnson government, designed only to capture swathes of the North for the Conservatives, there at least appeared to be a semblance of commitment to addressing regional inequality, and something for which the government could be held responsible by voters. It now appears that this is greatly unlikely to happen, with the current administration’s preference for mythical free-market solutions and tax cuts unlikely to reverse any geographical balances in the United Kingdom and is instead highly likely to exacerbate regional inequality. It can now only be hoped that Truss is not allowed to dodge accountability for the promises made by Johnson to Northern voters in the 2019 election, and who will, once again, be let down.