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From 1945 the British government restricted permissions for new factories in ‘congested’ cities such as Birmingham and London in the hope that the constrained growth would relocate to Northern cities and towns with declining industries and high unemployment. In the late 1960s and 1970s this central interference in local ambitions for growth was extended to offices.
Almost all economists in Britain now agree that these policies made Britain poorer than it would have been otherwise. The economic damage done to cities like Birmingham was larger than the economic benefit that the small amount of relocated growth provided elsewhere.
Political economists agree less on how Britain should avoid repeating this mistake.
To massively oversimplify,
Which brings us, surprisingly, to airports.
The first commercial passenger air service in Britain took off from Alexandra Park in Manchester on May 24, 1919. Headed to Blackpool, the biplane service was run by the aircraft’s manufacturer, Avro of Manchester. You might recognise the name from the iconic Avro Vulcan Bomber.
The North had ambitions.
The British government’s ambitions were different. It built just one civilian airport to serve the whole country, London airport in Croydon, and over the next five years it invested heavily in improving it.
If other cities wanted airports, they would have to build them on their own.
In 1920, Hull MP Joseph Kenworthy had suggested in The House of Commons that “the go-ahead municipalities of the north of England, Scotland, and so on” should be allowed to run municipal air services. The British government denied this request.
There would be one monopoly provider of air services, it would be generously subsidised, it would be run from London, and internationally it would be tasked by the central government to serve the British Empire and to provide “services between London and places in Europe”. In 1924 the British government removed any requirement to serve Manchester domestically at all and Imperial Airways abandoned the city completely.
Manchester realised it was on its own. It could build its own airport (as it did), but it could not run its own air services from it, and the British government’s monopoly air service provider was using an excuse of commercial viability not to serve it.
Many places would have given up, but Manchester does, genuinely, at times, do things differently. It fought. But more importantly, it also took action.
Manchester went around the British government and courted the Netherlands directly. Experiences like these are why Unionists in North England tend to be far more understanding of the SNP’s involvement in foreign policy on behalf of Scotland than Conservatives in the South. We know that sometimes disloyalty to a distant centre is in the national interest.
Having followed Dutch advice, Manchester opened its current airport at Ringway in 1938, and its first international service began. KLM to Amsterdam.
After the second world war, Manchester resumed where it left off. The next three international destinations from Manchester were,
You can spot the pattern. When the British government was involved, services to Manchester were not commercially viable. Other countries, consistently, and revealingly, saw no such barrier to commercial success.
The post-war Labour government was not happy about this.
“If ever there was a service which is not fit for municipal enterprise, it is the provision of airports” they said, beginning the process of nationalisation that would come for Manchester Airport in 1949. Manchester fought hard and managed to survive long enough for a Conservative government to win election in 1951 and step back from the brink.
These fights would continue for three more decades. One flare-up was in 1964.
Labour were back in power nationally and planning more nationalisations, including of airports. Edmund Dell, Labour MP for Birkenhead, sums up well why Manchester still opposed this.
“We have found at Manchester Airport that one will get service and assistance from the Ministry of Aviation in developing airports in the provinces only if there are bodies capable of fighting for the airport requirements of the provinces” and later “again and again in all our negotiations with the Ministry of Aviation we found that the Ministry seemed incapable of being diverted from the affairs of London Airport to the needs of the provinces, and that will continue while the Ministry continues to be responsible for the running of London Airport”.
These statements set the scene for what might have come next.
Margaret Thatcher flipped the threat to Manchester Airport completely. It was no longer fighting nationalisation. It was now fighting privatisation.
Previous Conservative governments had grudgingly accepted and at times even celebrated Manchester Airport’s municipal control and the competition that provided to what they saw as inefficient, low investment, and inattentive national government control.
Thatcher was much more hardline. She wanted to privatise everything. She also wanted to get the most money possible for the things that she was privatising. Manchester Airport was a big problem in the middle of that ambition.
Manchester Airport had expanded its runway and facilities to accommodate long-haul widebody jets. The British government had made it hard — it refused Manchester the right to borrow the money itself and required it to go through a tedious central government process to be allowed to — but with some help from the EU’s regional development fund, Manchester got its airport expansion over the line. Manchester could now accommodate more long-haul jets.
The problem was that the British government didn’t want it to.
The British government owned both Heathrow & Gatwick and British Airways and it was preparing to privatise both. It made sense to shuttle passengers from around Britain to Heathrow and Gatwick before flying them long-haul to the world in order to boost the value of London’s airports. British Airways abandoned flights between Manchester and New York, with the same line from the 1920s used to justify it. The services were not commercially viable it was claimed.
But this excuse quickly became absurd. In order to stop foreign airlines from replacing the flights lost by BA cuts and cannibalising demand for long-haul flights from Heathrow and Gatwick, requests to operate such flights were blocked. American Airlines wanted to fly from Chicago to Manchester. The British government denied permission. The Minister for Transport was claiming that Manchester lacked demand for long-haul routes in order to deny them the right to borrow money for more airport upgrades — “What regional airports need is more concrete flights, not more concrete” — at exactly the same time as he was blocking Singapore Airlines from operating routes from Manchester that they considered profitable.
Travel via London made Thatcher’s privatisations look better. Manchester’s pain was for the nation’s gain.
Continued municipal ownership has incentivised Manchester to support the expansion and success of its airport. It is the only airport in Britain to add a runway in recent decades: a second runway opened in 2001. Local financial contributions overcame national concerns that rail and tram links would not be commercially viable to get them built and the airport is today a major hub of the British railway network. Manchester just completed the doubling in size of Terminal 2 which will give it huge capacity for further expansion.
The EU’s open skies regulations finally removed completely the ability of the UK government to actively block flights into Manchester from the EU. Separate agreements achieved the same with the USA. Permissions for other destinations still go via the British government but the severe capacity constraints at Heathrow and Gatwick mean that flights are no longer actively discouraged from going to Manchester.
The situation is much improved even if complicated market mechanisms wrapped in international treaties combined with lingering London preference continue to distort the British aviation market. Severe capacity constraints at Heathrow would normally add huge costs to airlines and encourage them to choose Manchester, but charges are limited. In a market system these costs of Heathrow congestion would be passed on to passengers and focus the minds of Londoners who currently oppose airport expansion through their local democracy, but these price signals are heavily blunted. Every Mayor of London has opposed Heathrow expansion.
And so here is where I return to Birmingham.
Almost no sensible economist believes that constraining the growth of London would boost the growth of Manchester sufficiently to avoid Britain as a whole losing overall. I hope that we are past that dead-end.
But that agreement does not tell us what we should do about Heathrow.
For the Southern and the Conservative the answer seems simple. Heathrow is our national airport and the opinions of London’s democracy are therefore irrelevant. The British government must intervene in the national interest to unlock national growth in a country so starved of it in recent decades.
I disagree. Heathrow is no longer our national airport. Of course this is in part because it has failed to expand.
More importantly then, I argue that we should not want Heathrow, or any alternative, to return to being our national airport. When we had such an airport the result was a severe constraint of growth in Manchester and much of the rest of the country in order to preference its success. We need only look at Dublin, a much smaller city than Greater Manchester, to see what good leaving a country’s national airport plans can do for an airport.
Our current situation where Britain outside the South East has a choice of many hub airports to use and larger airports like Manchester have increasingly developed point-to-point networks is preferable to returning power to a British government that consistently exercised it to our disadvantage. Edmund Dell’s diagnosis in 1964 that when the British government was involved in the running of London airport it did not pay attention to the rest of the country remains true.
Many Northern Social Democrats and Liberals like me largely agree with Andy Burnham on this issue. Heathrow expansion is “principally, a matter for London and Londoners”. I am surprised that London’s democracy chooses to oppose its expansion. We might want to work nationally to try and unpick the barriers to making this result in much more expensive flights and in time a change of heart, but I am uncomfortable in the national government intervening on a local and regional issue. We have learned the lesson from Birmingham's supression by the British government.
Much more productive a task for national, regional, and local government is to make the most of Manchester Airport. It sits at the heart of Europe’s third most populous urban megaregion. At every distance it has a greater captive population than Amsterdam Schiphol. It should rival that hub.
But while the train from Manchester Airport to Liverpool and Leeds is typically short, runs on diesel and takes around 90 minutes, the equivalent journeys in the Netherlands are three times as fast, on trains four times as big, and easily twice as pleasant. The direct train between Manchester Airport and Sheffield was cancelled in 2022. Easy fixes to the British railway network that would unlock growth at Manchester such as upgrading the Castlefield corridor remain cancelled. There are easy and quick ways to unlock growth.
If London wants to expand Heathrow it should vote for a Mayor who backs it. I would be outraged if a British government then blocked that desire, just as I was outraged when a British government blocked the expansion of Leeds Bradford airport after my city had voted for it, and just as I have become outraged as I’ve re-read the history of a century of cumulative constraint that the British government has placed on Manchester airport in the name of having an integrated national aviation policy.