In 2012, two years after she was first elected as Wigan’s MP, Lisa Nandy was handed a petition organised and signed by local children. It called for the introduction of a fair living wage to allow some of their parents to escape the treadmill of irregular shifts at two, and sometimes three, poorly paid jobs. For Nandy, the moment captured the essence of a crisis that a few years later would turn British politics upside down.
“Some of these children hardly saw their parents because they were working so hard for so little reward,” she recalls. “That was a turning point for me. It made me think about the rise of exploitative agency work in towns like the one I represented; about the political economy of post-industrial regions, dominated by a bad kind of capitalism that needed to be re-thought.”
The unanticipated dynamics of the Brexit referendum and its aftermath placed these themes front and centre of British politics. In the Labour party, Nandy was one of the quickest to grasp the extent to which “red wall” Leave voters had come to feel disrespected and marginalised by the post-industrial economic settlement. But it was Boris Johnson’s Conservatives who surfed the Brexit wave. In the 2019 election, the Tories hoovered up traditional Labour seats and Johnson promised to level up the north. That aspiration, Nandy believes, never corresponded with core Conservative ideology and it finally crashed and burned this month, along with Johnson’s premiership. Speaking in Darlington last week, she said: “Those voices in the Tory party who tried to advance [that] agenda have been roundly defeated … as leadership contenders vie for the mantle of Margaret Thatcher, promising tax cuts, deregulation, and more managed decline across Britain. But levelling up is not dead – not for the millions who voted for change and who need and deserve to see it delivered.”
Rousing stuff. But as Rishi Sunak and Liz Truss seek a Thatcherite restoration, what would a Labour version of levelling up look like? A slippery concept and the product of unusual political circumstance, the idea has been criticised on the left for focusing only on certain types of places and people. What about the young graduate living in London with no assets and minimal disposable income? What about the minority ethnic communities, primarily in cities, whose life chances are inferior to those of their white peers? If levelling up is about equality, why should Labour embrace a narrow regional agenda inspired by Johnson’s opportunistic desire to hold on to northern seats?
Nandy’s response is partly practical: Labour needs to win back trust outside the great conurbations. “You can’t win an election by winning London, Birmingham and Manchester. If you could win by winning the cities, Labour would be in power right now.” But she believes Labour has been handed the opportunity to take “levelling up” away from a pork-barrel association with politically motivated handouts of cash, and make it stand for something much bigger.
“If this is the moment when levelling up dies in the Tory party,” she says, “it must be the moment when Labour steps in. Not to ‘nick’ the idea but to embark on a programme of national renewal.” The road to “renewal” must, she says, lead to a new economic settlement to replace the “bad capitalism” those Wigan schoolchildren railed against.
“A great rebalancing needs to take place,” she says, “bridging the divide between London and the south-east and the rest, between capital and labour, cities and towns, the asset-poor young and the asset-rich, and in terms of the status and rewards given to different kinds of work. We need to stop obsessing about the 1970s and think about how to move on from the four decades that followed. I was born in 1979, into a world that was about to be shaped by priorities that put profit over people and unbalanced society for the next 40 years. The current moment is about how to mobilise a popular desire to move out of that era.”
As the news of Johnson’s resignation broke a fortnight ago, Nandy was travelling to the eastern German state of Thuringia, in search of clues as to how this daunting task might be achieved. Germany has been a role model for British social democrats before. In the 1990s, as the last period of prolonged Conservative rule approached an end, Will Hutton’s The State We’re In championed the German social market economy and attracted the interest of a young Tony Blair. These days, Germany’s relative success in “levelling up” its eastern regions post-unification, the role of the green transition in that process and a new SPD-led government in Berlin all offer further inspiration.
“So much of what we’ve been grappling with is the same,” says Nandy after a three-day trip organised by the Friedrich-Ebert-Stiftung, a centre-left thinktank, “whether it’s the SPD in Germany, Anthony Albanese [Australia’s new Labour prime minister] or the Democrats in America. For example, there are the diverging preoccupations of more liberal, often younger voters in cities, and those in smaller places where good jobs have gone and the young go away to university and don’t come back. How do you put that coalition of interests back together?”
Olaf Scholz’s SPD has partially answered that question by focusing on themes of respect and dignity in all kinds of work, and attempting to ensure that no area is written out of the national story. In Thuringia, where cities such as Jena had a tradition of advanced manufacturing in the Communist era, state subsidies are helping a burgeoning electric vehicle industry restore a lost sense of industrial pride.
“This is exactly what we’re trying to develop in Labour,” says Nandy. “It’s what our £28bn commitment to green transition is about. Rather than allow the climate emergency and green transition to become another way of dividing people you recognise that the areas best placed to benefit from green transition are those that have been the losers over the past decades – coastal and former industrial towns where there is a legacy of engineering skills which should be transferable. So you use the state and local agencies as a convening power, investing big to create the conditions to get the private sector on board.”
The choice of the word “convening” is considered and pointed. Nandy insists that – as with federal Germany’s Länder – political power cannot be hoarded in the centre any longer. The state should facilitate, rather than dictate. Local government needs the power and funding to shape communities and allow communities to shape themselves.
In her Darlington speech, Nandy outlined a plan for a new “community right to buy” for assets deemed fundamental to local wellbeing, such as football clubs, pubs and playing fields. Empowered local government should also focus on improving the neglected status of vocational education, reviving the prestige and prospects of a non-university route to work and a fulfilling career.
Balance of power in the workplace was another theme of her German visit. In Berlin, the Labour delegation – which also included the party chair, Anneliese Dodds, and Jon Ashworth, the shadow work and pensions secretary – found union officials bemused at the British government’s confrontational approach to the RMT rail workers. “The trade unions told us – and this is something I recognise from experiences in Wigan – that when you are up against it in very tough times, as we are now, you need your workforce, because they are the people who know how things can work better and how savings can be made.”
The presence of worker representatives on German boards, and the status of unions as social partners, are the formal expression of an insight lost in Britain. “We had that moment in the pandemic,” says Nandy, “when Rishi Sunak stood in Downing Street alongside [TUC leader] Frances O’Grady and thanked unions for their constructive approach to the crisis. But it didn’t last. By bringing workers into the decision making process, governments get better decisions. I’ve never met a railway or postal worker who didn’t want their company to do well. That’s how they get their wages and continue to contribute to the common good.”
The public reaction to the RMT strikes – the widespread admiration for Mick Lynch’s defence of his members’ interests – has, she says, been telling. “It is the government who look like dinosaurs in the middle of a cost of living crisis, not Mick Lynch. In my constituency, people were not just supportive but almost relieved – not that there was a strike, but that someone was standing up and saying this can’t go on.”
Labour’s official line on the strikes has been notably cautious, but Nandy’s view of the big picture is unequivocal. “This government has deliberately tried to pit people who work in public services against the people who use them. But both groups have been screwed by a political economy in which, for 40 years, the proceeds of growth have gone largely to capital and not to labour.”
Nandy has a book out in September, before the Labour party conference. It’s called All In: How We Build a Country That Works, though she originally thought about calling it The Tilt. Taken together, the two titles go to the heart of why she believes levelling up is still vital. The thesis is that a London-centric, financialised version of capitalism has funnelled wealth, power and status upwards and southwards, unbalancing society while wasting and neglecting the talents of too many people. The deindustrialisation of the 1980s left much of the country unhappily dependent on the largesse of London and the south-east. Runaway executive pay and an excessive focus on shareholder returns have been accompanied by insecure jobs and stagnant wages. An intergenerational imbalance is turbo-charged by a housing market where asset wealth is overwhelmingly the preserve of older people.
In a party sometimes accused of intellectual timidity, Nandy is trying to think big. Solving these issues may involve more radicalism than Labour has so far been prepared to countenance. But, according to the shadow secretary of state for levelling up, the time is ripe for a bold land grab of political terrain the party should never have ceded.
Before her trip to Germany, Nandy spoke at a centre-right thinktank. “I was asked why Labour would succeed at this when, for 100 years, we have failed as a country to get regional policy right. My answer was that this is not a regional problem; it’s a national problem. When you write off most people in most places, wasting all that talent, the country cannot succeed.
“The Tories were never going to level up. But if Labour can seize this agenda it can turn Britain into the kind of country I’ve always believed in but never seen.”
Lisa Nandy’s agenda
Green Deal Germany’s east is being reindustrialised through huge investment in the electric vehicle industry, attracted by state subsides. Lisa Nandy believes a similar approach in Britain can lead to an economic renaissance in regions let down by a London-centric approach to growth over the last forty years
Local pride The Tory version of levelling up has seen central government hand out pots of cash to selected towns, leading to criticism of pork barrel politics and a top-down approach. Labour should instead promote a radical devolution of power to local communities, says Nandy, placing resources in the hands of the people who know their area best.
City living In an unbalanced economy where opportunities are concentrated in the big cities, towns are ageing as young people get out to get on. A dysfunctional housing market means that even with a high disposable income, many find themselves struggling with high rents and living costs.
Power to the people The government has portrayed the RMT strikes as a dangerous return to 1970s style union militancy. But the example of Germany, where workers are represented on company boards, shows the benefits of a consensual approach in which there is a better balance between the interests of worker and employers.