With white-collar workers reportedly already leaving London for more affordable or bucolic parts of the country, it seems that Andy Burnham’s decentralization project has already begun. Yet it’s too soon to say whether the result will be a damp squib or an economic revolution.

Although British politicians will always say that leveling up needn’t entail leveling down, in practice it’s often worked out that way. Knocking London may go down well in less privileged parts of the nation, but it’s still the region that yields most of the economy’s productivity growth. Policies that benefit other regions but hurt the City, such as Brexit, can therefore end up restraining the economy as a whole.

It doesn’t have to be this way. Economists can get chary when they hear talk of decentralization, since what makes the London economy so dynamic are the economies of agglomeration that come from being a global metropolis. The capital is today a global service center powered by knowledge industries. These thrive best in large cities with extensive research infrastructure, and in this respect London has few rivals, given that some of the best universities on the planet are an hour or less away.

However, there’s no reason this model can’t be widened to include some of the Midlands and Northern cities with great universities and cultural industries. When it built its TGV line from Paris to Lyon half a century ago, France revealed how high-speed rail could do more than merely link cities. Rather, it could bring them together into one common economic space — in effect, a megalopolis, an approach to high-speed rail that China has since used with great success.

One gets a sense of this in London’s Elizabeth Line. Although it was late and over budget, the new line has been a great success since it opened. By reducing travel times in the city, it has allowed people living in one end of London to look for jobs in the other. For workers, this means better job offers; for employers, the best available workers are found. The effect translates into an increase in the city’s labor productivity which some analyses suggest could ultimately increase national output by up to 1%.

Now, picture extending similar transport linkages to other parts of the country, such as Birmingham, Manchester or Leeds. The result could be one of the world’s greatest concentrations of both human labor and brainpower. This, of course, was the original vision of the HS2 project. That grand scheme was scrapped by a government which said it would use the money saved to instead fill potholes.

Overcoming that ambition gap will be only part of Burnham’s challenge if he is really to transform Britain. He’ll also have to shake up the UK’s byzantine planning system, which gets in the way of building infrastructure schemes that other countries do more affordably. Paradoxically, that would require him to centralize some powers while decentralizing others. During his brief period in government, Dominic Cummings hit upon the idea of centralizing planning using algorithms. If visionary, it was also politically toxic and required a better sales pitch than Cummings could offer.

It is, admittedly, a great deal to ask of a politician like Burnham, who is not known for relishing a fight. But unless he is willing to take on the interests vested in the existing, stagnant economic model, he can’t expect anything more than a damp squib to come of decentralization. Done properly, though, his political reform agenda could yet renew the nation.

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John Rapley is an author and academic who divides his time between London, Johannesburg and Ottawa. His books include Why Empires Fall: Rome, America and the Future of the West (with Peter Heather, Penguin, 2023) and Twilight of the Money Gods: Economics as a Religion (Simon & Schuster, 2017).

jarapley

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