Spain's Basque Country shows the future Prime Minister how to level up the UK - Ivan Jimenez

It’s not hard to find examples of why levelling up deserves to be more than just a slogan.

A new report by the End Child Poverty Commission found that almost two-fifths of children in the north east of England are living in poverty. Productivity levels in London stand at 32 per cent above the UK average, while in Yorkshire and Humber they are 17 per cent below.

In Richmond-upon-Thames, a healthy male at birth can expect to live to at least the age of 71; in Blackpool he would be lucky to reach 54 years old.

The candidates should look at the Basque Country, a region of northern Spain, to understand what’s required to truly level up.

Like many places in northern England, heavy industry once dominated our region. But we also experienced substantial industrial change in the 1970s and 80s as these industries declined.

The 2008 financial crash caused further damage, with productivity and wages falling to among the lowest in Spain, and unemployment rates soared to above 16 per cent. Skilled workers and graduates living in the Basque Country deserted the region because of the lack of prospects – a story replicated by the ‘brain drain’ from the north of England to London and the south.

Fast forward to the present, and the reversal of fortunes is stark. Living standards in the Basque Country are now among the highest in the world.

Unemployment is far below the Spanish average, GDP per head is on a par with the likes of wealthy Scandinavia, household income is among the top 25 per cent of OECD regions, and the region ranks alongside some of the most industrialised nations in terms of education levels.

Once grimy, unwelcoming cities are now major tourist destinations.

How have we achieved this? And what could the new PM learn from our experience?

Firstly, devolving real power to a region makes a huge difference. As a recent report by the Centre for Cities, think-tank argued, the major reason why regional policy in the UK has failed is that the regions have not had a level of government that could provide the necessary leadership for regional regeneration. Regions need to be given true autonomy and freedom to lead, not subject to directives dictated from Westminster.

The Biscay government, the governing body in the Basque Country, has been allowed such freedom. Our semi-autonomous status has allowed us to introduce our own tax incentives, which has enabled us to attract high-skilled labour from across Europe and tempted major companies to relocate here.

The likes of Mercedes-Benz, Canon and PwC have moved to the Basque Country, which is now considered one of the most attractive regions in Europe for investment.

The former Secretary of State for Levelling Up, Michael Gove, may have pledged that local authorities would be able to bid for more powers – perhaps even equivalent to those held by the

Mayor of London – but even that level of autonomy would fall way short of the fiscal freedom the Biscay government enjoys.

It also requires investment, especially in times when it is most urgently needed, such as during a cost of living crisis.

Industrial recession hit Bilbao hard in the early 1980s, but the Biscay government committed to building a new technology park, which transformed the city from an industrial relic into a centre for research and development and hi-tech industry. Yet, in its recent spending review and levelling up white paper, the UK government provided no additional funding beyond previously-announced schemes.

Former Tory leadership contender Tom Tugendhat identified that investing in education is key, pledging to establish new institutes of technology across the UK. When our heavy industry declined, the Biscay government invested to upskill its domestic workforce. The Basque Country now ranks alongside some of the most industrialised nations in terms of education levels, with 26 per cent of residents holding advanced degrees in STEM (Science, Technology, Engineering, and Mathematics) subjects, double the proportion of both the EU and the United States. 

Lastly, cultural investment can be a cornerstone of success. Levelling up funding to date has been allocated to small-scale projects such as local libraries and community arts centres. All fine, but establishing cultural icons should be the ambition.

Eyebrows were raised when Bilbao bid to attract the world-renowned Guggenheim, but it now symbolises the Basque region’s turnaround: a beacon in the centre of a once-deprived city which now contributes 425 million euros to regional GDP, generates over 9,000 jobs, and drives up tourist numbers. It has been the catalyst for the delivery of a full-scale urban renewal programme, including a new metro system and business centre.

Levelling up as a phrase in itself may well be just a slogan. But regional inequalities are very real, and in times of economic hardship, are at risk of widening further.

If the new PM is serious about redressing inequality, then taking a leaf out of the Basque Country’s experience would be a good place to start.

- Ivan Jimenez is Managing Director of Bizkaia Talent, established by the Biscay Government in the Basque Country as part of its strategy to revitalise the region.