Northern Futures Summit

I was at the International Economic Conference in Leeds the day before the start of the Tour de France when Nick Clegg MP announced the launch of Northern Futures (see "Power. Performance. Potential. Leeds Economic Conference" 5 July 2014 IP North West). Shortly afterwards the Office of the Deputy Prime Minister launched the Northern Futures website which canvassed ideas from members of the public on how to "build on the strengths in the North to create an economic core in the heart of the region that can compete with the biggest cities in the world?"

According to the website the Office received hundreds of ideas which were grouped into 9 common themes all of which can be viewed here. The government had also received the final report of Jim O'Neil's City Growth Commission Unleashing Metro Growth which the Royal Society of Arts published in October and David Higginson's report Rebalancing Britain which supports a fast rail link across the Pennines. All those strands were gathered together at the Northern Futures Summit which took place in Leeds on 6 Nov 2014. The agenda for the event is here.  The proceedings were filmed and you can watch it above.  The highlights of the day were keynote speeches from the Deputy Prime Minister, Jim O'Neil and Prof. Ed Glaeser of Harvard University. Apart from two short presentations from local schoolchildren, a welcome from the leader of Leeds City Council and comments from local council leaders and chief executives, the day was spent listening to "pitches" on behalf of the 9 groups of proposals, evaluating those ideas and voting on them with electronic voting panels which were attached to our chairs. We tested those panels by voting on which of great cities of the North was more fun. The popular choice was Newcastle followed by Manchester.

At the economic conference in July I had been dismayed by the negativity of the council leaders and chief executive of York towards Manchester which was quite in contrast to the message of the Deputy Prime Minister. The same politicians and local government officer were at the Northern Summit and I am glad to say that this time they were a lot more positive in what they said about the North West. Perhaps it was because representatives of Greater Manchester and Merseyside as well as the Deputy Prime Minister were at the conference for the whole day.

According to Clegg the reason for the discussion was the economic crisis of 2008 from which the world is only just emerging and the Scottish independence debate. He described the crisis as not

"just a traditional blip on an economist’s graph; this wasn’t any old recession. This was a complete implosion, a seizure in the way in which we run our economy. I think what everyone’s realised in the wake of the 2008 crash was that it wasn’t just a failure to regulate the banks, it wasn’t just became of imbalances in the subprime market in the United States. It was also the consequences of a very – a profoundly unbalanced way in which the British economy was being organised: overreliance on one square mile in the City of London to the exclusion of the 100,000 square miles across the United Kingdom."

Clegg's points were picked up and developed by O'Neil who argued that the regeneration of the North was in the interests of the whole country and not just the region.  It was not to be at the expense of London. Rather it was to reproduce in the North some of the benefits of agglomeration that are to be found in London.  O'Neil also downplayed the importance of the Scottish referendum in the debate on devolution for the English regions. The case for decentralization was economic and would have taken place even without the referendum.

That prompted a question from me as to whether elected mayors and city regional authorities of the kind that had been announced for Greater Manchester a few days earlier were necessary for co-operation.   I pointed to New York where the agglomeration stretched across three states or the Upper Rhine where the Basel, Freiburg, Mulhouse agglomeration straddled three countries. O'Neil responded that it wasn't.  Many of his Commission's plans could be achieved without such institutions. In answer to another question he quoted a remark from the Vice-Chancellor of Sheffield University that if it was necessary for Sheffield to become a suburb of Manchester in order for all cities to get a slice of a much bigger pie then so be it. It was a way of thinking to be encouraged.

In his publications Prof Glaeser has influenced much of the debate on agglomeration as the motor of economic growth.  He spoke about the factors that caused cities to grow such as Seattle and to decline such as Detroit. He warned that decentralization was not always a good thing because it could lead to bad local management as exemplified in Detroit.  Great public infrastructure projects like the Detroit monorail were not the answer. Having lost half its population the city's streets were no longer congested.   What seemed to work was investment in education and favourable policies for business.   As I had discussed TechNorth in my IP North West blog I asked Prof Glaeser whether it was possible to create a silicon valley or roundabout in our region. His advice was not to try to re-create Silicon Valley. Get the regulation and environment right and good things will happen.

I met a number of interesting individuals over lunch and the tea and coffee break. I learned about the Hannah Directory that indexes great things happening in the North of England. I spoke to academics, councillors and businesspeople.  Everyone seemed to glad to be at the event though several thought the pitching and evaluation format as a back of an envelope approach to developing policy.

Had I been running the summit I think I would have separated the issues of devolution and economic regeneration. Moreover I am not sure that devolution is what the country needs. This was illustrated by a pitch by Prof Tony Travers for fiscal decentralization and an evaluation by Sir Bob Kerslake of the Department for Communities and Local Government. Travers argued that decentralization should be gradual and incremental otherwise it would be resisted by Whitehall. Interestingly the mandarin pointed out that the risk of gradualism was that it would be achieved piecemeal. In my humble opinion Kerslake is right. If we are to avoid not just West Lothian but also West Gorton questions them we need a demarcation between the responsibilities between central and local government that requires a federal constitution. I believe Germany offers a model as it accommodates the aspirations of the "Free State" of  a Bavaria with a more than twice the population of Scotland which was independent much more recently as well as those of the city regions of Berlin, Bremen and Hamburg but that is a discussion for another day.

If anyone wants to discuss this article, the summit, Northern regeneration, constitutional reform or any other topic discussed or alluded to here, he or she should call me on 020 7404 5252 during normal office hours or fill in my contact form.

Further Reading

10 Dec 2014	Jane Lambert	Let's Take this Opportunity with Both Hands	IP North West
3 Dec 2014	HM Treasury	Autumn Statement 2014
7 Nov 2014	Eddie Copeland	Are elected mayors enough to deliver the Northern Powerhouse?	Policy Bytes
6 Nov 2014	Buce Katz	Manchester England England: Devolution U.K. Style	Brookings, The Svenue
25 Oct 2014	Jane Lambert	TechNorth	IP North West
22 July 2014	Jane Lambert	How can Leeds regain its Lustre	IP Yorks
5 July 2914	Jane Lambert	Power. Performance. Potential. Leeds Economic Conference	IP North West
3 Apil 2014	Jane Lambert	Creating a Northern Counterweight to London is good for the Nation	IP North West
3 Jan 2013	Jane Lambert	NESTA in Manchester	IP North West
10 Sept 2011	Jane Lambert	LEP Summit: My Impressions of the Day as a Delegate	IP Yorkshire
16 Oct 2014	Northern Futures	Open Ideas Day
5 Nov 2014	ONS	North of England Economic Indicators
6 Nov 2014	PWC	Northern Futures summit - PwC comments	PWC in the North
7 Nov 2014	Tony Travers	The Greater Manchester Agreement is only a small srep towards greater devolution in England	LSE, British Politics and Policy
7 Nov 2014	Paul Unger	Northern Futures: Promises Promises	Place North West

How can Leeds regain its Lustre?

Leeds Town Hall

Source Wikipedia

"Has Leeds lost its Lustre" asks The Lawyer today with the red rose above the white. Though Leeds remains an important legal centre the answer would appear to be "yes". As Catrin Griffiths wrote in "Outflanked in this War of the Roses" 21 July 2014 The Lawyer:

"Firms don’t readily offer up turnover figures split out by region, but headcount figures can tell you a lot of what’s been going on behind the scenes. The Lawyer’s data shows that the Leeds Big Six – Addleshaw Goddard, DLA Piper, Eversheds, Pinsent Masons, Squire Sanders Patton Boggs (legacy Hammonds) and Walker Morris – have all markedly reduced their headcounts in the past five years. DLA Piper refuses to give official headcount figures, but we understand it has also seen a drop of around 10 per cent in staff numbers. The biggest resizing has been at Eversheds, which has reduced its total staff numbers by a full third."

Asking "Whatever happened to Leeds" in "Out-of-London is the new London" 16 June 2014  The Lawyer Ms Griffiths noted

"Fifteen years ago it was a legal powerhouse that helped spawn DLA Piper, Eversheds, Pinsent Masons, Hammonds (now Squire Sanders) and Addleshaw Goddard. But as Manchester’s star has risen, so Leeds’ has fallen ...."

This article considers why that decline has occurred and what if anything can be done about it.

The law firms that Ms Griffiths mentioned grew quickly in the 1990s in response to a massive increase in works as a result of demutualization of building societies and a surge in consumer credit. The banking crisis put paid to both with the result that Leeds's GVA contracted sharply. According to The Lawyer it fell by nearly 6% between 2008 and 2009 while Manchester's actually grew slightly reflecting its regeneration and encouragement of new industries. The result, as Ms Griffiths concluded, is that:

"The Manchester brand has the advantage of a regenerated city, international airport, leading higher education institutions, future high-speed rail, a creative culture hub, BBC Salford (which for anyone living south of Birmingham means Manchester) and a couple of minor football teams."

In short, Manchester is doing better because it has a bigger population and a more diverse economy.

Manchester could do even better (and Leeds very much better) if their respective economic hinterlands were bigger. In "Creating a Northern Counterweight to London is good for the Nation" 5 April 2014 IP North West I referred to World Bank research that doubling a city's size increases its productivity by 3 to 8% and Evan Davis's contention that "if the population of Manchester could be quadrupled it would be between 6 and 16% richer than it is now."

Source Wikipedia

In fact, Manchester and Leeds and also Sheffield and Liverpool are located in an almost continuous built up area that stretches from Wetherby to the Wirral much in the way that Greater Los Angeles stretches from Ventura to San Bernardino in the East and Mission Viejo in the South. As in the North of England the communities of Southern California are separated by large areas of open countryside many of which are state or regional parks. Just as the Pennines separate the Leeds and Sheffield city regions from Greater Manchester and Merseyside the Santa Monica and San Gabriel mountains separate the towns and cities of the Pacific Coast from those in the San Fernando Valley.

The big difference between Southern California and the North of England is that the former thinks of itself as a cohesive and integrated whole whereas the latter does not. The sense of identity is not the result of local government unification - there are four counties and many municipalities in Greater Los Angeles - or massive infrastructure investment - there is nothing like the HS3 that the Chancellor of the Excehequer proposed a few weeks ago - indeed public transport in Southern California was appalling until a few years ago. It is entirely cultural and the thing that stops those of us in South and West Yorkshire, Greater Manchester and Merseyside from acknowledging that we already live and work in a conurbation of 7 million people and exploiting the economic opportunities of such a market for every type of goods and services (including in particular legal services) is our mindset.

This myopia was brought home to me at the Leeds economic conference at the beginning of this month (see "Power. Performance. Potential. Leeds Economic Conference" 5 July 2014 IP North West). The conference was opened by the Deputy Prime Minister who on this occasion spoke a lot of sense:

"It’s time for us to put aside outdated local rivalries. As we’ve seen with the Local Enterprise Partnerships in Leeds, Sheffield and Manchester, united we’re stronger."

He made the point that "Northern cities like Leeds aren't just competing with other locations in the south, east or west of England" but also have to rank against global cities like Frankfurt, Lyon, Bangalore and Chengdu for incoming investment. Clegg argued that "Leeds, along with Sheffield and Manchester, can and should form part of a northern hub, driving economic investment and growth across the north of England."

"Together, they can offer investors access to flexible, highly-skilled work forces, world-class universities with cutting-edge research expertise, a strong industrial base and clusters of innovative businesses in high-growth sectors such as precision manufacturing, creative and professional services, healthcare, retail and green industries."

Unfortunately, Clegg was followed by the leaders of Leeds and Wakefield city councils and the Chief Executive of York who really should have known better indulging in what can only be described as Manchester bashing:

"I wasn't going to mention Manchester" said one, "They're only better at self-promotion" said another. "We've hot a bigger economy £55 billion as opposed to £51 million" chimed a third to the general acclamation of the crowd."

I had come to that conference expecting to be buoyed up. After all we were there to celebrate the start of the Tour de France, one of the world's biggest sporting events, from the United Kingdom. I left the Carriageworks Theatre feeling thoroughly downbeat. So long as that sort of thinking prevails, Leeds, its business community and its professional services sector including its law firms will continue to wither on the vine. If on the other hand Leeds and in particular its professional services sector acknowledged that they were already part of a massive economic region and helped to develop it they could recover some of the dynamism that they displayed in the 1990s.

One problem with developing a sense of identity for the region is that it does not have a name. Again, perhaps, we can look to LA for inspiration. An alternative name for Greater Los Angeles is "The Southland". How about "Northland" for South and West Yorkshire, Greater Manchester and Merseyside?