Want to level up the UK? Look at disparity within the regions, not just between them
It is a truth which has rapidly become universally acknowledged (to borrow Jane Austen’s famous phrase) that the government must deliver for its new supporters in the regions.
This is a massive challenge. The gap in income per head, for example, between London and other areas of the country is obviously large. But the firm trend has been for this difference to widen, rather than narrow.
Between 1997 and 2017, income per head, after allowing for inflation, rose by around 17 per cent in both the north east and the north west — just under one per cent a year. In Wales, another area where the Conservatives made big gains, the overall increase was a mere 11 per cent. In contrast, in London it rose by 42 per cent over these two decades. In inner London, the increase was no less than 56 per cent.
But that’s only half the picture. To fully understand what is going on, we need to look within the regions themselves. Manchester provides a perfect illustration.
In the mid-1990s, within half a mile of the city’s main rail stations was a bomb site. Not a site created by a contemporary IRA outrage, but by the Germans in the Second World War. In the subsequent 50 years, no one had thought it worthwhile to develop a piece of land in the centre of a major English city.
How times have changed. The total resident population of the city centre is now 80,000. Manchester has been totally transformed. The skyline has altered just as dramatically as that of central London.
The economic structure of central Manchester has come to resemble those of the inner London boroughs.
The Office for National Statistics provides detailed data on the numbers employed in each industry for every UK local authority. Turning these into percentages, I used some fairly straightforward maths to work out which local authorities have an industrial structure most similar to that of Manchester.
Get the news as it happens by following City PM on Twitter.
The answer is urban areas like Camden and Islington in London, and other major regional cities such as Bristol and Leeds. None of the nine other boroughs which make up the Greater Manchester region look remotely like the city centre itself.
The same is true of other English cities such as Newcastle and Leeds. The types of jobs on offer are quite different from those in the surrounding hinterlands.
The cities voted for Labour with massive majorities. It was in their satellite areas where the Conservatives triumphed.
The story looks the same from whichever level of geographic aggregation we look. Comparing the regions of the UK, London is much richer than the rest. Within individual regions, the main city is much richer than the rest.
It is easy to see why this happens. Once an area starts to become more attractive for business, other firms increasingly see it as a place to locate. Skilled people want to both work and live there. A virtuous circle is created, and the area pulls away from its surroundings.
If the government really wants to level up the country, it will need to be really imaginative to avoid falling into this trap.
Sign up to City PM’s Midday Update newsletter, delivered to your inbox every lunchtime
Main image credit: Getty