The CSR and the revenge of the South

By , Wednesday, 10 November 2010, 16 Comments

Governing is no mere technical matter. It involves making choices of priorities and resource allocation and these are driven by values. So governing is intrinsically political. One cannot complain therefore that this government is being “political”. All governments are political. The point is to recognise what that politics is so that the differences between technocratic option-taking and ideological interventions can be surfaced.

Of course, all governments also deny that they operate politically as this latter notion seems, well, somehow “un-British”. We don’t do ideology in this pragmatic, empiricist country. Yeah, right, and I believe in the healing power of crystals.

My argument is not helped by the somewhat confused politics of the last government. Whilst it talked lots about social inclusion and child poverty, the gap between rich and poor expanded massively and if anybody was squeezed until the pips squeaked it wasn’t the uber-wealthy. However, in all the contradictions you can just discern a geopolitics within the UK. There was some modest but real bias towards distributing public resources northwards and to the Celtic Fringe, where most Labour voters happened to live.

This was not just about explicit regeneration investment, which went particularly to the former industrial areas. Housing investment – money for new build and to knock down slums – also found its way to the rust-belts of the UK. The cost of housing and out of work benefits was also something more or less paid for out of the tax dollars provided by the wealthier south and London. The massive growth of public sector employment in the last decade or so was also more pronounced in the north. One statistic:the North-West lost more than 50,000 people in the noughties but gained more than 80,000 new public sector employees.

Of course the last government also invented regional development agencies, which despite funding regions in the South did pump a lot of investment and development capacity into the North. Finally, the way in which local government was funded changed to the benefit of the North to some degree, with a trend towards specific grants hypothecated for causes which were disproportionately northern – regeneration spend was one but there were other streams such as Building Schools for the Future, Decent Homes or PFIs which helped the North more than might have been expected from mere demography.

So while no-one in the last government discussed this openly, there was a mild politics of the North (and former industrial areas of the UK) in what it did. I always wanted them to be explicit and have an even more robust transformational strategy for the North which would have really restored its economic base and taken communities up from retail jobs and off benefits, but I should recognise that for all its limitations there was an undeclared direction of travel northwards. This was the love that couldn’t speak its name, not least because the Blairites wanted to capture the South and were slightly embarrassed by the northern strength of the party even when many of them had been parachuted in to become “northern” MPs.

It is in this sense that the politics of the current government – despite having Liberal Democrats in it, with their strong positions in northern cities – must be seen as “southern”. I spoke at a conference recently and described the policies coming out of the Coalition since May as amounting to the “revenge of the south”. The CSR confirmed this.

Essentially, everything “northern” described in this text thus far has been dismantled. Regeneration investment: ended Bricks and mortar housing subsidy: ended. BSF and PFI: over. Decent Homes: no new money. Local authority specific grants: greatly reduced. Public spending: cut massively with its disproportionate effect on areas heavily dependent on public sector GDP. RDAs: killed. Benefits: cut.

Whilst much comment has focused on the ideology behind these cuts – the drive to a smaller state with less support for the poor and needy – there is a geography to the politics which needs to be understood. It’s the same geography as the 1980s. The South is to have its day once again.

We hear lots about One Nation politics and “we’re all in this together”. But the nation stops at Watford Gap and the “we” is confined to what Nancy Mitford used to call “people like us”. Something the great Sam Goldwin once said comes to mind: Include me out!

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  • Duncan

    I think you’ve identified an important issue – but alighted on the symptoms rather than the cause. In today’s UK there does seem to be a general perception that “The North” has to be propped-up by “The South”, and that’s just how it is. “The South” might now send less money North, the consequence of which can only be to make it grimmer still. The only way “The North” can see it improve things is through more public spending.

    But is anyone really unpicking the real reasons for the divide? Could it be that the UK is one of the most centralised, unipolar of medium-large nations? Only France approaches us in having so much political, economic and financial concentration in one city region. A one-size-fits-all economic policy is operated on the basis of what’s good for the Greater South East. Politicians argue that we shouldn’t join the Euro because (amongst other things) we’d be locked into an inappropriate interest rate – but most of the UK already arguably is! Investment decisions tend to reinforce the imbalance: you get greater returns per £ in the South East (e.g. Crossrail) but it just reinforces the congestion there and the underperformance elsewhere.

    The coalition talks about re-balancing but – given what this amounts to in practical terms – must be deluded if they actually believe what they say. If they were serious, they might promote English federalism (even if it’s not initially popular): let regions set their own tax rates and incentives (Scotland may get a bit more adventurous this way), take more responsibility for their own development and success (or lack of it) and stop looking to London for solutions/handouts. The decentralisation should continue to city regions and functional economic areas too: let them identify and pursue their own competitive propositions with meaningful powers. Meanwhile, there will need to be some continued redistribution of wealth from the centre – but it could be tapered-off over time.

    • I Spy

      Let’s be honest, the real reason that the north (north of High Barnet on the Northern Line) is failing is because ‘the north’ is still recovering from the economic restructuring promoted by the last Tory government. This eroded and corroded the manufacturing foundations of these strong and wealthy cities that underpinned their prosperity and provided the tools and physical products for capitalism to flourish globally. However the service sector hasn’t really ever taken on the baton. Something is fundamentally wrong.

      The writing has been on the wall for a number of years since Pathfinder days which sought to correct ‘over supply’ in the housing market by demolishing perfectly reasonable terraced housing in places like Liverpool and Manchester…meanwhile in London today you are hard pushed to find a 2 bed terraced house in the cheapest of London boroughs for anywhere close to £300k. Something is fundamentally wrong.

      I grew up in the midlands in the 80s and only ever knew recession and relative depression until I left there for good to work in London about five years ago. Why did I leave? Well, apart from a woman being involved, there were much greater opportunities to work and for career progression. The cost to me and the average renting Londoner….not being able to buy a house until I am 50+. Something is fundamentally wrong.

      London, by my eyes, and compared to other cities is a dirty, inequitable yet exciting place and is the spoilt child of english cities, gaining more and more national assets and ever more transport infrastructure at the cost of the regions. Something is fundamentally wrong.

      Instead of building silicon valley in Hoxton, how about looking north of the M42 (not M25) and providing necessary incentives to the private sector through devolved powers, giving these areas a real chance of going cold turkey and kicking their habit. Something is fundamentally wrong.

      • Duncan

        I think the previous Tory adminstration took the decision (perhaps unconsciously) that the North didn’t matter. The (not One Nation) mindset was that if you can’t compete, tough. Devil take the hindmost.

      • John

        “lets be honest”

        Excuse me but rather focus on the the distant past what about the recent three term Labour government?

        Labour distributed mothers milk aplenty to the North. Never mind that they were public sector jobs at the cost of the southern taxpayers.

        The US is complaining about a 25% public spending as a percentage of GDP. Never mind that under Labour public spending as a percentage of GDP went from 25% to its current 45%. So much for Gordon’s golden rule.

        But it doesn’t end there, in the north the public spending as a percentage of GDP is 77%.

        News Flash ! Mothers milk is dry and shock horror those who have enjoyed 9 out of 10 years on the dole under the boom times under Gordon must now find work !

        Yes this means we will have to close the asian workshops and pay taxes. Northerners are innovative and resourceful and well placed to create real jobs if only we can get rid of the army of public sector spongers draining the lifeblood of the local economy.

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  • John

    The ‘mild Northern bias’ of the Labour government that you describe makes me smile.

    The 80,000 public sector jobs gained by the North-West means that an equivalent number of private sector jobs were lost. Labour created a dependance culture of public sector jobs that ultimately are funded by the tax-payer. These are not real jobs and as such are unsustainable. Should they not have been lowering taxes to encourage manufacturing instead?

    Grant Shapps has announced £2 billion for decent homes but applicants will now be able to avoid the bureaucratic gate keepers , those public sector workers you refer to. Admittedly the Northern cities benefited the most from the decent homes investment so now will not need as great a share of this new money.

    Channel 4 reported a Mori poll last night showing 66% were in favor of the new benefits rules, and that figure had cross party support with 55% Labour supporters in favor.

    The Dispatches program on Monday night showed wide-scale sweat shops of Asian illegals operated by Asian businessmen. One wonders how the ample quota of Asian Labour councillors and public sector workers allowed this modern day slavery to operate in Labour wards? An inconvenient truth perhaps?

    • Andy

      the suggestion of ‘mild tory xenophobia’ in your last paragraph makes me sad. What on earth does it have to do with anything in this discussion on north and south? what in fact is an ample quota?

      In fact your whole commentary is dripping with nonsense and a twist of bitterness.

      How are these jobs not real? How does 80,000 new public sector jobs mean the loss of the equivalent private sector jobs? Eh, what kind of strange logic is that? That fact that the public sector employs people prevents the private sector from doing so? Really? It is just that I can’t remember when I heard a manufacturer pull out from the North because of government jobs?

      Anyway, I have a great solution. What we do is we cut back these jobs that spongers and the like have. you know, the dependency mob. We can’t really afford them. (had to give some money to these poor guys with a gambling problem. I think that is called compassionate conservativism or something). But hey, its alright because we are all in this together. Anyway, instead we all come together. As I said, we we get rid of these jobs (I have some mates who can do it all a bit cheaper anyway) and we do it all for free. In case you were wondering, and as I know you were concerned, it is not slave labour, it is about taking responsibility!

  • Northern Tory

    Mr Williams as a Conservative I probably shouldn’t agree with this article but from where I am standing in Sunderland. I think you have just, ‘clouted the nail right on the head’.

    The Party (half) expected big things at the last election in places like Sunderland and Tynemouth – they didn’t materialise so I think that gave some (The Cameroons) all the ammunition they needed to turn their back on the North East…

    My prediction is that we will return to riots on the Meadowell, Pennywell and areas like Cowgate in Newcastle. The cuts will cut deep and hard but won’t be felt until about 12-18 months time….

    The idea that people can up sticks and chase jobs isn’t feasible…due to the cost of securing homes/rental properties in the South and the fact most families rely on the extended family for childcare and psychological and financial support.

    I am a One Nation Tory and the future for the North East makes my stomach turn…

    • John

      Labour ‘created’ hundreds of thousands of public sector jobs in these areas and created an unsustainable tax burden on the economy. Last nights Channel 4 program ‘Britain’s trillion pound horror’ described this superbly.

      Only the most cynical would suggest that by packing constituencies with public sector employees and giving many social housing, that Labour would reason they would be supporters at the next election. Heck, give me a job and a life time tenancy (otherwise know as life time perk) and I would consider changing my vote!

      Its time for tough love and the North must now be weaned of mother’s milk.

      Do not underestimate the resourcefulness by writing Northerners off as losers who will riot. Through innovation and manufacturing the unemployed will take the jobs from the Polish workers who were not too proud to work in factories and pick fruit.

      As for people being unable to move to where there is work for social reasons how do you account for the Polish and other Eastern Europeans who migrated here? Are you really say that Northerners have become soft? I think not !

  • Northern Tory

    The market will not solve the problems of old industrial areas we need some sort of regional policy. Unless you are happy to let people and communities rot.

    Is corralling more people into an already overcrowded South really the solution. Whenever I visit London it appears that the transport infrastructure and public services are creaking and at breaking point.

    We won’t mention the massive amounts of (subsidy) money Crossrail consumes…

    Finally, John I would be very interested to know which Northern city you live in…it’s is obviously a very different place to the Northern cities I know…

    • Pattycake

      Here, here, Northern Tory – although I’m ambivalent about your political affiliation!

      The outlook for the North is VERY bleak indeed. I await with great trepidation the outcome of all these job losses – but then, the South, surely, will pick up the tab for unemployment caused by that! Serves them right.

      As was said in an earlier comment by Duncan,

      “the UK is one of the most centralised, unipolar of medium-large nations? Only France approaches us in having so much political, economic and financial concentration in one city region. A one-size-fits-all economic policy is operated on the basis of what’s good for the Greater South East.”

      At least the Tories could ensure some parity of opportunity in the North. At this rate, we , the local authority cast-offs, will end up as volunteers propping up the Big Society. How does that help? Surely it’s tautological – the unemployed will need community assistance and the unemployed will be the community assistants!

      Knee-jerk politics! Why can’t we bin the party politics and ideologies and just do what’s best for everyone, regardless of where they live.

    • John

      Northern Tory,

      I don’t recognize the London transport you describe given the new Docklands Light Rail (DLR) stations that have opened in recent years and also the new extension to the East London line that connects to the City of London at Shorditch High Street.

      Perhaps when you last visited London Bob Crow and his RMT were having one of their regular strikes destroying jobs and prospects for ordinary workers? Off course Bob’s okay for Bob who received a 12% pay increase bringing his total including expenses to £145,548.

      You bemoan the transport in London then question the investment in transport through Crossrail, which is being funded by London taxes.

      Three Labour governments attempted to address northern unemployment by growing the public sector without creating real jobs. These public sector jobs grew to 77% of the local economy and this was at the expense of growing manufacturing and other real jobs.

      Maybe I should start calling myself ‘Northern Labour’ now?

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  • Edward

    “Knee-jerk politics! Why can’t we bin the party politics and ideologies and just do what’s best for everyone, regardless of where they live.”

    That’s maybe very naive, but I couldn’t sympathise more with the sentiment, especially when you read of postings that include:

    “Three Labour governments attempted to address northern unemployment by growing the public sector without creating real jobs. These public sector jobs grew to 77% of the local economy and this was at the expense of growing manufacturing and other real jobs.”

    This kind of thinking comes directly out ideological party thinking and of the fetishising of ‘the free market’. There is no broadly accepted evidence basis for asserting that in the North East private sector jobs displaced by the creation of public sector jobs.

    Free-markets adherents seem incapable or unwilling to understand the reality that the private sector jobs were not there, were long gone, and were not likely to be created in the foreseeable future in that local regional economy. The entire infrastructure for the creation or redevelopment of the region’s manufacturing capability was destroyed – as a direct consequence of party policies and ideology followed in the nineteen nineties and noughties by Governments that preceded the Labour ones.

    The creation of public sector jobs in the region might be reasonably argued or debated to be an alternative or a substitute for private sector manufacturing jobs – but they have never been convincingly demonstrated to be replacement for private sector jobs.

    The free–marketers also seem to be capable of ignoring the reality that it was the inept and ideologically driven experiment in monetarism in the Conservative Government of the 1980s that sounded the death knell for whole swathes of manufacturing industry in the ’The North’. That directly created the permanent jobs famine and the alleged welfare dependency culture (that culture being, of course, not a matter of indolence or fecklessness; rather it is a unavoidable mode of survival for many people in a scenario imposed by a capricious London-centric Government).

    I think that just about one of the most inept pieces of propaganda dressed as journalism was the recent Channel 4 programme in which the narrator traipsed around a serious of decidedly right wing politicians and commentators (Kelvin McKenzie included for heavens sake) to supposedly ‘prove’ what is in fact a faith-based concept of public-sector-bad-private sector-good. This is an economically illiterate position – for some people it amounts to an economic bigotry. That statement is justified when you recall some of the other ‘witnesses’ called in that TV programme. They included unrepentant Geoffrey Howe, Conservative Chancellor and chief architect of the disastrous 1980s monetarism failure and Pinochet-supporter Norman Lamont who presided over the equally disastrous UK Conservative Government’s dalliance with the ERM.

    The baselines of the program was encapsulated in the scene where the narrator cited the North East as a Victorian workshop of the world (incidentally, just exactly how many of the regions of Victorian UK were the ‘workshop of the world’?). He then leaps up and over to the 1990s when he ascribed the demise of the industrial North East to the expansion of the public sector. It beggars beliefs that prime time serious TV gives a platform to such voodoo economics. The programme presenters were capable of denying the industrial decline of the North East beginning, arguably, as early as pre-WW1. That decline was down to global terms of trade and new industrial manufacturing centres and structural forces across the domestic UK (private sector) economy.

    Other British-specific factors included an inability to comprehend and adapt to its position in the post-Imperial world economic order – nothing whatever to do with some public sector jobs ‘crowding out’ a private manufacturing sector. That mentality continues to this day with the UK building aircraft carriers named after royalty and that we will not be able to afford to operate or to fly aircraft from to attack non-existent enemies.

    I also note the slight-of-hand from the allegedly ‘Southern’ or ‘Tory’ commentators who bewail how the public sector has supposedly crowded out the good-old-honest grit-and-toil private manufacturing jobs in ‘The North’; and then ignore how at the heart of the dysfunctional UK economy, Metro London and the South East’s preeminence largely came about through non-manufacturing, services industries. The interests (Sterling etc) of the UK regional manufacturing base were sacrificed to the demands of the London City Big Bang et al.

    The whole of the UK economy, and even more so public sector finances, are now suffering the severe consequences of that dysfunctional Metro-London-financial services economy. The consequences were write large in the Credit Crunch and its aftermath.

    Now, can we have a reasonable, evidence-based and non-London-complacent-centric discussion?

  • Edward Reilly

    I agree that it will be local leadership and a sound strategy that will ensure success but funding – as in football – is vital, and I fear that the reductions is spending by County and District Councils will make things very diffcult for Town Centre Management Partnerships.

    • David Marlow

      Thanks Edward – agree absolutely. This is the motivaiton behind my third action point. LAs need to make some resource available; there is a need for BIDs/Super-BIDs and maybe even BID-Lite; and we need to look at new sources of resource. However, just as there is a strong correlation between English Soccer teams, finances and league position – most likely this will also be the case with town centres, especially in the longer term.

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