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Last modified: 05 March 2015

The North-South divide. We've never even tried.

The most repeated myth in UK economics is that governments have tried and failed to heal the UK's North-South divide. The truth is that we've never even tried.

In the three most important areas of government intervention for creating economic growth — transport, higher education & research, and culture — all parties have consistently underinvested in the North of England.

I tweet, write and talk about this and how it hurts us all — from the Northerner who can't find a good job, to the well-employed Southerner who can't afford a decent home. A lot of people in London are sceptical about what I say. Here are answers to their most common questions.

Where there are no sources, they should be easy to find. If I haven't answered your question, get in touch. I will.

The North-South divide is nowhere near as bad as in Italy. Right?

Wrong. In 2008 the UK overtook Italy to become Western Europe's most geographically divided nation. And the divide is increasing (thanks Harry Aslam for the question).

But government investment is equal across the country. London just uses it better.

Nope. Far more government investment in the key areas for generating growth goes to London. Let's take transport as a first example. Source.

Wow, that sucks. But, London's a big city, so investments there generate the most growth.

They don't. The 2006 Eddington report did a lot of research into Leeds and drew up a list of investments that offered very good value for money. Only one has been funded. Compare that to the schemes that have been funded in London.

BCRs sound a bit technical to me, I bet there's no real-world side-effects of these decisions.

There are lots. In Canary Wharf the government spent billions on the Jubilee Line — the project has been a massive success. In Leeds, the government cancelled a tram that would have connected a similar development in Clarence Dock to the city — it's now pretty much dead.

There's only so much money. What are you suggesting? I already pay too much for transport.

You don't pay enough, that's why your train's full. A bus fare in Leeds is most often £2.80 even though buses here are much cheaper to run — I subsidise the £1.50 fare you think is too high in London. The South East gets special rail discounts not available to anyone else and benefits disproportionately highly from the huge subsidies government gives to rail transport.

I'm glad you mentioned congestion — I never get a seat on the train!

I feel bad for you but rail congestion is worse in Leeds than in London. Thankfully rail congestion in Leeds would be really easy to fix — if only the government would stop cancelling those easy fixes.

Just in case you were wondering, road congestion is worse in Leeds too.

But, it's London's density that makes its public transport great! Other UK cities can't compete.

You're right, sort of. Both density and size matter. If you've already decided that you want to build Crossrail somewhere, then London's likely to be the best place to build it.

But that doesn't mean that other big UK cities have to have awful public transport. It just means that their great public transport will be different. The third figure on this page listed unfunded schemes in Leeds that offered a better return on investment than schemes that were funded in London.

If we'd funded the Leeds schemes our country as a whole would be richer, Leeds would have better public transport, and yes, London would have slightly worse public transport.

There are even better ways to prove that London's density and size aren't the main reasons it is has better public transport and therefore better agglomeration advantages. One is to compare Leeds with a similar city abroad. Bordeaux and Leeds have similar population (about 1 million), and population densities (4000-5000 people per square km). Bordeaux has around 100m journeys by tram every year, and yet more on publicly controlled buses. The UK government cancelled Leeds' tram project, and privatised its buses — ridership is far lower.

Another proof is to compare Leeds and London with themselves two decades ago. Populations and densities in two cities have grown by similar amounts and yet Leeds bus use has plumetted, while London's has exploded. In 1986, London buses carried four times as many people as Leeds'. By 2009 they carried 12 times more. The difference isn't because of size or density — it's because of public subsidy for London, and privatised decline for Leeds.

You win on transport, but it's innovation that's important now. What about that?

We used to be quite an innovative bunch up here. Just little things, like Steel, Trains, Mass-produced fabric, Video Recording, Factories, Free Trade, etc...

But modern innovation relies on the state and the UK government spend far more in the South-East than it does in the North. I did a whole page on this.

But, The Haldane Principle! Money for scientific research is blind to geography.

The London School of Economics investigated this, and they disagree. In case you don't want to read, here's a summary

Diamond superseded the UK's existing synchrotron located near Manchester. The decision to move it to Oxfordshire was preceded by a heated and highly controversial political debate. Both locations were similarly competitive scientific clusters. Siting of the synchrotron in Oxfordshire created a highly localized cluster of related scientific research.

And there's another awkward fact. If government has no influence on where the UK invests in science, why do research councils get more even in their allocation of funding the longer they've been based outside of London?

But private companies like Google are investing in London, the government are just making the same choice!

Google might be doing their research & developement in London but they're the exception not the rule. Take a look at the figures about where business R&D takes place in the UK and you'll see that the government massively underinvests in The North West and the West Midlands and massively overinvests in London. Of course, over time, government investment draws in private investment so expect to see greater centralisation of R&D in the UK, and more after the fact justification of the need for yet more biased investment in the South of England.

see also here.

What about all those Art Galleries the government built in the North with my money?

The Labour government did build a few cool cultural venues in the North, but it was always spending more in London. If you don't want to read the summary of the report that proves it , here's a quote,

Central government spending on arts and culture in the capital amounted to £69 per resident in 2012-13, compared with £4.60 per person elsewhere in England.

What about technology? Surely not technology?

Yeah, that too. Beyond the direct subsidies available in Tech City, the government runs almost all of its technology events in London. Maybe you think that's just because of agglomeration — the pull of a world city — but compare how well Dublin, Helsinki and Barcelona do compared to similar sized cities in the UK like Manchester and Leeds. It's a bit about agglomeration, but not much!

Right, so what do you want? More public sector jobs?

I see you've drunk the kool-aid that makes you believe that the North is reliant on public sector jobs. What if I told you that the top three places in England for public sector employment were all in the South East? Source.

Kelvin McKenzie is right that London and the South East pays for the UK isn't he?

Kelvin's wrong about Scotland — they pay their own way — but the North of England is dependent on handouts.

Southerners work hard and can't afford a nice place to live. Then they send money North to provide basic services for Northern people, too few of whom can find good enough jobs to pay for the quality of life they enjoy. It's silly isn't it?

The good thing is that we all want this to stop. The North of England doesn't want handouts. If the UK government stopped investing as much in London and started investing in the places where they would get the best return we would close the North-South divide. All my friends would stop having to move to London for work, and many more of us could afford somewhere nice to live. It would also let more people live in one of the top places in the world and buy a lovely house outright with a deposit they'd been saving for a tiny flat in Stockwell.

Wonderful! One last thing. Why is this the first time I'm hearing this?

See here and here. And thank you for reading.

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