Is London too much? Four centuries of debate

King James I lamented in the early seventeenth century: “soon London will be all England”. Then, as now, London’s population growth was both driven by and drove the capital’s economic prosperity. Before the end of the century, arguments would appear for what we would now call the ‘re-balancing’ of the country’s economy and population : 

“Now as to the Grandour of London. Would not England be easier and perhaps stronger if these vitals were more equally dispersed? Is there not a Tumour in that place, and too much matter for mutiny and Terrour for the Government  if it should Burst? Is there not too much of our Capital in one stake, liable to the Ravage of Plague and fire?…Will not the resort of the Wealthy and emulation to Luxury melt down the order of Superiors among and bring all towards Levelling and Republican?”

This was written by Robert Southwell to Sir William Petty in 1686, one of the many  fascinating extracts and fragments of how contemporary observers saw the coming of the Maxine age in Humphrey Jennings’ marvellous ‘Pandemonium’. Southwell’s argument across four centuries sounds some very contemporary concerns: regional inequalities; threats to resilience, both natural and man-made; conspicuous consumption by the ‘1%’.

Moreover, as the historian Richard Olson points out,  Southwell was responding to an essay by Petty in which he argued that by 1800, London’s population would rise to 5 million, exceeding that of the rest of England.

Hence, both London’s pre-eminence, and the debate on whether this is beneficial or the opposite, has  persisted for four centuries. That suggests to me that the issue will not be resolved any time soon. As a policy-maker, the more salient issue for me is how to craft a set of national policies which both support London’s growth and dynamism, and also use this asset to the benefit of the whole of the UK. 

Any colour as long as it’s green

The Wall Street Journal tells me that Tesla has now overtaken Ford as the second largest car maker in the US by market value. General Motors is ahead but may now be glancing in the rear view mirror. 

Is this a “seismic shift” in the industry as WSJ puts it – a “growing belief that internal-combustion engines will be replaced by electric motors as the primary power source for automobiles”? Others disagree, seeing more hype than substance. Currently, Tesla produces fewer than 100,000 cars a year, compared with Ford’s millions. But are we on the brink of a major innovation-led change? 

Cities, Data and Digital Innovation: My new paper

My paper on Cities, Data and Digital Innovation is published today by the University of Toronto. You can read more about it here, and download the paper here.

I wrote the paper last year while on sabbatical at the University of Toronto. I enjoyed living, working  and writing the paper in Toronto. I hope you enjoy reading it.

Cycle power

Films such as ‘The theory of everything” and TV series such as ‘Grantchester’ imply that Cambridge is cycle heaven. And indeed, there are a lot of people on bikes; Cambridge has I believe the highest proportion of journeys to work on two wheels. But the infrastructure and traffic management lags the reality by a long way. While cycling across Parkers Piece or Midsummer Common is undoubtedly a joy, most city cycling in Cambridge involves the familiar mix of potholes, disappearing cycle lanes and an apparently mystical belief in the efficacy of faded white lines on Tarmac to provide a cycle-friendly city.

This may be now changing. The’DNA cycle path’ South from Addenbrookes offers great views as well as a path surface whose colours reference the four nucleotides of the BRCA2 gene, and the cycle way alongside the guided busway is another fast convenient route into and out of the city. And in the last few weeks work has begun on a segregated cycle lane along Hills Road. It’s only about a mile and will terminate at the Hills Road bridge – but it’s a start.

Promoting cycling and walking is more than a transport policy; it is a way in which cities can say something about what sort of place they are, and what sort of place they want to be. These are not (just) quality of life issues; for cities like Cambridge (and London) their economic futures will depend on their ability to attract and retain ideas, investment- and people

London and the UK economy: dynamo or Great Wen?

When @bridges_tom posted that he thought the role of London in the UK economy would be “one of the big issues for 2014” I was initially sceptical – but there seems to be gathering interest in the topic. In his post, he states that “a rest of Uk versus London narrative is unhelpful for a number of reasons” but we will have to wait for his next post for details.

David Smith of the Sunday Times looked at the same topic last Sunday. David Smith asks the question directly: is London good or bad for the rest of Britain? He goes on to answer this in three parts: does London distort monetary policy? Secondly, does London prop up other regions fiscally, or drain resources from elsewhere? Thirdly, what are the dynamic and supply-side effects of London’s dominance? Smith acquits London  on the second and third charges – London contributes much more to the Exchequer than it takes out, and Smith quotes evidence that regional growth rates are correlated with London’s, suggesting a positive link. On the first charge, Smith argues that in general, London is not guilty here either, with the exception of 1996-2007 when a high pound – driven by international capital flows into London/UK – hit manufacturing and hence many regional economies. Smith concludes that “London’s success is Britain’s success. it does, on balance, benefit the rest of the country.” He goes on to say that improved growth prospects in the regions will increase (not detract from) London’s success.

I think this last is a very important point. The UK regions are, in effect, London’s prime export markets. Stronger regional growth in the rest of the UK will  increase demand for London’s export of goods and (mainly) services, just as much as faster Eurozone, US or BRICs growth. Sir David Higgins, the new chairman of HS2, the UK’s second projected high-speed railway, made a similar point: “For London to operate as a really efficient global metropolis it needs to have the regions and the rest of the UK being complementary to it, and that is the big point.” (Times 15.01.14).

This isn’t a new discussion of course. William Cobbett in the 1820s, famously compared London to an unhealthy tumour (a ‘great wen’), draining goodness from the rest of the country:  ‘But, what is to be the fate of the great wen of all? The monster, called, by the silly coxcombs of the press, “the metropolis of the empire?” ‘  Even earlier, King James I worried about the expansion of London: ” soon London will be all England”.  But what is perhaps new (or new-ish) is the greater importance of agglomeration economies and cluster effects in an ever-more globalised economic system. Seen from this perspective, it is not only London’s size, but its differences to the rest of the UK (younger, more diverse, better educated) that are significant.This generates important political and social differences – but its effect on overall economic growth is not clear.

International Cities Week?

You know how it goes – you wait ages for a good conference in London, and then four of them arrive together.

This week I spoke on London’s economy at the Centre for London/Brookings/JPMorgan citiesfest on Tuesday and participated in a panel on Smart Cities at the World Islamic Economic Conference yesterday . Had I but world enough and time, I could also have attended the Economist Infrastructure Summit on Future Cities,  and also the first conference of the Open Data Institute.

The ODI gets my vote in the Don’t Take Yourself Too Seriously Award by having the humility (or perhaps confidence) to have a key session entitled “Open Data, So What?”. It would be a better world (or at least a better conference circuit) if that  kind of self-referential humour were more widespread.

Does this confluence of conferences indicate something important? I think it provides evidence, along with the current contents of my inbox, of an acceleration of interest in the policy issue of how we encourage and manage the economic growth of cities in a way which is sustainable in all senses of the term, and is also informed by a richer understanding of the scientific and technical challenges and what solutions might be possible. I think we also have a naming problem at present: there is increasing consumer resistance to ‘Smart Cities’ on the part of many policy-makers and budget-holders who have been on the receiving end of some hard selling recently on single solutions to complex problems. ‘Future Cities’ is the term preferred by our own Technology Strategy Board for the Catapult. This avoids some of the connotations of ‘Smart Cities’  but often puts me in mind of jetpacks,  1950s science fiction, and the wonderfully inspired if slightly-bonkers 1960s visions of groups such as Archigram with their walking and plug-in cities (http://en.wikipedia.org/wiki/Archigram) – perhaps no bad thing.

This policy debate sits close to, and overlaps with the debate about “Big Data” – with that term itself being contested of course – and whether this is the Next Big Thing or just the Next Big Hype. My own view: these developments are significant, and will have important and profound consequences, but at a policy and government level, we are still struggling to  come up with workable models that make measurable real impacts on people’s lives. This one, I believe, will run and run.

On the narrower, but endlessly fascinating topic of the London Economy, my slides for the Centre for London conferences are attached here:

Mark Kleinman London Conference 2013 v2

The city and the middle class: two views

This week I read two very different views on rising inequality in successful global cities, from Ed Glaeser in the New York Daily News on New York City, and from Michael Goldfarb in the New York Times on London. The titles alone point up the contrast – Ed Glaeser’s piece is “A happy tale of two cities” while Michael Goldfarb‘s is “London’s Great Exodus.

Ed Glaeser picks up on Democrat Mayoral candidate Bill de Blasio’s pledge to make “the crisis of income inequality” a major theme of his campaign, and argues that the inequality in the city (which Glaeser acknowledges is extreme) is paradoxically a sign of its success. New York attracts both rich and poor, and for specific reasons – “if anyone should be cringing, it is our more ‘equal’ suburbs – which often zone out the disadvantaged…New York has been successful in attracting rich and poor alike, and that makes the city unequal.” Glaeser is far too subtle a thinker to be an advocate of ‘trickle down’; he is in favour of reducing poverty and inequality – but sees the locus for these processes and for the policies to tackle them as the national level. “Local inequality reflects the choice of where to live, made by rich and poor alike.” I think this is correct, and have written about it in the UK context:  see for example  my 2002 article ‘There goes the neighbourhood’  . 

Glaeser, above all, wants to promote opportunity and social mobility, and big successful cities provide the job niches and ethnic networks that help new immigrants become the new middle class. Successful cities have to retain their middle class, and so political candidates should be concerned about the ‘missing middle’ who will leave the city if a combination of high house prices, poor schools and rising taxes takes hold.

It is this missing – or rather fleeing – middle that Michael Goldfarb writes about. For Goldfarb – a writer rather than an economist –  the process whereby London property has become a “global reserve currency” is squeezing out professionals who leave for more affordable cities elsewhere. Over the last few years, money has poured in to London property as a safe asset – attractive both to the rising wealthy of the East and to anxious investors from the Eurozone. As a result, “the ordinary uses of the city have changed beyond recognition. London was never a cheap place to live, but now more expensive property means more expensive everything else: restaurants, cinemas, bars and theater tickets.”

How accurate is the picture painted by Goldfarb?  While some of the most desirable parts of the centre of London have clearly become un-affordable for all but the super-rich, describing London as a whole as ” a no-go area for increasing numbers of the middle class” is an exaggeration. London is growing at a rate of around 100,000 people every year – effectively a new London Borough every three years. This is the fastest rate of growth in Europe, and at the very least implies a city that is increasingly attractive to some groups. Goldfarb correctly identifies the low annual property taxes in the UK which look absurd at the top end of the scale – but a full account would also refer to Stamp Duty, a property transactions tax which has recently been raised for the most expensive properties.

As far as schools are concerned, yes new school-building is not keeping pace with the rate of population increase, which will create problems if not speedily tackled. But London schools are improving far faster than those anywhere else in the country – a key driver of middle class locational choice. Research by the FT earlier this year showed that “London schools have improved so rapidly over the past 10 years that even children in the city’s poorest neighbourhoods can expect to do better than the average pupil living outside the capital.” .

And yet…Goldfarb strikes a chord in me when he writes “A very organic sense of London pride has allowed this city to withstand substantial shocks…Now it is beginning to feel that the next phase of London’s history will be one of transience, with no allegiance to the city.”  I think  (and I hope) he is overly pessimistic in this assessment, but he is undoubtedly pointing out a very real danger.