Businesses believe Michael Gove’s levelling-up plans don’t go far enough

There are elements that have gained cautious support but many are not convinced by the scope of the plans, argues James Moore

Michael Gove has unveiled the government’s long-awaited plan to achieve its levelling-up agenda (PA)

The reality behind the politics of levelling up is that it doesn’t matter to businesses and their employees if the government’s plans were picked up from Theresa May’s discard pile, as it appears they may have been.

It doesn’t matter if they were written on the back of a cigarette packet by a couple of civil servants and ministers attending one of Downing Street’s many lockdown parties.

The £6m, £6bn, or whatever the funding ultimately turns out to be is one thing – the question is, will it work? Will it improve things? Will it help Smith & Family Metal Bashing Plc get a factory built in, say, Carlisle if it needs one. Can the CEO be sure there’ll be the people there with the skills she needs to get it rolling and deliver a stack of good, well-paying, jobs?

The fact that the plans unveiled by Michael Gove – which even he has reportedly had some doubts about – look beyond the electoral cycle and out as far as 2030 has received a cautiously positive response from the business lobby.

They like the idea of thinking long. They look at Germany – which does that – see its success and they spy the potential. They also like some of the ideas. Devolution, for example, makes sense. With reference to the metal factory scenario, it would be smart if there was someone at a beefed-up local authority with the clout to help them work through what could otherwise be a time-consuming application process.

There have, I’m told, been some relatively constructive talks held on the way to this – which is quite an achievement when you consider the government’s fondness for talking at, rather than to, businesses. It could still stand to give more time to the unions, because if it wants to get wages rising, that’s where to start. But still, credit where it’s due.

Trouble is, amid all the ballyhoo, and the warm words from people who are willing to give Gove and the government a chance to show what they can do – what some are saying in private is that the secretary of state would be right to have doubts. These plans notably lack ambition.

Here’s one conversation I had about this, which rather sums up that problem.

“Find me any professor who would disagree with the idea that you need to increase literacy and numeracy outside London and the southeast,” my source said. “But the question is whether that should be part of levelling up or just a minimum standard.”

The answer is obvious: it should just be a minimum standard, because if you can’t get kids reading, you can forget about all the airy talk about improving skills and creating dynamic modern economies.

Trouble is, schools in many areas struggle for funding and find it hard to attract teachers. Is it any wonder given the challenges they pose on top of the 60 to 70-hour-a-week workloads? Which involve ticking the boxes demanded by the Department for Education and Ofsted that teachers face wherever they do their jobs? In part thanks to one Michael Gove.

Moving on to the question of skills, it’s more of the same.

Stephen Evans, chief executive at Learning and Work Institute, pointed out that the mission for 200,000 more adults to gain qualifications by 2030 “takes us back to 2016 achievement levels, reversing only a quarter of the fall since 2010”.

He added: “Skills investment will remain £750m lower in 2025 than in 2010. The government needs to deliver a much bolder vision for how services work together to benefit people, otherwise the reality will fall short of the rhetoric.”

The CBI boss Tony Danker, will pick up the same theme in an upcoming speech. Danker will point out that the government has adopted the torpid forecast from the Office for Budgetary Responsibility (OBR) of 1.3-1.7 per cent growth for coming years, which is like a football team being satisfied with life down in League Two.

If the OBR is right, we’re in for a rough ride. Britain may need an extra £30bn or so by 2030 just to cope with its ageing population. Where’s the cash for levelling up going to come from on top of that? The Tories look like they’re going to have to accept their reputation as the tax-raising party. The backbenchers are going to love that.

Danker thinks Britain could do better, and he’s right. His call to incentivise business investment when chancellor Rishi Sunak’s “super deduction” tax break comes to an end makes sense as your starter for 10. More investment would deliver more growth. Britain’s performance on this front has been underwhelming, and that’s putting it mildly, for years. If Sunak could find a way of pushing it up the league table, that would be an achievement to take to the bank.

I don’t buy into all of Danker’s ideas. I always worry about business leaders talking about “smarter regulation”, for example, because it’s usually code for “less” although it should be said that he will be at pains to stress otherwise.

Some regulation is necessary. Employment laws, for example. That’s another problem with Gove’s plans. One of the chief issues facing those living in “left behind” areas is the prevalence of insecure work – poorly paid jobs in which employees have few rights and no security, either of hours or of continued employment.

“Without a plan to deliver decent work up and down the country, millions will struggle on, on low wages, and with poor health and prospects,” said the TUC’s Frances O’Grady.

And that gets to the heart of the matter. All the lofty words, gaudy promises, even cash (which seems to be going to some decidedly leafy areas) aren’t going to solve anything in the absence of sensible, stable policymaking that delivers.

This government has yet to prove it can deliver that. Just look at the Partygate paralysis. Just look at the pandemic and the number of people who died. Just think about how much good all the billions lost to fraudsters while it has raged could have done for its levelling-up cause.