As Conservatives packed bags for Manchester, Michael Gove garnished his elevation to the head of a gluttonous new Levelling Up department with the slogan “stay local but go far” and with a pledge that no one should have to “leave the place you love in order to live the life you want”. Phase one of his work, we learned, will be salving bruised community pride with boosts for careworn high streets and town centres. Then will come “laying the groundwork for your long term economic transformation”.
He seemed not to be talking about London. The way the Sun told it, Gove regards whatever he believes “levelling up” means and entails – an explanatory white paper is on its way – to be essential because lack of delivery would be a betrayal of Brexit voters and a failure to enable Britons to fulfil their ambitions without moving south – and he didn’t mean south of the Thames.
At the start of the party conference season I spoke to John Dickie, chief executive of business group London First about the state of the capital as it clambers from the wreckage of Covid, in particular its work culture and transport systems and, first of all, the implications for London of what the government’s so far rather hazy agenda for “levelling up” might be.
“We will all, I think, be excited to see what the new secretary of state comes up with,” he said, politely, before identifying, as Gove now effectively has, that the “levelling up package” is designed to speak to that coalition of voters around the country “who feel that the last 20 or 30 years of generalised rising average prosperity and globalisation and all of things that are supposed to be good have passed them by” – the same combination, he believes, that nurtured the rise of Ukip.
He expressed sympathy for the argument that “there’s been more talk than action” about helping areas of the country that have been, to borrow Theresa May’s term, left behind, and he praised the government for seeming to be keen to do more. But he warned that “the challenge is quite how you give those people what they want. I’m not sure if reopening some train stations in the north-east or beautifying high streets or any of the sorts of things it’s quite easy for central government to do are actually quite what somebody who’s seen their wages stagnate or been moved to a more precarious employment contract wants.”
That sort of change is, Dickie stressed, “quite hard to deliver, and you don’t deliver it by moving some central government jobs to Darlington” – a reference to Rishi Sunak’s plan to build a new Treasury Economic Campus at the edge of the County Durham town. That said, he stressed that a London response to the “levelling up” debate should begin by recognising that “it is exactly the right thing for anybody in government to be worrying about, because it cannot be right that London is the only large city in the UK that performs above the national average in terms of GDP per capita. If you look at Germany or France, that’s just not the case.”
That situation can compound the problem by contributing to a perception of London as “other” rather than the nation’s capital, Dickie explained. To address that, London “needs the rest of the country to feel that London is helping them do well”, and this presents a major challenge.
“I think the start point, a really simple thought experiment, would be to ask, would the United Kingdom be better or richer, more successful or happier, if London didn’t exist?” The answer, for Dickie, is clear: “If the UK did not have one of the world’s most vibrant and economically productive urban centres, it is difficult to see it being better off.” However, he also thinks “there’s a need for London to be a bit better at articulating what it does,” acknowledging in passing that his organisation has given thought to changing its name, which presently might give to some an impression of metropolitan conceit.
Yes, Dickie acknowledged, there are the sound arguments coming from Transport for London as it wrangles with Grant Shapps and, behind the scenes, the Prime Minister’s transport adviser Andrew Gilligan over funding and autonomy, about investment in the capital creating jobs across the nation – arguments Boris Johnson often made himself when he was Mayor. But Dickie thinks a still stronger case can be made about Central London office developments, referring to past London First research showing that around two-thirds of the value generated by such a project’s lifespan is accrued in regions outside the capital, with components and materials transported in.
“We also need to think a little bit more creatively about how some of the things London does can work still better for the rest of the country,” he said. He takes tourism as a prime example. In normal times, London is a huge draw for international visitors, but also a point of entry to the UK as a whole. Dickie thinks our national rail system inhibits visitors from travelling beyond the capital more extensively: “If a family comes here on holiday from Italy for two weeks and decides to make a day trip to the Lake District, they rock up at Euston to find it will cost them more to go there by train than it did to fly here. This is not how other countries do it.”
Dickie also addressed an aspect of London that is routinely screened out of the “levelling up” discourse – the high levels of poverty within the capital, much of it concealed by average earnings figures that are higher than the nation’s as a whole but which don’t factor in the city’s famously punishing housing costs: “This notion that can be spread abroad that Londoners are all rich and having a great time at the expense of everyone else is not true to people on the minimum wage living in a flat in Zone 4.”
This point relates to other key “levelling up” themes, which the government has so far been vague about: devolution and the powers of local government. “The central challenge faced by London government and by metro mayors and others elsewhere in England is that we’re living in the most centralised country in Europe apart from possibly Albania,” Dickie remarked, drawing on experience that goes back to being a councillor in Camden in the 1990s. Just because London boroughs have complained for years, and especially in the last ten, that many of their problems and failings relate to paltry central government funding or the lack of powers to raise more money themselves, doesn’t mean it hasn’t been justified.
“If you want good local government, you need to give it the tools to do the job and be genuinely accountable,” Dickie said. “The same is true of regional government. If you turn to levelling up, you need to ask yourself whether the right way to deliver it is to have some poor team of people in whatever HCLG is now called trying to assess 40 different applications from 40 different local authorities for their share of a pot of money designed to improve Z.”
Previously London First’s Policy and Strategy Director, Dickie became chief executive five months ago, succeeding Jasmine Whitbread. In a previous life, he was the BBC’s Head of Corporate Affairs. Making London’s case within the blurry context of “levelling up” is inextricably entangled with more London-specific issues, including housing and skills shortages and, particularly acutely in the context of recovery, transport.
London First has been consistent – and consistently aligned with TfL and Sadiq Khan – in calling for long-term financial support for the government that makes TfL less dependent on fares than it has increasingly become: “At a time when the Tube is running at 55 to 60 percent of normal, that means a big hole in TfL’s finances that business needs to have plugged, because what we cannot have is cuts to public transport, shorter hours of operation, less frequent services and less capacity in the network that will stifle a return to the workplace and a return to Central London.”
Such an outcome would threaten the “well-known benefits of agglomeration economics”, the cheek-by-jowl physical proximity of business that accounts for London being “the most productive part of the European economy.”
Dickie made the point that TfL finances could be righted with “just a slither of the tax surplus London generates in normal times,” plus, perhaps, a bit more from within the city itself “by other means”. Such as? “The most obvious mechanism in the medium term is to look at some way of taking a greater contribution towards the overall public transport provision from all the cars, lorries and vans that use the roads in London”. He meant more road-pricing, a move that would also support other widely-shared public policy goals, such as lessening congestion, improving air quality and combating climate change.
But Dickie did not understate the difficult of winning public support for this: “It’s the sort of public policy solution politicians run a mile from. If we’re going to do this, we’re going to need to take our time to have a serious, in-depth conversation with Londoners. One of the lessons of the pandemic is that when local authorities bring in things like Low Traffic Neighbourhoods when they haven’t actually engaged with local communities, people get hacked off. It’s not even the merits of the scheme, it’s the who-do-these-people-think-they-are doing this to us?'”
Central London’s recovery is, of course, intimately tied to a return to office working after the months of widespread working from home. Dickie emphasised that an awful lot of Londoners haven’t been working from home at all, because the frontline nature of their jobs did not permit it. He also made a distinction between “a return to the office now, over the autumn,” and the longer-term issue of the future of work. While the leisure, culture and hospitality sectors of the capital’s economy have suffered badly, others have been “surprised by how practical home-working has been” with businesses “able to do their work really well from remote settings, from home.”
What happens next is hard to predict, with much depending on what a business’s clients are going to want from them, for example. Dickie also pointed out that pre-pandemic office work often meant “working in other peoples’ offices in meetings with stakeholders or with clients to do business of whatever kind. We’d be moving from place to place, we’d be squatting in a coffee shop for an hour or two in between because that made more sense than going back to base. So getting demand back into Central London is not as simple as working from home or in the office. It’s also about getting people back to being out and about.”
He detected momentum in that direction, that “people will want to be back with their teams with their colleagues doing things that just aren’t the same on Zoom. I suspect we’re going to see the office as places with more meeting rooms relative to desks, more space where people can collaborate, more space for being productive and less space for people sitting at a desk writing a report.”
This, though, may occur alongside “lessons about productivity and flexibility from the experience of the pandemic,” with successful businesses being those “that think how to maintain the flexibility that made their staff feel good – that they could see their children at the start of the day, and pick them up from school and so on. How do you make a kind of hybrid model for your business work so that you are more productive, more sustainable, more effective? Those are the businesses, and the cities, that will thrive in the next decade or so.”
Who would bet against London being in the vanguard of that, in spite of the battering it has endured? But it needs help not hindrance with that process. A government bent on levelling down London will do so at the nation’s peril. Much may depend on Michael Gove.
Photo from ITV News.
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