What If The Midlands Engine Strategy Was Implemented Earlier?

The Actual History

The Midlands Engine Strategy represents a relatively recent development in British regional economic policy. Officially launched in March 2017 under Theresa May's Conservative government, the initiative emerged as a complementary strategy to the Northern Powerhouse concept (introduced in 2014 by then-Chancellor George Osborne). Both strategies were developed in response to the persistent economic imbalance between London and the South East versus the rest of the United Kingdom.

The Midlands Engine covers a broad region spanning both the East and West Midlands, encompassing major urban centers including Birmingham, Leicester, Nottingham, Coventry, Derby, and Stoke-on-Trent. This area, once the industrial heartland of Britain during the 19th and early 20th centuries, experienced significant economic decline following the deindustrialization processes that accelerated during the 1970s and 1980s. The manufacturing sector, which had formed the backbone of the Midlands economy, contracted dramatically during this period, with tens of thousands of jobs lost in automotive manufacturing, steel production, ceramics, and other traditional industries.

The 2017 Midlands Engine Strategy outlined a vision to boost economic growth in the region through five key priorities: improving connectivity, increasing innovation, encouraging trade and investment, supporting skills development, and enhancing quality of life. The government initially committed £392 million through the Local Growth Fund specifically for the Midlands, with additional investments in infrastructure projects like the Midland Metro extension and improvements to the M1, M6, and A46 road networks.

The strategy came in the context of growing recognition that Britain's economy was excessively centralized around London. By 2017, productivity in the Midlands lagged 15% below the national average, despite the region being home to approximately 10 million people and 800,000 businesses. The GVA (Gross Value Added) per head in the West Midlands was just £21,823 compared to London's £43,629 in 2015.

Prior to the Midlands Engine, regional development policy in the UK had gone through several iterations. The Regional Development Agencies (RDAs), established under the Labour government in 1998, represented the last major comprehensive approach to regional economic development before being abolished in 2010 by the Coalition government in favor of smaller Local Enterprise Partnerships (LEPs). The East Midlands Development Agency and Advantage West Midlands were the RDAs covering the Midlands region from 1999 to 2010.

The period from 2010 to 2017 saw a relative policy vacuum in terms of regional strategy, characterized by localism and austerity measures that reduced public investment in regional development. It was only with the introduction of the Northern Powerhouse concept, followed by the Midlands Engine, that coherent regional economic strategies returned to prominence.

By 2025, the Midlands Engine has achieved mixed results. While some infrastructure improvements have materialized and certain cities like Birmingham have seen increased investment, particularly around the HS2 rail project, the fundamental economic imbalances between the Midlands and the South East persist. The COVID-19 pandemic of 2020-22 further disrupted progress, with the Midlands suffering disproportionately high infection rates and economic damage. Brexit has also complicated the manufacturing-focused economy of the region, with new trade barriers affecting supply chains for key industries like automotive manufacturing. Despite these challenges, the concept of the Midlands Engine remains part of the government's "leveling up" agenda, though critics argue that funding has been insufficient to truly transform the region's economic fortunes.

The Point of Divergence

What if the Midlands Engine Strategy had been implemented much earlier, in the early 1990s? In this alternate timeline, we explore a scenario where a comprehensive regional development strategy for the Midlands emerged during John Major's Conservative government (1990-1997), nearly 25 years before the actual Midlands Engine was launched.

The most plausible point of divergence would be in the aftermath of the 1992 general election, when Major's government—having secured an unexpected victory despite the ongoing recession—sought bold economic initiatives to distinguish itself from the Thatcher era while maintaining Conservative principles. In our timeline, Major's government did implement some regional policies, including the Single Regeneration Budget and Government Offices for the Regions, but these were relatively modest compared to what might have been possible.

Several factors could have precipitated this earlier Midlands focus:

First, the recession of the early 1990s hit manufacturing regions particularly hard, creating political pressure for targeted intervention. In this alternate timeline, Major's government recognized that the Midlands—with its diverse manufacturing base and central location—offered the best opportunity to demonstrate successful regional economic intervention without abandoning market principles.

Second, the European Union's increasing focus on regional development funds in the early 1990s could have provided both inspiration and matching funding opportunities. In this timeline, Britain positioned itself to maximize draw-down of European structural funds by creating a coherent Midlands strategy that aligned with EU regional development principles.

Third, internal Conservative Party politics might have played a role. In this timeline, Michael Heseltine—who had long championed industrial policy and urban regeneration—exerted greater influence on Major's economic thinking. As a counterweight to the Eurosceptic wing of the party, Heseltine convinced Major that a bold regional strategy centered on the Midlands would provide electoral advantages while demonstrating Britain's constructive engagement with European regional development models.

The divergence might have specifically occurred following the "Black Wednesday" currency crisis of September 1992, when Britain was forced to withdraw from the European Exchange Rate Mechanism. In our timeline, this crisis damaged the Conservatives' economic credibility. In the alternate timeline, Major and his Chancellor Norman Lamont used this moment of economic recalibration to launch an ambitious "Midlands Renaissance Initiative" (the precursor to what would later be termed the "Midlands Engine") as part of their economic recovery strategy.

Instead of focusing primarily on monetary policy following the ERM exit, this alternate Conservative government developed a comprehensive industrial and regional strategy centered on leveraging the Midlands' manufacturing heritage, geographic centrality, and educational institutions to drive national economic recovery. The initiative included significant infrastructure investment, skills development programs, industrial partnerships, and early examples of metropolitan governance that would not emerge in our timeline until decades later.

Immediate Aftermath

Economic Stabilization (1992-1995)

The implementation of the Midlands Renaissance Initiative in late 1992 produced immediate political and economic effects. Coming after Black Wednesday, the initiative was initially met with skepticism from financial markets, with some commentators viewing it as a desperate attempt to regain economic credibility. However, Major's government presented it as a strategic pivot rather than a panic measure.

The early focus of the initiative aimed at stabilizing the manufacturing sector, which had been severely affected by the recession. Key interventions included:

Manufacturing Competitiveness Program: A £1.5 billion fund established to help Midlands manufacturers modernize equipment and production processes. Companies like GKN, Rover Group, and Rolls-Royce were early beneficiaries, enabling them to preserve thousands of jobs that would otherwise have been lost.
Transport Infrastructure Acceleration: Projects already in planning stages were expedited, including upgrades to the M42/M6 interchange and improvements to the West Coast Main Line. This created immediate construction jobs while beginning to address the region's connectivity challenges.
Skills Retention Scheme: Rather than allowing skilled workers to become unemployed during the recession, subsidies were provided to companies to retain workers through reduced-hour schedules combined with training programs. This preserved crucial manufacturing expertise that would have been permanently lost in our timeline.

The economic impact was not immediately transformative, but the initiative succeeded in slowing the decline of manufacturing employment in the region. By 1994, unemployment in the West Midlands had fallen more rapidly than the national average, dropping from 10.7% to 8.9%, compared to the UK-wide reduction from 10.4% to 9.2%.

Political Reactions (1993-1994)

The political reaction to the initiative revealed interesting dynamics within British politics:

The Labour Party, under John Smith's leadership, initially criticized the initiative as insufficient while acknowledging its direction. Shadow Industry Secretary Robin Cook developed Labour's "Midlands Industrial Strategy" as a more ambitious alternative. This competition of ideas significantly elevated regional economic policy in national political discourse.

Within the Conservative Party, reactions were mixed. The Thatcherite wing, represented by figures like Norman Tebbit, expressed concern about "industrial intervention," while moderates embraced the approach. This created tensions, but Major successfully framed the initiative as consistent with Conservative principles of fostering enterprise rather than state control.

Local governments across the Midlands, regardless of political control, largely embraced the initiative. The first "Midlands Regional Forum" in March 1993 brought together local authorities, business leaders, and universities, creating early momentum for collaboration that had previously been absent.

Institutional Development (1994-1997)

The most significant immediate impact was the establishment of new institutions and governance arrangements:

Midlands Development Corporation (MDC): Established in 1994, this became the central coordinating body for the initiative. Unlike previous urban development corporations with narrow geographic focus, the MDC covered the entire Midlands region with sub-regional offices. Michael Heseltine served as its first chairman before returning to the Cabinet.
Midlands Infrastructure Authority: This body received powers to plan and coordinate major infrastructure across traditional local government boundaries—an early precursor to the combined authorities that would emerge decades later in our timeline.
Midlands Innovation Network: A partnership between the region's universities and major companies, this network established innovation centers focusing on manufacturing technologies, materials science, and early digital applications for industry.

Importantly, these new institutions developed with cross-party support, creating a consensus around regional development that transcended electoral cycles. The "Midlands Compact" signed in 1996 by Conservative ministers, Labour shadow ministers, and regional leaders committed all parties to maintaining the core elements of the strategy regardless of the general election outcome.

Early Economic Outcomes (1995-1997)

By 1996, the initiative began showing measurable results:

Foreign direct investment in the Midlands increased by 28% between 1993 and 1996, with notable investments from Japanese automotive companies expanding beyond their initial UK operations. Toyota announced a significant expansion of its Burnaston plant near Derby.
The "Midlands Manufacturing Technology Centre" established in Coventry became an early example of public-private partnership in research and development, specializing in automation and precision engineering techniques.
Birmingham began its urban renaissance earlier than in our timeline, with the redevelopment of the Bullring area commencing in 1995 rather than 2000. This accelerated the city's transition toward a service and retail center.
The creation of the "Midlands Skills Academies" network addressed persistent skills gaps, particularly in engineering and technical trades, establishing a model that would later influence national skills policy.

When Labour won the 1997 general election, the new government under Tony Blair maintained the core elements of the initiative, rebranding it as the "Midlands Economic Partnership" and integrating it with their wider regional development agenda. The institutional foundations laid during 1992-1997 provided a robust framework that would shape the Midlands' economic trajectory in subsequent decades.

Long-term Impact

Industrial Evolution (1997-2010)

The early implementation of the Midlands strategy fundamentally altered the industrial trajectory of the region during the Blair and Brown Labour governments:

Manufacturing Renaissance

Unlike our timeline, where manufacturing continued its steep decline, the Midlands in this alternate reality experienced a more managed transition. Total manufacturing employment still decreased, but at roughly half the rate witnessed in our timeline. More importantly, the composition of manufacturing shifted dramatically:

Automotive Sector Transformation: The earlier focus on modernization helped companies like Jaguar Land Rover evolve more smoothly. When Ford sold JLR to Tata Motors in 2008, the company was in a stronger position, with advanced manufacturing facilities already established in the region. By 2010, the West Midlands automotive cluster employed approximately 100,000 people directly and indirectly—about 40,000 more than in our timeline.
Precision Engineering Hub: The early establishment of the Manufacturing Technology Centre created a cluster of precision engineering firms serving multiple industries. Companies that disappeared in our timeline, like machinery manufacturer Alfred Herbert of Coventry, found new niches in specialized production equipment.
Aerospace Strength: Rolls-Royce's Derby operations expanded more significantly, with additional investment in research facilities creating an aerospace innovation corridor between Derby and Nottingham that attracted supplier companies.

Early Digital Transformation

The strategy's focus on modernizing traditional industries led to earlier adoption of digital technologies in manufacturing:

The "Midlands Digital Manufacturing Initiative" launched in 1999 introduced techniques that would later be called Industry 4.0, giving regional manufacturers a head start in implementing smart factory concepts.
The University of Warwick's Manufacturing Group, under Kumar Bhattacharyya's leadership, became a global center for digital manufacturing research a decade earlier than in our timeline, attracting significant research funding from both government and industry.
By 2005, the proportion of Midlands manufacturers employing advanced digital production techniques was 35% higher than in our timeline, creating productivity advantages that helped preserve the regional manufacturing base.

Infrastructure and Connectivity (2000-2015)

The alternate timeline saw accelerated infrastructure development that significantly changed the region's connectivity:

Transport Network Evolution

Midland Metro Expansion: The tram network in Birmingham began expanding in the late 1990s rather than the 2010s, with lines to the airport, Black Country, and eastern suburbs completed by 2008, transforming urban mobility.
Road Network Improvements: The M6 Toll was completed in 2000 rather than 2003, and additional improvements to east-west connections via the A14 and A50 corridors created a more efficient regional logistics network.
Rail Renaissance: The "Midlands Connect" rail strategy, implemented from 2001, restored direct services between regional cities that had been cut in previous decades. This included reopening the Ivanhoe Line between Leicester and Burton and enhancing the Birmingham-Leicester-Peterborough corridor.

Digital Infrastructure

In this timeline, the Midlands became an early testbed for digital infrastructure:

Birmingham was selected as the UK's first "Gigabit City" in 2005, receiving comprehensive fiber optic coverage a decade before comparable initiatives in our timeline.
The "Digital Midlands" program established regional data centers and cloud computing facilities, attracting technology companies that would otherwise have concentrated exclusively in London or the M4 corridor.

Urban Regeneration and Spatial Development (2000-2020)

The physical landscape of Midlands cities evolved differently:

Urban Centers Transformation

Birmingham's Renaissance: The city center transformed more comprehensively and earlier, with the Bullring redevelopment followed by major projects like the Library of Birmingham and New Street Station renovation completed 5-10 years before our timeline. By 2010, Birmingham had already established itself as a major conference and business destination.
Secondary Cities Revitalization: Cities like Leicester, Nottingham, and Coventry saw coordinated regeneration of their centers, with distinctive specializations emerging: Leicester in cultural industries, Nottingham in creative and digital sectors, and Coventry in advanced manufacturing and design.
Balanced Development: The strategy's emphasis on polycentricity prevented the extreme concentration of development in Birmingham alone, creating a network of complementary urban centers with stronger economic connections.

Housing and Spatial Planning

The earlier strategic approach also influenced housing and spatial development:

A coordinated "Midlands Housing Strategy" implemented from 2002 ensured that residential development kept pace with economic growth, preventing the severe housing affordability issues that plagued growing regions in our timeline.
The establishment of "Midlands Urban Design Standards" in 1999 led to higher-quality built environments in new developments, with an emphasis on density, public transport access, and environmental performance.

Economic Outcomes and Social Impact (2010-2025)

By the 2020s, the cumulative effect of these early interventions had created a substantially different economic and social landscape:

Economic Performance

Productivity Convergence: By 2025, the productivity gap between the Midlands and the UK average had narrowed to just 5%, compared to 15% in our timeline. This represented an additional £35 billion in annual regional GVA.
Balanced Economy: The region developed a more balanced economic structure, with manufacturing still representing 15% of GVA (compared to 10% in our timeline) alongside stronger business services, creative industries, and technology sectors.
Innovation Performance: The Midlands filed 45% more patents annually by 2025 than in our timeline, with particular strength in manufacturing technologies, materials science, and transport systems.

Social and Demographic Outcomes

The economic transformation had profound social effects:

Reversed Migration Patterns: Instead of losing young graduates to London, Midlands cities began attracting and retaining talent. Birmingham's population growth accelerated, reaching 1.2 million by 2020 (compared to just over 1 million in our timeline).
Reduced Inequality: Earlier and more sustained economic development led to lower levels of deprivation. By 2025, the number of Midlands neighborhoods ranking among the 10% most deprived nationally was 38% lower than in our timeline.
Educational Attainment: The long-term focus on skills development and the stronger connections between industry and education led to significantly higher educational outcomes. By 2022, 47% of working-age Midlanders held degree-level qualifications, compared to 38% in our timeline.

Political and Governance Evolution

The long-term governance of the region evolved differently:

Metropolitan Leadership: Elected mayors were introduced to Midlands cities in the early 2000s rather than the late 2010s, creating stronger regional leadership and accountability.
Political Realignment: The early success of the Midlands strategy complicated traditional political narratives. The Conservatives maintained stronger support in Midlands urban areas than in our timeline, while Labour developed a more distinctive regional economic agenda to compete.
Devolution Model: By 2025, the "Midlands Devolution Framework" had become a model for other UK regions, with substantial powers over transport, skills, housing, and economic development transferred from central government.

Brexit and Pandemic Response (2016-2022)

Even major disruptions played out differently in this alternate timeline:

Brexit Impact Mitigation: The stronger and more diversified industrial base helped the region weather Brexit disruptions more effectively. The Midlands Export Strategy (2018) facilitated quicker adaptation to new trading arrangements.
Pandemic Resilience: During the COVID-19 pandemic, the Midlands' manufacturing capacity was quickly repurposed to produce ventilators, PPE, and later vaccine components, demonstrating industrial resilience that was lacking in our timeline.

By 2025, the economic geography of the UK was significantly more balanced, with the Midlands established as a genuine counterweight to London and the South East—an outcome that remains aspirational rather than actual in our timeline.

Expert Opinions

Dr. Elaine Coventry, Professor of Regional Economic Development at the University of Birmingham, offers this perspective: "The timing of regional economic interventions is often as important as their content. Had the Midlands Engine concept been implemented in the early 1990s, it would have coincided with several critical transitions: the shift toward knowledge-based manufacturing, the expansion of the European Single Market, and the emerging digital revolution. The actual Midlands Engine arrived too late to fundamentally reshape these transitions, whereas an early 1990s implementation would have allowed the region to ride these waves of change rather than being submerged by them. The counterfactual suggests we might have preserved much of the industrial commons—the networks of suppliers, skilled workers, and specialized services—that were lost irrevocably in our timeline."

Sir Richard Lambert, former Director-General of the Confederation of British Industry and economic historian, provides this analysis: "What's particularly fascinating about this counterfactual is how it might have changed the relationship between state intervention and market forces in British political economy. An early successful Midlands initiative under a Conservative government would have challenged the simple left-right narratives about industrial policy. We might have developed a distinctive British approach to regional development—neither the laissez-faire model that dominated the 1980s nor the bureaucratic centralism that characterized previous interventions. The tragedy of our actual timeline is that we spent nearly two decades oscillating between different approaches without building the long-term institutions and consensus needed for regional economic transformation. By the time the Midlands Engine actually emerged in 2017, many of the opportunities for regional rebalancing had already been missed."

Dr. Nasreen Khan, Research Director at the Centre for Cities, comments: "The urban hierarchy of England might look substantially different in this alternate timeline. Birmingham, in particular, would likely have solidified its position as England's genuine second city much earlier, potentially growing to a scale that provided real agglomeration benefits comparable to those of similar-sized European cities like Lyon or Munich. The most profound difference, though, would be in the secondary cities like Leicester, Nottingham, and Coventry, which have struggled to find clear economic identities in our timeline. With earlier strategic intervention, these cities might have developed complementary specializations within a polycentric regional economy, rather than competing with each other for limited investment. This would have created a more balanced urban network in the Midlands with stronger economic connections between centers—something that remains elusive even now."