Labour must back cities over towns in pursuit of growth
Improving the economic health of the UK’s large urban centres is the key to moving the national dial on growth and should take precedence over plans to revive towns, according to Andrew Carter, chief executive of think tank Centre for Cities.
Speaking to Place North ahead of the Labour Party conference, Carter said the government should lean more heavily on its underperforming cities over the course of the parliament.
The UK’s large cities lag behind their European counterparts in terms of their contribution to the national growth story. Carter is hoping to hear that the government is determined to rectify this when they take to the stage in Liverpool by setting out a clear plan for the nation’s cities.
“I’m still waiting to see what their what their regional agenda is,” he said.
“What’s required from central government is to think about the national economy and to see big cities as economic assets in the national growth agenda, and regarding them as being central to growth and activity across the country.”
Productivity in the UK’s cities is low compared to other similarly sized places in Europe.
This point was made by the mayors of Greater Manchester and West Midlands combined authorities recently when unveiling plans for a rail link between the two city regions aimed at boosting both economies.
In Carter’s view, successive governments have failed to provide cities outside the capital with the impetus they need to thrive.
“When we look at the British economy, it’s quite obvious that these big economic hubs, Greater Leeds, Greater Manchester, and Greater Newcastle, aren’t doing as well as their European counterparts. There’s no reason why they can’t,” he said.
In recent years, Whitehall has given Metro Mayors more powers to shape their places, which has been a positive step towards Carter’s vision of a nation powered by thriving regional cities.
However, recent chat around devolution has been less encouraging, he said.
Secretary of state Angela Rayner wrote to local authorities in so-called “devolution desserts” in the early days of the new government inviting them to get on board the devolution train.
Andrew Carter wants to hear a coherent plan for the UK’s cities. Credit: via Centre for Cities
Carter believes it would be better for the country’s growth prospects if she had convened a meeting with England’s biggest cities to tell them they were getting even more powers. Deeper devolution for Manchester should come before a deal for Lancashire for example.
“How do we double down and really make more of the progress that has been made in some of the places that already have [devolution]?
“It is a classic Labour tension: everything for everywhere. We move at the pace of the slowest, rather than encouraging those that are most capable, most advanced, to go even further.”
The vast majority of the country’s Metro Mayors are Labour politicians, which means they will have higher expectations of the current government than the last one.
Political allegiances will not protect the government from the wrath of place-first mayors if they are not provided with a clear plan and pathway to supercharging their respective economies, according to Carter
“They are not going to wait forever. If we don’t get delivery and meaningful change and action, the mayors are going to start to agitate in the way that they agitated with the last government.”
Is the government failing to grasp the importance of cities? One early policy move would suggest so.
Labour has reduced housing targets across many of the country’s largest cities including Liverpool, Birmingham, and Manchester while increasing them elsewhere.
Carter described this as a “strange strategic outcome” and said it provides an insight into the government’s take on the role cities can play in the economy.
“If you just trend it out over time, Greater Manchester’s contribution to the national economy goes down as a share rather than increases,” he said.
“I think that is the wrong way to go. We want it to play an outsized role in the national economy in 10 years’ time.”
It is natural for a party that has just won a huge number of seats to want to keep constituents in those areas happy.
However, improving the productivity of somewhere like Mansfield will have a minimal impact on the UK economy compared with investing to drag Manchester’s output up to where it should be, Carter explains.
“All of our big cities underperform so there’s gains to be had. Getting these other smaller places to do better than they currently are is fine, but the big national dial shifts when Manchester does better, or when Leeds does better.
“A 20% improvement in Mansfield at the national level is not very much, whereas 20% improvement in Greater Manchester is a lot,” he said.
This week’s Labour conference in Liverpool is the party’s biggest test since regaining power this summer.
The development community and the nation’s metro mayors will be watching and listening closely for signs that Keir Starmer and co have thought beyond the buzzwords of housing and growth.
Action and decisions are required.
“The big cities story is difficult politically. The Conservatives found it difficult and currently Labour find it difficult,” Carter said.
“What’s good for the economy can be a challenging political sell. What I’m saying is, and it’s easy for me to say this, you need to pick, you need to make some choices.”
Hmmm “ Carter believes it would be better for the country’s growth prospects if she had convened a meeting with England’s biggest cities”. Well, he must’ve missed the photographs outside number 10 when Labour did exactly this with the CA mayors Within weeks of their election win.
By Ray Macintosh
All well and good but we still have pathetic transport investment in our cities outside the South East. A booming Manchester is useless if nobody outside of it can reach it.
By Elephant
I’ve got a radical suggestion for Carter…how about not looking at devo for places like Lancashire as some sort of situation where one area’s gain is the other area’s loss? As @Elephant comments – access to these places and transport is shockingly bad so it’s no good pumping these places to bursting. It’s quite possible to give places like Lancashire the tools to solve their own pressing issues (transport, housing, productivity, poverty) at the same time as strengthening the metro area and giving them the tools they nee. It’s not either / or – which is completely reductive (and also a driver of populism and strife…which we’ve just witnessed can be incredibly harmful and destructive). And it shouldn’t just be about spaffing public money on the metro areas either. There’s squillions of investment into metro areas – so much so it’s arguable that what’s needed is these places’ ability to capture a portion of that investment for much needed infrastructure. Is it Lancashire’s fault that Manchester doesn’t seem to be able to capture any affordable housing/commitments or scant social value from it’s enormo-towers? No.
So what’s needed is more tools for value capture and value harnessing (tax increment financing, anyone? workplace parking levy? ULEZ road pricing?). It’s arguable places like Lancashire need public investment more precisely because they are not as productive/attractive to private investment. Why pump stuff that would happen anyway or where there’s private investment ready to be tapped which clearly isn’t contributing what it should to the public realm/goods. Carter’s views are so boringly reductive and unbalanced…not everything is about GDP bottom line. What’s the point in pumping economies so much they become too expensive to live and work in? what does the centre for Cities want? Just more GDP? How does that benefit everyone in a society where wealth is unequally distributed. Riddle me that Mr Carter.
By Sceptic
So he’s at a conference in Liverpool, surrounded with huge potential and mentions everywhere else?! Liverpool should be and needs to be punching higher, with the right investment and support it could easily double its economic output.
By GetItBuilt!
In fairness to Carter, Dan was talking with him before the Labour Party Conference took place- as the story states.
By Julia Hatmaker
… so says the chief executive of think tank Centre for **Cities**. Really? quelle surprise! Nonsense position to adopt, overlooking the wealth of opportunity in towns across the whole of the UK ripe for evolution and just asking for a tickle of £support compared to the asks of the big cities. To effect 20% change in Mansfield compared to 20% change in Manchester are oceans apart in terms of scales of ask and realism. Deliverable vs undeliverable. You could get a lot lot more 20% of Mansfields for your 20% of Manchesters and more quickly too. The answer is both surely.
By Observer
Cities of towns? I think they all need backing. How can you just ignore the plight of so many nothern towns??? I get cities need backing too but just looking at many of Manchesters surrounding towns and how much they have suffered in the last couple of decades. Bolton, Oldham, Wigan, Rochdale etc etc.
By MJ
Lancashire a real mess , it’s devolution deal is 3rd rate . Unless it addresses the issue the two tier local government structure and like all other northern combined authorities go 4/5 single tier unitary authorities it will never be in a position to present a united front and gain the real benefits devolution offers .
By George
Some great responses. Carter should exit his ivory tower, occasionally. What does the CEO of the Centre for Towns make of this?
By Lurch
Money (GDP) fool you. How is it measured locally? Money trickles into City Centers and down to Capital Cities. Most Corporate HQs, Legal, Accounting, Govt. Admin, Stock Exchange, Insurance, etc., etc. head offices are in cities with high turnover and best paid jobs. They extract wealth created elsewhere. So you build more cities and we all get richer? Sounds like bad National Economics to me.
By Anonymous
@September 23, 2024 at 2:44 pm
By George
There’s an argument to be made for reorganisation in the Red Rose County (5 or 6 unitaries and highly empowered civil parishes underneath) but the important thing is that Lancashire have now got devolved powers. The deal is happening. The adults in the room have won. This process is only the beginning.
By Rye
We’ll always be held back by our lack of appetite for nuclear power and our lack of ambition on public transport.
By Tom
What growth? We don’t make anything anymore. Growth is just consumption.
By Anonymous
“Greater Leeds”… encompassing Bradford, Harrogate, York, Huddersfield!! And yet for CfC “Greater Liverpool” even encompassing only the 6 urban boroughs seems to stick in the craw.
Perhaps if UK economic policy wasn’t so enthralled to lobbyists with curious agendas we might all be better off.
By John
In response to Rye , yes Lancashire has git its third rate deal .and the government are asking for further proposals. This us were the problem will be progress over the past 20 years has been stalled by the county council and the 12 districts . Unless the two tier issues are addressed Lancashire will remain third rate . So I agree with the 3/4 unitary solution with civic parish’s below , but I question how this will be achieved given the short term and self interest of many councillors in the county and districts .
By George
@September 24, 2024 at 10:44 am
By George
The largely two-tier Derbyshire and Nottinghamshire have the East Midlands Mayor. Greater Lincolnshire, largely two-tier, is getting a Mayor from May 2025.
If the current deal was scrapped, it would mean further delay to get on the devolution latter. Hence why Rayner and Mohan were sensible to proceed with the current deal and beef it up later.
I didn’t say a 3/4 unitary solution. I proposed a 5/6 unitary one, roughly 250,000 each. Big is not always better.
My civil parishes idea would be to do what Cornwall, Wiltshire and Somerset are doing – devolution of further powers. Many Cornish towns run their library services.
By Rye
Just a reminder that the economy of Greater Manchester is larger than the whole nation of Hungary. If you boosted output by 40% in Manchester then the whole of the UK could have significant tax cuts. That’s the enormous price of not building new rail lines across the North and finishing HS2, along with underfunding R&D, schools, universities and other infrastructure. We need someone in the Treasury who can understand both sides of a ledger. If you spend 100 billion on an asset that’s worth 120 billion then you’ve made 20 billion in assets, not lost 100 billion. Currently the Treasury doesn’t do this in its accounts, which is astounding stupidity, especially given cash flows are not an issue for the BoE.
By Dr B