Wednesday, 23 April 2014

London: the Mecca of Public Investment

Thames Traders: the locus of state largesse and private profit

The Mall
The Gini Coefficient soars on the Mall
St James's Park
Houses of Parliament
Covent Garden
Thames Traders

Blackfriars Bridge serving God and Mammon
Millenium Bridge
St Paul's over Millenium Bridge
Shard peaks out from Globe
On the South Bank with lots of silly buildings
Golden Hinde and Corporate men
There is no doubt that London is booming again. It is awash with prestige commercial developments in the ever-expanding financial quarter, new housing, refurbishment of older buildings and hotels. We are told that London generates the highest GDP in the UK and that is not in dispute. Most of this is generated by the service sector that charges the rest of the UK prime rates for its high-end services - banking, insurance, law, marketing, and other intermediary services. It is easy to believe the rhetoric of Londonphiles and the Mayor who claim the growth is private sector-led but that would underestimate the huge investment made by the public sector in the capital. Most of which has nothing to do with Boris, he just hogs the kudos. It is UK state spending on infrastructure, government functionaries, higher education, sport, and culture.

London may be a world mega-city and location of choice for big corporations. Much of this is driven by the fact that 8 out of the 10 busiest railway stations in the UK are in London (only Birmingham New Street and Glasgow Central creep into this list) and they are run by network rail which is state subsidised. These massively modernised stations bring in commuters, tourists, business trippers and short break UK citizens in search of culture and big events in their droves. Similarly, five out of the six largest airports are in the London region (only Manchester gets in at 4th) and these were built, if not now operated, by the state. 
Civil service jobs and most of the biggest quangos are based in London. The public expenditure regional tables show that London has the second highest per capita expenditure after Northern Ireland. London's success as a world city is very dependent upon the regional aid, including London allowances, that it draws in from the rest of the UK. And of course, we should not forget that Arts expenditure by government is fifteen times greater per head in London than for the rest of the UK

All of this was brought home to me this week as I walked around London in the April sunshine. London was buzzing and warmed by the pre-Easter sunshine. We went to a debate in the House of Commons, joined the crowds in and around the museums and honeypots like the South Bank, St. James' Park and Covent Garden, We watched the London Marathon, another event not just generating more revenue for London but benefiting the city with hours of free TV marketing. We walked miles every day and I was staggered at the level of state investment being pumped into this international city. 

London's transport infrastructure together with the dominance of government, educational, institutional and corporate HQs guarantees both customers and sponsorship for its rich and diverse cultural activities. London just drips with museums, theatres, well-tended public parks, galleries and celebrity architecture. They are all dependent on the massive public subsidy that the rest of the UK unwittingly bequeaths to the capital. As an example of the unequal distribution of wealth compared to the rest of the UK,  London has no peer.  It stems as much from government largesse as private sector investment.

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