Why Manchester illustrates the challenge of reducing the regional divide

The government needs to deliver for its new supporters in the regions. This is a truth which has rapidly become universally acknowledged, to borrow Jane Austen’s famous phrase.

It is a massive challenge. The gap in income per head, for example, between London and the regions is obviously large. But the firm trend has been for this difference to widen, rather than narrow.

Between 1997 and 2017 income per head, after allowing for inflation, rose by around 17 per cent in both the North East and the North West. Just under 1 per cent a year. In Wales, another area where the Conservatives made big gains, the overall increase was a mere 11 per cent.

In contrast, in London income per head rose by 42 per cent over these two decades. In inner London, the increase was no less than 56 per cent.

But the difficulties grow deeper. Manchester provides the perfect illustration.

In the mid-1990s, within half a mile of the city’s main rail stations was a bomb site. Not a site created by a contemporary IRA outrage, but by the Germans in the Second World War. In the subsequent fifty years, no one had thought it worthwhile to develop a piece of land in the centre of a major English city.

The total resident population of the city centre area was 400. Now, it is 80,000. Manchester has been totally transformed. The skyline has altered just as dramatically as that of Central London.

The economic structure of Manchester has come to resemble those of the Inner London boroughs.

The Office for National Statistics provides very detailed data on the numbers employed in each industry for every local authority in the UK. Turning these into percentages, I used some fairly straightforward maths to work out which local authorities have an industrial structure most similar to that of Manchester.

The answer is areas like Camden, Islington and other major regional cities such as Bristol and Leeds. None of the nine other boroughs which make up the Greater Manchester region look remotely like the city itself.

The same is true of other English cities such as Newcastle and Leeds. The types of jobs on offer are quite different from those in the surrounding hinterlands.

The cities returned Labour with massive majorities. It was in their satellite area where the Conservatives triumphed.

The story looks the same from whichever level of geographic aggregation we look. Comparing the regions of the UK, London is much richer than the rest. Within individual regions, the main city is much richer than the rest.

It is easy to see why this happens. Once an area starts to become more attractive for business, other firms increasingly see it as a place to locate. Skilled people see it as a place both to work and live. A virtuous circle is created and the area pulls away from its surroundings.

The government needs to be really imaginative and innovative to avoid falling into the trap of simply reinforcing the wealth of cities and not towns.