Rethinking our future: London should not fear Manchesterism – it needs it

Andy Burnham will find his Downing Street in-tray filled with economic and social challenges. We asked eight experts how he should tackle them. In this analysis, John Dickie looks at London. Click here for the rest of the series

“What Manchester does today, the world does tomorrow.”

The 19th-century Conservative prime minister Benjamin Disraeli reportedly said those words when the city was at the forefront of the Industrial Revolution. Could they prove prescient today as Andy Burnham takes office in Downing Street? And what does his economic vision of “Manchesterism” mean for London? 

Over the past decade, Manchester’s economy has outperformed the capital’s and the UK’s as a whole. Its skyline has been transformed and so too has its public transport network. There is much that London and other regions can learn from these successes and the pragmatic politics underpinning them. 

Key tenets of Burnham’s tenure as mayor of Greater Manchester have been an ability to sell a positive vision, bring together people of different political persuasions and demonstrate policy flexibility to support delivery. How could this translate on the national stage? Burnham has said applying Manchesterism as prime minister would involve building more council homes, a focus on technical education and a rewiring of the British state by empowering local leaders through a devolution revolution. 

Much of that agenda and the objective of good growth in every British postcode is vital. Amid a hugely challenging economic inheritance, accelerating growth is the only sustainable way to increase investment in public services and drive up stagnating living standards. 

Yet business leaders across the capital have raised concerns about investment moving out of London, greater state intervention and plans to increase public spending, which would most likely need to be funded through higher taxes. Such measures would be an own goal.  Unlocking London’s full potential as an engine for the whole UK must be central to any credible economic strategy. The capital accounts for just under a quarter of the UK’s economy and makes a significant net contribution to the exchequer that, rightly, supports public spending in other parts of the country. 

Growth is not a regional zero-sum game: supply chains, jobs and investment flow across the UK. So it is welcome that Burnham praised London as the world’s greatest capital in his first major speech after the Makerfield byelection and committed to giving the city – alongside other parts of the country – more power to stand on its own feet and better meet local needs. 

Despite much of the machinery of government being located in London, it has often not served Londoners and businesses well. Meaningful devolution would be a start. But it is not enough to drive growth – so what else is needed? 

Firstly, it’s vital that promises of devolution do not in practice turn into the politics of redistribution with funding allocations shifted away from London towards other regions. After all, the capital has some of the most deprived postcodes in the country. 

Secondly, the new government needs to remove roadblocks to growth, particularly a sclerotic tax system. Improving our competitiveness, including through business rates and stamp duty reform, is key to attracting a greater share of global investment. 

Thirdly, the UK needs to sweep away overly onerous regulation that is holding the private sector back. Planning, critical to the housebuilding Burnham is championing, is ripe for further reform. With London boroughs spending £5.5m a day on poor-quality temporary accommodation, how about creating a framework that enables private capital to build more better-quality homes and cut the public rental bill? 

Finally, the new government must avoid needless uncertainty that causes major investment decisions to be delayed. Clear signalling that projects such as the Heathrow expansion will continue at pace, which matter not just to London but the whole country, would send a reassuring message to investors. 

There is much to learn from what has been delivered in Greater Manchester over the past decade. Working in partnership with London will be vital if Manchesterism is to deliver growth in every postcode – from SW1 to M1 and beyond.  

John Dickie is chief executive of BusinessLDN 

Photograph by John Keeble/Getty Images

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Other articles in this series:

Too many are going hungry – the ailing welfare system needs attention

Overhaul the energy market – or pay the price in the long run

Britain faces two big problems on defence – only by spending can we solve them

How Andy Burnham can put Britain at the heart of the AI revolution

The crisis in adult social care has to be confronted, not kicked into the long grass – again

Don’t stop school leavers going to university – just make sure the courses are fit for purpose

Culture must be valued for its own sake – it is everyone’s right to enjoy it