In the United Kingdom we have a long history of attributing the struggles of cities outside of the south of England to the decline of more traditional industries. Politicians from all parties have sought to reverse these trends, but in seeking to improve city economies by replicating the industries of the past, we risk preventing these places from fulfilling their potential in the 21st century economy.
This is because for these cities, the vast majority of which are in Labour heartlands, their present-day woes do not just reflect the consequences of deindustrialisation, but also their inability to support growth in new and emerging areas of economic activity.
Our new report A Century of Cities looks at how cities have performed over the last 100 years, and explores the emergence of the two-tier economy of progress and decline we see today. It finds that cities such as Oxford and Peterborough have over 300 per cent more jobs today than in 1911, while cities such as Burnley and Blackburn have around half as many as they did a century ago.
But overall jobs growth does not tell the whole story. In a century of great change, ranging from ever-increasing globalisation to the rise of air travel, cities have had to constantly adapt – and to build new and profitable industries within the knowledge economy.
Some cities, such as Bristol and Brighton, have been exceptional at reinventing their economies in the face of constant change. Others, such as Doncaster and Swansea, have done less well – replacing coal mines with call centres, and dockyards with distribution centres. They have replaced one set of low-skilled jobs with another, replicating their economic structure.
And there is a clear geography to this. Of the 41 cities classed as replicators in the report, 30 are in the north, Midlands or Wales. Out of the 16 cities classed as reinventors, 11 are in the south. And overall, 2.3 times more jobs have been created in the south over the past 100 years than in the north, Midlands or Wales. While in past times it was the geography of natural resources that drove economic success, today, it is the geography of knowledge that has driven the widening ‘north-south divide’.
The irony is that for 80 years successive government policies intent on closing the gap have inadvertently reinforced replication, instead of encouraging reinvention. Examples range from the Special Areas Act of 1934, which attempted to boost industry in areas of high unemployment, through to the regional growth fund, which sought to rebalance the economy towards manufacturing and the north.
If Ed Miliband wants to reverse this pattern and really drive a tangible recovery in jobs and prosperity in cities outside of the south then Labour will need to give them the policy and financial freedom to reinvent their economies. Labour’s devolution plan, building on the foundations of Andrew Adonis’ growth review, is an encouraging first step towards this.
But critical to the success of this plan will be ensuring it places the right emphasis on increasing the stock of knowledge in city economies. The first step to achieving this will be improving skills levels. And the second is to encourage cities to develop business environments that support innovation, entrepreneurialism and knowledge networks between workers and businesses. To be realised, both of these elements must be central to not only Labour’s devolution plan, but should stand at the heart of its manifesto – after all, better-performing city economies means a happier, healthier Britain.
The move from the industrial revolution to a knowledge revolution has fundamentally changed the role that cities play in the national economy and Britain’s role in the global economy. If Labour is serious about improving both the UK’s living standards and future prosperity, then the party must accept that we have entered a new phase – and adapt too.
———————————-
Paul Swinney is chief economist at Centre for Cities. He tweets @Paul_Swinney. The full report can be read here
———————————-