Why the UK resembles a developing nation
—Sometimes the closer you are to something the harder it is to see it for what it is. This is true for countries as well as individuals. It is especially apt in the case of the British and their capital city. There is a vague national sense that London is ‘very big’ and even that it might be quite dominant over other conurbations. There just is no popular understanding, however, of how big and dominant London is and how distinctive this is by international standards. A few facts should put what is a highly unusual situation into perspective.
At the 2011 census the population of Greater London had reached 8.174 million (easily the largest in the European Union). The next largest city – Birmingham – had a mere 1.072 million inhabitants. The ratio of London’s advantage over the next most populous place was, therefore, slightly more than 7.6 to one. Compare this with our European neighbours. Paris is only 2.5 times the size of the second-largest city in France, Marseilles. Berlin is but twice as big as Hamburg. Rome is about double the size of Milan, while Madrid holds slightly less than that margin over Barcelona. Warsaw has a similar edge over Lodz. The population of London today is about the same as the next 17 largest UK cities (Birmingham, Leeds, Glasgow, Sheffield, Bradford, Edinburgh, Manchester, Liverpool, Bristol, Cardiff, Coventry, Leicester, Belfast, Nottingham, Newcastle, Hull and Plymouth) combined. This is an extraordinary outcome.
Indeed, Britain has a population distribution more akin to that of Africa, Latin America and east Asia in many respects than Europe or north America. The only other heavily populated nations (those with 50 million citizens or more) on the planet that are even more dominated by a single city than the UK are Ethiopia, the Philippines and Thailand. Looked at purely from the vantage point of population geography, Britain resembles a developing nation or an emerging market more than it does a mature economy. Yet this is virtually never commented upon in our national conversation.
It should be, not least because the divide between London and the rest is actually getting wider. It completely distorts our economy and, arguably, our society. This year some 45 per cent of all the graduate employment positions advertised are for appointments in the capital. As far as the professional middle class, in particular, is concerned, London has become a form of gigantic black hole dragging everything into it. To choose to build a career anywhere else is, at best, to be deemed eccentric and, at worst, a disturbing indication of a lack of ambition. In England, it is often London or bust.
This is not a positive state of affairs even for those in the capital. It makes London an incredibly expensive city in which to live and work, with the property market utterly distorted by its status as an international enclave rendering housing close to unaffordable to most normal residents. It can make the rest of the country feel inconsequential. This is despite the fact that cities such as Aberdeen, Bristol, Cambridge, Edinburgh, Glasgow, Manchester, Newcastle and Oxford are world-leaders in their specialised sectors. The biggest project and priority over not the next five years but at least five decades has to be the regional rebalancing of the British economy. Without it, most other initiatives designed to improve the material prosperity and social wellbeing of the British people will be doomed to worthy failure. We will not start to address this, though, until we acknowledge in our political discourse how strange we are as a country. That candid confession and subsequent discussion should start now.
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Tim Hames is director general of the British Private Equity and Venture Capital Association
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