Lisa Nandy's replacement by Angela Rayner as Shadow Secretary of State for Levelling Up, Housing and Communities signals more caution from Keir Starmer's office. In this blog, Jack Newman and Dave Richards argue that 'Levelling Up' is an area where caution is potentially damaging, and real ambition is needed to deliver much-needed economic growth across England and the UK as a whole.
Since 2020, Keir Starmer’s leadership of the Labour Party can perhaps best be characterised by cautiousness. With Labour commanding a well-established lead in the opinion polls, such caution invites parallels with New Labour’s period in opposition under Tony Blair. As Roy Jenkins put it, Blair in opposition was ‘like a man carrying a priceless Ming vase across a highly polished floor’. It has led critics to argue that Starmer’s Labour has been light on policies and slight on rhetoric.
To some, this represents a pledge-breaking betrayal of the Labour left, while others argue that it is sound electoral strategy at a time when the incumbent Conservative government is lurching from one crisis to the next. Labour’s leadership argues it is making a pitch for a ‘sensible centre’ at a time of increasing political polarisation with a political statecraft that prioritises an image of ‘economic credibility and competence’. The question this raises is whether the scale of challenges washing over UK politics requires a more radical, agenda setting approach.
One widely reported issue in Labour’s fiscal approach is that it significantly restricts its capacity to raise money at a time when almost every public service and policy sector is in desperate need of investment. We share this concern, but our research points us towards a second potential failure of over-caution, and this relates to what is known as ‘spatial policy’.
Spatial policy concerns a broad-brush approach to initiatives that seeks to revitalise a particular place, be it a neighbourhood, town, city, or wider region. This is usually part of a wider attempt to tackle regional inequality across the UK. The recent concern with ‘left behind places’ expressed in the current Government’s ‘levelling up’ agenda is the latest of many attempts to address spatial policy in the UK, a country in which London’s dominance makes it one of the most geographically unequal countries in the developed world.
Starmer’s difficulty is that while economists have identified spatial policy as one of the most important pathways to growth, public policy researchers have identified major barriers to effective spatial policy in the British political system. Our research surveying spatial policies over the last half century finds an increasingly bewildering array of unfinished projects and half-hearted reforms. The lack of consistency is staggering, and helps explain why the UK has comparatively poor economic performance outside of London and the South East, which in turn is a major break on the UK’s productivity growth.
Underlying this is the UK’s labyrinthine system of local and devolved government. This too has been subjected to overactive tinkering for many decades and is now immensely complicated and unwieldy. To revitalise our post-industrial towns and cities as well as struggling rural and coastal communities, we need to give local leaders the powers (and budgets) to solve local problems and capitalise on local specialisms. However, this is easier said than done.
Devolving power in the UK means reforming a very complicated and heavily entrenched political system with vested interests at all levels. To do this while also avoiding adding yet another layer of unfinished reorganisation requires an ambitious plan. It requires a detailed understanding of the problems with English devolution and intergovernmental relations across the United Kingdom, alongside a strategic long-term plan to put these problems right.
Currently, questions remain over whether Labour has the ambition necessary to offer meaningful solutions. The year started promisingly with the publication of Gordon Brown’s report on the UK constitution which sent all the right signals, emphasising the need to decentralise UK’s politics in order to realise the four nation’s economic potential. In January 2023, Starmer followed up with a keynote speech in favour of the report and argued:
We have an economy that hoards potential and a politics that hoards power. And it’s no coincidence – no accident – that this leaves us with more regional inequality than anywhere else in Europe…We will embrace the ‘Take Back Control’ message…we will spread control out of Westminster [and] devolve new powers.
Labour’s Five Missions set out a vision of democratic reinvigoration based on a more bottom-up approach to power with major reforms to both central government and the wider Westminster system. To empower English towns, cities, and regions, Labour argues it would reinvigorate local government by devolving more power to the devolved territories and stresses the importance of joint decision-making. Yet over the last six months, Starmer’s fear of dropping the Ming vase has seen such progressive devolutionary rhetoric subsumed by a rising tide of caution.
Lisa Nandy sought to push this devolved agenda forward in her speeches and writings as Shadow Levelling Up Secretary, but struggled to produce any concrete policy plans or get the solid support of the leader’s office. Tellingly, she expressed scepticism over a system-wide reform approach, preferring instead a more pragmatic [read ad hoc, layering] approach echoing a continuity with previous administrations.
The September 2023 reshuffle has seen Nandy replaced by Angela Rayner, who is notionally tasked with taking this agenda forward. Yet, Rayner has shown no previous intent or ambition to decentralise the UK’s political system, and even if she had concrete policy plans, it is unclear whether she would have the backing of Starmer and Reeves. Rayner’s appointment and this reshuffle looks like it has been designed to help manage the Party, rather than grasp one of the few real, and indeed realistic, opportunities that Labour has for delivering on their all-important mission for economic growth to address one of the most pressing of public policy challenges that of resolving the UK’s regional inequality problem.
Dr Jack Newman is a Research Associate at The Productivity Institute and the Department of Politics at the University of Manchester. His current research focuses on whether UK productivity is constrained by the structure of its political institutions.
Dave Richards is Professor of Public Policy at the Department of Politics at the University of Manchester, and current Principal Investigator on the ESRC-funded Productivity Institute project, The UK Productivity-Governance Puzzle: Are the UK's Governing Institutions fit for purpose in the 21st Century?