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More devolution may be key to solving the UK's London-centric imbalance

JACK BROWN: Giving greater powers to our towns, cities and regions is key to addressing the UK's skewed economy.

London

This piece was originally written for the Policy Institute's new Policy Review publication, which features essay contributions on a range of different issues by the institute’s researchers and Visiting Faculty.

Read the full collection of essays.

Unlike New York or Berlin, London is simultaneously the political, economic and cultural centre of national life in the United Kingdom.

It is perhaps no surprise, then, that the capital has often had an uneasy relationship with its nation state throughout their shared history. But in recent years, this relationship has appeared more fractured, even hostile. Why is this? Why now? And what should we do about it? In 2018, I authored a report with Centre for London, drawing on opinion polling and interviews with local leaders across the UK, in an attempt to answer these questions.

The first thing to note is that London survived the financial crash with minimal damage, yet many blamed it on the politicians and bankers who reside in London’s two ancient cities. Today, the capital’s economy is going great guns, with the gap between its performance and that of the rest of the nation growing year-on-year.

Regional growth need not be a zerosum game, and London’s success need not come at the expense of anywhere else’s. But while it may not be the fault of the capital, the UK is certainly a spatially unequal place, often described as the most regionally imbalanced nation in Europe. Whether intentionally or otherwise, the UK economy skews heavily towards London and its surroundings.

London’s success has huge benefits for the UK. In 2016/17, the Greater London region contributed £32.6 billion more in taxes to the public purse than it received in public spending. Alongside its commuter belt of the South East and East of England (otherwise known as the Wider South East), London is the only part of the UK to contribute more than it receives. On a regional basis, the rest of the United Kingdom is – currently, at least – entirely reliant on London and its neighbours to pay its bills. While this situation is far from ideal for both capital and nation, we are yet to find a solution.

Despite this reality, there is also a continued and widespread perception that London’s success is not being shared. Centre for London polling found that while over three-quarters of Britons living outside of London agreed that the capital contributes either “a lot” or “a fair amount” to the UK economy, just 16% say that it contributes the same to their local economy. As mentioned, this is not entirely accurate: money raised in London funds public services across the nation, not the other way round. However, this sense of disconnect is real, and powerful.

Local decision-makers across the country believe that a subliminal 'London-centrism’ affects the minds of London-based national politicians and civil servants.– Dr Jack Brown

Perhaps there is something that runs slightly deeper here. Centre for London polling also found that Britons’ pride in London as capital city reduces with geographical distance from it. YouGov analysis also demonstrates that distance also correlates with Brits becoming more likely to think London gets more than its fair share of public spending, as well as increasingly unfavourable views of the capital in a more general sense.

There is a feeling that the capital is remote, uncaring and disinterested in the rest of the nation. Perhaps unsurprisingly, those parts of the UK that are the biggest net receivers of London’s cash are also some of the most anti-London. A similar correlation between high Leave-voting areas and dependency on EU cash was also seen in 2016.

To make things worse, Centre for London’s polling also demonstrated that, despite London playing numerous roles in national life, it is the capital’s role as the home of the UK’s central government that springs to mind first when non-Londoners think of the city. So it appears that “London” is often a codeword for dissatisfaction with government.

Local decision-makers across the country believe that a subliminal “London-centrism” affects the minds of London-based national politicians and civil servants. By virtue of being based in the capital, national decision-makers are felt to skew their policies towards London and its own particular needs. In a diverse nation of towns, rural areas and unique cities with differing specialities and requirements, this is seen to be failing.

At the more extreme end, there is the idea of a remote, metropolitan elite, out of touch with the concerns of “real people” outside of London, and even working actively against their interests. Nigel Farage is currently making great political capital of rallying against the perceived betrayal of Brexit by the “Westminster elite”. The narrow Leave victory in the 2016 EU Referendum has been widely and repeatedly interpreted as a rejection of distant, unaccountable elites by “the people”. And, as has been widely observed, the Greater London region was the only one in England to vote to remain in the European Union.

How to remedy this? How could we build a more regionally balanced UK, and better connect people, places and power?

Current government policy involves redirecting Arts Council funding away from London, and moving civil servants (and Channel 4) out of the capital. But this simply moves the same problem to a different location. And with 80% of jobs in the private sector, the arrival of a small office of civil servants is hardly the transformative measure that towns, cities and regions outside of London need to grow.

On top of this, Centre for London’s polling showed that there is little public appetite for simply moving national institutions elsewhere in the country. When given a list of London’s key national political, cultural and other institutions, and given the opportunity to pick up to three that should be moved out of London to elsewhere in order to Local decision-makers across the country believe that a subliminal ‘London-centrism’ affects the minds of London-based national politicians and civil servants.” 26 Policy Review | 2019 make the country “fairer”, the top pick by quite some margin was “none”.

 

Serious, radical devolution of power to a more accountable local level could give the UK’s diverse towns, cities and regions the tools they need to grow.– Dr Jack Brown

So, if rearranging the parts is unlikely, how about rebuilding the machine? The best way to end “London-centric” national policymaking would be to make fewer decisions nationally. Serious, radical devolution of power to a more accountable local level could give the UK’s diverse towns, cities and regions the tools they need to grow.

The Blair government established devolved bodies in Scotland, Wales, Northern Ireland and London. George Osborne introduced metro mayors to represent combined authorities across England, and championed the “Northern Powerhouse” and the “Midlands Engine”. Greater Manchester, which has devolved powers over healthcare that go beyond even those afforded to London, presents a great example of what strong local leadership can do when trusted by central government to get on with it.

But the powers given to devolved bodies and politicians in the UK remain meagre by international standards – and particularly so in England. The percentage of taxes raised (and spent) by central government is higher in the UK than in most of our competitor nations. And yet progress on devolution, like so much else, has stalled entirely. Brexit dominates national life and policymakers’ time and energy.

With a great deal of historical baggage, and politicians at the centre inherently reluctant to cede power, creating a truly devolved country would require serious consideration and serious effort. But rather than proving a distraction, the results of the 2016 EU Referendum should surely be an impetus – to addressing regional imbalances, and delivering power to the most local, most accountable level.

 

Dr Jack Brown is a Lecturer in London Studies in the Department of Political Economy, King’s College London.