The Financial Fairness podcast
Episode Four: Levelling up or levelling out?
Guest: Danny Dorling
Mubin talks to Danny about levelling up. Why is Britain so unequal? What is levelling up and is it working? Danny gives his verdict on all these questions and more.
Mubin: Welcome to the Financial Fairness podcast with me, Mubin Haq.
We have huge geographical inequalities across the UK, and that impacts all of us, from our health, living standards, jobs, transport, housing and much more. Levelling Up is the Government’s attempt to try and reduce these gaps, but will it work and why are these inequalities so wide in the UK.
Here to discuss with me is Danny Dorling, professor of Human Geography at the University of Oxford, who’s written extensively about spatial inequalities.
Danny, thanks so much for coming on to the podcast. We've heard a lot about levelling up from the government over the past few years, first announced in their manifesto back in 2019. Before we get into the nuts and bolts of it, can you just describe, what it actually is.
Danny: What it is for the government is an aspiration that the country becomes less divided, isn't the most divided country geographically in all of Europe, and put in practical terms, they're looking at doling out relatively small amounts of money to areas to try to make life less uneven.
Mubin: Before we talk about actual policies, and what the government's been doing, can you just say a bit about the geographical inequalities and disparities this new agenda is trying to address?
Danny: I've been doing this for 30 plus years. So 25 years ago, we looked at disparities in health. The UK then had the biggest health divides between its regions of any country in Europe. The second biggest divides were found in Germany, and that was in the 1990s, just after reunification. So differences in your chances of dying young, are, I would say the most important one, but there were many others. Differences in the incomes that people receive in different regions and different parts of our cities. Differences in educational opportunities. There are parts of Britain where you are odds on to go to an elite university, just by being born in that area. And there are other parts where you’re odds on, not to go on to university but to have a low paying job. House prices, wealth, almost everything, it's difficult to find something in life in Britain where there isn't a large divide between our localities.
Mubin: And this translates itself into government spending, I'm presuming as well.
Danny: Not necessarily John Hills, who was at the LSE did the best work on this by far. And he found, for instance, that if you look at health spending, as far as it's distributed across the population, because the middle class live a lot longer in Britain, than the working class, then the actual spending by government, on for instance, hospitals, doesn't even things out because the wealthier parts of the country have many more very elderly people who will require more care. So it's actually quite hard to show that government spending on social programmes reduces the gap. And other forms of government spending, for instance, on research and development, or museums, or galleries and so on, is incredibly concentrated towards London and the Southeast.
Mubin: How historical is this? Have there been periods when it's been less unequal in terms of these sort of geographical disparities?
Danny: Oh, yes, we've had dramatic narrowing of the gaps. If you go right back in the Industrial Revolution, the cities that of the North - Manchester, Liverpool, and so on, rose up and became very powerful and much richer. The time when we really noticed this divide, for the first time was in the 1930s. And it was the Special Areas Act in 1934. We had a budget of 2 million, designed to try to reduce the divide in the 1930s, because mass unemployment hit certain areas far worse than others. But after the Second World War, these divides rapidly came down. So that by the 1970s, a city like Sheffield, which wasn't doing well before, had an average life expectancy better than the national average, we were most equal in the early 1970s. And in that period, the population centre of the country actually moved north, people stopped migrating net down to the south of England, the divides were never as narrow as they were then. But since the late 1970s, when unemployment came back, and in the 80s, when we had a much more laissez faire approach to economics, the divides grew and grew and grew. And they haven't really shrunk at any point since then, whenever you measure them.
Mubin: It feels like these divides have been with us for a very long time. But what you're saying is that they really, were peaking in the 1930s. We then saw a reduction, and they really reduced by the time we got to the 1970s, but have been growing since then
Danny: That's right. So, by the 1970s, we were one of the most equal countries in Europe. And our regional divides were extremely narrow. If you go back to the 1970s and early 1980s, London was losing population, people were leaving London, it was a very different place to what it is now. And within cities, by the 1970s, we had some of the lowest geographical divides we'd ever measured. there's a danger that people look back with rose tinted glasses, and the kind of imagine it was much more equitable. But all the data we have from the 1971 census and the 81 census, and the 91 census, shows these divide, growing and growing. And we’ve become so used to them now, we think that they were always there. But they were much, much less in the past.
Mubin: Yeah. And I feel as if I've fallen into that trap, even though I remember some of that history, particularly London, and people leaving the capital and it being really not a great place people wanted to live.
Danny: Well, think of Notting Hill. When Charles Booth, did his mapping in the 1890s of London, Notting Hill was one of his yellow areas. So it's where people had servants living in grand houses. As we became more equal, and in particular, with the Second World War when some people fleeing Notting Hill because they're worried about V2 bombs, Notting Hill became less exclusive. And that's why it could become an area in which people from the Caribbean could afford to, to live. That's why you have the Notting Hill Carnival. And Notting Hill, and all those areas around in London became much less divided - you have to remember, we almost entirely got rid of all the servants, by the 1970s. By the 1930s, being a servant was the most common job for women in London, you know, we were that divided as society. But we've got rid of those divisions by the 70s. And London might have felt grimy, and it might have felt that things were falling apart. But the differences between areas is much less and then you get the gentrification beginning. You get people buying a bargain, you get the increases slowly in house prices. And eventually, you have the Notting Hill of today, which you can only afford to live in and pay for a property, essentially, if you have some inherited wealth, you can't earn enough money yourself to live there anymore, just as you couldn't 100 years ago. So there have been these incredible changes over generations.
Mubin: And is it really a London versus the rest or London and the South East versus the rest? How true actually is that, are there other places outside London and the South East?
Danny: Oh, it's a fractal map. So there is certainly a north - south divide. But in the south there are enclaves of poverty, including the largest concentration of poverty in Europe, in London. And in the north, there are enclaves of affluence, including in all of the famous red wall constituencies. There are at least three affluent neighbourhoods in each one of those constituencies that people don't realise that are affluent. So the map is complicated. But it is essentially a map of divides, within divides, within divides. The north-south divide, and then the divide within each region between the parts that are doing well, and the parts that are doing less well, which tend to be the less well connected parts by transport. And then within each city and each neighbourhood, you now have these incredible divides based around Primary School catchment areas, you know, the most ridiculous thing to have your country divided by - where the price of your house or the cost of your rent can be doubled within a mile or two.
Mubin: So we've seen these growing divides really geographically. How does this compare to other countries, particularly in Europe? Are we - I mean, I think you've hinted at already, we’re pretty unique, - but has that always been the case?
Danny: No, no, it wasn't, it wasn't always the case. By income inequality in the 70s, we were the second most equal large country to Sweden, we were on the edge of being Scandinavian. And people wrote books, about Paris and the French desert, about the regional divides in Europe about how terrible it was that everything was organised from Paris and how the rest of France was doing badly. That was in the past. But in the last few decades, we've had an equalisation in much of Europe, so that when Euro Stat tried to measure regional inequality, it's very hard for them to find out what is the second most unequal European country to the UK - we stand out by a mile, our inequalities are so massive, we have an outlier on their graph. And famously, they actually had to break the vertical axis of the graph, they show geographical inequalities on because the UK was so unequal that it wouldn't fit on the graph. But what's fascinating about that graph is that the range of inequalities in other countries are so similar that you can't work out which is the second most unequal country after the UK. And it really is that that remarkable.
If you think about Germany, when Germany unified, Berlin didn't become this incredibly expensive, larger city at the expense of the rest of Germany, that didn't happen. It could have happened, it took quite a lot of effort to make sure it didn't happen. And people still complain that Berlin isn't the same Berlin it was in the 60s and 70s. But you have processes and planning and effort going on in the rest of Europe, to make, for instance, Vienna, you know, a livable place. It's not just the Nordic countries that do this. All countries have regional divides, they all worry about them a lot. But if you look at say, the size and power of the capital city, then after London as compared to the rest of UK, the next most unequal countries on this continent - and only just – are Turkey and Istanbul, a city outsized for the country it's in and much more powerful; and Moscow and Russia. Those are the two comparator countries, Russia and Turkey, with the UK in terms of our geographical divide.
Mubin: And so they were by the sounds of it more divided than we were back in the 70s. But through planning and policy, try to reduce that. Is that right?
Danny: There is a lot of that work I think you can't assume it has happened by accident and of course, European funding, you know, European Union funding for particular regions, of which we used to get a lot of this because our Northern regions did so badly. Europe sent us money because we were so poor, and we complained that we were paying in money from, from the southeast, to Europe. So it's planning. It hasn't happened everywhere. Italy has large regional divides that translate into different political parties, but even Italy's regional divides, are nothing as compared to ours.
Mubin: Yeah, they've got that big north south divide haven't they.
Danny: Yes, yep, they've got that. But it isn't as big - measured by life expectancy or by income, or by the cost of living and cost of housing. It is not comparable to our north-south divide.
Mubin: So let's look a bit more at levelling up and what the government's trying to do. Could you just set out what their plans are?
Danny: Well, they've renamed what was the old department for communities and housing, they’ve put the words levelling up into its title. So it's not a new department, it's a rebranding. And if you're cynical about this, a lot of this is about branding and talk, but they do have an aspiration that, you know, at least they do realise that this is a problem, and one that will not simply go away naturally, because people will move to cheaper areas, because it's cheap. You know, that's what the Conservatives fought in the 1980s. If people only just got on their bike, as Norman Tebbit said, and moved somewhere where the work was better, this would all even out. So there is a change, they've recognised that this is a problem, they set a series of targets of things that they would like to change, and they've created a fund where areas can bid for money. And that money can be used to put in a small bypass or bridge or do something else to a city centre, maybe revamp a train station or something when you look at it.
Mubin: What's the scale of this money? Because we've had some announcements recently, haven't we, in terms of the second wave of funding, but how much is the quantum?
Danny: It's quite large when you put it all together. But it's quite small when you look at the amount that any individual area gets. That's what matters. And it's small, compared to say the drop in funding for secondary schools per pupil, which has been massive. So if you like the money going into levelling up, has come from other sources where the government have cut money, local authorities have had huge cuts across the board. They've lost over half of their adult social services. And that money has been stripped out of government spending, money that was often allocated by formula where the poorest areas would get more, that's been reduced, decimated is a fair word, many times - 10% reductions again, and again, and again. And a little bit of that saving is being spread out in this bidding process where you can say, you want to do something to level up. And in particular, you want to make people proud of their area, there's lots of talk about people feeling good about the place. And if that can happen, then they suggest that they will have levelled up. But the amount of money being spent is much less much, much less than the amount of money that's been cut in other ways.
Mubin: Yeah. And that's such an important point to bear in mind. Because over the past decade or more, we've seen local authorities, particularly but also central government departments really pared back in terms of spending.
Danny: Yes, and that, of course has affected poorer areas more than richer areas. So the irony of having a rebranding a government department as ‘levelling up’ while for the last 10 years, you've actually been making things more unequal shouldn't be lost on people.
Mubin: They've got missions now haven't they, there's 12 of them. Let's have a look at the first one, increasing pay, employment and productivity in all areas of UK, with each one containing a globally competitive city.
Danny: Yes, that sounds laudable, it's not hard to tear these apart. We've just gone through our biggest reduction of pay since the Napoleonic Wars, bigger than the 1930s, bigger than dozens of all the recessions we’ve had in the last 200 years.
So pay has actually dropped in real terms. Employment, apart from large amounts of sickness, we have very, very high rates of employment because you have to work. You can't survive as a single adult on benefits. Productivity is always a bugbear in Britain. But it partly reflects our inequality in pay that somebody has said to be productive if they're paid more.
And finally, that globally competitive city thing. I mean, there are these rankings of cities across Europe, and the government has been shamed, because hardly ever any of ours are high up in the rankings and cities that often we don't know the names of, are appearing above Manchester and above Newcastle in the rankings. But it's such a vague term globally competitive city, it's not hard to sort of suggest that somehow your cities are. And simply having that as an aspiration doesn't do very much.
I mean, the second one, raise public investment in research and development outside the southeast by 40%. That's laudable, it's in their power, because a lot of R&D money, particularly for the research councils, is organised by government. But if you look at where the big research centres are, where the centre is looking at gene technology, and so on, it's in London, or Oxford and Cambridge, and outside of there, there is much less, and the amount of spending is so low that raising it by 40% is not necessarily that hard. And we also have some of the lowest research and development spending in all of Europe. So it's, it's from a low base, but, but it's good that they're, recognising this as an issue.
Mubin: Let's go into another one, transport, which is bringing the rest of the country's public transport ‘significantly closer’ - to London standards. Now this seems like quite a tough ask really. It's quite ambitious, when you look at London?
Danny: Um, well, I mean, London isn't a panacea. You know, London has an incredibly expensive underground system compared to the underground trains in other European countries, very old, of course, as well. But it's mostly about buses in most of the country. And it's not beyond the wit of people to work out how to stop your bus systems falling apart. But we have had a reduction in the availability of buses in many parts of Britain, that's when an area really gets left behind, is when the bus stop service stops, stops working. But the question is how they're going to do it? Because they favour private competition, private bus companies, rather than having a system such as, such as in London, where you have a transport regulator, and you don't have different companies competing against each other, because it's really inefficient.
One nice thing about this whole levelling up agenda is it is a slow realisation by the party of government, that what they believed when they were teenagers, that the market would simply sort this out, doesn't work, or at least an acceptance that there is a need for, for government to do some things on this. But it's such a low kind of base of ambition. It doesn't say, we want to transform some of our cities to have some of the best public transport in Europe, some of the lowest carbon electric bus fleets, and so on it it's can we get people to have what some people in London have, which is -
Mubin: Well, I'm probably a bit more bias than you, because if we had some tube networks in the rest of the country, that might be quite good. But as you say, this might just be about buses, rather than tubes and trains.
Danny: It's about buses. I mean, one problem the government have is that Britain has become remarkably poorer, particularly in the last 12 months, you know, the cost of borrowing is now very, very high. So the kinds of schemes we used to have, you know, new train lines, where HS2 might still happen, but you know, we don't know how far it's going to go. Those schemes become unaffordable.
Mubin: Let's look at another one which we talked about earlier, which is narrowing the gap of healthy life expectancy between the areas where is lowest and highest. And we've got some massive gaps, not just in terms of life expectancy, but as they highlight here, healthy life expectancy.
Danny: We've got gaps between neighbourhoods that are 20 years, you can expect to live on average 20 years longer in some of the most affluent local neighbourhoods as opposed to some of the poorest and we haven't had gaps like this since the 1930s. We can actually go back and see that this has happened before, but you have to get to the 30s to see that huge divide.
Margaret Thatcher had the first health targets - target one of the World Health Organisation she signed up to in the 80s, which was to reduce the geographical gaps between areas and the gaps between social classes by half by the year 2000. Now, we actually did the opposite, we had the biggest widening, but at least, at least she signed up to the target of initially she thought than what she was doing, free enterprise and so on, would somehow narrow this gap.
Tony Blair had four health targets, two to do with particular causes of disease, which were already getting better anyway, heart disease and so on; two to deal with geographical divides and social divides infant mortality, and Blair failed on both of those, those divides got wider, under Blair.
These are sort of similar except, when you are the most unequal country in Europe, when you have some of the highest rates of infant mortality, it's only about five or six countries in Europe, which are worse than us for that, then it's hard to imagine it getting worse. So they may reduce. My scepticism is, I can remember something called the Black Report, which came out around the time of the 1979 government, and it identified 10 areas where government should intervene, to try to push life expectancy up because they were doing the worst. The government did no intervention, then, but five of the area's improved anyway. Because if you pick the very worst ones, there's often something pretty bad that's just happened recently that stops.
Mubin: We've seen some improvement over that time, surely between the 80s and now
Danny: We've seen life expectancy go up. It's just gone up by more in most other - well, I'd say now - all other European countries, the rise in life expectancy has been higher.
Mubin: But did none of those disparities between these areas reduce during, say the past 50 years?
Danny: Oh, there is one way in which they did reduce. Scotland got better. So Glasgow in particular, which used to be the sickest city in Europe, Glasgow has seen improvements. Scotland now has lower infant mortality rates than England. But this is partly because the Scottish Government have intervened on all kinds of things, to actually do things which makes Scotland more level.
For instance, if you have a third child in Scotland, I think it's now the majority of our children in three child families and England are living in poverty. If you have a third child in Scotland, you're allowed to have child benefit for them. We got rid of that in England.
Mubin: I've got some grim news for you, Danny, I've just been sitting on a Health Foundation Health inquiry. And in Scotland, we do have lower life expectancy than for other UK nations. And if you were born in 2012, your life expectancy has now dropped by 4.4 years, over the last decade. So things aren't as rosy I'm afraid.
Danny: Yeah. Oh, they're not all good. But the difference between Scotland and England is not as bad as it as it used to be. And this is well worth looking at and investigating. And there's some dramatic differences. For instance, you know, we expel several 1000 children every year from schools in England, and we don't necessarily know where they all go to. In Scotland. I think the latest figures I saw is that only five children are permanently expelled a year. It's having these kinds of different attitudes to life and what you're doing that can make a difference. And within the UK, we can chart different regions and we do have this interesting thing of having different governments now since devolution
Mubin: I feel as if this is another book coming on of yours. You know, you had ‘Fintopia’, that's gonna be ‘Scotopia’ next.
Danny: Well, no, Scotland's got a long way to go and Scotland is much more like England than anywhere else. If you just look at the social divides in Edinburgh and Glasgow and the divides between areas, and this is what's different about the UK and we've kept different. Edinburgh's full of private schools and so is Glasgow. So if you really want to reduce divides in those cities and make them European, where private schools are not normal, they've got a long way to go.
Mubin: So just coming back to what's driving this in terms of government and the levelling up, from what you're saying is, it's this realisation that actually these divides matter, and that they do need to be reduced and that, just allowing the market to do it is not actually going to make a difference is that the justification behind this? Or was this the overall new framework post Brexit for the government to come up with another new big idea in terms of how it's going to transform the country?
Danny: Well, they did make promises during Brexit, that the government would replace the spending that came from Europe, which was formula driven and went to the places that needed it most, they’d replace it by something better. The irony is that there's a lot of controversy over where the money has gone. And it has often gone to constituencies of government MPs.
They also got a boost in the 2019 election. They were shocked by the northern constituencies that they won. They had candidates that they put up there who they never planned to become MPs, let's put it that way. And you can sort of see an excitement of, you know, maybe these places will vote for us. But perhaps we ought to do something for these places which have just voted for us.
And also, the government lost support in the South East of England. It's rarely mentioned about the 2019 election, but the conservative vote compared to the labour vote went down. counties like Oxfordshire and Cambridgeshire and now governed for the first time ever, by coalitions of local councillors, not from the Conservative Party. So you could cynically say that the old domination where so many Conservative MPs came from the southeast of England is reducing, and there is an increase in representation from other parts of the country where people can see what that they're not getting. So I don't want to be entirely cynical about this, I do think it is potentially a sign of a change in our opinion and understanding. We've just got such a long way to go
Mubin: Let's look at how some other countries have kind of tried to level up. We touched on this earlier, we've seen reductions elsewhere. Germany's often cited, post-unification, we saw huge amounts of money going into levelling up the East, in relation to the West.
Danny: Yeah, that was quite stunning. And it, I think it shows a very different attitude. So, you know, reunification came as a shock, the fall of the Berlin Wall in 89, wasn't predicted, it was a shock. And there was a feeling of kind of holding hands across the divide, which was an absolute physical divide, and of people coming together again. But also, the West initially was facing enormous migration from the east, it didn't know what to do with these people. And worrying that the East was going to hollow out and who on earth would be left there. So there was a practical reason for doing this as well as an emotional reason. And also a political fear, I think that if you didn't do this, then there was a chance of a rise, such as occurred in France, with the Le Front National, a rise of far right politics in a disgruntled country and in a disgruntled region. So it was done, mainly out of good feeling. But partly through a realisation of what might happen if you don't do that.
Mubin: And it was massive, just to put some numbers on that it was one and a half trillion pounds that they spent trying to bring the East up. And that's 70 billion pounds a year, so it's huge numbers.
So let's make you Prime Minister, which doesn't sound too unfeasible given we've had so many prime ministers recently. What would you do?
Danny: What would I do to level up? Well, I’d point out at first that levelling isn't about up, levelling is about out and it's about spreading, and it is ridiculous to claim you are going to make everywhere rich.
Okay, what I would do, the Palace of Westminster has an enormous renovation bill, I would move it, perhaps initially temporarily. But I'd move it over the intersection of HS2, at the heart of the Wye, just to the east of Birmingham, I’d put a new parliament over that station, 30 minutes from Manchester, 30 minutes from Euston. Move the civil service out to Birmingham - it would save money, of course.
And then worry about the transport systems in the rest of the country, you know, just getting people out of 1960s train carriages, making the service reliable. So that a normal day on the trains in the north is not like a strike day in the south. You know the nuts and bolts of basics, not talking about 40 new hospitals. Actually, what you need to do, having come out of almost a wartime situation of the last 10 years in terms of austerity, nobody's bombed our infrastructure, but we've managed to pull it apart ourselves. And say this is going to take 20,30 or 40 years, we are going to have to move our taxation up towards the European average simply for the reconstruction needed after the damage done.
But you'd have to actually care about the other parts of the country. And I've lived for 10 years in Newcastle, I lived for 10 years in Sheffield, I've lived in Leeds - and most of our MPs, haven't. They're from the south. They went to university at 18, in the south, at age 21, they went to London, they might have an affluent northern constituency, which is nice to have one of your homes in that you could go to for the weekend. But there isn't that feeling of being part of the same country. And so that is the first thing, I think, which has to go. Some of them may have been born outside of the southeast. But they all came to the southeast at 18. And they never left it again.
Mubin: So lastly, now that you've given your manifesto - I feel as if you go write this manifesto now, before the next election - I want you to give a scorecard on the levelling up agenda for government. So you know, let’s do it A to G, we are going to rank for this and you could do A plus if you want, but I don't think we're going to straight into A star or A plus.
Danny: No, it's not G, it's better to realise this as a problem and not. Margaret Thatcher refused to accept there was any poverty in Britain. if you have a government, who doesn't believe in such a thing as poverty, you really are in trouble. So it's not a, it's not a G, I'd give them a D or an E. Because bodies like IPPR North have shown that since they announced levelling up agenda, more government money has actually gone to the south than the north and the Northeast in particular. So the audits that have been done to date, don’t suggest great success, but at least they acknowledge the problem now. It's just taken a lot of time and many, many years to get to this point.
Mubin: Thank you very much, Danny. That's all been fantastic to hear.
Danny: Thanks so much for having me.
Mubin: If you enjoyed hearing Danny’s thoughts on inequality, he has a new book called ‘Shattered Nation’, coming out later this year, covering much of what we’ve been discussing.
And if you enjoyed this episode, please like, share and subscribe on your preferred podcast platform, it really helps us spread the word. And don’t forget, series one is available now across all major podcast platforms and on our website. Until next time, thanks for listening.