Wednesday, August 13, 2008

When Thinking the Unthinkable Goes Wrong

It's rare for a think tank report to merit a full page in The Sun, but Policy Exchange has managed it this morning, with their report which, in tabloid speak, appears to call for the North of England to be closed down and turned into a museum.

Of course in reality it is much more complicated than that, as the report's introduction makes clear.

Geographical inequality is growing... Many of the forces that make life tough for struggling cities will continue. As demand for more highly qualified workers grows, the lower skill levels associated with regeneration towns will make it even harder for them to catch up – not least because their brightest and best educated leave for London after graduation. Nor is a change of government likely to continue supporting regeneration policy. Ministers in the current Labour Cabinet overwhelmingly represent inner city areas. A future Cabinet, perhaps more representative of suburbs and the wealthy South East, may not have the same commitment to high levels of regeneration funding, particularly if economic circumstances demand a squeeze on public spending. But if we are honest about the constraints and realistic about the opportunities then we can make progress. We need to accept above all that we cannot guarantee to regenerate every town and every city in Britain that has fallen behind. Just as we can't buck the market, so we can’t buck economic geography either. Places that enjoyed the conditions for creating wealth in the coal-powered 19th-century often do not do so today. Port cities had an advantage in an era when exporting manufactured goods by sea was a vital source of prosperity; today the sea is a barrier to their potential for expansion and they are cut off from the main road transport routes. More generally, the economic pull of Europe has boosted the South East at the expense of the North, Wales and Scotland.

Luck has also played its part: in 1900 London had finance and Manchester had cotton. Finance has since prospered and cotton collapsed, reinforcing geographical changes. There is no realistic prospect that our regeneration towns and cities can converge with London and the South East. There is, however, a very real prospect of encouraging significant numbers of people to move from those towns to London and the South East. We know that the capital and its region are economic powerhouses that can grow and create new high-skilled, high-wage service sector hubs. At the same time market mechanisms can be used to induce some firms to move out of the South East. We propose a significant liberalisation of land use in London and the South East. At present local councils ignore market signals and zone land for industrial rather than residential use. There are over 2,500 hectares of industrial land in London alone, and 10,000 hectares in London and the South East together. If only half of it were used for housing, it would create £25 billion in value and allow half a million people to move to an area that offers much better prospects than where they live now. Such a marketled policy would prompt many industrial firms that are based in London to relocate to where land is cheaper. So some people will leave regeneration cities; some jobs will move to regeneration cities. Both are desirable outcomes.

Desirable? Debateable, perhaps. But to assert, as the authors do, that cities like Oxford or Cambridge should be massively expanded, with all the greenbelt implications of that, is simply not realistic politics. I know think tanks are there to think the unthinkable, but they ought to realise that politicians are there to implement the implementable, not commit political hari-kari.

I imagine David Cameron is none too pleased to be having to deal with this issue today, as he starts a tour of North West marginal constituencies. What he should do is point out that one of the authors of the report, Dr Tim Leunig of the LSE is, in fact, a leading Liberal Democrat supporting economist!

One thing I was most amused by in The Sun was the short editorial spluttering by their Whitehall editor, the extremely affable Dave Wooding. Dave defends his home city of Liverpool and attacks the report for suggesting that Liverpool is anything other than the most wonderful place on the planet to live. I always find it amusing that Liverpool's greatest fans seem to be people who have done just what the Policy Exchange reports suggests - and moved away.

The fact is that in today's employment market people are far more mobile than they have ever been and are more happy to relocate than they have ever been. People go where the jobs are. There has never been a free market in this country. Governments of all colours have had regional policies and policies on regeneration, some of which have worked and some of which haven't. But to suggest that because some city regeneration projects have failed, more attention should be paid to building in areas which are already economically strong is muddled thinking.

If you want to see an example of a city which has been transformed by regeneration over a period of three decades, look at Cardiff. If I understand the Policy Exchange report correctly - and I have not yet had time to read it in its entirety yet - that investment would have instead been made in the South East.

I think I had better read up on this before my appearance on ANY QUESTIONS on Friday, don't you?!


Anonymous said...

It is not surprising to find favourable comments about Liverpool in the Sun which is still suffering from its story about the Hillsborough disaster in 1989.

Anonymous said...

Can you imagine them ever bringing out anything like this for Scotland or Wales?
Typical disdainful highhanded musing of a scion of the British occupation government of England.
What they really want to do is close England down but they don't have the guts to say it.

Mind you, if Harman ever gets to be PM it'll be cattle trucks and Zyclon B for te English!

Anonymous said...

There is more than a grain of truth in the point that you cannot buck the market.

Just stand back and look from the perspective of history. We see now dotted around different countries, the ruins of once great cities. Changes in the economic trading patterns as well as products reduced the mighty (and well populated for their era) to ruins with only goats grazing where once people prospered.

Regional development policies cannot overcome climate shifts when it comes to agriculture or other matters. It is one of the fallacies that Politicos without a good grounding in economics regularly make - EU take note.

Madasafish said...

Interesting. I live outside Stoke On Trent.
20 years ago it was a dump: closed coal mines, antiquated, clsoing and loss making potteries.. and just a mess..

Since then it has been transformed : a mixyure of EC money, Garden Festival and most importantly private enetrprise - the biggest being Phones 4U.

It is much less of a dump now and appears to be thriving. Most of the former miners have found work.. etc

Contrast it with some of the pit towns in the North and Scotland where mining was THE only job.. and once gone the reason for the community has gone.

I guess what I'm saying is it's horses for courses.. some places are best left to rot as once the original cuase for their existence has gone, why live there? Others with mixed industries can and will survive .

PS I'm not saying Stoke is wonderful but even Stoke City are now in the Premier League - if only for 1 year!

Mulligan said...

The BBC have been in their element all morning over this ill considered piece of nonsense, with of cours ethe Conservative Party being lined up to take the rap.

Anonymous said...

You are right to be a fan of Cardiff, though I admit to being guilty as the Liverpudlians you mention of leaving my hometown at 18 and whilst being fiercely proud of Cardiff, I cannot realistically move back there.

There are comparatively few real private sector jobs in Cardiff, the boom that you mention is largely off the back of public sector money and many of the private sector jobs that do exist are low paid such as call centre work. Neither my husband nor I would have anything like the employment opportunities which we have in the Thames Valley.

As you say, think-tanks are paid to think and say the unthinkable though they cannot have followed their own arguments through to their logical economic conclusions, let alone thought about the political implications.

Anonymous said...

I am one of the many who left Liverpool for London. I think there is some justification in what this report is reported to say. In the 1980s, Liverpool had huge amounts of money spent on 'regeneration'. Some of the buildings have been tarted up nicely, but when I go back, the people seem so dull, and look, frankly, awful. When all the bright people with a future have moved out of a place, no amount of money is going to get it going again.


Anonymous said...

Cameron doesn't have to "deal with it". It's a think tank report - nothing to do with the Tory party, which has already expressed its disagreement with it.

Anonymous said...

Oh not the Scouse thing again. You needing to get the hits count up Iain? Nadine did an excellent article on her (and my) home city some months ago but she doesn't seem to have a search facility so I can't find it!

This report is embarrassing. What if bus loads of Scousers and Bradfordians turn up in the green and pleasant bits tomorrow? Can the infrastructure cope? Time for William Hague to explain to a wider audience the work being done by Campaign North.

Roger Thornhill said...

If regeneration was economically viable and a natural process, all that should be necessary is for the Local Council to get out of the way and let it happen.

Of course, the brown envelope industry would take a hit, so obviously that would never happen.

Anonymous said...

"There is, however, a very real prospect of encouraging significant numbers of people to move from those towns to London and the South East"

The south east is full, it can't take any more - nor does it need to.

Three of my staff commute from the north east every week.

Their family's mortgages and living costs are so much lower in the NE that they need work only a three day week here for a good standard of living. They live in rented accomodation with a pensioner here while they work.

High flying professionals? Nope. They're HGV drivers helping to cover the national shortage which is a particular problem in the SE.

Instead of migrating unsustainable millions into the SE, why doesn't the government expand our rail system and train people with the skills we really need, like HGV driving (which costs about £1-2000 per person) and encourage more of this sort of migration?

Anonymous said...

A good report with the germ of a good idea.

Basically, it says move people south and regenerate the old cathedral cities where possible.

Well I come from York but live in Oxford and Worcester now so I can see the logic of thsi at first hand. As a child, I saw York as a run down place. The old railway carriage manufacturing and sweet manufacturing industry died out and there was not much left to take its place.

It used to be a solid Labour stronghold surrounded by Tory rural constituencies but now the place has been transformed economically as it has become a commuter city to Leeds and the financial services community provides the wealth there. It benefits from a good rail service to London/Leeds and much improved road access to Leeds as well as and good broadband and mobile coverage. The place is quickly becoming a much more Tory area.

York did not attract thsi new wealth with piles of Govt money though - what happened was it just became economically worthwhile and feasible for financial services to go there in the 1990s and with its good access to London they stayed and expanded.

Same goes for a place like Worcester. Again a post industrial city but at present really struggling to recover with a terrible railway line down to Oxford and London Paddington which cuts it off form the South East. The railway is single track down to Oxford in places since the double track was removed in the 1970s. Now the announcement has been made to improve transport links by putting back the double track and I suspect the place is going to dramatically improve and unemployment will fall. Mobile and broadband coverage is also poor but as more people move there then investment in thsi will also be worthwhile. If BT improved their old fashioned (5 digit) exchange so broadband was quicker and more reliable it would be an attractive place for businesses to relocate to.

I agree we need to move people to the South East and agree that not all cities can be regenerated but I do think the Regional Development agencies should be shut down and the money put into basic road, rail, broadband infrastructure and them let businesses decide if they want to relocate.

I suggest the Cathedral cities may be a good set of targets for the Tories to direct their regeneration efforts towards. They can quickly be turned into votes as they are surrounded by Tory voting rural seats and by encouraging their growth this would be at the expense of old Labour seats in metropolitan areas.

Anonymous said...

Let's be realistic too, few home owning families in the North East can afford to relocate to the South East because they could never afford our mortgages.

Nor would many wish to move away from their families and communities.

My staff from the NE say they love it there, they have a far better quality of life than those in the SE do and they would hate to live in the SE full-time.

So will it largely be young people, fresh out of uni or college who would make the move? If so, where are they to live? In the housing that can't be sold because of the slow down? Given their student debts, How are they to afford it?

Anonymous said...

The regeneration money has been spent on the wrong things - tarting up buildings and creating self serving regeneration agencies. The money needs to be spent on the structural basics of motorways, railways and broadband and then for councils to stop micro managing where business's go.
If it is made easier, quicker and cheaper to access the old cities then the market will move the jobs to those locations.
Also the SE is already overpopulated and for the sake of it's environment (and quality of life) there shouldn't be any major population influx.
However the point of rezoning land in the SE from industrial to residential would probably have a significant beneficial impact on the country as a whole.

Anonymous said...

Ironically this report is arguing for something that many Labour Councils are doing already. Wear Valley in County Durham, for instance, has nominated areas in their district as suitable for development. Others are deemed unsuitable and any development at all is prohibited as 'unsustainable'. Presumably these villages will be allowed to die.
This is nonsense, if people want to develop housing, or anything else in such areas they should be allowed to do so.
This reflects the wider problem in the north east and other Labour heartlands, that what is holding back regeneration is the dead hand of Labour bureaucracy. I have had to deal with these people over a development, and it was easier dealing with the Communist Bureaucracy in Czechoslovakia before 1989.
If we really want to regenerate the north we need to open up the planning process.
Unlike the south east, there is an abundance of land - a lot of it brownfield - suitable for development within cities and other settlements, so green belts can remain intact.
Of course that is the last thing the Labour Party wants in the North East, because it does not want its fiefdoms of the unemployed, and public sector workers diluted by more independent and prosperous private sector workers and businesses.

Anonymous said...

"What he should do is point out that one of the authors of the report, Dr Tim Leunig of the LSE is, in fact, a leading Liberal Democrat supporting economist!"

I wondered how you would spin this. Chris Grayling even said it was "independent".

I hardly think saying its all the Liberals fault is the best way out of it thou, considering PE is really the Tory policy department.

I suppose having 1 liberal is a counter balance to all the Tories like:
Michael Gove
Nick Boles
Minira Mirza
Anthony Browne
Natalie Evans
Theodore Agnew
Rachel Whetstone
Richard Briance
Richard Ehrman
Robin Edwards and many more

Anonymous said...

How very Dave!

Anonymous said...

lets be honest some of these northern towns are just ghastly - we should include Blackpool in the list of towns that need to be closed down. The longer we leave it, the more the taxpayer has to bail out these unproductive towns. The report authors' timing might not be helpful to the party, but any right thinking tory will agree that they have a point.

Anonymous said...

Nualb never do anything that's not to their political advantage.

There was a big row in, Labour marginal, Harlow a few months back over plans to build a mosque, with dome, in an area with no parking.

Why build a mosque here when so few Muslims live in Harlow, went one argument. Because the government plan to move a lot of Labour voting muslims into the area to prop up the Labour MP's withered majority, said one bright spark.

Are these plans of the same ilk, say, by forcing developers in Labour marginals to provide rented accomodation for the poorest students from Labour heartland areas?

Anonymous said...

This gets me so angry - it's such a mistaken and flawed argument - but it's also morally vacant. (Are these the same people who call for an English Parliament?)

This week, IPD, Savills, etc. have produced a report that says regeneration areas outperform the market. Which is a no brainer because if you start from a low base, etc. But the key point is that public sector regeneration has enabled private investors to invest and recoup - no state regeneration, no private profit. It is BECAUSE there has been investment from the government that there is a market to invest in. Taxpayer's Alliance have made the same mistake - abolishing Regional Development Agencies won't save you £4bn or whatever - that money doesn't go missing - it goes into companies, and new town centres and business parks and bridges and trains. And why shouldn't we live in these places? after all, the alternative is apparently a new housing estate in the outskirts of the M25

Anonymous said...

And you thought the traffic jam you were in the other night was bad?

Start re-locating large chunks of the population to the South East of England and it will become a daily occurrence.

The infrastructure is already lagging behind the growth in population in the South East.

Anonymous said...

Apostrophe Police says Manchester, Leeds, Liverpool and Newcastle are fantastic cities that are simply excellent. Do not forget that winning THEIR hearts wins us the election. Conservatives in the North will change the UK for the better. THEY are the future. Not London.

Anonymous said...

Very similar proposals were in the air seventy years ago during the Depression,especially in respect to the North East and South Wales ,where the coal trade and heavy industry had collapsed.

In the end,natural migration and pre-war re-armourment stabilsed matters but there was serious consideration to moving whole populations compulsorily.For example, a new town was to be built on Severnside to house the population of Merthyr.

These ideas are for cattle not people.People will migrate of their own accord and for their own self interest.

But it is odd that the same questions turn up every few decades and the think tanks reach the same conclusions and believe that no-one had thought of them before.

Anonymous said...

Perhaps we should ask why all NuLab growth area are in the South/ Midlands and why John Prescott was knocking down houses in the north (Pathfinder schemes) before we label this a Conservative led idea

Anonymous said...

On listening to TalkSport this morning (Radio 5 is all Olympics) they were speaking to somebody who wrote this (didn't catch name,sorry) it turns out he's moving to Australia to go and work for a think tank out there. Talk about kick and run...

Anonymous said...

The firs Half hour of the Jeremy Tick Tick wine wine show was worth listening to (available listen again) if there was ever an underhand show with stooges all mentioning Regions and how local government can help.
One of the Authors was a German Doctor on the show,he kept mentioning regions and how his region was transformed with regional power.
Hun! we don,t want the fourth Reich,
I see operation Barborosa 11 ( The EUSSR Project) was halted by the Rusians at their border with Georgia this week.

Newmania said...

This is partly common sense . Cardiff is does well is because the Welsh are deluged with English Taxpayers money on a scale the Scots can only dream of . Duh..well thats clever
The North floats on subsidies and the 15 billion from the RDA`s alone is hardly likely to survive the downturn . Meanwhile infra structure projects in the South have been absurdly neglected and Cornwall reduced to beggary . Look , for example at Newhaven , near me crying out for investment and with a real prospect of long term prosperity .
When business has no natural reason to locate you only ever create fragile short term fixes that disguise unemployment (eg silicon Glen) . We cannot afford it and lets not forget that the standard of living enjoyed by those in the North is greatly superior to those in the South who pay for it
The argument for retaining regional spread is that skills will atrophy and infrastructure has to be maintained, this is much the same argument for keeping old coal mines open at a loss and not without merit . It is only realistic though to point out there is a limit as there was for coal. Which this whole problem goes back to really
The answer is of course not to rubber stamp barbaric housing development in the lush fields of the South, quite the reverse ( as you say).
As prices go up here the temptation to locate in the North will increase and the market will correct itself. This process has been stymied by jobs for the Labour heartlands none more so than the North east where more tax vouchers are earnt than real money .
In Scotland the only successful business is the part the government did not try to rig ie Oil services and the booming financial centre. The sooner the state stops overly rigging the regional market the better for the long term good of the whole country . Labour have succeded in spitting us in two by their disguised redistribution and crony-ism and in poitning this out this report appears to make a good contribution.

I must say your own views are slightly opaque to me , you seem to partrly agree and partly demur , its probably me ....

Anonymous said...

The authors might be economists, but they certainly aren't geographers. The report says "Coastal cities, whether large like Liverpool and Hull, or small like Scunthorpe or Blackpool are most vulnerable".

For Leunig and Swaffield's information Scunthorpe is 30 miles in land! If they ever decide to visit Scunthorpe I wish them all the best in finding the beach.

Anonymous said...

What of course should happen is that employees will go where the Labour is, especially the honest, trained, cheap, hardworking type.

Problem is thats in China, not so much in Swansea or Cardiff.

Service industries have to be where the people with spare spending cash are, which is in the South East. A problem not at all helped by increased transport costs.

Britain has long since planned to become a tourist and financial center, by our ruling elites. So primarily a tourist and financial center is what Britain will become.

As far as I can see, apart from famously producing things like, dishonest politicians, the most brilliantly effective state propaganda system, an every growing underclass, and Nuclear submarines, Britain is not much more already.

Anonymous said...

Great idea Policy Exchange, encourage all the Labour voters to come to the South East!

Personally I rather like living in a Tory stronghold.

neil craig said...

However, precisely because of the population density the south east has limited room for growth. Moving the population is difficult(& moving it from open spaces to cramped ones has disadvantages). Moving the infrastructure may be easier. Certainly the idea that the financial servies industry is immobile is nonsense. They even have broadband oop north. If air traffic is now more important economically than seaports then exactly which part of Britian is it most difficult to build a new airport in?

Rather than this 5 year plan attitude we should just improve all our infrastructure, cut givernment or cut the amount of it in London & let the market work it out.

J.C.G. said...

A couple of points, sorry about the length!

I'm one of those fiercely proud Scousers, I work down here because my family relocated in the 80s and my work is here but I would love to go back if it were feasible.

My question is: why isn't it? Why in the modern world do we still need to live within 10 or so miles from an office which is in one of 10 streets in the City of London? I could do my job from my own front room in Liverpool, be contacted by clients on the phone, send emails, speak to colleagues, all without the need for "clocking in" every day.

Why don't employers seem to take this option seriously? Is it a trust issue, is it tradition? I don't understand.

Also, as some other people have pointed out, surely the South-East needs LESS people in it, not more.

Finally, the same argument could have been used for most of the South-East and -West in the 19th C:
"These rural areas are useless now we have all these dark satanic mills in Lancashire. Why don't we pack up all the populations of these outmoded villages and ship them to Bradford, where they can gain honest employment from King Cotton."

It would have been ridiculous then and it's ridiculous now, cities will always have an ebb and flow effect as industries rise and fall. Who's to say the City of London won't be a ghost town in 50 years because all the finance has moved to Frankfurt?!

Anonymous said...

Please don't go to the wall to defend the green belt - the green belt in Cambridge has already been shredded, in part because the University itself made free with porky pies.

David Lindsay said...

London people routinely believe that things like electricity only exist in London, so it comes as no surprise that Policy Exchange (Michael Gove's toy think tank, most notable for being exposed on Newsnight as a forgers' den) thinks that there are no airports, there are no motorways, there are no banks, and there is no Internet outside the South East.

Taken together with the apparently serious suggestion that yet more people should move to the South East, this report tells us all we need to know about the seriousness or otherwise of the Cameroon project, the participants in which, as much as anything else, seem blissfully unaware that their party already holds most of the seats in the South East (although for how much longer, if the plan is to strain the infrastructure there even further?), and will only return to office by winning seats elsewhere. For example, in the North of England.

Anonymous said...

I live in Sheffield, and am originally from London. I wouldn't move back for all the tea in China.

The suggestion that Sheffield is a failing city with a falling population is ridiculous. House prices have increased over the last few decades in line with national percentages, and the city has a very high percentage of graduates from its two universities staying on to live and work in the city following graduation. We have the largest sixth form in the country, our inhabitants are the fittest and our city the greenest with the most parks and trees.

I don't think the report writers visited Sheffield before damning it so thoroughly. Maybe they should have

Anonymous said...

While the report is the usual mildly barmy think tank fayre the real story is the shoddy reporting of it in all media. If you read the thing it isn't exactly saying get everyone out of Liverpool, merely that the previous reasons for Liverpool's success have gone and finding new ones that are as good looks unlikely.
But in the media we get the mayor of Leeds being wheeled out comlaining about the denigration. In reality they say little that is negative about Leeds, apart from to rightly point out that it doesn't have the economic clout to drag neighbouring towns up with it the way London does to places in Kent, Berkshire etc.

Blackacre said...

Anyone up for starting the Middlesex Nationalist Party and declaring independence from the smelly north then? Get real - they exist and if we do not try to deal with them, the big old cities of the north will become powderkegs. They will not just disappear overnight.

@molesworth_1 said...

Let's face it, if sea-levels rise as predicted (before you all get going on this one, I did say IF sea-levels rise...) the problem of England's redundant sea-ports is going to take care of itself & the SE of England isn't going to look anything like as attractive...

As to whether London & the SE is a more attractive place to live, well I shall be putting it to the test. Myself & mrs molesworth are departing our North Pennines hideaway tomorrow, off to the 'Big Smoke' for a long weekend - Museums, London Eye, blagging the Tube, arguing with surly bar-staff etc etc. Haven't been there for years now, but I'm not expecting to be charmed into remaining. After 5 days of 'hectic metropolitan living' I fully expect to feel an enormous sense of relief at being back in the sparsely populated, non-industrialised &, thankfully, unwatched, unsupervised and minimally policed (ho ho) hills. Unless somebody offers me a very highly paid job, of course...

David Lindsay said...

That they want all development to be around London, Oxford and Cambridge says it all. They have no concept of anywhere except those three.

And remember, these are the people who would actually be running the country while "Prime Minister" Cameron and "Chancellor" Osborne spent every day recovering from the night before.

Anonymous said...

Such a statist, leftist "solution" from a ostensible centre-right think tank is very surpirising!

I thought we were on our way to dispensing with central planning as the communist-inspired nonsense it is.

A centrally planned economy didn't work, a centrally planned health service does work, so should the Government should start relocating large sections of the population on a series of centrally planned targets - NO!

Anonymous said...

Hi Iain -

I think the Policy Exchange report got a couple of things right. First, economic geography and history do matter. And second, as you also say, no regional policy (Tory or Labour) has come anywhere close to narrowing the growth gap between the North and the South.

But you're right that calling on politicians to shut down cities - voters and all - is a bridge too far.

I think we'd be better off focusing regeneration and transport funding on Manchester and Leeds. With good transport links, and a trained workforce, these already-successful cities could become bigger regional hubs - and eventually help the Barnsleys and Burnleys to develop new economic roles.

A strong manifesto (for either party) would be one that says we need to focus regeneration money on a few places in the North - so that they can generate opportunities for other nearby areas.

Anonymous said...

Where would all the water come from? London and the South East barely have enough drinking water as it is. Add to that the millions of immigrants nulab are to dump on it to supply more nulab voters.

Now the tories want even more crowded in. Would that be so that the proles can die of dehydration while tories use the rest of the country for fox hunting?