With less than a week to go until the general election, we know a few things about what is coming next. For example, it is almost certain that our next Prime Minister will be our first knighted Prime Minister since Sir Alec Douglas-Home in the early ’60s. 

Unlike Sir Alec, who came in with an economy growing at a roaring 4% per annum, the economy that Sir Keir will inherit has been stagnant in real terms since 2010. 

As a result, we have heard plenty about how “there is no money” for ambitious policy agendas and the talk is about how to convince private investors with a global purview that the UK is the place for them to park their money.

But, where there are ways to achieve social goals without additional money, we still hear rhetorical commitments to making things better.

As someone who lives in one of the UK’s less affluent (but still wonderful) cities – recently dubbed by its own newspaper as “Austerity City” – tackling regional inequalities is one of my top priorities. 

So, just to be helpful, I have put together a quick list of 5 ideas to help tackle regional inequalities. And, even better, the only capital they will cost is political. 

1. A regional growth mission board

One of the few pieces of Whitehall Architecture that we think is likely to take place after the election is mission boards. According to a recent FT article these boards will “be headed by Starmer himself, would draw on private sector expertise and may be granted powers to help deliver policy”. At the same time, “the Treasury would focus more on attracting investment and driving growth — as well as its traditional fiscal functions”.

While all of this is welcome (though, let’s be honest, giving the Treasury more power may prove a double-edged sword), we know that closing regional inequalities is really hard, but it’s really popular. Levelling up, as it used to be known, propelled Boris Johnson to his enormous majority and the “Red Wall” remains a key swing area. It would be a good move both politically, and policy-wise, therefore, to have a regional growth board to tackle this thorny economic challenge. The board could be made up of regional and city mayors, private-sector investors, and third-sector specialists who can drive key policies and act as Ambassadors for the interests of the poorest places in the country. 

2. Aligning Economic Clusters with Industrial Strategy

Policy wonks from a diverse set of political traditions have been delighted by Labour’s embrace of Industrial Strategy. One count has over 50 think tanks, business groups, and firms calling for an industrial strategy. It will help the UK set out its prospectus for investment to the UK’s private sector, to foreign direct investors, and, most likely, to our own public sector.

But, we know that sectors tend to cluster – they form around hubs. This gives employers access to talent, and employees access to employers without having to uproot your whole life when you move jobs. Clustering also creates networks that help drive innovation and in turn, attract investors.

The canonical example is Silicon Valley, but in the UK you could easily refer to biosciences in Cambridge, or Financial Services in London. Across the red-walled major cities, we have the seeds of similar clusters, media in Salford Quays in Manchester, gaming in Dundee, or manufacturing in the North East. 

So, when we come to make our new industrial strategy, we should think about how we align our offer with the places that we want that investment to benefit. 

3. 100% business rates retention for our big cities and combined authorities

This is where we get to the tax section. The truth is that tax changes can’t fix a lot of things, but they do set the frameworks and incentives which encourage different kinds of behaviour from businesses, Governments and Local Authorities. These can then either reinforce vicious or virtuous cycles of development.

As part of that goal, in 2013 councils were permitted to retain half of the business rates in their local patch. Now, we hear major Combined Authorities and Local Authorities calling for full retention of rates. In principle, this is a great idea. 100% retention increases the incentives to make starting and growing a business as simple as possible.

After the introduction of 50% rate retention in 2013, the LGA surveyed councils and 2/3rds of them said that it increased their incentives to widen their business tax base. This means more businesses contributing to local areas. If, at the same time, the Government reformed the rates system to encourage investment and to remove some of its quirks like the deflator, then we really might be cooking with growth gas.

4. Introducing local income taxes

I think this one might be ruled out because of the vague commitment not to raise taxes on working people. But I am ruling it in because Westminster wouldn’t have to be the body responsible for levying these taxes. Combined Authorities and Local Authorities, instead of being reliant on our regressive and economically stultifying property tax regime, could instead raise taxes based on income. A local income tax certainly wouldn’t remove the downside of making it even easier for rich councils to charge lower taxes than poorer areas, but some kind of redistribution mechanism to move money across councils could likely smooth over much of this problem.

But the major upside is the enormous scale of revenue that local income taxes would bring in. An IFS analysis found that just 1% of local income tax on all tax bands would yield around £6 billion, equivalent to almost 15% of councils’ core budgets. For most local councils this might help their revenues keep up with inflation and rising demand for their core services. For those with more ambition, these taxes could do what they do in France and basically fund an entire local public transport system. 

5. Residential property tax reforms

Stamp duty and Council tax may be my two least favourite taxes in the UK’s plethora of arbitrary and absurd taxes.

Council tax hits the poorest the hardest and the poorest in the regions even harder. Almost unbelievably, my two-bedroom flat in Liverpool incurs several hundred pounds more than Buckingham Palace.

Stamp Duty stops people from moving and clogs up our already overpriced and undersupplied housing market. If we have any interest in encouraging our increasingly elderly population to move back towards towns and cities where they can get real services and live independently, then Stamp Duty has to go. 

The benefit of sweeping away the whole lot and replacing it with something like a land value tax or a proportional property tax would be hundreds of pounds a month in the pocket of the median voter, and a huge uplift for development where land value is already high helping to encourage building in the areas of highest demand.

A combination of these would no doubt require a significant amount of political capital. But, if we are going to finally try to ‘level up’, then some version of these policies will be necessary in the long run. Getting them done early in a Parliament gives them the best chance of bedding in with voters and creating the positive externalities that might keep Northern voters putting their crosses in the Labour column.

It might also raise a pound or two for UK PLC along the way, so what’s not to like?