Why London Is Still Winning From Levelling Up

government's leveling up agenda. And for those who don't know what leveling up is, which is probably people that don't live in the UK, this is basically a pledge to revive large parts of the UK, I not London, that have been left behind, all those bits of Britain that have been forgotten supposedly over the years, slipping further behind the capital. And of course it was one of the big slogans, wasn't it the election in alongsize getting Brexits done.

That Johnson got that huge majority. Yeah, you've got a huge, huge, resounding general election win. And then a little less than a year ago, at a speech and Coventry, the Prime Minister again focus on what he called the outrage of

glaring regional inequalities. And it's the mission of this government to unite and level up across the whole UK, not just because that is morally right, but because if we fail, then we are simply squandering vast reserves of human capital, and we're failing to allow people to fulfill their potential and we are holding our country back. But what we're looking at now is the real data underneath the anecdotes

or the hype or the government's spin. And we've been spending months crunching that data across twelve different metrics for every every constituency in the UK, and the outcome of that data crunching is pretty uncomfortable reading, probably for the government. So it's basically, David, most of the places that like behind London and the southeast of England and Johnson came to Parer that have seen little signs of better times.

That's right. And you know it was supposed to narrow the gap between the farthest plung bits of Britain and London and actually the winner for the last few years has been at the Capitol. So we're going to hear in a bit from the Chief Executive Officer of Legal and General Nigel Wilson. Yeah, and he's Northerner. He really cares about this leveling up agenda. I remembered talking to him, as you know, three or four years back about this

and why this should have been a priority for the government. First, we're going to speak to our man who's been on the ground across Britain and who is responsible for that digging into the data. Bloomberg's reporter Joe May's welcome. Joe, Hello, how's it going? Very good? So you just got back from traveling around the country. Tell us where you've been the Red Wall tour the Red Wall to I was

up in sedge Field in Wakefield in Yorkshire. They went across to Rochdale near Manchester and down to Stoke which are kind of may regions that constitute the Red Wall, and I was meeting the Grace and the Goods to find out what they made of Boris Johnson's progress, and yeah, they weren't too impress, which talies with the data that we've pulled together and and just going back to the data that you've been mining for the last few months,

so it tells this pretty bleak picture. Not only a thing's bad and the and the Gulf exists between London and these parts of Britain, but it's got worse, right, Yeah, because lovely up is not a static thing. I think the government would like it that London stayed where it was and then the rest of the country could be kind of pushed along upwards towards London. But London is

such a kind of phenomenon. Let's continued to grow and do so well in the last couple of years, it's call that econom momentum, and the rest of the country just simply has not done the same. So as you get that widening disparity in the country, and the fruits of the proceeds of economic growth in the UK just continue to accrue to London the Southeast and they are not being shared around. And that's what the government is trying to solve. But as our data shows, is just

not happening. So what are they most worried about? So there was this kind of amazing moment where I was in sedge Field, so formally Tony Blair's seats the labor Prime Minister, but now one by Johnson, and there's this disused rail yard in a town called Ferry Hill, which the government wants to turn into an active rail yard, but it hasn't yet done so. And this is exactly kind of leveling up project you think they might achieve. You make a train station in a new area, bring jobs,

allow him just to access work in nearby towns. And I went into the fish and chip shop in the town and I spoke to the owner, Colin Myers, and he told me that he came to this town because of the promise of a railway station four decades ago, and it still hasn't happened. And for decades, yes, he'd been there since nine eight. And he said, I came here and they said there will be a new railway station.

It still hasn't happened. And he said to me, as if the government doesn't even know we are here, and it was holding out hope. He is, I mean speaking to the local MP, and the local MP is trying to get this railway station to be built, but there's no sign of happening, no sign happening yet. So he was great and his his colleague Caroline was saying to me that this places on the bottom and they'll never

level up around here. You know. It was really quite striking how much it's effectively despair about whether the gun will ever has it and that has this phrase stuck though that it's got some recognition. People say, we're never going to level up around here. They've heard Boris Johnson say this, right. They would only say that once I'd introduced that, right, so they don't even know what it

brought this plan. That was the most common reply I had, which is, well, what is this leveling up you're talking about? I certainly haven't heard about it. And I explained what it means, you know, spreading wealth and prosperity. They're like, all right, okay, weird, that's not happening, and we don't see any sign of it happening. I don't think no improvement, however, there's nothing there yet, nothing, there's no guarantee of any improvements. Still a changing the time I've been here four or

four years. Yeah, it's got worse than that change. So, David, what's amazing in this is that actually people feel forgotten, they feel left behind, and yet they love the Prime Minister. I think Boris generally has not a brilliant job, absolutely brilliant. I can't not the guy. The most striking finding often was that that, oh, yeah, Boris, he's doing a great job. You feel very sorry for him. Did well with the pandemic. Sorry,

sorry for what well? They think they didn't mean, dealt with a rough hand, and you can see that to be prime minister in a global pandemic and to have to deal with all of that. So there's still a lot of sympathy out there. And the kind of corollary is they don't feel much love for the labor leader kiss Stunt and they feel, like many were saying, we don't understand him, we don't know what his policies are,

he doesn't enthuse us. And therefore, even though the leadling updata is bad, you can see why it's not a game over for Boris Shunson. But is this about spending more money in the regions to regenerate and attract talent? Like what can the government actually do? It's about doing

lots of things all at once. So public policy experts would say, yes, you can spend money in areas, but if you don't also improve the local council, reduce crime, improve the town center, provide more jobs, and do all these things at once, then you'll never actually really see a meaningful kind of leveling up effect in an area.

Money is one thing. And even on money, I was speaking to the head of the Stokes County Council, which has been one of the biggest recipients of leveling up funding, and names Abby Brown, and she was saying, I just don't have the people to spend the money that I've

been given. I think there's always a challenge around needing more resource, so you know, having to have conversations with the government to explain to them that, for example, we only have one personal transport policy for authority were quarter of a million people were really well geographically placed and we know that we have some industry come see because of our geographic location, what we have one person who

is responsible for any transport policy. But your your analysis Joe's, showed that public spending per capital has actually fallen behind London in most places have written stuff, hasn't it. So even if the government's saying they're going to put more money in, it's not flowing in to the extent that it needs to to actually close that gap with the capital. Yes, and it's a director lever that the government could be

pulling but which our data shows that they're not. And it seems like there's a mindset in Whiteshall in the Treasury which leans towards spending where they think they get the best return for money. And often historically if you do a spreadsheet calculation at will show London comes up best because the return of investment is high, and they need to get away from that mindset, I think, And that was something that the council leaders were telling were

telling me. Joe, thank you so much for that reporting and for coming on air to talk about Thank you, and thank you for your amazing data analysis as well, and looking forward to the next the next revisiting of the data in a few months time. Thank you very much. So it's striking how Joe, I think, was talking about the government promising to pay all this money to level up and it's not actually happening. But you know, the other side of the coin is is corporate Britain right

and having to have some private investment into these areas. Yeah, and it's maybe up to some of the private companies to actually sure that they're all over the country and trying to level up. So we spoke to a very interesting chief executive he's legal in general. I mean I was going to say, what do they do, but what

don't they do? Dave Right. They do pensions, they do investment schimes, they do insurance obviously, but they also see themselves as one of the big sort of agents or engines of leveling up across the country with investments in a ton of regenerations schemes across Britain. Yeah, I think they've invested over thirty billion pounds and leveling up regional

UK economies with a further like millions pledged. And Nigel Wilson, the CEO, is a Northerner and a proud Northerner himself and is very passionate about this subject and we're delighted for him to join us. But really, Nigel, you're much more than that. You've been really one of the most vocal chief executives when it comes to leveling up and

making sure that everybody gets a fair chance in the UK. Yes, and I'd just like to say thank you to you guys for doing outstanding pieces of research, because you need to hold the government to account and actually measure what the outcomes. So we're very appreciative that. I think the cool thing with this, with this tracker is that we're going to come back to every three months, you know,

And it's about proper accountability, isn't it. They're going to try and do one themselves, but it needs to be intellectually honors. And you know the problem is the government's managing by sound bite at the moment and not by policy outcomes and outcomes. And we're all about outcomes. We're about investing, you know, real money and in the real economy, delivering real jobs. And I guess the problem that it's it's a very easy excuse when you have inflation through

the roof. I don't think it's an excuse at all. But our policymakers using it as an excuse, well, of course they are right, yeah, I mean yeah, but it's not an excuse. I mean, it has to be a legitimate excuse if we can continue to earn it. And as I don't think it's going to change our strategy because we're busy leveling up the best we can right across the country. But we need partners and people who want to work with us to help accelerate. And it's

almost every area we're failing. Housing is failing transportation fair and health failing, education is failing, productivity is failing. And we've got structural under investment again in the UK, which is the problem we've had for the last thirty or forty years. And you know, very different from America, which is a much more dynamic get Gore place. So your your experience then as a as a business leader looking at all corners of the country that talies with the

Bloomberg data findings that things are just actually getting worse. Yes, but but that's an aggregate number. There are pockets of real excitement across the UK and we're really excited about you know, working with a number of different partners in a number of different cities. But the theme that we had was the UK economy we would never be successful or grow if we didn't invest outside of London. London can be and it's probably the best city in the world to live in, but so why have we not?

I mean in places like Manchester leads so many other places that have so much potential, why have we under invested? Look, I think Manchester has do being a pretty good job and leads as doing. We've picked on two of the two of the best one but they are the best, you know, and you know that isn't even a good benchmark in monsters. I think there can be much much better.

We have a partnership with Manchester University. This is this is a great example of of something is that when you Mist closed down in two thousand and four, there was there was a site available to regenerate. You know, we won the competition for that site generation in two thousand and twenty one and mere seventeen years later. And the piece of change is just too slow and there are too many barriers to getting things done in the UK.

Even London is a great example. You know. One of the reasons housing is so expensive in London is that just the shortage of supply. Typically it takes seven years between buying a site and putting a sped in the

ground on a site in London at shocking. You said, London is one of the best cities to live in in the world, and our data shows that yes, the gap has widened despite the government saying they're going to try and redistribute wealth across the country and in fact the only areas where the gap had narrowed is because London had itself got worse. So it's not any leveling up, it's actually leveling down on things like life expectancy, which

you can attribute to COVID nineteen. Do you think it's just inevitable that London is going to continue to outperform the rest of the country. It's just because of all those advantages it's got. No, that is the honest answer to that. You know, we have a four billion pound investment program with Oxford because Oxford dre invested in a wonderful university. But it needs to judge itself against sem I t in Harvard in terms of what we're doing.

But Nigel, what about the North? I mean there must be places in the UK where people just will get the numbers and think, well, my, you know, I'm not making a decent living. Everything is hard. The government is not helping me and what I was promised when I voted for Brexit is not powering through. I don't know

whether it's just a vote for breckfit around that. I think it's it's a it's a long term trend which we haven't stopped yet, and it's just insufficient in estiment gone into the economy and outside of London to stop that trend and you know, our job and our collective job is to work in partnership with central government, local government and need the universities across the UK and really step up and everybody has to step up otherwise in

three months time you'll be telling me the same story everybody. You mean, corporate Britain as well as the government. I mean, whose fault is it that this investment isn't happening. It's a collective responsibility and and you know central government hasn't stepped up. It's it's pretty obvious that that's how it happened. But at a local level everybody has to step up as well and not just wait for central government to turn up. And that's never happened to thirty or forty years.

It's not suddenly going to change overnight. But the private sector has to to step up as well, right across the right, across the country and you know Leads, Manchester, Birmingham, they're also great cities. But the delta between those cities in London, it's is almost the largest in the world. Doesn't happen in America? America has you know, It's top cities are all very similar in terms of their their

g d P and the standard of living. It's hugely different between London and everywhere else, and Germany is the same. Germany has you know that their top cities and in fact even in East Germany now Leipzig, Dresden, in Berlin's per capita income exceeds every city in England apart from London, and only Edinburgh is higher right across the UK, and

that's real leveling up that we've seen in Germany. But it's a huge commitment by the government and the private sector to bring the East Germany up to being much closer to West Germany. So so what's happened in the UK is it historical reasons because of some manufacturing that happened in those places, and I guess the cost of living is just going to make these inequalities between the

South and the North worst. Well, there's if you look at another headline number, there's one point eight million job vacancies in Britain. One point eight million. This is the high it's ever ever been and it's a very unusual occurrence that theres so many job vacancies and these jobs are not being taken. This is an under investment in education and training over thirty or forty years. America has a bit of that as well. I've joined a call with a number of American cres who are complaining about

the same thing. They have lots of vacancies, they can't they can't fill them right now. And the economy is changing faster in terms of the demand for new solutions, and technology is leading that charge, and at the moment, the labor markets are lagging behind that that we haven't trained up enough people to work in those new, new, new areas, and therefore the premium on workers in those

new areas is extraordinary high. All that's just going to feed back into the inflation ten percent forecast the end of this year. That's a that's a huge barrier to any any progress in leveling up, isn't it. I mean, the economy is looking very very shaky for the rest of this year, is and we're not. In fact, we're stepping up our leveling up investment because actually there's there's more opportunities now you are, there are others and why not,

I don't know why not. It's one of those things where people have asked me that question, and you know, we've made a bit of great success of it. You know, our return and equities, which is very high for a financial services company. We've scaled up extraordinarily in lots of all the areas that I was talking about that are that are problems. But when we come with a solution to government, they're actually very supportive of that. But actually

you're paying for it. We're paying for it that we're happy to pay for it, so we don't ask the government. We look for projects where we will finance the whole thing, but part of the core infrastructure needs to be provided by by the government. But are you pulling investment out of London to fund that or is it an add

an additive thing. It's an additive things as well. Can I ask about financial services in the city specifically, Um, it's a huge part of the economy that the leveling up agenda is ignoring the strength of the city in a sense and not thinking about how do we speed things up as the city transitions postpract I mean, what's your what's your sense of the future here right in

the square mile? Not the future is bright? I think here in the in the square mile, and it's great to see everybody back to work and there's great excitement

across the city. There's so much innovation going on, there's so much investment required, and there's great clusters of that investment and that's why, you know, I'm very excited about the creativity and creative industries in and around London and those who will be financed by you know, financial firms like like our like ourselves, and so there's masses of new market opportunities or opening up a huge amount of investment required and that Golden triangle between Oxford, Cambridge and

London is going to continue to attract massive amount of capital. And I'm really impressed by a number of the vice chancellors across the UK right now who will reaching out and saying, actually, we've got to be part of this. We can't just be an academic institution. We have to step up and be more like the best in class in the world, which are the m I t S, the Harvards, and understand that how long do you think if the right investment got to the right places, does

this leveling up take. It's a ten to twenty year project. I mean, I think that's the thing you have to do is recognized that it's a ten to twenty which is what we've done is you know, whether it's in Newcastle or Sunderland, every every city you go to. If you went and sold the senior people, they would say, well, actually, here's here's a whole bunch of projects. Three years have passed and we've gone backwards. So you know it's three of the three of the ten have gone already. Are

we actually going to make that deadline? No, your data is not going to say we're going to make the deadline until we have real concrete action in support of leveling up from the government, which is which, but also the local governments as well, having to step up and getting rid of political views to a certain extent and focus on place, because place, some people should come first and politics should be second. If you had a magic wand to level up easier and better than what would

you do. I've changed the planning regulations pretty much run right across the UK very quickly. I would empower local

people to make decisions a lot more quicker. I'd reallocate the budget to spend more on interest city transport rather than intercity transport, because you know, everybody's saving ten ten minutes a day traveling to and from work, getting rid of all the pollution it exists at the city city level is much more important than you know, taking ten minutes off the time it tooks to get to Birmingham by two. The right way to level up is also

focusing on healthcare. And you've done huge studies on this health inequalities increasing and you know, in leveling up, it is absolutely going backwards right now, right across the country. And this government, you know, it fought the election about building new hospitals, massive investment that they just put up national insurance to pay for more funding with the health care system. But is that feeding through at all or

is it all just spin? But it's not feeding through And I think the again, you need somebody who takes accountability and responsibility. You know, there was a great talk about the forty one hospital. Where are they? You know, I don't think you know, none of them have been built so far, and I think five are in planning so far, and it's just too slow. Going back to that earlier theme, Americans, get it done. We need to get that mentality over here, get on it. Who's responsible,

who's accountable, who's going to deliver on this? Because it's so important that we modernize and use technology to deliver better solutions for health in the UK because there are healthy life expectancies just going backwards. That you're sounding Niger when you go around the country. The people in these constituencies who were promised all of this, they must be noticing now is that does get angry. They are angry

and they're disappointed. What are they doing about it? But they don't know what to do, you see, because they don't feel as though they have any any levers to pull right now. At that sort of level, this is the rule of the states in a modern economy and that the state has to step up. Thank you so much. I'm Francie Laqua and I'm David Merritt. And that's it for this week's episode of In the City. We will be back next week and in the meantime, if you

like the show, please first of all rate it. Also check out the bloom The UK website for more news and views. This episode was produced by Sammasati. Special thanks to our guests Joe May's and Nigel Wilson. Ahead of Bloomberg Podcast. Is Francesco leaving? All right? Bye Gang Bye.