What will a Labour government mean for 'levelling up'?

Posted on: 8 July 2024 by James Hickson in Blog

Whilst regional inequality was not a central focus of Labour’s election campaign, James Hickson argues that the Party’s ‘securonomics’ agenda could offer the basis for a new approach to addressing social and economic disparities across the country.

Introduction

Having won the general election, Labour has taken power from a Conservative party that, since 2019, made addressing regional inequality an orienting goal for government. Though the ‘levelling up’ agenda was ultimately undermined by government instability, and a questionable record of delivery, it nevertheless helped to highlight the scale and significance of the stark disparities that exist between different parts of the United Kingdom.

Before the election, Labour had intimated that they would seek to position themselves as the new party of levelling up; reshaping and redefining this agenda on their own terms. Despite this, there was little explicit focus on issues of regional inequality in the Party’s election manifesto. Nor is addressing regional inequality highlighted in its six ‘first steps’ for government.

What, then, does Labour’s election victory mean for levelling up? Whilst there remains some uncertainty about the extent to which the new government will diverge from the trajectory established by their Conservative predecessors, there are reasons to think that Labour’s new approach to economic management – dubbed ‘securonomics’ by Chancellor of the Exchequer, Rachel Reeves – could nonetheless signify a different approach to addressing regional inequality in the UK.  

Securonomics: the seeds of a new approach?

Labour has set out an ambition to rebalance the UK’s economic geography, and achieve “economic growth across the country”. New Local Growth Plans will support a place-based approach to industrial strategy that seeks to maximise “the strengths and specialisms of our towns and cities”, with a focus on developing opportunities in sectors such as life sciences, digital, creative, financial services, clean power, automotive and defence. In particular, Labour plans to develop new clusters of innovation-intensive R&D, and “internationally competitive green industries”, to help rebuild economic opportunity in the country’s “industrial heartlands”. Here it will be critical for the new government to demonstrate how its approach can successfully disrupt the particular tendency within the knowledge economy towards intense geographic concentration.

Likewise, Labour have committed to deepening and widening existing forms of devolution, whilst also establishing closer partnerships between central and local government in order to deliver economic renewal. In England, where Labour control 11 of the 12 city-regional mayoralties, local leaders will be given greater levels of autonomy over policy areas such as transport, adult education and skills, housing and planning, and employment support. A new Council of the Nations and Regions will also be established to facilitate improved collaboration between Downing Street and devolved administrations.

However, Labour can be seen to depart more starkly from existing orthodoxy with the idea of securonomics. Whilst not explicitly regional in focus, this agenda could sow the seeds for a new approach to addressing the underlying structural drivers of regional inequality. Securonomics acknowledges that the material and psychological impacts of increased economic instability over recent decades have hampered growth, undermined living standards, and left many communities feeling marginalised. Any hope of regional rebalancing therefore first requires concerted “national renewal”, with the state playing a more active, interventionist role in order to help rebuild a sufficient foundation of social and economic security for everyone, everywhere. Crucially, achieving this basis of shared security is not only morally necessary, but also instrumentally necessary as a precondition for reigniting growth across the country. In particular, Labour have promised:

• More security at work, with plans to ban zero hour contracts, end fire and rehire, and ensure the minimum wage reflects the cost of living.
• More secure housing, with a manifesto commitment to “the biggest increase in social and affordable housebuilding in a generation”.
• Stronger public services, with plans to improve the National Health Service, transport services, education and child care across the UK.
• Improved energy security, with Great British Energy helping to increase domestic production of sustainable energy and tackle the current cost of living crisis.

What will this mean for places?

Whilst the idea of securonomics recognises that the foundations for shared security, and shared prosperity, will need to be strengthened across the whole of the UK, as a flagship government agenda it will inevitably have distinct local implications. Angela Rayner (as both Deputy Prime Minister and Secretary of State for Levelling Up, Housing and Communities) is likely to be particularly significant in defining what securonomics means for Labour’s regional policy.

Firstly, with many of the country’s most disadvantaged communities often facing the most intense forms of insecurity, there will be questions about how spatially selective the new Labour government will be as it seeks to deliver tangible impacts. The Conservatives’ approach to levelling up was roundly criticised for its lack of strategic focus on the most left behind regions, and we may expect Labour to similarly face pressure to demonstrate they are providing targeted support to those areas that are most in need.

Secondly, the securonomics agenda could also have implications for local and city-regional government. With a commitment to closer intergovernmental partnership, and the devolution of more powers from Westminster, local leaders may be expected to play a leading role in promoting the securonomics agenda in their areas. For example, this could include considering how devolved funding and policy  can be utilised to help strengthen communities and develop more secure local labour markets.

This relationship between central and local government over the coming months and years will likely be informed by a growing sense of urgency at the community level. Whilst some elements of the securonomics agenda are strictly regulatory in nature, and therefore largely cost neutral, there will nevertheless be pressure for renewed investment in the public realm, particularly in those areas that have been hit hardest by austerity. Labour, however, have tied themselves to strict fiscal rules that limit their capacity to raise public spending. With such constrained resources, it is unclear how the state (either nationally or locally) will be able to invest in the shared bases of security that are considered necessary to kickstart growth.  

Speaking on the steps of Downing Street after the election, the new Prime Minister stressed that delivering change “is not like flicking a switch”, and has previously suggested that a “decade of national renewal” will be required to fully deliver on the Party’s ambitions. Whilst it would be naïve to promise quick fixes, the question remains whether this kind of slow and steady approach will be sufficient to deliver greater security and narrow the UK’s corrosive regional inequalities.