This article appears in the Winter 2016 edition of the Fabian Society’s magazine, Fabian Review.
Everyone wants to rebalance the UK economy, to generate jobs and growth in the parts of the country that need them most. Or at least they are keen in theory and when they are making speeches about it. But in reality, public money is poured into the wealthiest, most vibrant parts of the country regardless of the cost to places that are (to coin a phrase) ‘just about managing’.
And even when efforts are made to support parts of the country that are struggling, they are undermined because even more is done to stoke growth in places that already doing well. The thinking seems to be that firms want to invest in booming areas; people want to live there (of course they do – that is where the jobs are); and that it is the job of government to anticipate and accommodate this growth.
So predict and provide rules the day, whether in transport (build more roads to meet demand), housing (build homes ‘where people want to live’) or economic development (create more jobs where there are already jobs).
All this, we are told, helps ‘UK plc’. But UK plc does not exist; it is a slogan, a category mistake. In reality, as has been endlessly discussed since Brexit, a growing economy does not necessarily benefit all parts of the country, and the places left behind may actively resent those that are doing well.
It is depressing when lazy clichés shape thinking, but the UK plc mindset is not new. I recall a CPRE seminar on rebalancing growth under the last Labour government. A Minister representing a northern seat simply could not process the idea that if an overseas company offered to create 200 jobs in a part of Surrey with full employment, a housing shortage and lots of Green Belt, it would be sensible (at the very least) to encourage it to invest elsewhere. The Minister’s view was that UK plc needed the jobs (even if Surrey did not) and that there was absolutely no point in trying to redirect the investment.
Ministers are now keen to show that Brexit Britain is ‘open for business’, which means new roads, new ports – the Chancellor is keen to revive the proposal for a deepwater port at Dibden Bay in the New Forest – and, of course, a third runway at Heathrow.
From an environmental perspective, it is hard to know where to start with the third runway. More people will die from air pollution; carbon emissions will increase, as the government’s committee on climate change has confirmed; and the new runway will damage the tranquillity of the Chilterns and the Kent and Sussex Weald.
It will also add to housing pressure in the south-east. A Treasury civil servant told me that the new runway would ‘unlock’ 80,000 jobs locally. What he meant was that homes will have to be found for an extra 80,000 people in an area of full employment, housing shortage and lousy air quality.
London’s five airports already have 50 per cent more flights than New York or Tokyo. An expanded Heathrow will become the biggest airport in the world, sucking even more money and employment to the richest part of the country, and one of the most environmentally pressured. Some of this is spelt out in the Airports Commission’s report, but it is viewed as a positive. The third runway, it says, will benefit an area stretching west of London through the Thames Valley into Oxfordshire, an area of low unemployment, but where ‘housing constraints… remain an issue’.
Once again, ‘just about managing’ places will come second to the supposed economic interests of ‘UK plc’, and the most environmentally pressured areas will be pressured some more.
There are years of argument ahead. The third runway will be vigorously opposed by environmentalists and local residents, and my money is on them. But it would be good to think that we could avoid battles of this sort in future.
The Airports Commission said that expanding either Heathrow or Gatwick would fit well with existing spatial plans. But that is because England, unlike most developed countries, lacks any sort of national spatial plan. Perhaps it is time we had one, to help us assess the consequences of decisions of this sort for the whole nation.
CPRE viewpoint 
Powerful stuff; my frustration with the whole situation is at boiling point.
The wealthy, the monied, our parliamentarians think we’d all like to live like them – flying afar, living down south, travelling to London 40 minutes faster, loading up our trolleys in supermarkets, spending our lives behind the wheel of a car. Only so many people can do that, then (as you hint about homes and jobs around Heathrow) limits are reached. We can’t all have a slice of the cake – some of us have to have other things, and just as well because other things might be better for us.
Many of us are rejecting the car-owning option, the international holidays, the supermarket dependence. We might be called citizens rather than consumers.
I can not argue with any of your comments. The only thing I would add is that a good way of taking the pressure of the south east would be to move the House of Commons northwards. This sounds radical but when you bear in mind the insane cost of the building repairs urgently needed the economic argument for the move is overwhelming.
”But that is because England, unlike most developed countries, lacks any sort of national spatial plan”
If there was a spatial plan it would probably question HS2 – and promote HS3 ( now called NPR).
There’ve been many efforts over the years to promote the different regions of the United Kingdom. Most have yielded poor results, and this experience is common across European counties facing similar imbalances. Regional policy takes many years to put in place. It may appeal to some Fabian-style audience, but the results are scarcely encouraging. Regional policy was promoted by the Wilson government and the Blair government, with mixed outcomes. Oceans of money were spent, and what is the outcome? This blog testifies to it.
Regional development was not seriously questioned, until Peter Hall famously quoted a 1970s Royal Commission report that said it was:
‘Empiricism run mad; a game of hit and miss played with more enthusiasm than success’.
Governments of all kinds have slavishly supported Assisted Areas. It was not until Margaret Thatcher heeded Hall and boldly kicked over the traces that the policy was set aside. Regional policy has its place, of course, but it must be applied with caution, or public money will be wasted. It has always been a favourite with the Labour Party. Blair embraced it unquestioningly, until Brown turned against it. Billions were spent on dubious schemes that did not stand the test of time. If ever re-elected, they would do the same again. We cannot afford to repeat that.
As for the new runway at Heathrow, who knows what its effect might be? Meanwhile, London is reckoned to need a hub airport, with growing capacity. Will a 3rd runway somehow benefit the rest of the country? There are multiple stages in economic planning. The way in which improved capacity in the London airport system passes through the rest of the economy is not clear. It is equally difficult to say it will cause an imbalance in the country. Economics is too imperfect a science to be conclusive on this point. My guess is that the impact will be minimal, and that the media have exaggerated it. It is no use praying in aid other elements of the debate, such as carbon targets, as these are increasingly tradable.
Putting the new runway in Birmingham or Leeds would not produce comparable results. This is because of geography and assumed levels of usage. No one can guarantee that an increase in capacity can be converted into an increase in trip-making, trade, tourism and then productivity. Economics may model, but it was never so precise.
Assumptions about the future aviation market also have a slim evidence base. In the reference case, the value of slots at constrained airports such as Heathrow and even Gatwick rise sharply. This is because demand at those airports is constrained by a combination of demand and scarcity pricing. Such factors would play out differently in each region.
Would a national plan help? Unlikely, very unlikely. And now that the decision has been taken, most people will accept it. Professional ranters will be never satisfied of course, but look at what happened to poor old Zac Goldsmith. He resigned to fight the airport, and no one cared. We have been lamentably tardy at making decisions on new infrastructure. T5 took an 8-year inquiry. Did it produce a better result, well no? On balance, Heathrow is the safest bet (but you can’t be sure) and a national plan would take even longer.
Is the Edward Dawson who used to work for CPRE? If it is, then he seems to have undergone a bit of a sea change. His response is a thinly disguised plea for the UK’s version of the market economy to be allowed to get on with what it does – damage the environment, increase social, geographic and economic inequality, and fail to provide a commodity for which there is an urgent and real demand (housing).
The Richmond Park by-election tells us nothing about the airport issue, but a great deal about what people think of Conservative policies – the Lib Dems offered an alternative vision of society and were duly rewarded.
Shaun, your post is spot on.
The by-election was all about Brexit but quite how the EU will deliver all the things that the UK’s market economy does not is beyond me. It was also the usual response by some voters in Richmond (many of whom have hugely benefited from the market economy) who love to wear their caring and sharing on their sleeves knowing that the LIbDems will never be able to carry out their policies. After all look what happened to Vince Cable, across the Thames, when he suggested a mansion tax.
Thank you Peter for the response and it is me. There has been no change, in that my close affection for rural England remains undimmed. I am equally committed to CPRE and its role in protecting our countryside heritage.
My point on commenting on the blog was to challenge some points. It seemed to me that this was expressing a rather narrow view, and appealing to limited mindsets. Saying that airports may cause some problem or other is rather obvious. All developments have good and bad effects.
The truth is we all love to fly. We all travel across the world, and not overland. We look down on the land as we fly into distant airports.
The decision to approve Heathrow has been made. It was made by the government, which is there to make decisions. Normally once a decision is made, we have to accept it. If we don’t, it undermines the legitimacy of democratic government. Of course there are those hardliners who never accept anything. They will die in a ditch before accepting a project they disagree with. CPRE is not like that. We put forward arguments at inquiries, and we accept the result, whichever way it goes. We should appeal to wider set of people, who share concerns for rural tranquillity, but also accept democratically arrived at decisions.
As for free market economics, few now advocate a state-controlled economy. Not many would recommend controls on capital markets or their replacement with some form of economic planning. North Korea and Zimbabwe come to mind. Some dream of central planning, and refuse to accept its inherent limitations and inhibitions. But we risk straying into political territory, and that is not my purpose.
Accept the Heathrow decision, even if we have reservations (no pun) about its effect and its location. CPRE does not need to add its voice to the chorus of local professional protesters; there are enough of them.
Edward, many thanks for your thoughtful comments – though naturally I agree with Peter Cleasby that you are a bit too relaxed about continuing with predict and provide policies. What we have at present is not the state absenting itself from decisions on development; it is the state acquiescing in or even actively stoking growth where it is needed least and where there is the least environmental capacity to absorb it. Among the counties that will feel the consequences is your county of Hampshire.
Regional policy can take many forms. No one would contend that all the efforts of previous governments to redistribute growth have been successful. But there have been successes – think, for instance, of the Thatcher government’s deal to attract Nissan to Sunderland. Think, too, of the transformation of cities such as Birmingham and Manchester over the last 30 years, brought about by a combination of dynamic local leadership and national policy (including planning policies, ensuring that housing and economic investment are focussed in cities).
I don’t think it sensible to reduce the question of how to rebalance growth to a question of left vs. right. The northern powerhouse concept, devolution deals, elected mayors and so on show that Conservatives also want to spread growth beyond London and the south-east.
But these efforts are undermined by two things. First, central government’s stranglehold on income generation. Local authorities need the capacity to raise income, whether through taxation or (following the model of Joseph Chamberlain) enterprise.
Second, and end to policy and investment decisions that stoke growth in the south-east at the expense of other regions. Policy on ports is a good example. The Dover ports have grown significantly in recent years, but their environmental costs (Operation Stack, increased air pollution from roads etc.) are ‘externalised’ and borne by people in Kent. Its role in stopping the proposed giant port at Dibden Bay is one of CPRE Hampshire’s biggest successes in recent years – but it looks as if you may have to fight the battle again.
Finally, on Heathrow, the decision was justified on the grounds that it will generate lots of jobs, particularly in the south-east. In carbon terms, an expanded Heathrow will mean that regional airports cannot increase their capacity unless other sectors of the economy cut carbon more than anticipated. Of course you are right that we cannot tell whether these assumptions are correct. But I find worrying that they underpinned the decision to expand Heathrow.
Considering economic policy in CPRE is a good thing. I did this at an inquiry some years ago, and was praised by the inspector for being the only party to do so. Economics does not always give a clear lead, of course. Take all the fateful predictions of the Brexit campaign. In spite of this we end the year with record buoyancy in the markets: FTSE share index of 7,143.
On regional policy, I know a bit about this. There are very many good results of investment in the so called ‘less-favoured regions’, but there are also many ill-thought plans that ended in failure. Overall, the lessons were never learned and even compounded by plan on plan.
Michael Heseltine’s seminal report of 2012, ‘No stone unturned in pursuit of growth’ was well received. At the heart of his plan were ideas to unleash the potential of local economies and council leaders. It would enable all regions to raise their game. This was important stuff though not yet implemented.
I remember once attending a dinner with Tony Benn as guest speaker. I took the opportunity of chatting to him at the prior reception and asked his opinion of regions. He said they were only of marginal importance, which took me aback. ‘Not very important’ was his view. They present a mixed picture, and not a panacea. There is, of course, a herd mentality about the South East, but even the Thames Valley thinks it is ignored by government, and never reaches its full potential.
On sea ports, I presented a 7,000-word proof of evidence to the inquiry in October 2001. I concluded it with the statement: ‘the balance of argument is, in the opinion of CPRE, against the development of a marine terminal at Dibden Bay’. It was welcomed by the inspector, and the Secretary of State accepted that the Harbour Revision Order be not made. Round two now perhaps.
Finally, on airports, the debate on this has been unresolved for decades and needs to be brought to a close. The decision comes after an independent commission, which consulted exhaustively. All schemes have local objectors some are nimbies, while others support the airport as a source of employment. Let’s hope we’re not dragged into mire here. The New Year is nearly upon us and I am sure it will be of great merit.
A very Happy New Year to one and all.
Edward Dawson has seems to have made two incorrect assumptions in his comments.
One, that there is a political opposition worthy of the name and money that goes with it and, two, that the arguments put forward for expanding Heathrow are correct.
There is no effective political opposition to the current government which is very bad for democracy. Out political system depends on a effective opposition. The job of opposing the government therefore falls to NGOs like CPRE with each NGO campaigning within its remit.
The Client Earth case shows that official figures can be wrong, thus they should never be taken at face value. Predict and provide is a fundamentally flawed system as it very much guess work and increases unwanted demand. With airport expansion it is obvious that many of the figures supporting expansion are at best wishful thinking. The need for hub airports for example will reduce over time due to the distance new aircraft can fly. So if the government has made a decision based on incorrect facts then we are duty bound to challenge the government.
This is a strange and in part eccentric post by Shaun Spiers with a welcome dose of reality poured on it by Edward Dawson.
(1) Does the Fabian Society still exist? One had though that the chanes in the modern Labour Party brought about by Blair, Mandelson and Corbyn (in their different ways) had ended its influence or even existence. CPRE National Office seems to think long-gone bodies still have weight; the last National CPRE Chairman was stated to be ‘a member of the Bow Group’, implying access to the Conservative Party. The Bow Group was once a Tory One Nation body of some influence, but it has not been heard of for decades. And in the present political climate it may not be wise for CPRE’s Chief Executive to appear to be linked to a long-forgotten component of the Labour Movement.
(2) It is not at all clear what connection there is between the ‘Just About Managing’ families, as Theresa May calls most of us, and Heathrow’s Third Runway. Most people, just about managing or not, don’t fly from LHR as we nowadays use many airports around Britain which are more pleasant to use, more convenient, and offer flights by low-cost carriers at reasonable prices. LHR is for the world’s business travellers and intercontinental travel, not for ordinary use for holidays and family trips.
(3) Opposition to LHR 3rd Runway by CPRE National Office sits ill with its support for HS2. HS2 will cut through Green Belt, AONB and Areas of High Landscape Value as defined in local authority plans. LHR takes very little Green Belt, and if it ends up as the Heathrow Hub version (doubling the length of the current northern runway at LHR) it will be mainly a deck over the M25: not a Green Belt feature of any beauty. Yet we find that CPRE National Office supports HS2 and opposes LHR 3rd Runway. (CPRE Branches affected by HS2, with one possible exception, oppose HS2.)
(4) ‘The new runway will damage the tranquillity of ….. the Kent and Sussex Weald’. No, that is the effect of a second runway at Gatwick. CPRE Surrey and Sussex Branches oppose LGW 2nd Runway for that reason among others. London’s airports have been muddled up here.
(5) What sense is there in a national spatial plan? None have ever been effective and what Scotland and Wales have are not land-use plans as planners would recognise them. This is a throwback to the legendary ‘National Plan’ associated with George Brown in 1965, which was not effective, or implementable. Such plans are usually ‘economic growth’ plans with exaggerated and unrealistic growth forecasts, and are soon forgotten.
(6) Edward Dawson in his first commentary above correctly says that regional policy has its place, but must be applied with caution or money will be wasted. HS2 has been supported by CPRE National Office apparently because it thinks it will somehow re-balance England, but few if any experts in economics or planning claim that, yet alone can demonstrate it econometrically in any convincing way. HS2 is an example of ‘billions of pounds being spent on a dubious scheme’, to borrow from Edward Dawson’s response.
(7) Birmingham’s transformation over the last 30 years has been brought about by economic growth, the work of property developers, a strict control on peripheral development and the effect of Green Belt policy. It is certainly not due in anyway to ‘dynamic local leadership’ as Shaun Spiers states. Birmingham City Council’s ‘leadership’ has been generally poor, exemplified by its Chief Executive for some years being Lin Homer, the most criticised public servant of modern times. Her administration was famously described as ‘disgracing a banana republic’ as regards the electoral system she was responsible for. The 2012 article on Ms Homer here remains a good read:
http://www.dailymail.co.uk/news/article-2104546/The-rise-rise-Ms-Incompetence-Border-Agency-boss-rewarded-failure-promoted–run-tax-office.html
Thanks, Mark, an eccentric response, but I’m happy to post it. Regarding the Fabian Society, I wouldn’t read too much into my writing for Fabian Review. The Fabian Society is a respected think-tank and worth engaging with. But we have also recently written for Bright Blue (an excellent blog on farming by Graeme Willis), I have appeared on a number of Policy Exchange platforms, I am a member of the cross-party Social Market Foundation’s Policy Advisory Board, we hope to collaborate with the Conservative Environment Network etc. etc. CPRE works with people in all parties without endorsing any of them. I do not deny that as recently as 18 years ago I was involved in the Labour Party, but I’ve met very few Conservative MPs who want to hold that against me. In fact, the only person who ever mentions it these days is, er, you.