The benefits of Foreign Direct Investment are not being shared with Britain’s towns

Rotherham High Street. Image: Getty.

There is a growing awareness that regional disparities are an urgent problem for the UK’s economy and society, following decades of government policy that has fostered divergence in the fortunes of different places. Research by Will Jennings and Gerry stoker for the Centre for Towns has repeatedly revealed stark differences in the economic fortunes of Britain’s towns and cities. It’s a picture of “Two Englands”, with increasingly different outlooks and experiences.

Until now, however, this debate has not considered another important driver of local jobs and growth: Foreign Direct Investment (FDI). Bridging the Gap, the new report launched this week by EY and the Centre for Towns shines a light on the gaping disparity between the UK’s largest cities and towns, which have been successful in attracting investors from overseas, and the smaller towns and rural areas which have increasingly struggled to attract investment.

FDI has increased by four-fold into the UK’s Core Cities – including London, Manchester, Birmingham and Glasgow – whilst investment elsewhere has tended to stagnate or decline. These Core Cities have attracted 51 per cent of all FDI projects in the last twenty years.

This was not always the case. The share has increased from 31 per cent of the UK’s total FDI in 1997 to a staggering 56 per cent share in 2017. Of these, London has attracted a whopping 74 per cent of projects in the bigger cities.

The good news story for Britain’s cities is in stark contrast to that for many smaller towns: former industrial towns experienced a seismic 74 per cent fall in FDI projects between 1997 and 2013. This decline shows how certain areas have been neglected by government over a long period of time – dating back to restructuring of the UK economy that began in the 1970s.

Successive governments have compounded this. In 2005 Tony Blair, said the future belongs to those, “Swift to adapt, slow to complain, open, willing and able to change”. Today’s report shows just how much those areas that were able to adapt have continued to benefit, while those who were unable to have fallen further behind.

Towns in particular have suffered from under-investment in transport, and ineffective interventions to raise local skills and qualifications in the local labour market.


By contrast, those towns whose local economies have adapted through location close to universities, such as Cambridge and Loughborough; or a revived contemporary industrial presence, such as Redcar, Rotherham and Mansfield, fared significantly better. The patterns that emerge from this report underline that decline in investment is not inevitable: it tends to occur in places where government has taken its eye off the ball, failing to rebuild or provide conditions that attract investors.

Simply, government must do far more to deliver conditions that make its towns and regions far more attractive to investors abroad. There are political as well as economic rewards for all parties in delivering an agenda with a promise of jobs, skills and infrastructure across the diverse local economies of the UK.

As Mark Gregory, EY’s chief economist notes in the report, the decisions taken by foreign investors are driven by infrastructure and skills locally. The UK government needs to pay urgent attention to improving its offer on this front, and thereby ensure a more even distribution of investment across the country. Our report identifies a clear set of priorities for attracting foreign investment that would share the benefits between Britain’s towns and cities: investment in regional transport, a more place-sensitive approach to industrial strategy, faster broadband for all areas, and incentives that lure service investors out of Core Cities.

The Brexit vote highlighted the deep divisions felt between different parts of the country and the aftermath of Brexit is going to prompt fundamental questions about the UK’s economic model – and how prosperity is to be shared by all. Yet today’s politics is characterised by division. The ex-industrial towns that have suffered from low levels of overseas investment in their local economies were more likely to vote to leave the EU – with successive governments having failed to support them in the shift to a more open global economy. Why believe in a global and open Britain, when you are left to go it alone?

The government cannot afford to ignore the growing evidence about the economic challenges faced by Britain’s towns, and the policies and investment required to make them attractive to investment that will bring jobs, business, amenities and hope to local communities. Not only would this stimulate local economies and boost to some of our most deprived regions: it would make the whole country more attractive to foreign investment, and begin to heal some of the divisions that have emerged.

Lisa Nandy is the Labour MP for Wigan. Dr Will Jennings is a senior lecturer in politics at the University of the Southampton. They are among the co-founders of the Centre for Towns.

 
 
 
 

“Every twitch, breath or thought necessitates a contactless tap”: on the rise of the chain conffeeshop as public space

Mmmm caffeine. Image: Getty.

If you visit Granary Square in Kings Cross or the more recent neighbouring development, Coal Drops Yard, you will find all the makings of a public space: office-workers munching on their lunch-break sandwiches, exuberant toddlers dancing in fountains and the expected spread of tourists.

But the reality is positively Truman Show-esque. These are just a couple examples of privately owned public spaces, or “POPS”,  which – in spite of their deceptively endearing name – are insidiously changing our city’s landscape right beneath us.

The fear is that it is often difficult to know when you are in one, and what that means for your rights. But as well as those places the private sector pretends to be public space, the inverse is equally common, and somewhat less discussed. Often citizens, use clearly private amenities like they are public. And this is never more prevalent than in the case of big-chain coffeeshops.

It goes without saying that London is expensive: often it feels like every twitch, breath or thought necessitates a contactless tap. This is where Starbucks, Pret and Costa come in. Many of us find an alternative in freeloading off their services: a place to sit, free wifi when your data is low, or an easily accessible toilet when you are about in the city. It feels like a passive-aggressive middle-finger to the hole in my pocket, only made possible by the sheer size of these companies, which allows us to go about unnoticed. Like a feature on a trail map, it’s not just that they function as public spaces, but are almost universally recognised as such, peppering our cityscapes like churches or parks.

Shouldn’t these services really be provided by the council, you may cry? Well ideally, yes – but also no, as they are not under legal obligation to do so and in an era of austerity politics, what do you really expect? UK-wide, there has been a 13 per cent drop in the number of public toilets between 2010 and 2018; the London boroughs of Wandsworth and Bromley no longer offer any public conveniences.  


For the vast majority of us, though, this will be at most a nuisance, as it is not so much a matter of if but rather when we will have access to the amenities we need. Architectural historian Ian Borden has made the point that we are free citizens in so far as we shop or work. Call it urban hell or retail heaven, but the fact is that most of us do regularly both of these things, and will cope without public spaces on a day to day. But what about those people who don’t?

It is worth asking exactly what public spaces are meant to be. Supposedly they are inclusive areas that are free and accessible to all. They should be a place you want to be, when you have nowhere else to be. A space for relaxation, to build a community or even to be alone.

So, there's an issue: it's that big-chain cafes rarely meet this criterion. Their recent implementation of codes on bathroom doors is a gentle reminder that not all are welcome, only those that can pay or at least, look as if they could. Employees are then given the power to decide who can freeload and who to turn away. 

This is all too familiar, akin to the hostile architecture implemented in many of our London boroughs. From armrests on benches to spikes on windowsills, a message is sent that you are welcome, just so long as you don’t need to be there. This amounts to nothing less than social exclusion and segregation, and it is homeless people that end up caught in this crossfire.

Between the ‘POPS’ and the coffee shops, we are squeezed further by an ever-growing private sector and a public sector in decline. Gentrification is not just about flat-whites, elaborate facial hair and fixed-gear bikes: it’s also about privatisation and monopolies. Just because something swims like a duck and quacks like a duck that doesn’t mean it is a duck. The same can be said of our public spaces.