The North/South divide reopens...

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From the latest Manpower Employment Outlook Survey:

...a distinct line can be drawn to demarcate the division, running from the River Humber in the North East down to the Bristol Channel. North of the line, employers predicted negative hiring intentions of -2 per cent, while south of the line - including all of the South East of England - they predicted positive hiring intentions of +6 per cent.

And the factor driving this problem?

“Despite politics largely being held in London, most public sector workers are based in the North of England and Wales. The continuing public sector cuts are therefore particularly damaging to these areas that do not have such a vibrant private sector economy such as the South East. Furthermore over 32% of businesses are based in London and South East England, therefore naturally there is more employment.” 

After several decades of seeing the relocation of public sector employment, the stark truth is revealed. There simply isn't enough private activity outside the South East. And all the local enterprise partnerships, regional strategies and green growth agendas won't make a jot of difference. When 60% of the economy is public spending, private enterprise and initiative is squeezed out - that is the problem.

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A successful North - we'd love it but not that way Julian!

Julian Dobson, on his Living with Rats blog, wrestles with the long-standing – and seemingly intractable problem of the relative underperformance of England’s Northern counties.

Julian asks us what a successful North of England economy would look like and sets out a ten-point descriptor – covering the offering of opportunities to everyone, not compromising on “sustainability”, encouraging distinctiveness and diversity, valuing the contribution of the “voluntary and community sector” and, of course, a local ownership approach founded on mutual and co-operative approaches. It is a delightful collectivist paradise described by Julian and this Shangri la will doubtless be peopled by selfless men and women sacrificing their own individual success to the collective whole. Commonweal will be all!

I was tempted to carefully dissect what’s wrong with all this item by item but there was one of Julian’s ten points that stood out above all the others as something the would shackle the North to a permanent dawdle behind more successful places:

A successful northern economy is one that reduces its dependency on other parts of the world and on national government support. This means ensuring our money supports local and regional businesses, and strengthening links between the north’s businesses and communities. There should be a clear correlation between incentives for business and firms‘contribution to local training, skills development and community wellbeing.

In this we see – and I could cry – the ‘import substitution’ approach to economic development being rolled out. This is the strategy that blighted Latin America as they cowered behind high tariff barriers and anti-yankee policies. The most successful places are places that are open to trade – even in a world where free trade is compromised by restrictions on free movement and a dysfunctional system of development finance.

Julian, like so many of the left, thinks that there is a way to ‘collectivise’ the free market and a means by which it will be civilized (at least in their terms) and controlled by “the community”. By taking this view, we are led inexorably towards state direction and a society where economic activity is categorised into “good business” and “bad business”. The little local co-operative – even if like the Meriden Motorcycle plant a co-operative that destroys value – represents the former while an industrial complex manufacturing parts for power stations and managed by a multinational PLC represents the latter.

The problem with Julian’s utopia is that it would place an intolerable burden on those wishing to do business and most importantly those wanting to do business that involves something other than a grand scale taking in of each other’s washing – a business that exports.

Since Julian asks though I’d better set out how we get to a successful Northern economy (perhaps more valid than what that economy might look like when we get there). For me success lies in people being empowered consumers – in us having the wealth and income to consume the things we want to consume. After all we live to consume (in its widest sense) rather than to produce!

Getting to success must be founded on:

Low taxes on personal and business income

No or very low tariffs and duties

A regulatory environment that encourages choice and flexibility in employment

A pro-business and pro-development planning regime

Priority for infrastructure investment that support growth – roads, ports, broadband

An education system focused on core skills and employability

Aside from infrastructure this is all about less intrusive government, about a tax system that avoids disincentives and an education system that works.

And what would be my measure of success? Aside from us all being healthier and wealthier, I guess the ultimately successful North of England would be a place that looked at itself and decided it didn’t need government any more.

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Update: Seems I'm not the only person who finds Julian's prescription a little unworkable. Here's Tim Worstall on the subject:

Apart from the fact that high speed broadband (as opposed to the dial up/ broadband difference) doesn’t make any difference at all, it’s just the usual ritual cant about inclusiveness isn’t it?
There’s three things that are wrong with the “northern” economy.

1) The exchange rate’s too high.
2) Wages in one sector of the economy are too high.
3) The private sector is getting crowded out.

The solution is to cut government, cut wages (and taxes) and the exchange rate, well that’s more difficult.

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BBC staff - just shut up about moving to Salford

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I really do find the BBC – and many of its folk – extremely trying. Yesterday we saw the producer of ‘Breakfast’ – that trailblazing, insightful masterpiece of television – whining that some of the team wouldn’t dirty themselves by moving to Salford. 

"People haven't yet said they're definitely coming and I don't think many of them will for a while.The presenters are in the same position as the rest of the team.

"It's not easy for people, they have to think really hard about whether they can move their families, whether they can commute." 

Forgive me for not weeping and wailing at the prospect of some very well paid people having to make a choice – loads of other people make that choice and move to the North. I do appreciate that people like Sian Williams and Bill Turnbull have never actually been to the North – except maybe to a nice hotel in the Lakes or North Yorkshire. And that such people believe Salford to be populated by a mix of toothless old gimmers with flat caps and very thin legs (or else by ravening, feral zombie youth starved of London flesh).

Apparently it will be worse still than that as Will Smith (who I believe is a popular American cinema actor and occasional excuse for a singer) won’t grace the sofa! It is clear that, without such folk, ‘Breakfast’ will fade into insignificance while people switch over to watch whatever dribbling pap the other sides are showing us. For Ms Ford, the Breakfast producer this is all dreadful:

“There are things we'll have to do differently because we are in Salford," she said. "There are certain people who at the moment are more accessible and they won't be in the future – politicians, celebrities, opinion formers.

"Will we get Will Smith on the sofa in Salford? It would be naive of me to say 'Oh yes, it'll be fine.'

"It won't be as easy as it is now."

There are, of course, no celebrities, politicians or “opinion formers” (this women really has swallowed the PR tosh handbook) outside London. The North is full of people with funny voices, strange eating habits and who probably smell odd too.

The decision to move chunks of the BBC to Salford was a daft, political decision that made little or no business sense. However, to hear BBC staff talk you’d think their lives were at an end at having to leave London.

PS And while we’re on the subject of BBC bollocks – go here to complete their “consultation” on equalities and diversity. And die a little.

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