Imagination not needed: what should we do?

Part three of a series. Part one is here.

The North needs better transport, more research and development, and a share of national institutions to succeed economically. There’s nothing imaginative there. Most importantly it needs these things to be in the right places. I’ve written at length on these issues. Here’s a short summary.

The UK government should,

1. Accept that state investment and state power play an important role in private-sector economic success. We know this because state-sector research and development funding is extremely well correlated with private-sector research and development funding and there is decent evidence that state spending causes private sector spending. We also know this because capital cities create private-sector skilled jobs even more quickly than public-sector skilled jobs. We also know this because moving the BBC to Manchester created huge private-sector spill-overs.
2. Focus state intervention in places where it will generate the greatest economic return. There’s decent evidence that agglomeration effects are real: bigger places generate much more innovation and economic growth than we’d expect just from their size, at least up to a point. There’s very good evidence that the UK’s large cities are abnormal among rich countries in not obeying this rule. We should invest there and resist the temptation to spread jam. Birmingham, Manchester, Leeds, and Glasgow are our winners. We should join other places to them, but they must be the heart of our economic success.
3. Focus state investment in research & development in large cities. This will require us to accept that current allocation of R&D funding is biased in favour of London and the South-East. The data is clear that this preference is inefficient and has damaged Northern cities. We need to start undoing this damage.
4. Focus state investment in transport within large cities and their conurbations. Simplethings like longer trains on lines like Pontefract to Leeds, trams between towns like Dudley and Birmingham, regulated buses in large cities (and fewer buses elsewhere), and a single smart card in each city region with the features of London’s Oyster card to pay for it all.
5. Focus state, or state-linked, institutions in large cities when taking them out of London. The ONS should be in Cardiff or Bristol, not Newport. The ICO should be in Manchester not Wilmslow. Digital Catapults should be in Newcastle and Leeds not Sunderland and Bradford. The Crick centre should be in Liverpool, and a Shakespeare memorial theatre should not be in Knowsley. It may not be a good idea to move these institutions again but we shouldn’t repeat these mistakes in the future.
6. Help people in unhelp-able places to succeed in cities nearer to home. I don’t have an economic answer for Newport, Bradford, Blackpool, Middlesbrough, Dudley, or Walsall. Not on their own anyway. Putting art galleries, government offices, or innovation centres in each of them is unlikely to generate a good return for the UK or for the people who live there. Let's join them properly to Cardiff, Bristol, Leeds, Manchester, Newcastle, and Birmingham and invest in success in those places. Then instead of showing people the way to a distant and expansion-averse London we could help them be more productive much closer to home. We have never really tried this.

Specifically, I would,

1. Double state-spending on R&D in Manchester (including Liverpool), Birmingham, and Leeds (including Sheffield). This is the job of BEIS in directing the UK’s research councils and bodies like InnovateUK. If extra money cannot be found it should be found by reducing spending in Oxford and London — cities where state-spending is too high given low private-sector spending. These cities have also failed to expand their housing stock to welcome newcomers to fill the jobs they create. Taking into account housing costs, willingness to grow, historical biases in funding, and the likelihood of generating clusters of excellence when assigning funding would achieve this. Ideally decisions would be taken away from the South-East in somewhere like Leeds but if things need to stay in Swindon let’s just limit the number of meeting that are allowed in the golden triangle.
2. Give Manchester, Birmingham, and Leeds £15bn each to spend on local transport schemes of their choosing. The money should come from budgets for Crossrail 2, HS2, and Heathrow expansion. If the cities chose to spend the money on HS2 and Heathrow expansions than those schemes should proceed but there must be complete freedom for those cities to decide priorities themselves.
3. Move another 15% of the BBC and at least half of Channel 4 to Manchester. The BBC in Manchester has been a huge success because it avoided the usual jam-spreading/find the poorest place possible approach to moving things out of London.
4. Move the British Library to Leeds. You’ve never heard of it and it’s almost impossible to get to but in the wealthy hinterlands of Leeds the British Library have a document store. It’s a great example of designing things outside of London to fail. Let’s move the main British Library to central Leeds and make a success of that.
5. Move the British Museum to Birmingham. Not Basingstoke, not Warrington, not Middlesbrough. Let’s do a huge state move out of the capital, free up a huge amount of land, and move something of huge national value to the UK’s most central big city.
6. Move the Capital to Manchester. We need to vacate the Houses of Parliament for refurbishment. Move to Manchester. It’s very central in our country, has always been a neutral place for all four nations, is currently planning huge expansion, has spare capacity at its international airport, and a world-famous brand, and is much more representative of the whole country than London. Move the Capital to Manchester while we refurbish the Westminster Parliament. And then don’t move it back.

Tweet