Minding the gap or moving the government?

What can be done about the London problem: the growing economic divide between the capital and the rest of the country?

Mind the Gap, a two-part BBC documentary by Evan Davis, looked at the causes and consequences of the growing divide between London and the rest of the country. He argues that powerful economic forces are polarising Britain: in theory technology should mean we can work from anywhere but in practice the economics of agglomeration mean that businesses look to cluster together and secure the benefits go with being close to each other.

However, for all those positive effects there are negative externalities too: the pressures on transport infrastructure, the environment and perhaps above all housing. Not so slowly, but surely, Londoners are being priced out of their own city. Much of this was summed up by in part one of the programme by film first of The Shard and then, just a few miles, the derelict and the soon-to-be-gentrified Heygate Estate.

The housing consequences come not just in London but in places like Cambridge, where part two highlighted Astra Zeneca’s decision to relocate its research and development from Cheshire to Cambridge. And they’ve featured again and again in  blogs and articles that have caught my attention recently.

Philip Barnes blogged about the Londoncentric focus of discussions about the housing crisis. ‘Walking round London is simply different to walking round other cities,’ he says. ‘You can feel the economic confidence – on the street, in meetings and during economic discussions.’

That sounds about right, even though I’m probably not best placed to judge given that every city I go to feels like it is bursting with money compared to where I live (West Cornwall). You don’t have to look at the house prices or the rents or listen to Boris Johnson for long before London does feel different.

London First, an employers’ organisation whose mission is to make the capital ‘the best city in the world to do business’, produced a report arguing that the ‘unsustainable’ housing crisis is putting its competitiveness at risk. It made a series of recommendations including new suburbs, increased density and new borrowing powers for local councils as well as a ‘21^st century Domesday Book’ of publicly owned land.

For this particular viewer, sitting about as far from London as it’s possible to be and still be in England, Evan Davis seemed just a little too pleased with the vast amounts of money pouring into the capital, too uncritical of the economic forces that have turned on the taps and too blind to the role of the state in many of the successful projects he highlighted. However, he also posed some important questions about the future of London and of Britain. Why is it that so much has come together in one place? And why has no other city come close to matching London’s growth?

For a good primer on the issues raised and some of the problems too, see this blog by Jonathan Schifferes of the RSA’s City Growth Commission on five insights and five oversights in the programme.

For an excoriating external perspective on the London ‘success story’, see this op-ed by Ben Judah in the New York Times. Being ‘open for business’ in reality means selling out to Russian oligarchs and Qatari princes, he argues:

‘The Shard is London, a symbol of a city where oligarchs are celebrated and migrants are exploited but that pretends to be a multicultural utopia. Here, in their capital city, the English are no longer calling the shots. They are hirelings.’

That point was picked up in an editorial in The Observer on Sunday about a city in thrall to money and greed. For London that means a growing spatial segregation as the super-rich colonise the centre and the poor are forced out altogether. For more on housing and inequality, see Danny Dorling’s new book.

And all of that got me thinking about London and its place in the country. It’s not just that it’s the capital of three national entities and the historic capital of an empire that makes it unusual. It’s also the way that so many of the networks that Evan Davis discusses are concentrated in one place – and the fact that this is not inevitable.

In the United States, for example, the political and judicial capital is Washington DC, the financial centre is New York, the tech heartland is around San Francisco and New York and Los Angeles are different centres of the media. London is all of these.

When you think about it in these terms it’s actually quite hard to think of another country where quite so much is concentrated in one place. France perhaps? Or Japan?

Elsewhere it’s normal for different networks to be based in different cities. Think of the number of countries whose capital city is not their largest city, for example. That is the case in Australia, Canada, South Africa, India, New Zealand, Pakistan, Nigeria as well as the United States. All of these were once part of an empire ruled from London but unlike their former colonial masters all of them have managed to avoid being dominated by one city.

Evan Davis may well be correct about the economic forces behind this. He may also be correct that global capital does not see the rest of Britain: the choice is London or Paris or New York not London or Birmingham or Manchester. Those of us who think that London was the last place that should have hosted the Olympics have to face the fact that the games would probably not been awarded to any other city.

However, how far are these forces somehow inevitable and how far are they the result of political choices to favour global finance capital that in turn have favoured London? We can argue about whether old-fashioned regional policy could influence the location decisions of companies like Google but it seems to me there is still one big decision that we can make for ourselves: where we have our government and/or our capital city. It’s a question that deserves to move from pub discussion (outside London) to serious debate (everywhere).

Countries around the world and, it seems, especially in the Far East, are confronting the negative externalities of mega-cities and seeing a change of capital as one possible solution. In China, the issues are pollution, a shortage of water and over-population in Beijing. In Thailand, Indonesia and the Philippines they are congestion, traffic jams and flooding. In Japan, earthquakes, tsunamis and the Fukushima nuclear disaster have prompted discussions about moving the capital from Tokyo. Malaysia has already built a second capital to complement Kuala Lumpur.

So maybe we should seriously think about it here too. Yes, the costs would be enormous, but so too would the potential savings in selling off prime London sites and the gains from releasing the pressure on London’s infrastructure and housing. The long-term costs of the status quo could be even greater and there are other major advantages too:

• It would turbo charge the creation of the second city that Evan Davis sees as the answer to the gap between London and the rest.
• A parliament and a government outside London would reflect the concerns of the country as a whole not just those of a metropolitan elite.
• Moving the government outside London would be a powerful restatement of the importance of the union in the event of a No vote in the Scottish referendum – and maybe a way of preventing further national break-up if there is a Yes vote
• The enormous investment in HS2 could be geared to the new geography of Britain rather than just finding quicker ways to get in and out of London
• As Rick has blogged at Flip Chart Fairy Tales, it’s not just the government that would move. Where previous relocations (even of the BBC to Salford) have resulted in the grunts moving north and the senior executives staying in London, this would be different. Journalists, lobbyists, PR firms, trade associations and charities would all have to move too, taking their staff and their spending power with them.
• Parliament has to move anyway: the Palace of Westminster is falling down and is full of asbestos and fire hazards. One of the three options under consideration is a total evacuation of the Commons and Lords during refurbishment. Why not just make it a permanent relocation?

The choice of a new seat of government would of course be far from simple. The obvious candidates, Birmingham and Manchester, already argue about which of them is England’s second city. Sheffield or Leicester or Wolverhampton or Stoke (whose £1 houses seem perfect for MPs) might be alternatives too.

But if we are looking for somewhere in the centre of the country are we talking about England, Britain or the UK? Edinburgh, Cardiff and Belfast already are capital cities. On some measures Haltwhistle in Northumberland, not far from the border between England and Scotland, is the centre of the UK.

And what if we just recreated London’s transport and housing problems somewhere else?

However, these are questions for the future. For now, the issues are how we free ourselves from London’s domination and how we free London from the consequences of that domination. Are we merely pawns at the mercy of global economic forces or do we have choices that can be exercised through the state? And should those choices begin with where we choose to have our government?