The original 1962 article, published in The Economist, making the case for a new capitalby Alastair Burnet / December 20, 2002 / Leave a comment
What has the south of Britain got that the north really wants? Short answer: the economic and social stimulus of a London. What has the south got that it would be well rid of? Short answer: the inefficiency of a congested central London. The arguments for reinvigorating the north are only too well known to every politician and economist. The chief arguments for decongesting the southeast are that a prolonged and unregulated influx means a high cost in road building and traffic jams; excessive journeys to work; and the effect of soaring urban land values on the provision of housing and other social needs. The troubles of the north and south are complementary. If only something could be done to move one of London’s fundamental magnets to employment up to the north, the problem of Britain’s steady relapse into “two nations” could be solved at a single blow.
Up to now, all political parties have assumed that the right magnets to try to move northwards are manufacturing industries. This policy has never really worked, because it means trying to cajole private commercial enterprises to go to one part of the country when they know in their hearts that they would make bigger profits if they operated somewhere else. In the near future this policy is likely to work even less well still. The pull of Europe, whether Britain is in the common market or not, is calculated to increase the flow of industry and population into the southeast. No government, Tory or Labour, could bring itself to prohibit this movement into the British segment of the largest consumer goods market in western Europe. But, in return, is there any major, non-manufacturing, non-market-located and really magnetic growth industry that could be safely and profitably transplanted north of the Trent? The most obvious candidate is the industry of central government itself.
London’s past pride and present headache is to have become three capitals in one: the centre of commerce, finance and administration. In the 19th century, it was the financial capital and the administrative capital only. The centre of gravity for industry and commerce in those days lay in the north. As industry has congealed into large corporate agglomerations, and as boards of directors have therefore become financial tycoons rather than men of the workshop manager type, the centre of commercial power has inevitably moved down into the financial capital of the…