At the heart of many articles I have written over recent years is a tension between the forces of the economy, which are sorting places into futures very different from their pasts and each other and the politics of their electorates, who don't like the look of what this means for them.
In places that are growing, are the politics of sometimes unwelcome development – mostly nimbyism. In those who feel like the tide has gone out for good, we see the politics of frustrated hopelessness for livelihoods and communities. Both are the politics of fear for an unwanted future and a lamented past.
How can we make more places feel like the tide is coming back in, if that is what is needed, or that the pressure of development is at a price and pace that makes people feel it is worth paying?There is no easy answer to this question. But the bare bones of one have been hidden in plain sight for 30 years. It is the model of city region-based growth.
Of course not everywhere fits into this neat dichotomy. There are growth-oriented places in the South and prosperous places elsewhere. Nonetheless, this tension and how it plays out in the months and years ahead is a defining feature of our country and has been at the forefront of my mind as I read of the seismic change taking shape in English local government this May.
It is not hard to see in the flight of voters away from the two main parties a rejection of the economics that has brought us here. After all, it is Labour and the Tories which have attempted when in government to square the circle between our economic constraints and political desires for decades. And lest any Liberal Democrats cheer this fact, they should recall what happened to their party in coalition when they took ownership of the trade-offs our nation faces – electoral annihilation.
Readers will recall that during the Corbyn era, the left of Labour thought it had an answer: the Preston pound and an attempt to encourage more money to circulate around places by promoting local trade through community wealth-building.
A noble, vital aim, but one hampered by the same problem as Trump's tariffs: you end up paying more for the stuff you make yourself than you could have paid for buying it from elsewhere. It produces winners. But it also produces more losers.
And that leaves us with economic orthodoxy which assumes rather too readily in this context that it is people, not place, that matter. All we need to do, it is argued, is fix transport, skills and, for the economically adventurous, innovation. The historical facts support them. Our attempts at regional and industrial policy have not produced progress commensurate with the money our nation has spent, although we can never know how bad things might have been if we hadn't.
It was with this in mind that I read a piece in the Financial Times as I digested the May elections. Citigroup bank decided to open an office in Malaga, Spain, post-pandemic as a ‘hub to offer junior investment bankers a better work/life balance'. It has now decided to close that office.
Remote from the centres where deals are really made in a sector still viewed by many in the industry as proximity-based, the workers in this most would think rather agreeable peripheral location found themselves working longer hours, lower down the corporate food chain.
It was miserable work and employees wanted to be where the action was. This, of course, is what our economy serves up in the jobs on offer in non-globally leading towns and cities. It is, at the better end, what people have just voted to reject, as they did in the Brexit referendum and others.
All this leaves a very big question confronting our society. How can we make more places feel like the tide is coming back in, if that is what is needed, or that the pressure of development is at a price and pace that makes people feel it is worth paying?
There is no easy answer to this question. But the bare bones of one have been hidden in plain sight for 30 years. It is the model of city region-based growth.
Our nation state and the next phases of devolution simply must enable Manchester, Leeds, Birmingham and Newcastle, and through them, Salford, Bradford, Coventry and Sunderland, to start to burn more brightly as centres of global economic prowess.
If they do, and in due course others too, they will beam heat and light over their broad hinterlands as they are already starting to do – with Manchester above all.
We need more of the good London effect in more of the country, without the bad London effect of letting growth outstrip the capacity of the place to absorb it. It is lunacy to label this as trickle-down economics. That is about reducing taxes on rich people so they create wealth. The argument here is simply that creating wealth is going to be easier in some places than others – a statement of what Basil Fawlty might term the ‘bleedin' obvious'.
To the newly-elected, as to those already burdened with power, there is a route map here. We need more successful regional cities and city regions. That means more investment and a new regional innovation policy to promote the start-up and growth of companies which want to be in our great city regions or other places with the necessary locational advantages.
This last point is important. There are smaller and successful places in every region whose prosperity is vital to the country. But creating inclusive growth anywhere means being far bolder than Whitehall has allowed our politicians to be in making sure we have devolution of skills, welfare and health.
We need enabling as well as punitive policy to do much more heavy lifting to make sure the benefits of our putative successful growth model are felt far more widely than has been the case hitherto. That would be a great deal easier for mayors with more fiscal levers than they currently have.
There will be a societal pay-off from more devolution. It will put local leaders on trial. Will a better future lie in grand, but empty gestures, the hard-headed politics of making long-term decisions through sound administration or marrying short-term wins with the hard slog of generational improvement? The sooner we put this to the test, the better.
Mike Emmerich is founding director of Metrodynamics
