Hey politicians, write your own quotes don't just take whatever dribble the press office gives you...

A case in point:

“Whilst at this point in the bid development we have not identified specific schemes being proposed within constituencies, do be assured Coun Groves and the team are working closely with district partners and local stakeholders to ensure the content of the bid has the widest possible impact. We will also ensure we continue to keep local MPs informed as the bid develops.”

Nobody - not even the incredibly bureaucratic Cllr Susan Hinchcliffe - talks like this, yet we're supposed to believe that she actually spoke these words (they were in the press release after all, in quote marks and everything).

This comment is in response to a local MP, who happens to represent the constituency containing Cllr Hinchcliffe's ward, saying that his patch isn't getting a look in when it comes to doling out the transport money for the Leeds City Region. And it's a fudge because the politician (or rather the anonymous press officer - who used to work for the Labour Party no doubt) doesn't want to say the truth - "sorry Phil but we've looked at all the schemes, they've been assessed to death and the only ones that qualify have been put forward - I'm afraid none are in Shipley."

Instead we get a wiffly statement filled with partners, stakeholders and promises of information that doesn't, when you take it to bits, say anything at all about why some schemes are chosen and others aren't. The reader is none the wiser about how the West Yorkshire Combined Authority decides where to splash cash on boondoggles. I suspect this is deliberate- good grief we can't have regular folk understanding how we make funding decision for heaven's sake!

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Trains are not the solution to any of the UK's transport problems, they are the problem.

I've felt for some while that we have our transport planning, infrastructure, investment and systems all, as my mum would put it, kecky-pooky. Just to give one example - there were 5.2 billion passenger journeys on buses but just 1.9 billion journeys on railways, yet public subsidy for rail is double the subsidy for buses (including the cost of giving every old person who wants one a free bus pass). The problem is that, whenever there's a problem with rail travel - a method of travel that is never used by half the population and which accounts for less than 5% of total journeys - it's all over the news as pundits and politicians fall over each other to tell us that a couple of late, overcrowded trains is a national scandal.

The real national scandal (if this is the currency we want to deal in) has been the gradual depriving of many communities from anything that looks even remotely like a reliable public transport system. It's no damn good giving older people a free bus pass at enormous cost if there aren't any buses for them to make use of the pass. Yet that is the reality of the UK's upside down approach to investment on public transport. There's a £48 billion investment plan for the existing rail network plus the eye-watering £55 billion or more for HS2. And we haven't even got to such delights as Northern Powerhouse Rail or extending high speed up to Scotland!

By contrast, the road investment strategy amounts to just £15 billion (there's an additional £1.9 billion for cycling and walking - which add up to more journeys than rail) and there is a further £12 billion or so directed through local councils, regional mayors, LEPs and combined authorities. Bear in mind that 95% of all journeys and over two thirds of all passenger journeys take place on roads. Yet government - urged on by campaign groups like the Campaign for Better Transport - still bungs ever more money into rail networks.

The problem is that too many people have heard the words "modal shift" and think it's a realistic option to get more people "out of cars and onto trains". I've heard this at just about every single combined authority meeting without any consideration of how on earth an over-capacity rail network that amounts to less than 10% of miles travelled can provide this modal shift. Worse still we are stuck in a planning model that says people travel to work in central business districts - the curse of Christaller lingers in transport planning meaning that the reality of people's lives is not reflected in how systems are designed or, indeed, what sort of systems get built.

Here's a quote from Laberteaux, Lance Brown and Berger, writing in Infinite Suburbs about what they call Interburbia:

"...in documenting the actual quantities of population, jobs, and transportation movements, we reveal that a planning focus on the developing suburban nodes and their infrastructural linkages (rather than suburb to city core) would more closely match the urbanizing processes we confirm on the ground. A renewed infrastructural focus on intersuburban commuting along with parallel policy and design solutions could help create a better interface between the flexible, service-based economy of suburban environments and the majority of the US population who live and work there."

To translate this a little and by way of illustration, let me talk about my neighbours. Firstly, none of them use public transport to get to work. And the location of that work includes Halifax, inner suburban Bradford, Skipton, Cowling, Bingley and Otley. Only two people have work that takes them to the nearest city centre - the node around which transport planners will work - Bradford.

This pattern will be repeated again and again throughout the UK's urban areas - people don't live in suburbs and commute to inner cities, they live and work in suburbia. Even in London with perhaps the world's more extensive public transport network, the majority of journeys are by car and most people do not work in London's central business districts. Yet intraurban transport planning - look at Crossrail - is all about moving people to and from suburbs to the city centre. And interurban planning is about moving people from one central node to another central node.

The result of this is that expectations of transport investment from most decision-makers (MPs, councillors, government policy planners) are influenced by the loud voices of, mostly richer, people who use trains including, of course, the editors of newspapers and employees at the Department for Transport. Plus of course all those blokes who are still psychologically attached to their train sets. This means that the interests of road users - including those 5.2 billion bus journeys - are of secondary importance to those of rail commuters whinging about how much the tickets cost and that there's a delayed train because the engineering works over-ran.

With driverless options and the advent of a 3D transport environment (the current one is largely 2D), very expensive fixed rail systems - a transport form that takes people from one place they don't want to be to another place they don't want to be - become harder and harder to justify. Yet UK transport plans seem to be trapped into an accelerating investment in new and upgraded rail systems despite this not having the remotest chance of delivering modal shift at any scale.

Trains really aren't the answer to the UK's transport challenges - they ignore the reality of people's lives, fail to recognise choice, are expensive and inefficient, suck in subsidy that amounts to a regressive tax on the less well off, crowd out new and innovative options, and fail to encompass emerging technologies. It's not that trains aren't the solution, it's more that they're the problem.

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It's time to stop obsessing about trains - they aren't the infrastructure solution we need

Let's imagine for a minute that I'm going to give you several billion pounds for the purpose of making the North of England's infrastructure "fit for the 21st century". Let's also forget that, in the real world, this looks unlikely because when you put infrastructure schemes through the Department of Transport's models they tell you that investing in the North - compared to yet another rail scheme for London - is a financial no-no.

Now, because you're an assiduous consumer of commentary and consider yourself bang up to the minute on transport issues, you come straight back and say something like:

High Speed Rail from York to Liverpool - maybe extending HS2 to Newcastle as well

Electrification of assorted railway lines (Calder Valley, Harrogate-York, etc.)

Rail links to Yorkshire's airports and ports

Light rail for Leeds (that may or may not connect to Bradford, Huddersfield and Wakefield

New stations, new rolling stock, fancy ticket machines and ticket systems

More trains, bigger trains, faster trains...

I know this is the response most folk will give because, even in the North where 95% of people don't use trains (on anything but a very occasional basis), the reporting on transport issues is utterly dominated by problems with trains - too old, too crowded, strikes, break downs, timetable problems:: you name it the BBC, Yorkshire Post and local media will be all over it.

Tell me, when did the newspapers or television news last cover the fact that your bus is old, slow and subject to delays and cancellations? When was there a shock horror report complete with vox pops from exasperated commuters saying how the endless summer of road works has caused congestion everywhere? One of the main routes into Bradford, the B6144 along Toller Lane and White Abbey Road, has been closed for eight weeks while Yorkshire Water try to find some of the wet stuff - have there been any reports on the sheer annoying inconvenience and cost of this work? You missed it?

Yet the single most important means by which people in the North get to work is by car and, however much you might want to parade your green credentials, all that vast investment in railways won't make anything but the tiniest of dents in this traffic. And, as you all know of course, the problems on the railways result from the decision (something to do with privatisation) to incentivise increasing passenger numbers - there isn't enough capacity on the rail system. Modal shift (every councillor I've ever met who has served on a transport committee can intone this - it goes with 'get more freight on rails' as a mantra) if it is a success simply results in the rail system seizing up.

So here's an alternative list for your infrastructure investment - one better linked to reality and less to the fact that too many transport planners still have a model railway in the attic:

Bus priority schemes, new buses and better bus stations

Superfast broadband - targeting where the commuter traffic is coming from not where it's going to

Car share apps and schemes - with financial rewards for users

Properly funded road maintenance and improvement - dealing with the thousands of stalled small schemes

Deregulation of taxi and minibus - getting something like the US Dollar bus schemes

Support for employer run bus schemes

Incentives for home working and local shared work spaces

Better cycling infrastructure (including, for larger places, cycle rent schemes)

Railways - for all that they have a place - are still 19th century technology. The EU auditors recently reported that the only high speed line on the whole continent (including HS1 and the Channel Tunnel) that is profitable is the Paris-Lyon line. The money spemt on railways represents a huge subsidy to wealthy urban commuters and we're paying the price of this with potholed roads, outdated diesel buses, over-regulated taxis and the almost complete absence of any national (let alone regional) strategy for roads. It is time to line the transport planners up and ask: "do you like trains?" If the answer is "yes" then get rid of them.

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London's property market - are the vultures circling yet?

My wife owns a share in an apartment on the Costa del Sol and it's lovely. But as successful investments go, it isn't one. The area between Estepona and San Pedro is littered with the marked out roads, pavements and street lights for what would have been thousands of villas and apartments. Even some of the completed developments are ghosts, mothballed by the developer or the bank against some possible - even mythical - future recovery in the housing market. Don't get me wrong here, there are also thousands of completed developments filled with happy people from all over Europe, it's just that the enthusiasm of developers, the gung ho (and sometimes corrupt) approach of local councils to development and an international property investment industry focused on flipping off-plan rather than housing people resulted in a vast oversupply of development opportunities.

For all that the Costa del Sol is great, the supply of people who want to go and live there is limited especially given the competition from other sunny, cheap and welcoming places like Bulgaria, Malta, Cyprus, assorted Greek Islands, Turkey and Portugal. Not to mention the rest of Spain's Mediterranean coast. I know that 'living there' covers a multitude of options from full time residency through spending winter on the beach to what amounts to extended tourism. But such opportunities limit the demand for such property, even in a world where a two-bed apartment will cost as little as £100-150k.

Imagine then how limited the market must be for two-bed flats that are selling at £2-3m!

There are an extra 14,000 unsold apartments on the market for between £1,000-£1,500 per sq ft. The average price per sq ft across the UK is £211.

Molior says it would take at least three years to sell the glut of ultra-luxury flats if sales continue at their current rate and if no further new-builds are started.

However, ambitious property developers have a further 420 residential towers (each at least 20 storeys high) in the pipeline, says New London Architecture and GL Hearn.

So we already have 14,000 empties and plan on building about 40,000 further properties to go onto this market? Do we not see that this is going to do nothing at all to resolve London's housing problems, will probably bankrupt a couple of developers and will result in a lot of wealthy Londoners stuck in negative equity. Regardless of any Brexit effect, the simple truth the we learned on the Costa del Sol applies here - there aren't enough people who have the cash to buy these apartments and who want to own property in London.

...hundreds of Asian investors who had bought London developments off-plan in 2015-16 in the hope of making a quick profit by selling apartments on closer to completion have instead lost hundreds of thousands of pounds. “They intended to flip [buy and sell on] the apartments and make big profits, but it hasn’t worked out like that, and now they are trying to get out at the smallest possible loss.”

A lot of folk who lounged on Spanish beaches back in 2004 or 2005 will be very familiar with this pitch - it was what the salesmen said back then: "the market's booming, everyone's investing, you only need to put down a deposit, you can't lose!" A loads of people took the punt, sticking down options on, as yet unbuilt, apartments and villas expecting to "flip them". It didn't happen. Most ended up owning an apartment they hadn't expected to own that was worth a lot less than the mortgage. For some it was a financial mess, even a disaster.

In London and for the New London Architecture "shiny city of millionaires" sort of developers, the prospects look pretty grim right now. Not because of Brexit (although that probably hasn't helped) but because if your development strategy is based on there being an increasing supply of people who can pay more than £2m for two-bed flat, then - outwith Venezuelan-style inflation - your strategy is going to crash. London's centralise and densify policies are creating this situation. Indeed, I'm sure the vultures that feed apon unsuccessful capitalists' vanity are circling already.

The problem is that, in every way (not just housing) London is too expensive, not family-friendly and lacking in the essential community that makes places work. Without revisiting the "build it ever higher" strategy - densify, densify, densify - London faces a second property crisis; one of empty mothballed homes owned by anonymous finance houses, crashed property developers, a frantic secondary market of short term lets, and an ever-wondering public asking why the city built things for international investors to 'flip' rather than homes that people might want to live in?

I recall a conversation with a Yorkshire developer about a conversion and new-build scheme in Saltaire. He ended up rescuing the development by creating a rental business for the flats he couldn't sell. Speaking to me he said: "Six months earlier I'd have been pricing up yachts, six months later I'd have been bankrupt." Right now London's 'build it and they will come' development market is looking pretty ropey and it's hard not to conclude that, as ever, avarice and vanity have meant that property developers have ignored the lessons of the Costa del Sol.

Yes, you've got benign local (and national) government keen for you to build. For sure, there are banks from all over ready to throw money at the schemes. But are there actually enough real customers for the things you're building? If there isn't, you need to think again about the strategy. In the case of London, we've maybe reached the point where there isn't.

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Should Council's be doing this?

I understand the financial imperative for local authorities to seek investments that will provide (possibly) assured future income. But there is a point at which you have to ask whether using the Public Works Loan Board (PWLB) to invest in commercial property is either fair or the proper use of such borrowing:

Through this innovative partnership, local authorities borrow money from central Government via the Public Works Loan board at a fixed low interest rate and regenerate surplus land that they own by building a Travelodge hotel as either a stand-alone project or as part of a mixed-use development. Not only does this create jobs and boost the local economy but it also provides a substantial return of profit for the council.

It looks great, doesn't it? After all the commercial interest (Travelodge in this case but it could be other businesses) gets access to cheaper finance than would be the case had they borrowed from normal commercial sources. And the Council gets that much vaunted 'regeneration' and an income from owning the freehold. It all seems like a brilliant idea but it does raise questions especially where the deal is less of a partnership that the one described here.

The first question is how local authorities with preferential borrowing rates and a benign tax environment are affecting the property market, especially for the sorts of investment - shopping malls, car parks, supermarket sites and so forth - that are favoured because of their (hopefully) reliable income. It may well be the case that the value of these assets is inflated by the capacity of local councils to invest larger sums given low interest rates on their borrowing.

The second question is whether the PWLB exists for the purpose of commercial property investment - especially the sort of investment Bradford Council has undertaken by simply buying an existing car park for several million quid. Surely the operation of the PWLB shouldn't be merely 'prudential' (does the ground rent exceed the cost of borrowing) but should contain some recognisable social value.

Finally, do local councils have the expertise to engage in this sort of property investment - what looks like low risk may turn out to be more problematic. Imagine buying up a freehold only to find that the income from ground rent dries up or becomes difficult to collect? Local councils are looking for long term income here without necessarily appreciating how market and social change will affect that long run - what happens to car parks in a world of self-drive cars? Do AirBnB type models undermine the budget hotel? And how will the medium term play out in the world of retail letting?

Councils will, of course, turn round and say, 'but we've no choice as we've no money'. This merely returns to the original driver of such investments - falling council revenue budgets - while the risks associated with such strategies are unclear and the impact on property markets elsewhere store up further problems. And this is all before we consider how many billions councils will add to public borrowing.

Should councils be doing this?

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Young people are neoliberals - they just don't realise it yet so let's help them.

It seems to me that the real issue young people have is feeling excluded from the benefits of our capitalist, neoliberal society not that capitalist, neoliberal society itself. And this seems a reasonable gripe to me. Here's a tweet from lefty journalist John Elledge:




This - perhaps not all that considered - comment tells us a great deal. Mostly that the real irritation of the emerging graduate generation is that they feel unable to afford investment assets like houses. For me this is one of the essential failures of UK government over the last thirty years - the idea of a property owning democracy was ignored as we got ever more excited about the seemingly endless rise in house prices.

Some people want to blame all this on my generation - the boomers - who took advantage of cheap asset prices in the 1970s and 1980s and rode the bubble to the point where the house my Dad bought for £3,250 in 1963 in now 'worth' over £400,000 (Dad sold the house in 1975 for about £14,000). I am absolutely with all those people who feel that they're outside this bubblicious world - not just the young or poor but a whole load of people from 'Up North' who've not seen anything like the gains those 'Down South' have seen.

Add to this that we told young people that the way to get into this bubble world was to get a good degree (in fact any old degree as Blair's enthusiasm for book-learning led to the numbers going to university getting up towards half of 18 and 19 year olds). And because these degrees were the gateway to a world of wealth and power, we told young people they could have a load of (cheap) borrowing that they'd spend half their life paying off so as to get the degree.

Young people don't want to be socialists, they want the entrance fee to our neoliberal world of valuable assets, to that property-owning democracy we were all promised. And this is why they've dumped the capitalists, the people who they think are stopping them from joining the glorious free market rat race. "Have free university tuition". "Here's a subsidised mortgage". "How about a big pay rise". "Or a higher minimum wage". "Free child care". "Discounted rail travel"...

It doesn't matter how much others ask where all this cash is coming from, people aren't listening. Or rather they see those telephone number house prices and say, "y'all can afford to pay for this stuff, get on with it". And Labour offered them everything they were asking for and some things they weren't - no questions asked. Is it any surprise that folk who are outside that wealth bubble flocked to this banner?

Young people - and plenty of the not-so-young - want to know when it's their turn to play the free market, asset-owning, property-speculating game. They don't want socialism, they want what their parents and grandparents had - the chance to have a real cash stake in their society, the thing that Margaret Thatcher promised to my generation (and largely delivered). This isn't about nationalisation for all that people tell you the government should run stuff (they always have done by the way even at the height of Maggie's pomp). No, it's about us renewing the promise we made to the post-war generation and to late boomers like me - play your part, work hard, be a good citizen and we'll make sure you can have that real cash stake in Britain.

Right now we're still telling people to play their part, to work hard, to borrow to fund education and to be a good citizen but government has reneged on its side of the bargain, that cash stake in Britain. And the single-minded focus of any new government should be to renew that offer and make it work. Those young people really aren't baby ideologues desperate for some sort of socialist New Jerusalem. They're just like you and I were 30, 40, 50 or 60 years ago - bothered about our own futures, the things we care about, in that thing Adam Smith saw as the driver of a better, richer society: self-interest.

So let's start offering people that chance. Let's free up the planning system so more houses get built were people want to live. Let's revisit the idea of tax relief or other support that backs individual, personal investment in our society. Let's liberate the innovative instincts of property and finance people to meet the aspirations of today's ambitious young people - 21st century capitalists, budding neoliberals every one. And let's do this knowing that the alternative, Labour's market-fixing, price-controlling, 'magic money tree' programme carries in it the seeds of disaster, the crash that socialism always brings.

I'm with you if you want to bash at those folk farming grants and corporate welfare. I'm on your side if you want to try and stop well-funded lobbyists getting government to fix a market or a system to suit their clients. I'm right there if what you want is to stop rent-seekers freeloading on free health, welfare and education. And I agree with you when you say people should pay the taxes they owe - on the nail not just after a long-winded and expensive investigation.

But this isn't about socialism just about getting a free market that works for all of us. It's about setting economic liberty - the idea that, more than anything else, is responsible for the health and wealth nearly all of us enjoy today (even if we can't afford a house) - at the heart of government policy. The more we try to control the market the less liberty we have and the more power we hand to the commissioners, the lobbyists and the corporations protected by the government fix.

What we all want is a real stake in the nation we're a part of - not just a vague notion of citizenship but a real sense of being a part of the place, of having roots. And that means renewing that promise made by Harold MacMillan in the 1950s, by Ted Heath in 1970 and by Margaret Thatcher in 1983 - Britain isn't just land and institutions but its people, all of them. And all of them should have the chance to take a real, solid, tangible stake in their nation.

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Why we can't buy Ghanaian chocolate bars

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I was quite struck by this article about a woman making artisan chocolate in Ghana:

Ruth had come over to meet potential trade buyers and told me her story. Chocolate was for her currently a cottage industry, using her garage as a factory and employing her mother to grind beans obtained from a nearby farm. To my mind, it was a chocolate equivalent to a micro-brewery, converting local crops for local consumption. Surprisingly, she is the first independent business to make artisan chocolate in Ghana.

It's a reminder - as the writer makes clear - that Africa is a very different place from the myth presented by NGOs like Oxfam or Save the Children with their images of starving children, subsistence agriculture and wicked foreign investors. Instead, we've a glimpse of an increasingly urban society filled with enterprising people like Ruth. It also tells us that the traditional source of funding - the bank loan - can be difficult for traders like Ruth to secure.

But before we get to tied up in feeling sorry for Ruth and her mum, let's remember she has the resources to travel to London to pitch to trade buyers at an exhibition promoting hundreds of Ghanaian businesses to buyers in the UK. The writer suggests - because he's from a cuddly social enterprise background - the sort of crowd-funding approach to financing Ruth's business that Hotel Chocolat and Brewdog has used. Make an offer - whether it's a cash return or free chocolate doesn't really matter - to potential small investors.

And it struck me that, regardless of the way in which investors are rewarded for their investment, this is a very good way of financing a business - the business-owner transfers the risk to the investor. And it's true that crowdfunding can be an effective means for many initiatives - Bradford's Drunken Film Festival for example - but wouldn't a better route for nascent small businesses like Ruth's being the issue and sale of share capital? Either through 'Dragon's Den' style angel investors or other routes to equity markets.

The other problem for a Ghanaian chocolate business is, of course, the way in which the developed world protects its chocolate business:

Cocoa producing countries limit themselves to mainly exporting beans -rather than manufactured cocoa, or chocolate products- mostly because of tariff escalation. The EU has a bound rate of 0 percent for cocoa beans, but a 7.7 percent, and 15 percent ad valorem duty on cocoa powder and chocolate crumb containing cocoa butter respectively;
Similarly, Japan applies a bound rate of 0 percent for un-processed cocoa beans, but charges a 10 percent tax for cocoa paste wholly or partly defatted, and a 29.8 percent duty on cocoa powder containing added sugar;
The US has no ad valorem on cocoa beans, but imposes a duty of 0.52 cents/Kg for cocoa powder -with no added sugar- and tariffs could go up to 52.8 cents/Kg for imported chocolate products containing cocoa butter.

Maybe that's for another day but it's a reminder that, for all our heart-on-sleeve keening about Africa, we consistently make it more difficult for businesses from places like Ghana to do business - other than on our strict and expensive terms - here in the developed world. To start with Ruth will get some protection if she focuses on small consignments but the tariffs will kick in the minute she's exporting for resale rather than individual consumption.


The best thing - other than investing - the the developed world can do is stop placing barriers between producers and manufacturers in places like Africa and the markets they needs to succeed in Europe, North America and Japan.

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In which a Guardian writer bemoans the lack of slums...

Or so it seems:

In this mix of complexity and incompleteness lies the possibility for those without power to assert “we are here” and “this is also our city”. Or, as the legendary statement by the fighting poor in Latin American cities puts it, “Estamos presentes”: we are present, we are not asking for money, we are just letting you know that this is also our city.

It is in cities to a large extent where the powerless have left their imprint – cultural, economic, social: mostly in their own neighbourhoods, but eventually these can spread to a vaster urban zone as “ethnic” food, music, therapies and more.

All of this cannot happen in a business park, regardless of its density – they are privately controlled spaces where low-wage workers can work, but not “make”. Nor can this happen in the world’s increasingly militarised plantations and mines. It is only in cities where that possibility of gaining complexity in one’s powerlessness can happen – because nothing can fully control such a diversity of people and engagements.

OK, our writer - one Saskia Sassen - doesn't actually use the word 'slum' here because that would load a whole lot of negatives onto her narrative. This narrative is filled with the popular "everything is being bought up by huge corporations" line - as if the buildings in London, New York and Berlin were all owned by collectives, co-ops and interesting old couples who've lived there since the place was built. There's also a slightly worrying 'and lots of the money is Chinese' as if this is necessarily a problem (a decade or so ago the bad foreigners with funny names were Japanese).

Now the point about slums is that they allow people to do those capitalist things away form the gaze of the authorities occupying expensive real estate in the city proper. And our writer is perhaps right to be concerned about the squeezing out of these places:

"Arrival cities are known around the world by many names," Saunders writes: "slums, favelas, bustees, bidonvilles, ashwaiyyat, shantytowns, kampongs, urban villages, gecekondular and barrios of the developing world, but also as the immigrant neighbourhoods, ethnic districts, banlieues difficiles, Plattenbau developments, Chinatowns, Little Indias, Hispanic quarters, urban slums and migrant suburbs of wealthy countries, which are themselves each year absorbing two million people, mainly villagers, from the developing world."

But Sassen is also wrong because the arrival of those grand developers, the imposition of those gigantic regeneration schemes, and the suborning of public space to private use doesn't stop those migrants coming. They still fill up the cracks, occupy what space can be found that's too marginal, contested or contaminated to attract those rich foreigners with funny names and their millions. And Sassen seems overly bothered by the location of public buildings filled with regulators and controllers - as if these people are either the friend of the slum-dweller or their places of work truly public spaces.

In The Arrival City, Doug Saunders talks about Istanbul - not the old city of tourists and old architecture but the far suburbia where the rural migrants settled illegally and built the fastest growing, most dynamic communities of Turkey. And this is the pattern in all our cities - the success of those at the margin makes the success of the city, a success achieved in the teeth of government opposition, eviction, regulation and distrust.

But they stay in the city. I remember selling a magnificent hand-stitched quilt to a middle-aged Jewish lady in Mill Hill. She and her husband were rich, living in a multi-million pound house in a desirable North London suburb. Asking the woman why she wanted the quilt she told me that she 'wanted an heirloom, our families came here with nothing and we want our families to have something'. Those families didn't come to Mill Hill, they came to London's East End and lived in a couple of cramped rooms from where they made their way in the world.

We look at slums and see squalor, dirt and disorganisation. The leaders of these places speak of poverty, exclusion and prejudice. But those new arrivals aren't staying in those slums - the best summation of what drives them is this quotation from Marco Rubio, one of the men seeking the Republican nomination in next year's US Presidential election:

Many nights growing up I would hear my father’s keys at the door as he came home after another 16-hour day. Many mornings, I woke up just as my mother got home from the overnight shift at Kmart. When you’re young and in a hurry, the meaning of moments like this escape you. Now, as my children get older, I understand it better. My dad used to tell us — (SPEAKING IN SPANISH) — ‘in this country, you’ll be able to accomplish all the things we never could’. A few years ago, I noticed a bartender behind the portable bar in the back of the ballroom. I remembered my father, who worked as many years as a banquet bartender. He was grateful for the work he had, but that’s not like he wanted for us. You see, he stood behind the ball all those years so that one day I could stand behind a podium, in the front of a room.

This isn't a defence of slums, just an observation that, for many of those who live in urban poverty, their life is better than the one they left behind. And they also know their children's lives will be better too. I guess only a conservative would really understand this though.

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Divestment doesn't work (but then we knew that)

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The economists Harrison Hong and Marcin Kacperczyk found that sin stocks outperform other stocks by 2.5 per cent per year. This has even resulted in a niche industry: for instance, the Barrier Fund, formerly known as the Vice Fund, is a “sin-vestor” mutual fund that exclusively invests in companies that are significantly involved in alcohol, tobacco, gambling, or defense. It has beaten the S. & P. 500 by an average of nearly two percentage points per year since 2002. By divesting from unethical companies, “ethical” investors may effectively transfer money to opportunists like the Barrier Fund, who will likely spend it less responsibly than their “ethical” counterparts.

It's not just that those sin stocks outperform the market but that divestment campaigns actually contribute to this outperformance. As we discovered in Bradford last week, this doesn't stop self-appointed campaigners virtue-signalling by proposing (at no loss to themselves of course) pension funds pull out from those "sin stocks".

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If we're to serve tomorrow's economy we need to invest more in roads and less in rail

Since 2001 rail travel in the UK has increased by over 50% (and has more than doubled since rail privatisation in the 1990s). I'm guessing that people see this as a cause for celebration and a recognition that 'heavy' rail is part of the nation's long term transport solutions. And this celebration is reflected in the investment programme for those railways, in proposals for brand new railways and in political rows about this investment.

However there's a problem. Currently rail journeys account for just 3% of total journeys (slightly more than this as a percentage of journey miles) and we are repeatedly told - hence the investment programme - that the rail network is over capacity. Let's assume that the investment programme succeeds and rail capacity is increased thereby allowing another doubling in rail journeys (this is a big requirement that the planned investment isn't going to meet) - rail would then constitute 6% of journeys made in the UK and the system would be uncomfortably crammed to the gunnels.

Given that the billions of planned rail investment dwarfs every other planned investment by the UK government, you would assume that it would go a long way towards resolving the nation's transport challenges. Between the investment in the current network and High Speed 2, the UK's rail investment programme amounts to approaching £80bn. This compares to the road investment programme of (and I'm being kind here) less than £30bn over the same period. The UK plans to invest more than twice the amount in rail than on the road network, yet there are 20 times as many journeys by road as there are by rail. Roughly speaking we're planning to spend £40 on every rail traveller for each £1 we spend on a road traveller.

The result of this imbalance in investment is that the UK's roads are not up to scratch. Local authorities have trimmed on highway maintenance (in Bradford we underspend by 30-40% each year on highway maintenance) and have little or no capital available to deliver improvement schemes let alone new road schemes. The national investment programme - the £15bn announced in 2014 that is slightly enhanced by decisions in the July 2015 budget - barely scratches the surface of improvements needed in the strategic road network. Yet a decision to delay one small part of the rail investment programme is treated as a major political faux pas whereas the consistent and lamentable underinvestment in our roads doesn't merit media coverage let alone the sort of outcry we get from train fans.

MP after MP, from every side of the house, lines up to berate ministers, including the prime minister, about rail investment. But questions about roads are few and far between despite most of those MPs' constituents making more use of them than they do of railways. When road schemes are asked about the response is that there isn't the funds, that other schemes have higher priority or that the decision is delegated to one or other agency.

For decades we operated under a sort of 'field of dreams' myth about road investment - 'build it and they will come' was the mantra. Or rather the reverse of this - building roads increases traffic volumes ergo if we don't build roads people will shift to other forms of transport thereby saving the planet (or something along these lines):

In transportation, this well-established response is known in various contexts as the Downs-Thomson Paradox, The Pigou-Knight-Downs Paradox or the Lewis-Mogridge Position: a new road may provide motorists with some level of respite from congestion in the short term, but almost all of the benefit from the road will be lost due to increased demand in the longer term.

The problem is that, wherever we look now, this paradox appears to be weakened - in the UK traffic volumes fell for three consecutive years (something that hadn't happened before) during the downturn and, since 2010 have been essentially stable. This is a situation mirrored in the USA where there has been a significant decline in vehicle miles - the population adjusted estimate is that traffic volumes have fallen back to the level they were back in 1994. This picture - dubbed 'peak car' - reflects the logical cap to car ownership rises driven by declining household size, suburban growth and women entering the workforce (as well as increased earnings relative to the price of cars). The consequence is that we should reconsider the various induced demand models for road development:

In a world of peak car, where traffic levels are flat to declining on a per capita basis, induced demand no longer holds court, certainly not to the level claimed by those who believe it’s pointless to build roads. In fact, what peak car means is that while speculative projects may be dubious, there may be good reasons now to build projects designed to alleviate already exiting congestion.

Our road networks are pretty resilient. Despite decades of underinvestment in maintenance the network remains in place and functional (if a little bumpy). However, if we are to deliver on the demands of a new economy, turn round the economic performance of the North and meet the needs of technological change, we have to look again at transport investment priorities. Placing a bigger stress on roads makes sense both because they are the dominant mode of transport for UK residents and also because those roads will prove central to future transport technologies:

A pair of trucks convoying 10 meters apart on Interstate 80 just outside Reno, Nevada, might seem like an unusual sight—not to mention unsafe. But the two trucks doing this a couple of weeks ago were actually demonstrating a system that could make trucking safer and much more efficient.

While the driver in front drove his truck normally, the truck behind him was partly operated by a computer—and it stuck to its leader like glue. When instructed to do so, the computer controlled the gas and brakes to pull to within 10 meters (roughly three car lengths) of the truck ahead. The computer then kept the two trucks paired at this precise distance, as if linked by some invisible cable, until the system was disengaged. If the truck in front stopped suddenly, the one behind could have reacted instantaneously to avoid a collision.

It's time for a rethink on transport priorities and begin to invest in the infrastructure we need for tomorrow's economy - that infrastructure is roads.
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Another reminder why we need to spend more money on our roads

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Even in London:

More than half of Londoners commute to work by car or other light vehicles (including car pools). Transit accounts for about a quarter of commuting, while about 10 percent of commuters walk to work. Approximately six percent usually labor mainly at or from home.

And there's a reason for this - despite the supposed dominance of commuting to central London most of the region's employment isn't in that central business district (defined as the four central boroughs of Westminster, Camden, Southwark and Lambeth plus the City of London - ought really to include Tower Hamlets and Kensington as well):

Despite its strong CBD, the London area is anything but monocentric. Approximately 85 percent of London area jobs are outside the central business district.

The commuting we hear about (very loudly on assorted social media most mornings) is primarily folk travelling in from outer London and the fringe of towns on the edge of London. Yes it's important but this transport system has taken the lion's share of UK transport investment for the past decade or so. It is tome to rebalance and start investing in the transport network everyone uses - roads.

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Roads are much more important than railways - public investment should reflect this fact. It doesn't.

A bit of Britain's most important transport network

No matter how desperate the banana republic, the international airport is always a shimmering palace of perfume and croissants. It is only when you get out onto the dirt roads that you realise where you are.

The government seems determined to take the same approach to our own transport system: all the money gets sucked into vanity projects while transport used by the rest of us remains creaking.

And the biggest vanity project of all is Britain's rail network. The truth of the matter is that most of the public seldom if ever use a train - they are expensive compared to buses, inconvenient and crowded. But more to the point we prefer - and will continue preferring - to use the car. Just 2.4 million people - overwhelmingly in London - commute to work by train or tram. This is just over 9% of commuter journeys and compares to the two-thirds of journeys to work on the roads (by car, bus or motor cycle - adding in walking and cycling gets us to eight out of ten commuter journeys on the roads). Nearly half the population (45% in 2009/10) simply didn't use a train at all for any reason.

Yet whenever we talk about transport investment, we talk about trains. Billions is promised for new railways like HS2, for ever shinier stations, and for the polishing of existing (and admittedly creaky) networks. The need for rail investment is always hogging the headlines while the scandal that is our underinvestment in looking after the network of roads and pavements that carries 90% of journeys barely gets a mention. In 2012 the government invested £7.5 billion in the road network split roughly 50/50 between the strategic network and local roads. This compares to around £13 billion spent on railways (split between subsidising fares to the tune of £3.8 billion and the rail investment programme).

So Ross Clark is right, government in the UK is starving the everyday transport network - our roads - of funding while promising ever shinier new rail infrastructure (best part of £20 million on a new entrance into Leeds station being a fine example). Here in Bradford we need around £11 million a year to sustain our road network but are only spending about £6 million each year. With the result that the standard of the roads deteriorates year on year - the government responds by bunging one off funding for fixing potholes at councils when what is really needed is an adequate capital budget that would allow the proper maintenance of the road over a 25 year cycle.

The problem is that building grand railway schemes is popular with rail users. And rail users are mostly in London where the decision-making is done:

In 2009/10, 59 per cent of all rail journeys started or finished in London. The South East and the East of England were the regions with the next highest number of journeys but 65 per cent of journeys in the South East and 75 per cent in the East of England were to or from London.

And those train users - even in London - are more likely to be in their twenties or thirties and more likely to be in well-paid professional employment. The profile of rail users doesn't reflect the national demographic profile but the very different profile of London commuters (and higher income London commuters at that).

So we have a transport system that provides just 2% of journeys, costs the taxpayer over £13 billion a year, has incredibly low levels of customer satisfaction, is unreliable and still requires some other form of transport for people to complete their journey. How exactly is this the transport system of the 21st century? And why does it suck up so much of the attention (and investment) while the much more important road system isn't provided with the cash to even maintain it to a safe standard let alone improve it?
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The evidence suggests new roads won't generate more journeys.

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It has been a commonplace view - supported in the past with some evidence - that building new roads didn't work as a strategy to reduce congestion because those roads encouraged new journeys. Indeed part of the argument here was that congestion itself acted to discourage car use and encourage shifts to other forms of transport.

So, when the government announces £15 billion of road investment, we get a familiar outcry:

The government claims the investment will be transformational, creating jobs and reducing journey times. But this is wishful thinking, ignoring the inconvenient truth that new roads create new traffic while dogmatically clinging to the assertion that road building is good for the economy.

The problem with this view is that, while it seemed to be true as car ownership soared and alternative travel options stagnated, it was never the roads that created the journeys - rather those roads acted as a justification for getting the car, then getting the second car and latterly buying the kids a car. However, since 2006 (or thereabouts) the game has changed with journey miles reducing. Partly this reflects recession and the cost of fuel - although journey miles increased during previous recessions - but mostly it reflects the impacts of other changes in our world.

How road use has declined in the USA

As this graph shows (I know it's from the USA but let's remember it's a much more car oriented culture) over the last decade there has been a steady decline in the miles travelled by car in the USA. The data for the UK doesn't show the same decline but slight increases in vehicle miles here are almost entirely down to light goods vehicles (LGVs - all those delivery vans plus the ubiquitous white van). And there is nothing to suggest that upgrading roads results in increases in vehicle miles. Even back in 2003 studies showed that the induced travel effect of new roads was lower than previously thought and that induced investment and induced growth effects were larger. Put simply the economic benefits of new roads has been under-estimated while the environmental disbenefits were over-estimated - with the result that investment was moved away from roads.

Since 2000 UK public investment in railways has increased from £3.5 billion per annum to £7.5 billion compared to a rise from £2 billion to £3 billion (not even keeping pace with inflation) in road investment. And we should remember that while about a fifth of the population use trains a lot, most people seldom if ever use this form of transport (buses are much, much more important than trains). But everybody - whether they own a car or not - uses the roads. So any strategic investment in our road network is welcome especially since about half the proposed investment is going into looking after the roads we've already got - something that governments, local and national, have neglected for decades.

Among the collectivists of this world there's a view that the private car is a bad thing (I seem to remember some daft Labour MP suggesting private cars should be banned). I take a different view - the availability of a car in the drive means that people are liberated from the inconvenience of public transport and the tyranny of its timetables. Talking to a senior council officer the other day, I discovered that there are places not three miles from the centre of Bradford that not only have no trains but, after 6pm, have no buses into the city.

However, regardless of my preferences (and the preferences of most Britons), the fact remains that the 'roads create traffic' argument lacks good evidence - road investment doesn't increase trips and does increase investment and economic growth. As Aaron Renn commented in talking about the graph above:

In fact, what peak car means is that while speculative projects may be dubious, there many be good reasons now to build projects designed to alleviate already exiting congestion. 

Bear in mind that by speculative projects Renn means privately-built roads predicated on toll income not simply new roads. The assumption that traffic growth had no limits was always the weakness in the 'green' argument against new roads but it's clear that as technology - smartphones, Skype, e-commerce and so forth - eliminates reasons for journeys the numbers of those journeys declines. And road investment really does become a stimulus to growth when it focuses on reducing or removing the congestion that pollutes and plagues our lives.

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We already have a 'progressive consumption tax'...

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Bill Gates has responded to the Thomas Piketty wealth tax proposal by moaning that it's not fair. By which he means not fair on entrepreneurs and the like who invest their money in the betterment of the business or society:

Bill Gates frames his argument like this — if you have three wealthy people, one spending money on new businesses, one spending money on charity, and one spending money on luxury items for him or herself, the last one should be taxed more because the first two are contributing more to society.

Now I may be wrong here but Bill's idea already applies (at least in the UK where we have a value-added tax). And, even though there are fewer consumption taxes in the USA, that country gives generous tax breaks for charitable giving and exemptions for capital investment in new or existing businesses.

So, whatever we think of Piketty's policy solution (and I think it mad, bad and dangerous to know), it does have the merit of being an attempt to resolve what that economist sees as an essential challenge to our society and economy. Bill Gates proposal is one that favours 'charity' over consumption and investment over spending. And, this might be fine for very rich folk like Bill but for the rest of us it's a proposal for a tax on the pleasures of life.

So once more let's remind ourselves that we don't live to hoard resources, to invest in business or to have 'charitable' consumption put on a special pedestal. We live to consume.

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Driverless cars. Or why we shouldn't waste our money on high speed rail.

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I know I'm a bit grumpy sometimes but I still take the view that the essential limitation of public transport is that is takes you from one place where you don't want to be to another place you don't want to be. Unless you're a trainspotter. And the bigger the distance travelled the further those unwanted start and finish points are from where we want to be. The high speed railway may whizz us from Manchester to London in a breath but for 99% of travellers they don't want to go to Euston station which means an onwards journey, one that could take as long as the journey in the lovely fast train.

The plus side of public transport is that you don't have to drive the train, plane or bus and can sit back and admire the view (or, if you'd rather, get on with writing your novel, catching up with TV or even doing some work). So travel is less stressful, at least until you need to lug your bag across three platforms and up two sets of escalators and then cram yourself onto an overcrowded tube train filled with people who appear to be considering murdering you for having a large bag. And let's not imagine trying to get a bus!

The solution - where the technical investment should go - must be in combining the door-to-door advantage of the private car with the relaxation of good public transport. And this means that, instead of billions on a limited fixed rail system connecting a half-a-dozen places to London, we should be looking at driverless cars. Because these do solve those problems and hold out the opportunity for long distance road travel to be significantly more efficient.

Here's Sam Bowman speculating (not unreasonably) about the opportunity:

Instead of spending 90 minutes driving in and out of work each day, commuters will be able to catch up with a newspaper and a cup of coffee while their car drives for them. Or by working remotely for those 90 minutes, a 9 to 5 employee could increase their daily earnings by 20 per cent.

Coordinating with each other remotely, driverless cars will be able to avoid other traffic, maybe ending congestion entirely. Cars are parked for 98 per cent of their lives: to exploit that, driverless car owners could turn their vehicles into taxis while they’re at work, drastically reducing costs for everyone. Eat your heart out, Uber.

One third of transportation costs are labour costs, which will be eliminated entirely, and driverless lorries will be able to travel non-stop, making goods transportation much cheaper. Driverless freight transport may eventually outcompete rail on time and price entirely, especially if driverless-only highways are built that allow for much faster speeds, making railroads entirely redundant.

We're still a fair distance from this world (and we can add local 'pod' systems such as that proposed for Milton Keynes to the mix) but it is clear that investment - brainpower and cash - is going into the driverless car. And that it makes the £30 billion plus proposed for HS2 seem like a completely misplaced investment.

The problem we have is that the public transport lobby has become a combination of vested interest (rail and bus operators want more money going into railways and bus systems) and misplaced environmentalism. Over half our national transport budget is being spent on subsidising inefficient transport systems and even the capital investment is misdirected - for example, Leeds are planning to spend £250 million putting a bus on a string.

The solutions have to be how we make more efficient use of road space - automation leads to safer travel and to significant improvements in fuel efficiency (what we could call the 'peloton principle') - rather than, as is the case now, responding to congestion by seeking to reduce use. Driverless systems also solve another problem - they are good (by travelling in peleton) for long distances yet still provide the flexibility to allow for door-to-door travel.

Given that we aren't expecting to see HS2 built for at least 15 years, it seems a better bet to line up behind private investment in road transport to get systems that respond to real need rather than narrowly-focused arguments about rail capacity.

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Leaving Bradford? Your views please

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OK, I most of you aren't from (or especially interested in) Bradford but for those who are there's a blog post at the Bingley Rural Conservatives website about whether Shipley, Bingley and Keighley should leave Bradford:

There are undoubtedly differing views about this idea – some feel that replacing rule from Bradford with rule from Keighley isn’t necessarily an improvement while others feel that the dominance of the old City over the wider District leads to misplaced priorities. Phil Davies is very concerned about planning decisions but there must be equal concern about the manner in which Bradford Labour has implemented its cuts to services.

Just recently, during the budget discussions, Labour proposed closing five children’s centres – every one in the Shipley and Keighley constituencies and every one in a ward with Conservative councillors. The same goes for spending on highways, on youth services and on regeneration – the focus is on the City and especially the City centre.

Happy to accept views from anywhere - politeness is, as always, urged on you!

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Further evidence that government and investment don't mix...

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Via the fabulous Leeds Citizen blog:

An investment fund set up by local councils to overcome “market failure” in the banking system and help kickstart the region’s economy looks like it’s having difficulties of its own.

And the difficulties are that, a year on from starting the fund:

...while there has been “a degree of interest”, no funding applications have been approved yet.

So the Councils in West Yorkshire who run the fund are trying to recruit expertise from the banking sector to try and make the fund work. The budget is £120,000 - the good investment bankers aren't going to spend time in Leeds for that sort of pittance!

Another 'we can do better than the private sector' scheme. And another failure!

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Larry Summers embraces the New Fascism

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“All within the state, nothing outside the state, nothing against the state.” Benito Mussolini

There's been a deal of comment about a little spat between Larry Summers (who is I discover a top American lefty economist chap) and George Osborne, Britain's Chancellor of the Exchequer. The debate between the two can be summed up as "hey you, yah boo, I'm right and you're wrong." Except it wasn't as witty or intelligent as that. It came across as a rather pompous version of an exchange on Question Time (and just as edifying).

However, I was curious about Mr Summers opinions and what he supposes we should be doing differently. Essentially the gist is here:

"It’s tragic that we are bequeathing to our children a deficit in the form of massive deferred maintenance on our infrastructure. If at a moment when we can borrow money for 30 years in the 3pc range, in a currency we print ourselves and the construction unemployment rate is in double digits, if that is not the moment to fix Kennedy airport, when will that moment ever come?"

Rather than have a money deficit, we have instead an 'infrastructure deficit'. Which supposes two things - we actually need that infrastructure and, more importantly, government borrowing is the only way to provide it. At the heart of this argument is a belief (which has nothing at all to do with macroeconomics but is absolutely an ideological position) that, in Isabella Kaminska's words:

...the only productive use of capital is increasingly through government spending.

This ideological position - the conviction that the only good investment is through government - is a core tenet of what I call the 'New Fascism'. This is a philosophy that adopts the same assumptions about society as Mussolini and his colleagues did in designing the Fascist state - for draining the Pontine Marshes read floating airports, high speed railways and freeways rammed through previously attractive small towns.

If (and this is a big question) it is right to raise government borrowing, why does Summers surmise that spending it without return on expensive and unproductive infrastructure programmes is better than cutting taxes on businesses and consumers? If businesses have more money will they not invest that money? And will that investment not generate a return - a real one - unlike those grand projects Larry likes?

And if we cut taxes for consumers won't they spend that money buying the things that the businesses are making? Perhaps on houses, maybe on cars? Isn't that a rather more efficient approach to stimulus that tying loads of borrowed cash up in incompetent government procurement programmes?

The truth is that Larry Summers is a New Fascist - wanting a planned, directed, controlled, state-led system rather than an untidy, exciting and people-led system.

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Detroit and Liverpool: thoughts on urban renewal

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We've all seen parts of the crisis in Detroit - the bankruptcy of the City government, the abandoned houses you can buy for a few dollars (although nobody does) or the endless chatter about racial strife and political corruption. Not to mention crime, violence and urban decay.

And this is nothing new. People have been commenting on the problems of Detroit since the 1950s with each generation of observers seeing the crisis through the prism of that age's prejudices. And during this time Detroit continued to decline. Fingers are pointed at 'white flight' (let's call it 'jobs sprawl'):

One consequence of this dysfunction has been a severe case of “job sprawl” within the metropolitan area, with jobs fleeing the urban core even when employment in greater Detroit was still rising, and even as other cities were seeing something of a city-center revival. Fewer than a quarter of the jobs on offer in the Detroit metropolitan area lie within 10 miles of the traditional central business district.

The result of this is that Detroit's population has dropped from 1.8 million to just over 700,000 with, inevitably, the better educated, the more entrepreneurial and the more ambitious departing the city.

Everyone points to different urban pathologies as the cause, partly guided by ideological prejudice and partly by whatever is academic flavour of the month in urban studies. Yet we never point the finger at 'regeneration' as the heart of Detroit's problems preferring instead to speak of industrial decline or even Detroit as a sort of municipal buggy whip manufacturer.

So let's look at the 'regeneration' efforts:

For decades it has done the opposite, championing a growth policy that mirrored the city’s overly-centralized private sector. It has gambled—with tax breaks, subsidies, and extensive eminent domain—on stadiums, casinos, office towers, factories, and a downtown monorail, only to find that these didn’t produce nearly the anticipated benefits.

We see here the classic inward investment approach - focus on big 'transformative' projects and provide incentives to developers and favoured businesses. And these inward investment strategies were matched by brutal clearance and community redesign:

Throughout the 1950s and 1960s white mayors steamrolled roadways through functioning black neighborhoods like Black Bottom, and housed the displaced in dangerous, high-rise government projects. Funding for this and other “urban renewal” came from federal programs like President Johnson’s Model Cities, and using Detroit as a flagship, was meant to modernize aging urban communities. 

There's no doubt that racism played a part in Detroit's failure but far more important to that failure was the misplaced belief that the solution - always and every time - lay in securing external finance, public or private, to be directed by the City government or its agents. Every time there is a crisis, out comes the begging bowl and up goes the cries for "more resources" or for "more investment".

Here in England we have been shielded from part of Detroit's problem - rightly or wrongly, local government here doesn't have the unrestricted borrowing power of a US city. But the pattern of urban decline is little different. Take Liverpool, once a great city of empire, now a shadow of its past. This isn't to detract from the efforts - some more successful than others - to reinvent the city and to create a vibrant and dynamic cultural and social heart to Merseyside. But Liverpool still lives with that historic decline:

There are persistently high levels of deprivation in the city and Liverpool remains ranked as the most deprived local authority area in England on the ID 2010, with its position unchanged from the 2004 and 2007 Indices. 

All that 'regeneration' hasn't prevented Liverpool from remaining poor - just as was the case with Detroit. Millions in regeneration funding, economic development cash and a myriad of 'interventions' have left Liverpool just as it was in 1980 - the poorest city in England. And still the clearance continues:

...Liverpool City Council’s planning committee gave the go-ahead to a two-phase hybrid application from housing association Plus Dane Group for the clearance and redevelopment of 5.97 hectares of the Victorian-built terraced houses in the Welsh Streets area, which is part of the Princes Park regeneration zone.

Not only does this approach divide communities and undermine the sense of history in a place but it repeats past errors - and mirrors Detroit's errors - by seeing social investment as a parallel to economic development. People may have a slightly newer house (or some people at least) but they still don't have good prospects of personal economic advancement. Liverpool - despite the investment - remains poor.

And people leave. Since its peak in 1931, Liverpool's population has declined by nearly 50% as people have moved to places with better prospects - some not so far away but others far, far away from the Liver Birds. This is pretty similar to Detroit. Yet we still hear the plaintive cries of the urban leader:

Deputy Mayor, Councillor Paul Brant, said: “You cannot cut your way to growth. In Liverpool we are innovating and investing in schemes that will deliver jobs and economic benefit, whether it’s using our borrowing power to kickstart developments, or to generate new income streams as we have done by purchasing Everton FC’s training ground.

Look at Detroit and ask whether this approach - an approach that has attracted plenty of government cash to Liverpool over the years - will do anything to transform the city? Or, when the next Index of Multiple Deprivation is published, will Liverpool still be England's poorest city?

The sad truth is that the 'regeneration' policies we follow - and continue to follow nationally and locally - are part of the problem not part of the solution. Waiting for the Whitehall fairy to wave the magic funding wand is a fine strategy for council officers and the trooping backwards and forwards to London for meetings gives an illusion of activity but it doesn't help the city, whether that city is Detroit, Liverpool or my city of Bradford.

Here we're rabbiting on about being a 'producer city' which suggests a commitment to business creation and innovation. But, in reality, this is simply repackaging the same old approach - big grand projects that will 'transform' and much about how public investment will lead or draw out private investment. Bradford's not as poor as Liverpool but we have adopted the same strategy as that city - a strategy that echoes the failed approach of Detroit.

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Business & politics - why Heseltine is wrong

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There's a sort of conservatism - let's call it the "business right" - that sees politics through the prism of a thing called either "business and industry" or else "business and commerce". This viewpoint produces familiar comments such as:

"We need more businessmen in politics"

And:

"Government needs to be more businesslike"

Or indeed any number of variants on this theme where the essential premise is that "business administration" is somehow a superior construct to "public administration". And, this being so, that we have only to introduce such administration to government to bring about a miraculous transformation in the efficiency and effectiveness of public services.

Moreover, by bringing in business people, we get a sudden rush of initiative, enterprise and other fabulous business virtues. Thus we get boards established, run on corporate principles and populated by private sector folk - the holy grail of public services and public investment being "business-led" is met. And we rejoice for it will be but a short while before the benefits of such initiative is felt by all!

This is the essence of Michael Heseltine's politics. The lion-maned, millionaire businessman (and politician) does not believe in free markets, free trade and free enterprise. Heseltine believes in "business", in industrial strategies, in subsidies, in picking winners. Above all, Heseltine believes that government should harken to the cries of the business establishment and fund their schemes (while putting those business 'leaders' on the boards that administer those programmes).

And it seems like the Coalition plans to adopt Heseltine's approach:

"In line with Lord Heseltine’s report, today we have also announced a package of wider support that is a big vote of confidence for our industrial strategy, particularly the aerospace, automotive and agri- technology sectors. This support not only gives businesses certainty, but shows the Government is determined to back those sectors where Britain can deliver and compete on a global scale in partnership with industry."

Weirdly, Heseltine pretends that all this is somehow radical, new and change-making. It's almost as if the old interventionist has written George Osborne's script for him:

 “We asked Lord Heseltine to do what he does best: challenge received wisdom and give us bold ideas on how to bring government and industry together. He did just that, and that is why we are backing his ideas today.”

I fail to see anything at all in Heseltine's proposals that "challenge received wisdom" or indeed do anything but repeat what Heseltine has proposed off and on since the 1970s. Hand control of planning to unelected boards, pour money into regeneration, create new regional quangos and define a privileged set of industries that benefit from government largess (chiefly the property development industry).

In the North we have had thirty years and more of this 'partnership with industry'. It hasn't delivered salvation - indeed with each passing year the North slips a little further behind the rest of the nation. It's true that some already successful business folk get to sit on grand boards - the latest being Local Economic Partnerships - but these boards achieve little even when (as with the Regional Development Agencies) they're given loads of money to spend.

Challenging received wisdom would have meant a very different approach. Rather than a snuggly little relationships with the grandees of big businesses, we might work instead with the real enterprise of millions. Instead of a grand board proposing sweeping nonsense about "green industry", "creating the technologies of the future" and other such tommyrot, we might have teams of coaches working with real people in the communities of the North. Helping people realise their aspirations, navigating start up businesses through the thickets of red tape, linking them to networks of other businesses and building a new economy on real enterprise rather than random guesses about "those sectors where Britain can deliver and compete".

This isn't about whether GDP or GVA grows but more about helping Mary, Steve, Iqbal and Samara to get their idea to work. It's about helping a bunch of young people without great qualifications to achieve something of their aspirations - whether that's to be a singer on a cruise ship or to run a successful computer repair business.

The "business right" - rather like the Fabian left - does not recognise free markets but only business markets. We're in a 'global race' rather than a peaceful, pleasant exchange of value with others. Countries, regions, cities, even neighbourhoods, 'compete' - that Porterian 'dog eat dog' philosophy dominates thinking. At no point do we consider that the object isn't actually competition but the successful operation of comparative advantage.

We have a government set in the belief - the hubris - that there are a set of levers that, if pulled in the right pattern, will result in success. And the rhetoric of liberty, of allowing people the space to succeed, is pushed aside in favour of a business-led quangos and investment in privileged sectors.

I have only one prediction. Just like every other time we've followed Michael Heseltine's advice, every time we've adopted "business-led" regional strategies, these policies will fail.

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