Two weeks after an article in The Guardian that compared the North East to Detroit, Peter Hetherington – a former reporter for both The Guardian and The Journal – makes a case for the potential strength of the North East, while inside Mark Dolder adds a business perspective to the debate
Regional cities, rather than capitals, drive national economies. That’s the reality in France, Germany, the rest of mainland Europe, much of the USA, China and Asia – but not England.
Our nation stands alone as the ultimate centralist state – a notoriety once reserved for our Gallic neighbour across the Channel – investing disproportionately in Greater London and the surrounding South East. They collectively gobble up the lion’s share of the national transport budget, subsidised by you and me.
We can be sure something is terribly wrong when the Bank of England governor, Mark Carney, warned last week that London cannot drive the UK economy on its own. For good measure, he added that the capital is not as strong as its more outspoken supporters would have it.
As a North American, where great (non-capital) cities sustain national economies – be they Vancouver, Montreal, Seattle, San Francisco or San Diego – he needs no reminding that our centralised state serves England badly.
Nearer to home, French cities, from Lille and its metropolitan environs in the North to Montpellier in the southern sun-belt, have arguably made much greater strides at re-inventing themselves than the capital – thanks partly to powerful local politicians who were also members of the country’s national assembly.
So where stands the new North East – Newcastle, Gateshead, Tyne and Wear, Northumberland and Durham – in our dysfunctional economy? Well it’s certainly some way from the whingeing of self-styled Northumbrian exiles in London, casually dispensing tired old American ‘rustbelt’ clichés, with the odd reference to Detroit. And on the latter point, they’re actually behind the times: one popular US ‘urbanist’, Bruce Katz, insists that the old ‘motor city’ is reinventing itself and drawing in new investment!
A few years ago, at the Chicago annual conference of the Congress for the New Urbanism, a US campaigning organisation, I asked its director – former mayor of Milwaukee John Norquist, well acquainted with Britain – to name his favourite cities over here.
Without prompting, he replied: “The one that rises the highest in terms of good urbanism... so many beautiful buildings, and bridges... is Newcastle.”
For the record, that comment appeared in The Guardian – proving that you should judge my old paper by the totality of its coverage, and not by one single feature.
But, I have to say, the endemic defensive mechanism in the North East, triggered off by the hostile reaction to relatively balanced articles about the economic reality of the region – like it or not, in the UK wealth league, it is falling behind the rest of the country – does us no favours. Chi Onwurah, MP for Newcastle Central, is right. Our economy is teetering on the edge. We face many challenges – and, hopefully, opportunities.
I could mount a strong defence of The Guardian in other areas – highlighting the iniquities of a national local government funding settlement, for instance, so outrageously tilted against our great regional cities – but, really, it’s time to move on. We need a new political, and economic dynamic.
In an illuminating new book – Good Cities, Better Lives – the acclaimed planner and geographer, Sir Peter Hall, contrasts regional cities in centralist England with their infinitely more powerful counterparts in mainland Europe, where city-regions have become powerful economic players.
“Some of these countries, and some of the cities in them, seem to be responding faster and more imaginatively to the challenges that face us all,” he writes. “Their economies are generating new, and worthwhile jobs in new industries, both in the manufacturing and service sectors. Their old inner-city industrial areas are being re-shaped into existing new urban neighbourhoods that meet the highest standards of environmental excellence... satellite communities... linked into seamless webs of public transport – regional trains, trams, buses.”
Bluntly, through successive Governments, regional cities and their regions have been consigned to either the slow lane, or – more worryingly – the hard shoulder of our national economy.
Compare and contrast with mainland Europe, and the federal USA, where a culture of fiscal independence has clearly taken root.
Take our nearest neighbour. France began to devolve in 1982, when substantial public funds were moved from ministries in Paris to 21 new regions. This was followed by another initiative, the contrat de ville, to underpin a new relationship between the state, local councils and the private sector.
As Sir Peter Hall notes in his new book: “Together, these triggered an astonishing 20-year frenzy in France’s great cities which has transformed them into some of the most modern and exciting places in Europe.”
Alongside this, Hall points to a special tax on employers, introduced first in Paris and then extended progressively to regional urban areas. Initially designed for capital spending, it has been increasingly used to support operating expenses as well as ambitious public transport systems – over 30 tram and metro schemes, for instance – in every major French city, and in smaller urban areas.
Today, the French economy is strengthened considerably by 14 powerful strategic city-regional authorities, which have become major players in their own right. The closest Communaute Urbaine to us – Lille, in northern France – bears uncanny similarities with northern England, covering a conurbation of 1.1m. As Hall says, it has moved from being a secondary French city to a significant metropolis of north west Europe.
Around Europe, city-regional government is transforming the economic geography – while in England our great cities, from Newcastle to Liverpool and Bristol (economically, the most successful) struggle on with a declining council tax base and a central funding formula increasingly geared to population rather than to need.
Might things be changing? As John Norquist, the former mayor of Milwaukee said in a recent interview, London will soon be seen as a problem rather than a solution to the UK economy. “Why is everything so focused on London?” he asked. “There’s London and the rest.”
He is a fan of lean government. He likes low taxes – but he also thinks cities should raise the bulk of their funds locally. “It’s not healthy to have state interference,” he added.
In the USA, Bruce Katz, (co-author of another newish book, The Metropolitan Revolution) thinks US cities are turning round, driven by fresh thinking after the ‘great recession’ of 2007-08.
In north east Ohio, around Cleveland – yes, the old ‘rust-belt’ – he calculates 10,500 new jobs have been created in less than 10 years, with well over £1bn in private investment. Even in Detroit, he says a network of philanthropic and business leaders have revived the core of the city with new businesses, entrepreneurs, new housing and retailing.
“Something exciting is happening,” he adds. “Bankruptcy has not stopped the enormous level of investment.”
Unlike Britain, however, US Cities – and mainland European ones – have the financial clout to attract new business, with either tax breaks and, conversely, sometimes increases in sales tax to fund civic ventures and – in the case of greater Los Angeles – a new light rail system.
San Antonio, in southern Texas, is creating new jobs in energy industries, and solar power, through a council-owned power company; it also asked voters to agree a small hike in a local sales tax to fund all-day kindergarten classes for four-year-olds.
Meanwhile, we can only dream, and hope against hope that another government – who knows, after another property bubble bursts? – might eventually realise that its over-concentration on London and the South East, is counter-productive and selling England short.
That doesn’t necessarily mean penalising London. But it does mean giving our great cities, and surrounding regions, some of the freedoms enjoyed not only by the capital’s mayor, Boris Johnson – but also, more importantly, by the great cities of mainland Europe.
Perhaps in promising Scotland more devolution, and fiscal independence, David Cameron might turn his attention for a change to the cities of the North. After all, on taking office four years ago, he did acknowledge that the “unbalanced” economy was skewed too much in favour of one city (London) and one industry (financial services). And we know what Bank of England governor, Mark Carney, thinks of that.
There’s one overriding, immediate issue. Are our local politicians up to the challenge? Are they collectively capable of building consensus across business and other sectors, acting with purpose and unity? Do they recognise the urgency, for starters, of promoting a region drifting seemingly aimlessly without a marketing strategy? It’s a small, but necessary immediate step.
On that score, the jury is out.
- Peter Hetherington, a former Journal reporter, was northern and regional affairs editor of The Guardian. He will shortly chair the Town and Country Planning Association.