Levelling up: don’t copy the Germans

‘Germany has succeeded in levelling up where we have not,’ Boris Johnson claimed back in July last year, when talk of pork pie putsches lay far off in the future. But as the government unveils its levelling up plans today, the promise of a German-style investment package is unlikely to materialise. And that’s probably a good thing. Germany’s economic and social reunification is not the miracle it is claimed to be.

In many ways, East Germany and the left-behind regions of Britain have similar economic problems, if for different reasons. When the Berlin wall fell in 1989, East Germany’s largely nationalised economy was sold-out to private investors at breakneck speed. Industrial production fell by two thirds within the first two years. Accordingly, the region’s GDP shrank by 13 per cent in the first year, followed by another 20 per cent contraction in 1991. As unemployment rose to eight per cent within six months, socialist subsidies on rents, childcare provision and food prices were scrapped, flinging hundreds of thousands into destitution.