New Analysis Shows Just How Big a Failure Boris Johnson’s ‘Levelling Up’ Agenda Really Was

In 2022, Boris Johnson’s Government laid out a vision to narrow the disparities of wealth, health, and power between the regions of the United Kingdom by 2030. They were fine words indeed. 

New research has shown that this mission has, so far, failed abysmally. Many parts of the UK have actually been going backwards relative to London and the South East since Boris Johnson was elected in 2019. 

According to new analysis from the National Institute of Economic and Social Research (NIESR), while some progress has been made in areas such as digital connectivity and crime reduction, critical areas like pay, employment, productivity, education, and housing have seen little to no improvement.  

Worse still for hopes of ‘Levelling Up’ – a phrase that has now been ditched by Keir Starmer’s Government – there has been a marked deterioration in school education standards and housing conditions in some parts of the UK between 2019 and 2023. 

A central goal has been to close the gap in pay between affluent areas like London and the South East and poorer regions such as the North East. 

But regional pay disparities remain largely unchanged. Despite some increases in the official National Living Wage (NLW) – in reality the minimum wage – benefiting low-wage earners, the broader objective of reducing overall regional inequality has not been met. 

Living standards in poorer parts of the country have worsened significantly more than in more affluent areas. Since 2019, overall living standards have dropped by an average of 7-8% in the UK, with the bottom decile experiencing a dramatic 20% decline.

In contrast, the top income deciles – the richest 10% – only saw a three per cent hit. Living standards are defined by households’ real disposable income (a metric known as eHRDI), which accounts for the makeup of households and housing costs as well as other factors. 

The divide is most evident when comparing different regions. For example, the gap in living standards between London and the North East widened from £4,600 a year per household in 2019/20, to £7,300 in 2023/24. That’s an increase in the living standards divide between the North east and London, during the ‘Levelling Up’ years, of around 50%. 

Similarly, the gap between London and the North West grew from £2,900 to £5,400. But the gap between living standards in London and Yorkshire & the Humber was most stark, rising in that time from £2,000 a year to £6,000. 

Again, that decline in living standards is not uniformly distributed. The poorest 20% of the population, concentrated in the most deprived areas, are projected not to see a return to pre-pandemic living standards before April 2028. 

Housing, another critical area under the Levelling Up missions, has seen a sharp decline in both supply and affordability since 2019. 

The deterioration is most acute in the South East, other southern regions, Yorkshire and the Humber, as well as cities like Belfast and Glasgow. Conversely, marginal improvements were observed in parts of Wales and Cornwall, though these are exceptions rather than the norm.

Primary school education standards have also deteriorated across most regions, with the educational disruption caused by the pandemic having a lasting impact, with only Scotland showing some resilience against the downward trend. 

The pandemic years did not hit everywhere equally, and Britain is a long way from reducing regional disparities. 

The Government has inherited a legacy of low GDP growth, flatlining productivity, declining living standards, and crumbling public services. While the vision of Levelling Up was a generational task, the immediate failures and persistent inequalities underscore the need for a more robust, sustained, and inclusive approach to regional regeneration.

NIESR argues that the decline in educational standards poses a long-term threat to the prospects of regional regeneration, since education is so “foundational” for future economic and social mobility. 

‘The Country has Noticed the Conservatives’ Lack of Levelling Up’

Since Boris Johnson’s 2019 pledge, the public has received more of the same – austerity and higher taxes from the Government and, in many cases, cash-strapped local councils

Mike Buckley

The findings from the NIESR briefing offer a sobering view of not just the Levelling Up agenda, but Labour’s ‘fiscal inheritance’ from the Conservatives, something which will be music to the ears of Labour HQ: 

• The UK faces four long-term economic problems: low trend productivity growth, a limiting fiscal framework (the old and new Chancellor’s strict ‘fiscal rules’), declining living standards for the least well-off, and persistent regional inequality.
• UK productivity growth has fallen relative to the OECD average since the financial crisis in 2008, and is now towards the bottom of the pack.
• Business investment in the UK is 10 percentage points of GDP lower than the OECD average.
• Taxes as a percentage of GDP are at their highest since 1950.
• The poorest UK households are 21% worse off relative to the pre-Covid year 2019.

And a few points that Labour will not like to hear: inflation is expected to rise over the coming year, then fall back slowly towards target. NIESR also predicts that the Bank of England will reduce interest rates much more slowly than the market expects. 

Meanwhile, public investment needs to increase to 4-5% of GDP to address regional disparities, requiring a rethinking of fiscal rules. Labour’s plans currently do not allow for this level of public investment in e.g. infrastructure and other long-term ‘capital’ projects. 

As the NIESR report notes: “The new Government has inherited not just low GDP growth, flatlining productivity, lower living standards, crumbling infrastructure and poor public services but also persistent regional inequalities.” 

The overall prognosis is one of “stunted recovery” from the series of major economic shocks starting with Brexit and the Covid pandemic. 

Now for the hopeful part. White the authors are clear that genuinely boosting Living Standards outside the capital will require major public investment in infrastructure and good jobs, devolution has a big role to play in empowering England’s regions to invest and make long-term decisions. 

And unlike the ‘begging bowl’ approach of the last Government – pushing competing parts of the country to pitch for little pots of money from Whitehall – Keir Starmer’s Government says it is serious about actually devolving power. 

In short, there is a lot at stake in the English Devolution Bill when Parliament returns in September. 

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Josiah Mortimer also writes the On the Ground column, exclusive to the print edition of Byline Times.

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