Robin McAlpine, who directs an organisation called Common Weal in Scotland, wrote a great blog for them yesterday under the above title.
What he quite effectively showed - using ONS and House of Commons data - was that Scotland is doing just fine as a UK region. The problem is that the whole of the UK suffers because London sucks the life, investment and income out of almost all its regions.
I won't do more than signpost the article here: I recommend reading it. And I endorse not only the analysis but also the suggestion that if Scotland was not a region but a country in its own right (which it is not at present) then its situation might be very different indeed.
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Interesting… and a similar line as I followed in a column on this topic yesterday stating that the business lobbyists are missing the point by accusing the Scottish government of depressing the economy through higher taxes. Truth is that the Scottish government does not have power over the appropriate levers (currency, oil taxes etc) to affect economic change.
https://dailybusinessgroup.co.uk/2017/04/are-higher-taxes-really-hitting-scotlands-growth/
There is a lot I can agree with there
This quote:
Westminster policy decided to cut sharply the number of public sector jobs, but not in the capital. Yes, isn’t it brilliant when you can be a bit Keynsian to yourself (keep ploughing in the public expenditure to prop up the wider economy in your own region) while slashing the same thing in all the other parts of the country?
Rings very true from the perspective of the North East of England. Just look at transport spend per person
http://www.independent.co.uk/news/uk/politics/north-south-divide-transport-spending-government-theresa-may-chris-grayling-crossrail-london-a7177656.html
We are still not connected to the national motorway network for goodness sake (although that is being remedied). My local library has closed, my local swimming pool has closed, Co. Durham Council claims that their budget is being cut by 80%. Some other regions are doing even worse.
The inequality between the capital and the regions is worse in the UK than anywhere except Russia. Government should be forced to make sure that all spending is on a per capita basis to stop pump priming existing regional inequality.
Government should move out of London to somewhere like Doncaster or Wakefield.
Germany and US has a better model where the finance centre and government centre are
not the same. I like London and want it to succeed but it will do just fine without the extra stimulus.
Agree with all that
Perhaps these thoughts may contribute to this debate?
London First is a very appropriately named, major pressure group of big business organisations, operating in almost every conceivable sector. High on the list of London First targets up to 2012, was infrastructure spend on transport, which even with all the public resource investment advantages that have been allotted to London by the sacrifices in self-interest of everyone else in the UK, turns out to be not enough. So let us list (by no means exhaustively) what makes up not enough investment for London, paid for by everyone in the UK: the Olympics, East London regeneration, Millennium Dome, Crossrail (1), St.Pancras-Channel-Tunnel (HS1), Docklands Light Railway, Jubilee Line, Wembley, HS2 (which begins in London and reaches other places, but not in our lifetime), etc., etc.; and now Crossrail2 (“serving London and the wider South East”).
London First soon moved on to new and ever larger demands in ‘London 2036: an Agenda for Jobs and Growth’ (2015):
“To underpin London’s ability to attract and retain talent, and to create growth and jobs across more areas of the city, London needs an effective, integrated and affordable system of transportation and housing. The city’s rapid population growth is putting increasing strain on its existing infrastructure. The draft London Infrastructure Plan identifies over £1 trillion of spending that is likely to be required between now and 2050 to support the city’s population and economic growth”.
London First wants £1 Trillion pounds of future investment over 35 years (equivalent to nearly £30Bn in current values, every single year for 35 years); paid for by everybody in the UK.
We can certainly confirm that London has uniquely cornered the UK Government infrastructure spend, from London First’s own Global Hub comparisons:
“The biggest challenge for London in meeting its investment requirements is funding.
London is much more reliant on national decision-making and national spending transfers than comparable cities: for example 74% of GLA and borough expenditure is funded from intergovernmental transfers, compared to equivalent figures of 31% in New York and 18% in Paris”. (source for 74%: Enid Slack, ‘International Comparison of Global City Financing’ 2013)
Conveniently the Institute for Public Policy Research (IPPR) gives the 2013 infrastructure spending in London and the South-East, compared with England as a whole:
“When we consider transport infrastructure projects which are deemed by Treasury and the Department for Transport to be primarily ‘regional’ and which involve some element of public spending, we can identify 69 projects with a combined projected cost of £32 billion. Here, a very clear picture of the dominance of London becomes clear. Two-thirds of planned spending on regional transport infrastructure is committed to London alone; when combined with projected spending in the South East, 86 per cent of [spend] (sic) is committed to London and the South East. By comparison, just 6 per cent is committed across the whole of the north of England.” (‘Still on the Wrong Track’: IPPR North, 2013; p.8)
A substantial element of the final funding of this joint public-private £32Bn is private sector, but if we focus on the £8Bn where the public sector is the sole funder, then London and the South-East’s share drops to a meagre 84%; a drop of a mere 2%. All that Public Sector effort; all that Parliamentary representation from the rest of England; all for 2%.This is how democracy works in Britain.
London alone accounts for almost 80% of all solely public sector funded projects in England. In the 2011 census, London’s population is given as 8.2m (Office of National Statistics). This represents 15.4% of the census population for England & Wales: 15% of the population merits 80% of the national public-sector infrastructure investment. This means that the other 85% of the population of England & Wales receives just 20% of the public-sector infrastructure investment. Remember, output returns follow investment (London First, above): no wonder London is more successful than anywhere else. All the resources are concentrated in one place, and on the 15%: the few.
And in a nutshell you summarise the UK Invetsment, productivity and inequality crisis
Moving the location of government has never had a more opportune moment. A huge facilities spend is coming, and overdue, no matter what. The only certainty is that repairs/refurbishment of existing structures is going to incur big cost over runs. They can’t claim not to recognise the need to spread things out as they forced the same, with some success, on the BBC.
Tradition is strong as is the Londoncentric view but the opposing arguments should be devastating. Forgetting all the economic, geographical and sociological reasons for moving it, just think of security.
I have to agree with McAlpine and with you. We need the ONS/Bank of England statistics to be more widely highlighted (they’re available – but not highlighted) so that the various regions of England and Wales can understand just how London fuels itself, to the detriment of everywhere else.
My daughter and son-in-law used to live in Darlington – they’re now with us in Havant. Ken went back to visit his family last New Year – and was frightened (he’s ex-Army!) to walk around the town centre. ‘The atmosphere was venomous,’ he told us on his return. ‘People are seething with resentment – but they’re targeting immigrants – and in particular the Roma – for their hatred.’ Not London – not the elite – but the people they’ve been told are causing their problems by the Murdoch press, the Express, and the Mail.
How can we counter these perceptions? There doesn’t seem to be any ‘populist’ newspaper or media that tells the truth.
And this is what the Mail et al want
Since 1977 approx 60 trillion (up x3)(yet only another billion people)of money has come into being!yet the narrative is that only double the amount (in actual money is enough to survive on) that is classed as impoverished & even then by doing the same trick has the regions here! socialising wealth on paper,rather than in reality,one statements says it quite well football is played on paper & neither is wealth distribution,just bad maths to deliberately distort the whole equation. it’s the difference between the American dream & its reality.
The City loves to proclaim – very loudly and on every least occasion – that it is an indispensable wealth creator, benefiting the whole economy.
The truth surely is that not only is London as a whole, the tail that wags the, but the City the tip-end of the tail that wags the tail.
To change the metaphor, it is at best a leech, drawing off blood from the system, and at worst an invasive cancer of wealth circulation – NOT creation – and one that circulates the wealth in one direction, namely FROM the UK economy to a corrupt network of secrecy jurisdictions.
Frankly, without root and branch reform, the UK would benefit from the disappearance of at least 80% of the City’s activities, and probably nearer 95%!
Sorry – missed off the all-important “dog” from the metaphor. That’s what comes of posting on the train via a Smartphone.
My enthusiasm foir financial transaction taxes is limited to noes that collect no revenue – because they stop the harm that the transactions cause