Photo by Leon Neal

Grow Britain by getting out of the way

Gove has swallowed the opposition’s patronising rationalisations of Brexit, along with their economically illiterate solutions

Artillery Row

Listening to Michael Gove’s recent pronouncements on “Levelling Up”, you could be forgiven for thinking that his side had, in fact, lost the EU referendum. Music, you may have thought, to the ears of a metropolitan Remain voter like me. But to someone who is also a Conservative, it’s troubling that the Secretary of State seems to have swallowed all the opposition’s most patronising rationalisations of Brexit along with their most economically illiterate policy solutions.

Take the argument Michael Gove made in Liverpool on Tuesday — which he admitted “may seem odd coming from a politician on the right of the spectrum” — that traditional “trickle down” economics don’t work. He’s right, it does seem odd.

For a start, the whole concept of “trickle down” economics is largely a leftist straw man for which no serious economist has ever advocated. As Thomas Sowell puts it: “Why would anyone advocate that we ‘give’ something to A in hopes that it would trickle down to B? Why in the world would any sane person not give it to B and cut out the middleman?” Tories used to understand that there is not a fixed supply of wealth that must be taken from the rich in order to be given to the poor. They used also to recognise that the best way to create growth is, more often than not, for governments to get out of the way.

Government can’t create flourishing global cities, but it can destroy them

Yet Gove appears to regard the places and conditions which we know are conducive to growth with suspicion. “Unless government takes a lead,” he said, “then what we see is an agglomeration effect. What people have called the Matthew effect: ‘to them that have more shall be given’. And that is why government has to act.” But it is this very clustering of creative and commercial talent in big cities that make them engines of wealth creation and culture which increase prosperity for the whole country. As Richard Davies has illustrated in his book Extreme Economies, using the example of Glasgow (ironically one of the places that will now benefit from Levelling Up’s largesse), these “agglomeration effects” take generations to build up and can be lost very quickly through poor public policy. The Government can’t create flourishing global cities, but it can destroy them.

Then there’s the Levelling Up white paper, which reads suspiciously like it was written by poorly paid pointy heads who rarely leave Westminster — and I should know because, having worked as a journalist and in Parliament, I am one. It’s not just that it goes on about metrics and the Medici, it’s that the entire intellectual underpinning comes straight out of the Remain campaign’s playbook.

Littered with the language of the “left behind”, it’s the apotheosis of the narrative that Brexit was a symptom of disaffection — and that, in voting to leave the EU, what people really wanted was a big government to heal a broken nation. This is the logic of the second referendumers who thought that the 52 per cent were too poor and uneducated to have really meant it, so had to be asked again. The Johnson administration has pitched itself directly at the people to whom this caricature is most insulting — ironic, then, that its new policy agenda is so condescending.

Having decisively won the 2019 election, the Conservatives should know better than anyone that ‘the North’ is not some vast Ken Loach filmset populated by ex-coal miners with ferrets in their trousers. In fact, the original definition of the “red wall”, as identified by the pollster James Kanagasooriam, described seats that were demographically similar to traditional Tory areas but supported Labour for cultural reasons. In other words, those who voted Conservative for the first time in 2019 are not that different to people who have always voted Conservative — elderly, security-conscious, home-owning and patriotic.

If the diagnosis is wrong, we can’t have much confidence in the cure.

Consider the plans for devolution. The Government has promised that by 2030, every part of England that wants it can have local powers similar to London. It’s not clear why your stereotypical Brexiter, who’s suspicious of politics and spurned the bureaucracy of Brussels, would want more politics. In fact, when offered a regional assembly in 2004, the North East voted against it by a whopping 78 per cent thanks to a “no” campaign led by none other than Dominic Cummings.

Then there’s the high-minded stuff about “pride in place”. The Government wants people’s “satisfaction with their town centre and engagement with local culture” to rise in every area of the UK. How it intends to achieve this, though, is via a modest amount of funding to regenerate high streets, and copying the model of Medici Florence.

It almost feels like Remain lost the referendum but won the ideological war

Three problems with this — first, as the white paper itself says, the Italian Renaissance was a period of “transformative, city-centric growth” based on those exact agglomeration effects Gove dismisses. Therefore it’s very difficult to see how this could be duplicated in small towns across England. Second, arts and sciences flourished in 15th century Florence because of private patronage, not state intervention. Third, I’m not convinced people from coastal communities would prefer to be living in world-historically significant centres of culture. If they did, they could always move to London, but Levelling Up’s parochial exhortation to “stay local but go far” actively discourages that.

None of this is to say that regional inequality isn’t a problem — it’s the responsibility of any government to improve public services and raise living standards. Proposals around infrastructure and education are welcome, even if they’ve been kicking around Whitehall for years. But anyone who feared the decision to leave the EU meant Britain would become “Singapore on Thames” can take great comfort from the “Levelling Up” agenda — indeed it almost feels like Remain lost the referendum but won the ideological war.

There is an alternative — perhaps Brexit wasn’t such a seismic shift after all. Britain has long had a strong vein of Euroscepticism, as evidenced by the 8.5 million people who voted against remaining in the Common Market in 1974, the convulsions over Maastricht and the UK’s role as a barrier to integration while we were members. Maybe, when people voted to leave the EU, it wasn’t out of deep malaise. Maybe it was because they wanted to leave the EU.

By the same token, when people voted Conservative in 2019 perhaps what they wanted was a Conservative government — one that believes in rolling back the state, supporting businesses, and enabling competition and innovation to raise standards and spread opportunity. But what would I know? I voted Remain.

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