As this most strange and surreal of national moments has unfolded, voices of power and influence have constantly talked about national unity and shared feeling. The media are suddenly awash with “we” and “us”. All those flowers, flags and banners embody the same message: that whatever this country’s tensions and resentments, the United Kingdom remains exactly that. But, by a grim accident of timing, when politics resumes this week the biggest story will be about something that suggests the exact opposite: a government so unconcerned by the huge gaps that divide people and places that it is going to widen them even further.
Friday will see the much-trailed “fiscal event” in which the new chancellor, Kwasi Kwarteng, will outline the details of the government’s energy prize freeze and the tax cuts promised by Liz Truss in her campaign for the Tory leadership. The Resolution Foundation reckons that, on average, the richest tenth of households will benefit from these measures by about £4,700 a year, while the poorest tenth will receive £2,200. By way of adding insult to injury, towards the end of last week news broke of Kwarteng’s push to remove the existing cap on banker’s bonuses, a legacy of our membership of the EU. As with Truss’s hostility to an extended windfall tax on the big energy companies, here was more proof of her government’s key intention: to “go for growth” by privileging wealthy and powerful people and interests, in the hope that doing so might boost the UK’s output.
Clearly, that approach leaves little room for the jumble of policies, rhetoric and half-formed intentions known as levelling up. That agenda was ailing already: even as Boris Johnson continued to talk up some imagined rebalancing of Britain as his big mission, transport plans centred on the north of England were cancelled and cut, the Whitehall schemes that replaced EU funding for the regions of the UK turned out to be a shadow of what preceded them, and the long-awaited levelling up white paper was turned into a non-event by Rishi Sunak’s refusal to back it with any new public money. But in the wake of Johnson’s fall, levelling up has been sidelined even as a vague idea.
To no one’s great surprise, Truss’s first speech outside Downing Street made no mention of the term at all. The Department for Levelling Up, Housing and Communities is now the responsibility of the low-wattage Tory minister Simon Clarke. Out in the real world, the comparatively small-scale projects funded by £4.8bn of dedicated levelling up money are now threatened by rising inflation – and late last week, the Financial Times reported that among both local councils and Whitehall insiders, “there was no expectation of extra cash from central government”. So far, one of the few glimmers of thinking about regional inequality among Truss and her allies has been a fuzzy suggestion that “certain areas” will be turned into low-tax, deregulated enterprise zones – a reheated version of an old and failed idea, and a far cry from past levelling up promises of infrastructure, improved education and all the rest.
Under Johnson, levelling up’s failure could be put down to a lack of coherence and competence. But in Truss’s case, the sense of the idea hitting the wall is the result of ideological convictions highlighted in her first big TV interview. Four days before the Queen died, she appeared on the BBC’s new programme Sunday with Laura Kuenssberg, where she was asked by the host why she was prioritising tax cuts that would hugely benefit people at the top. Truss blithely conceded the point. “But to look at everything through the lens of redistribution, I believe, is wrong,” she continued. “Because what I am about is growing the economy, and growing the economy benefits everybody.”
Truss knew the significance of what she was trying to explain, even if Kuenssberg didn’t seem to. “This is a really important point,” she insisted. “The economic debate for the past 20 years has been dominated by discussions about redistribution. And what has happened is, we have had relatively low growth … and that has been holding our country back.”
Superficially, this is a very strange view of the past two decades: was that period really so “dominated” by a debate about fairness and inequality that it stifled the economy? Even in the New Labour era, senior politicians tended to keep quiet about such things: Gordon Brown’s redistributive policies, let us not forget, happened largely by stealth. Moreover, once David Cameron and George Osborne took over, austerity ensured that inequality – not least in its regional manifestations – got much, much worse. So who or what was Truss’s target?
What she was really bemoaning, it seems to me, was the turn Tory politics took after the Brexit referendum. Theresa May and Johnson may have qualified their talk about the UK’s inequalities by insisting that they did not intend to take money from areas at the top of wealth and income rankings. But they nonetheless talked up their focus on disadvantaged people and places, and claimed that they could use the state to start to reshape the British economy. In February this year, the then levelling up secretary, Michael Gove, contrasted levelling up with “trickle-down economics”, and said that if the free market was left to itself, “then what you see is inequality growing”.
This is what Truss and her allies have seemingly come to avenge: as Thatcherite true believers, they think that even the most halfhearted interventionism might lead to ruin (hence her initial rejection of “handouts” to ease the energy crisis), and that ultimately, inequality is just another word for what makes capitalism so dynamic. Her fellow Tories see this linchpin of her beliefs very clearly. “She has an agenda, it’s quite ideological, and it’s very Conservative,” says Osborne. “We didn’t get that with either Boris Johnson or Theresa May.”
That last point is true. The fact that Truss’s two predecessors said they would move away from post-Thatcher Toryism, in fact, was a big part of the reason why the political loyalties of former Labour heartlands began to shake in 2017, leading to the fall of the so-called red wall two years later. However delusional it may now seem, plenty of people in such places had voted to leave the EU in a spirit of hope, and both May and Johnson then did their best to convince them that their optimism wasn’t misplaced.
Now we are suddenly in a very different political climate. What, you can only wonder, is Truss’s message to voters who live in the kind of areas still routinely termed “left behind”? That they ought to damp down their hopes, do their best to get through hard times, and rejoice if some sugar-rush boom in financial services pushes up national income by a few per cent? If that remains her government’s approach, millions of people will know exactly what they are dealing with: the end of any lingering hopes that levelling up would mean anything, and the return of the credo that ensured they were left behind in the first place.