Northern cities need a flourishing capital, so there will be no winners from the downgrading of transport schemes
Those MPs in the north and west of England who believed Boris Johnson when he promised to level up the regions will be drowning their sorrows this weekend. The prime minister’s flagship integrated rail plan was revealed to be not much more than reheated and piecemeal improvements to existing rail lines.
Leeds will be allowed to move ahead with a tram system connecting the city and its nearest neighbours. A couple of electrification projects mothballed in 2017 have secured another lease of life. But otherwise the word “integrated” in the document’s title falls foul of the Trade Descriptions Act.
Northern Powerhouse Rail and the high-speed link from Liverpool to Hull are on the back burner. In favour are much smaller projects that could, just possibly, be under way by the next election.
Such was the panic inside No 10 about the need for clearly marked achievements by 2024 that the previous plan for a parallel high-speed network linking major cities with one another and London – better known as HS2 and HS3 – had to go.
One aspect of this change, however, is likely to cheer those in the regions who pour scorn on south-east England, not least for spending much of the past three decades gobbling up the majority of infrastructure spending. And that is the severe punishment Johnson has meted out to the capital.
The boss of Transport for London, Andy Byford, warns in an interview with the Observer this weekend, the capital is “staring into the abyss” as it struggles with the impact the pandemic has had on its finances.
Ageing trains will break down, signalling upgrades will be delayed and bus networks will be cut unless next month’s funding review is more generous. Plans to support walking and cycling will evaporate.
Tourists may not care that it takes longer to travel between attractions: superficially, London will look the same. Foreign businesses may not be so generous. To them the capital is the most attractive city in Europe and wins the war for foreign investment every year. They may think again when confronted by a policy programme that aims to level down.
As a former mayor of London, Johnson will know that thousands of foreign businesses located in the south-east want to be part of its rich tapestry of export-oriented service industries. They enjoy high levels of productivity, supercharged profit margins and a large pool of skilled well-paid labour.
These companies are not going to up sticks and move to Birmingham or Manchester because they have fallen out of love with London. They will relocate to cities – on the continent, or further afield
– that are striving to match its economic and cultural power. Only Edinburgh comes close as a competitor inside the UK, and thanks to the Scottish government’s obsession with exiting the union, that alternative looks more parochial by the day. Much as Britain does after exiting the EU.
It makes economic sense, over the coming decades, to encourage businesses that start life in the regions by giving them better infrastructure. And to further this trend with subsidies for firms to move away from the capital. There is no doubt a more balanced economy would also support a strategy that aims to cut carbon emissions.
But killing London to benefit the regions follows the same argument put forward by many Brexit supporters – that we need to cut off trade with the EU if we are to boost links with the rest of the world.
When politicians pitch London against the rest, it only serves to perpetuate ingrained prejudices – prejudices evident in Deborah Mattinson’s book Beyond the Red Wall. Yet there cannot be a good economic outcome.
West Midlands mayor Andy Street knows he will wave goodbye to Goldman Sachs and HSBC and their investments in Birmingham office space if these banks decide London is no longer for them.
Street says openly that he needs a thriving capital to provide a platform for growth – and not just from relocated banks but from a broad range of businesses that could migrate north with better train links and stay put when public health, education and subsidised arts and culture come in the same package.
Michael Gove knows that treating London like a bulging piñata, swollen with financial sweeties that will pour out if you whack it hard enough, is economic madness. He claims he will give us a definition of levelling up, possibly before the end of the year, hopefully one that recognises that the nation needs London to thrive. It pays the bills.
Byford needs to win his battle for more cash as much as his transport counterparts in northern cities do.
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