Has London grown too big for its boots?

A new academic survey has discovered the North-South economic divide is widening. Those in the capital are proud its growing influence. Others say its pre-eminence is bad for the rest of Britain?
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The population weight of Britain is slipping south. As the census shows every year, people move away from northern and western regions to the South and East.

The population weight of Britain is slipping south. As the census shows every year, people move away from northern and western regions to the South and East.

But why? To say it is growth and jobs is true but that begs more questions. Why is the economy of London and the South-east so good at creating jobs? Why is it so competitive not just in UK or even European terms but in world terms? For the London region has a reasonable claim to be the most international place on earth.

There are long-standing measures such as more international air passengers, more international telephone calls or more cross-border money being managed than anywhere else. There is a newer one: the region has the largest non-national community of professional workers anywhere in the world. It has become a magnet for global talent. Example: nearly one-third of the FT100 top companies has a non-national as chairman or chief executive. No other country has anything like that proportion. They come here for the professional opportunity, not for the service on the Tube.

The most remarkable aspect is that it has been not just unplanned but also unexpected. Back in the 1970s, the aim of policy was to slow down what seemed an inevitable retreat. Columnists wrote of the danger of absolute decline, not just relative decline. The success story has, I think, three main elements.

One is the importance of the international financial services industry. London's dominance of the commercial banking side of that goes back to the 1960s and pre-dates the recent boom, but the Big Bang reforms of the City in 1986 enabled it to dominate investment banking and securities business in this time zone. Finance is a huge money machine, pulling in its wake other services industries ranging from expensive lawyers to expensive restaurants.

But it is not just finance. After all, the region's economy has weathered the worst downturn in the markets for a generation. The second general reason for success is the march of globalisation. As economic relationships become ever more international, a big advantage accrues to existing international centres. A Chinese manufacturer needs a European base. Where does it go? It goes to the place where the Chinese banks have offices. It could perhaps choose Paris or Frankfurt but London is a more natural choice. So a "winner-take-all" situation develops, where leading centres in each time zone go on growing because they are the leading centres. A global superleague of cities is emerging and London happens to in pole position.

That leads to the third force driving the economy of the South-east: the social/cultural/intellectual mix. That is, an amalgam of the world language, an open culture, two of the world's top 10 universities and a vibrant cultural and intellectual life. Example: Britain now publishes more book titles than any other country. Further example: there are more Chinese students in the UK than in any other country, again more than the US. Of course, this is a UK phenomenon but it is one that is skewed disproportionately to the South-east.

What is the message here for other UK cities? The first point to make is that several other cities in these islands are doing very well. The scale is different of course, but Edinburgh, Manchester and Leeds have all enjoyed a boom. Perhaps the strongest competition comes from Dublin, the fastest growing city in these islands, which has been extremely astute in building an economy that is a mini-version of London and the South-east. Unsurprisingly, it also faces similar pressure on its infrastructure.

Naturally, the magnet of London creates problems for UK regional cities because the South-east tends to suck away talent. But it also creates opportunities, for other UK cities and regions have the largest market in this time zone on their doorstep. But it is wrong to see London as being in competition with, say, Manchester or indeed even successful Continental cities with an international focus such as Frankfurt and Amsterdam - though both are doughty competitors.

Rather, the greatest competition between the superleague cities in the future will come from other superleague cities. So London is competing against New York, Los Angeles and Tokyo of course but increasingly also Shanghai, Sao Paolo, Mexico City and Bombay. There is no cause for complacency. London, like these other cities, has to cope with the pressures of growth and part of the answer to that seems to be to spread the load more widely throughout the South-east region.

The view from the North

Hunter Davies: Writer. Native of Carlisle, and Lake District resident

"Oh yes! It's full of vanity and self delusion. I live half and half between Cumbria and London, and find [Londoners] are so confident of themselves. They think everything is organised from London and that Carlisle is a suburb, somewhere off the Northern Line. Funny thing is that one day you get a report saying everybody in London is delirious and the next day one saying they all want to move out.

Austin Mitchell: Labour MP for Grimsby

It's the pampered recipient of every major new development - from the Tube refurbishment and Crossrail, to the Dome. They really think it's the centre of the universe. The North gets several hundred million pounds less of public spending than either London or Scotland or the South-east. London benefits, too, from higher wages and rising house prices. The only consolation, in my view, is the North is a better place to live.

Dame Elizabeth Blackadder: One of Scotland's most decorated artists

I don't know if London's getting too big for its boots, but I do think that the South doesn't always know what's going on around the rest of the country. Obviously, London and the South-east attract a lot of people, but there are a lot of cultural things happening in the North which they are not aware of. Edinburgh, for one, has a thriving art scene, and there's a lot more opportunity for young artists in cities outside London than there was previously. Artists have always travelled, and Scots are just as likely to go to France, America, Italy and the Far East as they are to go South. There are a lot more private galleries outside London and a lot more opportunity for fresh talent to be discovered and nurtured. People in the South often think of the North as some kind of wasteland, but it's not. The South doesn't always have the best of everything.

Simon Armitage: Poet, and author of All Points North. Native of Huddersfield

London seems to be the beating heart, feeding blood to places like Manchester. There's work down there, but there's an awful lot of debt up here. There's a sense that in the past, we gave [London] our labour and our products, now we are giving [it] our debt - and one of these days, it's going to be called in. That's a great worry. Things have changed. If you arrive in Manchester by train these days and look to your left and right, it's an advert for the future. The Leeds cityscape is also unrecognisable from what it was 20 years ago. But it feels like there's a lot of surface wealth.

Peter Barron: Editor of The Northern Echo

I do feel that there is far too much emphasis on London, and I return to the cliché that it is as if nothing exists north of Watford. In spite of the successive economic blows, we have faced, the North is a fantastic place to live and bring up your children. We have some of the country's most outstanding countryside, and the quality of life is wonderful - yet if the jobs are not here, much of our talent will go elsewhere. We seem to be reporting manufacturing job losses on an alarmingly regular basis here. The North has had more than its fair share of job losses, and, as a region that was the main manufacturing heartland of the country, we have suffered so badly and continue to do so. As a result, the North has had to have a world-class, highly adaptable workforce to survive. The big issue for us is a review of the Barnett Formula, which is what the Government uses to decide how much funding to give to the region. It was last reviewed 20 years ago, and many in this region feel it is woefully outdated.

Geraldine Smith: MP for Morecambe and Lunesdale

Yes, I think that we do [still] tend to be directed by London. There's been a debate in Parliament about regional assemblies, but they won't make any difference [to disparities in funding]. Things have improved over the past seven years: property prices have been catching up, and I can certainly say that I know which I would prefer between life in London and Manchester. But there's a long way to go before we get our fair share [of investment]. London and the South-east have a very strong lobby for us to contend with.

Richard Holloway: Former Bishop of Edinburgh and member of the Commission for Human Fertility and Embryology, and of the Broadcasting Commission

Whenever I travel around London, I feel hassled and harried. I don't believe the quality of life is any better. My children's generation - all in their early 30s - love London. When they come back to Edinburgh - which is increasingly cosmopolitan - they notice the lack of cultural diversity. What makes London attractive is its cultural pluraformity, its multi-ethnicity, and the fact that it is a global city.

Professor Tom Devine: Glucksman Professor of Irish and Scottish Studies, and Director of the AHRB Centre for Irish and Scottish Studies at the University of Aberdeen

Health in Scotland is not as good as it could be, but, if you take into account the quality of life, several towns rank very high as desirable places to live. Scottish universities punch well above their weight, and are ranked just behind Switzerland and Israel in terms of per capita output of scientific papers.

The view from the South

Beryl Bainbridge: Born in Liverpool but has lived in London most of her life

No I don't think that London has got too big for its boots. It has always been there and always will be. It was Disraeli who first started talking about a divide and it was being brought up all the time on TV. I did it in the 80s.

I don't really know what it means and what people want us to do about it. I don't see how it can be avoided. Parliament, Buckingham Palace, Scotland Yard - everything that has cities in mind is in London.

In my day, in the Sixties, you came down to London. You just didn't stay up North. Even the Beatles didn't stay in Liverpool. They knew they had to get out and the only place to go was London. Going to the theatre meant going to London. It was the same with everything. In the past, there was something about the North and they have lost that special "thingy".

It feels like they have lost something. The North used to have agriculture. It used to produce wool and cotton and import and export - things that kept London going. But all that has gone now.

Brian Sewell: Art critic

I am a Londoner born and bred and I have not observed any swagger on the part of Londoners. If I see anyone swaggering, it is on the part of the North. I think the arrogance lies in the North and most people in the North brand us as "softies". London did not deliberately set out to do this. It is one of those accidents of thousands of years of history. The fact is it is the capital and it is not in the middle of Britain. It is the nearest place in the UK to mainland Europe and it is bound to get this emphasis. It was abundantly clear in the first part of the 20th century that there was a great deal of lively cultural and industrial power in the North. It is entirely due to government neglect - of all the successive governments since 1945 - that they have not bothered to see what is out there and restore these regions. Also, one could argue that it is a failure on the part of the industrialists of the Midlands and the North to maintain their pre-war positions. It is not London that closed off the British motor trade. It is not London that closed off Liverpool as a major dock. These things were done entirely by the natives. But I would return to saying that no government has been witty enough to know it was happening.

Jon Gaunt: Presenter of the Jon Gaunt Show, BBC London, triple Sony Award winner

People think everything goes to London, whether it's the Dome, the new football stadium or the Olympics. But there are two Londons. There's the working London and there's yuppie London. Working people across Britain have the same problems - they want to get their kids educated, they want hospitals, and if you haven't got any money and you live in the North you've got the same set of problems as someone in the South. One thing is for sure - the streets of London aren't paved with gold.

Jenny Jones: Leader of the Green Party in the London Assembly

People who live in London are very London-centric and think this is the centre of the universe but it's just not true. When you say the words Manchester or Birmingham, these places have bad connotations but they all have their regional advantages. Clever marketing can help with this. If you say Manchester, you think crime and grime, but there are many beautiful places there. It's all happening in the North but it's just here in London we don't notice it.

Christopher Frayling: Rector of the Royal College of Art and chair of the Arts Council

It is certainly true that London perceives itself as the centre of the world and the centre of gravity for the arts but there has been a counter-movement since the mid-1990s which is pointing in the direction out of London. There has been a whole series of lottery-funded arts projects including the Baltic arts centre in Gateshead and the Walsall gallery. The arts-led movement has been for urban regeneration which is now beginning to kick in. It started with Glasgow post-docks when they completely re-presented the city as an arts-led centre and it became an interesting model for other cities outside London. And for budding talent in the theatre, there is actually more opportunity in the regions, which have become a crucible which takes a risk with young talent which the West End cannot afford to do. London still exerts a huge magnetic pull but it has been counter-balanced in the past few years.

Rabbi Julia Neuberger: Britain's first female rabbi

I love London, I think it's a wonderful place to live. I still live two miles from where I was born and have lived most of my life in between. But there are real issues about how difficult it is to find somewhere decent to live that doesn't cost the earth for key workers and people who do all sorts of important things but can't afford a couple of hundred thousand pounds to start. Would I consider moving out? Well, my husband's just got a job in Warwick so I'll only be here part of the time. London is a great place to be old - there's so much to do.

Luke Johnson: Chairman of Channel 4

I think the success of London is both a great flaw and a strength of Britain. London is the greatest city in the world, more important even than New York and we have always suffered in this country from the weakness of our provincial cities. If you look at Germany, you find they have 10 major regional centres and even France has powerful and proud regional centres, whereas in Britain, the political, cultural and industrial centre is the capital.