Here’s why you can’t bridge the north/south divide just by moving public sector jobs

Media City, Manchester. Image: Getty.

The question of how to tackle the north/south divide in the UK economy has plagued policy makers for decades. In recent years, attempts to do so have mainly focused on the Northern Powerhouse initiative, which initially aimed to boost Manchester’s economy to create a counterbalance to London, but subsequently broadened out to focusing on strengthening economic performance across the North through improving rail links.

However, to improve the North’s economy, we need to make some hard choices about where to make policy interventions – and this means reverting to a particular focus on Manchester and other big cities.

The Centre for Cities’ recent briefing sets out the role that cities, and city centres in particular, play in the national economy. The big problem for the north is that its cities are punching well below their weight. If the North’s cities were as productive as those in the Greater South East, the North’s economic output would be £154bn larger. That’s three extra economies the size of Manchester.

Clearly then, focusing on boosting growth in cities outside the Greater South East will be critical in improving the economic performance of the North and other regions. The question, therefore is how best to do this.

One of the most direct tools that policy makers can use is to move public sector jobs around the country – as we have seen, for example, with the BBC’s relocation to Salford and the ONS’s move to Newport. This issue is again high on the political agenda, with the government considering moving 800 Channel 4 jobs out of London

But how effective are such relocations – and if the government wants to move Channel 4, where should it go to? In August we published a new briefing looking at the economic impact of public sector relocations, which offers two key findings in response to these questions.

Firstly, a note of caution: our analysis shows that while the BBC’s relocation to Salford has been positive for Greater Manchester in bringing jobs to MediaCityUK, its impact on employment across the wider city region was small – equivalent to a maximum of 0.3 per cent of all the jobs in Greater Manchester in 2016. By extension, the jobs impact of the potential Channel 4 relocation shouldn’t be expected to be very large either.

The analysis also suggests that if the BBC had moved to a smaller city than Manchester – with fewer high-skilled workers and a less diverse economy – it’s likely that the limited employment boost it brought would have been less significant. This leads us on to our second key point: if the government does move Channel 4, it should move the jobs to a major city which is already home to a large-share of high-skilled workers and firms in related industries – in another words, a city like Manchester.


Of course, this raises the issue of fairness. Given that Manchester has already received a great deal of policy focus in recent years – from the BBC’s relocation, to the four rounds of devolution it has enjoyed and the introduction of the new mayor – is it right for Manchester to get Channel 4 too?

The answer, in our view, is probably yes – despite the political difficulties it may bring in terms of Manchester being seen to be prioritised over other cities. Moving Channel 4 to MediaCity would build on a project that was started back in 2011, and would allow it to benefit and expand the existing specialist pool of workers and suppliers that has been created since the BBC’s move – and working with the scale of the city in the way that the ONS’ move to the much smaller city of Newport could not.

Sure, an extra 800 jobs from Channel 4 would be a positive thing for the other cities bidding to be the new station’s new home, such as Birmingham, Liverpool and Sheffield. But the bigger issues for these places is the barriers that for decades have deterred high-skilled businesses from investing in them in sufficient numbers – and which moving Channel 4 would do little to help break down.

To boost growth and prosperity, these cities need many thousands of knowledge-based businesses in many different sectors deciding to set up shop in their economies, creating tens of thousands of new jobs in an emergent way that successful cities foster, rather than through ‘big ticket’ policies. For that to happen, these places need to address the skills and transport issues that hamstring their economies, which should be a higher priority than headline grabbing initiatives such as securing Channel 4.

Birmingham, for example has the highest share of people with no formal qualifications of any city in the UK, and Liverpool doesn’t fare much better. Meanwhile no other city in the UK has a body with Transport for London style powers, despite this being very much in the gift of politicians to change – this too should be a priority for northern cities.

Policy is right to focus on specific places. But it has to be clear on how it is tackling the challenges that each place faces. Looking to give everyone a prize, and being unclear on what an intervention is aiming to do, ultimately doesn’t help very many people.

Paul Swinney is senior economist at the Centre for Cities, on whose blog this article was first published.

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Which nations control the materials required for renewables? Meet the new energy superpowers

Solar and wind power facilities in Bitterfeld, Germany. Image: Getty.

Imagine a world where every country has not only complied with the Paris climate agreement but has moved away from fossil fuels entirely. How would such a change affect global politics?

The 20th century was dominated by coal, oil and natural gas, but a shift to zero-emission energy generation and transport means a new set of elements will become key. Solar energy, for instance, still primarily uses silicon technology, for which the major raw material is the rock quartzite. Lithium represents the key limiting resource for most batteries – while rare earth metals, in particular “lanthanides” such as neodymium, are required for the magnets in wind turbine generators. Copper is the conductor of choice for wind power, being used in the generator windings, power cables, transformers and inverters.

In considering this future it is necessary to understand who wins and loses by a switch from carbon to silicon, copper, lithium, and rare earth metals.

The countries which dominate the production of fossil fuels will mostly be familiar:

The list of countries that would become the new “renewables superpowers” contains some familiar names, but also a few wild cards. The largest reserves of quartzite (for silicon production) are found in China, the US, and Russia – but also Brazil and Norway. The US and China are also major sources of copper, although their reserves are decreasing, which has pushed Chile, Peru, Congo and Indonesia to the fore.

Chile also has, by far, the largest reserves of lithium, ahead of China, Argentina and Australia. Factoring in lower-grade “resources” – which can’t yet be extracted – bumps Bolivia and the US onto the list. Finally, rare earth resources are greatest in China, Russia, Brazil – and Vietnam.

Of all the fossil fuel producing countries, it is the US, China, Russia and Canada that could most easily transition to green energy resources. In fact it is ironic that the US, perhaps the country most politically resistant to change, might be the least affected as far as raw materials are concerned. But it is important to note that a completely new set of countries will also find their natural resources are in high demand.

An OPEC for renewables?

The Organization of the Petroleum Exporting Countries (OPEC) is a group of 14 nations that together contain almost half the world’s oil production and most of its reserves. It is possible that a related group could be created for the major producers of renewable energy raw materials, shifting power away from the Middle East and towards central Africa and, especially, South America.

This is unlikely to happen peacefully. Control of oilfields was a driver behind many 20th-century conflicts and, going back further, European colonisation was driven by a desire for new sources of food, raw materials, minerals and – later – oil. The switch to renewable energy may cause something similar. As a new group of elements become valuable for turbines, solar panels or batteries, rich countries may ensure they have secure supplies through a new era of colonisation.

China has already started what may be termed “economic colonisation”, setting up major trade agreements to ensure raw material supply. In the past decade it has made a massive investment in African mining, while more recent agreements with countries such as Peru and Chile have spread Beijing’s economic influence in South America.

Or a new era of colonisation?

Given this background, two versions of the future can be envisaged. The first possibility is the evolution of a new OPEC-style organisation with the power to control vital resources including silicon, copper, lithium, and lanthanides. The second possibility involves 21st-century colonisation of developing countries, creating super-economies. In both futures there is the possibility that rival nations could cut off access to vital renewable energy resources, just as major oil and gas producers have done in the past.


On the positive side there is a significant difference between fossil fuels and the chemical elements needed for green energy. Oil and gas are consumable commodities. Once a natural gas power station is built, it must have a continuous supply of gas or it stops generating. Similarly, petrol-powered cars require a continued supply of crude oil to keep running.

In contrast, once a wind farm is built, electricity generation is only dependent on the wind (which won’t stop blowing any time soon) and there is no continuous need for neodymium for the magnets or copper for the generator windings. In other words solar, wind, and wave power require a one-off purchase in order to ensure long-term secure energy generation.

The shorter lifetime of cars and electronic devices means that there is an ongoing demand for lithium. Improved recycling processes would potentially overcome this continued need. Thus, once the infrastructure is in place access to coal, oil or gas can be denied, but you can’t shut off the sun or wind. It is on this basis that the US Department of Defense sees green energy as key to national security.

The ConversationA country that creates green energy infrastructure, before political and economic control shifts to a new group of “world powers”, will ensure it is less susceptible to future influence or to being held hostage by a lithium or copper giant. But late adopters will find their strategy comes at a high price. Finally, it will be important for countries with resources not to sell themselves cheaply to the first bidder in the hope of making quick money – because, as the major oil producers will find out over the next decades, nothing lasts forever.

Andrew Barron, Sêr Cymru Chair of Low Carbon Energy and Environment, Swansea University.

This article was originally published on The Conversation. Read the original article.