Focusing on local wealth creation to level up the North
This paper by Jamie Driscoll, Mayor of the North of Tyne Combined Authority, argues that the answers to the economic problems of the North East lie in generating more wealth in the region. This will result in a virtuous circle of reducing health and skills inequalities which, in turn, will lead to greater prosperity.
But wealth generation depends upon the freedom to innovate. This should not be limited to the private sector. Whole swathes of services and infrastructure are run or administered by local, regional, and national government. Too often, they don’t coordinate well. Funding mechanisms and convoluted lines of accountability disincentivise both long-term strategic action, and agile innovation.
Competitive bidding, in particular, damages local accountability, strategic planning, and worst of all, local agency. It reinforces the belief that Westminster is both the cause of – and the solution to – regional inequality. You cannot level up the North from Whitehall.
Nor can regional economic inequality be addressed by raising taxes locally. The unevenness of the tax base would just exacerbate the inequality.
This report proposes fiscal innovations as supplements, or alternatives, to fiscal devolution. Mayoral combined authorities would gain these fiscal mechanisms:
- A regional wealth fund to boost SME growth.
- Earnback from payroll taxes to incentivise job creation.
- Invest to save to front load investment, paid for by downstream savings.
- Land value uplift to accelerate transport infrastructure investment.
- To coordinate national government policies with local and regional delivery
- The establishment of a levelling up board at the level of the mayoral combined authority, chaired by the mayor, with representatives from each domestic government department.
This is a win-win. It pays for itself. It creates incentives for stronger regional leadership. It grows the national income. It reduces pressure on public services. And it improves the lives of our citizens.
Al Mathers Anthony Painter
How can the government tackle the UK's chronic and enduring regional inequalities? We explore three plausible areas of focus for levelling up: economic development, social cohesion, and community power and identity.
In this series of talks, the Oxford Martin School brings together academics, policymakers and practitioners to discuss the role of the private sector, the public sector, and educational and social institutions in making levelling up a reality.
Levelling up needs to consider people as well as the places they live in. Undermining economic security by cutting Universal Credit gets us nowhere.