UKC

This programme , that argues London is 'too successful' and is possibly detrimental to the economic prospects and infrastructure of rest of the UK.

I wonder if this likely to change rUK's view on the upcoming Scottish Independence vote .
Could it even trigger disquiet in the Northern cities for more local powers.?

Perhaps more to the point, could the broadcasting of the concerns of Cities in the North of England, influence Scots to reflect a bit more deeply on their decision to, of not to, vote to break away from London( and Westminster)

http://www.theguardian.com/tv-and-radio/2014/mar/04/mind-the-gap-london-vs-...

In reply to Jim C:
It's a problem. I think a more balanced economy would pretty obviously be better for everyone - so many problems are caused by national scale inequality, not to mention that people who don't like London and the South East would have a better chance of finding jobs elsewhere while people who do like it would actually be able to afford to live somewhere within forty minutes commute of the centre. There's probably some political recognition of this, which is why you see stuff like chunks of the BBC being moved to Salford and similar stuff.

I think there are big political obstacles, though.

For instance, there's a natural tendency for businesses to want to accumulate in the same place - firms want to be near their clients, they want to be well placed for trade events, they want to be in contact with influential people in related industries. The worry [edit: I'm not saying I totally agree with this, just that the worry is a political obstacle] is that if you try to work against this, you're essentially moving water uphill - that you could pour a lot of money into initiatives to stimulate regional economies, but the net effect would be that everyone's worse off than if you accepted that a lot of economic activity will tend to focus on London, and figured out how to deal with it. And worse, if you do succeed in moving a lot of the economic activity away from London then there's a risk that you'll make the UK as a whole a less attractive location for international businesses to base things - part of the attraction of London being precisely that so much stuff is concentrated there.

So yeah, I'd be interested to hear some practical thoughts. I'm kind of hoping that the whole silicon glen thing takes off, because I'd love to have a better chance of finding good tech jobs somewhere that isn't really flat...

In reply to Ramblin dave:


Given that the "Silicon Glen" monicker has been around since the 1980s, and that the area took a big hit after the dot-com bubble collapsed, I think you may be waiting a while for it to "take off". Bar normal business fluctuations, I think it pretty much is where it is.

There does seem to be a fair demand for games designers & programmers if that's your bag.

In reply to Martin W:


The biggest problem for the Silicon Glen at the moment (I work in tech in that area) is recruitment, there is just no way to recruit enough qualified workers, as most of the good graduate move to London or Reading. They try to attract EU nationals at the moment, but quite often it's the same thing, they prefer to go to London.

In reply to RomTheBear:

I've got a sort of running joke that given the number of quite good techy types I know in the south east who'd far rather be living a lot nearer some sort of hills but are stuck here because that's where the jobs are, it should be fairly easy for us to collectively relocate and start some sort of world-beating technology company in (say) Fort William on a relative shoestring. Offer relatively crap pay but extreme flexitime so you can grab good climbing conditions etc.

I'd guess that the catch is always going to be that tech workers are normally thinking a career step ahead. So while one firm may be making them a good offer, they'll also be wondering whether they'll be able to find another job without moving if that firm goes tits up or decides that they're surplus to requirements...

In reply to Ramblin dave:


I'm totally in

In reply to Jim C:

Given the disproportionate spend on transport infrastructure in London and the Southe East, compared to anywhere further north, it's inevitable that more business, industry and population will be drawn to the metropolis. They are even talking about Crossrail 2. What successive governments have spectacularly failed to do is create the infrastructure where it's easier and more cost effective for business to thrive further north.

All Crosssrail, Thameslink, and M25 widening do is ease congestion in the Capital and the commuter belt in the short term. In the meantime, anyone further north has to struggle with seriously out of date transport links that inhibit wealth creation.

Instead of trying to move large numbers of people and goods short distances a little less slowly, surely it makes more economic sense , to be able to move things faster over longer distances. Spending billions on moving people and things up to 30 minutes faster on distances of less than 50 miles hardly seems an efficient use of money, when say upgrading the M1/M6 to 4 lanes and improving east west links would create bigger cost savings, particularly to the manufacturing sector.

If the disparity of infrastructure spending continues, I can see a good case for the far north of England wanting to join an independent Scotland, as it is be closer to Edinburgh than to London - both in terms of distance and in journey times even with the current state of the roads and railways.

In reply to Lord of Starkness:


I'm not convinced by this. London spends a lot on transport infrastructure, but only just about enough to keep it moving - try using the North Circular or the Central Line or Kings Cross station at rush hour!

I don't think economic activity is attracted by the infrastructure, it's attracted by the other companies and organizations who are already there - the financial institutions want to be where the government is, IT consultants want to be where big business is, service industries want to be where well lots of people are and so on. If you just abandon London commuters to their fate and move the infrastructure spending up North, there's a risk that a lot of international investment will just relocate to more practical global cities abroad, while the rest of the country will fail to pick up the slack proportionately.

My gut feeling is that transport infrastructure is a reactive thing, and that if you want to social-engineer more economic activity away from London, you're going to need a better lever. Science and technology research funding might be a good start. Arts funding, too, although it seems like things are going a bit better in that direction than they were twenty years ago...

In reply to Jim C:

Oh yes, all the bright people want to live in London do they?

If they were really bright, why would they want to live there?


The really revealing bit was the contrast with other parts of England. What a mess. You folks down there are going to grow a spine and start to fight back against Boris' gambler class. Not happening any time soon by the look of it.



Anyway, 'so long and thanks for all the fish'.

In reply to Jim Fraser:



I think the program answered that rather well - the clustering of groups that feed off each other - not my cup of tea, but I could see the rationale.

In reply to Jim C:
A really interesting program, I knew London was economically important, but not quite to the extent shown - the complaint from the North of England, and the rest of the UK, that London is too dominant probably does not reflect enough upon this - what was the line - "London produces more than Scotland, Wales, NI and the North East of England combined" ?

Will be interesting to see Davies take on re-balancing the economy in part 2.

As far as the impact on the independence debate I'm not sure, if the view of the YES campaign is that London is too dominant and the solution is to leave the UK, then this program will reinforce that view.

But if you accept the logic of that position, then Scotland leaving the UK can only damage the rUK outwith London further - which may be an unpalatable thought for some.

If however the success of London (and the London devolution that BJ wants) acts as a driver for a revised English political settlement, drawing on the success in improved democracy that i take Scottish and Welsh devolution to have been/being - then that might make for a UK that more in Scotland wish to be part of.

I suspect that given time the neccesary correction to the political system of England will occur if the UK remains extant - will the voters of Scotland give it time to occur, or are they lacking in patience?

In reply to Ramblin dave:


Yep, I king of agree with that. Mostly I think the problem is not that London is attracting too much, this is a good thing, the problem is the other cities definitely punching below their weight.

In reply to Jim C:

I think one of the problems is that the most significant factors in London's success are disguised subsidies from the state which makes all the talk about productivity and contribution to GDP naive. The way GDP and 'productivity' is defined if you grossly overpaid people to dig a hole and fill it in again they would appear as more 'productive' and contributing more to GDP than people doing useful work like building engines for planes despite the fact they are achieving nothing and in terms of practical output they may as well be unemployed.

The government statistics show expenditure 'on behalf of' a region rather than expenditure in a region. Expenses related to 'National' resources such as the headquarters of departments and agencies, large facilities and payments to suppliers such as lawyers, accountants and IT contractors are then divided up and allocated to regions according to population. But a disproportionate amount of this 'national' spending clearly happens in London and the South East. When you compare 'spending on behalf of' regions compared with tax from regions it looks like London is subsidizing the the rest of the country. If you looked at spending in various regions you would see the rest of the country subsidizing the economy of London.

The second massive but nearly invisible factor is the myriad of financial schemes set up to prop up the banks. There has been £375Bn of quantitative easing and this printed money is being used to buy up gilts from city institutions. That is generating artificial business for the city and putting money into the London economy. The easy money is then making its way through London financial institutions into the London stock market, London property and funding for crazy internet startups based in London. London is benefiting far more from that £375Bn of printed money than the rest of the country.

In reply to tom_in_edinburgh:


Are they? Davies did not seem to identify this in the program - do you have a source for the "london subsidised by the rest of the country" bit? It would be an interesting counterpoint to Davies's thesis.

In reply to Jim Fraser:

Are you sure I said that Jim ??
It may have been someone else.

In reply to Dr.S at work:

I think it was something like over £4K per head on transport in London, and £295 elsewhere. But that is not hidden is it ?

In reply to Dr.S at work:
By it's own figures the government spends more per head in London than anywhere else in England.

https://www.gov.uk/government/publications/country-and-regional-analysis-20...

"Among the English regions, public spending per head was lowest in the South East at £7,638
(13% below the UK average) and highest in London at £9,435 (7% higher than the UK average)"

In reply to Dr.S at work:

Salmond's says :-

""Scotland would rebalance the “economic centre of gravity of these islands” by becoming a “Northern Light” that would act as a counterpoint to London’s “dark star”. "



http://www.telegraph.co.uk/news/politics/10677213/Alex-Salmond-Independent-...

In reply to Jim C:

no, not at all hidden - and that level of expenditure may be necessary to support the burgeoning population - lower investment levels may well be appropriate in parts of the country with static populations.

If we let London break, then I doubt it will do the UK much good - as Rom says trying to get other regions to accelerate is the way to go.

In reply to Jim C:

Yes I saw that - I'm not sure that he is correct of course!

And I fail to see why if London can become a big draw within the UK, Scotland (or rather I guess the central belt) can not also do so within the UK - after all Scotland gets a similar spending level to London per capita.

In reply to Lord of Starkness:

What about telecommuting, teleconferencing? If you work in IT, I thought you simply needed access to a computer and could work from anywhere? So do you really need to be in London?

In reply to Jim C:


I was intrigued at this number and after looking at other parameters quite a bit it became very clear that indeed the government spend a lot more money on infrastructure per head in London but sounds at lot less per capita in other areas, so at the end of the day London is actually one of the only region in the UK generating more taxes than it received.

Seems to me that London is actually doing a lot of good for the rest of the country, but we NEED to empower other cities, London is pulling away, but the other cites are widely under-performing.

In reply to 999thAndy:




yes, I was replying to Tom's suggestion that there are hidden subsidies, and that These were critical to Londons success.

Post edited at 13:09

In reply to tom_in_edinburgh:

It's a shame that some of that £375Bn that was 'found' to prop up the financial institutions and fuelling the London property bubble, could not have been put directly in to infrastructure spending outside of the London Area. I'm quite sure it would have created a lot of construction and manufacturing jobs all across the UK, increased employment and tax revenues, and had a more beneficial effect on the nations finances than swingeing cuts and austerity - that are being felt more keenly north of Watford and west of Reading!


PS I live in Lancashire, work for a firm in the Midlands, and we're actually doing not too badly thanks to Crossrail -- but I've other friends in Construction related businesses in the north that are struggling to survive. I know a lot of people who end up travelling from the North to work in the London area during the week, and only get home at the weekends just to make ends meet. They stand no chance of being able to buy or rent family accommodation in the London area due to the disparity of housing costs. A good number are actually worse off than they would be 'on benefits' however they have pride and a work ethic.

In reply to Dr.S at work:

I don't think subsidies are critical to London's success, it has just reached critical mass / tipping point.

In reply to 999thAndy:


concur

In reply to Blizzard:

Sort-of-kind-of. AFAICT there's a general feeling that there's still a benefit to being in the office most of the time, talking to people in person, looking at the same monitor and so on. I know a few people who've managed seriously remote working but they tend to have been hard to replace technical experts who were in a position to say "either I work from home or I'm leaving..."

The cost-vs-benefit is hopefully going to swing in its favour over time, though - better technology, less cultural resistance - which would be an unmitigated Good Thing. Arguably this is also part of the reason why, when we talk about "infrastructure", telecoms is at least as important as transport.

In reply to Dr.S at work:


I don't think it does. If you read the government documents they are measuring 'spending for the benefit of' regions rather than 'spending in' regions. When the expensive parts of government services are provided in London much of the spending which is attributed as being for the benefit of regions is actually happening in London. All those civil servants costed as 'for the benefit of' regions are spending their salaries on services in London and paying taxes which are attributed to London and they are buying services for the government from providers in London.

The statistics are not supposed to tell us what the per capita spend in London is, probably because government believes all the regions would get very angry if it was obvious how much of their taxes were spent in London.

In reply to 999thAndy:




Yes but looking at spending per capita is meaningless if you don't look at the other side of the balance sheet, which is the tax receipts. In 2011, London generates a surplus of 10.3%, the south east barely break even with 0.7% surplus, and most of the rest of the UK runs LARGE deficit (Overall the UK has a budget deficit).

The key here is basically the productivity. Yes we spend more per head in London, but per head they bring also significantly more.


The problem is not spending in London, they definitely more than pay their way, the problem is that other parts of the UK are punching below their weight, we need to empower other cities so they can find their own way to increase productivity.

In reply to tom_in_edinburgh:


Ok, see your point, but I do not think that the expensive parts of most government service provision are in London - the biggest elements of UK spending are the NHS, Social security/pensions, education, devolved administrations and DEFRA - they account for the vast majority of all spending, and the vast bulk of that will be spent locally.

Hence I do not buy your idea that a "hidden subsidy" is the root of London's success.

In reply to Dr.S at work:

Well assume that say 5% of a large department's spending goes on central functions run out of London and its total budget is £100Bn. If you think of 5 big regions each of which has £20Bn spent 'for its benefit' that translates into roughly £24 Bn spent in London and £19Bn spent in the 4 other regions.

The point I'm making is that 'the vast majority of expenditure is spent locally' is not inconsistent with a big subsidy for London.

The other aspect is that in recent years the single largest component of the UK governments financial activity has been printing £375Bn to buy its own debt and that cash is getting laundered through the city of London. Without all that QE cash sloshing about the London economy would be significantly less happy.

In reply to Dr.S at work:
Looked it up , it depends what you look at, DrS but 'Services' that do not show the equality you mention .

"Identifiable expenditure of SERVICES by country and region 2012-13"

London 14%
South East 12%
North West 11%
Scotland 9%
Yorkshire ; West Midlands ;East all 8%
East Midlands 6%
Wales 5%
North East 4%
NI 3%

In real terms
78,391 millions London
53,944 millions Scotland

NE and NI get the least was down at around 20,000 Millions

In reply to RomTheBear:


I could be talking rubbish here, but is it possible that a lot of taxes attributed to London, is actually created elsewhere in the UK, but as they may have their Head/Registered office in London , these revenues/taxes then are declared in London?

Waits to be educated

In reply to Jim C:





Not sure if you have allowed for population differences in your calculations Jim?
In 2011 London's was 8.1million and Scotland's 5.3 million, so those numbers look similar per capita which is what I referred to.

Returning to Tom's point, I think that the existence of the large regional variations suggest he is wrong that a significant hidden subsidy exists as that would tend to smooth out regional variation rather than create it.

In reply to Dr.S at work:



( more homework - ' Must do better' )

In reply to Jim C:

You can find the numbers here, and a description of methodology.
https://www.gov.uk/government/publications/country-and-regional-analysis-20...

In reply to Dr.S at work:
It is not as easy as it seems, Scotland's spending includes water for example which is added in to the figures for Scotland into the spending per capita, but not included in other regions !

Apples and pears...

In reply to Dr.S at work:



N.b That's exactly where I got the figures I posted. DrS

In reply to Jim C:
Agree not easy to be 100% sure on any of this especially for us non-financial types - Since most govt spending is accounted for by the 5 big departments I doubt water accounts for the disparity on the scale shown in the numbers.

Anyhow - I'm interested by your view of the Guardian review you linked to at the start of the thread - did you think it was a fair analysis of the program?

In reply to Dr.S at work:


This bit ?
Jim C - on 00:25 Wed
"This programme , that argues London is 'too successful' and is possibly detrimental to the economic prospects and infrastructure of rest of the UK."

I

In reply to Jim C:

Yes

In reply to Dr.S at work:
I will try and find the source, but it might have been a newspapers analysis, or a R4 programme ( I spend a lot of time in traffic jams these months)

I have used quotes on ' too successful '. If it had been an online article, I would probably copied and pasted a larger quote, so probably from print or Radio.

Jim

In reply to Jim C:



Looks at the breakdown of tax revenue, corporation tax is not even 10%. The big bulk is VAT, income tax, NI, which can be very easily attributed by region.

Actually if you look at HRMC data for the tax receipts of corporation tax they take into account the geographical distribution of employees as well, in many case they also use survey data to try to have an accurate picture.
Also I am no expert in statistic but it seems to me that the civil servant of HRMC did the best job they could. I don't have any reason to think I should doubt the numbers, anyway I certainly couldn't do any better myself.

http://www.hmrc.gov.uk/statistics/receipts/disagg-method.pdf

In reply to Jim C:

Part 2 tonight - Hebden Bridge to the rescue?!

In reply to Dr.S at work:

It's quite true. Hebden Bridge is the death star of the British economy. From Rawtenstall to Heptonstall, it's been sucking the life-blood out of surrounding communities since, er, quite some time ago, actually.

In reply to Tim Chappell:

Ever since the chattering classes invaded...

In reply to Ramblin dave:

I drove through Bacup a year or two ago. They had a shop that, in broad daylight, on a Sunday morning, was selling CAPPUCINOS. Cappucinos! In Bacup! I ask you.

In reply to Tim Chappell:

Did you see the prog Tim? what did you make of it if so?

In reply to Jim C:

Evan Davis didn't quite understand that Salford Quays is in Salford not Manchester. Interesting idea of a northern linear city in an arc though. Makes HS2 sound even more of a mistake, likely to suck even more economic activity down to London rather than the opposite.

In reply to Tim Chappell:

Cappucinos in Bacup??? And a shop in Bacup open on a Sunday??? I am not sure which my grandparents would have found more scandalous.