VOICES PHILIP MCCANN A nation of differences
Professor Philip McCann explains the enigma of the UK whose economy is unlike any other. There are massive differences in economic productivity between regions and nations, and a system of government that is the least equipped to address the issues. By Martin Ince
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HILIP MCCANN IS Professor of Urban and Regional Economics at the University of Sheffield. But he is finding life in the UK a little strange, having been out of the country for most of the past 12 years, especially in New Zealand and the Netherlands. He explains: “The UK has changed a lot in this time, partly because of the Global Financial Crisis. But it still has its own way of doing things, including the narratives that the public and the media tell about the country.” This is especially true, says McCann, when
it comes to his own interest as an economic geographer. His work centres on the economic role of towns, cities and regions, and how they relate to national economies. He has studied this dynamic in nations ranging from the UK to Thailand, Japan and the United States, and says: “I have concluded that there is a real enigma here. It is very hard to draw a real comparison between the UK, whose economy is very specific and unique, and any other country.” The first and most striking difference between the UK and other nations, says McCann, is the massive variation in economic productivity between its regions and nations. These different levels of productivity in turn drive levels of affluence and influence social conditions, and are regarded as a key determinant of economic success. McCann’s message is that amongst the industrialised economies, the UK has “some of the world’s biggest inter-regional differences in productivity.” He has examples to make the point. “On some measures the UK has bigger productivity variations than the whole of the Eurozone. It has regions that are less productive than many parts of the Czech Republic, Slovakia, the Baltic states and the former East Germany. And almost half of the UK population today lives in areas that are poorer than West Virginia or Mississippi in the US, where British TV companies go to make documentaries about poverty.”
Continuing the US state analogy, McCann adds that the UK also exhibits huge variations in economic productivity over surprisingly small distances. “The UK is only the size of Wyoming, but we find consistently that the benefits of high productivity in some regions do not spread into the less productive ones.” He adds: “There is no simple story about this. Areas that do well on one dimension do less well in others [in a way that is hard to explain]. Even I don’t understand it completely, and I wrote the standard textbook on the subject.”
22 SOCIETY NOW WINTER 2018 This failure would be a cause for concern
anywhere, but in McCann’s view it is especially damaging in the contemporary UK. He says: “The UK’s system of government is the least equipped we can imagine to address these issues. It is very centralised, but in addition it is organised on sectoral lines – so you get a ministry for an area such as transport – rather than regionally. That means that you tend to have one centralised and top-down policy for a highly diverse country.” This approach works well, says McCann, in nations which are very equal inter-regionally. He cites the Netherlands and New Zealand as examples, having worked in both. Japan, despite
“ On some measures the UK
has bigger productivity variations than the whole of the Eurozone
being far bigger, is another example. “There,” he says, “policymakers can think about a policy knowing that it will fit and gain traction in the same way all over the country. But if you have big internal differences, like the UK has, that top-down approach will not work.” In contrast to these comparatively homogeneous nations, McCann sees the UK as a patchwork in which the strong productivity growth seen in some regions is “counteracted” by the slow pace of growth elsewhere. The higher productivity areas, he says, include
London and a wide swathe of the South East, the East and parts of the South West of England, as well as Scotland. In the other camp are the English North and Midlands as well as Wales and Northern Ireland. He adds that these two groupings are almost equal in population. So the areas of over- and under-performance cancel each other out and the UK economy as a whole does not go anywhere. And while part of the effect can be blamed on the global financial crisis, which led to a period of low-income growth, the effects still persist a decade later. Northern Powerless? McCann agrees that these issues are now
on the policy agenda more strongly than in the past. They are the underlying logic behind the Northern Powerhouse and Midlands Engine concepts and have been taken up by the Institute for Public Policy Research and the RSA, amongst others, in a series of reports on the North of England Economy. There is also growing interest
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