'A friend of the North? The signs aren't good for Ms Truss'

·3-min read
Future PM? Liz Truss will not be friend of the north, according to our letter writer. <i>(Image: PA Wire/PA Images)</i>
Future PM? Liz Truss will not be friend of the north, according to our letter writer. (Image: PA Wire/PA Images)

LIZ Truss, contender to become our next Prime Minister without having a general election, has revealed she will be no friend of the north.

She announced (and then quickly U-turned on) a proposal to cut the future wages of what she described as ‘civil servants’ based outside of London via the introduction of Regional Pay Boards.

This, she said, would reduce ‘waste in Whitehall’, which as everybody apart from her knows is a place in the centre of London and the very place where she does not intend to cut the wages she regards to be wasteful.

The detail unravelled when it was pointed out that such a system would imply cutting the wages of people like teachers and nurses working outside of London.

She argued that she didn’t mean cutting their wages, but did not clarify whose wages she did intend to cut.

Her only clear undertaking was to withdraw her proposal to establish Regional Pay Boards as their wider remit would be a catch-all including teachers and nurses.

She did not explain how she had managed to include nurses, who work for the NHS and not Whitehall, and teachers, who work for local councils and not Whitehall, within her definition of Whitehall workers.

What she had managed to do was signal to the 160,000 Tory party members who will decide whether she or Rishi Sunak will become their next leader – and thereby decide for the rest of us, without our consent, who will be our next prime minister – that she considers there is too much money being taken in taxes being spent on public sector wages, and that is a ‘waste’ she will cut.

For decades there was a system of London Weighting Allowances.

These were introduced to get much-needed workers into London following the devastation caused by German bombing raids during the war resulting in housing shortages and thus high rents.

This system has now been largely abandoned in the public sector, while of course London continues to attract the highest wage earners in the private sector as so many businesses are headquartered there.

There is thus a resentment between the public and private sectors in London, with the latter poaching from the former by offering premium salaries.

But why is the cost of living considered to be so much more expensive in London than the rest of England?

A tin of beans costs the same, a kilowatt of electricity the same, and a glass of water the same.

And as we are now beginning to learn through the evidences emerging from the Levelling Up agenda, things like public transport in London are far more freely available and cheaper than it is in the rest of the country, so that can’t be it.

I believe there are two main drivers.

The first is that London has always been the Capital of Conspicuous Consumption where the rich flaunt their ill-gotten gains and surplus wealth, and the rest look on in relative envy.

The second is the cost of housing in London. It is arguable that part of this high cost has actually been driven by London Weighting Allowances – after all, if the cost of everything else is much the same or lower, what else is there to spend your extra income on other than the home you live in?

This drives house price inflation, and this is further driven by relative shortages, which feeds into the fixation on ‘getting onto the first rung on the property ladder’ which then drives inflation even more.

We should note that the Bank of England has just removed a stress test whereby lenders assess the ability of would-be mortgage borrowers to ensure they can cope with increased monthly payments.

So just as inflation is kicking in, a stress test for inflation is being removed. You can guess where that will end.

The bottom line is that Liz Truss as PM would signal the end of Levelling Up the North.

Which is another way of saying the Tories will not win the next election – it will be down to Keir Starmer to lose it.

So anybody’s guess!

Bill Finlay