London gets the lion's share of taxpayer money for health, housing and transport. Now Boris wants to blow more on the capital. But his argument is flatly wrong
Are you anxious about the double-dip recession? Unsure about how to pep up a seriously flagging country? Don't fret – Boris Johnson has the answer. You take billions from British taxpayers and pump it into the economy – but don't do anything daft like spread the cash around Britain, heavens no. You blow it all in the capital.
"A pound spent in Croydon is of far more value to the country than a pound spent in Strathclyde," Johnson told the Huffington Post in an extraordinary interview this weekend. And in what was evidently an off-day for his internal censor, he went on: "You will generate jobs in Strathclyde far more effectively if you invest in parts of London."
So there it is: the sometime contender for the Conservative leadership wouldn't mind a Keynesian stimulus, thanks very much – so long as it's kept strictly within the M25, rather than wasted on the rained-upon provincials.
On the one hand, this is simply Boris being Boris, during a campaign to be re-elected as mayor of London. Then again, Johnson has always been the pretend maverick of British politics, making rightwing orthodoxy more colourful for the retail voter. This time too, he is peddling a line much used by business-lobby groups and conservative think tanks such as Policy Exchange and Treasury studies.
The argument runs roughly thus: London and the south-east are the only seriously productive parts of deindustrialised Britain left, and the income they bring in keeps the rest of the country afloat. And so the logic goes, what's good for the investment banks and the consultancies and the capital must be good for the rest of the country.
Trickle-down geography, the academic Doreen Massey calls it: what trickle-down economics looks like when depicted on a map of Britain.
Except that the argument is flatly wrong. Far from being the cash cow the rest of the country suckles on, London scoops the pool when it comes to public spending. As the Treasury's own analysis shows, the capital receives more taxpayer money per head on the vast majority of government services. Londoners receive more taxpayer money on health, housing and culture – and they get more than double the national average on transport.
What about the infrastructure being built for Britain's future? Two geographers at Newcastle University, John Tomaney and Andy Pike, mapped out the biggest public works they could think of – and they all cluster in the country's south-eastern corner. There's the £10bn Olympics, concentrated on London. Terminal 5 at Heathrow, which cost more than £4bn, and the Channel Tunnel Rail Link, which comes in above £5bn. When it really gets going, Crossrail will be Europe's biggest construction project – and its prime purpose will be to get business people into and out of London.
Tot up all the planned economic development schemes, as the construction skills industry training board does, and you find that Greater London alone is due to receive £45.6bn in airport and rail capacity, and waste disposal and other hard-helmet work. That is more than Scotland, Wales and Northern Ireland put together.
What these figures tell you is how far London sucks in cash and project work that might otherwise go elsewhere. All this, and I haven't even made the obvious point about the hundreds of billions used to bail out the capital's banks. Put in regional terms, this is Keynesian investment for one corner of the country – and sullen welfarism for the others.
Put these points to Whitehall policymakers and what you get back is that the south-east needs even more resources to build up overstretched capacity. The more thoughtful ones at least have the grace to acknowledge that this is a (north) circular argument. As Tomaney points out, Teesport could have been expanded instead of Felixstowe, giving precious jobs to the north-east and taking some of the strain off the south-east. The point was made loudly and well by local business leaders – and it was roundly ignored by Westminster.
Which brings us neatly to this week, and Thursday's referendums to have directly elected mayors in Newcastle, Wakefield and eight other major cities. According to earnest people who care deeply about democracy, the best way to stop the rot of deindustrialisation is to have mini-me versions of Boris and Ken. But what exactly will these new city mayors be in charge of? Local rail and bus services and, possibly, investment in broadband, if the consultation papers from Eric Pickles' department are to be believed.
Directly elected mayors will simply have more accountability; they certainly won't have any extra powers. Besides, I can think of no single situation in the West Midlands so bad that it would be improved by having Liam Byrne in charge of Birmingham.
The solution to London sucking resources from the rest of the country lies in getting Westminster and Whitehall to share cash and power more evenly. Otherwise, an elite in the capital will continue to race away, leaving other cities to the tender mercies of George Galloway and whichever carpetbagger politicians happen to be passing.