The championing of the north by the Greater Manchester mayor, Andy Burnham, is a noble cause, but his past support for HS2 was a dreadful mistake. From the start, it was clear that the staggering £100bn cost – more than all other rail projects put together – would cripple all British rail investments everywhere. So it has proved.
The latest rumoured HS2 salami-slice proposed stopping the service at the new Elizabeth Line station at Old Oak Common – which the chancellor, Jeremy Hunt, has now denied. This is a shame, because it makes sense to offer a better east-west London service than running another service through Euston.
But all this really emphasises is that HS2 is only about London. Had Burnham and his fellow mayors opposed HS2 in favour of local rail, they would have won, and this nonsense would have stopped. At it is, he was dazzled by getting fast to London, while Mancunians are left gazing at empty Avanti platforms.
Burnham has fallen back on pleading for ever more public money, which he knows he will not get but can at least blame the Tories for not giving. At this week’s Convention of the North conference, he applauded a German minister for his country’s generosity to former east German lands after the 1989 reunification. Why could London’s government not do the same for the north?
Of the generosity there is no doubt. Vast sums were tipped by Berlin into the former communist territories in a desperate bid to bolster its crippled economy and stop migration westwards. About €2tr, the equivalent of £70bn a year, was transferred into the east between 1990 and 2014. This was overwhelmingly in direct welfare payments – virtually a universal basic income – and grants to local governments. Just 9% was in business subsidies.
There is no question this bounty rescued the east from disaster. The city centres of Leipzig and Dresden now look handsome and prosperous, the latter’s dazzling Frauenkirche Lutheran church restored at last from British bombing. Yet still the east has trailed. In 2018, the unemployment rate was 6.9% to the west’s 4.8%. Its productivity has improved but is still well behind.No eastern company appeared on Germany’s stock exchange index. This is reflected politically. The east’s population gets older as young people drift west. In 2020, 91% of western Germans thought democracy is the “best suited form of government”, but only 78% of eastern Germans felt the same.
Whether such heavy regional subsidies benefit an economy or merely embed dependency is controversial. Britain’s Barnett-formula block grants to Scotland and Wales may boost spending power but seem not to fuel economic recovery. They can build infrastructure, but that does not create startup businesses or jobs in the creative and knowledge sectors. It does not hold young people back from the enterprise and bright lights of distant cities. Moving Germany’s capital to Berlin was critical in aiding the east’s reintegration because it brought new blood to the city. Likewise Dublin’s extraordinary growth over the past half-century has elevated Ireland into one of Europe’s richest states per capita.
One lesson that Burnham rightly draws from Germany is how regions should be governed. To prosper, a city must be allowed to be master of its fate. After reunification, the former East Germany’s local authorities were slashed and modernised from 7,000 to nearer 2,500. They were given powers over local taxation, education and health, with central block grants free of ring-fencing. This is the exact opposite of Britain’s contempt for localism. Local councils are stripped of virtually all discretion and expected to deliver on central targets tied to detailed grants fixed by formula. These funds have steadily declined since 2010, leaving local councils with little to do but tread water to avoid drowning.
There is no doubt that big cities hold the keys to growth for modern regional economies. They suck enterprise and creative talent from their surrounding hinterlands, but they in turn are sucked by the magnetism of even bigger cities, particularly capitals. Public money may help, but the magnet seems to be some critical mix of creative activity, cultural assets, lifestyle glamour and tourist appeal.
Famously, civic appeal lies in what children say when told they are moving house, or what an executive’s best friend says over lunch. The answer is not a government grant but smart shops, museums and concert halls, gentrified neighbourhoods and nightlife. It was typified by Bradford’s chief executive, Kersten England, who once declared the key to its future lay in making its tumbledown centre the “Shoreditch of Yorkshire”.
The only way to counter the pull of London is to jolt the north out of its inferiority complex. Yes it needs faster local trains – desperately and now – as well as smarter leadership. But it also needs magnetism. Moving Germany’s capital was indeed drastic and had history on its side, but, as any visitor to that city knows, the impact has been galvanising.
Manchester needs that. Moving the House of Commons to the city – even if just for the duration of a parliament – would not be the same, but it would be sensational. It would stamp the north on the national and international map. The great town hall would make a perfect parliament house – and the Northern Quarter and Ancoats a new Soho and Shoreditch. Such a gesture would do more than any levelling-up grant or high-speed trip to London. It would signal confidence in a new regeneration. As of now, nothing else will.
Simon Jenkins is a Guardian columnist
