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East Midlands Chamber News

What does levelling up mean? Analysing the opportunities for the East Midlands

Ever since Boris Johnson entered No 10 in December 2019, levelling up has been an oft-used phrase from the Prime Minister and his cabinet. But what does it even mean and how should it take shape? A group of political and business leaders, including a Chamber director, discussed this at a recent webinar, with Dan Robinson in attendance.

Clipstone Colliery Headstocks (Credit: geograph.co.uk)

A few months ago, Lord Daniel Ravensdale was driving towards Sherwood Forest when he passed Clipstone Colliery Headstocks.

The abandoned towers are the centrepiece of a north Nottinghamshire mine that produced a million tonnes of coal per year in the 1980s but closed in 2003 after eight decades in operation.

“It’s an immense and actually quite beautiful mining structure, with two giant towers that held the wheels controlling the descents of the cages into the pits and drawing out coal,” says Lord Ravensdale.


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“But it’s in quite a sad state of disrepair. It’s crumbling, most of the windows are smashed and I thought it was really quite an evocative symbol for how we got here following the deindustrialisation of the North and Midlands – and why we need to level up.”

Clipstone, located on the north-east edge of Mansfield, is just one of many post-industrial communities in the East Midlands.

Before the 1984 Miners’ Strike, the region boasted about 30 working mines but just a few years later, most had closed with the loss of tens of thousands of jobs. Its final mine, Thorseby Colliery, shut down in 2015.

“Many of those mining communities around where I grew up never really recovered from those pit closures in the 1980s,” says the Nottingham native.

Why now is the right time to kickstart levelling up agenda

Lord Ravensdale is a cross-bench peer who founded and co-chairs the All-Party Parliamentary Group for the Midlands Engine alongside Broxtowe MP Darren Henry.

He is speaking at the Levelling Up webinar, hosted by the transport group Midlands Engine, just over a year after Boris Johnson won a clear majority in Parliament on a pledge to “get Brexit done” and “level up” the UK.

Lord Daniel Ravensdale

It’s a frequent phrase used by Westminster, but its actual meaning is sometimes unclear.

Jane Stevenson, the Wolverhampton North East MP, says it’s about “equality of opportunity” to key social motors like jobs, while Chamber director of policy and external affairs Chris Hobson believes we need to consider sectoral, as well as geographical, levelling up. Many agree that infrastructure will be at the backbone to all this.

Webinar host Caroline Wheeler, deputy political editor of The Sunday Times, says that while the Government’s “bandwidth” for levelling up has been affected by the pandemic, the signs are positive it remains high on the agenda.

This is partly inspired by a desire to hold on to the “red wall” seats Johnson won from traditional Labour strongholds in the North and Midlands at the general election, but also because of the opportunity to “build back better” – another phrase coined in No 10 that reflects the need to restart and rethink our approach to economic development.

In the 3 March budget, it was announced some Government departments will be moved out of London into the regions, while Caroline adds “there’s a real opportunity now, when it comes to infrastructure and transport investment, to really drive the economic recovery of those areas outside London.”

The Office for Budget Responsibility has forecast borrowing to hit £355bn for the current financial year ending April 2021 – the highest level since the Second World War – due to the major state interventions during pandemic.

But Lord Ravensdale believes the UK can still afford levelling up as the ultra-low interest rates – the Government can currently borrow for 30 years at 0.9% – make it an “ideal time” to invest in sustainable infrastructure.

Among the projects he would like to get started on with haste include Midlands Engine Rail – seven projects that will improve links between the East and West Midlands – as well as strategic sites earmarked by the East Midlands Development Corporation surrounding East Midlands Airport, the proposed Toton HS2 station and Ratcliffe-on-Soar Power Station.

Ratcliffe-on-Soar Power Station

He adds: “Thinking about the green economy, we need to build our innovation systems in the Midlands with a particular focus around net zero.

“This would get our research and development going, improve our productivity and increase the growth rate of the economy.”

Lord John Mann, another cross-bench peer who was Labour MP for Bassetlaw from 2001 to 2019, believes the Prime Minister will place great significance on developing a green economy as rapidly as possible because he won’t want his legacy to be tarnished by Covid-19.

“We’ll see significant investment, for example, in the electric car industry to try make us world leaders and, off the back of that, there’ll be openings for advanced technological innovation,” he says.

He believes taking advantage of tax breaks, such as the 130% first-year capital allowance for plant and machinery in the “super-deduction” policy announced in the budget, will help the UK to get a “headstart”.

Abandoning 'yesterday's thinking' will help us grow Midlands cities post-Covid

There’s also opportunities presented for cities in the Midlands by the anticipated exodus from the capital post-Covid.

Lord Mann says there’s “lots of whispers in Westminster about what on earth is going to happen in London” as companies pivot towards homeworking, commercial property values plummet and major investors follow people in looking away from the South East.

Lord John Mann

He adds: “This is a huge opportunity for our region, quite unlike any that’s been before, as investors with the products and services of the future look to relocate either their people or physical infrastructure.

“We’ll see vast amounts of this, which means the era of the Midlands Engine is about to happen if there’s the inventiveness.”

The Chamber and its partners have already noticed a growing number of inward investment enquiries from businesses currently based in London and the South East, says Chris Hobson, although one of the key challenges to address will be providing enough high-quality workspace.

Abandoning “yesterday’s thinking” in terms of our approach to developing cities and towns, as well as the role of technology, is also critical to grasping these opportunities.

Chris adds: “What’s really important for us in the Midlands, which we’ve previously fallen foul of, isn’t to focus on how much funding we receive compared to other areas of the country but to instead focus on what we can give back as a return on investment in infrastructure within the region.

“To be clear, infrastructure is a means to an end for us – it’s about creating business growth, harnessing exciting new technologies and regenerating communities.

Chris Hobson

“So what is our offer in the Midlands? The advanced logistics sector has been going great guns over the past 12 months, while we also have strengths in MedTech, biosciences and advanced manufacturing that can grow for national benefit with the right infrastructure investment.”

It’s all a far cry from the coal mining era of Clipstone’s heyday and Lord Ravensdale believes there’s ample opportunities for these left-behind communities.

But it will require the Government to “define what levelling up actually means because we all know that what gets measured, gets managed”.

He adds: “The Chancellor said last year he would do whatever it takes to support households and businesses through the Covid crisis, and we need a similar unambiguous commitment from Government to do whatever it takes to level up the regions.”


How metro mayors could help eliminate regional inequality

Regional inequality has been an “intractable problem” for nearly a century – but giving metro mayors more power could help to finally deliver levelling up, according to Lord David Sainsbury.

The former Sainsbury’s chairman and life peer believes increased regional responsibility for spatial planning and transport policies – similar to those held by the Mayor of London – as well as further powers to align courses run by further education colleges with industry needs would improve how cities are managed, while creating a “much more favourable business environment”.

He also called on the Government to target more R&D funding at poorer regions, rather than established centres of excellence such as London, Oxford and Cambridge, as this would allow “value-added sectors” to grow outside the South East.

Lord Sainsbury unveiled research on these issues at a Levelling up the UK’s regional economies webinar hosted last month by the Centre for Cities think-tank that he founded.

“It should be remembered that regional inequality has proved an intractable problem in the past and the price for success is enormous,” he said.

“If the country’s underperforming cities close their output gap, the UK’s economy would be nearly £70bn larger. That’s a target worth going for.”

The reason for “deep regional inequalities” stemmed back to the Industrial Revolution, in which many cities in the North specialised in a single industry, said the former Science Minister.

“As these industries faced competition from low-wage firms in the developing world and their prosperity declined, new high-wage, value-added firms blew up in the South instead,” he said.

“The experience of other countries should show the Government the only way to level up the UK is by supporting the growth of existing or potential new clusters of high value-added businesses in the poorer regions of the country.”

In January, the Centre for Cities published the Cities Outlook report, an annual health check of the economic performance of the UK’s largest cities and towns.

It said the “unprecedented increase” in the number of people claiming unemployment-related benefits since March 2020 meant there was now a four-fold increase in the number of people who now needed to find or improve their job situation in those regions in order for levelling up ambitions to be realised.

 

This article originally appeared in the April edition of Business Network magazine, which can be read here

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