 | 'Take away the British parliament, government and the civil service and much of what drives London's economy would collapse. All the comfortable, well-paid, middle-class jobs in quangos large and small would either wither on the branch or disappear completely as they shifted to wherever the power lay.' George Rosie in the Sunday Herald, 12 th March 2000. |  |
If the London edition of the Daily Mail truly represents Middle England, then Middle England is working itself up into a strop about goings-on north of the Border. Last week, Ann Leslie, the paper's star writer, launched into an extra ordinary sneerfest about our shiny new Scotland. Her metropolitan disdain knew no bounds. The Holyrood par liament building was a "ridiculous monument to Scotland's national identity", the Gaelic language was the province of "be-sandelled and bearded former polytechnic lecturers" and so far we have been running our own affairs without "any degree of competence".Devolution, Leslie says, has proved to be a "disastrous experiment", laced through with corruption and sleaze which will have her own Scottish ancestors "weeping in their graves". The headline to her piece said it all. "As the Mail's chief foreign correspondent, I have visited 70 countries," she declares, "but my trip to Scotland has been one of the saddest" Crikey! Is Donald Dewar presiding over the end of civilisation as we know it? Could Lord - call me Sir - David Steel be the Antichrist? Are the four horsemen of the apocalypse about to gallop out of the hole at the bottom of Holyrood Road?
Most of Ms Leslie's meanderings are easy enough to dismiss. They are the reactions of a middle-aged, dyed-in-the-wool Tory fretting over constitutional change. But there is one strand in her argument I find irritating and that is the notion that the rest of Britain, particularly Scotland, only manages to get by on handouts from London. In the light of devolution's somewhat beleaguered status at the moment, I felt it was time to dust down its core charge - that the real "subsidy junkies" live in the south east of England. It seems the myth needs to be "Scotched" once more.
As Leslie sees it: "Southern England is the chief generator of tax for the United Kingdom overall (which happens to subsidise Scotland to the tune of at least £5 billion a year)." I think of this argument as Cockney economics. And currently you are as likely to find its practitioners on the left as the right. Mayoral candidate Ken Livingstone is one. So is Frank Dobson's running mate, Trevor Phillips.
In the run-up to London's elections here's what they'll be telling us: London is now so dynamic, so powerful, so rich, so influential and so awesome it is "carrying" the rest of Britain. It is the "engine" of the British economy. In this Cockney cosmogony, the car-builders of the Midlands, the steel-makers of Wales, the petrochemical producers of the north east and the whisky distillers and oil extractors of Scotland count for next to nothing. Indeed, some Cockney economists now argue London would be much better off without the rest of boring old Britain, particularly the northern parts. They see London (with the south east attached) as a Singapore-on-Thames. Hong Kong with resident royals. A 21st century city state with an economy bigger than Sweden's or Switzerland's and a future which will thrive in the glittering world of financial services, showbiz, movie productions, designer stuff - and not much else.
According to this theory, were it not for the dazzling entrepreneurs who labour inside the M25 Britain would long ago have slid under the North Sea. As they see it, the rest of us have been living high on London's handouts for years. Now London wants its money back - and soon. Demanding refunds from the rest of Britain - as per Mrs Thatcher and the EC - will, it seems, be a key role for the new directly elected Mayor and his Cabinet.
Well, there's nothing wrong with playing to your electorate. That is what Red Ken, loyal Dobbo and the rest will be doing until May 4. It's all good knock-about stuff, even if it does irritate Her Majesty's subjects outside the M25. But as the Cockney economists have been running off at the mouth for some time now, and will go on doing so for some time more, it seems like a good idea to see how their claims stack up.
And, of course, they don't. The point they seem unable - or perhaps unwilling - to grasp is the extent to which London's economy is underpinned by the vast apparatus of the British state. Its ramifications are awesome and they are overwhelmingly centred on London and the south east.
With the exception of the Welsh and Scottish Executives, every great department of state is located in London. The Ministry of Defence, with its long tail of armouries, research establishments, barracks, training schools etc, is particularly strongly rooted in and around London. Between them, these government departments employ many thousands of people and spend billions of pounds of taxpayers' money, most of it in London and the south east.
What is extraordinary is how few Londoners seem to realise this. Even the well informed are ignorant of the extent to which they are subsidised. They are largely unaware of the apparatus of the publicly funded state that surrounds them. They know about 10 Downing Street and vaguely of the big, grey government buildings in Whitehall, but that's about it.
The huge panoply of public authorities, executive agencies, research councils, regulatory bodies, tribunals etc - not to mention the apparatus of English law - somehow fails to register. They are just part of the urban landscape. Nobody ever questions whether any might do their job as well, or better, elsewhere in the UK.
Why, for example, does the British Standards Institution have to be located in London? Is there any reason for the Charity Commission to be inside the M25? Why should the Office of Gas Supply not be in Manchester? Could the Housing Corporation not be located somewhere in the Midlands? Wouldn't it make sense to have the Horserace Totalisator Board (the Tote) in Cheltenham or Newmarket? Given that most of England's jails are scattered all over the country, why do the men and women who run Her Majesty's Prison Service have to be in the metropolis? And so on.
When pressed, all of these organisations - and there are more than 200 of them - tend to come up with the same answer: to be near government. Take away the British parliament, government and the civil service and much of what drives London's economy would collapse. All the comfortable, well-paid, middle-class jobs in quangos large and small would either wither on the branch or disappear completely as they shifted to wherever the power lay.
Even that brand new, if now somewhat tacky, institution the National Lottery is run from London. Not only is Camelot itself London-based, but so are the various bodies which regulate the inward and outward flow of lottery cash. The National Lottery Commission, previously known as Oflot, employs 37 people at its Victoria headquarters. The National Lottery Charities Board, also in Victoria, employs 86 at its headquarters. Much of the lottery money flows through the Millennium Commission, which has a staff of around 100 in London to ser vice the decisions of the nine commissioners.
At 200 or so the job numbers are insignificant - although Truro, Macclesfield or Falkirk would be delighted with them - but their location is not. The National Lottery may be new but the controlling instinct is as old as the English state. England was metrocentric long before the Unions of 1603 and 1707. It would never have occurred to the powers that be to run and supervise the National Lottery from anywhere but London.
Take, for example, the BBC, an organisation from which Ann Leslie occasionally benefits. The BBC is funded entirely by a compulsory tax on television watchers. At the last count - 1998-99 - we were taxed a whopping £2.2bn to pay for the corporation, which is a big annual cake by anybody's standards. The BBC does offer a few slices to what it calls the "nations and regions" of Britain, but the biggest, sweetest slice by far goes to London. That is where the decisions are made. That is where the big money is spent. It is poured into the big radio and tele vision broadcasting centres in Portland Place, Shepherd's Bush and the White City.
Nor is that all. Her Majesty's government chips in as well. The BBC World Service is funded by the Foreign and Commonwealth Office by a grant-in-aid of £160 million a year - almost as much as the Holyrood parliament building will cost. And where are our millions spent? In London.
And, of course, as well as the BBC per se there is the great swarm of "facilities houses", production companies, camera operators, lighting firms, costume houses and mobile canteens that thrive on the BBC's largesse. They come and they go, but they employ hundreds, maybe thousands of people. And they suck in a lot of talent from all over the UK.
Now, I am not suggesting the BBC should be dismantled and moved to Birmingham, Glasgow or Manchester, although the folk in these cities would no doubt welcome the suggestion. Or that the television licence - of which I deeply approve - should be scrapped. But I do think that when public spending is being discussed, even by the likes of Ann Leslie, the billions spent by the BBC over the years should be brought into the equation. And London should have the decency to acknow ledge that the BBC is yet another piece of public funding from which it benefits hugely.
It might also consider the virtual stranglehold London has on the UK's, and particularly England's, publicly funded art galleries and museums. The list is long and the annual funding is strong - The National Gallery (£18.6m), the National Portrait Gallery (£4.6m), the Tate Gallery (£18.2m), the Wallace Collection (£1.8m), the British Museum (£32.9m), the Natural His tory Museum (£26.9m), the Science Museum (£21.2m), the Victoria and Albert Museum (£29.1m), the Commonwealth Institute (£0.6m), the Imp erial War Museum (£10.5m), the National Maritime Museum (£10.1m), the National Army Museum (£3.2m) and the Royal Air Force Museum (£4.8m).
And then, of course, there is the new British Library at King's Cross. The sorry saga of that project makes Miralles' Holyrood look like small beer. After years of muddle, techni cal problems and soaring costs the building finally came in at £511m, almost three times the original budget. The library now runs on an annual grant of £83.2m and employs around 2400 people.
One way or another, we are currently paying London's galleries and mus eums around £265m every year to cover running costs and acquisitions. Londoners see this as their due. "This is the capital, after all," was the rationale offered by one politician.
But London's tax-supported cultural scene is important to the city's prosperity. It may even be crucial. A survey published just last week of 400 top businessmen by the London Chamber of Commerce and Industry showed 75% of them regarded London's "cultural diversity" as one of the main reasons they preferred the city as opposed to other European capitals. In other words, without the artistic talent sucked into the city by huge amounts of public spending, London would be a lot less attractive to big business.
Where London fails to score, as all the mayoral candidates are reminding us, is transport. Getting around the Great Wen remains hard but is getting easier. And so it should, given the amount of our money which has been spent, particularly shuttling folk into the one-time tax-break enterprise zone known as Docklands. According to London Transport, extending the Jubilee Line from Green Park down to Docklands cost a cool £3.5bn. Only £400m of that was private money. Nobody seems quite sure how much it cost to extend the Docklands Light Railway across the Thames down to Lewisham.
In her whinge about Scotland, Ann Leslie makes the now familiar claim that "southern England is the chief generator of tax for the United Kingdom overall". On the face of it this is true - but only on the face of it.
One of the reasons why Lon don and the south east generates so much tax revenue is because it is rich in corporate headquarters. Which means that not only is it home to the corporate world's big earners and big tax payers, but it is where the companies pay their corporation taxes. Which in turn means the tax money generated by, let's say, BP's oilfields off the Scottish coast are attributed to London.
Now given the number of British companies big and small which have their headquarters in London but make their money all over the UK, that is a massive distorting factor. It makes London seem much richer than it is. And it makes the "economic regions" of Britain seem much poorer than they really are.
And where there are corporate headquarters there are all the ancillary service industries that headquarters need - law yers, accountants, advertising agents, tax experts, designers, architects, graphic artists, prin ters, messenger services, even high-toned caterers for board room lunches and dinners. London is full of them. They proliferate in the interstices between the corporations. And they provide work, some of it very well paid, for many thousands of people.
Take public relations, for example. At the last count, in 1998, the Public Relations Consultants Association had 150 members on its books employing around 10,000 people and doing more than £300m worth of business. At least 81 of these companies - 54% of the UK total - are based in London. "There are two main reasons," says Chris McDowell, chief executive for PRCA. "The public relations business is dominated by American ownership and when the Americans think of Britain they think of London. And when PR firms say to their new clients where do you want us to be, 90% of those clients say London." Whatever the reason, the PR business in London is booming. McDowell calculates it is growing at the rate of around 20% a year, with a long way to go. And the fastest expanding sector is "public affairs" - the political lobbying firms. By their very nature these firms have to be where the politicians are, in London.
London is one of a handful of great, world-class cities. Only New York and perhaps Tokyo have the same kind of resonance and global clout. As such, London needs and deserves to be supported by the rest of Britain. All that the rest of us - Scots, Welsh, Northern Irish and "provincial" English - ask is that Londoners should be aware of just how much they owe the hard-pressed taxpayers who live outwith the M25. The folk of London and the south east are, in fact, the subsidy junkies of Britain par excellence. It is time they acknowledged the fact.
But I am not holding my breath. Nor should you. Metrocentricity is a profound affliction, as the utterances of the London mayoral candidates and the likes of Ann Leslie demonstrate. It is hard to shake. It may well be incurable. Expect to hear much more of it in the years to come. It could result in the demise of the United Kingdom.
12 th March 2000
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