Levelling-up and Regeneration Bill

Lord Hain Excerpts

2nd reading
Tuesday 17th January 2023 Lords Chamber

[Lord Hain (Lab)]

My Lords, I also congratulate the noble Baroness, Lady Anderson, and the noble Lord, Lord Jackson, on their excellent maiden speeches.

Levelling up may be a Tory pledge but it is sadly not a Tory priority. It is a commitment but sadly without any conviction. Last year, for example, the richest fifth of households paid only 9% of their disposable income on indirect taxes while the poorest fifth paid 23%.

It is state-funded cash benefits, such as the state pension, pension credit and child benefit, together with imputed income from benefits in kind provided by public services, such as the NHS, decent social care, education, free childcare and free school meals that really help to reduce inequality and level up. Last year, the contribution to reducing income inequality made by cash benefits and benefits in kind was 20 times as great as that made by taxes of all kinds.

Yet the Office for Budget Responsibility has confirmed that 82% of the decade of Tory austerity under Chancellors Osborne and Hammond involved cuts in public spending amounting to over 7% of GDP, equivalent in today’s terms to £180 billion—more than the entire NHS budget for England. State-funded cash benefits are the biggest single factor in helping to cut income inequality in Britain, so cuts here are especially damaging.

Tory public sector pay freezes and pay caps have also hit public services hard. They have led to critical staff shortages on a massive scale, which in turn have generated enormously long waiting lists, missed performance targets and delivery failures, as well as forcing workers to go on strike. Yet the Resolution Foundation reckons that three-quarters of the fiscal tightening announced since spring 2022 is once again focused on public spending cuts. The familiar Tory pattern is repeating itself. Rishi Sunak’s vision for his premiership is turning into the same old Tory cuts story.

As Labour’s Shadow Levelling Up Secretary Lisa Nandy says of the unequal distribution of income and wealth in Britain in her brilliant recent book:

“The winners continue to win, the losers continue to lose”.


Our industrial heartlands, once the engine room of Britain, are performing at 10% below pre-Covid levels, after a decade of underinvestment, huge amounts of money stripped out of communities and taken out of people’s pockets.

Last year, the Commons Public Accounts Committee reported that billions of pounds had been squandered on ill-thought-out levelling-up plans, forcing areas to compete over tiny pots of levelling-up money, effectively competing for minuscule refunds of the money stripped out of those very communities by long years of Tory austerity. The chair of the committee stated bluntly that

“government are just gambling taxpayers’ money on policies and programmes that are little more than a slogan, retrofitting the criteria for success and not even bothering to evaluate if it worked.”

The shared prosperity fund, which was meant to level up, is delivering £1.1 billion less in funding to English regions than came from the European Union structural funds it was designed to replace and which the Conservatives promised to match but have not done so.

Wales is full of areas that need levelling up, yet the overall shortfall to the Welsh budget is more than £1.1 billion. Overall, Welsh capital funding falls in cash terms in each year of the current three-year spending review period and will end up 11% lower in 2024-25 than in 2021-22—so much for levelling up.

Despite recent increases, the Welsh Government budget in 2024-25 will be £3 billion lower than if it had grown in line with GDP since 2010-11. Tragically, the Tory so-called levelling-up agenda is a complete sham, and I strongly recommend Lisa Nandy’s brilliant new book All In: How We Build a Country That Works for a real levelling-up agenda.