Across the world, many countries have multiple large cities that are informally understood as the capital cities for different sectors of the country. While Berlin is the political and cultural capital of Germany, Frankfurt is its financial centre; in Italy, Milan is the financial and industrial capital rather than the political heartland of Rome; the United States of America has its centres of influence differentiated between New York, Los Angeles, and Washington D.C. In Britain, however, the spheres of culture, politics, the economy, and finance all emanate from one place: London.
While its smaller landmass than the aforementioned countries perhaps makes it less likely to sustain multiple ‘capitals’, it is nonetheless striking that a nation of the United Kingdom’s standing is dominated so much by one city. London is by far the largest, most populous, and most productive city in the UK, and much more than simply the political and administrative centre. As such, for at least the last few decades, London has had an almost inevitable magnetism, drawing in more and more of the country through improvements in commuter transport links and enticing people in with its immense cultural infrastructure of landmarks, museums, cafes, restaurants, theatres and bars.
Considering the dominance of London raises several interesting questions. Firstly, in what ways is Britain ‘centralised’, and why should we decentralise it? Is this process already underway? And finally, how can we decentralise Britain in a way that shares prosperity around the country while retaining London’s status a global, world-class city? Such questions are not new, however, the forces of the coronavirus pandemic and the climate crisis have imbued them with novel challenges and opportunities.
London is a “much easier place in which to live, work and commute than other UK cities”
London is, of course, the official capital of the United Kingdom, and so it is the seat of British political power. At a glance, its economic importance is clear from the fact that more than half of the UK’s top 100 listed companies and over 100 of Europe’s 500 largest companies are headquartered in central London. Furthermore, with just 13% of the national population, London is responsible for 23% of the UK economy. Its diverse economy, including its proud hospitality and cultural attractions, are unmatched elsewhere in Britain. Most of the country’s notable newspapers, think-tanks and non-governmental organisations (NGOs) are also based in London.
The Greater London area benefits from public spending that is often higher per-head than any other English region, particularly with regards to transport infrastructure. The city benefits from a coherent, cohesive, and effective public transport network, which often involves fares much more affordable than the much less affluent towns and cities of the Midlands and the North, which often suffer from unreliable, inadequate, and un-coordinated patchworks of privatised bus and rail services. Such investment in public transport has, in this respect, made London a much easier place in which to live, work, and commute than other UK cities.
Indeed, the much-maligned High Speed 2 (HS2) rail line endeavour can be seen as another huge public investment which arguably serves the capital most. With the rail project lacking a timetable for its northern component and its Birmingham-to-London segment experiencing countless delays, reviews, and over-spends, it remains to be seen if the line will ever be extended to the North. It seemingly follows the misguided idea that improving access to London is an automatic benefit for an area and the result is more and more of the country being pulled into its gravity well, pushing the extent of its commuter zones ever-further.
“While the average salary is higher in the capital, so too are living costs”
So, it is clear that Britain is heavily centralised around its capital. So why is change needed?
First and foremost, decentralising Britain is important for ‘levelling up’ the other regions of Britain, to borrow the Conservative government’s turn of phrase, and to bring lasting prosperity to regions that have felt left behind by London’s surging success since the 1990s. This is especially important as we enter a period of post-pandemic recovery.
From a business perspective, a London-centric economy potentially results in firms missing out on talented people from across the country, who are unable or unwilling to relocate to the capital. That said, plenty of young graduates from across Britain often leave their home towns and cities to move to London, meaning the top talent is often sucked from the regions. Addressing this ‘brain-drain’ is important to increase the prosperity of the rest of the UK’s towns and cities.
For working people themselves, decentralising Britain would mean a better chance of good employment in areas with lower living costs and potentially a higher quality of life. After all, many Londoners have the least disposable income of workers anywhere in the UK, because while the average salary is higher in the capital, so too are living costs.
Politically, it is imperative for the leaders of the major British political parties to convince the more ‘left behind’ areas of the country that they care for their fortunes. The Conservatives need to appear to have repaid the faith of the new blue seats in the Midlands, North-West and North-East, while Labour desperately needs to win back support in areas such as the former mining communities upon which it could formerly count so consistently. The Liberal Democrats cannot hope to recover if they do not foster an image of themselves of more than the party of middle-class Londoners, while the clamour for independence from the SNP and even Plaid Cymru will not be placated without a progressive agenda which makes a concerted effort to address the issues of not just all England, but all corners of the United Kingdom.
In addition, local leaders such as Mayor of Manchester Andy Burnam (Labour) have been vocal in arguing that the pandemic response has highlighted the limits of a centralised crisis response and the need for greater devolution not only to Wales, Scotland, and Northern Ireland, but also to the English regions due to the need for locally-tailored responses to spikes and surges in Coronavirus cases.
Change is already happening.
While all of these arguments appear to be aspirational, it can also be seen that change is already happening. First of all, there have been early signs over the last couple of years that London is perhaps losing some of its lustre; the capital’s population growth over the last decade has only been sustained by international migration and the high birth rate, with 550,000 more Britons leaving the city than moving to it. The house price differential between it and the rest of the UK is decreasing somewhat, and accounting firm PwC has argued that graduates are beginning to forgo the capital.
The long-term impact of the coronavirus pandemic is likely to exacerbate this. If companies decide to make remote working a permanent mode of employment, Greater London’s exorbitant rental costs and long, busy commutes become unnecessary. Even if companies bring employees back to offices for part of the week, workers are likely to be prepared to stomach a longer commute if it is not every day, and so will be more willing to live further from the city centre. Such decentralisation of the economy from the City of London may well improve life for many in the wider metropolitan area, despite the insistence by the Conservative Government and office property investors such as Lord Sugar that it is imperative to return to central offices. However, the question remains whether this will help the country at large, or just the commuter towns of South-East England. Nevertheless, the decentralising effect of Covid-mediated employment patterns will be felt in all major towns and cities across the country.
Some businesses may see this as an opportunity to cut costs by escaping London’s sky-high office rental costs, which can be seven to nine times higher than in other areas of the UK. Indeed, some companies have already moved headquarters to other British cities, for example, HSBC moved its retail banking HQ to Birmingham in 2017 and Amazon chose to re-locate its major British corporate site to Manchester in 2018. Smaller businesses may choose to (or be forced to) fully embrace remote working in the post-pandemic era, removing the need for employees to pay over the odds to locate themselves in prime commuter zones.
If this is the case, and the decentralisation of Britain is both beneficial and already underway, the final thing to consider is how we should steer this process in order to ensure both London and the rest of the UK benefit.
As the British economy aims to recover in the post-pandemic world, employers should embrace flexible and remote working as long-term employment models, enabling those across the country to work for the UK’s biggest companies and for those firms to have the ability to access all of the talent Britain has to offer.
The struggles of the airline industry might make domestic UK flights unviable. As such, investment in high-speed rail is needed, as is happening across Europe. This should be done in such a way that the wider country benefits, instead of sinking huge sums of money and destroying swathes of the environment to take twenty minutes off the Birmingham-to-London Euston route. Any attempt to address the climate crisis is likely to add impetus to this, and so an increase on road and air travel tax and a decrease in rail tax should be utilised to reduce rail fares to encourage passengers.
In addition, the looming renovation of the Houses of Parliament provides a unique opportunity to move the UK’s centre of political gravity to a different region, even if on a temporary basis. The Prime Minister even briefly suggested moving Parliament to York during the works, although this was quickly dismissed by his MPs. This could spur conversations on relocating public bodies to areas outside London, and move the attention of British politicians away from Westminster.
Overall, Britain’s heavily centralised and London-centric nature is detrimental to the country and the pressures of the Covid and climate crises may force change, some of which may already be underway. That said, London is the United Kingdom’s capital, the largest city by far, and above all a fantastic and genuinely world-class city; it should remain prosperous and important because if it doesn’t, the whole country suffers. However, a more decentralised country, where prosperity and opportunity are more evenly distributed can only be beneficial, and indeed may be both necessary and irresistible in the years to come.