Mind the Economic Gap
Posted May 12, 2014
Keywords: Demographics, london, urban inequality, wealth and poverty, Politics & Legislation, Economic Sustainability, Leadership & Management, Finance, Urban Planning, Populace, Economy, Urbanism
Read the economic news and you might imagine Britain is entering a new era of optimism after six years of depression. House prices are booming again, and even the most cautious commentators are predicting renewed economic growth.
Outside London and a few regional success stories, that optimism evaporates rapidly. More than a decade and a half after the former prime minister Tony Blair talked of ‘bringing Britain together’, the divides are starker than ever and many of the efforts of that era to regenerate the most deprived communities have proved little more than sticking plasters.
Take Tredegar, a town like many in the South Wales valleys that has lost its industrial base and has struggled for decades to find a future. Too far from Cardiff to be a commuter town, its legacy of joblessness and ill health stands testament to the failure of successive waves of public policy. To quote a recent report:
Smoking levels, obesity and alcohol abuse are amongst the highest in Wales, as are mental health problems with one in eight adults taking prescription antidepressants. There are high cancer rates, linked to poor lifestyles and late presentation of symptoms. Suicide rates are also comparatively high.
That extract was from the summary of the ‘deep place’ study of the town by CREW, the Welsh regeneration think tank. With a few tweaks, it could be a summary of many of the places across the UK that are increasingly cast adrift from support and opportunity.
The Westminster government no longer sees it as its business even to understand such challenges, let alone address them. The Welsh Assembly Government is well-meaning, but lacks powers and could be much more confident in using those it does have. In too many places we are left with a pastiche localism that demands that those facing the biggest challenges should do most to help themselves.
Yet in the absence of confidence or courage at national level, local action can sometimes be the only tool in the box.
The CREW study is important because it recognises this and says what kind of local action is needed, but puts it in the context of the need to continue pressing for a change of culture at national level. It points out that welfare reforms have taken around £1 billion out of the Welsh economy: simply to assume that private enterprise will make up the difference is like the ancient Pharoahs ordering their slaves to make bricks without straw.
But national policies could be much more effective if they supported local action, CREW argues. It calls for a focus on the ‘foundational economy’, the four sectors of food, health and social care, energy, and e-commerce. These are areas where we could keep jobs and money in places like Tredegar by building localised supply chains and changing our patterns of spending and procurement.
Food and energy in particular are areas where Britain has become dependent on an oligopoly of big supermarkets and energy companies, and where breaking their stranglehold could create new networks of opportunity. The Local Economic Blueprints drawn up in Brixton, Totnes and Herefordshire show how this could begin to happen.
And if you don’t think we need it, and should just wait for the proceeds of recovery to trickle down, bear in mind that even in a city like Leeds, nearly one fifth of jobs pay less than a living wage. That’s neither just nor sustainable, and you can’t simply patch a divided society together with a network of philanthropy and foodbanks.
Local economic development has to be about much more than spreading the proceeds of growth slightly less unfairly, or scattering a few more crumbs from investors’ tables. As I posted last month, we need to recognise the real investors in our cities. That requires a shift of culture, but it demands a shift of economic power too.