CPP’s annual Local Economy Tracker explores how people feel about the economic opportunities where they live, what they think needs to change and which political parties and tiers of government they trust the most to deliver improved economic opportunities.
This year the tracker paints a deeply fractured picture of the UK’s economic landscape. Generally, those living in parts of the North of England and the devolved nations are more pessimistic about their long-term local economic outlooks than those living in London. Those living in former industrial heartlands and those living in the most deprived 20% of places are particularly concerned about economic opportunities today and pessimistic about the economic prospects for their places.
Lack of confidence in the Conservatives to deliver economic improvements in local areas
Half (50%) of the UK public think policies introduced by the Conservatives would have a negative impact on their local economy over the next 5 years. Just 9% of people think their impact would be positive. As a damning indictment of the government’s levelling up agenda, this distrust was felt most strongly (by 58%) in those areas that were supposed to be a core focus for policy action – former industrial areas, the North of England and areas of higher deprivation.
The jury is still out when it comes to Labour
By contrast, views about the Labour party’s ability to improve local economies are equally split: 27% positive, 27% negative– although the most common view on Labour in this respect is that they “will make little difference” (36%).
Economic pessimism highest outside London
The only part of the country with a more positive outlook than negative over the next five years is London, where 42% of respondents think their economy will improve and 29% think it will get worse.
Widespread lack of confidence that local economies can serve the needs of young people
77% of people are not confident that their local area can provides good economic opportunities for young people (19% are confident). This feeling is widespread, with at least 66% of respondents in every part of the UK expressing a lack of confidence.
Private renters most pessimistic about economic inequality in their areas
39% of private renters think the local economy will become less equal over the next 12 months (compared to 29% across the UK population as a whole). A similar proportion of renters (39%) think the economy will become less equal in the next 5 years (compared to 31% of homeowners).
More affordable housing was the most selected solution from a list of options to improve peoples’ local economy over the next five years, along with health, with 28% of people selecting either option.
Widespread scepticism about the ability of all tiers of government to improve economic conditions for local areas – though mayors fare best on this front
38% of people think policies from central government would have a negative impact, rising to 49% of those living in the Yorkshire and Humber region.
Of all tiers of government, regional mayors are expected to have the best impact for local economies with 21% of those living in metro mayoral areas thinking they will have a positive impact (although 24% say negative). This level of optimism about mayors is highest in the North West, with 37% expecting mayors to have a positive local economic impact.
CPP believes the pessimism identified by this year’s Local Economy Tracker should be a wake-up call to political leaders. CPP advocates for proactive investment in the drivers of fair growth, including high quality public services and an effective industrial strategy. Options for how an incoming government can fund these productivity-enhancing investments are set out in CPP’s recent report, Funding fair growth: How to transform the UK economy. They include reforming fiscal rules and reforming the UK tax system, including by abolishing ineffective tax reliefs on oil and gas companies.