A series of unfortunate opinions
I’m not here to make friends. And I am under no illusion that I am the embodiment of the will of the people. Here are three of my sincerely-held opinions. I am not expecting any reader to agree with all of them. Agreeing with any of them would be a bonus.
National insurance should be rising, not falling
National insurance has just been reduced by the Chancellor. This seems to have been warmly welcomed. “A good way to boost employment”, Paul Johnson of the IFS said.
That begs the question whether we want to boost employment. Once the question is posed, the answer is clear to me: we don’t.
Britain is at near-record levels of employment right now. That’s not the problem. In fact, the demand for workers is such that Britain is continuing to need to import vast numbers, despite the government being sworn to reduce immigration levels.
The problem is more that wage growth is anaemic and that stems from anaemic long term productivity improvements. So we want to get employers using their employees more efficiently and making it less easy for them to extend the productivity problem by throwing more bodies at it. That means that we should be doing exactly the opposite: making employment more expensive. If employers are incentivised to. They call NI a tax on jobs and that’s exactly what we need right now.
You might object that national insurance is paid in relation to those who are in employment. That gives those who are not in employment, eg pensioners, a tax advantage on their income over hard-working families©. It’s a good objection.
Fortunately, I have an answer. Employee national insurance should be reduced by 1% a year and replaced by 1% added on income tax at every band. Meanwhile, employer national insurance should be increased by 2% each year. By this means we would (a) get employers to value more carefully how they use available human resources, (b) thus start reducing the desire of employers to secure additional labour and thus hold out the prospect of reducing immigration in future and (c) filch more money from rich codgers and employers, all at a time when the country’s finances desperately need the support.
The reason why there’s so much opposition to development is that the public has had decades of bad experiences
Among the great and the good, as the New Elite were once labelled, there is a striking consensus. Britain is paralysed by sclerosis in planning and building. Britain needs to bulldoze through the objections of NIMBIES both literally and metaphorically, they urge, and build, build, build.
I almost agree.
There is no doubt that Britain is a horrifically expensive place to build infrastructure. Few ask why.
For starters, Britain, and England in particular, is densely populated. Of the countries with more than 10 million people, only Bangladesh, Taiwan, South Korea, Rwanda, Burundi and India are more densely populated than England. With the possible exception of South Korea, none of those are really comparable to England.
Britain is not just densely populated, it’s fairly evenly densely populated. Compare this map of Britain, depicting where no one lives, with this map of France. France isn’t just much less densely populated, there are large parts where sticking some important bit of infrastructure isn’t going to bother anyone at all.
What this means is that new developments are only going to get a smooth ride if the public has confidence in the planning process. And right now, for good reason, it doesn’t.
I don’t need to go back as far as the urban planning catastrophes of the 50s, 60s and 70s, though they certainly form part of the folk memory of planning culture. (Whether you deplore the primacy given to the car, the inordinate number of shoddily-built tower blocks or the dominant style of brutalism on the cheap, there’s something from that era for everyone to disdain.) Public projects in Britain have for as long as I can remember been seen to have benefited the developer or the sponsoring politicians with scant regard for the interests of the existing public.
As an example, consider the abortive attempt by north Essex councils to create a new dormitory town, West Tey. There’s certainly a need for a lot more accommodation and the location was well chosen. But with woefully inadequate upgrades of transport infrastructure, schools, hospitals and so on, it would have been a disaster for all concerned. The proposed Rapid Transit Service turned out, on closer inspection, to be a bus route.
A public outcry ensued and the idea was thrown out by the planning inspector. The ground has now been thoroughly salted for any modified version of the plan to be put forward. The action group is up and running, extremely suspicious of the local authorities and interpreting every development in the area through this lens.
Let’s take a look at a true shocker that’s currently under consideration: the proposed redevelopment of Liverpool Street station. This proposes to take a well-functioning light and airy railway station, one that is listed and that was sufficiently attractive to appear in an award-winning ad, and plonk a modern skyscraper on top of it. Will this work? Well, there are other examples of such architectural atrocities in the near area going up. I’ve put a picture of one at the top of this post. As John Rentoul commented when he saw this, oh dear. At least that building had no great architectural merit. When the public hears of redevelopment, they expect this kind of degradation of public space for private gain.
The public are quite capable of discerning the difference between good and bad plans. The people of Stratford willingly took a chance on ABBA Voyage, a venture which has pulled in untold thousands of tourists to London. They balked at the Orb, a monumental illuminated sphere that would have bathed east London in perpetual dawn. Would it have brought in lots of tourists? Very probably. It would certainly have ruined the quality of life of local residents. The government doesn’t seem to care. It has just called in the decision to reject the idea for reconsideration.
Forget NIMBIES and YIMBIES, the key group for planning purposes are MIMBIES. And right now the Maybes instinctively lean towards Not, scarred by their past experience of dismal planning decisions. This failure by government to persuade the persuadables is a central part of why planning in Britain takes so long and becomes so expensive.
To overcome the concerns of the MIMBIES, government should offer a social contract. If the government are going to streamline the appeals process then to take the public with them, they need to commit to provide adequate infrastructure of quality for the major building programmes that are required.
Then Britain can build, build, build.
Regions outside London should stop competing with London and instead try to leverage off London’s success
This opinion is the opposite because everyone claims to believe it and no one really does.
Britain is essentially two economies yoked together: one is a top-tier western economy and the other is a transplanted struggling eastern European economy. You would have thought that the optimal strategy would be to have the struggling economy work co-operatively with the top-tier economy. Far too often, you get the impression that the plan of the have-nots is instead to try to siphon off London’s success.
This approach is not just hostile, it is dumb. If it is fought as a competition, London will win, flattening The Rest still further (for much the same reason that London won the opportunity to host the Olympics on its first attempt after repeated failures by Birmingham and Manchester). And this isn’t a zero sum game; both London and The Rest can benefit from cooperating.
Parts of the country outside London have joined the top-tier economy by doing just that. London’s economy has effectively expanded to form a greater greater London that stretches as far out as north Essex in one direction and to Gatwick and beyond in the other. In the process, greater greater London has acquired a series of exurbs that have also benefited from the effect. The south coast is dotted with them: Brighton, Bournemouth, Hastings, Worthing.
Cambridge and Edinburgh have found their own ways to the top tier, but there’s plenty of scope for other towns and cities to get there too. That requires them to work with the successful parts of the economy.
That’s where the problem comes. Because that will require a fundamental shift of mindset on the part of both the greater greater Londoners and (for want of a better word) the provincials, a shift that neither is very willing to consider. Far too many Londoners don’t want to part with the real goodies and far too provincials define part of their identity against London’s ways.
London has been willing to make gestures to pacify the less fortunate parts of the country but without any serious consideration of how it might do more than that. So it has happily consented to any number of public sector jobs being transferred from London to regional centres, and has done for decades: for example, the Royal Mint has been in Llantrisant for nearly 60 years. This kind of transfer is innately good for London and innately bad for the receiving area.
The government has a target of relocating the jobs of 22,000 officials from London by 2030. Such jobs are eagerly gobbled up by the regional centres, but they’re like Big Macs, satisfying an immediate appetite for job opportunities at the expense of something more nutritious. They don’t normally add to the growth potential of a region. They just satisfy an immediate need. Is Darlington going to be able to develop an economy based around a centre of excellence because large parts of the Treasury have moved there?
It’s hard to see a likelihood of many companies being spun out of the Treasury in Darlington in the same way that Cambridge has done from its university. It may provide more opportunities for Black Sheep Coffee. Llantrisant has not become a numismatic powerhouse such as has transformed the economy of south Wales.
In this the public sector is only imitating the private sector. The concept of northshoring and near-shoring has been around for decades. The public like it. Arlene Foster first made her name by efficiently marketing the idea of nearshoring in Belfast to professional services firms. But too often the jobs transferred are junior, requiring little expertise and offering little authority. Call centres aren’t going to transform the prospects of any region. If that’s all that’s on offer, the bright and the ambitious will leave.
More is possible. To its credit, the government is looking to relocate 50% of senior roles from London as part of its relocation target. I question whether even senior officials in the DWP are going to provide the locus of an economic agglomeration effect but at least jobs with more seniority offer people a reason to stay in their local area.
One successful transfer of this type was the move of large parts of the BBC from London to Manchester, with the development of a media ecosystem around it: a Media City, no less. It’s an industry facing severe challenges at present but even so this looks to have worked as hoped for. A new hub has been created while allowing London’s own vibrant media economy to develop in different directions.
For this to work, greater greater Londoners need to accept that if London is not going to choke on limitations of size, it needs to parcel out not just gribble but some prime meat capable of creating a new hub that can work in partnership with it. And provincials need to accept that instead of defining themselves against London they need to be ready to adopt some of the practices that have made London so successful.
Since this requires two changes of mindset, and one would be difficult enough, I don’t expect it will happen. The idea is quite nice.