Is levelling up a Christmas tree or a bullet train? Will we look back at it as a flabby concept onto which politicians, wonks, and campaigners competed to hang their favourite policy bauble or as a driving force, taking the country towards transformed prospects in those places which will be hardest fought at the next election?
Levelling up was set to be the defining concept of the new Johnson Government, but has been drowned out by the demands of dealing with Covid-19. As the health crisis recedes, the speed and shape of our economic recovery will become the defining issue facing government. We must revive levelling up and take bold action to redesign our economy.
Levelling up marries two pressing economic and social issues. The first is the poor productivity that has dogged our economy, creating a historically weak recovery since the 2008 recession. The second is the rising tide of poverty, driven by increases among workers and children. There are unproductive firms and people trapped in hardship in every part of the UK, but these problems do have a specific geography.
Levelling up must mean transforming both productivity and prospects in those parts of the UK with weak local economies. Low-income voters gave Boris Johnson’s Conservatives a decisive victory in 2019. That was, in part, because he convinced them that economically ‘left behind’ places would see a greater share of national resources, more and better jobs, opportunities for their children, and renewed local infrastructure.
Social security has not been prominent in debates about levelling up, but woe betide a government that forgets its crucial role for those people and places who will pass judgement on whether the levelling up promise has been delivered. New research into the most extreme poverty in the UK, destitution, found the proportion of people experiencing it rose by 54% between 2017 and 2019 – to 2.4 million people, including over half a million children.
Strikingly, the greatest rises were in the North of England. The North East now has the highest rates of destitution, with areas like Middlesbrough and Newcastle badly affected. In the North West, Manchester, Liverpool, and Blackpool all have high rates of destitution. The Government’s levelling up agenda cannot succeed without action to stem the rising tide of extreme hardship in the North, and social security has a crucial part to play in that.
Social security is an underpinning public service, like our NHS, which many of us rely on over the course of our lives. Partly it compensates for market failures: the lack of truly affordable homes, low paid and insecure jobs, job design that shuts disabled workers, parents and carers out of better paid work.
Successful levelling up should reduce the pressure on the social security system as these failures are corrected, but social security is also a mutual support system for times in our lives when work, or full-time work, isn’t feasible. It is an anchor that keeps us steady through tough times, until we find our feet again: when families break down, illness strikes or the work dries up. It is a base that enables people to take risks.
Boosting pay often requires us to change jobs or set up a new business. Taking that leap is risky. A new bus route might prove unreliable, leading to job loss; a new childcare arrangement to allow longer work hours might break down; the long road to make a new business profitable might turn into a dead end. To truly level up means turning weak local economies into thriving engines of prosperity. A strong social security system is a crucial ingredient in creating that vibrant economy.
We must therefore redesign social security as we redesign our economy. It must provide reliable protection from destitution, which means working with those who are experienced in the current system to fix design flaws, such as the five week wait for the first Universal Credit payment, and unaffordable debt deductions.
Wider action to boost job security and pay should accompany reforms to ensure social security support smooths fluctuations in earnings rather than exacerbating them. Work incentives should focus on those groups most sensitive to them, particularly single parents and second earners. Services to help people to get and keep good quality jobs need to be integrated at the level of local labour markets. Skills, employment support, childcare, and transport all combine to either open up opportunities or close them down.
Levelling up requires a coherent local strategy across all these areas, underpinned by an effective, compassionate social security system, rooted in the expertise of those who rely on it.
Helen Barnard is the Director of the Joseph Rowntree Foundation. This article first appeared in our Centre Write magazine The Great Levelling?. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Alex Proimos]
