Eradicating Britain's North-South divide will take investment on an unprecedented scaleby Jonathan Derbyshire / December 10, 2015 / Leave a comment
Published in January 2016 issue of Prospect Magazine
Read the rest of Prospect’s big ideas of 2016 here George Osborne, the Chancellor wants to transform Britain’s economic geography. In this vision of our urban future, the “north-south divide” will be a thing of the past. Britain, or England at any rate, will no longer be a unipolar country, in which London sucks money and talent inexorably southwards—it will be bipolar. Just as towns across the southeast of England have been drawn into London’s orbit, so the satellites of our great northern cities will find the attraction exerted by their larger neighbours harder to resist. Osborne calls the northern pole of a rebalanced British economy the “Northern Powerhouse,” a phrase he coined in a June 2014 speech in Manchester. Britain, he said, needs a counterweight to London and the southeast. In 2013, London, southeast England and east England together accounted for 38 per cent of employment in the UK, but 83 per cent of annual jobs growth. Across the nine other regions, overall employment levels were still below the pre-crisis peak. The Chancellor wants a collection of northern cities—Manchester, Leeds, Liverpool, Newcastle and Sheffield—“sufficiently close to each other that combined they can take on the world.” That might be over-ambitious. As Richard Leese, the leader of Manchester City Council, pointed out recently, if you draw a triangle with Newcastle, Sheffield and Liverpool at its corners, the area covered is less than that covered by Beijing alone. What Leese calls a “virtual super city of the north,” with a population of 10m people, would be dwarfed by the Chinese capital, which is home to 22m people. But it would have more people than London. The case for the Northern Powerhouse rests on a consensus among urban economists that the bigger and denser a city or city-region is, the more productive it will be. So, the argument goes, Manchester on its own will never be a match for London. Only an agglomeration on a trans-Pennine scale can resist the centripetal forces emanating from the capital. That’s the logic, at least. But turning “Bipolar Britain” from a dream into reality is going to require infrastructure spending on an almost unprecedented scale. And there are downsides, too. Big cities in the Northern Powerhouse will certainly benefit from the devolution of power and resources from Westminster, as Manchester is already doing. But what about smaller, poorer and more geographically isolated places? Devolution works best for already successful places.