You can’t level up without a Green New Deal
by Miatta Fahnbulleh
This is an article from the fourth issue of the New Economics Zine. You can read the full issue here.
‘Levelling up’ is this government’s favourite phrase. It formed the central pillar of Boris Johnson’s recent Tory Party conference speech. Many of us hoped that by the end of it, we would be clearer about what ‘levelling up’ means and how the government is planning to deliver it. But we’re still none the wiser.
We’ve also heard a lot from the PM about how proud he is of our ambitious targets to cut greenhouse gas emissions to net zero by 2050, issuing a net-zero strategy leaves much to be desired. No action, and no proper plan for two defining and critical issues is very bad news. But for me, there’s a silver lining. That is: levelling up and tackling the climate crisis can go hand-in-hand.
So, what is levelling up? However ill-defined the concept, the phrase has huge political traction because it goes to the heart of the issues that dominate our politics: how do we get the economy to work for everyone? Our prime minister may have dismissed concerns about our country’s wellbeing by saying, “never mind life expectancy, never mind cancer outcomes – look at wage growth” – but we need to recognise that levelling up should include not just the ability to make ends meet, but the ability to thrive and live happy lives.
We’ve just seen a decade where the benefits of growth have been unfairly distributed, and huge swathes of our country have been held back. For the last two decades, living standards haven’t budged. Against this backdrop, the goal of levelling up should be quite simple: to ensure everyone has a decent standard of living, particularly the communities that have faced decades of deprivation and neglect. It needs to tackle disparity within regions as well as between them. The challenge of levelling up is as real in Barking & Dagenham or Hackney as it is in Barrow, Darlington or Barnsley.
“… levelling up and tackling the climate crisis can go hand-in-hand.”
At the same time as dealing with widening inequalities, we have the urgent and ever-intensifying issue of tackling climate change. The impacts of the climate crisis are becoming more visible to us all, even if the worst of effects haven’t touched us directly yet. We know that climate action is a deadly can to kick down the road, but as of March this year, the government was still only spending 1% of what its own Climate Change Committee (CCC) recommends it should on green policies. The CCC is calling for 1% of national wealth (GDP) must be spent every year for us to meet our climate targets. WWF have said that the actual amount being promised is just 0.01%.
These two challenges are immense, and more difficult to resolve in the economic aftershocks of the pandemic. But we can meet them. To do so we will need national investment and policy innovation at the same scale we saw in the pandemic: a national mission for climate change that has levelling up in its DNA.
If the government is serious about levelling up and tackling the climate crisis, it needs to get five things right.
First, the government cannot tackle the climate crisis or level up on the cheap. The UK has a long-standing problem of low investment in communities, which has also been unequally distributed across the country. Now, we need a big injection of investment with initiatives that cut our greenhouse gas emissions to net zero. The question is whether we do this as part of a proactive strategy to reprogramme our economy for the better, or in a blind panic as the impacts of the climate emergency start to bite. If we need to invest to cut our emissions, why not plough this into our communities now to create jobs, boost industries and revive places?
Second, large-scale local investment should be combined with local industrial strategies. These strategies should show us the potential for new jobs in sectors which are likely to grow in our clean, green future – such as housing retrofitting, renewable energy, health or social care. Taken together, these sectors could create millions of low carbon jobs, many of which directly contribute to projects which further reduce the UK’s carbon emissions. This pipeline of jobs should be supported by a training programme that builds up skills in an area, so that local residents can access these new jobs. But simply creating new jobs isn’t enough – they need to be secure, have decent working conditions, and pay a living wage.
“… the government cannot tackle the climate crisis or level up on the cheap.”
Third, the government cannot level up struggling areas without empowering regional and local government. The economic challenges in the West Midlands are different from those in the North of Tyne, and each need tailored responses. If we simply yank levers in Whitehall and hope for the best, it won’t work.
Levelling up requires rapid devolution of power to regional and local government. Local politicians should have more power over certain taxes, devolved funding, education, skills, employment support, energy, housing, planning and local public transport. To be meaningful, this should come along with the creation of strong local institutions, like Mayoral Combined Authorities.
In return for new powers, local leaders should make sure that when local public institutions buy services or goods, they buy them locally. Leaders should also support community ownership, employee ownership, mutuals and cooperatives, so that local people have a bigger stake in their local economy.
Fourth, in many parts of the country, levelling up will require focusing on parts of the economy which create jobs but are often overlooked. Small and medium-sized businesses account for over half of the jobs created across the UK. In the north of England, almost two-thirds of all private sector jobs are in small and medium businesses. They are the bedrock of local economies. But there has been little focus in improving productivity in these firms. Supporting these businesses to thrive, not just survive – particularly after the pandemic – through things like affordable rents and tailored business support, is essential.
Finally, levelling up should revive places by building up community assets and wealth. Some devolved funding for combined authorities should be used to create a Community Wealth Fund that would allow community groups to design local schemes to improve the look and feel of their places. This might include creating more green spaces and planting more trees, building community food growing projects, or developing community energy schemes. When local areas are invested in and supported, both money and people stay local.
The scale of the challenge is clear – but so is the roadmap to boosting the economy and getting us closer to net zero. All we need is a government bold and brave enough to get behind the wheel.
This was originally posted on the New Economic Foundations blog on 10th November 2021.
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