London and the Rest of the UK: Better Together.

In my previous post (https://citypolicy.wordpress.com/2014/01/12/should-the-uk-get-rid-of-london-should-london-leave-the-uk/) I considered the questions that have been posed by several commentators recently: would the rest of UK be better off without London? And what can be done about the north-south divide? My view is that a rest of UK versus London narrative is unhelpful for four main reasons.

First, if the UK economy is to grow to its full potential, it needs to grow together. History tells us that attempts to suppress and constrain growth in London and the South East does not result in it being diverted to other regions. Generally, when London grows so does the rest of the UK.  But we should not just rely on London. Most successful advanced national economies have strong second tier cities that are important engines of growth in their own right. So whilst London’s economic success should be encouraged, we need to do more to promote growth in the cities and city regions elsewhere. This is should not be an argument about economic need or inequalities; it should be about the future success of UK plc. The Core Cities and their surrounding city regions are 27% of the UK economy; London is 22%.

Second, we need to focus more on the positive linkages between London and rest of UK. London is a huge asset to the UK economy. Financial and business services have been a source of substantial jobs growth in the Core Cities (no more so in Leeds which is the UK’s second largest concentration of F&BS jobs). These firms are organised in national, as well as international networks, with London as a focal point. The same is true of other sectors, such as creative and digital. We need to understand better the business-to-business linkages and trade patterns between London and other UK cities. And London and other cities need to work together to promote investment and trade in these growth sectors.

Third, better transport and changing working patterns can strengthen positive links between London and other cities. Professor Sir Peter Hall has identified the phenomenon of the London and the South East megacity region. This functional urban system has a population of over 18 million, and stretches across the South East, and into parts of the South West and East of England. Across this mega-city region many people commute into London. But overtime, firms have decentralised activity away from London to the smaller towns of the mega-city region, and commuters have taken up jobs and started businesses closer to home. As a result, many of these smaller towns have become significant economic drivers in their own right. Transport improvements, such as HS2 or Great Western Main Line electrification could extend this positive economic reach of London to cities such as Bristol, Birmingham, Nottingham, Leeds and Nottingham. Changing working patterns, whereby people split their working week between London and other cities, could also boost this effect.

Fourth, within England the debate should not just be about winners and losers in terms of the share of the spending pie from Whitehall, it should be about the ability of Cities and city regions to finance investment themselves. That is not to say there is not unfairness in terms of how the big cities have fared in recent Local Government Finance Settlements compared to the shires, or compared to their counterparts in Wales and Scotland. But London and the Core Cities have common interests and are forging a common cause in making the case for greater freedoms and flexibilities to finance and invest funds to support economic growth (see: http://www.corecities.com/news-events/london-and-englands-largest-cities-join-call-greater-devolution-drive-economic-growth).