The pull of London

              After a good bout of rich bashing, it is time for the politicians to move on to some London bashing. After all, London is  much richer than the rest of the country. It can’t be fair. London should pay more to the rest, and the rest should be given bigger favours to stem the tide of London’s success.

             In the Economic Policy Review I wrote with my Committee in 2007 I pointed out that the London economy had grown 41% between 1998 and Q3 2006, the UK economy by 27% and the Scottish economy by just 16%. This large outperformance of London has continued in the troubled years since.

              Why should this be? London has benefitted from substantial inward migration of talent and money from abroad. It has been host to the very successful financial and business service sectors. It has offset some of the damage of inadequate UK bank finance for property after the crash by the strong flows of foreign money into its market.

           Some now say that London is doing damage to the rest of the UK, sucking up too much of the talent and wealth. They do not seem to appreciate that London is crucial to the financing of the rest of the country. The recent collapse in financial service  and banking profitability has been one of the reasons tax revenues are disappointing, after years of relying on large tax revenues from this successful sector. High earning teams shifting arboad is another part of the low tax revenue problem. If London loses this business it is unlikely Leeds or Bradford, Manchester or Stoke will pick it up. It will more likely vanish to Hong Kong, Shanghai  and Singapore.

            Much of the world’s wealth and progress is coming from the rise of vast and energetic cities. In China it is the move into the cities which is fuelling the growth. In Western Europe the Paris basin is far more prosperous than most of the rest of France. Around the world growing and successful vast cities are locked in competitive struggle for the world’s rich, and for the world’s creative, financial and  industrial talent. These cities are asked to help support the populations closest to them in their nation state or federation.

            It is important to keep one of the world’s large cities here in the UK to help pay the bills. There may be all sorts of issues over who comes and what they expect, but there would be one thing worse than having a city like London on our doorstep – not having one. I am all in favour of more jobs, more enterprise and higher living standards throughout the UK. I just do not think that bashing London will help bring that about. Using London is a brighter means of spreading the good news.

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146 Comments

  1. Nina Andreeva
    Posted February 22, 2013 at 6:44 am | Permalink

    You could take the “heat” out of London by forcibly removing more civil servants and anybody else who is dependent on public money out of it and into the provinces. Its absolutely ridiculous that so many of them have to be there when lots of private bodies can communicate from the centre electronically and benefit from cheaper provincial rents. If anyone objects, like the BBC luvvies who objected to being Shanghai’d up to Salford, tough go and take your boundless talents elsewhere.

    You could also do as Singapore does in that you can only “come in” with your family and other dependents, if you have a job that pays at least 20k a year. London might be the money maker but it has lots of areas that are nothing but a drain on the rest of us provincials

    • Barry
      Posted February 22, 2013 at 9:36 am | Permalink

      “You could take the “heat” out of London by forcibly removing more civil servants and anybody else who is dependent on public money out of it and into the provinces.”

      I find it hard to believe that civil servants are generating the “heat”. Government departments have been relocating their staff for some time, with less than 17% still in London. Nearly 13% are located in the NW alone.

      • Nina Andreeva
        Posted February 22, 2013 at 11:19 am | Permalink

        Bar the FCO which needs to be in proximity to the ambassadors who are accredited to the Court of St James, give me a reason why any of the other depts of state need to be in London at all? Apart from the perm secs and their staff who need to be in direct contact with their ministers what is the reason for the rest of their entourage to be there too?

        • livelogic
          Posted February 22, 2013 at 3:50 pm | Permalink

          Many departments of state could be halved in size with a substantial net benefit to the country anyway. Just do that and cut the pay of the rest by about 30% to make it in line with the private sector that pays for them all.

        • Barry
          Posted February 22, 2013 at 4:12 pm | Permalink

          I’m not going to “give you a reason” because I didn’t say that they had to be in London in the first place; I just said that the process of moving out has been going on for some time and 17% is left.

          The presence of state employees is a dubious benefit in any case.

          • John Maynard
            Posted February 22, 2013 at 10:17 pm | Permalink

            Correct. That is exactly how large parts of Scotland, the north-east and the north-west became public sector junkies, and are now suffering pain.
            Ms Andreeva still seems stuck in the Brownite mind-set – “solve unemployment by creating /moving out large numbers of public sector bureaucrats”.

        • uanime5
          Posted February 22, 2013 at 7:24 pm | Permalink

          Well if ministers need to have regular meetings with people in their department it’s easier if they’re near Parliament, rather than some other part of the UK.

          • waramess
            Posted February 23, 2013 at 4:42 pm | Permalink

            uanime5 Skype is free

          • Jerry
            Posted February 23, 2013 at 6:16 pm | Permalink

            @waramess: “Skype is free

            …and totally insecure! I assume though that you made that comment in jest, not in any seriousness at all, but knowing the crackpot money saving idea that some on the right come up with I’m not sure. :(

            Also, as I pointed out elsewhere, even ministers need to be close to Parliament because of the need to vote at divisions.

        • Jerry
          Posted February 22, 2013 at 7:47 pm | Permalink

          @Nina Andreeva: Because the Secretary of States need to be in personal contact with both their ministry and parliament (never mind attending cabinet), thus unless you want these ministers spending most of their time travelling or sitting twiddling thumbs the Ministries needs to be in London -and that means within 15 mins of the House of Commons because of need for any MPs working within the ministry needing to vote.

          LL and Barry are both correct, many of these departments could be reduced in size, or the scope of the ministry changed to allow savings, for example I suspect that the DfCMS or the DWP could be abolished and their responsibilities absorbed into other ministries for example. Whilst, as Barry points out, some back room office work could, if it is not already, be moved out of London.

          • nina andreeva
            Posted February 23, 2013 at 1:39 pm | Permalink

            Jerry your powers of comprehension are letting you down again please reread the post again and reconsider your comments

          • Jerry
            Posted February 24, 2013 at 11:10 am | Permalink

            @nina andreeva: Yes Nina, making personal attacks is the best form of defence and all that…

            So Nina do explain how the perm secs and their staff are going to be in direct -that is, in person- contact with line managers and other staff etc. etc. Try actually seeing the whole picture, not just the two square millimetres that fit your latest ‘money saving’ idea that fits your personal or political agenda.

      • lifelogic
        Posted February 22, 2013 at 1:25 pm | Permalink

        Better still just get rid of the 50% who do nothing useful or worse do positive damage.

        • Bazman
          Posted February 22, 2013 at 8:24 pm | Permalink

          Insults to the many such as NHS workers and the millions of the public private sector doing the work of infrastructure at taxpayers great expense.

    • lifelogic
      Posted February 22, 2013 at 11:05 am | Permalink

      £20k a year will not go that far in London rent for a small flat.

      • Jerry
        Posted February 22, 2013 at 7:51 pm | Permalink

        @lifelogic: “£20k a year will not go that far in London rent for a small flat.

        Yes LL, especially if you are setting the rate for the rent! Foot, meet Mouth, oh you already know each other – intimately:)

        • Bob
          Posted February 23, 2013 at 6:32 pm | Permalink

          @Jerry
          “Yes LL, especially if you are setting the rate for the rent! “

          Market rates are set as a result of supply and demand not by an individual landlord or tenant’s desires.

          • Jerry
            Posted February 24, 2013 at 11:25 am | Permalink

            @Bob: Rubbish, when there is excess demand and limited supply you get a market working more like a cartel, in the case of private housing lets one landlord increases their rent and the rest will follow, because there is limited supply and they know tenant will have to pay the increase.

            A supply-and-demand free market only works property when it is discretionary, and few would class housing (or utilities) as such, unlike the market in baked beans, fine wines or Bugatti’s for example.

          • Bob
            Posted February 24, 2013 at 4:22 pm | Permalink

            @Jerry
            You’ve just described supply and demand.
            How much would you let your house for if you had a queue of people prepared to pay £1000 per month?

            £500 perhaps?

            No wonder they they call you the Limp Dums.

          • Jerry
            Posted February 24, 2013 at 6:09 pm | Permalink

            @Bob: Thanks for proving my point… Oh and stop talking about yourself all the time, (etc ed)

          • Jerry
            Posted February 25, 2013 at 9:33 am | Permalink

            Oh right so Bob can call others “Limp Dums” but others can’t make similar comments, John I have no problem with being moderated but it does need to be a constant across everyone….

      • Bazman
        Posted February 22, 2013 at 8:27 pm | Permalink

        £400 a week is not much for rent in London ,but NMW is to much? Here’s the deal. You clean your own flat. Ram it.

    • bigneil
      Posted February 22, 2013 at 3:32 pm | Permalink

      what happened to the idea years ago that people worked from home – when i see massive office blocks – think of the power consumption – the cost of building it – all the cost of installing the furniture etc – for what – for loads of people to struggle miles to work – at ever increasing cost – stay for hours – then go back again?? – -when an office is just that – and only that – -then why cannot it work from over the internet? – -being in a big office doesnt make it any more secure from hacking than being at home if the computers are on company security – -and effectively – working from home is an instant “cut in hours” and less travel costs are a pay rise – -its not a perfect system – but sticking a massive tower up is only paid for by the customers of that firm.

      • Jerry
        Posted February 23, 2013 at 10:14 am | Permalink

        @bignneil: We were also going to have the ‘paperless office’, because of computerisation, now there is more paper than ever and it is still increasing. My point, people want or need hard copies just as people want to meet face to face (body language is not always easy to interpret via a video link and next to impossible with audio only conferencing and totally impossible with email/text alone. Even then not everyone has the ability to work from home, people often do not have a spare room to set up as an home office, anyone with a family will know that screaming kids or the spouse ‘hovering’ in the background are not good…

      • Bazman
        Posted February 23, 2013 at 2:17 pm | Permalink

        Where’s my flying car? That’s what I want to know.

  2. livelogic
    Posted February 22, 2013 at 6:46 am | Permalink

    Indeed.

    London needs a five runway Heathwick, lower taxes, an unblocking of the roads that have been progressively blocked. The non dom rule is excellent and has helped London hugely, why not extend it to British people too so they do not have to leave with their money.

    The £2M mansion tax will hit many small ordinary houses and flats – it will be largely just a tax on Londoners.

    Moving the BBC to Manchester/Salford was daft too. It might become even more left wing, quack green up there, if that is possible and is far away from the real action.

    • Nina Andreeva
      Posted February 22, 2013 at 9:24 am | Permalink

      Disagree, moving them away helps shatter the liberal metropolitan elite. Remember the Alderly Edge area in Cheshire has the highest concentration of millionaires in the UK, the NW is not full of Derek Hatton’s

      • lifelogic
        Posted February 22, 2013 at 11:11 am | Permalink

        I am from the North West but left to go to University 30 ish years ago and have not been back that much since.
        I know it is not full of Derek Hatton’s not even Liverpool is.

        I just think that a business needs to be in the right place and a business like the BBC needs to be near government, westminster, near Heathrow and near London where so much of the action is. They have “branches” all over the place anyway.

        • Nina Andreeva
          Posted February 22, 2013 at 2:10 pm | Permalink

          Why does the BBC need to be in London? The news media is all centered in NYC (inc TV) yet the political action takes place in Washington DC. Sorry to say it again but look at the Germans and how success derives from decentralisation, not everything is centered on Berlin. The Bundesbank is in Frankfurt, the constitutional court in Karlsruhe etc

          • Jerry
            Posted February 22, 2013 at 8:06 pm | Permalink

            Yes Nina, it is crazy that the USA TV industry is centred on either NYC or LA, it would make far more sense for it to be centred on the USA’s national capital – W-DC, perhaps that is why the BBC, ITV/ITN, Ch4, Ch5 and (B)Sky(B) are in or very close to the UK’s capital, London – duh….

            The real question is, why should the TV industry not be in London! Apart from some weasel worded reasons (basically political correctness and regional envy) I have never heard an outstanding reason for such a move as has taken place.

    • Bob
      Posted February 22, 2013 at 10:19 am | Permalink

      @lifelogic
      ” The non dom rule is excellent and has helped London hugely, why not extend it to British people too so they do not have to leave with their money.”

      You mean that UK residents should be able to opt for a £30k lump sum of tax, regardless of income.

      What a great idea!

      “Moving the BBC to Manchester/Salford was daft too. It might become even more left wing, quack green up there, if that is possible and is far away from the real action.”

      Privatise it – then they can waste as much money as they like (after they’ve paid some corporation tax of course).

      • lifelogic
        Posted February 22, 2013 at 11:37 am | Permalink

        Indeed the government (wastes mainly) about £10K per head on so called “public services” so anyone paying £30K plus tax on UK source income as non doms pay, plus spending taxes is paying quite enough. Perhaps the same 30K for their wife too (rises to £50K after some years too now).

        On the BBC I see last night on Question time we had Liberal Democrat Vince Cable MP; Labour shadow health minister Diane Abbott MP; former deputy prime minister Lord Heseltine; Rev Giles Fraser, who resigned from his position at St Paul’s in 2011 – So 4 (five with Dimbleby to 1) just Peter Hitchens to say something sensible. Sensible and off the usual “BBC think” every bigger state, magic money tree, quack green, tax borrow and waste line of the three parties.

        Not much to separate the dopey Diane Abbott and Heseltine really.

        • Credible
          Posted February 22, 2013 at 3:53 pm | Permalink

          Question Time could have been so much more balanced if they had all been right wing.

          • Bob
            Posted February 22, 2013 at 4:59 pm | Permalink

            @Credible
            More than one would be nice!

          • lifelogic
            Posted February 22, 2013 at 5:55 pm | Permalink

            Bob – Indeed more than one would be nice – if there is one sensible person in five you are doing well on the BBC then the other four and the chair gang up on them.

            Mind you the BBC is not helped by having over 60% of the Tory party as quack green, big state, tax borrow and waste, lefties virtually indistinguishable from Labour and the Libdims.

        • Bazman
          Posted February 22, 2013 at 8:35 pm | Permalink

          How may in the UK pay 30k tax when the average wage is 26k and receive 10k in so called services lifelogic? Not a bad deal huh? Ram it without reply.

        • Jerry
          Posted February 24, 2013 at 4:27 pm | Permalink

          @Lifeloogic: Oh such arrogance, the only thing that can possibly be sensible is what LL agrees with… :(

      • Jerry
        Posted February 22, 2013 at 11:57 am | Permalink

        Bob: “Privatise it [the BBC] – then they can waste as much money as they like

        You still have not answered the question I put to you weeks ago, do you own shares (or work for) BSkyB?

        Also you might not like the response to any BBC privatisation, making its funding voluntary would actually give any (as LL put it) “left wing, quack green” editorial lines more than a little legitimacy, and even more than other UK broadcaster should such a television service be independant of any existing multi-channel/station subscription or adversing revenue method…

        As I’ve said before Bob, stop ranting and try actually finding a clue!

        • Edward
          Posted February 22, 2013 at 2:18 pm | Permalink

          Well thats fine Jerry, if the BBC as an independent business, trying to gain a larger share of the viewing audience, decided to put out programmes which had a political bias.
          I have no problem with their right to decide to do that that, because I could decide to cancel my payment to them and view channels I preferred.,which I cannot do at present if I want to watch non BBC freeview channels legally.
          That is why currently their charter tells them to be balanced in their output and in my opinion they are not.

          • Jerry
            Posted February 22, 2013 at 5:50 pm | Permalink

            Edward: “That is why currently their charter tells them to be balanced in their output and in my opinion they are not.

            This argument has been had before, bias is in the eyes and ears of the beholder, otherwise please do explain why both the right and left complain that the BBC is being biased against them, often the same content or programme, indeed only the other week some on here were complaining that QT was overly biased to the left whilst the SLP were Tweeting that QT was overly biased to the right and never invite them onto the panel. Go figure both sides can’t be correct unless the BBC is actually playing a very straight game, straight down the middle…

          • Max Dunbar
            Posted February 22, 2013 at 6:37 pm | Permalink

            What is balance? For the BBC Charter to even suggest this is laughable. A smokescreen only. The BBC has never been balanced; the only difference now is that the BBC is blatantly and arrogantly more biased than ever. It is too powerful and does not fear anyone. Politicians are at its mercy.

          • uanime5
            Posted February 22, 2013 at 7:35 pm | Permalink

            Unless your TV provider allows you to choose which channels you want I doubt you’ll be able to choose not to have the BBC. Most likely it will be included in the basic package, so you’ll still have to pay for the BBC even if you don’t want to watch it.

        • Nina Andreeva
          Posted February 22, 2013 at 2:19 pm | Permalink

          Privatise it because the output is not worth the licence fee. Apart from the obvious left wing bias the programs are mostly crap and not fit for anyone with an IQ over 100 regardless of their political views

          • Jerry
            Posted February 22, 2013 at 5:53 pm | Permalink

            @Nina Andreeva: Well yes, but then the same arguments could be made to make the subscription services stop their bundling, why should people be forced to pay for 200 odd totally crap and unwanted channels before they can even think about subscribing to what they actually want – for example films or sport?

          • Bazman
            Posted February 22, 2013 at 8:37 pm | Permalink

            Not worth the output but SKY is? Really Nina? What are you and your husband like? How ya getting on with not paying for double glazing? Personal? You bet girl.

          • Bazman
            Posted February 25, 2013 at 8:33 pm | Permalink

            Satellite TV Nina? Must be some quality TV in your house then? It’s bad in any language.

        • Bob
          Posted February 22, 2013 at 2:25 pm | Permalink

          @Jerry

          1. I told you before, I have no stake in BskyB, and never have done. But I suspect that you have some kind of vested interest in the BBC, maybe not directly, but you come across as an enthusiastic defender of the public sector, so maybe that’s the answer. -> Would you care to declare an interest?

          2.You accuse anyone who holds an opinion contrary to your own of ranting. -> yawn…

          • Jerry
            Posted February 22, 2013 at 6:07 pm | Permalink

            @Bob: No you said that you did not have a subscription to any BSkyB product, because you do not pay for a TVL, not quite the same.

            Oh and no I do not have any vested interest in the BBC, beyond paying the TVL fee, having a clue as to how the media and broadcasting industry works and having known -in a non media/broadcast professional setting- a few people who have worked for the BBC, the independant (commercial) TV sectors or feature films. I have also been very critical of the BBC here, it does indeed need radical reforms but not privatisation nor closure or breaking up.

            As for your rather silly second ‘point’, much the same can be said of you, anything you don’t like or understand must be some lefty plot. -> yawn…

        • bigneil
          Posted February 22, 2013 at 3:45 pm | Permalink

          will someone called tom please start arguing with jerry – -really miss not seeing them on telly

          • Nina Andreeva
            Posted February 23, 2013 at 2:41 pm | Permalink

            Baz who says I was buying Sky? My beef with the BBC is that despite being run by the Oxbridge elite and charging me for the privilege its output is on a par with Murdoch’s rubbish. Round the back of my house, out of view from any interfering busybody from the council, I have a satellite dish. Its there to satisfy the multi culti viewing needs of the Andreeva household from Eutelsat which has many stations on it (inc English ones) which do not charge.

            NB any challenge from the council will immediately be met with the HR Act in that you interrupting my access to information and hat it is racist to expect my children to watch TV stations that only use English

    • uanime5
      Posted February 22, 2013 at 7:30 pm | Permalink

      The non dom rule only applied to income from another country, so it won’t have any benefits for people who earn their money in the UK.

      A £2 million mansion tax will mainly hit those in large houses, not small ones. Even in London £2 million is considered a high price for a house, not the standard price.

      • Bob
        Posted February 23, 2013 at 2:22 pm | Permalink

        @uanime5
        “The non dom rule only applied to income from another country, so it won’t have any benefits for people who earn their money in the UK.”

        That’s exactly the point, why discriminate against UK domiciled people. What happened to equality?

    • Bazman
      Posted February 22, 2013 at 8:31 pm | Permalink

      A 2M flat is just owned by small ordinary Londoners? This is true as there could be up to 70k of these properties in the UK. Or..They are a persecuted minority that the rest of Britain wants to put oppressive taxation on? Can’t be both..

    • John Maynard
      Posted February 22, 2013 at 10:21 pm | Permalink

      I sincerely recommend that you go to the DT website and carefully read the article on Heathrow’s plan to raise charges to airlines by 40% to “attract more customers” (sic).
      Heathrow is a (Spanish) ramp. We desperately need a new and competitive hub airport.

    • Bazman
      Posted February 23, 2013 at 2:22 pm | Permalink

      How has the non dom rule helped Britain other than by creating a large number of unused holiday homes in central London? Extend it to anyone who can come up with 30k a year not to pay tax and sometimes not even council tax? Basically allowing the rich not to pay tax is what you are saying.

  3. MickC
    Posted February 22, 2013 at 7:29 am | Permalink

    Probably most criticism of “London” is, in fact, criticism of the economic circumstances which have led to Londons pre-eminence in the UK.

    Those circumstances stretch back to the mid 19th century when capital managed in London (but created by the Industrial Revolution) was invested in trade abroad rather in industry in the UK.

    The wealth and power of London grew but that of the industrial provinces weakened, and has never recovered.

    In other words, free trade at that time damaged the prosperity of much of the UK-economic decisions have long shadows.

    Other countries, notably Germany and the USA did not go down that path at the time and became richer.

    The USA has now followed the UKs path (world policeman role included) and has also suffered. It will become poorer like the UK, with a very wealthy ruling class effectively running the country for their own benefit.

    • Ben Kelly
      Posted February 22, 2013 at 10:29 am | Permalink

      This is a highly thought provoking response. It is time to slay the “protectionism is bad for our economy”dragon and take steps to becoming self sufficient.

      Big business benefits from free trade but individuals suffer (unless cheap large screen tvs, trainers and “stuff” are really the secret to a happy life).

      • A different Simon
        Posted February 22, 2013 at 12:04 pm | Permalink

        Ben Kelly ,

        Living in a community adds immensely to quality of life . Having the neighbours round for drinks occasionally , children playing with each other , children being members of clubs etc , looking out for each other .

        Having some time to spend with your family and friends rather than working every hour and still not making enough to get by .

        Resisting Sunday trading so staff are not under pressure to work 7 days a week .

        Mothers staying at home with the kids , at least until they are old enough to go to school .

        One income being sufficient rather than two incomes becoming the norm with the results that all contingencies are used up and with it any sort of financial security .

        This type of living and the family has been under assault for the past at least 25 years .

        • Ben Kelly
          Posted February 22, 2013 at 3:43 pm | Permalink

          Simon,

          I concur with every word. We need a champion

        • Credible
          Posted February 22, 2013 at 4:30 pm | Permalink

          Well said Ben.

          Political parties that claim to support the family have been leading this assault.
          Today we must recognise that it is only the economy and profit that matters and ‘there’s no such thing as society’

          Long hours, high stress, lowering aspirations and poor pay don’t make an economy more productive anyway.

          The assault is particularly intense for the less well off in London and for the London commuter belt.

        • lifelogic
          Posted February 22, 2013 at 6:06 pm | Permalink

          I am not sure it is “under assault” so much as people actually choose this “working every hour” just to buy the latest silly car, computer, holiday, house, plastic surgery, illuminated white teeth or whatever it is they desire.

          Perhaps all the adds rather encourage it they are very good at pulling the emotional levers of the gullible, I agree – Rather like the Labour party.

          Personally I quite like walking, normal teeth, faces that move and some Bach/Byrd or similar which cost almost nothing.

          • Bazman
            Posted February 23, 2013 at 2:29 pm | Permalink

            Or the latest silly utility bill or food. The most silly thing they work very hour for is to pay the rent or mortgage. Some extravagantly buy a takeaway or go to the pub after earning enough for these pointless things. I would like to see you almost nothing lifestyle as I am sure that most could not afford it.

      • Gary
        Posted February 22, 2013 at 2:41 pm | Permalink

        Especially in the modern world, specialization and the division of labour is the key driver of prosperity. Self-sufficiency to any realistic extent is unobtainable. We need to trade freely to enjoy these benefits and we need to earn currency that is demanded by those who make things that we desire to import. Protectionism and currency debasement undermine these aims and make us all poorer.

        • uanime5
          Posted February 22, 2013 at 7:38 pm | Permalink

          Actually it’s economically better to make everything that we can, and import what we can’t make or what others can make better.

          • Edward
            Posted February 23, 2013 at 12:16 pm | Permalink

            Uni,
            I suggest you invest all your savings and get a big loan and set up a manufacturing business in the UK making “everything we can” as you say it is such a good idea.
            All you need to do is to undercut the best prices in the world and see just how “economically better” you would end up.

          • Bazman
            Posted February 23, 2013 at 2:33 pm | Permalink

            It would be like living in the third world or at best like a Russian peasant growing and making what you can and selling some to buy what you can’t. Ah! The romance..You can see it in their faces.

          • A different Simon
            Posted February 24, 2013 at 1:01 am | Permalink

            Gary makes a good point about specialisation ; at least within an organisation .

            Now and then I look through the job advertisements to see what prospective employers are asking for .

            Typically they are asking for someone who is proficient in every skill under the sun ! For an unexciting wage too .

            Even if such a person existed , they would have to be the jack of all trades and master of none !

            I have immense respect for all rounders but sometimes you need a specialist .

            A mate of mine has made a career out of clearing up the mess which others have made .

  4. Leslie Singleton
    Posted February 22, 2013 at 7:51 am | Permalink

    One aspect one rarely reads about is the perception that people not involved in the City often that the City is just one big boozy barrel of laughs. It absolutely is not of course. Getting in early (very early) and leaving late (sometimes very late if things go wrong), big big decisions with huge responsibility often needing to be made all but instantaneously, hire and fire ultra competitive culture, ghastly and expensive commute, often shortened burned out career etc etc. Not the complete walk in the park that many of the envious seem to think.

    • James Monro
      Posted February 23, 2013 at 4:22 am | Permalink

      Protectionism that’s why. Only a small number of people are allowed to enter the industry. Allow more in, reduce the work load per person, add more competition, lower wages and bonuses.

  5. JimF
    Posted February 22, 2013 at 8:00 am | Permalink

    This is where your colleagues’ bleating about fairness becomes a sham.
    Where is the balance of fairness between the London worker paying large sums of money and spending time commuting to a knowledge-based high pressure job versus the lower pressure lower wage person in a suburban town? Even with the London worker earning multiples of the suburban worker’s salary his work pressures are higher, he has less time to spend at home and already pays more in housing and travel costs.

  6. Disaffected
    Posted February 22, 2013 at 8:10 am | Permalink

    In 2002 I attended a meeting where the service provider claimed the government did not know how many immigrants and asylum seekers were entering the country but had reached the conclusion the public services in London and the south east could not cope any further and they had to be distributed around the country. Now the government bashes all those that provide for the stupidity. Instead of bashing companies, people for non tax, and anyone who seeks to get on why not stop the causes that create the need for the over taxed system? Stop EU budget £56 million each day, stop overseas aid by a similar amount, cut welfare for short term need not life style choice which is better than most who work can afford. When is the welfare bashing for fiddles going to start? When is the EU bashing for fiddles going to start? When is the overseas aid consultants and fiddles going to start?

  7. Mark
    Posted February 22, 2013 at 8:14 am | Permalink

    “.. Some now say that London is doing damage to the rest of the UK, sucking up too much of the talent and wealth…”

    Socialists might say that; that kind of mentallity where success must be punished, not competed for, and everyone brought down to the lowest common denominator by statute.

    I’m surprised you’re defending on this level.

    • Mark
      Posted February 22, 2013 at 9:40 am | Permalink

      As a regular commenter here, I would ask if you would kindly add a distinguishing item to your Mark so that my comments aren’t confused with yours.

  8. Old Albion
    Posted February 22, 2013 at 8:35 am | Permalink

    the London economy had grown 41% between 1998 and Q3 2006, the UK economy by 27% and the Scottish economy by just 16%.

    Is Scotland included in the (dis)UK figure. Or have you already separated them?

    Replt Yes, of course Scotland is included in the UK figure. Scotland is a small part of the whole – under 10%

  9. oldtimer
    Posted February 22, 2013 at 8:44 am | Permalink

    In the UK it has always been so. As they used to say in the days of that earlier Empire , “All roads lead to Rome”. There is sure to be relative decline for London versus the fast growing cities of the Far East. What has been, or ought to be, alarming is its absolute decline as a source of the wealth of the nation.

  10. Alte Fritz
    Posted February 22, 2013 at 8:57 am | Permalink

    London’s dominance (and attitude) can be irritating to us provincials, but, as ever, history is the best guide. Most significant pre Roman wealth was concentrated in the South East. From the Roman conquest is sufficiently well documented to show that London, given especially its proximity to the continent, will always be dominant in this country.

    We have to be positive and make the best of what is not the best of jobs.

    • Bob
      Posted February 22, 2013 at 12:09 pm | Permalink

      @Alte Fritz

      Most of the large cities have had their heydays, like Liverpool, Birmingham, Manchester, Newcastle upon Tyne etc., but they all eventually went into decline.

      Now it’s London’s turn. After the anti business measures start to bite, banking and finance will go the way of manufacturing and shipbuilding once they ceased to be competitive here.

      • Bazman
        Posted February 23, 2013 at 2:35 pm | Permalink

        Notice all the places you mention are in the north? London has geography on it’s side. It is near Europe and if you turned the country upside down the effect would be the same.

    • uanime5
      Posted February 22, 2013 at 7:46 pm | Permalink

      Firstly London may be better for trading with Europe but Birmingham was better placed to trade with the US. So which city is dominant depends on where the UK is shipping things to.

      Secondly given how manufacturing is declining in the UK it won’t matter where a city is in relation to the continent because what the UK will be selling won’t require shipping.

      • Edward
        Posted February 24, 2013 at 1:36 pm | Permalink

        Uni
        I am very puzzled why you say Birmingham was better placed to trade with the USA
        I can think of no trade routes from Birmingam to the USA compared to London or Liverpool, for example, who have obvious sea ports.

        • Bob
          Posted February 24, 2013 at 8:53 pm | Permalink

          @Edward
          “I am very puzzled why you say Birmingham was better placed to trade with the USA”

          Maybe uanime5 is referring to Birmingham, Alabama?

  11. Andyvan
    Posted February 22, 2013 at 9:27 am | Permalink

    I’m very happy that London is doing well. I’m very pleased that it makes so much money for the taxman as it means he might steal less from me. But the thing I’m most happy about is that I don’t have to live there, go there or travel near there except on very rare occasions because if that’s what it takes to be prosperous I’d rather live in a hut in a forest and be poor. The traffic, dirt, noise, overcrowding and constant pressure would finish me off in a week.

  12. James Reade
    Posted February 22, 2013 at 9:38 am | Permalink

    Generally in agreement here – might lead you to spit out your tea to read that.

    I’m always interested in what provokes your variety of posts John – can you link up or reference any people who have been specifically putting forward such comments?

    The problem with how most people see economic development is as some kind of zero-sum competition – if London’s getting the growth, we can’t have any. But it’s not zero sum and if things are done better in London, chances are others (plenty of public sector stuff I’d have thought) are done better elsewhere, and by rearranging it like that, all can have the growth.

    Reply See Mr Clegg’s recent speech, for example.

    • uanime5
      Posted February 22, 2013 at 7:48 pm | Permalink

      If London is having all the growth because nearly all the wealth and talent is going to London then it is zero-sum competition. So if you want other areas to grow London will have less growth.

      • Edward
        Posted February 24, 2013 at 4:31 pm | Permalink

        Strange view Uni
        It assumes wealth is a finite resource, which it is not.
        There is no reason London needs to get poorer to enrich other UK cities.
        Wealth can be created.

    • John Maynard
      Posted February 22, 2013 at 10:33 pm | Permalink

      That’s the problem in a nut-shell.
      The lump of labour fallacy lives on in the (woeful) British media.

      • Bazman
        Posted February 23, 2013 at 2:36 pm | Permalink

        Which media? The newspapers?

      • A different Simon
        Posted February 24, 2013 at 1:07 am | Permalink

        The people who claim the theory of “lump of labour” is a fallacy are usually proponents of mass immigration , bringing in cheap labour or don’t have to contend with unemployment themselves .

  13. Brian Tomkinson
    Posted February 22, 2013 at 9:44 am | Permalink

    JR: ” After a good bout of rich bashing, it is time for the politicians to move on to some London bashing.”
    I must have missed that one. I haven’t missed the fact that Osborne has borrowed £5.3 billion more in the first 10 months of this financial year than last year. That the governor of the BoE has instigated another run on the pound and inflation seems here to stay. When are you going to take some action to help prevent our relentless progression to financial ruin? Put country before party before it is too late.

  14. Gary
    Posted February 22, 2013 at 9:47 am | Permalink

    I would question the wealth creating credentials of an inflationary credit system , which in the UK is based in London. Some would argue it is precisely this that has shackled the country with unpayable quantities of debt.

    If the monopolistic legal tender monetary laws were repealed and the free market allowed to work, London would effectively cease to exist as known.

    • waramess
      Posted February 22, 2013 at 11:26 am | Permalink

      Gary On the other hand London is aabout far more than just banking

  15. Posted February 22, 2013 at 9:50 am | Permalink

    London will decline as a business centre in the long term as people become less willing to spend the time and money travelling to work. My elder daughter has just taken advantage of voluntary redundancy because, whilst she enjoyed her job, it cost her £3500 a year (after tax) to get to work as well as taking between three and four hours each day travelling in a packed train. She is confident that she will find work locally which will give her broadly the same net income and she will have more time to look after the home and will probably no longer need to employ a cleaner and occasional gardener. Her husband will also save fuel and time in not having to take & collect her from the station.

  16. A different Simon
    Posted February 22, 2013 at 10:09 am | Permalink

    Were banks hugely higher “profits” circa 2005 indicative of better performance than their operations circa 1990 or just adopting a looser risk profile ?

    Perhaps the banks should move towards a 3 year accounting period like the Lloyd’s of London syndicates so they aren’t tempted to count their chickens and bonuses before the stack of cards comes down ?

    The banks were essentially greedy tax agents for the Govt extracting money from the real economy and giving one coin to HMRC and keeping one coin for themselves .

    In return the Govt , desperate for spending money and not in the least concerned with where it came from , turned a blind eye to what was going wrong .

    For sure the UK needs to retain London but only a small part of the financial services industry creates wealth .

    The majority of the financial services industry is parasitic and merely transfers wealth inwards and upwards .

    The migration of go getters to the big cities is a trend which has been borne out in every country of the World . Thus it astonishes me when small countries join the EU thinking they will benefit rather than have their talent lured away and end up poorer than they started .

    • sjb
      Posted February 23, 2013 at 9:39 pm | Permalink

      @A different Simon

      Which smaller countries are poorer for having joined the EU?

      • A different Simon
        Posted February 24, 2013 at 9:48 pm | Permalink

        sjb ,

        In the short term they all appear to be richer .

        My point is that in the long term they might well find themselves subject to the law of unintended consequences if national trends translate into EU trends .

        Given that city’s drain towns of talent , it is not unreasonable to expect that successful countries will drain less successful countries of their talent – making them poorer .

        The longer term might be closer than they think if Germans decide they don’t want to continue bankrolling the EU .

  17. A different Simon
    Posted February 22, 2013 at 10:25 am | Permalink

    We can’t go back to the days of high tax revenue from high bank profits circa 2005 because those profits weren’t real , they were just creative accounting exercises .

    London certainly contributed to the industrial revolution with enabling services such as insurance for shipping and lending capital but other cities contributed much more ; Birmingham , Bristol , Manchester , Liverpool , Newcastle and others .

    For sure the UK needs London but it’s control over the rest of the country needs to be reined back .

    What we really need is a balanced economy .

    • John Maynard
      Posted February 22, 2013 at 10:41 pm | Permalink

      Bristol and Liverpool – slaving.
      Newcastle, Glasgow – ship building.
      Manchester – cotton, then process industry.
      Brum – metal bashing and cars.
      Sheffield – steel.

      Manchester and Brum (and Leeds) have adjusted.
      Not sure about the others though.

  18. Neil Craig
    Posted February 22, 2013 at 11:14 am | Permalink

    Unaddressed here is why London is doing so well.
    One option may be that large companies like to set up their HQs close to the centre of government (the growth of Edinburgh also suggests this).
    Another is that government itself makes up a lot of the jobs, particularly the top jobs.

    Both of these are things which Londoners should not look on as their personal achievement and cannot be increased overall by replicating them elsewhere.

    Other options may be that the internet communications are particularly good,
    that good transport links (even Heathrow) support growth,
    that, as John implies, it is immigration,
    or even that being near the interlink to French nuclear supplies means that people are not worried about blackouts.

    John saying what these factors are would and how they could be replicated elsewhere be more useful than simply saying the rest of the country should be grateful.

    • John Maynard
      Posted February 22, 2013 at 10:45 pm | Permalink

      So, you missed John’s discussion of the “vast, energetic super-cities” “drawing in talent and wealth from overseas” then ?

      • Neil Craig
        Posted February 23, 2013 at 10:51 am | Permalink

        I missed the bit where he said how to turn Glasgow, or perhaps Glasgow-Edinburgh, into one.

  19. waramess
    Posted February 22, 2013 at 11:22 am | Permalink

    You are right. Redistribution of income is never a good idea. Tax the rich and make them less competetive and redistribute it to the poor will simply cause greater poverty.

    The redistribution process in itself is normally wasteful as politicians struggle with ideas to regenerate regions with new ideas that often fail and are very costly

    Each region must be left to regenerate its economy according to its competitive advantage and, if there is none then it should wither on the vine.

    People in the UK are totally mobile; there is no barrier to changing where you might live and there is no language barrier, so movement to where there might be better opportunities should not be an issue.

    Leave London alone and the wealth it brings will be apparent particularly in its capacity to generate foreign exchange.

    • uanime5
      Posted February 22, 2013 at 7:53 pm | Permalink

      Each region must be left to regenerate its economy according to its competitive advantage and, if there is none then it should wither on the vine.

      Given that each region gets their budget from the taxes collected from all regions if one region starts to decline it will have increased unemployment and welfare, which will result in higher taxes in the other regions to pay for this.

      It’s idiotic to believe that you can allow large parts of the UK to decline with this having any negative effects on the other parts of the UK.

      • waramess
        Posted February 23, 2013 at 12:06 pm | Permalink

        uanime5 “if one region starts to decline it will have increased unemployment and welfare, which will result in higher taxes in the other regions to pay for this. ”

        You are of course correct and this is why we should not provide subsidies to poorly performing regions. To do so just makes us all poorer.

        The political imperative is always to resist change and so we continue to provide subsidies to the regions whose economic rational has long since disappeared.

        Only the markets can by their actions determine where the opportunities lie and we should be willing to embrace change.

        Continuing to support the old regions with subsidies will increase cost of production for the UK generally and further impair our competitiveness both domestically and overseas.

    • A different Simon
      Posted February 22, 2013 at 11:23 pm | Permalink

      “You are right. Redistribution of income is never a good idea. ”

      This is one reason why the EU is destined to fail .

      Transfer payments to countries like Spain and Greece only end up making their citizens lazier and exacerbating the corruption which prevent projects from happening in those countries .

      Hard working Germans must be sick to the teeth of paying so the Southern Europeans can sit on their backsides all day .

    • Bazman
      Posted February 23, 2013 at 2:40 pm | Permalink

      More trickle down fantasy. How about trickle up? Is that good for all of us?

  20. Iain Gill
    Posted February 22, 2013 at 11:49 am | Permalink

    Re “Why should this be?” you are missing the obvious, it’s the centre of the rail network, has the main airports, has Eurostar running in, and so on.

    Re “London has benefited from substantial inward migration of talent” and from the rest of the UK too, but has also created a lot of problems related to immigration for which the businesses in London mostly don’t pick up the tab.

    Re “very successful financial” I would revise what you are saying there unless you want to face down total unmitigated electoral disaster. The banking sector had to be bailed out by the rest of us etc, as you well know. Get the balance right on that rhetoric.

    I like London and think we need it as part of a balanced UK economy. I like the fact my favourite foreign rich rock stars have bought very expensive houses there. But I do think your analysis is slightly off the mark, I compare with other capital cities and see a wide difference that doesn’t exist elsewhere.

    • A different Simon
      Posted February 22, 2013 at 3:09 pm | Permalink

      “The banking sector had to be bailed out by the rest of us”

      “Had” implies past tense yet we are still bailing the banks on a daily basis until the taxpayer has recapitalised them .

      Look at ZIRP , attempts to keep the housing bubble inflated , UK I.T. workers having their futures undermined so that Indian outsources can flood the UK with Indian ICT visa workers as part of the deal for our wonderful banks getting access to Indian markets .

      The economy is being sacrificed in a vain effort to save the banks .

      Personally I’d rather the Govt tried to save the economy .

      • Iain Gill
        Posted February 22, 2013 at 7:58 pm | Permalink

        agreed 100%

  21. Mactheknife
    Posted February 22, 2013 at 12:06 pm | Permalink

    John

    I live in the Midlands and work in London. As I arrive into St Pancras each time I see huge investments and developments being built. On my right is the Francis Crick Institute and on my left London Met Unviserity Kings Cross. These are but two of many major investments under development in London and there have been many more in recent history. If just ONE of these investments were moved to a large town or city outside of London it would have a massive impact on the local economy. I read somewhere that a university puts £300 M per year into the local coffers and does London need yet another university ? Surely the government could make provision for some incentives for public organisations to move outside London or for potential new developments to be sighted elsewhere. Similar arrangments could be made for private investments.

    Nobody should bash London, that is the wrong approach. We need a good strong internationally renowned city which is an economic driver for the country as a whole. The problem we have is that the country is not sharing in this prosperity.

    The town I live in has lost 25,000 jobs in the last 25 years according to a recent economic survey for the local authority. The HS2 phase 2 comes very close to the town (1 mile) yet does not stop there – no planned station. This is the type short sighted government planning that causes the economic imbalance we see between London and the provinces.

    Until you and other MP’s recognise what the issues are and are prepared to act. Our regional towns and cities are destined for economic decline.

    Reply There are large investments going into provincial towns and cities – e.g. £850 m new station development for Reading. I visited Bolton yesterday and saw the large investment at the Reebok stadium/shopping centre etc.

    • Edward
      Posted February 22, 2013 at 2:24 pm | Permalink

      I agree with you Mr Redwood
      In Birmingham we have an excellent new shoping centre, new and growing canal side developments, a new rail station being built and a new main central library as well as many other retail and housing developments going on.
      Some of the new office space is being taken up by companies relocating from London, taking advantage of lower commercial rents and lower staff salaries and much lower housing costs

      • Mactheknife
        Posted February 22, 2013 at 4:18 pm | Permalink

        Edward

        Birmingham will benefit greatly from HS2 rail developments as will other cities on the route. The biggest beneficiary will of course be London, this has already been stated by parliament. In my area which is covered by Phase 2 the train runs for some 50 miles straight through towns and areas which have seen massive de-industrialisation and huge job losses and are perhaps some of the most economically deprived areas – but hey ho sail straight on by ! The only conculusion to be reached from this is that the government either is not aware or does not care what happens to the regions.

    • Mactheknife
      Posted February 22, 2013 at 4:06 pm | Permalink

      John

      I’m sorry you resorted to a glib answer its really not like you.

      As you well know Reading is hardly an example of a struggling town. It has many knowledge based employers there and large international companies – I know Reading very well as I visit clients there most weeks. As for the Bolton example, its not shopping centres we need. We are told constantly that to remain compettive we should move to a knowledge based economy and the two examples I gave are of knowledge based organisations choosing to locate in London. My point being that if one of these relocated to a regional town or city, then that and all the small businesses which spring up to support it will be both an economic driver and rebalance the differential.

      Reply I agree that if a private sector investor choose a northern town to invest it could help – I remember being Minister for the North East when BA decided to invest heavily in New castle, which was a great help. When it comes to public sector led investment, there have been many large schemes outside London.

      • Iain Gill
        Posted February 22, 2013 at 8:03 pm | Permalink

        yep Reading and the M4 corridor basically do well because they radiate out from Heathrow, and when you get past Swindon you get the ripple affect from Bristol coming the other way. and yep Thames Valley park etc were put there because they were close to Heathrow basically. The investment in Reading station goes with the electrification of the main line, an investment I dont actually support as my experience with the East Coast mainline is the overhead lines themselves have problems so often that the electric trains are left useless and only diesel trains are running up and down anyways far too often.

        there are many far flung parts of the country that do not get any ripple affect from Heathrow and are doing very badly at the moment.

  22. behindthe frogs
    Posted February 22, 2013 at 12:28 pm | Permalink

    One major concern is that London by ever increasing its commuter belt is destroying the surrounding countryside. You only need to ask how much of the huge unnecessary housing developments proposed for Wokingham will be occupied by commuters.
    There are many employers in London who actually have no reason for being there rather than elsewhere in the country where there are empty properties and a high level of unemployment. While this starts with the civil service it also applies to many private companies.
    The government needs to look at proposed large “industrial” developments in the London area and ask whether these should be located elsewhere in the country. We also need more initiatives like the BBC Media City in Salford.

    • Iain Gill
      Posted February 22, 2013 at 8:05 pm | Permalink

      should say people working in London have to live somewhere, where would you suggest? of course

  23. forthurst
    Posted February 22, 2013 at 12:30 pm | Permalink

    How much of the wealth coming into London actually comes from abroad? Unless London actually adds value to the rest of the UK, any money extracted from the UK is essentially parasitical. It is not at all clear that the enormous salaries enjoyed by central government and its agencies add value, or the BBC, or the banksters etc. The extraction of money from the rest of the economy by coercion or fraudulent financial practices, and handing some of it back again to central government in an iterative loop so that it, in turn, can fund mixed ability juries to live far more comfortably in my homeland, but no more productively than in their own third world homelands, does not make us all wealthier, quite the contrary. We need far more information before we can identify just who is funding whom. What is clear is that London contains a high concentration of people who tell lies for a living.

  24. Peter Davies
    Posted February 22, 2013 at 2:02 pm | Permalink

    Whatever anyone thinks about London, the Financial District is very important but no one can argue thatthe whole UK

    • Peter Davies
      Posted February 22, 2013 at 2:07 pm | Permalink

      …the whole UK economy does need better balance. I have never understood why financial services need to be in one place for a start, why not spread them round the country a bit more, were all in the same time zone and its easy to communicate.

      Also from a balance perspective we do need to ramp up manufacturing which we know we can do based on the German model so taking action to get more overseeas companies to set up here would be a start – it is high quality exports which keep the economy in check, take the Germany example.

      • Iain Gill
        Posted February 22, 2013 at 8:08 pm | Permalink

        Well the IT industry not so long ago was a net earner for the UK, big money was coming in, now that we have handed so much of it over to Indian outsourcers we are paying out and earnings are negative. To say nothing of the IP we have handed over. To say nothing (words left out-ed) of Indian nationals we allow to (come-ed) in here as workers. Bad business, bad politics, bad national government decisions.

        • Peter Davies
          Posted February 23, 2013 at 9:14 am | Permalink

          I’m not privy to whats behind the Indian IT example but one of the comments above indicated that it is directly linked to allowing UK banks access to the Indian markets.

          Fine in itself if true but if its at the expense of the earning capacity UK IT workforce it seems counter productive. It also shows that banks and financial services still hold too much sway over govt policy no matter what the colour of govt.

          Am I reading this right?

          • Iain Gill
            Posted February 23, 2013 at 10:31 am | Permalink

            yes thats pretty much it

            its a symptom of the government being staffed by people from a narrow section of society with limited real world experience and with friends and advisors close to the Indian outsourcers

          • Bob
            Posted February 23, 2013 at 7:02 pm | Permalink

            “its a symptom of the government being staffed by people from a narrow section of society with limited real world experience and with friends and advisors close to the Indian outsourcers”

            Is that why Dave has now taken to wearing a turban?

      • A different Simon
        Posted February 23, 2013 at 9:47 am | Permalink

        Whilst it is better to have a vibrant London , the UK doesn’t actually need London .

        It doesn’t produce and food , generate any energy , supply any water to the rest of the country .

        Reply: It provides substantial tax revenue for the rest of the country to spend, and many services used by people all across the UK.

        • A different Simon
          Posted February 24, 2013 at 1:16 am | Permalink

          John ,

          How about persuading your colleagues and all the other public servants that they should use the services of the City of London for their pensions ?

          If regulators and legislators actually had to use the services they purport to regulate and legislate then they might be inclined to do a better job .

  25. Alan Wheatley
    Posted February 22, 2013 at 2:17 pm | Permalink

    I agree: it makes far more sense to help the less successful to do better rather than handicap the more successful.

    But government must take account of the fact that universal policies have different effects in different parts of the country. It was not so long ago that Gordon Brown, as Chancellor, sent Eddy George to “the North” to explain to the locals that interest rates were being set to the benefits of the nation as a whole, and if they were detrimental to northern industries that was just too bad.

    Another example can be seen with HS2. If, indeed, one of the objectives is to reduce the North/South divide then it would be far more credible if the line was to run down the East Coast to link up with HS1, with a branch to London. Having the delay and inconvenience of changing trains in London undermines speedy continental travel from the Midlands and the North (includes Scotland).

    • Peter Davies
      Posted February 23, 2013 at 9:19 am | Permalink

      “But government must take account of the fact that universal policies have different effects in different parts of the country.”,

      Putting aside the issue of democracy this statement knocks the nail on the head as to why the EU as a single federation of states simply cannot work.

      If it doesn’t work well for the UK, how on earth can it ever work for 27 (28) countries?

  26. Tad Davison
    Posted February 22, 2013 at 3:03 pm | Permalink

    This is the inherent madness that lies at the heart of British politics. An area or individual is prosperous and successful, so rather than emulate and replicate that success elsewhere, they cane it to death, and do their damnedest to destroy it, by taxing to the hilt, and thereby removing incentives.

    This applies equally to the EU, and is why I continue to argue, that if Britain were free of it, and allowed to trade in surplus with the rest of the world, the rest of Europe would have to follow our example. That is the ONLY way we can ever hope to change the negative, introspective, protectionist, all-pervasive EU to which unfortunately, we still belong, and is contrary to the rather naïve assertions of the pro-EU lobby, that to change the EU, we must be at its heart.

    So what happens when London is bled dry, where do they turn to next for the revenue to fund less than efficient parts of the nation, borrow it maybe?

    I despair of most politicians.

    Tad Davison

    Cambridge

    • uanime5
      Posted February 22, 2013 at 8:00 pm | Permalink

      London is successful because it gets a disproportionate amount of the funding and talent. So it’s not possible to replicate this anywhere else without taking money or business that would have gone to London and putting it somewhere else.

      The UK doesn’t have a trade surplus with the rest of the world, we have a deficit. So even if the UK left the EU we would still have a huge trade deficit.

      • Peter Davies
        Posted February 23, 2013 at 9:21 am | Permalink

        The UK has a trade deficit with the EU and a surplus outside the EU (ROW) – where do you get your figures from?

  27. uanime5
    Posted February 22, 2013 at 5:03 pm | Permalink

    Some now say that London is doing damage to the rest of the UK, sucking up too much of the talent and wealth. They do not seem to appreciate that London is crucial to the financing of the rest of the country.

    If London didn’t suck up so much of the talent and wealth then it wouldn’t be so “crucial” to the UK and other cities would be able to develop. The UK needs opportunities spread throughout the UK, not the majority of them in London. Much of the housing problem in the south east is because so many high paying jobs are concentrated in one city.

    Much of the world’s wealth and progress is coming from the rise of vast and energetic cities.

    Then perhaps the UK should have vast and energetic cities, rather than trying to cram everything into the city nearest the politicians.

    Also the NHS spent £15 million gagging whistle blowers. Perhaps this is an area where spending can be cut.
    http://www.telegraph.co.uk/health/healthnews/9887260/NHS-spent-15m-gagging-whistleblowers.html

    • Iain Gill
      Posted February 22, 2013 at 8:11 pm | Permalink

      I suggest the £15 m is an underestimate, there is also a lot of court cases they have fought and thrown big money at the lawyers in order to smash ordinary people who cannot afford the legal fees to keep challenging them along the court processes. Many of these cases any other business would have said sorry, paid up, and learnt and actually changed to stop making the same mistakes again and again and again and again…

      • uanime5
        Posted February 23, 2013 at 1:50 pm | Permalink

        The £15 million is just for gagging whistle blowers, the amount they spend on medical negligence cases is much higher as these cases usually go to court.

      • Bazman
        Posted February 23, 2013 at 2:44 pm | Permalink

        Banking would not have and has not.

  28. Electro-Kevin
    Posted February 22, 2013 at 6:20 pm | Permalink

    I was born and raised in London and lived in and around it for 39 years. In many ways I miss it. Not least the architecture, the racial diversity (which I grew up with) but mostly the security of its work – all of this contrasts with the increasing feeling of insecurity, irrelevance and the parochialism found in the provinces.

    I left because I thought it a bad thing that an increasingly high amount of the local population did not speak English and seemed to have no visible means of financial support. I did not like the local Ali G dialect and did not want my children coming home speaking that way. It was disheartening that the lovely house I sold was then subject to fraudulent activities for the first time in its fifty year history – this confirmed my worse suspicions about what was going on.

    There is a certain smugness which seems to be coming from London at the moment. This – I believe – comes from their feeling of being less ‘worse off’ than the rest of the country. This is being propped up on life-support to the cost of savers and pensioners. “We are too big to fail.” Seems to apply to London as well as the banks.

    Our capital city has a duty (at least a moral one) to support the rest of the country.

    Why ?

    Because it was so often in London that it was decided to de-industrialise much of the country and often for a fast buck and for the benefit of a few. To say we owe so much to London is to put the cart before the horse. A reversal of history. The banks did not create wealthy Britain. The seafarers, merchants and the industrialists did. They came from all parts of the land.

    Clearly there is no such thing as Nation now. The real power is held by mega corporations and personal loyalties and allegiences to these now transcend patriotism towards country. Mega corporations tend to gravitate towards mega cities so we need one for this reason.

  29. Jon
    Posted February 22, 2013 at 7:25 pm | Permalink

    I’ve read figures between £20bn and £40bn that get distributed to the rest of the UK from London every year. When it comes to things like the Olympics all you hear from certain sections of the UK is we don’t want to pay a penny towards it. A few hours later its whats in it for us? Scottish politicians in particular blame anything you can think of on London to aviod responsibility for their own decisions.

    I remember in the early days of Labour with all the immigration the North and Scotland used to send them on a bus to London with a 4£ figure sum sweetener for the London boroughs to take them.

    I like working in London on the whole but it is a different country when you go out into the sticks. London is a success and all to often certain politicians bash that to appeal to the same prejudices of those that sent their immigrants south.

    • Jerry
      Posted February 23, 2013 at 6:34 pm | Permalink

      @Jon: “Scottish politicians in particular blame anything you can think of on London to aviod responsibility for their own decisions.

      :) To be fair, I think they mean the UK government, not “London”!…

      • Jon
        Posted February 24, 2013 at 11:54 am | Permalink

        They do blame the UK government but watch the Scottish Parliament and you’ll notice they also use “London” a lot, I expect its playing to a prejudice for a section of that electorate.

  30. David Hope
    Posted February 23, 2013 at 10:14 am | Permalink

    Of course we shouldn’t penalise London with taxes – taxes everywhere need to go down but I think this needs looking at a bit deeper.

    For example, your comments about Leeds or Manchester not picking up the work. Why not, what are the factors preventing it? In the last two centuries such places were of course at the heart of the economy. One might argue that high taxes, high regulation, depleted savings with many years of easy money all contribute.

    As someone who has worked in a small company near Leeds and a hedge fund in central London I can tell you which for me was doing the more useful work. It strikes me that London has many a non job created by government. For example accountancy, law and finance are huge and cause a brain drain with the high wages in big firms. But how productive are these. The first two are partially the result of ever greater regulation and laws from government. No one can do anything without these ‘experts’ who cost a lot for everyone doing more productive things.

    Finance benefits greatly from inflation, QE and super low overnight rates that offer many money making opportunities to the few not open to the many. Much of finance is just money shuffling and creaming off a bit (think 2 and 20 hedge funds like where I was!) and this is fine when it’s creaming cash off foreign investors, its less good when it is UK money. Regulation keeps out newcomers. Side effects of such policy also benefit hugely estate agents in the capital as property goes through the roof.

    In other words government and central bank policy causes a heavy distribution from distant areas to London.
    Where there are successful technology sectors in Bristol and Cambridge selling to the world (e.g. ARM and CSR) the governments reaction is to promote startups in London!

    Obviously there are other issues. Where sectors bring in foreign money it is clearly a good thing. Part of the issue is an expensive workforce relative to china and india. Many regions have been turned into public sector junkies where private companies can’t match state wages.

    Still, I think we need to look in more detail at why other regions in the country do badly. It’s not just a case of London is making money so all is well

  31. Mark
    Posted February 23, 2013 at 1:09 pm | Permalink

    London has certainly been transformed over the past 15 years or so. Now, just 45% of the inhabitants are descended from those who lived in the country at the time of WW II.

    Those who have left include the families and descendants who the Queen Mother had sympathy for in WW II during the Blitz in the East End of London. They have been replaced by a diaspora from distant Bangladesh. London is home to the largest Sri Lankan Tamil community anywhere in the world, including Sri Lanka itself. It has a large community of Somalis, (with high unemployment-ed) – again the largest population of Somalis outside Somalia itself. The Ballad of Peckham Rye would now not be written in Cockney by Muriel Spark, but in Yoruba.

    These communities – and many others – are mainly poor, and have created their own cultural (environment-ed) rather than engaging with British life. They provide the much more numerous counterpoint to the rich incomers, and a large drain on the taxpayers’ purses as they soak up resources in housing, health care, and income support.

    The rich immigrants are themselves a motley crew. For sure, there are the talented employees of multinationals and banks; top surgeons and consultants; some of the most talented from the arts. There are also large numbers who have treated London as a tax haven: in some cases basing businesses here, such as the long established London Greek shipowners, but in others contributing little except to the property bubble and the import of exotic luxuries. In the general free-for-all of immigration over the past 15 years, little attention has been paid to how these people may have attained their wealth, despite the tick box money laundering regulations. There can be little doubt that ill-gotten wealth has found a ready home in London. It is not really to be welcomed.

    Selling off London property at premium prices to foreign buyers has certainly brought in funds, but at the cost of distorting the property market and the wider economy. The only way to capture those funds is to crash London property prices. Then the loss on resale is borne by the foreign purchasers, and the round trip profit is captured by the British should they buy back in.

    Reply: Variety of culture and background can also be a strength – all our families migrated here sometime ago.

  32. Mark
    Posted February 23, 2013 at 3:50 pm | Permalink

    Experiment with different browser over disappearing post problem.

  33. Mark
    Posted February 23, 2013 at 8:46 pm | Permalink

    Experiment evidently failed to help place main post in moderation queue.

  34. Mark
    Posted February 24, 2013 at 11:27 am | Permalink

    An excellent exposé of the problem of the London rich:

    http://conservativehome.blogs.com/platform/2013/02/from-markfieldmp-1.html

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  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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