“Stepping Up to Level Up”: Why UK businesses should care about inclusive growth
With Levelling Up in the headlines, what role can UK businesses play in supporting sustainable and inclusive economic growth? We sat down with John Godfrey, L&G’s Director of Levelling Up, to hear more about how major UK businesses like L&G can help boost growth, raise living standards and restore local pride.
“Levelling Up” is sometimes viewed as an imprecise phrase, a politically convenient catch-all that covers anything and everything.
But when described by John Godfrey, Legal and General’s Director of Levelling Up, there is no imprecision. Godfrey is crystal clear on the key challenge that Levelling Up is seeking to solve.
“We are quite simply punching below our weight,” he explains to The House. “The problem essentially is the UK, with the exception of London and the South East, is a low wage, low productivity economy. We need to turn it into a high productivity, high wage economy. Of course, this isn’t just a straightforward north/south issue - London has areas of deprivation and the North has prosperous places, so it is important to co-create more granular solutions.”
It is clear listening to the passion with which Godfrey speaks, that this is not a case of a business opportunistically jumping onto a passing political bandwagon.
In fact, it is fair to say that it feels more like the opposite, that politicians have themselves caught up with a model of investment and growth that L&G has been advocating for more than a decade.
Indeed, for Godfrey, the roots of levelling up can be traced back even further. At one point during our conversation, he speaks enthusiastically about seeing the Piece Hall during a recent visit to Halifax.
“The civic confidence that was around in the 19th century. You see it in these brilliant civic buildings!” he exclaims. “That’s real pride. If we could get back to a modern version of that, that would be a big levelling up tick in the box, wouldn’t it?”
This statement tells you a lot about Godfrey’s worldview. He views regeneration and urban renewal as a long-term project with deep historical roots. It is a tradition within which he firmly locates L&G. He now wants to see other businesses making a similar commitment to help transform local areas.
To help drive this ambition forward, L&G recently launched a new initiative called Rebuilding Britain: Stepping Up to Level Up. This campaign will bring government and business together to explore new ways to drive local growth.
Asked about the timing of the launch, Godfrey suggests that new political structures have created an opportunity for businesses to play more of a role.
“Devolution is immensely helpful,” he tells The House. “If you look at Greater Manchester or the West Midlands, what you’ve got in both places is strong political leaders empowered to get stuff done.”
Godfrey is equally clear that this new breed of political leaders, regardless of party affiliation, is keen to see private investors play a fuller role in delivering local prosperity and growth. However, he cautions that this only works when businesses adopt a genuine partnership approach that recognises the complementary roles that they and local leaders each play.
It is an approach that is proving highly successful for L&G with 18 big, live projects across the country from Sunderland to Cardiff.
“The key is to find the best partners to work with,” he tells us. “There are some outstanding Local Authorities and local leaders who have helped us on this journey. Co-create a vision and then co-deliver it. That is the only way to deliver success.”
L&G’s commitment to developing strong local partnership approaches is increasingly being emulated by other businesses. When I ask Godfrey whether L&G feels that others are stepping onto its territory, he instantly rejects the idea.
“No. We want more people to join us,” he explains. “When we first started doing this, mainstream opinion in our industry was, ‘what on earth are you doing that for?’ But by the time we got to phase 6 or 7 we had other people competing for the same assets. That is fantastic. You have mainstreamed something.”
Whilst L&G have been actively investing in regional cities for some time, Godfrey is heartened to see other businesses now stepping forward to make it a mainstream activity.
“There is absolutely nothing wrong with CSR and philanthropy, but if that is the way you think about social impact it is always going to stay small,” he explains. “If you make sure that 100% of what you do has a positive social impact as well as earning you a profit, what we call Inclusive Capitalism, then you can really change things at scale.”
That commitment to delivering at scale is demonstrated in L&G’s actions as well as its words. The work that the company has led around housing supply is a prime example of how social and economic goals can be complementary. The business owns a factory in Selby that is building houses using Modern Methods of Construction. It also has a longstanding commitment to building both affordable and market rent homes.
Godfrey is similarly passionate when describing the potential of UK businesses to play a greater role in building a healthier nation. He describes the gap in life expectancy between different areas as, “the most profound inequality that there is.”
L&G’s commitment to health has recently led to the company launching a four-year partnership with Sir Michael Marmot and University College London to explore the role that UK businesses can play in reducing health inequalities. One of the new partnership’s first outputs was the recently published landmark report, The Business of Health Equality: The Marmot Review for Industry.
Godfrey believes that the report is well-timed, with Covid highlighting the importance of the relationship of business and health. He is keen that we build on the learning that emerged from the pandemic.
“The pace at which people could do things was hugely accelerated,” he explains. “The vaccine programme, the ability of businesses to change business models, more flexibility. We can’t lose the strides that we made.”
From health, to housing, and startups to regeneration, the scope and scale of L&G’s ambition around Levelling Up is undoubtedly impressive.
But if business investment is unlocked to close the gap in regional performance, then the impact could be transformational. Godfrey describes the prize on offer as, “a series of regional cities, all performing to the best of their ability, all performing more or less as well as London does.”
Business leaders, politicians, and the public would all agree that is a prize well worth winning.
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