Contrary to what Consul Boris says, the capital is an unsustainable subsidy-junkie
Civis Romanus sum — I am a citizen of Rome. This cultural identity transcended ethnicity, geography and politics by the time Roman power was at its peak. Modern London’s own ethnic badge states confidently, “I am a Londoner”. The city’s ambition has all the hallmarks of a ship in full sail on an ocean of provincialism. Governed — appropriately — by a classicist, London views itself as nothing less than the New Rome to which all roads lead. In truth, London is enjoying little more than a late-Soviet bloom and is becoming a relic.
It was probably 1976 when Communism reached its ideological and political zenith. Yet, what had seemed like an unstoppable force throughout a decade characterised by many questionable fads and dreadful fashions collapsed ignominiously a mere 13 years after its heady peak. Killed by complacency and mis-allocated resources, its dogmatic corpse was swept into — Leon Trotsky’s words — the dustbin of history.
Undermining London’s transnational character is the fact that the city has become a vast subsidy junkie where Soviet-style inputs support the entire edifice. Without annual fixes and long-term capital injections London’s future is more Moscow-on-Thames than a new imperium. Nowhere has this become more apparent than in the city’s bloated transport plans.
Take Crossrail. How much was this £15bn project driven by the lobbying of Canary Wharf bankers seeking their own direct route to Heathrow Airport? At Heathrow Airport itself the over-leveraged owners dream up ways to spend another £14-18bn on a third runway.
Consul Boris, however, is less keen on that option and prefers to erect his own Trajan’s column in the shape of an entirely new airport, which will merely consume £50bn of other people’s money so that there are more direct flights between London and Kazakhstan.
At least some of Westminster’s proconsuls have finally asked some hard questions about HS2. Justified as a Watling Street on tracks for Imperial London, the £50bn project (or is it £80bn?) seems now to resemble little more than a ZiL lane for some northern MPs. The cost of the £600m Cheshire diversion allows the Chancellor’s Tatton-based successors to enjoy the speed of getting there without noisily trespassing on voters’ gardens.
Crossrail 2 remains an un-costed idea with an unknown route but will doubtless require another £15bn infusion to get it rolling. Meanwhile, ThamesLink is halfway through a nine-year, £6bn splurge as it seeks to connect those great satellite towns of Bedford and Brighton. The apex of these fixes took place in the summer of 2012, with a two-week £12bn Olympic circus for the Metropolitan mob.
Network Rail knows how to play the game of tractor-production statistics with élan. It regularly points out that rail traffic has increased 40% in the last 10 years while, with equal consistency, it fails to note that its annual subsidy during that same period rose 283%, from £1.2bn to £4.6bn. The problem with this focus on outputs is that expenditure becomes self-reinforcing. That is, additional expenditure increases traffic flows, which in turn precipitates the need for even greater additional investment in new terminals, tunnels and tracks. It prompts a certain amount of nostalgia for those old lectures in Soviet Economics, elements of which can still be found on courses at the LSE.
Whether we focus on relative or absolute numbers, London and its environs overwhelm. In 2010-11 London received £774 per head on transport spending compared with the next highest region: £337 for the North West and £328 for the East. The Mayor’s cycle plans alone are the equivalent of the entire transport budget for Leeds in the past decade.
Kit Malthouse, the Deputy Consul at City Hall, in a recent Radio 4 interview, claimed that the rest of the country benefits from these grand infrastructure schemes. However, he ignored the value-added that accrues to London and the southeast, while Midlands metal bashers hammer away for the few remaining economic benefits. Not unlike the Scotch whisky industry in fact, which may be based in Scotland but is taxed in London. One might have thought that the British had outgrown archaic ideas of empires built upon cheap labour, access to raw materials and inequality.
Of course none of this would matter if London’s region-wide economic might brought national benefits in much the same way that Aberdeen’s oil industry alleviated much of the UK’s economic trauma throughout the early 1980s. Instead, technology is rendering London’s key industries obsolete. Within a generation Canary Wharf’s office towers will likely have about as much relevance to the British economy as a Clydeside shipyard.
For sure the day may come when all those shiny plate-glass, white-collar factories are transformed into houses, workshops, galleries and free schools. The same happened to mills in Bradford, warehouses in Newcastle and factories in Glasgow, but not without a considerable amount of grim economic adjustment, the effects of which still shape the outlooks of these previously proud, but ultimately provincial cities.
Such a transformation also suggests that the hard core of London will likely become more a citadel and less a broad inclusive city. It also points towards the death of the suburbs. Those suburbs have long fed central London with its half million — heavily subsidised — daily commuters, workers and producers, but they too are under threat from technological advances and shifting social trends.
Moreover, given London’s accent towards absolute headline numbers and suburbs extending deep into the Home Counties, a suburban decline will have a devastating impact on the city in which most of them live. Like the planned economy, the era of the suburban dream is passing and London appears ill equipped to adapt.
Of course, London’s vested interests will ensure increased transport fixes to bring more people within its orbit and to maintain the illusion of substance. Technology, on the other hand, suggests everything is going the other way. Jones Lang LaSalle noted recently, “Footloose businesses — particularly in the technology sector — rely more on being close to their clients and competitors, than they used to…”
Really? Surely technology has the opposite effect? After all, the India-based analyst, looking though the accounts of a Singapore-based company with operations in Brazil and Nigeria, is physically distant from his clients and competitors but technology has already shrunk his or her world dramatically. Even Jones Lang LaSalle concedes that for every technology start up centred on Shoreditch there is another TMT giant downsizing. In short, the trend to disperse is only beginning.
By the early 1980s the UK was heavily subsiding failing shipbuilding, coal, steel and auto industries as successive governments refused to admit that these dinosaurs could no longer compete in a changing world. This patronage hindered the development of new industries, entrepreneurship and innovation. Today’s largesse, focused on vast infrastructure projects in the southeast of England is the modern equivalent of these subsidies, while Canary Wharf’s glass towers have all the relevance of the docks below that once serviced an earlier Empire.
The classicist consul, when considering the latest transport fix for London might want to ponder the words he undoubtedly recalls from his earlier life, parturient montes, nascetur ridiculus mus — ”mountains will be in labour and an absurd mouse will be born”.
No wonder Russians, with their deep sense of nostalgia, like London.
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