England’s north-south divide is deepening despite two years of Boris Johnson’s “levelling-up” pledges, a landmark new report has found.
New research entitled State of the North 2021 produced by IPPR North – the northern branch of the Institute for Public Policy Research thinktank – compares levels of public investment in London and the south-east with the north.
It estimates that, in the five years to 2019/20, London received the equivalent of £12,147 per person – while in the north the figure was just £8,125.
According to Treasury data, an extra £61 billion would have been spent on areas like transport, skills and infrastructure would have if investment in the north had matched that in London over the five years from 2014/15.
The south-east, the report states, is home to one-third of the UK population – but accounts for 45 per cent of its economy and 42 per cent of its wealth.
Regional inequality
IPPR North’s findings will intensify concern among “red wall” Tory MPs that Johnson’s levelling-up promises are set to go unfulfilled.
Rishi Sunak, the chancellor, has effectively capped the main levelling-up fund at £4.8 billion for this parliament, a figure which critics have said is a drop in the ocean.
The 2021 allocations of the levelling-up fund is equivalent to an investment of just £32 per person in the North, IPPR North said.
The State of the North reports draws a comparison with Germany, where successive governments have spent an average of €70 billion a year reducing regional inequalities since reunification in 1990.
In the UK, public spending is concentrated in central government. Whereas four years ago, 95 pence in every £1 paid in tax was taken by Whitehall, that figure has now increased to 96p – compared to just 65p in Germany.
Jonathan Webb, one of the report’s authors, said: “However we measure investment in levelling up – whether we compare with Germany’s successful efforts to rebalance its economy, or to London-level investment – it’s clear that central government simply hasn’t put its money where its mouth is when it comes to rebalancing the economy.
“Levelling up will be consigned to the list of hollow, unmet promises made to people in regions like the north for a long time now, if it isn’t underpinned by investment and, crucially, fiscal devolution.”
‘Empty slogans and broken promises’
The government’s levelling-up white paper, outlining the government’s plans, has been delayed again and again – and is now set to be released at the end of the month.
Lisa Nandy, the shadow secretary of state for levelling up, told The Observer: “For all the talk of levelling up, the story of this government has been to strip power from communities across Britain.
“After a decade of empty slogans and broken promises, the levelling-up paper must finally provide the resources and a plan to deliver the radical change we have been promised.”
Interim Director of IPPR North, Arianna Giovannini added: “Two years on from the promise to level up the country, government’s rhetoric has reached fever pitch, but in reality they have once again over-promised and under delivered on rebalancing our economy.
“To succeed in levelling up, enabling people everywhere to live a good life it will be necessary to build an economy hardwired for widespread prosperity, that powers the net zero transition, and provides everyone with access to high quality lifelong education.
“Broadening and deepening devolution, and building collaborative relationships between and across all levels of government are essential components of the levelling up jigsaw.
“But reorganising local government by the back door, false dawns, and further centralising power and funding would be a huge mistake and level down the country”.
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