Like many Britons whose lives are lived outside of Westminster, I have a personal interest in ‘levelling up’.
The vast former steelworks at Redcar was part of the landscape of my Teesside childhood, and the industry provided employment for most of the men of my family.
Steel production dwindled over the decades before it ended a few years ago, leaving a chasm of deprivation and loss.
So the people of Teesside will be listening to Rishi Sunak – himself an MP for the nearby but more prosperous constituency of Richmond in North Yorkshire – who will be unveiling major new investment in the regions in his Spending Review this week.
Sunak plans to plough billions over five years into transport, digital, housing, energy and green projects.
Inevitably, some will question if we can afford to invest this much on levelling up. We can’t afford not to. The good news is there is no shortage of money sloshing around. The bad news is that it is in pension funds, which have a terrible record at investing in infrastructure.
That needs to change. Final salary pension funds sit on around £2trillion of assets. If even a small proportion were deployed, it would make an enormous difference.
These assets are the closest thing we have to the fabled magic money tree. But far too much is funnelled into assets giving low or negative returns such as gilts, which are basically government IOUs.
While UK pension funds have shunned infrastructure, overseas ones from Canada, California and Australia have piled in, so retired teachers from Ontario own some of our airports, including London City.
The Treasury, to its credit, has woken up to this. Along with the Bank of England and City watchdog the FCA, it has launched a working group to try to encourage them into infrastructure and green technology.
But they are up against an extremely hidebound culture. Previous attempts have come to naught, resulting in a missed opportunity on an epic scale.
Local authority retirement schemes have assets of nearly £300billion. If they invested some in their towns, working with mayors, universities and manufacturers, they could improve returns and the lives of pensioners, employees and fellow citizens.
Big City investors could also do much more. The only company active in this zone is Legal & General. No coincidence, perhaps, that its chief executive, Nigel Wilson, hails from the North East. This points to an attitude problem. Levelling up is often portrayed as fringey and only relevant to northerners. Yet it matters to everyone.
The better we are at growing our way out of this crisis, the less we will have to raise taxes and slash spending.
The pandemic has made things worse. The North East, which has suffered so much economic trauma over decades, is, according to the CBI, the least resilient region to Covid-19. Then there is Brexit. Many in the North East voted for it, but with some 60 per cent of exports from the region going to the EU, it is highly exposed to changes in the trading relationship.
Yet there is plenty of hope. On Teesside, the dream is to become the powerhouse of a new green economy. The old steel site at Redcar is now home to a pioneering clean energy project, Net Zero Teesside, that last week won £200m of state support.
It has the potential to create £450billion of economic value and up to 5,500 jobs.
We need more schemes like this and they are within our grasp. The money is there, languishing unproductively in our pension funds. It needs to be put to work.