‘This government ends if the red wall reverts back to type and we lose 45 seats then end up in hung parliament territory,’ warns one secretary of state. This comment is a reminder of how vital it is for Boris that levelling up is seen to be a success.
The rewards of getting it right are considerable. The Tories’ reward for that would probably be another decade in power: one cabinet loyalist says, ‘The boss wants to see a world where Labour are shut out. We consolidate the red wall.’
But fixing regional disparities isn’t easy: it is hard to find any country where levelling up is a mission accomplished (as opposed to a work in progress). Thirty years of intense German policy has succeeded in reducing the gulf between the old East Germany and the rest of the country. But that gap is still substantial: East German households have less than half the assets of west German ones.
Both Michael Gove, the levelling up secretary, and Andy Haldane, the new head of the levelling up taskforce, have found inspiration in 15th-century Florence. Gove told cabinet colleagues this week that the ‘Medici effect’ was one of the keys to it. The idea is that bringing together skilled people, good infrastructure and pleasant social spaces leads to greater creativity – as it did in early modern Italy – and that innovation in one field leads to unplanned breakthroughs in others.
But that’s in the long term. In the short-term, research and development spending will be reprioritised. More will go to industrial research rather than to the arts and humanities.
Ministers are struck by statistics showing that for every pound the private sector in London spends on research and development, the government spends a pound. Yet in the Midlands, the private sector spends £4 for every pound the government does.
The challenge is how to show there are tangible benefits from levelling up before the next election. Haldane has been trying to persuade ministers that, in the words of one, ‘It is OK to accept that some of the politics of the last decade haven’t had the desired outcome.’ But those who have spoken with him are struck by how long his timeframes are.
The Tories will need to avoid the temptation of throwing money at the problem in an attempt to create a sense of momentum, then boasting about the sums sunk. One enthusiast for levelling up admits, ‘I’m very wary of us turning into the people we used to criticise in 2009 and just saying the money is the point in and of itself’.
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