I have for several years now concentrated a lot of thought on the imbalance between North and South. I think it is now clearly understood that there has been a very serious disparity in investment by the public sector in infrastructure, with the bias being to London and the South East. This imbalance has been ongoing for decades, about 6 of them, and has been such that in excess of 90% of investment has been in London and the South East.
Most of our major cities had trading exchanges, trading in everything from stocks and shares through to cotton. These varied by reference to the industries in their vicinity. With the bias of investment in infrastructure in London, these trading exchanges moved to the City and the growth in our economy has since been driven by the trade on such exchanges and finance and financial services derived from them, all based out of the City of London. With greater IT Infrastructure and the cluster of intelligence, this trade has become global and self sufficient. It has become divorced from our other industries.
~~Winston Churchill famously said that he would “rather see finance less proud and industry more content”.
With the lack of investment in our infrastructure in our manufacturing and industrial heartlands, our regions have become less efficient and less competitive in an increasingly global market place. Our currency has devalued, our productivity is slowing, we are becoming less of a powerhouse in the global economy. At the same time, our wealth is drawn to London and the global financial markets, where it is directed to other economies, we are investing in growth abroad, rather than at home. We are 'making claims' on the wealth being created in other parts of the World from their entrepreneurial spirit and better and more focussed investment in infrastructure and skills.
We need a concerted and continued effort, through the likes of the Northern Powerhouse, to change this behaviour, both of our successive governments (of every colour) and of those that influence our wealth. We need to rebalance our investment in infrastructure across the country to create an even playing field and a more efficient national infrastructure platform on which our industries can thrive. We need to refocus the investment of our wealth so that it can be put to use creating and fuelling enterprise across the country, increasing our productivity, balancing our international trade and 'creating wealth'.
The natural result of this in the long term will be a rebalancing of the UK economy.
we are better at creating new claims on wealth than at creating wealth itself.