With much of the city reeling from the referendum result, many Londoners looked inward to question identity, their actions and the relation of London to the rest of the UK. With stark differences uncovered from the result, how should Londoners feel and act? Nick Barron thinks that our old ways have only made things worse.
“They lined up all the toffs and boffins, the chief executives, tycoons and clever-clogs in the (south of the) land, and asked the nation to pat them on the back. The invitation to a punch in the face was too good to miss.”
Like many Londoners, I suffer from Londoner’s guilt.
I’ll smile, tight-lipped, when some out-of-towner declares London a disgusting hole. I’ll politely change the conversation when someone tries to tell me that bringing up my children in the capital is tantamount to child abuse. I’ll be overly generous about the virtues of Liverpool’s nightlife or Birmingham’s civic buildings. I will be quick to offer a defence of any provincial dive on the basis of how lovely the nearby countryside is. I support the desire to ‘rebalance’ the economy and tut mournfully about how out of touch the metropolitan elite is with the plight of those in other parts of the country.
I do all of that because I know how lucky I am to live in London and there’s no need to rub it in to anyone who doesn’t. But the Brexit vote has shown that this is a bad strategy. Londoners’ guilt was a luxury we thought we could afford because we were living through a golden age, but it was storing up problems.
The Leave win wasn’t just a vote to choke immigration, it was an act of nihilism. Voters chose to harm London — to cut down a Gherkin-sized poppy. It is time Londoners’ stop accepting the blame for every problem the UK faces. London’s ascent is the inevitable result of two long-term economic forces that none of us is responsible for.
The first is agglomeration economics.
Growth is increasingly driven by the convergence of different industries and technologies — and the transfer of knowledge between them. Cities create a network effect, producing serendipitous encounters and making collaboration and exchange much easier. As cities grow, the network effect becomes more powerful.
Elite athletes benefit from training alongside each other, learning from each other and raising the bar each day. So too, companies improve from working side by side. Large cities find it easier to sustain centres of excellence than smaller ones. The ‘Northern Powerhouse’ strategy was based on this phenomenon. The sum of Manchester’s growing clusters of excellence in industries like the media, materials science and sport will be greater than its parts.
Big cities also create a larger potential market for investors and entrepreneurs — they are typically the first places to attract new services and usually the only places that can support major attractions. For example, a restaurant like Bluebird on the Kings Road needs to serve around 100,000 covers a year— which makes it hard for anywhere outside London to support more than a handful of places like this. But business tends to congregate where there are fancy restaurants, hotels and a plethora of support facilities and specialist services.
The second is Maslow’s Hierarchy of Needs.
At a recent conference on Sustainable Cities, Director of Global Research for JLL, Rosemary Feenan, argued that as we have become richer, the role that cities play in our lives has fundamentally changed in-line with Maslow’s Hierarchy of Needs.
When we were poor, cities were primarily places to look after our basic physiological needs — we fled the countryside in search of the higher incomes offered by industry. A small town could do that job pretty well. As we became richer, we created cities that offered us a sense of belonging, giving birth to an explosion of clubs and civic institutions. But larger towns were typically needed to sustain these.
Today, in an age of relative abundance, we are increasingly driven by the desire for self-actualisation. To be all that we can be. Spending on ‘experiences’ is rising much faster than spending on ‘stuff’.
It is the great cities that offer the richest opportunities to be, to do and to meet — to become. And people are willing to trade square footage for unique and wonderful moments. Not all people of course, but typically the most ambitious, creative and adventurous ones.
Look at them all. Go to Hyde Park or Brick Lane on a sunny day. Get up at 6am and go for a run on the South Bank. Stay out after midnight in Hoxton. The city is teeming with beautiful, talented people doing stuff all the time. Now take a train from Kings Cross (where you’ll trip over people from Google or St Martins making things and making money) to almost any provincial town or city you can think of — the difference is stark. There are fine places. Ever so clean. If you are lucky, in the middle of the day, outside the main train stations of even our biggest cities, there might be a couple of pensioners waiting for a bus. And that’s your lot. Durham is nice, but the opportunities to self-actualise are minimal.
This urge to become (turbo-charged by Instagram and Twitter, which award social cache to those with the most overtly fabulous lives) means that talent will increasingly cluster in the biggest world cities. As Michael Bloomberg observed, the best and brightest want to be where the action is.
It is these two manifestations of the network effect that explain London’s rise to pre-eminence and the irony is that while the UK’s membership of the EU common market might have served London better than the rest of the country, its unique strengths (its skills base, its diversity and its clusters) will offer it greater protection from Brexit than most places.
Multinationals look at countries like Risk boards, moving factories, R&D facilities and call centres around the map based on marginal gains. Reduced access to the EU market will deliver a significant blow to the UK’s competitiveness, but in London, that shock will be weighed against the difficulty of doing business in places without the highly-specialised ecosystems that London offers in key sectors including finance, law, life sciences, media, tech and god-help-us all, marketing and communications. Parts of the country without clusters or deep talent pools to protect them will be more vulnerable.
Brexit has the potential to do long-term damage to London, but the imbalance between London and the rest of the country will continue to grow.
The primary political problem the UK has is not London bias, it’s a lack of serious policies to navigate the wider economic forces at play.
Yes, London gets the lion’s share of public transport infrastructure investment, but only major cities need or can justify a major project like Crossrail. The economic return on investment in London is much greater. London is the biggest net contributor to the UK’s public finances and were it to have control of its own finances, Crossrail Two would have been built by now. There’s a strong case for more investment around the country, but not at London’s expense.
Westminster is a bubble, but it remains as impervious to the real needs of London as it does to those of the rest of the country. A Tory Party that gave primacy to the needs of London would not be home to so many Eurosceptics or be so hostile to the ‘metropolitan’ stylings of Cameron and Osborne. The Labour Party’s last remaining power base is among London voters, but its politicians are paralysed by useless, patronising guilt about the state of their of their old industrial heartland and happy to blame the London ‘others’ (bankers, oligarchs, et al) as a way to signal their virtue. The nationalist parties, UKIP and the Greens draw much of their strength from the idea that London is the enemy.
To recap: The damage Brexit may inflict is the result of a sense of economic injustice and resentment toward an aloof London-elite, but the economic forces that have produced this situation will not abate post-Brexit. Resentment may have found its outlet, but it hasn’t found its cure. The war between London and the rest will get worse.
To stop London being harmed by domestic politics we need to campaign for policies that will limit the impact of Brexit and support London’s continued growth. Londoners need to develop our own vision of a post-Brexit settlement as soon as possible and start making our case with urgency.
The London economy needs access to the skills and enterprise brought by immigrants, increased investment in housing and public transport and as much free trade in services as we can possibly manage. London also needs a sister city in the north with the scale to act as a counterweight and share the load of growth.
There is no room for complacency. Theresa May’s lukewarm support for the Northern Powerhouse strategy suggests that she has little time for agglomeration economics. She has made reassuring moves in recent days, but the new administration’s vision is a Northern Powerhouse-for-all, which is essentially a return to the old idea that investment should be spread thinly — counter to the logic of agglomeration economics.
To make our case, Londoners have to get over their guilt and insularity and start challenging the narrative that fuels national resentment, so that we can focus on the right questions. Specifically, this means three things:
- Myth-bust. No more nodding sympathetically when someone tells you that London is an economic leech or an economy built purely on the immoral earnings of bankers. Stop writing articles telling the rest of country that no-one can afford to live in London anymore because there are too many people living here.
- Celebrate others’ success. Tutting about regional decline, while sitting in a London studio does no one any good. We need more show and tell about the success stories outside London: Sheffield’s advanced manufacturing, Bristol’s aerospace industry — even Cambridge’s tech success is under-reported. Hail the heroes and highlight London’s role as an enabler.
- Engage. London’s not the impenetrable “other” of national imagination but we need to do more to help companies and individuals access the huge opportunities that London represents. Take Parliament on a national tour during Westminster’s closure. Prove to the rest of the country that politicians can seem detached, wherever they happen to sit.
London prides itself on its role as the most important cultural confluence point in the world. So it’s time to start talking to the 52% as though they were our equals to trade, debate and partner with, rather than plebs to be pitied or feared.
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