L&G Chief Says UK Has ‘Gone Backwards’ in Efforts to Level Up

The UK has “gone backwards” in its effort to level up the regions and spread prosperity outside of London, according to Legal & General Chief Executive Officer Nigel Wilson.

(Bloomberg) — The UK has “gone backwards” in its effort to level up the regions and spread prosperity outside of London, according to Legal & General Chief Executive Officer Nigel Wilson.

A series of shocks, sky-high inflation and a lack of investment have left vast swathes of the UK suffering through a historic fall in living standards, Wilson said.

His comments came as L&G – the UK’s largest investor – published its quarterly Rebuilding Britain Index, which showed that the prosperity gap between London and the poorest parts of the country was widening.

This will come as a blow to Chancellor Jeremy Hunt, who billed his fiscal statement earlier this month as a “budget for growth.” It included several measures designed to improve regional inequality, such as plans for 12 low-tax “investment zones” across the country and more than £760 million ($930 million) for local projects.


Levelling up was the flagship policy that secured a landslide election win for then-Prime Minister Boris Johnson in 2019, as the Conservatives won over longtime Labour supporters in the Midlands and North of England. 

The pledge was maintained by his successor Rishi Sunak. However, support for the Tories in so-called Red Wall districts has evaporated. Now the party trails far behind Labour in opinion polls, with a general election expected in little more than a year.

At L&G, Wilson called on the government to “stop playing on the fringes” and push ahead with planning reform and investment partnerships “if it is serious about leveling up.”

“Leveling up hasn’t really started, has it?” Wilson said. “It’s gone backwards. When we launched the index we thought going forward we’d be calibrating the progress that’s been made. But it turns out it’s been negative.”

The Rebuilding Britain Index surveys 20,000 people across the UK and covers areas such as health and social care, housing, jobs and economic prosperity and the environment. 

Pay Cuts

The score recorded by the index has been stuck at 65 since last July, and has only improved from 64 since L&G collected its first wave of data in December 2021. 

For working households, this has translated into 95% taking a real-terms pay cut over the last 12 months, with the poorest affected most severely.

Almost half of households, at 47%, are concerned about being able to keep up with rent and mortgage payments, and 54% have reduced day-to-day spending. 

“The 19th and 20th centuries saw massive progress [in living standards], but the 21st hasn’t for the average person — and for the poor person it’s even worse,” Wilson said. “We’ve got exclusive capitalism, not inclusive capitalism.” 

He blamed the concentration of power in Westminster for worsening regional inequality, and said central government must improve its cooperation with local authorities and private investors as a matter of priority.

“It’s regulatory reform, planning reform, policy reform and tax reform” which are needed to make the government’s growth strategy consistent with attracting investment, Wilson said. “Because if you stand back from this report, what you see is real median wages are less today than they were in 2006/7.”

L&G’s report said a “more joined up approach, through further government and industry collaboration, will result in the type of impact that is really needed in the places that need it the most.”

Wilson conceded that parts of Hunt’s budget earlier this month did show promise, especially the measures which will see more power devolved to areas such as the West Midlands.

“But it’s all about the delivery now, and government tends to assume the job is done when they’ve made the announcement,” said L&G Director of Leveling Up John Godfrey.


Read more: 

  • BOE No Longer Expects UK Living Standards to Fall This Year
  • UK’s Poorer Regions Fall Further Behind in Blow to Sunak’s ‘Levelling Up’ Pledge
  • Wilson Warns of ‘Low Growth, Low Wage’ UK Economy (Podcast)
  • Investment Zones Are No Silver Bullet for UK: Matthew Brooker

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