Table of contents
On 7 April 2022, the House of Lords is due to debate the following question for short debate in Grand Committee:
The Lord Bishop of Exeter to ask Her Majesty’s Government what are their ‘levelling up’ plans for the south-west of England.
1. Are there regional inequalities in the UK?
In 2020, the Institute for Fiscal Studies (IFS) conducted an analysis of regional inequalities across different countries which found that the UK was “one of the most geographically unequal countries in the developed world”. It said that the regional inequalities in the UK are “deep-rooted and complex”. The Government has acknowledged this problem. The Prime Minister, Boris Johnson, has said that while the UK is “one of the biggest and strongest economies in the world we are also one of the most unbalanced”.
1.1 Inequalities in the south-west
In August 2021, the think tank Onward published research on the relative performance of the south-west economy against a number of indicators, covering earnings, employment, skills, local industries and connectivity. It found that on many metrics, the south-west performs around average among UK regions and is not the lowest-ranked region for “many of the measures that levelling up might target”. However, it said that “this is because headline measures obscure severe weaknesses in certain parts of the south-west” and in certain parts of the labour market. In particular, it argued:
- Unemployment rates have fallen much slower than other regions since the great recession [the recession which followed the 2008 financial crisis].
- Much of the work in the south-west is part time, and those below the median are paid poorly compared to the rest of the UK.
- This is paired with a growing skills shortage among young people and a greater reliance on less productive, lower-paying sectors.
- Connectivity is poor both in terms of transport and digital infrastructure.
Onward also said that the south-west is a divided region, with Cornwall and Devon performing consistently worse on a number of metrics than better off areas towards Wiltshire and Gloucestershire. It argued that addressing these issues “will be crucial to levelling up”.
Pennon, parent company of South West Water, published a report on behalf of the Great South West which also looked at the economic challenges and opportunity facing the region. The report ‘Levelling Up the Great South West: A G7 Legacy’ was published in 2021. It found that data from its levelling up analysis of Devon and Cornwall at a parliamentary constituency level showed two “major patterns”:
- there is a clear divide between Devon and Cornwall and the rest of the UK in terms of productivity which “cannot be overstated”; and
- there is a gap between constituencies in Devon and Cornwall, with Cornwall in need of more levelling up generally, with the exceptions of Plymouth and Torbay that “are more in need than anywhere else”.
To address these problems, the report set out a five-step policy programme for central government which it said would “support the economic development of Devon and Cornwall and leave a lasting legacy for the wider great south-west region”.
In addition, recent research by the Government has shown that the south-west (and other regions) perform worse than London and the south-east in a number of metrics, including productivity, gross disposable household income and employment rates.
2. What are the Government’s plans to address regional inequalities?
Since entering office, the Prime Minister, Boris Johnson, has said he would tackle regional inequalities by ‘levelling up’. In the background briefing to the 2021 Queen’s Speech, the Government said that levelling up is at the heart of its agenda and was at the centre of its 2019 manifesto. It said that levelling up was about:
- improving living standards;
- growing the private sector;
- increasing and spreading opportunity;
- improving health, education and policing;
- strengthening community and local leadership;
- restoring pride in place; and
- improving quality of life in ways that are not just about the economy.
The Government said its policies to address these issues would be published in “a landmark levelling up white paper” which would set out “bold new policy interventions to improve livelihoods and opportunities in all parts of the UK”.
2.1 Levelling Up white paper
On 2 February 2022, the Government published its Levelling Up white paper. An extensive document at 332 pages, the paper provided a history and analysis of economic and social disparities across the UK. It also set out the Government’s plans to address and narrow these differences, covering various areas of government and public policy. Some of the plans outlined were new, while others had previously been announced.
In the white paper, the Government argued that levelling up was not about making every part of the UK the same, or “pitting one part of the country against another”. Rather, it said it was about the success of the whole country. To make the required changes, the Government said a “fundamental rewiring in the system of decision-making, locally and nationally” would be needed. It set out 12 national missions—which it said are quantifiable and to be achieved by 2030—as its policy objectives for levelling up. Issues covered by these missions included: pay; employment; productivity; domestic public investment in research and development; local public transport connectivity; broadband coverage; literacy and numeracy; healthy life expectancy; wellbeing; pride in place; home ownership; crime; and devolution.
The Government has said it will introduce legislation to put into statute some aspects of the agenda. It said it would explore provisions around:
- introducing an obligation for the UK Government to publish an annual report on delivery against the levelling up missions; and
- strengthening devolution legislation in England in order to expand devolution to more places, deepen current devolution deals and enable the devolution process to be simpler and more transparent.
It also said it would implement reforms to the planning system as set out in the white paper and explore provisions around compulsory purchase powers and support for reusing brownfield land.
2.2 Plans for the south-west
Focusing on the south-west, the Government said the region “is already benefiting from investments to boost living standards, spread opportunity, restore local pride and empower local leaders”. It gave details on a number of investments and policies which address these areas, some of which had previously been announced.
Work aimed at ‘boosting productivity, pay, jobs and living standards’ and ‘empowering local leaders and communities’ included:
- £131m through round one of the Levelling Up Fund to support six projects which cover issues including transport and city centres;
- £198m through the Towns Fund to “drive sustainable economic regeneration and deliver long-term economic and productivity growth”;
- Over £138m invested in 11 high streets through the Future High Streets Fund;
- £900m over 30 years in a devolution deal for the West of England Combined Authority;
- £540m for the City Region Sustainable Transport Settlement over five years to “transform local transport networks in the West of England”;
- £200m for the British Business Bank to expand its Cornwall and Isles of Scilly investment fund across the South West;
- £30m from the ‘Strength in MyWorld Collaboration’ in Bristol and Bath, a hub which will “build on regional strengths in creative media production, technology and research”;
- £5m in development funding to reopen rail stations in Wellington, Somerset and Cullompton, Devon;
- £559m of local roads maintenance funding between 2022–23 and 2024–25; and
- £241m from the Transforming Cities Fund split across the West of England Combined Authority, the South East Dorset region and Plymouth, to build new cycle freeways and bus priority infrastructure.
Work aimed at ‘spreading opportunity and improving public services’ included the creation of new Education Investment Areas (EIA) in the south-west. The Government said EIAs would “drive improvements through funding to intervene in underperforming schools, support growth of strong trusts and retain high quality teachers”. It also forecast an extra £229m for mainstream schools in the south-west in 2022–23 and said 11 new hospitals would be built in the south-west.
For ‘restoring local pride’, announcements included £53m for the South West Local Net Zero Hub and over £21m from the Community Renewal Fund for 36 projects to invest in people, places, business and communities across the south-west.
2.3 Reaction to the white paper
In the south-west, the plans received a mixed reaction. Some local commentators criticised the lack of new funding announcements and absence of information on how some of the plans would work. Highlighting this, local news website Cornwall Live said that a number of the commitments consisted of projects which are not new. For example, it said the expansion of the Cornwall and Isles of Scilly Investment Fund and a pilot project to boost bus travel in Cornwall had been previously announced. However, it also noted the new announcement of an EIA for Cornwall. Chair of the Cornwall and Isles of Scilly Local Enterprise Partnership Mark Duddridge focused on what he described as a lack of detail, stating that while he welcomed the publication of the white paper, “the critical issue is now timing”. He argued that this is because there is “still little detail” about the Shared Prosperity Fund that will replace Cornwall’s European Union (EU) funding. He said this is of concern as “we’re already facing gaps in investment and tackling skills issues”.
Other local business leaders have also raised concerns about the white paper arguing that the region was not receiving enough support. Chair of the South West Business Council Tim Jones labelled the plans “disappointing” saying that “there are no nuggets in this for the south-west”. Kim Conchie, chief executive of the Cornwall Chamber of Commerce, gave a more mixed view. He argued that while the county and greater south-west had not been ignored, it had not been prioritised to the same extent as the north. He also said there was a lack of detail and money, but that the terminology was positive. The chief executive of the Heart of the South West Local Enterprise Partnership, David Ralph, also said that while he welcomed the recognition that the south-west needs to level-up, he argued that the support and funding it received needed to match what is being offered to the north and the Midlands. Jonathan Keable, FSB lead for Plymouth, agreed, stating that “we need our equal share of funding”.
Concerns were also raised about the white paper’s support of ‘the Great South West’, a “powerhouse brand to promote the Local Enterprise Partnership (LEP) area of Cornwall and the Isles of Scilly, Heart of the South West and Dorset”. The Government mentioned the brand in the white paper as an example of a private sector initiative but did not provide details on any support for it. Commenting on this, chief executive of Devon and Plymouth Chamber of Commerce Stuart Elford voiced fears that “we will once again be overlooked and unable to realise our regional potential due to this lack of cohesion”. However, a spokesperson for South West Water (part of the Pennon Group), which has been a key partner in the #BacktheGreatSouthWest campaign, welcomed the white paper:
The commitments we have seen today to improve transport connectivity, digital connectivity, and R&D investment were all called for in our 2021 report ‘Levelling Up the Great South West’. Government has its part to play in delivering on these policy changes, but we know that real transformation is delivered by local people and local organisations.
The plan has also been welcomed by some local politicians. Linda Taylor, Conservative leader of Cornwall Council, said the white paper showed that the Government was “honouring its pledge to help level up local areas”. However, she also said that “the devil is in the detail and we need to see what is going to be available as we move ahead”. Leader of Devon County Council John Hart (Conservative) welcomed the plans for county deals, as did the leader of Torbay Council, Steve Darling (Liberal Democrat), who said that he expected the deal to help tackle the challenges faced by Torbay, including its housing crisis.
On a national level, opposition parties were largely critical of the white paper. Tweeting on the topic, the leader of the Opposition, Keir Starmer, said the plans were a set of “repackaged, rehashed and recycled announcements”. The Scottish National Party’s leader, Nicola Sturgeon, agreed with Mr Starmer saying the policy was “re-hashed money” and “re-hashed announcements”. She also labelled the white paper an attempt to divert people’s attention from an “utterly discredited Prime Minister”.
In addition, the Labour Welsh Government and Plaid Cymru criticised the lack of funding in the plans. The Minister for the Economy in the Welsh Government, Vaughan Gething, said that Wales would see a shortfall in funding under the plans of around £1 billion compared to what it would have received from EU structural funds. Plaid Cymru’s Treasury spokesperson, Ben Lake, agreed, arguing that “with no new funding announced today, people are right to be sceptical of these plans”.
3. Read more
- House of Commons Library, Levelling Up: What are the Government’s Proposals?, 18 February 2022
- House of Lords Library, Inequalities of Region and Place, 8 October 2021