Spatially Rebalancing the UK Economy: Towards a New Policy Model?

Abstract

Stimulated by the global financial crisis of 2007-08 and the Great Recession that this triggered, the notion of 'rebalancing the economy' has risen to prominence in UK policy discourse. An important element of this new 'rebalancing' mantra is a concern that the national economy has become too dependent on and dominated by London and the South East, whilst the rest of the country is performing below its potential. 1 As Prime Minister David Cameron noted upon assuming office in 2010:Our economy has become more and more unbalanced, with our fortunes hitched to a few industries in one corner of the country, while we let other sectors like manufacturing slide. Today our economy is heavily reliant on just a few industries and a few regions -particularly London and the South East. This really matters. An economy with such a narrow foundation for growth is fundamentally unstable and wasteful -because we are not making use of the talent out there in all parts of our United Kingdom. We are determined that should change (David Cameron, Prime Minister, 2010).Part of the Government's policy is the aim to promote a 'northern powerhouse' to rival London and the South East in scale and scope:The cities of the north are individually strong, but collectively not strong enough. The whole is less than the sum of its parts. So the powerhouse of London dominates more and more. And that's not healthy for our economy... We need a Northern Powerhouse too. Not one city, but a collection of northern cities -sufficiently close to each other that combined can take on the world (George Osborne, Chancellor of the Exchequer, 2014). However, the UK Government is also anxious that the growth of London is not hindered or compromised in any way. As a recent UK Treasury statement put it: Successful rebalancing will not be achieved by pulling down the capital city, but by building up the Northern Powerhouse and creating strong city regions, led by powerful, democratically elected mayors, that benefit from investment in world-class transport and have the support they need to foster innovation (HM Treasury, 2015, p. 70).

Territory, power and statecraft: understanding English devolution

“…They find that, despite calls for a common theoretical language on local and regional development, there are 'highly variegated international practices and experiences' (p. 47). Martin et al (2016) examine English governance by examining the persistence of spatial inequalities and the challenges of rebalancing the economy. They do so from a spatial economic perspective.…”

“…Of the 52 countries they examined, two-thirds have witnessed an increase in their levels of regional authority. Such restructuring is viewed by commentators as a response to a variety of pressures including managing distinct subnational identities and cultures (Tang & Huhe, 2016), mitigating economic diversity (Martin, Pike, Tyler, & Gardiner, 2016), relieving the political and bureaucratic burden associated with centralization (Organisation for Economic Co-operation and Development (OECD), 2015), and changing political views on the contribution of decentralization to achieving economic and social policies (Hambleton, 2015;Jessop, 2016). In recent years the UK has witnessed far-reaching devolutionary reforms to Scotland, Wales and Northern Ireland and the introduction of an elected Mayor and Assembly in London (Flinders, 2009;Sandford, 2016b).…”

“Northern Lights:” An Assessment of the Political and Economic Challenges Facing North East England in the Context of Greater Scottish Autonomy

“…In addition, however, it represents a response to more long-term concerns about a political system in the UK that has traditionally been viewed as excessively centralized compared to similar European nations. Hence, in the UK, the proportion of tax set at local level is equivalent to only 1.7% of GDP, compared to nearly 16% in Sweden, 15% in Canada, nearly 11% in Germany and 6% in France (Martin et al 2016).…”

Overcoming barriers to institutional integration in European second-tier urban regions

“…Second, secondtier cities tend to have fewer urban functions than their population would imply (BBSR, 2011), making them likely to rely on functions located elsewhere to increase their mass and diversity; and their surroundings are indeed functionally better served than in firsttier urban regions (Cardoso & Meijers, 2016). Third, especially in countries dominated by large capitals, second-tiers tend to be weak interlocutors when dealing with higher levels of government, so joining forces to become a larger demographic and economic player may give them a stronger voice and avoid being overlooked by policy (Martin, Pike, Tyler, & Gardiner, 2015).…”