The UK ‘geography of discontent’: narratives, Brexit and inter-regional ‘levelling up’

Abstract

This paper explains the background to the notion of the ‘geography of discontent’ in the context of UK interregional inequalities and political shocks. The paper then examines how the geography of discontent has bound conflicting political and economic narratives together in ways, which makes the correcting for these regional imbalances all the more difficult, and results in ambiguity and a lack of clarity regarding the nature and form which Levelling Up processes should take.

geography, discontent, Brexit, narratives, ‘Levelling Up’

Introduction

The notion of a ‘geography of discontent’ arose from the observation of the close relationship between the geography of the voting patterns for Brexit during the EU Refrendum of 23 June 2016 (Billing et al., 2019, 2020; Los et al., 2017; McCann, 2018) and the economic geography of UK productivity patterns (McCann, 2016). Broadly, there was a close correspondence between the economic weakness of the region and the pro-Leave pro-Brexit votes (Shafique, 2016). Moreover, in that same year, the relationship between geography of votes against either the political status quo (or against the advice of the government) and relative local prosperity was also clearly evident in the Van der Bellen versus Hofer Referendum in Austria on 24 April 2016, in the US Presidential elections of 8 November 2016 and the Renzi Referendum in Italy on 4 December 2016. Although the actual geography of the voting patterns was different in each case, as were the specific reasons for these votes, the common feature was that the geographical divides in voting closely reflected the spatial economic inequalities. In the UK and Italian cases, the divides were largely in terms of the South-North/North-South core-periphery patterns, whereas in the Austrian and US cases the divides were largely reflective of the urban-rural and big city versus small town divides. Further evidence for these types of relationships has since become available in other arenas (Dijkstra et al., 2020; Hendrickson et al., 2018; Lee et al., 2020; OECD, 2018a; Rodriguez-Pose, 2018), and although these types of relationships surface in different guises in different countries, the underlying social capital phenomena driving the geography of discontent reflects many of the issues originally articulated by Putnam (2000).

In essence, the notion of a ‘geography of discontent’ reflects the fact that political responses and actions are heavily shaped by a local community’s own understanding of its perceived status and value in society, within largely a national institutional setting. In turn, as we will explain here, this understanding is heavily shaped by the available narratives. These responses are primarily shaped by a locality’s relative economic positionality and the extent to which a community and its individual citizens feels valued or exploited by the wider society. Situations where local communities feel that their value to society is undervalued, under-represented and their needs are insufficiently prioritised and resourced, can give rise to a ‘geography of discontent’. However, it is not necessarily the very poorest cohorts in poor communities that revolt (Dijkstra et al., 2020; Reeves and Sawhill, 2020; Rodriguez-Pose, 2018; UKICE, 2021), but those who perceive that their economic value and progression routes (Autor, 2019), social status, social value and dignity of their work have been diminished by national and international trends (Sandel, 2020), or that their societal contributions are undervalued or exploited. As such, middle class and socially conservative cohorts within disadvantaged communities are often amongst the key articulators of a ‘geography of discontent’, as was the case in the UK (Goodwin and Heath, 2016). But importantly for our purposes, it is community and local perceptions, as well as individual perceptions, that are critical in shaping a ‘geography of discontent’ (Hendrickson et al., 2018; Lee et al., 2020; McCann, 2020a; Rodriguez-Pose, 2018), although the way that the geography of discontent is articulated also differs between countries depending on the context and the particular perceived grievances and sources of discontent (Dijkstra et al., 2020; Dijkstra and Rodriguez-Pose, 2020).

In the particular case of the UK, however, the geography of discontent is very closely connected with the narratives relating to Brexit, ‘Levelling Up’ and the 2019 general election victory of the Boris Johnson government, all of which are closely intertwined (Tanner et al., 2020). Politicians who campaigned in the EU Referendum on a ‘take back control’ platform and then in December 2019 on a ‘get Brexit done’ platform, are in power crucially because of the many constituencies in relatively poorer areas which for the first time in the last century chose to elect a Conservative rather than Labour MP, giving Boris Johnson’s government an overwhelming majority of some eighty seats. The former ‘red wall’ of traditionally Labour seats in the Midlands and North of England and Wales, partially crumbled, and the ‘Levelling Up’ agenda was intrinsically forged out of these geographical changes in voting patterns, in that the Johnson government and parliamentarians (Berry and King, 2020) realised that responding to the needs of these constituencies is critical for both their election to, and also their survival in, government. This is also manifested by the replacement of the long-awaited Devolution and Local Recovery White Paper in favour of a Levelling Up White Paper, as well as the formation of a ‘Levelling Up Taskforce’, a lobby group of some sixty or so Conservative MPs which represent many of the parliamentary seats in disadvantaged areas which, for the first time, voted for the Conservative Party in the December 2019 general election. This group of MPs, many of whom have been elected for the first time, are large enough to hold the balance of power in parliament.

This paper will argue that these various ‘take back control’, ‘get Brexit done’ and ‘Levelling up’ narratives are inherently mutually contradictory, and that in the long run much of the ‘Levelling up’ agenda is itself likely to be thwarted by Brexit. The reason is that while the ‘geography of discontent’ was genuine and well-founded, the narrative framing of Brexit and how it relates to these very real concerns was fundamentally incorrect. Although the narratives were sufficiently persuasive to convince both voters and those standing for parliament alike, Brexit itself is almost certainly going to weaken these already-weaker places, both absolutely, but also relatively, in comparison to the UK’s more prosperous places.

Prior to the EU Referendum, there was only one piece of serious analytical research which demonstrated that the economically weaker parts of the UK were systematically more exposed to Brexit than the more prosperous regions (Los et al., 2016) and there was absolutely no research that suggested otherwise. However, the notion that the more prosperous parts of the UK were the major beneficiaries of EU membership at the expense of the weaker parts of the UK had already taken hold prior to the EU Referendum. Why this is the case is explored in this paper. Yet, now a large body of evidence, including the government’s own analysis, finds that Brexit itself will seriously damage the UK’s economically weaker regions more than the UK’s more prosperous regions and that this is the case for manufacturing, services and agriculture (Billing et al., 2019; Borchert and Tamberi, 2018a, 2018b; Cambridge Econometrics, 2018; Chen et al., 2018; Clarke et al., 2017; Gasiorek et al., 2018; HMG, 2018; HoCEEUC, 2018; Raikes et al., 2019; Levell and Norris Keiller, 2018; Los et al., 2017; Oliver Wyman, 2018; Thissen et al., 2020), and also largely irrespective of the actual form of Brexit.¹ This is because the UK’s less prosperous regions, and especially those in the North of England and Midlands, are far more dependent on markets in the EU for their trade and prosperity than the UK’s more prosperous regions. Moreover, the combination of Brexit and the Covid-19 pandemic has the potential to completely undermine the whole of the ‘Levelling Up’ agenda.

Crucially for the purposes of this paper, outside of a very small circle of researchers and institutes, this profound contradiction between Brexit and Levelling Up is an issue that is almost entirely unknown in UK politics, public media and public perceptions, and almost never mentioned in any of these arenas. One explanation could be that pro-Remain advocates felt tired or disillusioned from continuing to argue about such matters after the EU Referendum vote in 2016. However, this argument makes no sense, given that there was a vibrant movement within all areas of politics between mid-2016 and the end of 2019 ranging from anti-Brexit activities to a policy of accepting Brexit but remaining as close to the EU as possible, including possible EEA membership. Given the fact that the ‘Levelling Up’ narrative was forged entirely out of the whole Brexit process and experience, what is deeply puzzling is that the fundamental contradiction between Brexit and Levelling Up hardly feature even in any of these post-2016 pro-Remain narratives, despite their prominence in post-2016 pro-Brexit narratives. Obviously, people want to improve where they live and to raise their voice for such improvements, and Levelling Up captures this desire, but the mechanism via which this was done, namely EU exit, will do precisely the opposite. This contradiction led John Mothersole, the former Chief Executive of Sheffield City, to comment that ‘Brexit was the right answer to the wrong question’. Levelling Up should have been pursued at scale years ago, and entirely independently of Brexit.

This, therefore, raises the question as to how these mutually inconsistent and self-contradictory narratives and slogans came to be so intertwined in the first place, and also why this contradiction was barely addressed whatsoever in any mainstream public, political or media arena.

In order to understand how this situation arose, this paper examines the role that particular narratives played in shaping and framing the current UK policy context. As we will see here, while in economic development terms the pro-Brexit narratives and ‘Levelling Up’ narratives are mutually contradictory, they are the result, in part, of previous and also largely unfounded narratives, at least from the perspective of local economic development. On the one hand, the ‘Levelling Up’ agenda can be understood, partially, as being an attempt to re-set and accelerate the ‘rebalancing’ narratives associated with the 2010 Coalition government which were co-opted for delivering a different set of policy priorities than what many people had assumed to be the case. On the other hand, the ‘Levelling Up’ agenda can also be understood as being, to a certain extent, a direct consequence of narratives linking the anxieties and concerns of local people in poorer localities who are not members of so-called ‘metropolitan elites’ to the UK’s membership of the EU. In economic development terms, these rebalancing and ‘metropolitan elite’ narratives were fundamentally at odds as far as economic geography arguments go. Yet, ironically, even though these anti-‘metropolitan elite’ narratives were themselves primarily championed by longstanding members of the ‘metropolitan elite’, these narratives were sufficiently persuasive in the short run to lead to the current political economy situation (Gaskell et al., 2020). Moreover, as we will discuss here, from the perspective of economic geography and local economic development, the cycle of conflicting narratives being deployed is repeating itself with a ‘cities versus towns’ narrative, which further confuses the nature and priorities of the ‘Levelling Up’ agenda.

The rest of the paper is organised as follows. The next section discusses the scale and nature of the UK interregional divides and explains how these have contributed to the types of political shocks observed. This is then followed in the third section by a discussion of the role played by narratives in the production of knowledge and also their role in the political economy. These insights are then applied in the fourth section to explain the shifting narratives regarding the UK regional imbalances over the last decade and the ways in which these are currently confusing the deployment of effective responses to regional imbalances. The paper ends with some brief conclusions regarding the required nature and scale of ‘Levelling Up’ responses.

The UK geographical divides

The UK regional and urban divides have been growing for the last four decades (Carrascal-Incera et al., 2020; Martin et al., 2018; McCann, 2016, 2020). The reasons for this are a complex mixture of the economic geography of the country, the asymmetric regional shocks associated with modern globalisation and the overly top-down and centralised governance system of the UK, with no single issue dominating the problem. Yet, in this context, Friedman-type shareholder capitalism (Baker et al., 2020; Mayer et al., 2020; O’Neill, 2020) which eschews any real sense of social responsibility to wider groups of stakeholders, allied with modern globalisation and a highly centralised, top-down and largely space-blind governance system (McCann, 2016) appears to have greatly benefitted certain UK regions, such as London and its wider hinterland economy, but in a way that has largely been at the expense of other regions (McCann, 2016). Today the UK has amongst the highest interregional inequalities of anywhere in the industrialised world (McCann, 2020a) while at the same time nationally gaining no long-term productivity advantage over any of its peer-group of competitor and comparator countries (Carrascal-Incera et al., 2020). At the OECD-TL3 local area level, UK productivity differentials are akin to those which span the whole of the Eurozone (Carrascal-Incera et al., 2020), while UK regional business cycles are less correlated than those across the Eurozone countries or even the EU28 countries (Deutsche Bank Research, 2013). While the UK has some of the most prosperous regions in the OECD, measured in terms of GDP per capita,² or alternatively in terms of wealth (Agrawal and Phillips, 2020; O’Brien, 2020), half the UK population live in regions whose prosperity is no better than the poorer parts of former East Germany (McCann, 2016) and poorer than the US states of Mississippi and West Virginia (McCann, 2016). Moreover, these regions bore the brunt of the cutbacks associated with the post-2008 crisis austerity agenda of fiscal retrenchment (Gray and Bradford, 2018).

This internal economic decoupling between the poor half (The Economist, 2020a) of the UK and the rest of the country is also reflected in a regional decoupling on many other social and health dimensions (McCann, 2016: SMC, 2020a; Tanner et al., 2020; UK2070 2020). The UK’s poorer half of regions have multi-dimensional living standards (MDLS) akin to Alabama (Veneri and Murtin, 2019), and access to quality healthcare, which is on a similar level to parts of eastern Europe (The Lancet, 2018). In the UK, local economic prosperity is also closely related to the quality and resilience of the local social fabric (Tanner et al., 2020). Prosperous places tend to have stronger social, institutional and civic engagement attributes than economically weaker places (Harrington, 2020) and this is evident at both the broad OECD-TL2 regional scale (McCann, 2016) and also at the very local scale (Tanner et al., 2020). While social mobility opportunities are relatively equal across most places for high-income groups, for lower-income groups, the locality of birth and upbringing heavily conditions the opportunities for self-enhancement and self-advancement on many dimensions. Being reared in an economically disadvantaged locality limits the long-term earnings potential (Joyce and Xu, 2020; Bell, Blundell and Machin, 2019^,3; SMC, 2020a, 2020b^,4), educational attainment (HoC 2021; Snowdon, 2020^,5; The Economist, 2020b^,6) and even life expectancy (Marmot et al., 2020),⁷ and these locally-specific effects are especially pernicious on the lower-income groups. Moreover, the local effects of adverse economic shocks on wider long-term socio-economic dimensions can last four or five decades (Rice and Venables, 2021), and social mobility is the crucial indicator of populist voting (Protzer, 2019).

Yet, these realities are neither new nor recent. These growing interregional inequalities have been developing over more than thirty years (Martin et al., 2018) and represent the day-to-day realities of many people’s lives. Importantly, for more than a generation, these issues have been given little priority by much of government and by mainstream ‘national’ public debates, which are often, in reality, London-dominated debates. For much of the last three decades many London-based thought-leaders, including much of academia, the national media and networks of think-tanks (McCann, 2020a), have been either largely unaware of these issues, have ignored them, or have given them a rather short shrift on the basis that these are just natural outcomes of agglomeration and self-selected migration processes (McCann, 2016). Indeed, a recent high-profile public survey found that in the UK the single greatest concern regarding social inequalities, and one which holds across the political spectrum, are the regional imbalances in prosperity (Duffy et al., 2021), something which the London-based survey authors found to be rather ‘surprising’ (Duffy et al., 2021). In a similar vein, some of the UK’s most prominent journalists are still entirely unaware of the scale of the UK’s interregional inequalities (McCann, 2020a), while some of the UK’s most prominent pro-Brexit economists continue to argue that London is the ‘motor’ of the UK economy (Lyons, 2020), even though so much of the evidence suggests that London’s prosperity has no real positive effect whatsoever on the poor half of the UK (McCann, 2016; The Economist, 2020a).

Interregional disconnection and political shocks

In the UK, it is this disconnection between national and London-centric economic policy narratives and the local experience of people in many parts of the country that is at the root of the geography of discontent. A growing body of evidence demonstrates that in terms of regions and economic geography, extreme individualism frays the social contract (Collier and Kay, 2020) but not in a spatially random manner. As well as benefitting people with higher skills, higher wealth and more well-connected individuals at the expense of others, extreme individualism also benefits certain places at the expense of others. If these spatial differences are skewed too far, then the economic geography of the economy as a whole comes to mimic something of an insider–outsider system (Linbeck and Snower, 2001) whereby these reciprocal obligations and the social contract appear to work for certain places but not for others (Collier and Kay, 2020). As such, this argument about the importance of ‘belonging’ (Collier, 2018a, 2020a; Sandbu, 2020) extends the earlier social capital arguments of Putnam (2000) to the relations between localities and the national state (Collier, 2020a).

The ‘geography of discontent’ reflects the extent to which a large number of citizens in certain localities sense that their communities are being ‘left behind’ (The Economist, 2017b) and lacking representation or engagement in national narratives, and the resulting ballot-box revolts are the only largely peaceful way of taking ‘revenge’ (Rodriguez-Pose, 2018) and trying to change the system. On the basis of UK and international evidence (Carrascal-Incera et al., 2020; McCann, 2016) there is now increasing evidence that governance has been, and is, a major contributory part of the UK interregional problem, and this sense is pervading all areas of politics and public debate. It is also the one mainstream arena where citizens feel they have the power to bring about change, a power which they exercise via the ballot box.

Collier (2018a, 2018b) has argued that these types of political responses of places can best be understood in terms of a ‘mutiny’, in which the immediate imperative is to overturn the status quo. The mutiny is a result of a breakdown in trust between local communities and the institutional and governance logic of the wider national state, and central to this breakdown is a sense that the assumed reciprocal moral obligations underpinning the social contract between the state and citizens have been abandoned in the case of particular communities and localities (Collier, 2018a, 2018b). The sense of belonging that citizens in certain places and certain communities have, as part of both a local and a national story, becomes critically weakened, and in particular, it is their sense of belonging in the national sphere which can become undermined (Collier, 2020a; Sandbu, 2020). This undermining of the local-national institutional relations has explicit spatial dimensions, and this is what the notion of the ‘geography of discontent’ captures.

As with most mutinies, however, there is not necessarily any clear objective or unified strategy for future development (Collier, 2018a), and this leaves mutinies open to political manipulation. In particular, social, political and economic narratives can play a critical role in motivating the societal shocks administered via the ballot box, and these narratives can act either to stabilise or to destabilise the situation, depending on the nature of the narrative, the advocates and proponents of the narrative, and also the broader societal context in which the narratives operate. As such, the ‘geography of discontent’ both shapes, and is also shaped by, the various narratives circulating in the social arenas relating to the specific issues about which local citizens and communities feel aggrieved.

In terms of UK economic development issues, these narratives have a particular long-run evolutionary trajectory which is important to understand in order to identify the challenges which the Levelling Up agenda now faces, both in policy terms and in terms of its intellectual basis. In order to make sense of these, we first outline the role which narratives play in knowledge and policy development, and then we set this in the specific context of the UK regional economic characteristics.

The role of narratives in knowledge and society

Narratives play an important role in all aspects of politics, business, governance and society. Within the fields of linguistics, social anthropology, psychology and philosophy, narratives are understood as framing devices that reflect a common shared sense of identities, perceptions, beliefs, know-how and methodological routines and allow for the experience to be understood and interpreted in particular ways. It is via narratives that we subjectively make sense of, and give meaning to, the world (Bruner, 1990), and the story-telling dimensions of narratives have their own implicit causal structures within them. Narratives exist in many social contexts, and individuals and communities to some extent choose which competing narratives to adopt. Indeed, competing narratives exist within all areas of the research community, especially within academia, and play a key role in the formation of what Lakatos (1970) calls different ‘research programmes’, which link epistemological themes to communities of practices, pathways for professional advancement and policy influence.

For our purposes here, we may refer to the knowledge or truth derived from these epistemological activities as ‘paradigmatic truth’, and these intellectual narratives and their panoply of supporting evidence also typically provide a basis for many political and public narratives. Sometimes, however, political narratives are entirely disconnected from, or even in opposition to, epistemological narratives. Brexit and Levelling Up would be one of those cases. There is a huge literature on the formation of political narratives which is far beyond the remit of this paper. However, here we are only concerned with how public and political narratives are disconnected from, or in opposition to, the analytical and empirical evidence regarding the regional implications of Brexit, and how this situation first came about and how it has continued.

In the wider social, commercial and political arenas, narratives are typically used as framing devices for shaping and managing expectations and for articulating choices and trade-offs, although they are also partly shaped by these same expectations and trade-offs. Even as individuals we rely on the ‘collective brain’ of a community (Collier and Kay, 2020; King and Kay, 2020) to make many of our decisions, and the local community is the social network within which narratives are developed and narrated, a key set of which are narratives about belonging to the local community (Collier, 2018d). Narratives are frequently developed and deployed in political and commercial arenas in order to act as coordinating devices (Collier and Tuckett, 2021) for advancing specific agendas and mobilising action, and shared narratives can also play a key role in sense-making within economics (Chater and Loewenstein, 2016; Shiller, 2019; Tuckett et al., 2020), policy-learning and policy-transfer activities. For our purposes, here, we may term this type of knowledge as ‘narrative truth’. In social sciences, paradigmatic truth relies in part on narrative truth, and the continuity-discontinuity narrative trajectories of paradigmatic truth evident amongst the research community can also be reflected in the narrative truth trajectories of society as a whole.

Typically, political narratives would be largely grounded in the mainstream research and epistemological narratives, and in ‘normal’ times, when the broader economic, social and political environment is relatively stable, the difficulties associated with differences in academic narratives tend to play a relatively minimal role in public life. However, all narratives are inherently provisional and are to differing extents in conflict with each other because the contexts in which narratives are formed and operate shift. On the one hand, narratives can be thought of as existing stories which are rapidly attached to experienced happenings to make sense of the world, while on the other hand narratives can also shift independently of fundamentals (Tuckett et al., 2014). However, in times of major societal shocks or crises which give rise to environments of radical uncertainty (Kay and King, 2020), narratives can shift dramatically, and the competition between differing narratives can play important roles in influencing the direction and ways in which society responds to these shocks.

The 2008 global financial crisis, the aftermath of the 2016 Brexit Referendum, and now the Covid-19 pandemic are all examples of situations of radical uncertainty. In environments of radical uncertainty, it becomes apparent that much of the received wisdom – in terms of the prevailing research programmes, decision-making routines and know-how - is incapable of understanding or facilitating effective responses to societal challenges (Kay and King, 2020; Manski, 2013), and in these conditions, narratives become critical in coordinating activity (Collier and Tuckett, 2021). Today the effects of dramatic societal shocks such as the 2008 global financial crisis and the current Covid-19 pandemic expose limitations in both our understanding of these shocks and the efficacy of our governance systems to respond to them (Kay and King, 2020), and this is also the case for slower-burning but no-less-profound challenges such as climate change. The advent of these societal challenges can act as tipping points that critically weaken or undermine existing research programmes, and in some cases can occasionally even lead to genuine paradigm shifts (Kuhn, 1962; Lakatos, 1970). Moreover, these changes, of necessity, also force a rethink in terms of how our governance and policy-making systems and structures operate, how they build on knowledge and the extent to which these are fit for purpose. In these situations, narratives become especially important in managing behaviour in times of radical uncertainty if they are constructed on the basis of contextual knowledge and on many different people’s experiences (Kay and King, 2020).

In the UK narratives regarding ‘take back control’ and the purported wider opportunities associated with leaving the EU are now increasingly being used to legitimate new policy schema relating to ‘levelling up’ approaches to regional development (Collier, 2020a, 2020b). These are areas where previously in the UK there had given very little attention given, so it is now necessary to consider these changing narratives and their origins.

Shifting narratives regarding the UK regional problems

Since the 1980s, there has been a widely held narrative spanning business groups, analysts, policy-makers and politicians that ensuring the success of the London economy is vital to ensuring the success of the wider UK economy. The mental model that many observers hold is that of London being the main ‘motor’ of the economy, and implicit in these lines of thinking is the assumption that the economic benefits generated by a successful London economy will then diffuse, disseminate and trickle down throughout the whole economy (McCann, 2016). Yet, the UK interregional problem of an internally decoupling economy, which has played such an important role in the votes for both Brexit and the 2019 Johnson government, is a result of the fact that London’s success is either disconnected from or even at the cost of, the prosperity of many other regions (Collier, 2018c; McCann, 2016). Moreover, in the post-2008 crisis period, increasing numbers of people started to perceive that this was exactly the case, hence the emerging ‘geography of discontent’. However, the narrative regarding London’s role as the UK’s economic ‘motor’ started to fray in the aftermath of the 2008 crisis. The crisis originated in the financial markets, and although London suffered a severe immediate shock, within two years it was already rapidly recovering, whereas other parts of the country have continued to struggle for a decade. The so-called ‘motor’ of the London economy had stalled and become increasingly decoupled (McCann, 2016) from the rest of the country, while at the same time it was still receiving the lion’s share of public investments, many of which had little or no real economic rationale beyond the narrative (Coyle and Sensier, 2019; Forth and Jones, 2020). Overall, there is no real evidence of any diffusion, dissemination or trickle-down effects (McCann, 2016) although these narratives were,⁸ or still are (Lyons, 2020), being posited by advocates of Brexit long after the evidence suggested otherwise. Indeed, it is the lack of any such diffusion effects over three decades (McCann, 2016) that is precisely why we see the UK’s enormous interregional inequalities today (McCann, 2020b). As Andy Haldane, Chief Economist of the Bank of England, has argued, on many levels the UK economy today represents an economy that is like a ‘hub with no spokes’ (Haldane, 2018).⁹

An acknowledgement of this growing awareness seemed to be evident in the early stages of the ‘rebalancing’ narrative. During the early part of the 2010 Coalition government, some economists understood the new ‘rebalancing’ narrative to be related to the need to address the profoundly different UK regional and sectoral shocks (Martin et al., 2016) which were becoming apparent in the aftermath of the 2008 global financial crisis. Instead, however, building on macroeconomic debates (King, 2002; Martin, 2010), the narrative of ‘rebalancing’ was used primarily to justify fiscal retrenchment aimed at shoring up the public finances, a policy referred to as the ‘austerity’ agenda by other observers (Gray and Bradford, 2018), during which the financial strains on local government services impacted most severely on the weakest places. Yet, under the influence of some key reports (Heseltine, 2012; Hunt, 2013; IPPR North, 2012), from 2015 onwards the Coalition government began to promote some new local and regional economic development agendas, such as the ‘Northern Powerhouse’ programme and the first city-region devolution deals. During this period the ‘rebalancing’ narrative had become increasingly associated with the need for regional restructuring, to the extent that by 2017 the narrative of ‘rebalancing’ (HoC, 2017) was almost entirely understood in terms of reducing interregional inequalities (McCann and Ortega-Argilés, 2020a). After nearly eight years of hardship, during which much of the UK suffered a dramatic loss of productivity growth (McCann, 2016, 2020b), the ‘rebalancing’ narrative had, at last, landed again on the question of unequal economic geography.

Meanwhile, during the run-up to the 2016 EU Referendum advocates of Brexit frequently argued that in the UK the real beneficiaries of EU membership were the so-called ‘metropolitan elites’ who were out of touch with the concerns of local people across the country, and yet whose interests dominated UK national policy-making. This was a very powerful narrative that was repeated endlessly in various newspaper columns, by certain politicians and also by interviews with members of the public. This narrative explicitly set the interests and wellbeing of prosperous city-dwellers as being tied to EU membership, at the expense of the wellbeing and concerns of people living in small towns and rural areas, and gave the clear impression that the benefits of EU Single Market membership were primarily only for wealthy city-dwellers and against the interests of most other people. Along with ‘take back control’, the ‘metropolitan elite’ narrative cleverly linked the priority for UK regional rebalancing to the need to exit from the EU. Yet, as far as economic evidence was concerned, this narrative was almost entirely false in paradigmatic terms, but it was very persuasive in terms of people’s sense of being left behind and undervalued. However, as we will see here, the implications of the inherent conflict between the paradigmatic truth and the narrative truth are now profound and long-lasting, not least for the advocates of Levelling Up, as well as for the people living in poorer regions.

Given the blurred interface between the ‘rebalancing’ and ‘metropolitan elite’ narratives which had arisen by 2016–2017 (The Spectator, 2016), it was therefore ironic that the momentum away from a macroeconomic and sectoral framing of ‘rebalancing’ towards a spatial narrative was itself immediately truncated by the 2016 EU Referendum vote. This was because between 2016 and 2020, the overwhelming nature of the Brexit challenges meant that the government had little or no capacity to address other issues. During the May government, regional, local and devolution-related issues were treated as being disconnected from the UK-EU negotiations, even though they were so central to delivering the Brexit vote. Between the summer of 2016 and late 2019, UK regional issues were almost entirely absent from either Brexit debates or the UK-EU negotiations (Billing et al., 2018, 2019).

Since early 2020, although appearing to move towards the political right on some cultural and international issues, the ‘Levelling Up’ agenda provides clear evidence that politically the Johnson government is moving left towards the centre on the domestic economy (Collier, 2018d), with the interests of ‘left behind’ places being central to their policy-thinking. However, even though Brexit ushered in the Johnson government, its implications pose enormous challenges for the Levelling Up agenda.

As already mentioned, almost all of the available evidence including the government’s own analysis suggests that Brexit itself will seriously damage the UK’s economically weaker regions more than the UK’s more prosperous regions (Billing et al., 2019; Chen et al., 2018; Los et al., 2017; Thissen et al., 2020). The reason is that the Midlands and North of England in particular, are much more dependent on EU markets than the UK’s more prosperous regions, with London and Scotland being the least dependent on EU markets. Many localities in the Midlands and the North are heavily integrated with UK-EU global value chains, especially in manufacturing, and these, in turn, provide the catalysts for other local manufacturing and service industries. For many of these Midland and Northern regions, EU markets account for 12–17% of their local GDP and local wage-incomes (Chen et al., 2018; Los et al., 2017). As such, the reductions in accessibility to EU markets associated with Brexit will more adversely affect the local economies in the Midlands and the North than in the South (McCann and Ortega- Argilés 2019). This also means that the economic restructuring required in the UK’s economically weaker regions in order to offset the shocks of Brexit will be greater than that which is required in the UK’s more prosperous regions, even though these weaker regions are less resilient (Kitsos et al., 2019). The region which will be the least affected of all, and which will have the least restructuring to do in response to Brexit, is London. This is because London is less dependent on EU markets than anywhere else in the UK, given the fact that it is amongst the most globalised economies anywhere in the world, and is more economically resilient than anywhere else. Brexit itself will almost certainly increase the UK’s existing interregional inequalities.

Brexit is also likely to increase the UK’s intraregional inequalities (Thissen et al., 2020). Within the broad regions, the adverse competitiveness effects of Brexit are even greater for hinterlands areas than for the major cities within these regions (Thissen et al., 2020). In other words, Brexit will increase both the UK’s interregional and intraregional inequalities, and as such will move against all aspects of the ‘Levelling Up’ agenda. Moreover, the scale of these opposing movements is likely to be orders of magnitude beyond anything that public policy interventions can match.

These economic arguments are diametrically opposed to the ‘metropolitan elite’ narrative so successfully deployed in the Brexit campaign. The notion that prosperous city-dwellers were the main beneficiaries of EU membership at the expense of other people is simply not borne out by the evidence. It was never the case, and there are two main reasons for this. Firstly, London, which is by far the UK’s most prosperous city, is relatively unaffected by Brexit, and secondly, many of the UK’s other large cities and their hinterlands, and especially those in the Midlands and the Northern regions, are very vulnerable to Brexit. This reflects the fact that the interregional economic decoupling we observe within the UK is also reflected in terms of the UK’s urban areas, with many of the UK’s large cities also being amongst the most deprived places in the country (Carrascal-Incera et al., 2020).

However, instead of the overwhelming economic geography evidence (Martin et al., 2018; McCann, 2016) burying the ‘metropolitan elite’ narrative, the narrative itself has now morphed into another narrative which is also fundamentally incorrect in terms of economic geography, but which is now highly influential in government and many political economy circles. This is what we might call ‘the left-behind towns’ narrative. This narrative emerged concurrently in 2017 as a mix of three distinct sources: the first is a narrative transfer within the international media; the second is the London think-tank arena (Goodhart, 2017), and the third is the world of psephology and political forecasting which examines voting perceptions and cultural preferences. Since then the narratives arising from these originally quite distinct arenas have largely merged and captured much of ‘Levelling Up’ narrative, and in many ways are diverting attention away from much of the UK’s underlying economic development and productivity problems.

In terms of the UK media, The Economist (2017a, 2017b) published high profile issues focused on the fact that in some countries, and especially in the USA, towns and rural areas were being left behind by cities in modern globalisation, a standard North American urban economics narrative (Glaeser, 2011). The London-centric vantage point of the UK media makes it susceptible to these ‘cities versus towns’ narratives, which have since been repeated frequently by numerous journalists to describe what is taking place within the UK. But the detailed evidence in the UK demonstrates that this narrative is basically wrong (CFC, 2021; Garcilazo and Oliveira-Martins, 2020; ONS, 2017, 2019, 2020). While there are indeed many struggling towns (both inland and coastal), the vast majority of which are located in the UK’s economically weaker regions, in the UK as a whole, large numbers of towns, villages, hamlets, and rural areas, especially in the south of England, are more prosperous than many of the UK’s large cities and urban areas (ONS, 2017), and these places also display a high quality of life on many different indicators (McCann, 2016; Tanner et al., 2020; The Lancet, 2018; Veneri and Murtin, 2019). Moreover, even in the Midlands and North of England, many of the most prosperous places are actually towns (Agrawal and Phillips, 2020). It is the underperformance of the UK’s large cities outside of the southern English regions and parts of eastern Scotland which is at the heart of the UK’s prosperity and regional inequalities (Martin et al., 2018; McCann, 2016), not left-behind towns.

Unfortunately, however, when discussing economic development issues a weakness of the UK media is that it instinctively looks for comparator examples from the USA, Canada and Australia (Sandbu, 2020; The Economist, 2017a, 2017b). To UK commentators, these countries feel like they are very similar to the UK, largely for cultural, linguistic and political reasons, whereas in terms of economic development issues they are fundamentally different to the UK, given their radically different geographical scales, population densities, separate political and commercial capitals, and federal governance systems, as well as their entirely different experiences of spatial economic restructuring. In contrast, most of the UK’s most meaningful comparators on these various dimensions come from other western European countries (Carrascal-Incera et al., 2020), but these gain limited traction within the UK media, largely because of linguistic barriers. Indeed, the only context in which such discussions about North America are both meaningful and deeply insightful for the links between geography and prosperity is the fact that from the WIOD World Input-Output Tables we see that the economic dependency of the UK on trade with the rest of the EU is almost exactly the same as the economic dependency of Canada or Mexico on trade with the USA (McCann, 2016). Indeed, on the basis of these North America comparisons, the UK is actually twice as integrated with the rest of the EU as would be expected purely on the basis of the relative and absolute scale of the UK, EU, US, Canadian and Mexican economies (McCann, 2016). None of these issues has been ever articulated either in pre-Brexit or post-Brexit public, media or policy debates.

As such, in addition to ignoring the profound and contradictory consequences of Brexit for Levelling Up, the subsequent narratives regarding ‘metropolitan elites’ and the plight of ‘left-behind towns’ also largely ignore the evidence. As already mentioned above, there are indeed some very poor towns in the UK, concentrated primarily in economically weaker regions, but there are also huge numbers of very prosperous towns in the UK. The key problem in the UK is that there are far too many under-performing large cities that are currently unable to galvanise their hinterlands including towns and rural areas as is typically the case in other countries. Moreover, the decaying social fabric is most notable in cities (Tanner et al., 2020) rather than small towns, and in largely those same places where social mobility is lowest (SMC, 2020a, 2020b). Although social mobility, which is driven fundamentally by economic considerations, is more important than cultural considerations in explaining the geography of populist discontent underpinning political shocks (Protzer, 2019), these cultural and psephological narratives have become a mantra (CFC, 2021) which is politically very persuasive in shaping policy-formulation at the highest echelons of power.

The new narrative problem is that taken together these media, cultural and psephological narratives, lead to different sets of political priorities for ‘Levelling Up’ than would be derived from economic arguments and as such, will fail to address the core problems. Unfortunately, the priorities derived from these arguments are largely disconnected from the key economic realities which underpin the UK regional inequalities, which is the serious longstanding under-performance of the UK’s large urban areas outside of the south of England and Scotland (Carrascal-Incera et al., 2020; McCann, 2016, 2020a). Not only will Brexit make Levelling Up more difficult than ever, but the towns-versus-cities narratives will make it even more difficult again to address.

Conclusions

The UK ‘geography of discontent’ is a result of the fact that the UK is one of the most regionally unbalanced economies in the industrialised world (Carrascal-Incera et al., 2020; McCann, 2020a). Over recent years the UK has undergone a series of economic and institutional shocks to its regional development landscape that is arguably greater than for any other advanced economy, and this has led to profound political shocks. While the 2008 global financial crisis and Covid-19 have impacted almost every economy, the UK’s economic response to both shocks has been amongst the weakest of any advanced economy, especially in terms of productivity (McCann and Vorley, 2020, 2021). Furthermore, the UK also faces the challenge that Brexit has begun to come on stream right in the middle of the Covid-19 pandemic. What makes the UK situation unique is that all three shocks are likely to have very similar long-term regional development implications (Chen et al., 2018; McCann, 2018, 2020b; McCann and Ortega-Argilés, 2020b, 2021; Thissen et al., 2020) which will further widen the UK’s existing interregional inequalities, and move against the ‘Levelling Up’ agenda.¹⁰

Politically, the ‘geography of discontent’ intrinsically ties Brexit and ‘Levelling Up’ together. Yet, although current political narratives suggest that the Brexit, ‘Levelling Up’ and the ‘towns versus cities’ agendas are all largely aligned, in economic terms Brexit and ‘Levelling Up’ are mutually contradictory while the ‘towns’ focus diverts attention away from the UK’s underlying geographical productivity and prosperity problems. This is not helped by the fact that the ‘Levelling Up’ agenda is framed at such a high level as to be rather unspecific, so that while some of the very local aspects may be tractable (Kruger, 2020), no one, even in central government, can properly connect with the interregional dimensions of it. The result is that at present the UK’s over-centralised political decision-making machinery is largely uncertain regarding the specific role of ‘place’ in national economic development and growth (HMG, 2021), the optimal form and scale of devolution, and also the nature and form of the Shared Prosperity Fund replacement for the EU Cohesion Policy.

In economic terms the real UK ‘Levelling Up’ or rebalancing challenge is how to catalyse growth in all UK cities to such an extent that they can genuinely act as economic ‘motors’ for their own regional hinterlands, while also re-orienting and re-purposing London so that it genuinely does act as a ‘motor’ for the whole of the UK economy (McCann, 2016). Unless the political narratives aimed at galvanising coordinated action across all relevant stakeholders, known in the literature on the psychology of public policy as ‘conviction narratives’ (Collier and Tuckett, 2021; Tuckett and Nikolic, 2017), are themselves aligned with the underlying economic problems being addressed, then ‘Levelling Up’ will not succeed and the geography of discontent will only get worse. Moreover, the scale of the challenge should not be underestimated. In order to respond to these challenges, the lessons from Germany (Carrascal-Incera et al., 2020) demonstrate that in order to be effective, ‘Levelling Up’ must be undertaken at a genuine scale, for a very long time period, and in a properly strategic manner involving the deployment of enormous resources and profound institutional and governance reforms (UK2070, 2020). Building local leadership, and the institutions necessary for this is critical because if local leaders can gain the trust of their communities, they can play a key role in influencing and reshaping narratives, and in turn attitudes and behaviour. Informed and forward-looking narratives with a common purpose are a sign of a healthy community. However, it is striking that some twelve years after the global financial crisis, five years after the Brexit vote and many months into Covid-19 crisis, there are no serious alternative narratives being promoted. As Colin Mayer at Oxford observes, the ‘geography of discontent’ thrives in a ‘Sea of No Alternative Narratives’.

Acknowledgements

This paper has greatly benefited from discussions with Richard Florida and Tony Venables, and from detailed comments and feedback from Sir Paul Collier, David Tuckett and Colin Mayer. This research was funded by the 2020 ESRC Economic and Social Research Council and UK in a Changing Europe, Small Grant: ‘Post-Brexit and the Needs of “Left Behind” Places’.

Footnotes

1

These conclusions remain robust, even allowing for the UK-EU deal that has actually been negotiated, one which removes tariff barriers on manufacturing, which may be perceived to somewhat favour weaker regions. This is because non-tariff barriers (NTBs) are far more important than tariff barriers and these have been largely re-imposed with the EU-UK deal. On average, EU tariffs for manufactured goods are equivalent to 3 per cent of the value of trade and for agri-food products, it is 20 per cent of the value of trade (HMG, 2018), with sectors such as cars at 10% and some dairy products at 35%. See: https://www.bbc.co.uk/news/uk-45112872. For exports into the EU, the costs increases associated with non-tariff measures (NTMs) on Financial Services are amongst the lowest of any sector (Ecorys, 2009). However, even where tariffs on manufacturing have not been reimposed as part of the EU-UK Trade and Cooperation Agreement, non-tariff measures (NTMs) or non-tariff barriers (NTBs), which include all non-price and non-quantity restrictions and restraints on trade are far more important, implying costs increases of between 10% and 30% across all sectors, with similar increases between manufacturing and services (Ecorys, 2009). HMG (2018) assumed that under a ‘No Deal’ scenario NTB costs increases on goods would range from 6% to 15% of the value of trade and 4% to 18% for services, while for an FTA the costs increases of goods range between 5% and 11% of the value of trade, and for services between 3% and 14% of the value of trade. The hybrid FTA-No Deal nature of the EU–UK Trade and Cooperation Agreement falls squarely into these ranges, and these are also consistent with the NTB costs assumptions embedded in Thissen et al. (2020). Moreover, all of the local and non-local input-output interactions are included in these analyses (Chen et al., 2018; HMG, 2018; HoCEEUC, 2018; Los et al., 2017; Thissen et al., 2020) whereby directly increased tariff and non-tariff costs are indirectly carried through into all other sectors, irrespective of whether increased tariffs are applied directly in these sectors. As such, the basic insights of Brexit on UK regions deriving from these various models remain largely unchanged by the specifics of the EU-UK Trade and Cooperation Agreement.

2

Gross Domestic Product per Capita is an index of overall productivity.

3

A child growing up in London to parents in the bottom third of the occupation distribution (in terms of median wages) has a 30% chance of moving to the top third, compared with 22% nationally and only 17% in Yorkshire and the Humber (Joyce and Xu, 2020, 13; Bell, Blundell and Machin, 2019).

4

In localities with the highest social mobility, the earnings of 28 year-olds from disadvantaged backgrounds are double those of the disadvantaged 28 year-olds in those areas with the lowest social mobility. Moreover, in areas with low social mobility, pay gaps between deprived and affluent sons are 2.5 times bigger than those which are evident in areas of high social mobility. Furthermore, in areas of high social mobility educational achievement accounts for almost all the earnings differences between individuals from deprived and affluent families, whereas in areas of low social mobility, up to 33% of the pay gap is driven by non-educational factors (SMC, 2020a, 9; SMC, 2020b, 29–41).

5

UCAS data shows that whereas almost half of the children on free school meals in London go on to higher education, outside of London the proportion is only 26%.

6

41% of disadvantaged London 18 year olds go on to higher education, while the figure for Barnsley is only 15%.

7

For the top income deciles, the interregional differences in life expectancy are two years whereas for the bottom deciles the life expectancy differences are five years (Marmot et al., 2020, 19), equivalent to the national life expectancy difference between the UK and North African countries.

8

See the ‘jam and Ryvita’ analogy of Boris Johnson contained in Part 1 of the Evan Davis BBC television programme ‘Mind the Gap: London Vs the Rest: Part 1’ which was broadcast on Monday, 3 March 2014 BBC2 21.00–22.00.

9

One argument against these observations could be that London generates large tax revenues from which other regions benefit. The shares of tax revenues from London to the rest of the economy in the pre-2008 crisis period typically amounted to some £10 bn-£20bn per annum (CLC, 2012, 2014) or between 4% and 9% of London’s Gross Value Added (GVA), whereas in the immediate post-2008 era these net tax revenues shrank to between zero and £10 bn or between zero and 3% of London’s GVA, recovering to some £35bn or just under 7% of London’s GDP by 2018 (ONS, 2021a, 2021b). In other words. London’s net fiscal contributions to the rest of the UK economy are tiny in comparison to its productivity premium over the UK average or its more than 95% per capita GVA premium over English regions outside of the wider South of England. Moreover, London dominates all parts of the UK in terms of overall per capita growth-enhancing public investment relating to research science and technology (Forth and Jones, 2020; O’Brien and Miscampbell, 2021), infrastructure, housing, and heritage and culture, (O’Brien and Miscampbell, 2021). Along with this, many aspects of the current tax system including council tax and VAT are regionally regressive (Blagden et al., 2021) while R&D tax breaks also favour innovation-related activities amongst SMEs and entrepreneurial start-ups in London and the South East (Fraser et al., 2021). Weaker regions aspire to greater growth-enhancing investments for driving local economic development rather than greater transfer and welfare payments from London.

10

The only difference is that while both widen interregional inequalities, Brexit has likely widened intra-regional inequalities (Thissen et al., 2020) whereas the incidence of Covid-19 has been greater in large urban areas and therefore Covid-19 is likely to narrow intra-regional inequalities.