Reform’s rise is a productivity warning, not a culture war victory

“Reform’s wins at the local elections have been largely attributed to identity and culture wars. But Grace Lordan argues that it’s economics that explains the results. Over the past few decades, the uneven distribution of productivity across England has led to the systematic exclusion of talented working-class people from jobs and wages. The election results are a sign of that economic exclusion. The numbers from last week’s local elections are clear. Reform UK won over a quarter of the national vote and control of fourteen councils. Labour lost nearly fifteen hundred councillors. The instinct across much of the commentariat has been to reach for the usual culture war frame. Immigration, identity, a backlash against liberal values. I want to offer something different. Not because the cultural dimension is irrelevant, but because it is insufficient. As an economist who studies productivity , labour markets, and what inclusion actually does for growth, I see something else in these results. The compounded cost of economic exclusion, finally expressing itself at the ballot box. The towns that voted Reform are not anomalies. They are data points. The geography of Reform’s strongest results maps closely onto a pattern that economists have documented for years. The Productivity Institute has shown that London’s productivity now stands at around 170 per cent of the UK average. A gap that has widened sharply since the late 1980s. NIESR’s analysis is equally stark. Firms across the north of England, Wales, and Northern Ireland lag 15 to 20 per cent behind the national average, and if cities like Manchester, Birmingham, and Glasgow had grown at London’s rate between 1992 and 2015, UK output could have been £120 billion higher over that period. This did not happen by accident. The Resolution Foundation’s Bridging the Gap report found that four factors account for around 40 per cent of spatial variation in productivity: the size of the local economy, human capital levels, and access to physical and intangible capital. All four have been chronically underfunded outside London and the South East. The IFS has since documented a further deterioration. After the 2008 financial crisis, investors began to demand far higher returns to put capital outside London, effectively splitting the UK into two financial worlds. Skills and investment continued to concentrate in already-productive places, while everywhere else was left to manage what the Productivity Institute describes as a vicious cycle of low skills, low wages, and low productivity. LSE’s Andrés Rodríguez-Pose , has argued the dynamic of “persistent poverty, economic decay, and lack of opportunities” causes the people living in places that don’t matter to take their revenge at the ballot box. We saw it in the Brexit vote. We saw it in 2019. We are seeing it again now. This is, at its core, an inclusion failure My research centre The Inclusion Initiative at LSE currently studies how diversity and productivity interact from education through to the labour market. The premise is not a moral one. It is an efficiency one. When people cannot access good work because of where they live, what school they attended, or who their parents are, that is waste. Wasted human capital is wasted GDP. The Social Mobility Commission’s State of the Nation 2025 report describes left-behind communities as “the defining social mobility challenge of our generation.” In post-industrial towns, coastal areas, and former industrial heartlands, entire communities face deep-rooted disadvantages that compound across generations. The Sutton Trust’s Opportunity Index makes the same point. Of the twenty constituencies offering the best social mobility prospects for disadvantaged young people, all twenty are in London. A child on free school meals in parts of the North East has a fraction of the chance of reaching a top-earning profession as a similar child in a London constituency. Research published by CEPR draws the link to productivity directly. Barriers faced by people from less privileged backgrounds (unconscious bias in hiring, lack of professional networks, exclusion for not “fitting in”) result in a systematic misallocation of talent, with highly capable people locked out of the roles where they would contribute most. In other words, a lack of inclusion causes the notion of a meritocracy to fail. Inclusion was never communicated as what it actually is. Here is where I think the Labour government, and the broader progressive consensus, made a big error. Inclusion, as practised in British public life over the past decade, became associated almost entirely with identity representation. Board diversity statistics, gender pay gap reporting, visibility targets in public institutions. These things are not wrong. But they were experienced by many working-class communities as policies designed for other people. Real inclusion, in the economic sense, is about removing the barriers that prevent people contributing their full capability to the economy. It is about skills investment in post-industrial towns. It is about tackling class bias. It is about the organisational conditions (clarity, fairness, psychological safety) that research consistently links to higher team productivity and innovation. This is the case for inclusion I have spent fifteen years making to business leaders, grounded entirely in productivity logic. That case was not made to the electorate. Instead, inclusion became a culture war flashpoint. Something to be defended rather than explained. The consequence is that voters with genuinely legitimate economic grievances came to see inclusion as nothing to do with them. That is a catastrophic failure with real electoral consequences. Reform’s diagnosis is often right. The harder question is the prescription. Reform did not win on false premises. Its critique of an over-centralised state, a planning system that stifles growth, and a political class that has ignored left-behind communities for decades is well-grounded. It is supported by serious research, not just grievance politics. On tax structure, there is expert agreement in places. The IFS has acknowledged that replacing stamp duty and business rates with an annual property tax, as Reform proposes, is a direction of travel with economic merit, since both taxes in their current form penalise mobility and productive investment. The problem is not the diagnosis. The problem is the gap between the diagnosis and the prescription. Reform’s fiscal platform promises roughly £70 billion a year in tax cuts, funded substantially by abandoning net zero commitments. The IFS has assessed this platform directly: “even with extremely optimistic assumptions about how much economic growth would increase, the sums do not add up.” The claim that tax cuts will pay for themselves through growth is, in the IFS’s words, “not credible.” A government can only implement parts of this package. This means trade-offs and losers that the manifesto does not specify. More directly relevant to the communities that just voted Reform in, the UK’s productivity problem is not primarily a tax problem. It is an underinvestment problem. This under-investment is in skills, local infrastructure and the institutional capacity of second-tier cities. UK employers are already cutting training budgets, with the Department for Education’s Employer Skills Survey recording spend at its lowest level since 2011 and employees receiving just 5.7 days of training on average, the lowest ever recorded. Policies that further reduce institutional investment would deepen the very conditions Reform voters are trying to escape. None of this is a reason to dismiss the Reform vote. It is a reason to take seriously the obligation that comes with it. Winning councils in Thurrock, Sunderland, and Barnsley is not an end point. It is the beginning of an accountability test that will be far more rigorous, and far more consequential for real people, than any election night result. The question every serious party now faces. The fracturing of British politics is structural, not cyclical. As the Institute for Government observed in the aftermath of these results, no single party commands a substantial section of public confidence. This fragmentation is here to stay. That fragmentation will persist for as long as economic geography remains so deeply unequal. Rodríguez-Pose’s framework is clear: the political consequences of ignoring left-behind places are not a one-time shock. They compound. They return, amplified, at every subsequent election. Closing the productivity gap between Britain’s regions is not a nice-to-have. It is the a key growth challenge facing the country. The productivity puzzle that has confounded British policymakers since 2008 is, in significant part, an inclusion puzzle. A failure to invest in the human capital of millions of people in the places that successive governments decided, implicitly if not explicitly, did not matter. Reform’s success should be read as a signal, not a sentence. It tells us that growth concentrated in London, credentials-dependent, invisible to millions of working people, is not working. People have now found a vehicle for saying so at scale and they should be heard. The substance of any credible response has to be the same regardless of which party provides it. More people, in more places, with the skills and the opportunity to contribute their full capability to the economy. That is what growth looks like. That is, in the end, what inclusion is for. All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Image credit: Martin Suker via Shutterstock. The post Reform’s rise is a productivity warning, not a culture war victory first appeared on LSE British Politics .

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