Politicians and policy experts in this country often like to compare it to Germany, with many thinking – rightly or wrongly – that it is the model of a well-functioning state. The Prime Minister did this in a recent flagship speech on his still undefined levelling up agenda.
Boris Johnson lamented how, three decades after German reunification, per-head GDP across much of the UK is lower than it was in the former East Germany.
In his own words, “to a large extent Germany has succeeded in levelling up where we have not.”
In fact, Germany has not yet fully levelled up and there are still big divides between East and West. But it has closed the gap between them in a relatively short period of time: back in 1990 East Germany’s productivity was around 60 per cent of that in West Germany, now it is around 85 per cent.
While many in the UK look to Germany as a model for levelling up, there is little understanding here about – or appetite for – the policies that the German Government has implemented since reunification.
Germany’s consensual style of politics shaped its approach to levelling up. Involving several parties ensured it had the buy-in of the whole political class – something lacking in the UK. Since he became Labour leader, Keir Starmer has only used the phrase “levelling up” twice. When it is used from the opposite benches, it is almost always with derision.
Getting cross-party support is about more than just political niceties – it shapes the policies that governments adopt. In Germany, levelling up programmes typically outlast parliamentary terms or the whims of incumbent chancellors, meaning that new governments don’t undo their predecessors’ progress. The main programme Aufbau Ost – Rebuilding East Germany – was launched with the intention of only ending once East and West Germany had equal living conditions. That could still be quite some time yet.
Here in the UK many of the policies trailed so far, such as more funding for local footfall pitches, seem designed to give Conservative MPs a positive story to tell at the next election rather than to genuinely address the inequalities that the country faces.
There is nothing wrong with short-term policies when matched by longer-term – but less eye catching – economic plans. Without these the UK will not see the same progress that Germany has since reunification.
For Johnson, this means accepting that he will not be the Prime Minister who finishes levelling up the UK – just as no one Chancellor can claim sole credit for levelling up East Germany. However, he can still set the country in the right direction and create some quick wins for voters at the next election.
To do this he must work with, rather than against, our biggest cities and their leaders – including London – to help them reach their economic potential. Only they can then create the prosperity needed to level up the whole UK.
This is what happened in East Germany, which in the last three decades has undergone an urban renaissance and a significant devolution of power down to cities.
In the early 1990s Leipzig, Berlin and Dresden had weaker economies than many small towns in the West. Now their situation has improved and, while they still trail western German cities’, their futures are bright and they increasingly attract educated young people who are changing their economic, cultural and social scenes.
For a similar result here, the Government must work with urban leaders to develop long-term policies to improve peoples’ skills and the attractiveness of cities as destinations for private investment.
The Government has so far sent mixed signals about its thinking on this – talking encouragingly about more devolution while at the same time tightly holding the purse strings to various levelling up-related funds. Meanwhile, the plans unveiled in the Budget for more skills funding are exactly the programmes it should be prioritising.
The German Government’s levelling up programmes are not yet complete and have not been without hitches. However, the ministers developing the UK’s plans could learn a lot about how their German counterparts, in partnership with states and cities, successfully narrowed the gap between East and West.