We're too dependent on London and the city is to blame, warns Nick Clegg

Lib Dem leader to offer stark assessment of an unbalanced Britain in speech to be given today

Nick Clegg will today accuse the City of London and successive Governments of “emasculating” Britain’s economy outside the capital – and leaving it dependent on public-sector handouts.

In a stark assessment of the country’s predicament, Mr Clegg will warn that in contrast to our competitors the UK does not have cities outside London that meaningfully contribute to economic growth. He will call on the City to do much more to support the wider British economy and spend less time concentrating on being a global financial centre separate from the rest of the country.

Although Mr Clegg’s speech to financiers and leading City figures at Mansion House will be seen as a stinging rebuke, his comments appear to be short on specific new Government proposals to support growth outside London and redress decades of over-reliance on the Square Mile.

In the speech Mr Clegg points out that historically Britain’s Northern metropolises were the engine room of growth – and were far more equal with London than they are today.

But he will say that successive Governments have failed to redress the economic imbalances that emerged alongside the decline in manufacturing – preferring instead to subsidise the rest of the country with tax revenues from the South East.

“The previous government, in particular, recycled and redistributed City of London tax receipts to other parts of the country through the long arm of Whitehall,” he will say.

“And in doing so they took the easy route: expanding the public sector in the North, paid for by the private sector in the South. Emasculating the North and overburdening the South. Trying to prop up a nation of 100,000 square miles on the profits of just a single square mile.”

Mr Clegg will contrast this with Germany, the US and India – all of which have vibrant and successful “second-tier” cities.

“The most successful economies are driven not just by their capitals, but by multiple thriving centres,” he will say. “Take Germany: Munich is an economic powerhouse; Frankfurt a financial centre; the Rhur, a cluster of industrial cities; Berlin is the country’s creative heart.

“America is home to Washington, Chicago, New York, LA. India is driven by Delhi, Bangalore, Mumbai. These are strong economies, built on independent international cities; each with their own USP. 

“[But] over recent decades, the debate on the UK’s economy has been cast too narrowly. The focus has been almost exclusively on London-based services as the principal source of UK growth.

“An orthodoxy has emerged which assumes that the profoundly centralised nature of our economy. Where one city – containing just 13 per cent of the country’s population – is responsible for over a fifth of its total output is somehow the natural order of things: fixed, inevitable, irreversible.”

Mr Clegg will call on the City to do more to support the rest of the country – and pledge Government support to transfer “financial freedoms” to cities and regions to support new industries. “Growth outside the capital strengthens London too,” he will say. “Their burgeoning private sectors are your customers. The regions are your trading partners and their breakthroughs are your gains.

“Successful cities draw on each others’ innovations. When you take the best from each city and put it all together, you create an economy that is greater than the sum of its parts.”

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Sport
Dave Mackay lifts the FA Cup in 1967 having skippered Spurs to victory
football
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
Jihadi John
newsMonikers like 'Jihadi John' make the grim sound glamorous
Arts and Entertainment
As depicted in Disney's Robin Hood, King John was cowardly, cruel, avaricious and incompetent
film
Life and Style
Travis Kalanick, the co-founder of Uber, is now worth $5.3bn
tech
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Circles South East Youth Service: Youth Services Volunteer

this is an unpaid voluntary position: Circles South East Youth Service: LOOKIN...

Recruitment Genius: Business Development Executive - OTE £30,000+

£18000 - £22000 per annum: Recruitment Genius: This leading privately owned sp...

Recruitment Genius: Software Developer

£30000 - £40000 per annum: Recruitment Genius: A Software Developer is require...

Recruitment Genius: Logistics Supervisor

£24000 - £27000 per annum: Recruitment Genius: The largest supplier to the UK'...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn