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The Medicis knew how to level up The PM needs a miracle to save the North

Cosimo and Giovanni (Andrew Parsons - Pool/Getty Images)


February 3, 2022   4 mins

What’s the point of levelling-up? The government’s white paper on the subject was published yesterday — to less than glowing reviews. 

But there’s a school of thought that its authors were doomed from the start. If you believe that geography is destiny then the North-South divide can’t be fixed. At best, the government can redistribute resources as a kind of consolation prize. Or, as Victoria Wood’s snooty continuity announcer once put it: “We’d like to apologise to our viewers in the North — it must be awful for them.” 

Except that the lesson of history is that geography is not destiny. Time and again, we see examples in which the relative fortunes of different regions draw level, or even reverse altogether. Take Belgium, whose Northern and Southern halves are distinguished by language as well as location. 

For many years, Flemish-speaking Flanders was poorer and less powerful than French-speaking Wallonia. Following Great Britain, Belgium was the second country in the world to industrialise — but because the coal deposits were concentrated in Wallonia, it was a lopsided revolution. The Walloons weren’t just part of a larger linguistic zone — they dominated the economy too. 

All that changed with de-industrialisation. For the Flemings, the cultural and political dominance of the French-speakers was always hard to swallow — but once the latter began demanding subsidies, it became unbearable. Today, Belgium is a rare example of a country in which the ethnic majority has separatist tendencies. 

But perhaps the industrial revolution was a unique moment in history that gave early adopters a one-off boost which then faded away. Certainly we see shifts in the geographical distribution of power and wealth that are too big and began too early to be explained by coal deposits or anything like that. Look at the whole of Europe. In classical times, the Mediterranean was where it was at. Ancient Greece, followed by Ancient Rome, were the dominant powers. To the north lay the abode of barbarians — to be civilised at the point of a sword or walled-off behind fortifications.

And yet long before the industrial revolution, the balance between the Europe of wine and olive oil and the Europe of beer and butter began to swing the other way. There was an intermediate period in which the south held its own — for instance, the Renaissance had an Italian origin and Spain and Portugal pioneered the Age of Exploration. But by the time of the Enlightenment, it was clear that the future of Europe — indeed the whole world — would be shaped in northern cities like London, Paris, Berlin and Moscow

Of course, I’m describing a mega-trend that unfolded over centuries and millennia. A conscious policy of levelling-up needs to show progress over a much shorter time frame — decades at most. So do we have any examples of that happening?  

Michael Gove, the Secretary of State for Levelling Up, looks to the Republic of Florence for inspiration. Under the rule of the Medici family, the city-state became the birthplace of the Renaissance. As Gove himself makes clear, there’s a wider range of reasons for its success than the Medicis’ famously lavish patronage of high culture. Nevertheless, a key part of his levelling-up strategy is to redistribute arts funding from London to the rest of the country. 

For a more recent — and more significant — example we need to look east. When the Iron Curtain fell, it revealed a profoundly unequal continent. The ex-Communist countries are still much poorer than the countries of Western Europe, but the extent to which they’ve levelled-up has been impressive. Indeed, in recent years we’ve seen the richest parts of countries like Poland and Hungary overtaking the poorest parts of the UK — much to the horror of British tabloids. 

But from a British perspective, the most relevant ex-communist state is the former East Germany. That’s because since reunification, the story is one of levelling-up within the same country. 

It’s not been a total success. After three decades of living together, the East is yet to catch-up with the West. But, again, there’s no denying the progress made. Immediately following reunification, economic output per head in the former East Germany was only 60% of that in the former West Germany. It’s now more like 85%.

This has produced a sobering outcome for the British. The fact is that, today, most of East Germany is as rich or richer than most of northern England. Data analyst Tom Forth illustrates this by comparing the English region of Yorkshire and Humberside with the German state of Saxony. At first sight this might not appear to be a fair contest. Saxony had a pretty rough 20th century: in the post-war period it passed from Nazi to Communist rule — until, that is, the Berlin Wall fell and East German industry collapsed.

And yet since 1990, Saxony hasn’t just caught up with the Yorkshire region, it has overtaken it. The crossover point was around 2010. By 2017, GDP per head was €28,000 in Saxony compared to less than €25,000 in Yorkshire.

So what can we learn from the German example? Well, there’s one thing that stands out — but, for a Conservative government, it’s rather awkward: the Germans spent a whole heap of money. According to Kathrin Enenkel of the Centre for Cities, the total sum between 1990 and 2014 averages out at £71 billion a year. She puts the UK’s levelling-up fund at £4.8 billion in total.

Of course, the German challenge was much bigger. After 45 years of democracy versus communism, there was a lot to be levelled-up between the two Germanies. But even if we focus on the policy areas that are relevant to the British situation, it’s obvious that we’ve been out-spent. To return to the Yorkshire example, Forth puts the level of government funding for R&D at €150 per head per year. The figure for Saxony? €450.

It’s encouraging that today’s white paper includes a promise to increase R&D funding for the rest of the country beyond London and the South East. But by how much does it intend to boost the total? Just one third. The Yorkshire-Saxony comparison would suggest that’s simply not enough. 

Transport is another area in which south-eastern England gets the lion’s share of public funds. So how much levelling-up can we expect from the Government here? Again, not much. In recent months we’ve seen funding for the “Bus Back Better” initiative slashed; the Northern Powerhouse Rail project has been downgraded; and the eastern branch of HS2, which would have run to Leeds and Sheffield, has been chopped. Meanwhile in Saxony, the city of Leipzig has been part of the German high-speed rail network for years. 

The problem with the white paper, then, is what’s not in it: ambition and a sense of urgency. Levelling-up the land is not an impossible dream. The lesson of history is that economic miracles do happen — but only if you put in the investment. 


Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.

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Chris Wheatley
CW
Chris Wheatley
2 years ago

The article just mentions the most important point and then forgets it again. Transport costs!!!

I have worked in manufacturing for over 40 years and transport has always been the killer. Our raw materials came in on deep sea vessels to Rotterdam, were transhipped and sent to Felixstowe, then trucked hundreds of miles to our factories. Our finished goods were then trucked south to the tunnel and into Europe. Felixstowe is the only efficient container port in the UK and all new industry has located to within about 100 miles of the port. This is why the A14 is always full of trucks. Being near to the tunnel is also important.

What is needed in the North is not high-speed trains as much as a good, efficient container port. This could even be used for exports to Europe.

The comparison with Eastern Germany also misses the point. The EU has spent years opening new markets in Eastern Europe and also developing new industry in the same areas. For transport reasons Eastern Germany is actually closer to markets and in a better position for investment.

If our plan in the future is to deal more with countries outside Europe, if we want to save trucking costs of food and other goods, if we want to use less petroleum products for pseudo-climate reasons, if we want to develop the North of England —- we need an efficient container port in the North West and better goods train routes to the south. Liverpool comes to mind.

R Wright
RW
R Wright
2 years ago
Reply to  Chris Wheatley

It baffles me that nobody thought to regenerate Hull by turning it back into a major port.

Katharine Eyre
KE
Katharine Eyre
2 years ago
Reply to  R Wright

Was going to write the same thing. Hull needs something. It’s better than it was in the 80s but still not somewhere I’d seek out voluntarily on my visits back home.
A great programme to watch to find out a bit more about the city’s history is – randomly – the episode of Restoration Home with Caroline Quentin where the house being done up is in Hull. Really interesting – if not a little sad to think of the loss of industry there.

SULPICIA LEPIDINA
SL
SULPICIA LEPIDINA
2 years ago
Reply to  R Wright

It should be top of the list, for didn’t it produce the sainted William Wilberforce,*the famous anti slavery campaigner.
Frankly you can’t get more PC than that.

(*1759-1833.)

SULPICIA LEPIDINA
SL
SULPICIA LEPIDINA
2 years ago
Reply to  Chris Wheatley

Why not the North East coast, Immingham, Grimsby, Goole etc?
They face towards “the enemy”*, and we’ve been spoiling Liverpool enough don’t you think?

(*Otherwise known as the EU.)

Last edited 2 years ago by SULPICIA LEPIDINA
Saul D
SD
Saul D
2 years ago
Reply to  Chris Wheatley

Agreed. We’ve spent the last decades pushing product into Europe through the south east corridor, and not surprisingly we have an economy heavily biased towards the east and south east. In the deeper past, the key British ports were to the west and the south for access to the Atlantic and out into the Empire. If the economy rejigs to be less EU dependent, northern England, Wales and Scotland could be beneficiaries, but it will require investment in ports (Liverpool, Cardiff/Bristol and Southampton) and improved transport infrastructure to rise to the challenge.

Chris Wheatley
CW
Chris Wheatley
2 years ago
Reply to  Saul D

Yes. In another string today I argue that Wales should be allowed to leave the UK or get in line with England. Either way, Cardiff would become more important. Perhaps the difficulty with the Bristol Channel is the range of the tides.
I would agree with Southampton. Hull does not face the west and we should be looking more in that direction.

Iris C
IC
Iris C
2 years ago
Reply to  Chris Wheatley

Fascinating and clearly true. I hope this will be noted and something done about it.
What about moving more government offices out of London – the DVLC must have been a boost for Wales. Or increasing the cost of living in London to a very high level so that businesses and government associated offices want to move north.

Alastair Herd
AH
Alastair Herd
2 years ago

Something, somehow, overlooked in all these conversations about how Germany did it better, is national debt after the Second World War.

Yes, Germany was ruined straight after the war, but it received massive amounts of American investment (from the Marshall Plan), and had all its international loans cancelled by 1953. Britain on the other hand was still paying off it’s American WWII loans till 2006!

The major explanation for Britain underwhelming development over the past 80 years, has been our crippling debt problems. And that doesn’t look like it’s going to get better any time soon…

Terence Fitch
TF
Terence Fitch
2 years ago
Reply to  Alastair Herd

Yes. Often forgotten. British Empire was sold off to pay for it. Nonetheless mixed blessing. Germany without Empire and WW2 destruction had to focus on industry. That said, we’d developed fantastic tech in WW2 in aircraft. Threw away the lead in 1950s and 60s. Hindsight a wonderful thing though.

SULPICIA LEPIDINA
SL
SULPICIA LEPIDINA
2 years ago
Reply to  Terence Fitch

We should have ‘nuked’ the Soviet Union as George Patton advised, and sub divided the Fatherland along the lines of the Morgenthau Plan.

SULPICIA LEPIDINA
SL
SULPICIA LEPIDINA
2 years ago
Reply to  Alastair Herd

‘We’ had the largest single tranche of Marshall Aid, and the previous Stafford-Cripps loan, and still managed to blow it!
Too much Defence spending (posturing) and the Welfare State being the main culprits.

Andrea X
AA
Andrea X
2 years ago

Pardon my asking, but WTF does the title have to do with the article? It should read something like “Why the Medicis can NOT save Britain”, then it would make sense. I kept reading expecting a big reveal, but nothing…

Andrea X
AA
Andrea X
2 years ago
Reply to  Andrea X

The title has now been slightly changed. At least now it is not completely divorced from the content (still, rather irrelevant, though).

Terence Fitch
TF
Terence Fitch
2 years ago

Two bits of data. Sorry not referenced but in my memory. Germany spent €2 trillion over 20 years on levelling up East Germany. A miniscule number (less than 10?) Northern state school kids go to Oxbridge annually.

alan Osband
AO
alan Osband
2 years ago
Reply to  Terence Fitch

I just had a look around on the net. Two state schools up North (one in Huddersfield and one in Manchester ) each had around 35 offers from Oxbridge .
Southern state schools do seem to predominate but not anywhere near to the extent you imply .
Maybe you meant less than ten northern state schools send children to Oxbridge (rather than 10 kids in total ) but even so

Last edited 2 years ago by alan Osband
Ferrusian Gambit
SS
Ferrusian Gambit
2 years ago

“Under the rule of the Medici family, the city-state became the birthplace of the Renaissance.”

I hope we don’t have any Siennese readers or this could turn nasty…

SULPICIA LEPIDINA
SL
SULPICIA LEPIDINA
2 years ago

Oh that Basil Chamberlain was here to answer that.

Andrew D
AD
Andrew D
2 years ago

On the point about geography not being destiny, is there any city whose eastern part is more prosperous than its western?

SULPICIA LEPIDINA
SL
SULPICIA LEPIDINA
2 years ago
Reply to  Andrew D

The Vatican? Or even Londonderry.

Last edited 2 years ago by SULPICIA LEPIDINA
Andrew D
AD
Andrew D
2 years ago

You’ll have to do better than that. The western half of Vatican City is more or less the Pope’s back garden, and while you may be onto something with the Bogside, that’s down to the particular historical circumstances of Stroke City.

Last edited 2 years ago by Andrew D
SULPICIA LEPIDINA
SL
SULPICIA LEPIDINA
2 years ago
Reply to  Andrew D

Bogside & the Creggan are well to the West in Londonderry.

Same mostly for Belfast,the Falls Rd, Andersonstown, and the Ardoyne again all well to the West.
All those ‘Proddy Dog” happy shipyard workers at Harland & Wolf,* all live(d) well to the East on the Newtonards Rd.

As to the Vatican, the Papal HQ, the Palazzo Apostolico, is again well to the East, even if the garden is, as you say, in the West.

(* In 1970, employing about 15,000, and not a single Catholic among them.)