Brexit, devolution and economic development in ‘left-behind’ regions John Tomaney* and Andy Pike+ *University College London, +Newcastle University https://doi.org/10.18573/wer.231 Accepted: 03/12/18 Introduction attention of policymakers. provide a poor measure of Finally, the politics of local real economic conditions in The Brexit vote in the UK, and regional economic these places. Considering according to Andrés development are considered, their high dependence upon Rodríguez-Pose (2018), is including the kinds of incapacity benefits paid to an instance of the revenge of institutions are required to those classified as unable to the ‘places that don’t matter’. affect a new economic future seek work, Beatty and This expression of discontent in such disadvantaged Fothergill estimate the ‘real’ from places at the sharp end places1. unemployment rates in such of rising social and spatial places to be 7.5% of the inequalities has fostered the The regional political working age population in rapid rise of populism that is economy of de- spring 2017. challenging the hegemony of industrialisation neoliberal capitalism and Educational disadvantage is liberal democracy. This Beatty and Fothergill (2018) concentred in left-behind paper considers the estimate that 16 million places (Education Policy problems of these so-called people live in the former Institute, 2018). This ‘left-behind’ places – typically industrial regions of the UK – disadvantage takes complex former industrial regions. almost one quarter of the and varied forms. For Such places figured national population. While instance, the North East prominently not just among these regions have shared in region consistently has those that voted leave in the the rise in employment in amongst the best primary Brexit referendum in the UK, recent years, growth rates in school results in the country, but also among those who London and other cities have but the lowest average adult voted for Donald Trump in been three times faster. incomes (Children’s the 2016 in the US, and for Despite prolonged and far- Commissioner for England, Marine Le Pen in 2017 in reaching deindustrialisation, 2018). In addition, left-behind France in their respective these places still have a regions experience presidential elections. In this higher than national average disproportionate levels of context, this paper’s aims are share of industrial jobs, lack premature mortality (Plümper fourfold. First, we outline the white-collar and graduate- et al. 2018). Mordechai et al. political economy of ‘left- level jobs, have lower than (2018) have identified higher behind’ regions. Second, we average pay and opioid prescription rates in offer a critical account of employment rates, are more the north of England and in recent efforts to ‘regenerate’ dependent on in-work and areas of greater social deindustrialised regions. especially incapacity deprivation. The highest Third, we describe new benefits, and have ageing incidence of relative urban policy prescriptions for ‘left- populations. Headline decline is primarily located in behind’ regions attracting the unemployment figures Northern England (Pike et al. This work is licensed under the Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/. 29 2016). Such places are 2017). There is a geography legacies of inward characterised by lower rates to this; McCann (2016) investment policy include the of net in-migration of shows that regions outside of major industrial complexes economically active age London and the South have built up by Nissan in groups, lower rates of productivity levels akin to Sunderland and Toyota in employment growth in the poorer regions in Central and Derby. But many of these decade to 2008, and a higher Eastern Europe and investments proved fragile; rate of contraction following southern regions in the LG in Newport and Siemens the economic crisis and United States. downturn in 2009-2012. They Deindustrialisation has on Tyneside withdrew their have substantially higher underpinned the long-term investments shortly after rates of poverty measured by growth of regional their high-profile openings. the unadjusted means-tested inequalities in the UK The fragility of such branch benefits rate. The factors (Tomlinson, 2016). Such plant economies is long- most strongly associated disparities have been established (Pike, et al. with relative decline in the UK exacerbated more recently 2017). Stirrings of economic are skill levels, industrial by several geographically nationalism and even ‘de- history and location at city, uneven trends, including globalisation’, have rendered regional and national scales. skill-biased technical change strategies based upon the City size and the reduced which has disadvantaged continued attraction of flows presence of consumer those regions with low mobile manufacturing services in places that are educational attainment; trade over-shadowed by larger shocks arising from greater investment more difficult for neighbours are key international integration of UK regions, especially in the differentiating factors markets (Sandbu, 2016); and uncertain context of Brexit between places in relative the rise of ‘residential and future trading relations. decline. Some places with capitalism’ in which Enterprise policy typically weak economies and lower economic growth is based on stimulated unsustainable value housing markets appreciating assets values market entry by short-lived experience both selective (Ryan-Collins, et al. 2017). businesses, displacing out-migration of higher Left-behind places typically incumbents (Storey et al. educated people and are the wrong side of such 2008), and encouraged selective in-migration of developments. ‘reluctant entrepreneurs’ into disadvantaged, often unwell, starting low-value service people with high levels of Former industrial regions enterprises (Turner 2003). social need (O’Connor, have been subject to waves While rising productivity 2017). of policy innovation and means existing employers intervention. Under the are likely to shed workers to Former industrial regions Thatcher and Major remain competitive; indeed, have presented a persistent governments, priorities problem for public policy some consider the remaining included, first, providing across the developed world jobs in ‘left-behind’ places financial and regulatory for several decades. While especially vulnerable to incentives to attract the rapid decline or automation (Centre for international manufacturing disappearance of Cities, 2018). employment in traditional investment to the former industries has occurred industrial regions, enabled by In this context, there has across North America and the UK’s membership of the been a search for new Europe, the scale of these Single European Market. approaches to economic changes has been especially And, second, encouraging development. Currently, a marked in the UK and adds to entrepreneurship through the powerful orthodoxy suggests the urgency of the issue. The promotion of enterprise that cities offer productivity UK’s ‘productivity puzzle’ based upon self-employment and growth premiums continues to vex and business start-ups. The because they generate policymakers (Haldane, 30 agglomeration economies have been ambiguous at globalisation through its through their scale, density best. Widening social and specialisation in financial and diversity. In this way, spatial inequalities between services, the attraction of London acts as the dynamo and within cities and regions multinational companies, that powers the UK are the accepted foreign investment and economy, through its consequence of this international migrants, and benefitting from rising asset financial, digital and approach and, for some, are values, London has knowledge-intensive the sign of a dynamic rather effectively ‘de-coupled’ itself business services (KIBS) than lagging economy from the rest of the UK and provides an economic (Glaeser, 2013). Such economy (see also Beatty development model to which interpretations underline and Fothergill, 2018). Very other places should aspire. views that see efforts to little of London’s growth has The recent growth of revive lagging industrial been driven by migration Manchester, based on the regions as having failed and from elsewhere in the UK expansion of services and being counterproductive; (McCann, 2016) property development, has better to enable migration to been presented as the model London (or other large cities) Similarly, there is little for other city-regions (Moran, where more productive jobs evidence that faster-growing et al., 2018). are plentiful (e.g. Leunig, cities in the North are contributing to the growth of 2008). Public policy now aims to neighbouring places. The facilitate the further growth of economic performance of large cities – typically by The limits of ‘regeneration’ cities is crucially determined easing planning restrictions by the region in which they are located. Cities in to allow more development. Reeves (2018: 30) has southern England and Recently, city-centre cogently summarised the Scotland have tended to regeneration has acted as a limits of recent policies: “[I]ndustrial strategy has grow above the national proxy for industrial strategy tended to concentrate on average, while cities in (Berry, 2018). The Northern cities as engines of growth, northern England grew more Powerhouse, for instance, on property development, slowly (McCann, 2016). operates