boxthejack endorses 'right-wing' think-tank, shock!

I rarely leap to the defence of right-wing think-tanks and I didn't expect to when I heard that the Policy Exchange had recommended evacuating the north because northern cities are beyond hope. Or at least, that's how the BBC and the Guardian seemed to report it.

"Do you live in Sunderland?" writes Peter Walker on his Guardian blog. "Are your bags packed? Well, the Policy Exchange thinks that perhaps they should be."

I smelt a rat when I heard who'd written the report. The economists in question are not nutty pro-business radicals. They're not all Tories either - Tim Leunig is a Lib Dem I understand. In any case, we should at least do them the service of actually reading their recommendations, linked above.

There are certainly aspects of the report that come across, at first, as a little defeatist:

"Just as we can't buck the market, so we can’t buck economic geography either. Places that enjoyed the conditions for creating wealth in the coal-powered 19th-century often do not do so today. Port cities had an advantage in an era when exporting manufactured goods by sea was a vital source of prosperity; today the sea is a barrier to their potential for expansion and they are cut off from the main road transport routes."

Concluding therefore that government should sit by whilst people just pack their bags and leave makes little sense. Investing in an integrated anti-Beeching transport system is surely a requirement in the climate conscious era anyway, subject to which the periphery will become effectively closer to the core.

What's more, these towns still have unique heritages, unique demographics, and - assuming some sense of communal belonging - the potential to turn these into unique selling points. When I read the BBC report I thought: 'The real problem here is centralisation - which would be compounded if everyone just upped and left.'

And this, in fact, is precisely what Leunig et al are saying. They do not suggest we should dismiss Sunderland and Liverpool, or let them stagnate as peripheral non-Londons. Rather, they suggest that pumping money into regeneration towns simply won't work unless there is more robust local organisation and accountable local government.

No wonder the Tories aren't going to adopt the report's recommendations.

In the short term, the authors anticipate some migration to the South East, and suggest that this should not be artificially resisted. They argue that the policy of dedicating so much land in London for industrial development rather than residential use makes it too cheap for business to locate in London, and too expensive for people to live there. Were this not the case, businesses would relocate to cheaper peripheral areas and trigger a virtuous cycle.

The summary compares Britain unfavourably with Germany and the Netherlands because of the peripheral nature of our old industrial towns. I would add here that both Germany and the Netherlands benefited from the absence of an anti-society demagogue who encouraged individuals to abandon all sense of belonging and pursue personal wealth at all costs, just at the point that the increasingly integrated global economy was acting as a powerful catalyst upon this process of fragmentation. Germany, in particular, did not promote cheap money and labour mobility as the panacea, but rather allowed a gradual liberalisation of markets. Critically, the Netherlands is small, and Germany has maintained regional autonomy.

And just because the report's writers don't necessarily share my antipathy towards Maggie, their recommendations are as un-Thatcherite as it gets:

"The relative weakness of local government [in the UK] has compounded this disadvantage; our studies of cities around the world – in Germany and the Netherlands, in Poland, Canada and Hong Kong – demonstrate that local communities manage their affairs better than a distant central government can ever do."

The article goes on to advocate:

• Devolution, because it leads to diversity which in turn reveals what works and doesn't work.
• Rolling up central regeneration funding, and giving local authorities that cash based on a progressive formula - the inverse of average income levels. Hardly right-wing.
• Allowing local authorities to set their own priorities, rather than adopting central priorities which lead to "identikit towns".
• Improving local government accountability: "That means much better scrutiny by the Audit Commission and local media and greater rights for local people to investigate what the town hall is doing. It also means ensuring that the voting system makes elections truly contestable".
• Maintaining central funding only for exceptional (presumably exceptionally expensive) circumstances, but giving local authorities responsibility for presenting and implementing the regeneration plan. They would be directly accountable to the local electorate.

Spot on I'd say.