Why the ‘One North’ economy doesn’t square with reality

Paul Swinney, Centre for Cities

City centres are leading growth so plans for the north need to focus on powerhouses of Manchester and Leeds not a single ‘flat’ economy, says Paul Swinney of Centre for Cities.

The Government’s recent publication of its Northern Transport Strategy, which sets out how it intends to improve intercity links across the North of England, is very welcome. But there’s one thing deeply troubling about it. And that’s the references to the North being one economy.

"The idea that policy should be aiming to create one ‘flat’ economy ignores the changing geography of jobs that has been seen across the North. And this line of argument threatens to hold the North back, rather than pushing it forward."

There’s little controversy around the idea of improving public transport in the North. The frequency and speed of rail services in particular are second rate compared to those in and out of London. And so for this reason the strategy is very welcome.

But the strategy runs very quickly into the same problems that the idea that the Northern Powerhouse is currently getting caught up in – the idea that, instead of being focused around the growth pole of Manchester, as originally envisaged, it will make the North of England ‘function as a single economy’.

Politically this is not surprising. Appearing to favour one area over another is not a way to win votes. But the idea that policy should be aiming to create one ‘flat’ economy ignores the changing geography of jobs that has been seen across the North. And this line of argument threatens to hold the North back, rather than pushing it forward.

Not so long ago the idea of the death of distance was a popular notion. Inventions such as email and video conferencing were supposed to free people of cities and allow them to work anywhere, without the daily commute. 

But the reality couldn’t be more different. Instead of geography becoming less relevant, the world has actually become spikier. Our strongly performing cities have become more important to the national economy because of the benefits they bring – namely access to workers, access to other businesses, and access to infrastructure. This is particularly the case for many high-paid, knowledge-based jobs in areas such as media, finance and IT, which rely on the benefits of face-to-face interaction.

It’s for this reason why we’ve seen an increasing share of jobs in the North clustering in the city centres of Manchester and Leeds in particular in recent years. Despite accounting for just 0.0001 per cent of all land in the whole of the North East, North West and Yorkshire, together the city centres of these two cites accounted for 230,000 jobs – roughly 4 per cent of all jobs across the three regions - in 2011 (up from 171,000 in 1998).

The same has been seen in London in recent years. An ever increasing share of the capital’s jobs – especially high paying ones - has been clustering within central London. And this has been underpinned by a transport system that reaches far out into the Greater South East, shuttling workers to the 1.5 million jobs located in heart of the capital each day.

So if the aim of policy is to improve the economic performance of the North of England, it should be clear in its prioritisation of Leeds and Manchester, rather than attempting to spread jobs around. Instead of talking about one northern economy, politicians should be talking about the creation of a number of Northern Powerhouses.  The role of transport policy, as is the case in London, is then to make sure that as many people as possible have good access to the high paid jobs in these city centres.

Sustained economic growth in the North of England in the future will not occur by spreading along the M62. Instead, to be successful, economic activity in the North needs to become ever spikier.

Paul Swinney is senior economist at Centre for Cities.


The BBC's ‘Mind The Gap’ two-parter on the North South Divide last year, with Evan Davies reporting, concluded that a Manchester-Leeds area ‘agglomeration’ of big city buzz, talent pools, SMEs, university research, design and technology skills and commuter spending power was essential if the North was ever to compete with London and other world-cities: http://www.bbc.co.uk/programmes/b03y3y8k HS2 Plan B aims to fast-connect a similar agglomeration by parking HS2 and building a 39-mile HS3 between Leeds and Manchester Victoria instead. It would join up a Northern Cities Crossrail system stretching west to Liverpool, east to Hull and south to Sheffield and Rotherham and draw time-closer a cross-Pennine economic zone half as big again as Birmingham: http://hsnorthstart.wordpress.... HS2 would not do this.
As someone in Liverpool who has been first hand witness to the tremendous re-emergence of the city's ability to provide jobs and futures to its population over the past 10 years (thanks to only comparatively small levels of investment and effort), I find it disgusting that the opportunities to keep growing the economy here at pace are seemingly discarded by those suggesting that it should essentially now be ignored in favour of investing in only one or two cities elsewhere. Liverpool needs powering up, not ignoring.