Get Government out of London
Feb. 14th, 2010 08:44 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksHard to miss the letter from 20 economists to the Sunday Times today, telling Alistair Darling that, when all is said and done, the so-called "clearly defined plans" for cuts aren't actually that clear and aren't big enough in any case.
But the government (whichever government is in after May) has a problem. Where do the cuts come? It's not just a matter of a large percentage of government spending being "non-negotiable"; the fact is, a large proportion of the "negotiable" area -- that in which the economists say the cuts have to come, is politically impossible to implement.
Now, obviously, I instinctively speak from the economists' side of the fence. But let's look at it from the politicians' point of view. Much of "discretionary" government spending is in parts of the UK where "government is the only game in town". The percentage of GDP in these areas that is down to state spending is over 70%. If you cut your discretionary spending here, all that you do is shift it over to non-discretionary spending. You don't actually cut your deficit that much at all. And, to make it worse, these areas have a higher multiplier effect (because the savings ratio is lower). It could actually be the case that cutting government spending in these areas would cause the deficit to increase, rather than decrease (sadly, the reverse is not the case -- increasing spending does not cause the deficit to decline, because the savings ratio tends to go up.)
That, from anyone's point of view, is not good news.
The UK is a strange place, in that the political centre is also the tourist centre is also the financial centre. Compare the UK with Germany, where no-one would claim that Berlin was the industrial powerhouse of the country, and not many tourists head off to Frankfurt or Hamburg for the weekend. Even France, where Paris is the financial, political and touristic centre, has a far more diffused spread of where GDP and earnings come from.
So, if you can't make more people be tourists outside London (despite serious efforts on all sides), and you can't move the financial centre any further than four miles down the road to Canary Wharf, what can you do?
Well, move the government. Not just poxy little shit things like the DVLA to South Wales. I mean the lot. Move Parliament, the PM's official residence, the entire civil service, out into the provinces, to a custom-built new "political centre". I suggest the outskirts of Birmingham, near the NEC.
Look at the advantages.
1) It will get rid of much of the "London-centric" accusations from the provinces (complete balls, since the government throws money everywhere but at London).
2) It will free up acre after acre of the most valuable real estate in the country, which could be converted into luxury flats and sold off.
3) It would reduce the price pressure on housing in London and would assist pricing in other areas.
4) It would ease unemployment difficulties in the Midlands.
5) It would reduce politicians' expense claims.
6) It would reduce pressure on Heathrow.
I look forward to one of the parties adopting this plan in their manifesto. What's the spread on how on how long I will have to wait?
_________________
But the government (whichever government is in after May) has a problem. Where do the cuts come? It's not just a matter of a large percentage of government spending being "non-negotiable"; the fact is, a large proportion of the "negotiable" area -- that in which the economists say the cuts have to come, is politically impossible to implement.
Now, obviously, I instinctively speak from the economists' side of the fence. But let's look at it from the politicians' point of view. Much of "discretionary" government spending is in parts of the UK where "government is the only game in town". The percentage of GDP in these areas that is down to state spending is over 70%. If you cut your discretionary spending here, all that you do is shift it over to non-discretionary spending. You don't actually cut your deficit that much at all. And, to make it worse, these areas have a higher multiplier effect (because the savings ratio is lower). It could actually be the case that cutting government spending in these areas would cause the deficit to increase, rather than decrease (sadly, the reverse is not the case -- increasing spending does not cause the deficit to decline, because the savings ratio tends to go up.)
That, from anyone's point of view, is not good news.
The UK is a strange place, in that the political centre is also the tourist centre is also the financial centre. Compare the UK with Germany, where no-one would claim that Berlin was the industrial powerhouse of the country, and not many tourists head off to Frankfurt or Hamburg for the weekend. Even France, where Paris is the financial, political and touristic centre, has a far more diffused spread of where GDP and earnings come from.
So, if you can't make more people be tourists outside London (despite serious efforts on all sides), and you can't move the financial centre any further than four miles down the road to Canary Wharf, what can you do?
Well, move the government. Not just poxy little shit things like the DVLA to South Wales. I mean the lot. Move Parliament, the PM's official residence, the entire civil service, out into the provinces, to a custom-built new "political centre". I suggest the outskirts of Birmingham, near the NEC.
Look at the advantages.
1) It will get rid of much of the "London-centric" accusations from the provinces (complete balls, since the government throws money everywhere but at London).
2) It will free up acre after acre of the most valuable real estate in the country, which could be converted into luxury flats and sold off.
3) It would reduce the price pressure on housing in London and would assist pricing in other areas.
4) It would ease unemployment difficulties in the Midlands.
5) It would reduce politicians' expense claims.
6) It would reduce pressure on Heathrow.
I look forward to one of the parties adopting this plan in their manifesto. What's the spread on how on how long I will have to wait?
_________________
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no subject
Date: 2010-02-14 09:24 pm (UTC)Bricks, now: bricks are a different thing altogether. Mind you, your knowledge of Birmingham real estate is understandably deficient. What with deregulation and all, the infrastructure around the NEC is hopelessly inadequate (the Business Park is dreadful). You'd probably be looking at Sutton Chase/Park, which would require an Act of some sort; after all, it's one of the last ten or eleven Royal Parks in this country. (I can't speak for Fiji.)
Appreciated the throwaway comment about discretionary versus non-discretionary spending, btw. (Look, I know it wasn't throwaway. Millions of others would think so.) Not an aspect of the general economic prospective, I fear, that has crossed all that many "professional" minds. Despite it being bleedin' obvious to ham-fisted amateurs like me.
Incidentally, there is no pressure on Heathrow. Normal human beings (and, obviously, that would exclude those who live in London) avoid the place like the plague. I'd actually rather fly through Gatwick (particularly now that I've given up smoking, which is not an easy habit to indulge in the sorry Sussex Bubble), because it does at least have connections to a relatively pleasant place like Reading.
Note that I did not suggest that Reading is in any way pleasant.
no subject
Date: 2010-02-14 09:32 pm (UTC)There are no unemployment difficulties in the Midlands.
Since Sir Geoffrey Howe's budget in 1981, unemployment in the Midlands has been trivial! Anybody can do it! You don't even need a particular skill!
And the best thing is: even if you do have a particular skill, it still doesn't matter. You're still unemployable!
Agreeing again?
Date: 2010-02-15 02:16 pm (UTC)However, now is a particularly difficult time to do this. London is essentially a virtual city-state which contributes disproportionately to tax receipts without getting comparable return.
In addition, pricking the house price bubble in London during a bust would be remembered for a very long time.
If the government were to move now, I suspect something akin to a sessionist movement would result.
Finally, if you include my view of the inability of the UK gov/media to tackle any significant problems, I think this entire crop of pols would have to retire. So I'd set the line at 25 years.
Re: Agreeing again?
Date: 2010-02-15 02:20 pm (UTC)And around the NEC? How is the traffic round there? My impression is that the M1/M42 etc are already running at capacity. I don't think anywhere in the UK has sufficient infrastructure to handle hundreds of thousands of new primary workers, to say nothing of the service jobs that would follow them.
Re: Agreeing again?
Date: 2010-02-15 02:50 pm (UTC)But the lack of infrastructure is no problem. It's a bonus! That gives you a built-in excuse to build more infrastructure, all of which you could claim back from the EU a la Ireland and its motorways. It wouldn't count towards the budget deficit and it would boost the economy. As for the "secondary" infrastructure (shopkeepers, cab drivers, restaurants, hotels) these would either soon follow or could be part of the original plan.
Excellent!
PJ
Re: Agreeing again?
Date: 2010-02-16 06:26 pm (UTC)I'm not actually sure what you mean by that.
Does it mean muscular types hefting girders and shifting bales and whatnot? Well, Birmingham certainly doesn't have that.
Does it mean guaranteed union jobs for life, followed by fully funded pensions? Well, Birmingham certainly doesn't have that. And both you and I think it would be an absolutely terrible idea. (Perhaps we could extend this concept to bwankers and incivil servants.)
Well, I could go on. And you clearly haven't looked very closely at Birmingham in the last fifteen or twenty years or so. Most of that is EU funded on precisely the basis you suggest.
It's awfully nice, and altogether quite helpful for a while. Not for jobs and employment. We don't got that now, massa, no mores than we dids in the 1980s.
We've also got shopkeepers, cab drivers, (rubbish) restaurants and (not very good) hotels.
Excellent? I think not. Insufficient. Pathetic. Next idea, please.
Jesus, you used to be a Socialist. Or at least an undergraduate at U(Kent) Canterbury. I think it's the downstairs flat wot did it.
no subject
Date: 2010-02-14 10:44 pm (UTC)