speri.comment: the political economy blog

Exploring North-South issues in the political economy of England

The HS2 rail project is underpinned by a flawed political economy that needs challenging

Professor Tony Payne, Director of SPERI

Tony PayneOver the years I’ve written a lot about North-South issues in the global political economy. Yet, until now, I’ve never said a word about North-South issues in England, my own country of birth and residence. But the more I think about the way this debate is now being framed in England, the more I wonder if there isn’t something useful to say about England’s current political economy from the perspective of several well-known theories of global development.

It’s certainly easier to establish quickly what we mean by ‘North’ and ‘South’. In the global context these terms have always been contested concepts. They sought to capture what has long been deemed to be an important binary distinction between modernising and backward areas, between developed and developing parts of the world, between rich and poor countries. The language has altered over the years, but the core idea has persisted and was given its ‘North-South’ expression most famously on the cover of the Pan edition of the Brandt Commission report of 1983. This depicted a Peters Projection of the globe with a red wavy line running along the US-Mexican border, through the Mediterranean, across the southern perimeter of the USSR and then dropping sharply downwards to sweep up Australia and New Zealand with the USA, Europe and the USSR into the developed, so-called North.

Working in Sheffield, we know that we are located in the North of England. This is a matter of geography. You can argue, as Owen Jones has recently done, that ‘the north-south divide is a myth – and a distraction’, highlighting the obvious reality that the divisions of power and wealth in England actually play out in much more complicated ways. But no-one can deny that Northern England is a different part of England from Southern England and that sometimes you have to travel between the North and the South. This is what brings us to trains and the vexed matter of the HS2 project.
On 28th March 2014, just a few weeks ago, The Guardian published a letter signed by the political leaders of eight major Northern English cities – York, Liverpool, Derby, Nottingham, Sheffield, Newcastle, Manchester and Leeds. It called upon all the main political parties to commit definitively to the HS2 project, to champion it and to focus on its delivery. What’s really interesting, though, is the reasoning the leaders advanced. HS2, they wrote, is ‘a once-in-a-century chance for our cities to realise their enormous potential and to make an ever greater contribution to the wider prosperity of the UK’. HS2 offered ‘growth’, ‘jobs’, ‘prosperity’, ‘a step-change in productivity’, all of which had to be grasped ‘at the earliest opportunity if our country is to remain a global leader’.

In short, the big city Northern leaders take the view that HS2 will bring hugely significant economic advantages not only to their cities but also to the North of England as a whole. Indeed, their support is now widely proclaimed by proponents of HS2 and presented as a key argument in its favour. The key questions therefore become: why do these Northern leaders think this and are they right?
I’ve been looking since at some of the official representations made by the HS2 lobby and can’t actually find much said in an explicit way about the political economy supposedly underpinning the project. But, even so, I think I can see what the unspoken argument is. I recognise it as the spatial equivalent, if you like, of the ‘trickle-down’ notion that has long sat at the heart of classical development theory in both its modernisation and neoliberal phases. The notion is essentially that wealth and prosperity will somehow just ‘spread out’ from core centres of economic production, however defined, to other geographic zones that are – and this is critical – well connected to the cores.

The problem is that this generally does not happen as easily and as automatically as supposed. Even the pro-free-market Institute of Economic Affairs is not convinced, because it has recently released a report that looked at East Kent (as a beneficiary of HS1) and Doncaster (as the possessor of a fast rail link to London for several decades) and showed that these places have hardly witnessed extensive economic regeneration as a consequence.

What’s more, this is hardly surprising from the perspective of development theory. As long ago as 1957 the eminent Swedish economist, Gunnar Myrdal, argued that, when fast growth occurs in one part of an economy, it is just as likely – in fact more likely – to ‘suck out’ enterprise, investment, people and ideas from less fast-growing regions with which it is connected. He described these as ‘backwash effects’, not ‘spread effects’. Myrdal himself was quite an orthodox economist, but his argument about the potential draining effect of growth on some regions linked up powerfully to that whole school of more radical development theorists who went on to argue throughout the 1970s and 1980s that core-periphery relationships in the global economy benefited cores, not peripheries, and were in fact designed precisely to do so!

You may ask whether these various theories of dependency and forced underdevelopment have not been undermined by the fast growth and development of so much of East Asia over the past few decades. The answer is Yes: in the sense that many of the theories exaggerated the periphery effect by asserting that it was determining, rather than just conditioning; but also No: in the sense that we need to note the fact that many of these countries managed to engineer their own development and re-orient their ties with the developed Western core. They did so by setting up ‘developmental states’ to plan their various routes to growth and development in strategic and sustained ways over several decades. They didn’t just seek to improve the frequency and speed of their connections to the core parts of the global economy!

The burden of this argument and the lesson for the leaders of the Northern cities of England is surely clear enough. Even the IEA got it partly right in arguing that they should focus on improving infrastructural links between Northern cities, rather than to London. More broadly, they should work together to think through and insist upon the establishment of a Northern Development Agency with the capacity to plan the integrated development of the North of England as a coherent regional economy. They ought also to be moving on with this with urgency, because, whatever happens in the Scottish referendum in September, the political position of the North within England will thereafter be even more exposed and vulnerable than it is at present.

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Categories: Business, Economics, SPERI Comment, Tony Payne | Tags: | 2 comments

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Comments (2)

  1. Dear Professor Payne

    Thank you for writing this article. I think you are right to be sceptical of the economic benefits of HS2. I also don’t think that it provides enough economic payback. In addition to the unbalancing of the national economy, I might also suggest that the mode of operation and technology used by HS2 is obsolete and based on outmoded forms of employment and mass transport needs

    For example HS2 will compete directly with the current business customers of the existing mainline network. The twenty minutes or so that it would save for business users, would in cash terms be peripheral to the existing value of the work undertaken. Yet at the same time fares would be too high to allow the mass of workers access to a diminishing labour market.
    It is certainly uneconomic for the self employed and day workers such a supply teachers, construction workers etc (at least without adding this overhead to their contractual costs) who are the ‘lifeblood’ of the post industrial northern economies.

    Instead a high speed network needs to be truly national and function more like a network such as the London Underground. Failure to connect midsize towns and cities such as Hull and Sheffield and Middlesborough will condemn residents to an ever diminishing pool of wealth.
    If you are interested, I have written a paper called “Way to Go: Re-imagining High Speed Rail in the UK” (also labelled the MaRT proposal) and published it on my website -www.martmoves.org.uk
    It contains criticisms of HS2 but also suggests different ways forward. If you have time, please have a look. There is a also a two page “Summary of MaRT” available on the same website. I am happy to receive any comments, enthusiastic or sceptical. The technology is suggests using is based on the current maglev system as used in Shanghai, but the system is open to any variant technology that can allow high speeds to be attained (180 mph+)

    • Dear Tom
      Many thanks for your constructive response. I will indeed take a look at your paper, but I am not a train specialist!
      Tony

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