The curse of being first

Early industrialisation and British demographic geography

The population density of England, Wales, and the Scottish Lowlands before (c.1701, left) and after (1911, right) the Industrial Revolution.

Britain’s status as the first nation to industrialise has left peculiar legacies that cannot be observed anywhere else in the world. Few of them are good. That being ‘first’ is not always beneficial in the long-run is also often applicable to individual industries, particularly those requiring heavy up-front fixed capital investment. Romanian internet speeds benefited from its relative tardiness in investing in internet infrastructure, given rapid technological advances in this field. The French nuclear power programme was not only able to observe the inferiority of the British gas-cooled reactors, but to improve upon the American water-cooled reactors before putting down much hard cash. But the sheer amount of fixed capital investment — e.g., railways, roads, plumbing, gas, electricity, and, above all, buildings of all kinds — that is required for an entire town or city to function in a modern economy is without comparison. Moreover, the longer that people stay in one place, the more likely they are to develop multi-generational cultural and familial ties that dissuade them from moving with the money; they become ‘sticky’, immobile. It is therefore somewhat unsurprising that most policymakers have proven unwilling to write these investments off. Instead, they have let the sunk costs fallacy suck them deeper and deeper into the hole.

Alexander Gerschenkron wrote of the phenomenon of ‘late industrialisation’, but rather than a spectrum of relative ‘lateness’, it would perhaps be more useful to have just two categories: ‘spontaneous’ industrialisation — a category which contains only Britain, and, arguably, Belgium — and ‘non-spontaneous’ industrialisation, containing everyone else who followed the British example, usually with the assistance of a healthy dose of government intervention, increasing in intensity the later the industrialisation occurred. As such, the process of industrialisation in Britain was, quite naturally, a much more drawn-out experience than that found elsewhere.

Britain could not simply copy or import technology from abroad; it could not learn from organisational innovations elsewhere. It had to build everything from scratch. It is perhaps unsurprising, then, that quantitative economic historians have repeatedly pushed back the start of Britain’s industrialisation and transition to what we might call ‘modern economic growth’, while also revising downwards estimates of economic growth at the beginning of the nineteenth century. Compared to the millennia prior, economic growth during the Industrial Revolution seemed breakneck, but compared to later experiences it was glacial: average annual growth of GDP per capita is now estimated at just 0.48% in Britain in the years between 1700 and 1870. A gentle yet accelerating take-off of repeated virtuous cycles of ‘Smithian’ growth — not a violent rupture whereby Prometheus’s technological fire explosively tore asunder the Malthusian chains.

In Britain, industrialisation was not so much a process of constant industrial upgrading within many of the same major urban areas, as it was for many later industrialisers. A late industrialiser might see a textile mill suck in landless labourers from the countryside; the industry expands, matures, then slowly declines in the space of as little as two or three decades — all just in time for the unemployed industrial proletariat to be able to find work in a newly-opened steel mill nearby. And even if the steel mill is not in fact quite so nearby, these workers are naturally much less tied to their current place of abode, having spent only a few years there, and are more willing to relocate to where the economic opportunities are. Nor did Britain experience the intermediary phenomenon — most common in the United States — of ‘ghost towns’, rising and falling in the span of as little as one generation, as a workforce with only shallow ties to the region more willingly moves on with the money as soon as a place becomes economically defunct.

By contrast, in Britain, industrial centres were long-lasting and developed much deeper roots, often as a consequence of factors that are now entirely irrelevant to a city or town’s economic success. Proximity to coal fields mattered enormously in an era of high fuel transport costs for industries requiring steam power, as well as for the manufacture of iron and steel and the many industries downstream of iron and steel; the presence of fast-flowing streams from the Pennines stimulated the growth of the textile industry in Lancashire, which relied on water power. This created a demographic geography in England that had no known precedent, as the previously rather sparsely populated North grew explosively, and old urban centres in the South, such as Norwich (the second biggest town in the country in 1662), Exeter (sixth biggest), and Great Yarmouth (eighth biggest) declined precipitously in importance, if not actually in population. Stranger still, the only town of relevance in the North before the onset of the industrial revolution, York (third biggest), was only the thirtieth biggest by 1861.

Multiple generations would live and die in these new industrial centres; a genuine civic identity in these previously ramshackle boom towns emerged, and people became less economically mercenary — and thus less mobile, and more active in lobbying for local interests. Moreover, the slow pace of industrialisation also meant that Britain to a much greater extent could develop a genuinely distinctive proletarian culture: elsewhere, ‘class’ was often little more than an economic category that described someone’s relationship to the means of production. Britain’s industrial precocity has thus meant that we have been gifted a population geography (and perhaps even a broader culture) that seems archaic and unsuited to modern needs; a population geography that seems in some sense unnatural.

But is there even such a thing as a ‘natural’ economic and demographic geography for a country to follow? Can intelligent, yet temporary state intervention shift economic and demographic geography without the need for permanent subsidy? In countries with vast inhospitable and/or isolated regions— say, Saudi Arabia and Egypt — the answer is obvious: there is indeed a wholly natural pattern in which population must be distributed. But answer is rather less clear for a country like Britain. The Northwest of England, for example, might be rather grey and rainy, a bit miserable, but it isn’t exactly uninhabitable; nor, at least by global standards, is it outlandishly far from other major economic and demographic centres. In this way, the regional policy debate touches upon similar themes to those of the industrial policy debate: namely, is it somehow ‘natural’ for one national economy to specialise in certain industries? Or can this ‘comparative advantage’ be permanently shifted by intelligent, yet temporary state intervention? Similarly to our regional policy example above, while it is obvious that no amount of state intervention would make British bananas competitive, with automobiles we cannot be so sure.

With such policy ambiguities, and with severe political disincentives against permitting the depopulation of those towns that appear to be economically defunct, it should be unsurprising that the British state has, for the best part of a century, deliberately hamstrung the growth of the Southeast — and, until the 1970s, the Midlands too — while gifting subsidies and tax breaks in an attempt to keep alive struggling regions.

It should be clear for all to see that this policy of long-term state subsidy has failed to redress regional imbalances: every region bar London, the Southeast, and the East of England currently runs an enormous deficit, only sustainable via vast fiscal transfers. This gives us good reason for serious pessimism when it comes to the efficacy of ‘regional policy’. In some regions, most notably Wales, these transfers have reached eye-watering proportions. One X.com user estimates that 65% of Welsh GDP consists of government spending. And not only do these subsidies have no end in sight, having done nothing to improve the long-term competitiveness of the regions; worse still, propelled on by the (mostly) Tory-led discourse of the ‘Red Wall’ and the ‘Left-Behinds’, they seem likely to increase even further, given the near-certainty that we will have a Labour Government by the end of this year.

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Britain’s difficulties in these emergent industrial centres were obvious from as early as the late nineteenth century. The four old ‘staple’ industries — textiles, steel, coal, and shipbuilding — which had built many of these towns (and in the case of coal, villages) were now struggling from foreign competition. This spurred calls for tariffs, as formerly free-trading producers increasingly hitched their political wagons to the traditionally protectionist engineering industries in attempt to save themselves. These demands for protection were rejected at the ballot box.

But it was in the interwar period that the situation became, in the view of many, unsalvageable; it was in this period that the ‘North-South Divide’ became deeply entrenched. Even before the Great Depression, British industry — and especially the ‘staple’ industries — was in crisis, hit hard by the deflationary return to gold, appalling industrial relations, continued competition from abroad, foreign market disruptions, and the hangover from overexpansion and malinvestment during and in the immediate aftermath of the Great War. In response, in 1928 the Government established the Industrial Transference Board, which existed for ten years and provided funds to help 275,000 men in declining industries and regions to retrain and relocate. It remains unique in British history as a non-transport scheme that sought to bring men to work, rather than work to men.

Britain is often remembered as having a ‘good’ Great Depression, at least by international standards. The lack of appetite in Britain for further deflation after years of societal near-meltdown in the defence of gold meant that it was forced off gold early, and was thus capable of implementing reflationary policy, especially monetary. It was not, as a whole, mired in a total industrial rut until the outbreak of war; it was not like France, or like the United States.

However, the recovery from the Great Depression in Britain was largely concentrated in the South and Midlands, buttressed by a suburban housebuilding boom. Worse still, many of the expanding industries — such as automobiles — were located in the South (e.g., Oxford) or the Midlands (e.g., Coventry). For the declining industries, policy was more active than in previous periods, but remained tentative: the National Government raised tariffs, encouraged cartelisation, and implemented scrapping schemes for textiles and coal in order to attempt to reduce the capacity of declining industries in a more orderly manner. For the declining regions, the Special Areas (Development and Improvement) Act 1934 appointed commissioners to improve the regions of West-Central Scotland, West Cumberland, Northeast England, and South Wales; this was followed by further Acts in 1936 and 1937 to provide more money for the commissioners.

Despite these activities, unemployment remained stubbornly high in the declining regions, peaking at rates of thirty percent or more, as against fifteen percent in the Southeast; in some towns, such as Jarrow — reliant upon shipbuilding, which was always highly cyclical, and moreover dependent on the health of international trade — unemployment reached rates as high as seventy percent. Only after the outbreak of the Second World War would anything approximating full employment finally be achieved outside of the South and the Midlands; in this respect, if we divide the British experience by region, while the South and Midlands had a ‘Japanese’ Great Depression, the rest of the country had an ‘American’ Great Depression. For many frontline post-war politicians — especially those who, like Harold Macmillan (MP for Stockton-on-Tees), represented constituencies in depressed regions — this would be a formative experience that would deeply influence their politics for the rest of their lives.

Britain was not defeated and occupied in this period; there was no trauma of national humiliation at the hands of an invading power, as was the case in France. Nor was there any general sense of national inferiority, as was the case in both pre-war Fascist and post-war Christian Democratic Italy. Nor did Britain have any historical experience with hyperinflation, as was the case in Germany in both 1922/3 and 1945/6, which would lead German politicians to generally prioritise price stability over employment to a greater extent than other European governments. The main trauma of British policymakers was rather more simple: not national humiliation, not national inferiority, not hyperinflation, but unemployment — the biggest failure, the biggest shame of the British elite in the preceding period. It was not so much that British policymakers had deluded themselves into building a ‘New Jerusalem’ — establishing the welfare state rather than modernising British industry — as conservative historian Correlli Barnett claims. Men were not sitting around idle and unemployed in this period, collecting the dole from a stupid but well-meaning government. In fact, the Attlee Government was very much interested in industry; it was even interested in productivity. Rather, the problem was that when given a choice between productivity and employment, both Attlee and his successors almost always chose the latter, however much noise they made about the former.

For although all European countries in some way committed themselves to full employment after the War, Britain was probably the most rigid in its pursuit. It is telling that one of the foundational documents of post-war Britain was the 1944 White Paper Employment Policy — emphasis on ‘employment’. Policymakers in the 1950s and 1960s repeatedly sought to force unemployment below 2%, especially in the lead up to elections, with inevitable inflationary effects. It was unemployment that led to Heath’s infamous ‘u-turn’ in 1972, as Heath, unlike Thatcher, had not yet accepted employment as the logical short-term casualty of liberal economic policies. Worse still for British policymakers, even at sub-2% rates of unemployment, various ‘black spots’ with rates of 5% or more in the declining regions were still to be found, yet nothing could seemingly be done on the macroeconomic level, given the effect that inflation would have on the parity of the pound, which was still regarded as sacrosanct. A more targeted policy was necessary. In order to square this circle, Britain’s first serious attempts at a ‘regional policy’ were born.

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It is not much of an exaggeration to say that Britain was the only country of importance in Europe that, after the end of the Second World War, was unable to reap substantial economic dividends from the vast demographic shift from low-productivity rural areas into high-productivity urban areas. It was not by the presence of an advanced capital city that Britain really stood out — Paris, Vienna, even Warsaw and Bucharest, are all recorded as having become effectively ‘modern’ in their amenities (even though their wealth was still hardly comparable to London, the global financial centre) as early as the turn of the century in the fascinating 1910/11 Encyclopedia Britannica — or even in the sheer number of locuses of industrial production scattered across the country — rather than modern production being concentrated in one or two regions. It was by the basic fact that Britain more or less uniquely lacked a backward agricultural sector of any real significance. Elsewhere in Europe, this would persist alongside rapidly advancing manufacturing and service sectors, which thinned the ranks of the rural poor only slowly.

This is best demonstrated by the fact that, although rural poverty had not entirely disappeared, it was clear for all to see that the epicentre of British poverty had by the end of the nineteenth century decisively shifted to the neighbourhoods occupied by the urban proletariat of major cities and heavy industrial towns. By the Boer War, politicians were already fretting that stunted and malnourished working-class boys would be incapable of competing militarily with their presumed German class equivalents — that is to say, hardy young peasants, strong from working the fields.

Insofar as Britain had any demographic dividends to reap after the War, they would have been through mothballing large parts of the economically declining regions, thus freeing up scarce labour — unemployment was generally around 2%, and sometimes lower, in the 1950s — for Britain’s new, higher-productivity industries, such as chemicals, pharmaceuticals, and automobiles. Quite aside from the directly beneficial economic effects, this may also have had the secondary effect of somewhat weakening the excessive power of the trade unions in the ‘new industries’ by reducing the bargaining power of the unions through increasing the available pool of labour — for although the role of the trade unions in British industrial decline can be exaggerated, they undeniably played an important role in the collapse of Britain’s biggest export industry, automobiles.

Precisely the opposite path was chosen. The notion of the full mobilisation of Britain’s economic resources was understood at this time to involve the achievement of full employment in every region; the idea that workers should, if necessary, migrate internally to find the most productive employment possible was rejected. Furthermore, there was a general belief that there would be serious negative social effects from ‘overcrowding’ in rapidly expanding and densely-populated Southern and Midlands cities. In order to achieve the desired regional distribution of industry, administrative action — such as the denial of building permits — was taken to try to force the movement of jobs away from the South and the Midlands.

Rather than fully restoring the city to its pre-1938 state, London was specifically targeted for degglomeration by the Town and Country Planning Act 1947, which enacted the infamous ‘green belts’ in order to prevent the supposed problem of ‘unplanned’ suburbanisation in the interwar period, inhibiting internal migration to the South. London’s population was dispersed, partly through slum clearances, and would not recover to its 1931 Census peak population until the 2011 Census.

Worse still, similar discriminatory policies were also enacted against the Midlands, especially the industrial centres of Birmingham, Coventry, and Leicester, as detailed in John Myers’s excellent ‘The Plot Against Mercia’:

The national government saw the success of the Midlands as damaging other regions. The Distribution of Industry Act 1945 sought to stop industrial growth in the ‘Congested Areas’ — the Midlands, East Anglia and the South East — and to push industry to declining ‘Development Areas’ in the North and West. Entrepreneurs had to get an ‘Industrial Development Certificate’ (IDC) before building a new factory…

The 1956 West Midlands Plan… set Birmingham a 1960 target population far lower than its actual 1951 population — so people would have to leave, and industry shrink…

Those requirements blocked most post-war growth in Midlands factories. But for 20 years, there was no limit on service businesses, and so Midlands entrepreneurs turned to those; despite the planning madness, the Midlands flourished… but in 1964, the Government declared Birmingham’s growth ‘threatening’, and banned further office development for almost two decades.

Unlike London, none of these towns have ever fully recovered, and the Midlands has now joined the North as a major loss-making region for the Exchequer. Indeed, Birmingham City Council, Europe’s largest local authority, is now bankrupt. All this has been exacerbated by choice to house the generally unproductive — and often unemployed or retired — at greatly subsidised rates in the centre of cities like Birmingham; meanwhile, productive taxpayers are increasingly forced out to the margins of a city with relatively poor transport links for its size. Although there are certainly many other factors behind Birmingham (alongside Manchester) being — as Tom Forth notes — ‘significantly less productive than almost all similar-sized cities in Europe’, this is probably one of the more important, as it has effectively helped degglomerate the city in an economic sense, even if not in an absolute population sense.

Alongside the ‘stick’ of degglomeration in the South and the Midlands came the ‘carrot’ of subsidy for Scotland, Wales, and the North. Numerous formal and informal regional policy schemes — usually taking the form of some combination of tax incentives, subsidised credit, free depreciation, the aforementioned denials of permits in the South and Midlands, and direct political pressure — were enacted in order to stimulate investment in areas of relatively high unemployment (despite unemployment, by historical standards, remaining very low almost everywhere).

Some of this came in the form of subsidies to specific industries which were concentrated in these regions, often accompanying nationalisation, which amounted to an implicit form of regional policy. The nationalised industries always lacked much financial discipline, despite attempts in the 1950s and 1960s by both parties to force the nationalised industries to to operate on broadly the same economic principles as the private sector. Nationalisation was also intended to ameliorate the appalling industrial relations in these industries. But in practice, unions were emboldened, as private disputes now became public (and thus political) disputes; it fell on the government to determine every worker in a nationalised industry’s wage and that industry’s level of employment; any losses, in any case, could be financed by the Exchequer — perhaps a price worth paying politically. This damaged long-term productivity and slowed the release of scarce labour from the declining industries.

Three of the four declining ‘staple’ industries were eventually nationalised: coal (nationalised in 1947), steel (nationalised in 1950, (mostly) privatised in 1953, and (partially) nationalised again in 1967), and shipbuilding (nationalised after around a decade of state support in 1977). Coal was obviously partly nationalised due to the influence of the Welsh lobby on the Labour Party; shipbuilding due to the influence of the Scottish lobby on both the Labour and the Conservative Party; the case of steel was more complex, more a matter of socialist principle.

The fourth of the declining ‘staple’ industries, textiles, benefited from rather less state support. Politically, it was the weakest — it was never nationalised, maybe because it was not associated with a ‘national’ lobby, and also because the mill-owners were generally rather unsympathetic characters (both in stereotype and reality) who the government did not want to bail out. Moreover, it was probably the most obviously unsalvageable economically. As such, aside from a scrapping scheme, and some protectionist agreements in which Britain pressured Hong Kong and others to ‘voluntarily’ limit their exports, the British state gave it little. Unfortunately, in an attempt to prop up the industry non-financially, they also imported Mirpuris, as British workers did not want to work low-paid night shifts in noisy mills at a time of full employment, and mills had to operate almost continuously to remain competitive. Needless to say, this not only failed to save the industry, it also gifted these towns ethnic ghettos and grooming gangs for the future.

Aside from the lobbying of specific industries, explicitly regional lobbying was relentless, and politicians were generally even more inclined to give in to regional than they were to industrial demands. The Distribution of Industry Act 1945 established the ‘development areas’, which could now receive various forms of subsidy — the precise method of subsidy changed constantly over the years — from the Board of Trade. This was followed by the Distribution of Industry (Industrial Finance) Act 1958, which added more ‘development areas’ beyond those listed in the 1945 Act. The Local Employment Act 1960 gave the Board of Trade the power to add (or, in theory, remove) development areas as it saw fit, and by 1966, nearly seventeen percent of the British population lived in a ‘development area’. The Local Employment Act 1970 extended the scheme yet further by introducing the ‘intermediate areas’, which qualified for lower rates of subsidy. By the end of the 1970s, two-fifths of the British population lived in an area (by then called ‘assisted areas’) eligible for regional policy assistance of some kind.

Regional policy was especially intensive in the cases of Scotland and Wales, who could call upon the need to protect ‘the Union’ and their ‘national identity’, unlike the depressed English regions. Perhaps the worst offender was Scotland, often using the Scotland Office and the various other Scottish agencies to help press its case. In 1958, Harold Macmillan proudly declared in his diaries that he had made the ‘Judgement of Solomon’ in a dispute between Scotland and Wales over new investment in the steel industry. At this time, there was thought to be sufficient demand for one (and only one) more strip mill in Britain. Llanwern, near Newport in South Wales, was the most logical and efficient location for this investment. Macmillan, however, decided to build not one but two strip mills. Although the mill at Llanwern was hardly a roaring success, the less efficient Scottish strip mill, located at Ravenscraig, was perpetually unprofitable and virtually bankrupted the company that built it; it was closed in 1992. In 1963, Macmillan also strong-armed Rootes (bought by Chrysler in 1967) into opening up a new factory at Linwood, also in Scotland, by offering tax breaks and actively preventing the expansion of their factory at Ryton in Warwickshire. Since there were no local suppliers, given the lack of a history of manufacturing cars in Scotland, almost all the components had to be shipped in from England, leading to high transportation costs and frequent stoppages due to shortages of parts. The plant was highly unprofitable and notorious for poor quality, and was closed in 1981.

This period was, in hindsight, a missed opportunity to resolve the problem of Britain’s antiquated demographic geography. If there ever was a time to act decisively, it was a time in which the global economy was so buoyant that full employment (probably ≈3% in this period) was achieved without much thought. People who lost their jobs could usually find a new one within a few weeks, especially if they were willing to move. Moreover, this was also a period when the British population as a whole placed more importance on economic growth than they do now.

That is not to say that nothing was achieved. Both Labour and Conservative governments made a concerted effort to run down the numbers employed in the bloated and heavily loss-making railways — despite trade union intransigence in a nationalised industry, usually a toxic combination — and, as mentioned, were mostly content to let textiles collapse, judging the former to be doomed by the motorcar, and the latter to be doomed by free trade with the third world. Even in nationalised coal, substantial progress was made until the Oil Crisis temporarily revived the industry and empowered its trade unions — famously, Harold Wilson closed more than twice as many pits as Margaret Thatcher.

Yet the sheer stubbornness of Britain’s demographic geography cannot be ignored: with the exception in some cases of the interwar period, almost nowhere in Britain has seriously decreased in population despite a century or more of industrial decline in many towns. The stability, even growth, of towns like Bradford (the centre of Britain’s eighteenth- and nineteenth-century textile boom), or entire regions, such as Wales (heavily reliant on coal and steel), should be seen as remarkable, indeed borderline perverse. It is often quite difficult to find reliable statistics for the population of a town or city over a century, as the boundaries of urban areas are inherently vague and somewhat unstable. Nonetheless, we can know for sure that, with the exception of a fall in population between 1921 and 1939, the population of Wales — despite the nearly total collapse of the region’s two core industries — has increased almost continuously across the twentieth century and into the twenty-first century. In 1911, the population was 2,421,000; in 2021, it was 3,107,500, an increase of roughly 28% — a much lower rate of growth than that of Britain as a whole, but still substantial, and undeniably unsustainable without massive state subsidy.

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Deindustrialisation devastated the declining regions, which lost most of the industrial employment upon which they relied. All of this frenetic effort in the early post-war period was, so it seemed, for naught. Regional policy lobbying now had to shift away from demands for the subsidisation of certain declining industries — which, by the middle of the 1990s, had (mostly) finally disappeared — or the strong-arming of successful industries to expand outside of the South — since there were no longer enough successful manufacturers to call upon for this task.

Eventually, two main solutions to Britain’s regional problem were found. The first was to put many of the newly-unemployed industrial workers on benefits (and thus off of unemployment records, since they were no longer looking for work), and particularly disability benefits, which exploded in the years after 1979, probably assisted by generous doctors who realised many of these men were unemployable unless they migrated southwards. This strategy was complemented by a second, more fundamental solution: jobs in government. This was much safer than jobs in industry, whether nationalised or private. After all, the government could hardly go bankrupt. Nor, unlike subsidised jobs in industry, was there was there any real promise of an eventual return on state investment. This was a safer strategy, as a future government, realising that no returns were likely to ever be forthcoming, might kill off the ‘lame ducks’ in a fit of rage, or ruthlessness, as was promised under Heath and actually happened under Thatcher.

It seemed like a win-win: London would lay the golden egg; Westminster would shower these blessings upon the country as a whole by creating new jobs in the public sector. This strategy reached its apex under Tony Blair, who, symbolically, established the Potemkin Scottish and Welsh Parliaments, which continue to provide inordinate numbers of unproductive public sector jobs at taxpayer expense. More and more of the non-devolved public sector was farmed out to the regions. In some cases, this was quite sensible: moving low-level bureaucracy to areas with lower labour costs and higher unemployment could even be regarded as a cost-saving measure. But soon the government ran out of jobs that it could plausibly redistribute without damaging the institutions themselves, and the policy spiralled out of control, with Labour moving the Office for National Statistics to Newport, and with the Tories more recently moving parts of the Treasury to Darlington. Blair also spearheaded the rapid growth of the universities, which have become central to many regional economies; in this way, many politicians feel forced to permit the continued existence of grossly overexpanded former polytechnics, which use the declining regions as a kind of human shield.

Some of these jobs were pared back under austerity, but this was a trend that had already started to reverse under May and Johnson. Under Cameron, it seems to have been quite widely acknowledged that Scotland, Wales, and the North were not struggling for lack of public sector jobs. Indeed, in many towns, virtually the only jobs that will pay much more than, say, £60k p/a are either in the public sector or what we might call the ‘quasi-public sector’ (i.e., jobs that are nominally private sector, but nonetheless adjacent to the public sector). All of this seems to have either been forgotten or disregarded since the 2019 Election, as a Conservative Party drunk on the rhetoric of the ‘Red Wall’ has sought to splurge — or rather, failed to splurge, since only a small proportion of the ‘levelling up’ funds were ever actually spent — on its new voters.

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Britain seems set to continue down the path of subsidy, indeed increased subsidy, for the foreseeable future. The difficulties of abandoning regional policy in its entirety — something even Margaret Thatcher did not do — are probably insuperable: no party will win on a platform of prosperity for the Southeast alone. The emotional arguments are too strong, too convincing to even those in the South, and the political arithmetic too difficult, even if this would indeed be maximally economically efficient. It is probably suicidal to attempt to counter openly the nearly universal myth that regional policy has never been tried, and that London is only doing well because it is stealing all of the taxpayer goodies.

Abundant past experience with regional policy clearly suggests that Britain’s ‘natural’ population geography leans strongly southwards, and that market-augmenting regional policy to try to change this has wasted taxpayer money, lowered productivity, distorted economic incentives, and made Britain poorer. It goes without saying that a genuinely nationalist government that believes in prosperity for Britain must permit greater freedom of internal movement, especially to the South, which has been inhibited by extreme pressure on housing in London and the Southeast. This can only be achieved by some combination of a bonfire of planning laws and a big reduction in external migration pressures.

This should come alongside a total privatisation and redevelopment of all of Inner London’s social housing into high-density accommodation — allocated by the market mechanism, rather than by government — that is suitable for young and ambitious Britons, both graduate and non-graduate. Yorkshire or Welsh accents should be common in London, not a relative rarity as they increasingly are today: many talented young people from the regions, lacking a childhood bedroom in the Southeast to move back into, are often being forced away from moving internally to where they can make the most of their potential and be the most productive for our country — which is normally, if perhaps not always, somewhere in London.

Assuming that a regional policy of some kind is here to stay, we must at least move towards a marginally more sane policy. Above all, in troubled economic times we must focus scarce public funds on the more salvageable cases, those that make Britain the least loss — I assume, given the above history, that all regional policy schemes are ultimately loss-making to varying degrees — rather than attempting to assist more difficult (and sometimes lost) causes. Why move the ONS to Newport when it could have been moved to Cardiff, if we must insist on Wales? (The ONS has never recovered from this move.) Why move the Treasury to Darlington when it could have been moved to, say, Leeds?

The ‘Northern Powerhouse’ may have been goofy rhetoric, but this is a rare instance where George Osborne’s policy made sense, primarily focusing on the private (not public) sector, and on creating centres of economic prosperity outside the South through increasing economic agglomeration by better connecting cities to their nearby towns. It seemed to accept, albeit quietly, that not everywhere could benefit from a policy that was founded upon logic rather than emotion: no amount of new transport links will save every town and village, no matter how isolated and economically defunct. Quite apart from anything else, many towns and villages have an ancient housing stock that it is not worth the cost and hassle of upgrading to modern standards. Some towns and villages, it should be concluded, must decline in population, and preferably fast, so we can make the best long-term use of our human capital; some of our old investments must finally be written off, and we need to come to terms with this fact. They served Britain well while they lasted.

This will create ‘ghost towns’, which are indeed somewhat eerie and depressing. But what is the genuinely compassionate policy? Is it really to have the state pay for the indefinite warehousing of British people in areas with no genuine economic prospects and nothing much to do, whether in work or in leisure, slowly wasting away their lives in front of a television screen, or at a call centre, or performing pointless bureaucratic makework? Or is it more compassionate to accept that we must cut our losses and let the dead lie, and that we should instead seek to unleash the energies of the British people in the hopes that they will create something new, forward-thinking, and profitable?