Post-Brexit Britain needs better approach on levelling up - here’s how: Justine Greening

Polling shows that the language of levelling up is understood by voters but whether it’s levelling up, improving social mobility, delivering equality of opportunity, getting on fairly in life - whichever phrase you prefer - the crucial point is what it’s about. And Britain is having one of the most fundamental debates it has had in decades - how we can become a fairer, more equal country when it comes to access to opportunity.

So if there is a debate this Government should have on levelling up, it's about how to deliver it, not what to call it. It means all Ministers’ efforts now must be focused on delivering for communities, especially those that put their faith in the Conservative Party for the first time in the landslide General Election of 2019.

Getting a stronger plan in place is crucial for the Prime Minister and it has to be about working with and through local communities.

On Thursday this past week, the £2.1bn “Landmark Levelling up Fund’ was launched by the Department for Levelling Up, Communities and Housing, covering regeneration, transport, and cultural investment projects all over the UK, including a number in the Yorkshire region.

But its announcement has left a number of Red Wall Conservative MPs frustrated that their communities have missed out. There have also been questions on how the bid allocations could have worked successfully when some more affluent communities have received funding whilst other less privileged communities have not. One former Labour MP joked to me that he’d had more success getting money out of a Conservative Government when he was representing his constituency before 2019, than his Conservative successor has had representing it since.

The issue stems from the fact that levelling up Britain requires different approaches for different communities. But Whitehall still can’t let go of decisions that are fundamentally best taken at a local level.

Consequently, local authorities spend months laboriously preparing expensive central government bids. Some are better salespeople than others, irrespective of the merits of their proposal. Meanwhile at the national level, Ministers end up deciding between proposals from places they may never have set foot in.

Post-Brexit Britain needs a better approach on levelling up. Here’s how it could work.

Firstly, we should see an end to the cap-in-hand, local to national government bidding, and shift to an approach of collectively agreeing local levelling up plans which local and national government have worked up together. During my time as Education Secretary, our Opportunity Areas developed tailored, locally-driven education plans. My DfE officials were actually on the ground and part of those teams, rather than sitting above and judging them. It wasn’t ‘us’ giving ‘them’ money, it was “super-devolution”, meaning devolved funding plus active Whitehall partnering on local level plans. There’s no reason why this couldn’t happen on a broader levelling up agenda than just education. Plus, the connections between the DfE officials in the different Opportunity Areas helped generate far more innovation and best practice sharing to lift education outcomes, than if they’d worked alone.

Secondly, we could adopt a pro-levelling up, more devolved approach for our tax system. To be clear, there’s always going to have to be some redistribution of resources from more to less affluent places and people to drive fairer outcomes across the country. But in post Brexit Britain, we’ve the freedom to do things differently. As a start, we should be looking at how local authorities can keep more of their community tax receipts to support their own levelling up priorities, rather than having no alternative but to go to the national Government for funding.

Business rates, a company version of local council tax, goes straight into central Government coffers even though, like council tax, it's directly collected by local authorities. Treasury reviews have never led to substantial reform of the business rates system, yet it leads to perverse anti-levelling up outcomes. It’s nonsensical to have business rates sucking funds out of our local high street businesses whilst, simultaneously, we have to put money back in to support them with various Government High Street Funds, and now this week’s Levelling Up Fund.

And in post-Brexit Britain we have the freedom to make taxes like VAT more supportive of levelling up. For example, by lowering rates on the day to day household goods that make up such a high proportion of lower income household spending, helping cost of living pressures, and increasing rates on high-value luxury items often only afforded by those with greater means. Whether it’s business rates or VAT, essentially a sales tax, the wider tax system needs to be redesigned for today's world where we also shop online too, so it works fairly across the board, a shift now well overdue. It’s not about raising tax overall, it’s about having a fair tax system that more successfully supports the levelling up outcomes we want for people and our communities.

In the run up to the next election both main parties have a golden opportunity to think differently. We all know the problems - it’s about time we had some fresh solutions.