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If the regions are to rise, London must take a hit
This week’s report by Lord Kerslake on the north-south divide presents the
problem in graphic terms. The Organisation for Economic Co-operation and
Development (OECD) shows Britain with the widest regional inequality of any
advanced nation. London’s economy is growing at between two and four times the
rate of the north. It is blessed with better health, better trains, better
skills. The south-east has largely escaped austerity, its public spending rising
£2bn in a decade. The north’s has fallen by £6bn. Fixing this gap will require
action “on a level with Germany post-unification”, the report says, when
trillions were spent over decades on the former east.
Some of this gloom is misleading. Surveys claim London is the least happy region
in the land, the north far more content. The OECD and the Institute for Fiscal
Studies have also shown that inequality in Britain is less between north and
south than between particular places. Leeds contrasts with Rotherham. East
London is poorer than Harrogate.
In addition, low house prices are starting to draw people out of town, followed
by companies such as Goldman Sachs, PricewaterhouseCoopers and JP Morgan. Just
over 10 years ago only 1% of emigrants from London went northwards. That is now
13%. Big cities are critical to any revival, and some of these are clearly on
the turn. They are developing “Latin quarters”, seen as crucial in keeping
“young creatives” locally engaged, such as Birmingham’s Jewellery Quarter and
Manchester’s Northern Quarter. The worst problems are the smaller places: the
Barnsleys, Blackburns and Oldhams.
Kerslake is aware of the need, but he does not address the issue obsessing my
Mancunians. To them the issue was London, seen as exciting, creative, rich – an
existential menace. Rulers since Elizabeth I have tried to reduce its appeal.
She tried to send her courtiers back to their country estates, and failed.
London has always been the goose that lays Britain’s golden eggs, and is still –
now more than ever.
My economics tutor used to warn us that much of what he taught might one day be
proved wrong, but he hoped at least to have showed us how to recognise nonsense.
A case in point must be Kerslake’s solution to the north, which tallies with
Boris Johnson’s old-Labour cliche of “levelling-up”. It lies in vast dollops of
public investment in infrastructure, in interconnectivity, skills and
“cross-governmental, ministerially led” coordination. This is the same language
used by Harold Wilson, Margaret Thatcher, Tony Blair – every prime minister–
usually in the year after an election.
None of this addresses what Manchester understands, that you will not level up
the north without levelling down London. The capital has to reduce its appeal to
the north’s most precious resource, its creative talent and entrepreneurial
zeal. This requires big regional cities to develop “creative critical mass”.
They must treasure their heritage, their converted mills, their historic
districts – anything to distract their young people from craving a move to
London. This may involve sucking energy from their surrounding towns – as Leeds
has from Bradford. Cities such as Frankfurt, Toulouse, Milan and Barcelona have
established a cultural self-confidence that has succeeded in resisting the
magnetism of their country’s capital. The only city outside London to come near
such magnetism is semi-autonomous Edinburgh.
In the case of demagnetising London, the task is near insuperable, but it must
be attempted. Revival will come from small steps, not giant infrastructures.
These steps will never work if they depend on London, on its taxpayers, its
civil servants, its government. Dependency economics has been the curse of
Scotland and Wales. There is no such thing as public spending-led growth – as
has conspicuously failed in eastern Germany. Growth comes from employers and
investors being stimulated to exploit local skills and talents. They should pay
local taxes and run local government. Northern cities will flourish only when
London stops stealing their people, their ideas and their power.
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https://www.theguardian.com/commentisfree/2020/feb/28/regions-london-northern-cities-young-people#maincontent