Long stories short
- New Zealand said it would begin the phased reopening of its borders after almost two years of controlling Covid by keeping them closed.
- Ofgem, the UK’s energy regulator, raised the price cap on default household tariffs to £1,971 per year (more below).
- Australian experts claimed to have discovered the wreck of James Cook’s ship The Endeavour in 14 metres of water off Rhode Island.
The New Levellers
Britain’s Conservatives are trying to fulfill a promise that brought them to power, and to fix a problem – structural decline in neglected regions of the country – that caused Brexit. They are trying to do this with no new money, which leaves only the power of the bully pulpit and the law.
The result is Michael Gove’s 332-page Levelling Up white paper. It’s part text book and part wishful thinking but it also contains policies that could change how people live.
The white paper doesn’t
- contain any new spending pledges beyond those announced in last year’s spending review, which amounted to £4.8 billion;
- set out a clear plan for how its goals will be achieved; or
- pretend to bind the hands of future governments.
But it could drive budgetary allocations for the next decade. That’s big: the 12-mission blueprint pledges a step change in investment, reorientated away from the Greater South East and towards areas underfunded during the past decade of this party’s rule and before.
£1.7 billion of the £4.8bn levelling up fund has already been allocated. Most of the money has gone to places that bore the brunt of local government cuts over the past decade – but not enough to compensate.
Eight of the ten local authorities with the biggest levelling up grants in England so far – Stoke-on-Trent, Birmingham, Leicester, Liverpool, Newham and Newcastle upon Tyne, Leicester, Bury, Newham and Rotherham – have suffered worse than average cuts to core spending power since 2010-11.
Together, they have been granted £350m from the first round of the levelling up fund to be spent over four years, but have faced a combined decline in yearly spending power of £1.7 billion in real terms since 2010-11.
Birmingham has received £53 million in levelling up grants, but has seen its yearly budget cut by over £600 million a year in real terms since 2010-11.
UK levelling up funds are paltry compared with those used to reboot East Germany after reunification.
Gove described his magnum opus yesterday as the “starting gun fired on a decade-long project”. In truth it’s the product of his fertile mind and a largely fruitless tour of Whitehall with a begging bowl. He allows himself whole chapters of throat-clearing complete with musings on the Florentine Medici model and the Industrial Revolution, but eventually offers concrete proposals on local government, transport, skills, schools and digital infrastructure. These include:
- More devolution. This underpins the whole white paper. Every region in England can be represented by directly elected mayors, if they want. There’s detail still to come on the process, but the undoubted success stories spearheaded by people like Andy Street (West Midlands), Andy Burnham (Greater Manchester) and Ben Houchen (Tees Valley) could be replicated many times over.
- Protection for tenants. Gove is anxious to draw attention to new rules for landlords – and there is one simple and affordable one that could make a difference: sanctions for “non-decent” standards that currently apply only to social housing are to be enforced against negligent private landlords too.
- Spending outside the Greater South East. A focus on place over people is a key feature of the white paper. It promises to direct all Arts Council funding and at least a 40 per cent increase in research and development funding outside the Greater South East by 2030.
- On R & D. How will Britain’s research golden triangle (Oxbridge plus London) respond to new central government efforts to pick regional research winners? On the evidence so far, not favourably. Sir Adrian Smith, president of the Royal Society, tells today’s FT “we cannot afford to rob Peter to pay Paul by investing in some localities at the expense of world-leading research in hugely successful research clusters”.
- On elected mayors. What are the financial incentives for existing local councils, and will those councils support the proposals if they threaten to change which party’s in control?
- On housing. Delivery of a National Landlord Register and changes to renting rules depend on a further white paper to be published in the spring. How many more documents are needed before proposals become reality?
Levelling Up started life as a political slogan and a panacea for low-wage, low-productivity Britain. We’ve been here before. This document echoes previous ministers’ responses to the same stubborn problems of economic geography, from Gordon Brown’s target-based approach to regional inequalities to George Osborne’s city-centrism and Theresa May’s Industrial Strategy, abandoned after just two years.
The scale of the challenge is daunting. Preston, the most productive city in the North West, is nearly 30 per cent less productive than London and Britain’s productivity puzzle won’t be solved with a wand. As Paul Johnson of the Institute for Fiscal Studies puts it: “Meeting the core ambition of simultaneously improving education and skill levels and availability of high paying jobs in poorer regions will prove extremely challenging.”
Comparisons with colossal West German fiscal transfers to East Germany after reunification need to be seen in the context of history. Neglected Britain hasn’t endured half a century of Sovietism. But enormous sums are still needed to fundamentally alter the economic geography of place.
Funds on that scale will be lacking as long as both main parties stick broadly to long-held orthodoxies on tax, spending and debt. The party that breaks with that orthodoxy and borrows to invest with a whole new level of ambition might actually do levelling up for real.
Next month we’re launching a brand new weekly newsletter, the Remaking Britain Sensemaker, dedicated to a better understanding of place-based inequalities and how to fix them. Members can receive pre-launch editions and, of course, tell us the issues that matter most to them. Just email me, Lara, at email@example.com and I’ll make sure you’re on the list.
Wealth investment, fairness, prosperity
The Bank of England has raised base rates by half a point to try to tame inflation, currently running at 5.4 per cent and forecast to rise to 7.25 when new gas prices kick in in April. The combination of high rates, high prices (especially for food and furniture) and lagging wage rises will mean the biggest annual reduction in spending power in 30 years, the FT reports. The government knows a living costs spike will only compound the political damage from its self-inflicted Partygate crisis, so chancellor Rishi Sunak announced a £9 billion emergency assistance package including rebates on council tax and energy bills worth £350 for most households. He won’t like having to pay for Boris Johnson’s populism, or his mistakes.
belonging identity, society, beliefs, countries
Dems play dirty
“I believe that the threat to our democracy is so grave that we must find a way to pass these voting rights bills…” That was Joe Biden in Georgia last month, in support of the voting rights package his party has failed to pass in Congress. The bill sets out to ban partisan gerrymandering, at which Democrats as well as Republicans excel. Yesterday New York’s legislature approved changes to the state’s congressional districts that mean there are now three more districts that lean Democrat, and three fewer Republican-leaning ones. The Democrats are right that gerrymandering is part of a wider threat to American democracy – the number of competitive congressional races has already been reduced by the current round of redistricting – but their warnings would sound a lot more convincing if they weren’t doing it themselves.
New things technology, science, engineering
Investors wiped 20 per cent or about $200 billion off the value of Meta, formerly known as Facebook, after the company announced its first ever decline in daily user numbers and its founder admitted younger ones were turning to sites like TikTok. TikTok competes directly with Instagram, Meta’s older video-sharing app, but it’s been growing faster and eating into Meta’s ad revenues. These in turn depend critically on personalised ad targeting, which is becoming harder for all Meta’s platforms as Apple in particular enforces new rules to protect its users’ data. “People have a lot of choices for how they want to spend their time,” Mark Zuckerberg admitted on a call with investors. No kidding. But that hasn’t stopped Apple and Amazon growing much faster than Meta during the pandemic. Apple’s market cap now exceeds the UK’s GDP.
The 100-year life health, education, living, public poliCY
Morning after deal
In December we noted that Boots the chemist was – in the opinion of campaigners and MPs – overcharging for emergency contraception. The company seems to have listened, and is now selling morning after pills for £10, which is as good a deal as you’ll get on the UK high street. That is a £5.99 price cut, following an earlier one from £25.99 to £15.99 in 2017. Clare Murphy of the British Pregnancy Advisory Service said: “The end of the grossly sexist surcharge on emergency contraception, involving a huge markup on a product used only by women, is a victory.” And Boots will still be making money.
covid by numbers
3,996,000 – doses of the Johnson & Johnson Janssen Covid vaccine that arrived in a single day last week in Syria, donated by Italy via Covax.
Our planet environment, natural resources, geopolitics
Knowledge isn’t power
Educating people about the carbon footprint of their home heating may not be enough to change consumer behaviour. The average household boiler emits greenhouse gases equivalent to 2.2 tonnes of CO2 each year – similar to the emissions from seven flights between London and New York, or streaming TV shows all day, every day, for four years. A poll conducted by Opinium for Nesta found that 88 per cent of people have no idea their boilers are this dirty. Even when told about their true impact, two thirds of the poll’s 2,000 respondents were no more likely to reduce their boiler’s footprint than before. Domestic heating currently accounts for around 14 per cent of UK emissions. If that’s to fall, consumers will need nudges and incentives, not just knowledge.
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With additional reporting by Ellen Halliday, Giles Whittell, Kim Darrah and James Wilson
Photographs Getty Images
in the tortoise app today
Johnson’s man in the north
The government has hinged its success on its ability to “level up” the country. A mayor and former rugby player provides the blueprint for how the Tories can do it.