Liverpool’s ‘levelling up’ is a model for other regions

Philippa Glover heads a small company that could represent a high tech future for the city of Liverpool. CNC Robotics specialises in bespoke robots for manufacturing. It has garnered support from four universities and the area’s established employers — Jaguar Land Rover, Unilever and AstraZeneca — to encourage talent to the region.

Glover moved to the city 15 years ago and has seen “a huge amount of change”. Liverpool’s manufacturers like CNC contribute £3.2bn to the UK economy and employ 50,000 workers in over 3,000 companies — almost 10 per cent of the region’s employment base. “The mindset of people in Liverpool is very much about ‘we will do it, we’ll make it happen’,” she says.

Although battered by coronavirus, Liverpool’s rebirth is a template for other parts of England. The city was once a byword for decline. The recessions of the 1970s destroyed its docks and manufacturing base, creating long-term unemployment and stoking social unease. The 1981 riots in the Toxteth area turned the city’s troubles into a national problem.

There was intense debate about how to respond within Margaret Thatcher’s Conservative government. Chancellor Geoffrey Howe suggested the city be allowed to go into “managed decline”. But environment secretary Michael Heseltine prevailed with an early version of what Prime Minister Boris Johnson now calls “levelling up”.

Heseltine tells me that following the riots he walked the streets of Liverpool. He recalls it as “a city that had lost its way”, adding that even in its industrial prime “it must have been a hellhole”.

Heseltine laid the foundations for an economic rebound. By forcing the public and private sectors to work together, derelict sites were cleared for redevelopment, notably with business parks. The city centre was designated an enterprise zone with tax breaks and government support for investment and jobs in new sectors.

Another innovation was the opening in 1988 of Tate Liverpool, the first regional branch of the art gallery, based in a 19th century warehouse. Helen Legg, its director, says that although some of the community was sceptical about what it could bring to the city, the benefits are clear. Liverpool’s culture sector was helping to attract up to 7m visitors annually before Covid-19.

“The gallery was instrumental in helping Liverpool become the [EU’s] ‘capital of culture’ [in 2008], which again followed on from the regeneration of the docks and really played an enormous part in changing perceptions of what Liverpool was about and also changing the ambition and the aspiration of people in the city,” Legg says.

Tourism has helped revive Liverpool, but Legg argues that the city still needs a more resilient jobs base. “There are a lot of brilliant young minds coming out of the local universities. They should be encouraged to stay.” Glover of CNC Robotics agrees that the city needs to better “nurture and grow talent”. Success, in her view, would be when young people are “faced with going down to the glamour of London, or coming into Liverpool”, they were able to conclude that both cities offered bright futures.

Legg and Glover are sceptical of Johnson’s levelling-up agenda for tackling regional inequality, pointing out that there is still no proper plan. There is certainly a lack of urgency in Whitehall, with no minister or department assigned to oversee the policy. Brexit, a comparable task in its demands on the state, resulted in the creation of a whole new department. Plus, two crucial years for delivering the necessary training, facilities and investment have been lost to coronavirus. And the absence of a Heseltine figure risks dooming the whole project.

Still, Liverpool offers lessons for improving England’s left-behind areas. Infrastructure projects — new roads and railways — can improve short-term jobs activity but do not necessarily lead to a stronger long-term employment base.

Liverpool has taken more than 30 years to build back from its worst days and the job is still not complete. But as Liverpool’s Labour mayor Steve Rotheram puts it: “Levelling up could be brilliant. It is the right thing for what the country needs at this moment . . . what I’d like to see is some substance to the words the government are using.”

sebastian.payne@ft.com