Wednesday 2 February 2022

The Class Politics of Levelling Up Failure

On BBC Breakfast this Wednesday morning, Michael Gove was asked if his long-awaited White Paper on "levelling up", i.e. state-led economic regeneration outside of London and the South East, contained any new money. He said yes. Analyses put together by The Mirror and the BBC say otherwise. Even worse, the announcements not only had no new money behind them, and it turns out Gove's big wheeze is a cut and paste job of the scrapped industrial strategy. Conservatism's about conserving, after all.

I don't intend repeating Gove's vague "missions", which have been summarised elsewhere. Most of the establishment critiques of it are spot on, as far as they go. The money pledged, the schemes announced, and the paltry ambitions of the government's big idea (Boris Johnson's "mission", if you can believe it) fall far short of what is needed to overcome decades of decline and neglect. Today, the £1.5tn the German federal government sunk into the East post unification has been the point of comparison, and one in which the East now enjoys a better standard of living than whole swathes of the English Midlands and North. But it's not enough to lament the Tories' hopelessness, take the piss, and call them incompetent for the umpteenth time. We have to ask why Gove's modernisation is so lacklustre and why, for all intents and purposes, amounts to giving tired-looking town centres a lick of paint.

Let's start with the generous, some might say naive explanation. It's that the Tories don't know what they're doing. In the Dave and Osborne years, their windy rhetoric about their "long-term economic plan" were but gusts of befuddling words. There was no plan. They took their axe to public services, privatised whatever was left after decades of sell offs, and presented their efforts at deficit reduction as the measure of their economic competence. And sadly, enough people fell for it to vote them back in. Underpinning Osborne's political economy was a viciously class conscious strategy aimed at making workers pay for the bank bail outs, and a hope that conferring more powers on the Manchester and Birmingham mayoralties would magically transform Britain into a turbo-charged Germany. Reader, this did not happen. When Theresa May had her go, from the steps of Downing Street she pledged her premiership would head in a different direction, a programme with a concern for social justice(!) and inequality at its heart. Nick Timothy put it in her ill-fated manifesto, and that was as far as it went while the loss of her majority and the pain of the Brexit negotiations torpedoed her authoritarian, but ostensibly patrician (matrician?) agenda. Johnson took it up as he inherited and built on her voter coalition. And two years on, notwithstanding Covid, here we are. Still talking about what-might-be. Tory statecraft since Thatcher can't build because it has forgotten how, and why we see incompetent decision-making, delay, and underestimation of the challenge.

A more coherent and accurate explanation locates the Tories' levelling up difficulties in the interests they articulate. Or, to use the old fashioned language, class. These should be familiar by now to anyone who has followed the Tory politics of the Covid crisis. Their incoherence, downgrading of public health priorities, but trying to face multiple directions at once is more than stupidity and incompetence but the effect of competing pressures. Their nationwide economic plan is no different.

Apart from their general concern with keeping workers under the heels of their employers, the primary economic interest the Tories have long favoured is the City of London. Not finance capital but, historically, commercial capital. Consistently, whether the two-nation politics of Thatcher or the one-nationism of Macmillan, the preservation of the City as a (if not the) global centre of finance and brokerage is their priority. The City interest lies in increasing the volume of trades as more trades mean more commission and therefore greater profits, and this free market common sense circulates among the revolving door of personnel between it, the Bank of England, and the Treasury. Cementing it in place are significant layers of Tory MPs whose immediate class interests tie in with the City (Sunak and Rees-Mogg, for example), and the dependence of the party on donors drawn from this coterie. This is important because basically, as well as the Tories' tribulations over Europe being partly rooted in received wisdom and statecraft, Brexit was also a debate taking place in City circles. How to secure London as a global hub in the 21st century? Stay within the ambit of the EU and keep clipping the coupons while becoming increasingly subordinate to the European Central Bank and Frankfurt, or strike out alone in a bid for global pre-eminence? I digress. The point is if this is the core sectional concern of the Tory party, then what takes place in the rest of the country is largely irrelevant. As long as the elite institutions keep churning out the next generation of brokers and city slickers, who cares whether unemployment is a problem in Bradford or not? Therefore Tory politics rests on a substrate of instinctive indifference.

Coming next we have the next layer of interests the Tories pander to: finance, property, and landlord interests. During 2020, their contradictory public health strategy consistently put the health of rents above the safety of workers and young people. Opening the universities up for a semester had much more to do with servicing the investments of property speculators, and landlords big and small than wanting to give students a decent experience, for instance. What has this got to do with levelling up? This layer, shading from the impeccably bourgeois to the chancing-it petit bourgeois, already do quite nicely out of Britain's lop-sided economy. The building of housing and the sprucing up of town centres threatens to increase the supply of residences and quality commercial properties, which is a direct threat to the rents they charge.

Related to this is the mass base of the present Tory coalition of voters: older people. This isn't because people naturally become conservative as they age, but in Britain at least there is a strong correlation between age and asset ownership. If you were able to acquire a house via a cheap mortgage in the 70s and 80s, or through the Right to Buy, or a bargain in the early 90s following the collapse of the Thatcher/Lawson property bubble and before prices took off again, in many parts of the country that asset has appreciated significantly and these older, mostly retired homeowners have an interest in this continuing - even if they have no intention of selling. Seeing the state of the country, millions of elderly owner-occupiers want a valuable asset they can pass on to their children to help them after they're gone. A perfectly reasonable desire, which leads many of them to vote for the very party that makes life unnecessarily hard for their working age children and grandchildren. A case of opposing their offsprings' future property-owning interests to their current interests as working people. In the here and now, this constitutes a further break on Tory modernisation. Everyone wants to live in a nice place, but if there are too many nice places then the value of their estates stagnates or, gasp, might even decline.

As far as the mass Tory core are concerned, it's very rarely spelled out in these stark terms and finds itself sublimated through authoritarian politics, nationalist populism, and beggar-they-neighbour politics. It therefore acts as a real pressure on the Tories, one that has effectively boxed them into a corner with a mass coalition (at least before their current difficulties) more likely to vote than the rest of the population, but not replacing itself like-for-like. Even as assets are passed on and inherited by the families they leave behind. The conservatising consequences of ageing (i.e. property ownership) is breaking down.

This is a snapshot of the internal contradictions the Tories have to wrestle with. Gove's White Paper, just like the non-starter industrial strategy and May's One Nation affectation before that indicates they have a sense that electoral success under Boris Johnson is not sustainable. The relationships feeding it are undergoing decay. To win in the long-term, the Tories have to strike out and make new supporters. Which is very difficult when the exigencies of maintaining the present coalition means kicking people of working age in the teeth. There is no way of squaring the political circle. Its coalition of interests are too tied to the asset price inflation economic model, and doing anything about it can only invite electoral defeat for the Tories. For that reason, Michael Gove might as well pad out his regeneration strategy with wistful invocations of ancient Rome. They are incapable of delivering on their levelling up promise, so why not offer some light reading instead?

Image Credit


Cathy said...

Where is the Labour Party Levelling Up programme? Unfortunately the Labour Party is on an inexorable path of self-destruction - the theme of this month’s Labour Affairs’ Editorial 1: “The strange Death of Liberal England, “ a nod to George Dangerfield’s 1935 classic: “The strange Death of Liberal England,” on the decline of the Liberal Party.

Labour’s current position can be personalised as the a lack of leadership, or, as Editorial 2 argues: “The Need for Policies,” and points to Labour’s “threadbare policies” on, for example, social care, energy , transport, youth education and training, housing.
More on this at

Phil said...

Lisa Nandy gestured toward some vague promises in her response to this, yesterday. The weekend before last a new Blue Laboury piece was published called Labour's Covenant, which addresses this kind of stuff. Post on that coming soon.

Blissex said...

«“The Need for Policies,” and points to Labour’s “threadbare policies” on, for example, social care, energy , transport, youth education and training, housing.»

But New, New Labour has policies on all these points, they are the same policies as those of the Conservatives or the LibDems, with a few variants.

The policies all three major parties propose are whichever policies are in the interests of affluent south-east voters, and they are doing very well indeed, with booming living standards for decades. Those voters don't feel any need for new ideas or new policies, except perhaps to boost property prices profits and to moderate wage costs.

So New New Labour should making bold, "progressive" proposals for things like decreasing the pension of women to 60 paid by doubling NI on men, or making mortgage payments deductible from taxes or at least from taxable income, giving 20% of voters in a ward the right to veto developments in it, allowing voters to sponsor the immigration of foreign house help/carers on indenture contracts exempt from labour legislation, etc. etc. etc.; after all the claim is that winning elections is all that matter, not the politics, and winning elections means winning over tory voters.

Anonymous said...

This is a good analysis by Phil of the utterly cynical slogan-rich, but new resource free, hype, of the Tory 'levelling up' con trick. But why should we be at all surprised ? The excellent BBC2 two-parter , last week, and this, on the post 2008 crisis massive extra enrichment of the rich (via quantitative easing powered asset value inflation), and the contrasting massive fall in the incomes of the lowest paid, and rise of the 'gig economy' gives the real picture of the impossibility of any 'levelling up' at all, not without a huge wealth tax on the rich, and state-led planned economic regional policy and German-style (Rebuilding of East Germany after reunification) - type redirection of resources .

But as other posters have already said , there is now no chance at all of the, totally recaptured by the corrupt, careerist, neoliberal Right, Labour Party, offering a radical, high tax of the rich, renationalising, state-planning-led, policy offer , of even the extremely mild 2017 Corbyn Manifesto kind . Mind you , even the 2017 Manifesto was so mildly 'Left' (abandoning the need to nationalise the banks almost as soon as Corbyn was elected Leader in 2015 ) , with John McDonnel tacking rightwards so often to appease the Right, that the much promoted Corbyn/McDonnell 'Industrial Strategy' was really just the same empty hot air as with all the other parties and their common vague promises to 'rebalance the economy'. And as for the much loved by the middle class 'left', Corbyn 'Green New Deal', this was equally just a load of empty slogans too. Unfortunately the Starmerite Front Bench are not even offering the pale imitation 1960's sub-Harold Wilson 'National Plan' era , state interventionism , of the 2017 and 2019 Labour Manifestos (even to take the NHS back into 100% public ownership). Just extra Austerity (to 'restore the public finances ' - on the backs of the majority, not the superrich) , and a continued worship of the capitalist system's untrammelled market forces.

We now have three entirely market forces worshipping major parties on offer to the voting public, all captive to the overriding desire to appease the billionaire-owned MSM, and therefore quite incapable of dealing in any way with ever-greater deindustrialisation, ever-greater regional disparity, and sectoral imbalance, and a over-large buccaneer financial sector calling the shots, and ever-greater income and wealth disparities across our social classes , the only 'offer' whatever Party the voters can choose. The current gigantic looming hike in the costs of electricity and gas , and other core cost of living commodities , shows the mass impoverishment for the many, versus ever greater enrichment for the few, this neoliberal agenda has brought us to. The eventual outcome will be the rise of a mass pseudo radical populist Far Right in the UK on the same lines as the divisive scapegoating Far Right across Europe today.

McIntosh said...

Are we not idealising the effect of spending on East Germany? Isn't it still lagging behind the Western part in employment and haven't large sections of its skilled younger workers moved west?
Are there any examples in Europe or the US of a successful levelling up? The glass works are not going to reopen in St Helens, or ICI return to Widnes and Runcorn. I cannot imagine how much would have to be spent to make Winsford match Wimslow, or Burslem match Bath.
And who is going to occupy the shops in the derilct High Streets? There is no BHS, Woolworths, Dotty Ps, Debenhams, etc. to fill them.

I look forward to seeing Labour's Covenant and how it proposes to turn back the tide of decline.

Anonymous said...

I don't think we are 'idealising the effect' of the gigantic spending by the unified German government in the old GDR states, McIntosh. The harsh forces of global capitalism utterly destroyed the old protected East German industries as soon as reunification happened, and , accepting large population movement after reunification to the West happened , huge infrastructure improvements and financial support for new businesses undoubtedly has set the massively underdeveloped states of the old GDR on a much more healthy path than it would have faced without this massive support. I myself witnesses the huge road building/upgrading programmes underway to link the underdeveloped East with the West during visits to (western) colleagues in Baltic Northern Germany in the early 2000's. And of course West Germany, and now unified German, has avoided so far becoming a totally financialised economy, with a still thriving large and small business-based manufacturing sector - supporting a huge number of skilled, well paid jobs. And yes, I do know that Germany's relative prosperity and constant trade surpluses are achieved , via a , for them, undervalued Euro, at the expense of the less capital-intensive, less efficient, southern European economies.

The destruction of the UK manufacturing base, from the Thatcher Era onwards in particular, was never inevitable - but a political, a financialised ruling class-based, choice.

Reversing such a now long-term asset-stripping destruction of our manufacturing base, and introducing real , people-benefitting, regional planning and economic development , would be a formidable task. And the ever-accelerating break-up of the UK into devolved nations (can devolved English counties be far off ?) including elected mayoral fiefdoms, does make comprehensive economic planning much harder than it was in the half-hearted state-led planning efforts of the 1960's under Wilson's Labour government. But if the current 40 plus years trend to ever deepening massive economic decline in the North continues, with ever greater income and wealth inequality everywhere, the future of the UK as a relatively peaceful, (bourgeois) democratic society must be in considerable doubt. .

Blissex said...

«The point is if this is the core sectional concern of the Tory party, then what takes place in the rest of the country is largely irrelevant. As long as the elite institutions keep churning out the next generation of brokers and city slickers, who cares whether unemployment is a problem in Bradford or not?»

And that is entirely legitimate politics, the problem is building a coalition that is opposed to that kind of politics and this point is relevant to that:

«A case of opposing their offsprings' future property-owning interests to their current interests as working people.»

There are two main reasons why property is "the truth and the way" in southern England, and many people think that their property is more important than their job, even for their children:

* Big yearly (even when unrealized) profits.
* The security of knowing that property prices are government backstopped.

For many, perhaps a significant minority, it is the security aspect that really matters: with insecure jobs, minimal social insurance, many people see the security of government backstopped property as its main attraction.

The "left" cannot really attract the voters who just want to benefit from massive upward redistribution via property from the incomes of the lower classes, but I would think that it can attract those who mainly care about security:

* By emphasizing how insecure property really is, with two huge crashes in 40 years, colossal debt leverage, and the state not having an unlimited ability to backstop against that.

* By reminding security-seeking voters that a social-democratic state can provide security to them by backstopping the much smaller and cheaper risks of pensions and social insurance and public services.

Sure, business and property rentier interests like it much more when voters are scared of losing their jobs, of being unable to rely on much reduced state pensions or public services, so it is going to be a struggle. But what alternatives are there?

BCFG said...

Anonymous says that the future of the UK as a relatively peaceful, (bourgeois) democratic society must be in considerable doubt. Peaceful of course if we ignore every bloody imperialist adventure, and ignore them we do!

I would argue we are already witnessing the end of that (bourgeois) not so democratic society. This will of course be replaced by another not so democratic bourgeois society. The lurch toward authoritarianism is, I would argue, not really because of the growing gap between rich and poor but thanks to advances in technology that massively cheapens the cost of authoritarianism. In other words, the bourgeois at the imperialist centre tended to steer clear of authoritarianism because it was too costly, but that is now not the case.

I will accept that Britain’s development toward Brazilification will necessitate certain authoritarian measures at certain times.

“The point is if this is the core sectional concern of the Tory party, then what takes place in the rest of the country is largely irrelevant”

The Tories always put their interests ahead of any other, and it has served them well in winning elections. As the saying goes if it isn’t broke don’t fix it!

However, the other concern that every ruling class has and must have, and I would argue is their most overriding obsession, fanatical obsession, is what the producing classes are doing and thinking. They concern themselves with this more than everything else put together.

It will be interesting how the various Tory parties manage to navigate the cost of living crisis (caused not by the pandemic, but by the very logic of exchange), the mass extinction event, and the climate destruction, along with the normal crisis conditions of capitalism. We already see a hint of this with woke hysteria, authoritarian state measures and divide and rule along every possible line, now including the old and young and healthy and unhealthy.

The privatisation of health care, which has gone on without a murmur, will allow the state to really ramp up the divide and rule along those who are healthy and those who are not.

Woke hysterics will ensure the focus is on what Claire Balding is paid by the BBC, and not tidal wave of mass destitution on the way.

As I have argued before, the only logical solution to these problems is the end of exchange. Anything short of that is Toryism, but with probably less logic (this article is a prime example of less logical Toryism).

Still, I would be very happy to see Corbynism at least being given the chance to succeed, or fail miserably.

Blissex said...

«The building of housing and the sprucing up of town centres threatens to increase the supply of residences and quality commercial properties, which is a direct threat to the rents they charge.»

But if housing was built and town centres were spruced up in places like Stoke, why would it matter to property rentiers? Property profits are extracted from wages (and from business profits) and thus more housing and nicer town centres in areas without jobs are pointless.

What terrifies the tory base is that jobs may come to the "pushed behind" areas, and therefore the flow of new tenants and buyers into the golden tory areas may shrink.

«a mass coalition (at least before their current difficulties) more likely to vote than the rest of the population, but not replacing itself like-for-like. Even as assets are passed on and inherited by the families they leave behind.»

That is not quite how the shrinking of the property rentier base works though, because the number of properties is not shrinking, and typically typically when a tory property owners dies, their property is sold and the proceeds are split among the tory heirs, who use the cash as a deposit to buy their own property, their own tory means of screwing everybody else (actually everybody poorer than them).

But while the number of properties is not shrinking, and the inheritance mechanism is not reducing the number of tory property owners, it is still deposits the mechanism that shrink the number of property owners: in areas where property prices are booming they are currently so huge that only existing property owners (by remortgaging) or their heirs (by selling the inherited property) can easily raise them.

That means that property ownership will become ever more concentrated among those who already have a property portfolio to leverage to buy more property. It is a debt-property spiral, that the government not only does not want to stop, but does not dare to stop, as the spiral cannot be painlessly unwound or even just stopped.