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30 August 2022

Will Liz Truss forget about levelling up?

Boris Johnson’s “defining mission” to increase regional investment seems like it may slip into the background.

By Freddie Hayward

Who’s more northern, Liz Truss or Rishi Sunak? In the contest to become prime minister, both candidates have been tripping over themselves to burnish their northern bona fides. Truss recites her status as a “straight-talking Yorkshire woman”. Sunak offers the vague credential of being the “most northern chancellor that this party has had for something like 70-odd years” (someone tell Sajid Javid). At least they’ve not yet feigned a northern accent.

Their focus on the north of England is understandable. The 28 northern seats the Conservatives gained in 2019 were key to obtaining the party’s biggest majority since 1987. But that success didn’t rest on Boris Johnson’s place of birth. Levelling up was central to the Conservatives’ surge across the Red Wall (the swathe of former Labour seats, sweeping up from the Midlands, across the north and then down into Wales, that turned Conservative in 2019).

Once Brexit was declared “done”, levelling up became, as Johnson put it, the “defining mission” of his government. It became synonymous with repaying those who voted Conservative for the first time in 2019. Levelling up meant infrastructure spending and a reinvigoration of towns. It meant investment in apprenticeships and technical qualifications. Under the departmental leadership of Michael Gove it swelled into a 297-page manifesto. New northern Tory MPs came to see levelling up as key to securing re-election.

Yet levelling up now seems poised to slip into the background. The policy has been largely absent during the leadership contest. Truss is on course to win, so what would levelling up look like under her?

[See also: Who do we trust to run the economy?]

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The Foreign Secretary has committed to several key levelling-up policies. She has pledged to reverse the government’s decision to downgrade the yet-to-start Northern Powerhouse Rail project and build the high-speed line from Manchester to Leeds via Bradford. She has promised to ensure the Treasury’s Green Book – which appraises whether government projects offer value for money – channels money into neglected towns. A levelling-up secretary will sit in her cabinet. Truss has also said she supports more metro mayors. In doing so, she’s secured the backing of the former levelling-up minister and chair of the influential Northern Research Group of MPs, Jake Berry, and the West Midlands mayor, Andy Street.

But despite these pledges, it seems unlikely that Truss will achieve what many took levelling up to mean – redressing the chronic regional imbalances of the UK – for two key reasons.

First, Truss’s belief in a small state and low taxes is incompatible with the state intervention levelling up requires. As Gove has argued, levelling up is “an argument with what one might call trickle-down economics… If you leave the free-play market forces entirely to themselves, then what you see is inequality growing and particularly geographical inequality growing as well.” Ben Houchen, the mayor of Tees Valley, has voiced similar views. In a recent letter to Truss, Houchen wrote: “This government can be proud of how it has supported those who have been neglected in favour of the affluent for so long and now it is time to redouble these efforts.”

Truss does not seem to share her colleagues’ concerns about protecting those “neglected in favour of the affluent”. For instance, her plans to cut personal taxes such as National Insurance would benefit the wealthiest in society more than the poorest by a factor of ten. Truss’s botched plans for reducing the pay of public sector workers outside of London further exposed her ideological instincts. The policy would have reduced pay for civil servants in places with a lower cost of living. In other words, the plans prioritised the market over an equal policy for all parts of the country. As one Tory strategist put it to me: “She understands levelling up, but she won’t do it.”

Second, the cost-of-living crisis will dominate Truss’s first year in office. Inflation is predicted to remain in double digits into next year. Energy prices will soar by 80 per cent to £3,549 in October. The severity of the crisis means there will be little time to spend on levelling up.

All of which poses significant electoral risks for the Conservatives. Levelling up is the most popular policy among Conservative voters – 81 per cent think the new leader should retain the policy, according to one poll. Abandoning the agenda will leave a vacuum for Labour to fill. Indeed, Labour has wisely appropriated the term and in crucial Red Wall seats, the party is now 22 points ahead on who is trusted to level up the country. Truss has spent so long talking to the party faithful this summer, she’s neglected the concerns of the electorate. As a consequence, “levelling up” is poised to return to think tank obscurity, leaving behind the problems it sought to solve, and disappointing those who voted Conservative in 2019.

[See also: Why Liz Truss will fail]

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