Whats our approach to Levelling Up?
Andy Haldane, about to leave the Bank of England where he has long been its respected chief economist, told the audience at Policy Exchange, the Conservative think tank, on Monday June 28th that Levelling Up should now be the central issue in our domestic politics. Thats a radical statement, which should make Liberal Democrats think carefully about how we develop our response to this challenge. Haldane pointed out that there are only two EU member states where inequality between the richest and poorest regions are as high as in the UK: Romania and Poland. He noted how economic (and social) imbalances across the UK have widened over the past 30-40 years. He did not add (though Liberals would underline) that gross inequalities undermine social order and democratic government. His broad agenda includes investing in education and skills, encouraging local enterprise and innovation, and a far larger British Business Bank, in addition to improving transport infrastructure and housing. And he emphasised that this agenda cannot simply be directed from the centre: it requires regional and local initiative, with substantial powers and finance devolved. On Tuesday Sir Michael Marmot issued his latest report on regional and local inequalities, focussing primarily on Englands North-West. This further spelt out the gulf between the wealthiest and poorest in our society, including the wide differences in health and life expectancy between prosperous and deprived communities. His agenda for change is similar to Haldanes: investment in education, local public services, job creation and housing, in addition to the governments current plans for improved infrastructure. We need to spend for future generations, Marmot told the BBC. Boris Johnson promised to level up Britain  and to Build Back Better after the pandemic  without defining what that meant or how it would be paid for. Others, outside partisan politics, are now spelling out what will be required if the promise is to be fulfilled. Polls show that many who voted Leave five years ago saw Brexit as the opportunity to rebuild British industry (blaming the EU for globalization, foreign takeovers and technological change). They also show that Johnsons rhetoric on levelling up resounded with voters in red wall seats. Both he and Marmot are asking for a significant increase in long-term public spending, and a radical shift in government from the centre to regions and local communities. Most of the Conservative Party is as instinctively opposed to any increase in public spending as the US Republicans. The editor of Conservative Home wrote in the Financial Times last week that neither Rishi Sunak nor Conservative MPs will support the spending increases or tax rises needed to fund social care reform, NHS recovery and moves towards zero carbon. The levelling-up agenda requires a good deal more; and the Conservatives will risk losing their red wall seats if they fail to deliver. Labour are silent on all this. But its not an easy agenda for Liberal Democrats to address, either. Voters in Englands home counties and across Greater London, where much of our active membership and most of our target seats are now located, will need to be persuaded to accept larger transfers from prosperous areas to poorer communities, and higher taxes to pay for better education, and social infrastructure. Theyve benefitted from the concentration of infrastructure investment in the South-East over the past 40 years; but will naturally argue that more is needed to sustain their regions position as the UKs prime wealth generator. But we cant duck this set of issues. So we need a narrative that will support the reshaping of our economy and our political structure that can attract public support. We should take over the build back better theme, while pointing out what is needed to ensure that the UK does invest for the long term. We should talk about bringing our deeply-divided country country back together, and how all our citizens deserve the life-chances that those in the most prosperous areas benefit from. And we have to be ready for the point when the gap between Johnsons heady rhetoric and the failure to deliver become evident to a rising proportion of the public. * Lord Wallace of Saltaire is a Liberal Democrat member of the House of Lords.