LSE London’s 2021 Mayoral Roundtable series concluded with a discussion of two of the key issues facing Sadiq Khan as he begins his second term as Mayor – the levelling up agenda and how to help London recover post-pandemic. Three panellists, Clare Coghill, Nick Walkley and Jonathan Werran, one a working local politician; one with executive experience at borough level but latterly working with central government; and one concentrated on the role of localism and community involvement looked at these issues from different standpoints. But all putting a similar emphasis on London’s central role in economic growth.
An immediate question addressed what the Johnson government actually means by ‘levelling up’. Broadly in the current debate it is seen to be about helping communities in the English Midlands and North, perceived as having been ‘left behind’ in terms of economic development and public funding. But in the current debate this seems to give more emphasis to support for the smaller industrial towns than to the major agglomerations that were the focus of the Cameron government’s ‘northern power house’ strategy. And it is unclear how this is supposed to affect the role of the London and the South East economies.
An alternative view, that makes much more sense to Londoners. is that it should be far more about helping groups and local communities that have been left behind by widening economic inequalities. If that definition is accepted, then there are many parts of London which are just as much in need of levelling up as those further North.
At a strictly political level, it could be seen less as a matter of economic or social strategy (a new regional policy) than simply offering ad hoc rewards to voters in the former ‘red wall towns’ to help maintain their loyalty. That could leave major financial/funding problems for the London and South East economies which are beginning to emerge.
Fundamental to any of these definitions is the question as to whether ‘levelling up’ can be achieved in such a way that the overall economy benefits – indeed maybe has to be – or does helping areas or people that have been doing badly inherently mean others losing out. If it is to be successful it was agreed that policies must speed up growth overall. But past experience had shown how difficult this has proved to be and as yet there seem few levers in place to ensure success.
From an out-of-London point of view it was argued that, while the agenda’s defined objectives are to create new jobs, boost training and grow productivity in places that have seen economic decline, the levelling-up agenda also reflects concerns raised for very many years about the over-dependence of the British economy on London. Agglomeration is accepted as key to growth but having an entire nation’s cultural, economic, and political influence emanating from one mega agglomeration is arguably not sensible.
How to move forward?
There was considerable concern expressed about London’s current situation. In particular, Covid has exacerbated the negative impacts of Brexit. Various sectors within London face existential risks and if London falls apart that is a problem for the UK as a whole. Long delays in getting the London Plan approved, and the response to TfL’s funding bid reflected other ongoing tensions with central government departments.
Yet, there is now a positive opportunity for London and for the Mayor’s second term: the London Plan can now be used as a document for delivery rather than discussion; Crossrail should be opening soon; and however worrying, Brexit has not produced the completely toxic shock to the economy that many expected. However, London still faces a housing market where demand massively outstrips supply, transport is now completely bedevilled by the TfL crisis and the economy has been severely impacted by the pandemic.
The main question for the Mayor is perhaps whether it is his alliances rather than his powers which are going to be the more important in this next phase of addressing London’s challenges.
In this context, businesses need the Mayor to take a strong lead as London faces these multiple challenges. But Sadiq also needs businesses to be with him in conversations about London’s position in for levelling up. It was argued that the money for levelling-up is not going to come from government, at best it will be just leverage. Levelling-up money will need to come from large scale institutional capital for major corporations taking decisions about where and how to invest. A confident London Mayor working with London based institutions can do a lot to both build different alliances and influence, making London first amongst many equals.
Stronger collaboration between the Mayor, GLA and London boroughs has emerged in response to the pandemic and can be replicated in other situations. Here, the GLA must use its partnerships with the boroughs and particularly work with flagship Tory councils both in central and outer London to establish better working relationships based on collective achievements.
One panellist argued that the Mayor needs to look beyond the institutional relationships with the boroughs. He saw opportunities because City government governance across England is now Labour territory which can help support communication between the Mayor and his counterparts. Together they can make common cause on the strategic importance of the agglomerations for regional balance as well as national development.
The pandemic may also have changed the dynamics between London and the rest of the Wider South East and London. The South East is heavily dependent on London workplaces. So there needs to be a conversation about what London means within a broader based economic engine. The fact that now the Cambridge Mayor is Labour increases the opportunities to develop this conversation further.
One specific question
One particular policy question asked was whether it was desirable to move some civil servants out of London – not a new policy but one which has usually only taken mainly lower grade less civil servants out of London because of the pull of being close to Ministers.
Two panellists agreed that further decentralisation of civil service staff to other parts of the country would be valuable and would provide additional jobs. It would also encourage different thinking as long as higher ranking staff are included. Both however argued that it does not address the absence of meaningful devolution.
The third panellist was more concerned about the quality of Whitehall and the national civil service since the major cutbacks of the last few years – putting at risk central government’s capacity to make the levelling up agenda work.
There was general agreement that there was no economic case to attack London – it could only harm the nation as a whole. But it was also accepted that there is a great deal of antipathy towards the capital.
The division of functions between London and other UK centres will continue to evolve, but there is a class of high-order internationally-oriented activities for which the capital will remain the obvious location of choice. London’s capability to compete internationally remains fundamental to a strong national economy.
The optimists in the discussion argued that London still has the capacity to support the national economy. That capacity can be seen as a conduit for growth and connectivity with other cities. But to achieve this everything that is possible must be done to improve those connections to support other parts of the country.
Finally, a more effective collaborative relationship with central government needs to be restored, compatible with whatever regional policy is to be pursued, but avoiding wilful acts of self-harm and displays of antagonism.