Economy: The Growth Plan 2022

Lord Walney Excerpts

Monday 10th October 2022 Lords Chamber

[Lord Walney (CB)]

My Lords, I want to focus on the parts of the growth plan targeted at regional disparities—the drive to level up the country. I draw your Lordships’ attention to my role as chair of the Purpose Business Coalition, which encompasses the levelling-up goals architecture.

The new Administration have not yet set out in detail how significantly their approach to levelling up will differ from the last. However, the signalling—including the briefing about de-Goveing Whitehall and wanting to dismantle the former Levelling Up Secretary’s strategy—suggests that the focus on delivering growth through taxation and deregulatory measures in the new investment zones will replace the activist approach to tackling regional disparities set out in the levelling-up White Paper of February this year rather than supplementing it. I very much hope that is not the case.

While the policy programme remained underdeveloped, the White Paper showed that the Government understood a fundamentally important point that had eluded Governments of both colours for decades: the importance of successful capacity building in areas being left behind. That lack of local agency is a key factor holding back many areas, and national government has a role to play there to help build up local institutions, governance capacity, its skills base and of course its physical infrastructure. It was really important that that was stated front and centre in the levelling-up White Paper. Without that, the geographical disparities that exist within regions, as well as between regions, may well widen further—an acceleration of the decades-long trend that has seen, in the main, large cities, including in the north, making significant and commendable progress but with provincial towns, such as the area that I used to represent in the other place, without the tools to keep up.

It is not too late for the new Administration to embrace a twin-track approach: supply-side change without dismissing the idea of active, joined-up government as some kind of quasi-socialist meddling, as some of the more wayward of the off-the-record briefings in the last couple of weeks seemed to suggest it is. I hope they will, and, I humbly suggest, that so will many of their new MPs in those northern constituencies.

The existing programme of infrastructure investment earmarked from the levelling-up and towns funds need not be sacrosanct in full. Much of it was targeted in town centres that have since been further ravaged by the Covid lockdowns. Reassessing whether those commitments remain the best way to target scarce resources would be understandable, although probably unwelcome for many of those new MPs, particularly in the north of England.

Finally, there must be a question mark over the extent to which companies would take advantage of relaxation of regulatory standards in investment zones, aside from the fierce debate that change in particular areas, such as environmental or employment legislation, would entail. As they decide what options to give the new zones, I hope Ministers will keep in mind the scale of change in boardrooms in recent years: how important it is now for companies to be, and be seen to be, good citizens making a positive impact in the communities in which they are based. Driven by genuine leadership and the market forces of ethical investors, discerning consumers, and the young graduates and school leavers they are in a race to attract, this is now mainstream within boardrooms. That means that if loosening standards happened in investment terms, it would not necessarily drive the change in business behaviour which would be needed if it was to successfully drive up productivity.