Declan Curry: the great London debate

 

Business journalist and Lloyds Bank Gameplan Live host Declan Curry asks if the Budget can help businesses across Britain become more productive.

About the author

Declan Curry

Journalist, former BBC business broadcaster and Gameplan Live host.

 Declan Curry

I've always loved London. I love all the places I've lived and worked in over the years - from Strabane to Swansea to Scunthorpe to Stirling. I remember Milford Haven with particular fondness, even though - when I broadcast from there - I couldn't always recall its name and called it Milton Keynes once too often. (I am still really sorry about that.)

But long before I actually lived in it, I knew London was the place I wanted to be. Blame the Thames TV animation of the London skyline that always appeared before George, Zippy and Bungle.

Yet the rest of the country has a love-hate relationship with the capital, and it's about 90% hate in my experience. It baffles me slightly. London is THE great global city. Innovative, creative, iconic, liberating, accepting, energetic (and occasionally up-itself); Britain is better-off because of London.

So I cheered inwardly when I heard the Chancellor say in his Budget that "we don't pull the rest of the country up by pulling London down."

There's always been a tension between the south and the north when it comes to government spending on big public projects. I understand why. There is only so much taxpayers' money to go round, even in less austere times. Any time I visit the great northern cities there will always be a few voices saying that, if the Government spent less on Crossrail, there would be more left over to improve the rail services across the Pennines.

We have an unusual gap in our economic geography. Economists say the gulf between the capital and the next big successful cities is greater in Britain than you find in other nations, and over the last generation that distance has been increasing. It's partly because industry has shrunk and it has taken those cities time to reinvent themselves. It's partly because of the centralisation of power, with Whitehall making decisions that used to be left to local councils. And, as I discovered when touring Britain for Lloyds Bank's Gameplan events last autumn, it's also because the economic connections around and between those great cities aren't as good as they could be.

"The entire area that runs from Liverpool, through Manchester, to Leeds, Bradford, York and on to Hull and Newcastle already has the ingredients to be a world-beating economic zone."

Those connections include transport. I enjoy taking the train from Leeds to Harrogate, it's one of the most beautiful journeys in the world, but it takes an awfully long time; far too long if you're doing it regularly for business rather than occasionally for sightseeing.

The entire area that runs from Liverpool, through Manchester, to Leeds, Bradford, York and on to Hull and Newcastle already has the ingredients to be a world-beating economic zone. It's got creative, inventive hard-working people. Its companies span advanced manufacturing, aerospace, medicine, renewable energy, IT and media; industries that are driven by knowledge and skill, not price. It has regular flights to customers on the doorstep in Europe, and on the other side of the world in China.

But the local road and rail links are often congested. In many parts, mobile and broadband coverage is slow. Economists say that dilutes economic clout in a region that - if it were connected up better - could give London a run for its money.

Things are changing. "High speed" rail is promised. Ultra-fast broadband is on the way, for some. There's a little more taxpayers' cash to spur industrial research and development. More decisions on skills, transport, housing and health are being taken by local areas; the latest, in the Budget, is a "devolution" deal for West Yorkshire. And those areas are being allowed to keep the proceeds of their success; the Budget revealed that Greater Manchester will retain 100% of any additional growth in local business rates.

Of course there's impatience that there isn't more of it, and more quickly. And other parts of the UK are scrambling to replicate their own version of the "Northern Powerhouse". The South West of England is getting £7 billion to help its planes, trains and automobiles move a bit faster. In the Midlands, there's investment in the cars of the future and the fuels that will power them.

"Even after the 2008 crash, London's financial services industry paid 13% of the UK's corporation tax bills and 15% of the nation's income tax."

But there is also investment in London's transport, regeneration and housebuilding - and so there should be.

London may give the appearance that it's on another planet, its housing market may have lost all connection with good sense and it may be a playground for the gilded and vulgar. But it is also the world's banker, insurer and lawyer. Even after the 2008 crash, London's financial services industry paid 13% of the UK's corporation tax bills and 15% of the nation's income tax.1 The capital's media companies, tech firms, restaurants and hotels turn out innovations that the rest of the world laps up.

And while other parts of the UK complain that London sucks in their best talent - and it does - it also offers the brightest in Britain an opportunity to develop their abilities to an international standard, right on their doorstep.

Would spending less in London leave more for everyone else? Possibly. But it would be a false economy. A more productive London is essential for a more productive Britain.

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