23 August 2022

Johnson’s resignation is a chance for a private sector-led reset on levelling up

By Daniel Harrison

Boris Johnson is leaving behind a manifesto that is partially-delivered. The new leader, whether it be Liz Truss or Rishi Sunak, will have to pick up quite a few pieces, and do so while in the midst of a storm on inflation and the cost of living. 

Even Johnson’s signature policy – Brexit – while now a reality, isn’t fully completed. In addition to Northern Ireland and its borders, many small and medium sized businesses are finding it difficult to adjust to the new regime. Nor is the former Prime Minister’s vision for ‘levelling up’ complete – far from it. 

Indeed, many Britons could be forgiven for not understanding what that term even means for their communities, but one thing’s for sure – a complete abandonment of levelling up as a policy would be electoral suicide for the Conservatives. The red wall seats were won on this policy. It has made people in northern constituencies feel like their needs are being catered to. It remains a key part of the mandate given to the Conservative government in 2019 and must not be cast aside. 

In fact it’s time to redouble those efforts whilst recognising that no central government, no matter how flush, can level up an entire country on its own. 

For a true improvement in economic outcomes across the country, we will need the private sector to lead and create the employment needed to drive our tax take and provide the public services Britons rely on. This sentiment is shared by many in regions in need of levelling up and should be a defining feature of any attempt to reset the policy. 

Ben Houchen, Tees Valley Mayor, penned an open letter last month to Conservative party candidates urging them each to commit to a Levelling Up Pledge, emphasising the importance of developing all parts of the UK in order to foster sustainable growth. As part of this Houchen called for the next leader to further English devolution. Houchen’s desire to facilitate “pro growth pro business policies” in different regions of the UK through devolution is something that would go a long way to bridging the gap between the North and the South. The government must empower local government and business in deprived regions to revitalise the levelling up agenda. Since Houchen’s letter both candidates have signalled their commitment to levelling up, a simple continuation of the previous regime’s approach would be ill-advised, however. 

The new leader must therefore return to core conservative principles to ensure growth: fair levels of taxation; sensible regulation; and other policies that encourage entrepreneurship and responsible economic risk-taking. It’s not right that the only winners in the global economy are the Southern behemoths with the deep coffers and compliance departments needed to cut through the morass of regulation. 

We say this advisedly, even though businesses in our sector have been, in some ways, the beneficiary of increased regulation, which is driving many of the sole traders in the financial services industry into early retirement, while discouraging the next generation of small firms who might have taken their place. 

That said, we recognise the key to thriving communities up and down the country is a whole host of small to medium sized businesses hiring people with skills; Britishvolt’s gigafactory in Blyth and Nissan’s Sunderland expansion are fantastic for these regions but such large scale investment is a rarity. 

The proposed Blyth freeport would have brought 60,000 jobs, providing a springboard for long term economic growth in the North East, and given the UK a post-Brexit boost. Despite these clear benefits the project didn’t receive government funding. Opportunities like this remain and should certainly be revisited when the economy stabilises. 

You don’t need to watch the telly to know that Britain’s got talent; the key is to give local leaders encouragement to spot, train and empower that talent, not try to manage everything from London.

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Daniel Harrison is CEO of True Potential, a North East based wealth management firm.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.