LONDON is a truly splendid, wondrous and remarkable city, of this there can be no doubt. Possibly the greatest in the world if you believe its mayor, Boris Johnson, and it would be churlish to dismiss his boast out of hand.
For much of my working life I have spent a lot of time there, but I never got close enough to truly love it until the last couple of years. The City of London’s financial district has its splendour but is desiccated in its own way, with much of it opening and closing too early for any kind of civility to endure. And it bustles and runs too hard for anyone to put down any kind of root. But when you get time to spend proper time across its myriad other districts the true scale and detail of its life and story beguile and seduce even the hardest northern heart.
It is hard to imagine, let alone source, another city on the planet that combines its economic and financial power, cultural allure, political beat, history, diversity and architectural majesty. All dissected by one of the finest rivers there is. But for the rest of the UK, it is both a colossal opportunity and a monumental problem. And we have never quite figured out how to contend with that reality. But we must. Urgently.
In economic terms London is like the pulsing, glowing, centrifugal generator of some science-fiction writer’s dream. It lends energy to the shires while drawing in energy, strength and people.
In doing so it has the pull of a super-charged moon on the rest of the UK, drawing tides of talent towards itself and sending back only a reflected glow. This is both creative and destructive. The economic model of the UK rests upon it, and it can’t sustain.
The level of inequality resulting is mind-blowing both within London and between London and the rest of the UK. The gap between the richest district of London (Mayfair) and the poorest UK area (on Merseyside) is by a country mile the largest in the European Union. In terms of wealth generated per head of population that gap is 1,000 per cent and has grown every year since 1997. Five times greater than the equivalent gaps in small progressive countries such as Sweden or Denmark.
House prices are booming in London while in much of the UK they are still flat or falling. Of course there are pockets of UK resilience and growth but the scale of London is such that it skews everything.
If we are indeed looking forward into a recovery and potential interest rate rises then policymakers need to have two eyes firmly fixed on the geographic and distributional implications of both growth and inflation and their response to it.
Not for a minute do I suggest that we should have differential monetary policy for different parts of the UK – large parts of London itself would be looking for difference. But policymakers must be clearly sighted on the impact of this blunt instrument and transparent about the consequences. And other levers must be deployed and devolved to allow the rest of the country to respond and compete.
The psychology of Britain’s discourse is dominated by the life experiences of the metropolitan London elite drawn to the riches of the capital through birth, experience and success. The policy responses to the great conundrum have rarely worked in the past and seem powder-puff in the face of its modern hyper-charged reality.
Too many British eggs sit in the basket of London. Power is held by people with little personal interest in changing that reality. Even when a brilliant analysis of the great conundrum is published, such as last year’s “no stone unturned” report from Lord Heseltine, the policy response is either feeble or lies on a shelf.
So now, more than ever, is the time for that to change. No sustainable recovery can be built on the quicksands of one growth engine, or of property, or both.
This is not an argument here for Scottish autonomy (although it could clearly be) but it is an argument for a radical overhaul of the policy thinking and framework across the UK. This must never become a fight about us versus them whichever part of the UK you sit in. The temptation for politicians to score cheap divisive points will be real whether towards London from the regions or vice-versa. This must be about empowering self for mutual gain.
The leadership challenge is to take full advantage of the magnetic pull of London on talent and money from the rest of the world while balancing that self-same pull on the rest of the UK. We mustn’t damage London’s potential to out-compete other world cities but we must devote resource to resolving this conundrum for Merseyside, Midlands, Tyne and Teesside, Wales and every other part of the rest of the UK.
In Scotland we have a major chance to grasp the policy tools we need next September. We are lucky. How we best deploy them and how our UK neighbours compete should dominate our thinking and debate as the “recovery” strengthens.
There is not one Britain, there are many. And that reality needs transparently reflected in all we say and do. «