The new conservative leader should level the north the Bilbao way
As the Conservative Party leadership roadmap ventured north to Darlington last night, the two candidates, Liz Truss and Rishi Sunak, faced fresh calls to set out their respective plans for “ Upgrade “. Delivering new opportunities and investment to Britain’s ‘forgotten’ towns was a central theme of the Conservatives’ 2019 election victory – and branded a ‘defining mission’ by Boris Johnson on the steps of Downing Street. And it will now be up to his former chancellor or foreign secretary to stick to the agenda and deliver on his promise to voters.
For Truss and Sunak, it will be a tough sell. A recent report by the End Child Poverty Commission found that nearly two-fifths of children in the North East of England live in poverty. While productivity levels, between London and much of the north, point to a nation divided in terms of economic activity. These are problems that cannot be fixed overnight.
The challenge, however, is not insurmountable – and if they seek a credible plan on how to truly “level” parts of the North, the development of Bilbao and the surrounding region of Biscay, in the Pays Basque, over the past 40 years, could serve as a guide. This region in the northeast of the Spanish state shares many similarities with towns like Darlington and other “forgotten” towns in the UK, and was decimated by the industrial decline of the 1970s and 1980s. the 2008 recession hit, its unemployment rate soared above 16%, and productivity and wages plummeted. Some skilled workers left the region for cities such as London, Munich and Paris, and local opportunities quickly dried up.
Yet now, less than 15 years later, Bilbao and the surrounding region of Biscay are a hive of activity, and a region that boasts levels of education and GDP per capita comparable to Sweden. Unemployment rates are the lowest in the state, as are levels of income inequality. Ordinary families are also feeling the benefits of the success of “upgrading” the region as a whole, with household incomes in the top quartile of OECD regions, and their once gritty post-industrial cities, Bilbao and San Sebastian, now world centers. for culture, gastronomy and advanced services.
What makes the Basque model unique and successful is its genuine commitment to decentralization. The provincial government of the Basque Country, Biscay, has its own fiscal powers, for example, and can tailor its policies specifically to the needs of the region. This has made it attractive to international investors and workers, with the region not only home to innovative new start-ups, but also major global employers, including Mercedes-Benz and personal watercraft.
If Truss or Sunak replicated this, across the North they could attract new industry and new workers to alternative urban centers outside of London and boost the regional economy. The case for this kind of decentralization has been backed by think tanks, including the Center for Cities, which recently produced a report citing a “lack of leadership” as the main bulwark in the “race to the top”.
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Investment will also be essential, especially in a context of economic uncertainty. During Bilbao’s industrial recession in the 1980s, the government of Biscay invested in a new technology park, which played a key role in the city’s development as a hub of European technology industry. Comparable commitments to the northern regions of the UK would show that the government has a long-term strategy for their development.
The same should apply to education. Former Conservative leadership candidate Tom Tugendhat has rightly identified that investing in this area is fundamental to ‘getting up to speed’ and has pledged to create new institutes of technology across the Kingdom. -United. Truss or Sunak would be wise to follow his lead on this and see the benefits of upskilling the UK workforce, where possible. This was a key pillar of Basque success, post-2008, and now puts the region near the top of the pile in terms of educational attainment, with 26% of residents holding advanced degrees in STEM (Science, Technology, Engineering, and Mathematics) – double the proportion of the EU and US.
And, finally, both candidates would be willing to consider the benefits that cultural investment can bring. To date, under outgoing Prime Minister Boris Johnson, ‘levelling’ funds have been allocated to small-scale projects, such as local libraries and community arts centres. This is important, of course, but so is the establishment of cultural icons, which attract external funding streams. In our case, we have the Guggenheim, once scorned, but which today symbolizes the Basque turnaround – it is the beacon of a once destitute city which now contributes 425 million euros to the regional GDP, generates more than 9,000 jobs and increases attendance sightseeing. He was the catalyst for the realization of a large-scale urban renewal programme, including a new metro system and a business centre.
The term “upgrade” can be a slogan. But regional inequalities are real. It’s something that should weigh on the minds of Truss and Sunak as they speak with voters in Darlington and the North over the next week.
Ivan Jimenez is the general manager of Bizkaia Talent, created by the government of Vizcaya in the Basque Country as part of its strategy to revitalize the region.