London’s booming

 

When I published the Conservative Economic Policy Review in 2007 it drew attention to the much faster growth rate recorded in recent years in London compared to the rest of the UK. Labour’s devolution and regional policies did not succeed in even arresting the economic underperformance of the UK outside London, let alone narrowing the gap between  London and the rest.

The ONS figures for gr0wth since then show more of the same. The period 2007-11 saw London grow by 12%  (nominal Gross value added) compared to just half that, at 6%, for the rest of the UK.  The CEBR and other forecasts are for London to continue outperforming in the period 2014-19, with their estimate showing London accounting for one third of the total likely growth for the UK as a whole.

No-one can deny Labour did direct much larger sums of public money to places away from London. They moved public sector activities including much of the BBC outside London.  They gave substantial devolved powers to Scotland, and some to Wales and Northern Ireland. They imposed additional taxes on financial and property activities concentrated in London. None of this balanced the growth or achieved the aim  of faster growth outside the capital.

I am all in favour of trying new policies, and extending old ones, that might help stimulate more growth outside London. I am happy for more of the public sector to move away from the busy city hub of our nation. What I am not happy about is the idea that London’s growth is wrong, needs to be stopped, or is unhelpful to the rest of the country. We should be pleased that we have one of the world’s great cities, that it attracts money and talent from abroad, and that it pays substantial taxes to contribute to the national public  spend.

The other evening I returned from speaking in Lincolnshire to Kings Cross at 11.15pm. The Victoria  line  train I took back to Westminster was standing room only for part of the journey. Last week I spoke to a business dinner about our EU relationship. When I left the restaurant in the West End at 10.30 pm it was difficult walking on the pavement for all the people out and about, and the buses went by  completely full. London is bursting with energy and activity, and is generating large numbers of business opportunities.

Brought up as a teenager in Kent, I looked to London for my future. I went there as often as I could afford the train fare. As a schoolboy and as a  student I wanted to enjoy museums, exhibitions, galleries, external lectures, music and theatre and the rest whenever possible. I always assumed I would get a job in London. London is still a beacon to many in our country, a place of opportunity and interest.

The problem we face is not that London grows too much, but that some other parts  of the country grow too little. The problem is not that wages  are higher in London, but that they are lower in some other places. Many people with businesses outside London do come to London from time to time to add to their orders and customers. London is not a threat to the prosperity of the rest of the country, but an opportunity to enhance it.

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69 Comments

  1. Gary
    Posted November 2, 2014 at 7:06 am | Permalink

    London and Wall st are going to boom for a few more years yet. Just as the Fed tapers QE back from $85bn to just $15bn per month, Japan unleashes “QE forever ” to the tune of 80 trillion yen per month, ie $70 bn. Add $15bn to $70bn and you have $85bn!

    QE has been moved east by subterfuge, and now with the yen carry trade on steroids, nothing has changed. The dollar took a moonshot, as did t-bonds.

    This farce will further increase deflation and eventually kill off the general economy. This is the greatest theft in world history.

    • Hope
      Posted November 2, 2014 at 8:01 pm | Permalink

      I read today that Clegg and Osborne have agreed devolved powers to cities, is this the start of the carve up of England for EU regions rather than have an English parliament for English people? How long before England becomes Balkanised? Layers of bureaucracy and unwarranted layers government that will cost us all a fortune.

      Police commissioners that no one wants and very few people turn out to vote for. Another cost without benefit as we see in Rotherham. Less than 4 percent turned out to vote.

  2. Mike Stallard
    Posted November 2, 2014 at 7:36 am | Permalink

    Fifty years ago, London was the capital of the Commonwealth. It was fairly important then too.
    Since then local government and local independence have been sucked into London. Schools used to be pretty independent really. So did hospitals. Councils were full of independent councillors. The Police forces were distinct. Nowadays everything is either Conservative or Ofsted or NHS or Labour.
    It is a big change. Out here in the Fens, you notice it very much. Even Tescos and Asda and the new cinemas are all parts of a chain which operates from out there.
    If you want to get anywhere, you leave.

    • William Gruff
      Posted November 2, 2014 at 3:05 pm | Permalink

      Since then local government and local independence have been sucked into London.

      They’ve been ‘sucked in’ to the Westminster machine, which is not London by any means, and many of those living and working in London for that machine are not from London or even the South East. In my, now twenty five years distant, fifteen years experience of working in London (self-employed in the private sector), I came across a great many northerners and Scots working there – and more numerous than the Londoners in the sphere within which I moved.

  3. Lifelogic
    Posted November 2, 2014 at 7:38 am | Permalink

    Indeed London is clearly a huge asset to the country and a huge draw to wealthy and successful people from around the world (with the sensible non-dom tax regime). They should extend elements of this to the British residents start, by Cameron de-ratting on inheritance tax and by reducing CGT and the daft 45% income tax.

    By all means move state sector bureaucrats out of London, but fire half of them first (as so many do little of any real value anyway). Also cut their pay accordingly to the local regional private sector rates. Was that done for the hugely overpaid BBC in Salford, one assumes not.

    • Lifelogic
      Posted November 2, 2014 at 9:28 am | Permalink

      I see that Miliband has managed the amazingly difficult task of being even less trusted as a leader than Nick Clegg. The 2015 election is clearly another sitting duck for the right, but for the fact that the Tories are led by someone who pushes policies almost identical to Nick Clegg’s.

    • Lifelogic
      Posted November 2, 2014 at 9:33 am | Permalink

      I assume the Richard Branson who owns airlines and wants to send rich people pointlessly into space, using vast amounts of energy, is not the same Richard Branson who goes on about global warming?

      Why on earth with modern technology develop the systems using manned aircraft?

    • Lifelogic.
      Posted November 2, 2014 at 10:27 am | Permalink

      Much of the London recovery is not due to this government policies, which are clearly the usual tax, borrow and waste, over regulate, expensive green energy crap, pointless wars, ever more EU and a bloated and generally rather incompetent government. They are due to problems in the EURO area (inflicted by the EU and the Euro), instability in Russia and Eastern Europe, the wars & the Arab spring problems.

      No credit is due to the Tories or Cameron, London is just less bad than some dreadful alternatives.

      • Mondeo Man
        Posted November 2, 2014 at 6:31 pm | Permalink

        Booms come and go as Dr Redwood knows – no-one is going to do a Brown and be so arrogant as to claim to have ended boom and bust. What is important is the underlying cultural fibre of our nation which can take success in the same stead as failure – this is what is being destroyed by government policy.

        On the present model London can earn as much as she likes – there will never be enough money, enough revenue, enough housing, enough schools, enough hospitals.

        London has her own cost of living crisis and population crisis to worry about.

        Peter Hitchens is on the money again today. Mr Cameron’s destabilisation of Libya and the removal of a buffer between us and the third world – hence people dying in boats on the Med trying to get to Britain.

        I cannot vote for this man.

        • Mondeo Man
          Posted November 2, 2014 at 6:31 pm | Permalink

          The figures bear me out:

          Tax revenue down, debt up.

          • Hope
            Posted November 2, 2014 at 8:12 pm | Permalink

            Yep. Hitchens spot on the money about Cameron’s folly into Libya and drugs.

          • Lifelogic
            Posted November 3, 2014 at 2:52 pm | Permalink

            Tax rates and complexity up, but tax revenues down and lots more unproductive jobs for people causing the loss of even more productive ones.

    • Richard1
      Posted November 2, 2014 at 11:17 am | Permalink

      CGT data are in: 2012-13 saw a decline in CGT receipts from 2011-12, despite booming stock markets and property and other asset prices and despite (or rather because of) the increase in the CGT rate from 18% to 28%. Mr Osborne thought the increase in rate would raise an additional £1bn. Obviously Osborne is influenced by all those statist civil servants in the Treasury, who seem to deny the Laffer curve and other inconvenient small govt / free market evidence and facts. But when the time comes for Conservative MPs to select a successor to Mr Cameron they must remember that Mr Osborne does not at heart seem to be much of a low tax free marketeer.

      Perhaps the cost of the increase in rate like the cost of maintaining the 45% rate is worth it as a political gesture – but the opinion polls suggest otherwise.

      • Lifelogic
        Posted November 2, 2014 at 3:49 pm | Permalink

        Indeed high taxes (and the vastly expensive green crap) are not even politically popular.

  4. Mark B
    Posted November 2, 2014 at 7:40 am | Permalink

    A good piece. Oh, and good morning.

    London, and England in general has always been a draw to those seeking to make their fortune. The Dick Whittington syndrome, I call it, after the story involving a cat.

    To get more business to invest in the North and the South West of England, not to forget Scotland, Wales and Ulster, business rates and other taxes need to be substantially lower. Particularly for manufacturing.

    Manufacturing benefits from lower energy and labour costs. One only needs to look at the industries of old to see what I mean. They were concentrated close to their principle sources of energy (water and coal) and were also close to the main movers of their goods, such as city port like London, Liverpool, Glasgow, Bristol and Newcastle. Where other important city centres had large populations of skilled labour, such as Birmingham, canals were built, using PRIVATE money !

    Capital needs to be freed and not controlled. Business needs to be ‘persuaded’, not bribed with taxpayers money, that investment in other parts of the UK are more profitable. UK haulage needs to be made much cheaper. Lower costs for those so that they can pass on it on too their customers.

    Less tax, and less regulation is what is needed. Regulation creates non-jobs made up of Government officials which have to be housed and paid for. These costs have to come from the wealth of others to service. Remove the overheads, and growth and prosperity will follow.

    • Edward2
      Posted November 2, 2014 at 9:47 am | Permalink

      Mark I agree with you 100%
      It amazes me how well industry and commerce does considering the efforts made by the EU, Westminster, Local Councils and the many other quangos to stop them.

    • Lifelogic
      Posted November 2, 2014 at 4:06 pm | Permalink

      Exactly government much beyond defence, basic infrastructure and law and order is just a brake on the economy.

  5. Richard1
    Posted November 2, 2014 at 8:23 am | Permalink

    Very well put. There is so much rubbish talked about how London’s success has ‘distorted’ the UK economy. Its great that London is successful, and its good news for the whole country. Policy should be directed at trying to generate prosperity elsewhere not to disadvantage London. Labour and the left should note that what’s making London successful is UK and international business activity, not public subsidy, state employment or regulation. In fact its in spite of those things.

    This goes to the overall approach of the political left. In the leftist world view if someone becomes successful and prosperous, someone else must have become poorer so the state should intervene to make it ‘fair’. Policies are then promoted which make everyone poorer. Let’s focus on making the whole of the UK a vibrant, prosperous and competitive place for businesses.

    • Denis Cooper
      Posted November 2, 2014 at 11:11 am | Permalink

      “Let’s focus on making the whole of the UK a vibrant, prosperous and competitive place for businesses.”

      Thanks largely to the past actions of the party you support there is a good chance that pretty soon there will be no “whole of the UK” to focus on.

      Does is not strike you as peculiar that your party has made itself so disliked in Scotland that “Red Tories” is seen as an apposite term of abuse for the Labour party, and that if your party wins the next UK general election, which is rather unlikely, and/or fails to win any seats in Scotland, which is much more likely, then that will significantly spur demands for another referendum on whether Scotland should separate from the rest of the UK?

      This is a party which within living memory had very strong support in Scotland, winning over half of the votes and the seats in the 1955 UK general election, and yet it is now so reviled that many Scots would be willing to break up the country just to escape from it, and indeed some of its own residual supporters in Scotland would also vote for separation from their fellow Tories in England.

      • Richard1
        Posted November 2, 2014 at 4:54 pm | Permalink

        I’m not sure of the relevance of your answer. It is the case that Conservative support amongst the 5m people in Scotland is lower than it is elsewhere amongst the 63m people of the UK. I note however that recent polls have the Conservatives ahead of Labour in Scotland for the first time since the 1950s! There is no reason at all why there should be another referendum. If there ever is – in 50 years or so – the unionist side at the time will hopefully run a less inept campaign than in the recent one.

        • Denis Cooper
          Posted November 3, 2014 at 3:07 pm | Permalink

          If you want to keep the United Kingdom intact then you should not gloat about support for Labour in Scotland collapsing down to the same level as support for the Tory party. In fact your party leaders should be thinking how they could help Labour block the SNP and head off the huge risk of the SNP holding the balance of power at Westminster. They have no qualms about collusion to block UKIP, but blocking the SNP is orders of magnitude more important.

      • Max Dunbar
        Posted November 2, 2014 at 5:06 pm | Permalink

        The irony is that the SNP may, according to some pundits, return a large enough number of MPs to Westminster that they can call the shots to some extent even though it is their avowed intention to turn their backs on the ‘English’ parliament that they despise so much. Similar in some respects to UKIP and the EU except that they are from opposite ends of the political spectrum.
        Another irony that the (politicians ed) of the SNP would like to forget however is that last time we had a Prime Minister of any real ability and who had a patriotic determination to do the best for her country it was the SNP who enabled her to beat Labour and return the Conservative Party to office and ’18 years of Tory rule’ in Scotland.

  6. JoeSoap
    Posted November 2, 2014 at 8:38 am | Permalink

    Yet we all experience on a daily basis a dreadful health service, poor public transport, traffic queues, poor care for the old and a big brother bureaucracy. Something, then, is going badly wrong.

    The first thing is that your figures need an adjuster for population growth. A 12% GDP growth in a City whose population has grown 13% isn’t any growth at all.

    The second thing is that the business opportunities which I don’t doubt are there don’t seem to be generating enough cash to incentivise those in these health sector etc. jobs to give a quality product. This can’t be because we are taxed too little (to translate a business opportunity to a new Bentley would remove up to 75% of the profit as tax), so just why is the quality of life on the back of these employment and growth figures so poor?

    • Richard1
      Posted November 2, 2014 at 10:46 am | Permalink

      That’s because there isn’t the choice and competition in the public services as there is in the private sector.

      • Mondeo Man
        Posted November 2, 2014 at 8:12 pm | Permalink

        Richard – Perhaps – like the M25 – these services are so popular that the population using them has increased.

  7. agricola
    Posted November 2, 2014 at 8:49 am | Permalink

    One could remove none profit making enterprises, such as government ministries to the fringes of the UK. Advantageous if you then employ a large percentage of local people. Modern communications being what they are, distance should be no problem.

    Private enterprise, the driving force of the economy, needs incentives in the form of lower Corporation Tax and National Insurance. The smaller they are the greater the incentive needs to be, maybe starting at a zero rate for the first five years. Draw circles of reduction centred on Marble Arch. Even at the large end of the scale it should be encouraged. Nissan, Toyota, and Honda made it work in spades, but they were not tainted with British management think as was the case with Rover Group.

    Smaller businesses nation wide would benefit from legally binding payment contracts with their larger customers. I have in mind payment in 30 days, no ifs or buts, and penalties that are mandatory for none compliance. Offenders after 90 days should be forced to cease trading. This is one of the biggest anomalies that successive governments have failed to tackle no doubt at the behest of big business lobbyists. The big six energy companies are prime offenders at sitting on green money the general public have already paid them.

    The plus side to this would be a reduction in long distance commuting for employees of government, lower accommodation costs, and a much less pressured lifestyle. For small businesses it could be the kick start they need. Those who cannot imagine life outside the M25 will have to continue to pay the premium.

    • Mark B
      Posted November 2, 2014 at 5:09 pm | Permalink

      I agree with you about the payment of small businesses. In France, it is illegal not to pay small firms. Why can we not have something similar ?

      Oh yes. The Conservatives are in the pockets of big business. The Socialists are in the pocket of the Unions and hate any business, big or small. And the Lib Dems cannot give a stuff.

      • Lifelogic
        Posted November 3, 2014 at 6:59 am | Permalink

        In practice it is better for small companies to freely agree payment terms with large companies or to do business elsewhere if they wish. Legislation will not really help they may just pay earlier but agree a lower price in return or similar.

  8. John E
    Posted November 2, 2014 at 9:04 am | Permalink

    There’s a vacancy coming up for Mayor…

    Reply Indeed, but not something I will be applying for. I have work to do on the UK’s relationship with the EU which can only be done from Westminster.

    • The Prangwizard
      Posted November 2, 2014 at 9:30 am | Permalink

      And I hope you will give equal time and energy to the defence of and promotion of the unity of England, and opposition to the powers which are determined to regionalise the nation by stealth and destroy our identity. This is also an EU and Labour objective which may gain momentum if the Scots gain more power at Westminster through the SNP.

      • Max Dunbar
        Posted November 2, 2014 at 5:19 pm | Permalink

        Please do not equate the SNP with Scotland. They represent only a proportion of the population here.
        If you dislike regionalisation and the loss of our identity then don’t encourage English separatism. It only plays into the hands of those of the Left who wish to destroy our nation and all that it has stood for. Our Union Flag must prevail or we are lost.

    • Lifelogic.
      Posted November 2, 2014 at 10:33 am | Permalink

      Indeed, JR’s job is surely to make Cameron move from being a pathetic/wet/fake green/high tax/Libdem to sensible conservative/UKIP policies so the country can avoid Miliband. Start with a referendum in 2015 at the very latest.

      Cameron would find it much easier to defend some sensible policies for a change. He is even quite good at defending totally absurd ones.

    • Brian Tomkinson
      Posted November 2, 2014 at 5:40 pm | Permalink

      Reply to reply,
      Just what might that new relationship be? More subservience to Frau Merkel and Brussels? Today’s Daily Mail: “David Cameron has torn up his plan to cap EU immigration after German Chancellor Angela Merkel vetoed it, it was claimed today.” All those press leaks look a bit hollow( par for the course with Cameron) and he hasn’t even got around to making his much vaunted speech yet. Did he give you any hint of his capitulation at what the Mail reported was “a drink-fuelled summit for Tory MPs” at Heythrop Park Crowne Plaza Hotel in Chipping Norton last week?

      Reply I drank no alcohol there and heard no climb down on immigration. You should not believe all you read in papers.

      • Brian Tomkinson
        Posted November 2, 2014 at 7:43 pm | Permalink

        Reply to reply,
        JR: “You should not believe all you read in papers.”
        I definitely don’t when it has been briefed by Number 10.

      • Leslie Singleton
        Posted November 2, 2014 at 10:26 pm | Permalink

        Comment on Reply–Maybe not all, but I think most–And I do not see Merkel rushing to deny the German reports–With her against, and, irrespective of what she thinks, every country having to agree, the sum of all that makes a nonsense of what Cameron has to say, just for a change.

  9. oldtimer
    Posted November 2, 2014 at 9:23 am | Permalink

    From my occasional visits to London I too am impressed by the sheer energy of London and of how busy and crowded it is. Some people work very hard indeed and long hours – too long in some instances thinking of my own family. That said, politicians penalising success is the last thing we need.

    What certainly does not work are attempts by politicians to force commercial businesses to relocate away from London or the South East. The historical evidence is clear about that. Government departments may be another matter, but I would be wary of schemes that left individual communities overly dependent on a government department for its employment opportunities.

    • Lifelogic
      Posted November 2, 2014 at 9:39 am | Permalink

      Indeed giving tax breaks or grants to encourage businesses to locate in the wrong places for the business, is just as daft as giving them to encourage absurd wind farms, CAP grants and pointless PV roof panels.

    • William Gruff
      Posted November 2, 2014 at 3:47 pm | Permalink

      What certainly does not work are attempts by politicians to force commercial businesses to relocate away from London or the South East.

      Anyone old enough to remember the disastrous reigns of Lord Wilson of Rievaulx will readily agree with you. I particularly remember the closure of Parsons’, the turbine manufacturer, at Erith, Kent and the removal of the business and jobs to the ‘ignored’ north, and who can forget that triumph of Scotch engineering, the Hillman Imp, built in Glasgow because of government ‘grants’ (recte: bribes).

      There’s a reason why more than 60% of every regional economy outside the South East is vested in the public sector and it isn’t the imagined chicanery of greedy southerners.

    • Mondeo Man
      Posted November 2, 2014 at 7:19 pm | Permalink

      Old Timer – hard work isn’t solely the preserve of Londoners.

      People here in the boonies struggle to survive doing two or three jobs and for a darn sight less than in London – this is why people move to London, for a future. I thought I was coming here to semi-retire … fool ! I’ve never worked harder or longer.

      • Mondeo Man
        Posted November 2, 2014 at 7:20 pm | Permalink

        I gather that you are retired.

        I expect there are a lot of care visitors in your area working half the day for no pay driving to clients.

  10. Ex-expat Colin
    Posted November 2, 2014 at 9:37 am | Permalink

    Its more about how many and exactly who lives in London. The “how many” part gives us a problem with overcrowding and over subscribed services. The “who” part raises problems with elections being almost a country of its own.

    Fortunately I lived on the Kent/SE London border and much preferred Kent..advantage was not to live in a noisy and crammed place. OK..its got some interesting things to see…thats it.

  11. acorn
    Posted November 2, 2014 at 10:08 am | Permalink

    A while back I said that economic statistics for England are distorted considerably by London. London, like all big cities, obtained critical mass at some point and became more like a City State. It also benefits from having a more coherent geographic management structure, if you disregard the superfluous London Assembly. London is one Travel To Work Area (TTWA) and Londoners have the shortest travel to work distance.

    The rest of England is an administrative mess and is deliberately kept that way by Westminster / Whitehall (W/W). The UK has the most centralised form of government in Europe. The control freaks in W/W, are never going to relinquish any powers. Or when they profess in, the media, that they do so, there are dozens of Local Government Senior Officers, that will tell you it is always “smoke and mirrors”.

    W/W is scared stiff of local political power bases forming, and challenging W/W, so they will always spin against “Regions”; “City Regions” and the like. The same as they did against Scotland that unfortunately succumbed to it recently.

    The “Rest of England” is always going to be London’s hinterland because the English, unlike the Scots, just don’t give a ****! “Boiling frog syndrome” anyone?

  12. Alan Wheatley
    Posted November 2, 2014 at 10:17 am | Permalink

    I agree we do not want to put a dampener on London prosperity and to enhance elsewhere.

    But there are issues with London growth, depending on what is meant by “growth”.

    Long gone are the days when it was possible to drive through London to get, say, from North-West Kent to the North of England. We now have the M25, but that is more like a necessary evil rather than a welcome relief.

    If the London population continues to grow house prices, commuting, congestion and sprawl will spread the current difficulties. There are loads of attractions for going to London, but the difficulty of getting there to enjoy them has become off-putting for the occasional visitor. Public transport in and around London may be excellent but that is of no help where not matched at the other end of one’s journey.

    If the cultural mix of London continues to become at odds with the rest of the country then we loose the sense of nationhood. Made worse if London is seen by government as THE way to go but the rest of the country do not share that vision.

    While efforts to spread growth to other parts of the country may not have produced the desired results it should not mean that such policy is wrong. Why has the policy not worked? What do the people intended to have benefited from the policy say?

    There is a danger of having too many of the Nation’s eggs in the London basket. Is London a bubble in danger of bursting?

    • Mondeo Man
      Posted November 2, 2014 at 7:14 pm | Permalink

      Booms always bust, Alan.

      This isn’t negativity, simply fact. No-one’s fault either way – I’m talking about the cyclical nature of business.

      More wealth is made calling the upturns and downturns right than anything else. When to buy in or sell out – this is what makes market gurus rich.

      But if the underlying country is buggered because people bought into the lie that the current model is working …

      Once third world corruption becomes endemic we lose our key asset: trust in Britain as a place to store wealth and do law.

  13. behindthefrogs
    Posted November 2, 2014 at 11:14 am | Permalink

    There is a need for projects that produce economic benefit outside London and the south east to be given priority. Thus for example HS3 should be given priority over HS2, improving rail links in the south west need faster progress etc.

    • Max Dunbar
      Posted November 2, 2014 at 6:13 pm | Permalink

      If politicians could limit themselves to infrastructure projects outside London and refrain from meddling in business affairs then progress could be made.

  14. Bert Young
    Posted November 2, 2014 at 11:36 am | Permalink

    London does spin off some subservient activities to outlying areas due to the high cost of property and commuting . The advancement in communication technology has enabled many businesses to use outside information sources to great advantage . I agree that these “outside” sources are , normally , within easy travelling distance to London ; follow-up meetings are often required on a face to face basis .
    Family life-styles more likely than not suffer the “London” effect – particularly women ; they are in the hands of grandparents and carers . The knock-on of the financial need is having a drastic down turn on children and social balance . Distribution of company headquarters was tried in the past to outlying areas , but , as far as I can judge , the central influence remains London .
    I believe that the financial hub should continue to be in London – its success is far to important to try to move it around , however , central commercial activities – retailing in particular, can and ought to be moved to other locations . Were this course of action to be adopted , some central service activities would also have no choice but to move .
    The conundrum is “success breeds success” and very few business leaders will want to try other location risks . The immediacy of contacts is at the heart of this and will not trust the computer screen as a substitute to the feel of a handshake .

  15. Mike Wilson
    Posted November 2, 2014 at 12:39 pm | Permalink

    If the whole country was as ‘successful’ as London – and had London house prices and the wages needed to put a roof over one’s head – I think it is fair to say we would be the most uncompetitive nation on earth.

    London always strikes me as a mad house.

  16. Denis Cooper
    Posted November 2, 2014 at 1:43 pm | Permalink

    I too was born in Kent, JR, or more accurately in what was then still part of Kent.

    But unlike yourself I was always repelled by London rather than attracted to it, and even though both my parents had been born and raised in London and had then moved out southwards in stages along the railway line after they had married and started to have children, and we had many relations still living there to be visited. After two years of actually living there I was glad to get away from it to northern parts.

    However I accept that like or dislike of London itself is really a matter of personal taste; my principal objection to London is that it simply won’t stay where it belongs, and that is mainly down to people like my parents who contributed to its outwards expansion, then primarily due to migration into London from the rest of the UK but now primarily due to immigration into London from the rest of the world.

    Apparently in 1603 when James came down from Scotland he was not only surprised by the prosperity he encountered on his journey south, and by the absence of fortifications at the great houses where he stayed – the two were of course connected – but amazed at the population and sprawling size of London and the rate at which it had been expanding, prompting him to comment that “soon London will be all England”.

    Then the population of London was about 0.2 million, rapidly rising and then falling again with mass mortalities from recurrent plagues, and it was only just beginning its expansion beyond the square mile of the City; now it can be taken as being anything between 8 million for the GLA area of over 600 square miles and 14 million for the London Metropolitan Agglomeration, covering over 3000 square miles, or by the claim of the GLA even 21 million in an EU “mega-city region” which spills over into great swathes of south east England and beyond:

    http://www.london.gov.uk/thelondonplan/introduction/positioning.jsp

    And while that is still not “all England”, as James foresaw four centuries ago, it has certainly become a large part of England, with getting on for half of the population of England, much of which huge expansion in numbers is directly or indirectly attributable to comparatively recent mass immigration from abroad into London proper, not only allowed but encouraged by successive UK governments despite knowing that this was contrary to the wishes of the great majority of the UK citizens who elected them.

  17. Denis Cooper
    Posted November 2, 2014 at 3:33 pm | Permalink

    Off-topic:

    http://www.telegraph.co.uk/news/uknews/scottish-independence/11203868/Alex-Salmond-SNP-could-do-a-coalition-deal-with-Labour.html

    “Alex Salmond: SNP could do a coalition deal with Labour”

    And their price for that deal would be?

    • zorro
      Posted November 2, 2014 at 5:05 pm | Permalink

      Scottish independence? Did I get it right?

      zorro

      • Denis Cooper
        Posted November 3, 2014 at 3:09 pm | Permalink

        Several moves in that direction, and also moves to give Scotland a veto on the UK leaving the EU.

        • zorro
          Posted November 3, 2014 at 6:01 pm | Permalink

          ‘also moves to give Scotland a veto on the UK leaving the EU.’…. They really can shove that where the sun doesn’t shine!

          zorro

    • acorn
      Posted November 2, 2014 at 5:54 pm | Permalink

      Denis, this is a good outside bet at the moment Ladbrokes have it at 2o:1. Nobody has woken up to this one yet but, like you, I think it is a runner.

    • Max Dunbar
      Posted November 2, 2014 at 6:57 pm | Permalink

      If the quotes that are attributed to Salmond in the attached article are to be believed, then anyone who supported the Union will be considered for ‘special’ treatment in the event of a successful break from the UK.

      • Denis Cooper
        Posted November 3, 2014 at 3:13 pm | Permalink

        Indeed. You have a referendum to directly consult the people and it is assumed that the two sides will both be cross-party and non-party, but if one party mainly lines up with another execrated party on the wrong side then it will stand condemned and can expect to be punished.

  18. Margaret Brandreth-J
    Posted November 2, 2014 at 3:51 pm | Permalink

    I am not sure why you seek to defend prosperity in London. The country does not want it to fail.As a teenager I was brought up in Manchester and enjoyed ,with my friends, the culture of this great City.As a young female there seemed to be just three choices, a secretary, a teacher or a Nurse . We have moved on considerably since then.It is still great and the energy is still there ,yet there are far more people feeling dejected and rejected. The work ethos which replaced the salaried ethos has spoilt the social cohesion.When there was something to aspire to, the motivation was greater. The trouble with Manchester is they have shot most workers in the back and built large buildings to replace humanity.
    I prefer a little peace these days, can’t stand the’ innits’ . the cutting of letters at the end of words , the closed mouth vowels sounds; yes, I’ m not hearing as well as I used to and must be becoming old fashioned .

  19. Stephen Berry
    Posted November 2, 2014 at 4:28 pm | Permalink

    JR: I always assumed I would get a job in London.

    In 1975, as the decline of heavy industry in the North accelerated, I came to down to London to find work. Along with many others, I succeeded. Apart from a few stints working abroad, I have lived in London for the last 40 years and seen the transformation and growth in this remarkable city. A trip down the Docklands Light Railway to Greenwich via Canary Wharf is simple proof of this. If anything, the tempo of change in London seems to be increasing in the 21st century.

    The charge that London’s gain is a loss to the rest of the UK is simply economic illiteracy on a grand scale. How many economic historians would claim that development of the industrial revolution in Manchester and Lancashire in the first half of the 19th century damaged the rest of the UK? Just the opposite in fact.

    But London is not just an economic boon to the rest of the UK. It benefits people worldwide. I chatted with a Venezuelan woman recently who had escaped from the rigours of the socialist government of that country and is part of a growing Latin American community in London. London has traditionally received refugees, whether they were Jews fleeing pogroms or Hungarians fleeing communism in 1956.

    But I would not like to finish without a word for our good friends across the Channel. One of the biggest influxes of people to London of recent years seems to have been the French, fleeing the latest Reign of Terror introduced by President Hollande. They are doing all kinds of jobs. Standing on the platform at Clapham Junction, I even heard the train times being announced with a Gallic accent. The French sent us Isambard Kingdom Brunel at the start of the 19th century. I wonder if we will get anything comparable in the 21st?

    • Mondeo Man
      Posted November 2, 2014 at 9:45 pm | Permalink

      We are getting more than comparable, Stephen.

      The pace of technological progress is unparalleled. In the past twenty years humanity has witnessed greater scientific and cultural leaps than in the Renaissance and even the Industrial Revolution.

      We are so accustomed to change that we don’t see it. It is so subtle and scaled down that it passes us by – but the artistry, higher order of thinking and problem solving are unsurpassed.

      Sadly none of it makes for better stories, story telling or films – and the high point in communication coincides in a cultural low point meaning that bad culture is being transmitted faster than good culture ever was.

      And where ARE the flying cars, the robots and the silver suits we were promised in the ’60s ???

  20. Jeffery
    Posted November 2, 2014 at 6:42 pm | Permalink

    London is probably the ‘poster boy’ for an increasing difference between the interests of those operating in the global economy and their fellow ‘countrymen’, seen around the world. Unfortunately, ever more (business) decisions relevant to the rest of England seem to be taken in London. This makes a mismatch in priorities by those taking the decisions rather crucial. Part of UKIP’s resonance with the alienated in the rest of the country? Not that they have any solutions.

    • Mondeo Man
      Posted November 2, 2014 at 9:49 pm | Permalink

      UKIP do have solutions.

      Unselective immigration is a problem and threatens to drag us down. The EU is an economic disaster and it is corrupt and undemocratic.

      Mr Cameron wrings his hands and says ‘It’s the EU, innit !’ when he can do bugger all to address people’s worries. And then wonders why UKIP is doing so well.

      Getting us out is by far the best proposal of all parties.

  21. John Robertson
    Posted November 2, 2014 at 7:01 pm | Permalink

    Constant reminders of what London delivers for the UK is needed as elswhere, particularly the devolved assemblies there is a constant attack on it. London is a net contributor to the UK but listen to what they say elsewhere they believe the opposite. They resent investment into it whilst not mentioning the 20 to 30 bn that is given out to the rest of the UK from the South East.

    People like Alex Salmond want to re balance the wealth statistics by kicking out the very firms that London welcomes. It has an abundance of international law firms, trading, consultancy, architectural, accounting and investment firms that all pay their international skilled workers very high salaries. The tax revenues and secondary business of these are a huge asset that benefits our poor as well. They won’t if they move to be based in mainland Europe, Asia or America. The likes of Alex Salmond and Labour think that by kicking them out through punitive tax that it will benefit the ordinary people. It will just mean the ordinary people will bear a bigger burden of the tax take.

    I’ve noticed in more recent years some architect firms setting up at the edge of the City and going towards Shoreditch area. Their names are foreign and no doubt command salaries that so many politicians want removed from these shores. Happily London welcomes them and more the better.

  22. Max Dunbar
    Posted November 2, 2014 at 7:09 pm | Permalink

    Big dynamic cities like London have always drawn people from far and wide. For those who like city life and are ambitious to do well in their chosen careers then London is the obvious choice in the UK. Perhaps because London is such a powerful capitalist entity it has transcended petty political interference and shaken it off. Leftists simply cannot get a grip there and make any ‘progress’ whatsoever except in local pockets of the less prosperous areas; and even these areas have changed rapidly and become better as the sheer pressure of prosperity has shaken off the shackles of miserable self-perpetuating socialism.
    London is a massive money-making success story and may it long continue to be so.

    • Mondeo Man
      Posted November 2, 2014 at 9:52 pm | Permalink

      Why does London contain so many Leftists then, Max ?

      I notice that the London Evening Standard has gone crazily leftist from the time when I lived there.

      • Mondeo Man
        Posted November 2, 2014 at 9:55 pm | Permalink

        There is a new political strand:

        Blairism

        The reconciliation of Leftist hypocrisies with capitalism. Where one can be a socialist telling everyone else how to live whilst making millions and seeking distinctly unfair advantages for one’s self.

    • Excalibur
      Posted November 3, 2014 at 5:55 am | Permalink

      Indeed, Max. As I have said before in these columns, talent coalesces to the centre.

  23. Iain Gill
    Posted November 2, 2014 at 9:03 pm | Permalink

    I like London.
    But it is fuelled by out of control immigration, both illegal and legal (uncapped ICT visas and all the rest). which have many negative impacts that you don’t mention.
    It does have many in-built advantages, centre of the rail network, it’s the first place foreign investors set foot, and so on.
    It’s not my favourite capital city.

  24. matthu
    Posted November 2, 2014 at 11:42 pm | Permalink

    So … the House of Commons authorities have destroyed all evidence of MPs expenses’ claims prior to 2010, meaning an end to official investigations into the scandal.

    So now we know for sure that Westminster is not beyond destroying evidence in order to frustrate any potential future criminal investigations. The public will have to draw their own unfortunate parallels with the abuse scandal.

  25. Alan Wheatley
    Posted November 3, 2014 at 10:12 am | Permalink

    Re: “London is not a threat to the prosperity of the rest of the country, but an opportunity to enhance it”.

    While I agreed “London” is not a threat to the prosperity of the rest of the country, a government focused on London is; or to put it another way, there are business activities away form the cities (London being the prime example) that need support tailored to their needs.

    An item on BBC1 Countryfile yesterday illustrates the problem. Government has decided that so-called vocational subjects shall no longer be counted when it comes to rating school performance, and this affects agriculture, horticulture and related topics. Thus schools will be disincentivised to teach them, and employment and business growth in these areas will be handicapped. And such policy is hardly beneficial to growth.

    Government (and the Civil Service) seem to be only capable of doing BIG, yet growth can come for many small businesses.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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