Britain needs a 20-year cross-party consensus to level up the economy and unleash the untapped potential of regions outside London and the south-east, the former Labour shadow chancellor Ed Balls has said.
Balls, one of five co-authors of an academic paper on bridging the UK’s regional divide, said it was vital that Labour and Conservative politicians put aside their differences in order to embed necessary funding and governance reforms.
The report calls for a UK-wide growth strategy, a regional growth delivery unit chaired by the prime minister and for all parts of England to be covered by a tier of government between the local and national level, either a mayor or a combined authority.
The report, the third in a series co-authored by Balls, also said unitary local government in England should be offered a multi-year financial settlement – ideally for a full five years – to support long-term reform programmes in support of universal basic public services.
“There should be a manifesto commitment to embed reforms that last more than a parliament,” Balls said. “We would like to see a 20-year consensus on levelling up. If you had that it would make a real difference.”
He said Britain’s big regional cities were being held back by a skills deficit and a lack of investment in transport infrastructure that meant they were less productive than rival cities in mainland western Europe.
“If we raised the performance of UK cities outside London to a level with comparable cities in other European countries there would be a £55bn-a-year growth dividend and an extra £13bn of tax revenue.”
A previous paper by the researchers from Harvard, King’s College London, University College London and the Massachusetts Institute of Technology (MIT) found that past politicians regretted not doing more to level up and agreed that there had been too many changes of direction.
“We have shown that former Labour and Conservative ministers agree on this, so current politicians should just get on with it,” Balls said.
The report said the potential prize was significant, given that 78% of the UK’s GDP was generated outside London. Britain had huge geographic inequalities in economic, health, education and social mobility outcomes, and while these had always existed, they had widened in recent years, it said. Divides, both between and within regions, wasted talent and potential and fuelled a “geography of discontent”.
The “pivotal factor” behind the long-term success of policy would not be the specific policies chosen but whether party leaders could agree to the outline of a broad settlement and gave it proper time to evolve and develop.
“The detail of how we design our institutions, or which precise levers we will pull, are subordinate to having a clear, agreed plan across the cabinet and driving through reform early in a parliament; and to building a durable, cross-party consensus so any reform has time to bed in,” the report said.
It said a national strategy would ensure that significant investments in the UK’s regions would be considered as part of an annual strategic framework rather than on a project-by-project basis.
