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Traditional ‘trickle down’ economics have failed to spread opportunity across UK, Michael Gove admits



Traditional Conservative economics has failed to spread wealth and opportunity across the UK and a greater role needs to be played by the Government, Michael Gove has admitted.

Signalling a major departure from the Tory doctrine, the Levelling Up Secretary conceded that the concentration of wealth and power in the South East had increased inequality over the last 50 years.

In his first major speech since setting out the Government’s long-awaited levelling up White Paper, Mr Gove told an audience in Liverpool that it was “simply wrong” that people and communities in the North and Midlands had limited life chances and fewer opportunities than those in the South East.

Mr Gove said it may seem “odd” for a politician on the Right of the political spectrum to say, but he admitted that “trickle down economics” had failed the country.

He added: “There’s been a traditional economic view, not just on the right but generally on the right, which says that the market will find its own level.”

Under such a view, he said, if one part of the country is overheating, such as London and the South East, then eventually higher rental costs, increased congestion and the added difficulty of doing business would mean jobs and investment would move elsewhere.

“But actually all our experience is that that is not the case,” he conceded.

And he added: “Unless government takes a lead then what we see is an agglomeration effect. What people have called the Matthew effect: ‘to them that have more shall be given’. And that is why government has to act.”

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While Mr Gove insisted that it should not be up to central government to dictate where money is spent, his departure from free market economics is likely to go down poorly among the right wing of the Tory party.

The former education secretary said it was vital that “the state has a particular role to play in partnership with local government and the private sector in order to improve growth and to improve life chances”.

When the Government unveiled its plans to level up the country, former Brexit minister Steve Baker branded the proposals as “socialist” and called for more “Conservative policies”.

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