To thrive, Britain must embrace failure.
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On airports, homes, and data centres, London, Oxford, and Cambridge constantly vote against growth while cities like Leeds and Manchester continue to deliver it. Despite this, the UK government directly invests in and forces through growth in London, Oxford, and Cambridge while restricting, blocking, delaying, and cancelling investment in Leeds and Manchester.
This kind of central planning has the expected result of supressing British economic growth. Misallocation of capital and suppression of economic freedom are costly.
It would be understandable if this was being done by and was supported by the political left. But amazingly, in Britain, it is the right of politics, otherwise believers in markets and incentives, who most strongly back the British state picking winners in this way. In doing so they regularly make arguments against the power of markets and competition and in favour of central planning by a big state. They should not be surprised that the public increasingly agree with them and back ever greater central government involvement in the economy to return Britain to prosperity.
Let’s look at three examples. Airports, homes, and data centres.
Airports.
London has never elected a Mayor who didn’t oppose the expansion of its main airport at Heathrow. Meanwhile in Manchester, the city council supported and built a second runway at its airport. The runway opened in 2001.
Manchester is not alone. In 2021 Leeds City Council voted to allow expansion of its airport. The Conservative UK government used national powers to block that expansion in 2022, partly to save enough of the national carbon budget for the Heathrow expansion it wanted to push through.
The pro-growth right and centre of British policy almost unanimously support these decisions. Heathrow should expand whether London wants that or not, they argue. Leeds barely matters enough for most to even realise that Michael Gove blocked our airport expansion. A common argument from the right is that the whole country benefits from London’s growth and so London shouldn’t be allowed the freedom to fail. The evidence from Ireland, and increasingly Scotland, points in the other direction. Places like Manchester should serve roles in competition with London, not just in cooperation with it, just as Dublin and Edinburgh do.
Homes.
Last year Leeds and Manchester combined completed as many new homes as Oxford and Cambridge together have managed in the last eight years. This year it is possible, though probably it won’t quite happen, that Greater Leeds and Greater Manchester combined will deliver more new homes than Greater London. The Mayor of London’s continued insistence on extremely high affordable home percentages among other obstacles to construction have contributed to a collapse in home building starts there that Leeds, operating within the same national laws, seems to have completely avoided.
Data centres.
In Leeds, Microsoft’s plans to build an enormous data centre on the site of a former power station are being “so well received at Leeds City Council’s north & east plans panel” that “the tech giant will march towards determination with confidence”. There are national hoops to jump through, but it is extremely unlikely that the local government will put obstacles in the way of this growth.
Meanwhile in the South East, local opposition to growth is so strong that the UK government has been forced to intervene to get datacentres built after the local council decided that building on a former landfill might "visually damage the greenbelt". This use of national laws on planning opens to the door, of course, to more central government obstruction of growth in Leeds, just as with our airport expansion. It also interacts with onerous British laws that threaten to hold up permission in costly legal challenges.
Government spending.
London, Oxford, and Cambridge act like spoiled brats within Britain because they get away with it.
No matter how hard they oppose Heathrow expansion, pro-growth policy makers will celebrate the UK government investing billions on the Elizabeth Line to connect it better. The UK government will continue intervening to force Heathrow expansion through and get held up in ever more costly legal battles.
No matter how hard Cambridge opposes new homes and labs, the UK government will continue funding huge amounts of science there while it supports the creation of a Cambridge Development Corporation to sidestep local opposition to growth.
No matter how hard Oxford fails to grow and refuses local government reform that would fix the problems it claims restrict the growth it says it wants, it will still benefit from the announcement of UK’s first AI Growth Zone nearby.
These decisions are a constant reminder to these three cities and their regions that they are too big and too emotionally cherished to fail. They are told over and over again that they will be protected from competition from places like Manchester and Leeds if necessary. It is one of the strongest incentives possible to them to oppose growth.
London will get new national institutions like ARIA and the AI Safety Institute that the pro-growth liberals swoon over and other institutions like Nesta and the Alan Turing institute that they are less keen on, but would hate even more if they were somewhere else. Successful organisation in the North like Tech North and The Open Data Institute Leeds will be closed if they compete. London will get the fantastic new infrastructure like the Elizabeth Line, HS1, and HS2, that they all use. Competitors within a zero sum emissions game will be blocked if they threaten to win. Oxford will get its AI Growth Zone and its second railway link to London, and together with Cambridge the country’s largest new railway line connecting Oxford and Cambridge at eye-watering cost with little economic justification. Cambridge will get its continued eye-watering high science funding, its development corporation, its new satellite towns, and much more beyond that.
And Manchester, Leeds, and the other cities of the North will continue to get much less. The British Library remains a dream in Leeds, as does a National Data Library, continuing on default mode to being set up in London. A Leeds tram is delayed, Northern Powerhouse Rail cut and kicked into the long grass, while public investment in research & development designed to increase growth in Britain remains steadfastly focused on just three cities, all of which refuse to grow.
And amazingly, the pro-growth policy people of Britain cheer this on. There is, so many of them claim in some way, simply no way that anywhere within Britain can compete with the Golden Triangle they just happen to almost all live and work in. Markets and competition just don’t apply to them. “It’s not London vs. Manchester, but London vs. New York” they use to excuse themselves from the power of competition and justify central planning for their own benefit. How convenient.
No doubt they will sneer at me and others for laying it out so clearly. Or act surprised when more cautious and collaborative people like Andy Burnham make similar points to mine more gently which they fail to detect the subtext in. Perhaps the usual accusations of hating London and talking Britain down will be levelled at me, just as they are at Andy Burnham and others of the more careful and collaborative crowd.
Enjoy yourselves. But please don’t act surprised if Britain turns away from the markets and competition you claim to cherish while arguing against the very same thing. And please at least consider that views you back are the major cause of economic stagnation in our country. I promise that I will continue to consider that my opinion that the North of England should prosper semi-competitively rather than in pure subservience to London is also effectively anti-growth, as I am often told. If London, Oxford, and Cambridge continue to know that they are too big and too cherished to fail, Britain will not thrive. It is neither unpatriotic nor populist to say so.