Saturday, March 17, 2012

Scrapping national pay rates will make Britain even more centralised

Britain is an extremely centralised country. In the USA, Washington is the political capital, but the financial capitals are New York and Chicago. Germany has Berlin and Frankfurt.

But in Britain everything is based in London and the South East of England, and regional variation of public-sector pay could make matters worse.

At present, national pay scales act as a form of regional policy. The higher standard of living that workers enjoy in the regions counterbalances the fear that you may be out of the swing of the things there, and the result is that some people are happy to work outside London and the South East.

If people in London are paid more, then this balance will be lost. There is likely to be a feeling that if you want to get on in the public sector then you have to be in London. So young people, at the time in their lives when they are most mobile, will want to live and work there.

The danger is that the brightest and best will end up in London, earning more than their counterparts elsewhere. This will make the centralisation of Britain even worse.


Tim (Kalyr) said...

That's a very good argument that I hadn't thought of.

Nic Prigg said...

This is already going on though! Whether your from the Highlands, or the central belt in Scotland to the North of England and Wales, there is a sense that in order to do x, y or z that you have to be in London. It doesn't matter what field you are in, the place to be is London.
At the moment, there is talk of needing to build a third runway at Heathrow or build an airport at Thames Estuary to make sure London remains what Lord Digby Jones (i think it was) called the hub.
We need to create new hubs.
In Scotland the main hub is Glasgow and/or Edinburgh although Glasgow is bigger but they are only an hour apart which is effectively like travelling from one end of London to the other.
At the end of the day we need to be able to empower individuals to set up their own businesses in places that aren't typical for those jobs and attract other people and businesses to those areas and create new hubs around the country.

Simon said...

OK, I kind of agree with your argument here, but the assumptions in paragraphs 1 and 2 are rubbish. Yes Britain is centralised, but not for the reason you suggest.

Let us just stop and think a second. The USA is 5 times the size of the UK, yet I would suggest it has only 4 major 'hubs', the three you mention and LA. Germany is also a much larger country and is surely an exception to most rules due to its almost unique history of gradual federalisation, not to mention having been two countries until very recently.

Now, other countries have prominent second cities as well. Italy has Milan, Spain has Barcelona, but notice that in both of these cases the city in question is the capital of a very distinctive sub-region, not an alternative centre for the country as a whole. Then notice that exactly the same is true in the UK. Its easy for somebody in England to say that no other city in Britain rivals London, but try saying that to the Scots!

Then let us look at other countries that are more decentralised than the UK but of a similar size. Is Marseilles really more important in France than Manchester is in the UK? Does Japan have any other city that stands out as much as Tokyo? Russia has Moscow and St Petersberg it is true, but again it is a much larger country.

I absolutely agree that it would be better for the UK to be less London centric, but actually its not that bad and is surely at least partially due to the fact that London remains a truly global city.

Just as with your view that the UK is a country that doesn't make anything anymore (in-fact, I heard on the Radio recently that we remain the 9th largest manufacturer in the world), your argument here risks depending on the assumption that things are much worse than they really are, and also of placing the blame for the UK's over centralisation in the wrong place.

nic said...

Simon, as a Scot, I would agree no other city rivals London in the UK.
Birmingham is the second largest city I believe in the UK followed by Glasgow.
Scotland has two "hubs" in Glasgow and Edinburgh but they are in no way rivals to London. Maybe a third hub in Aberdeen. The SNP might contest that but its true. In fact the SNP would probably agree but would argue thats why we need independence so that London is no longer the centre and that we can build a hub(s) that can rival London.

Simon said...

I have read that Edinburgh is the sixth largest financial centre in Europe, it is also the centre for Scottish law and the Church of Scotland, has three universities (one truly world class), hosts the most famous cultural festival in the world and is undoubtedly a centre both of Scottish and international culture.

Sounds like its thriving to me!

Anyway, I'm not saying it 'rivals' London, I don't think many Germans would claim that Frankfurt rivals Berlin or Americans that Chicago rivals New York, however it clearly holds its own.

Anonymous said...

Your concern with centralisiation is spot on, but I'm not sure this is the right way to tackle it. There are *already* London allowances many (all?) public sector pay scales. (This has the effect, by the way, of favouring work in London over other parts of the south east with similarly high housing costs.)

Phil said...

Differences in taxation would be a far more effective tool for decentralisation.

If we had a national property tax like LVT there'd be a huge incentive for companies and individuals to choose the North West, Wales etc. rather than the South East.

Richard said...

The upcoming London Olympics are just that, the LONDON Olympics. Why build a new velodrome when Manchester has an excellent one? Why not use the watersport facilities near Nottingham rather than build new ones? All we will get is the whiff of burnt gas as the Olympic flame jogs past in a feeble attempt to make the rest of the UK involved. Of course the building of the facilities provided lots of jobs. I now work with a Lithuanian who painted white lines in the car parks and he got to know lots of Bulgarian construction workers. After all we are the lazy British, our own Government treats us like that when we lose our jobs.