Protectionism is bad when Trump does it – so why is it so often welcomed by British cities?

Protectionist in chief, Donald J. Trump. Image: Getty.

Do we stand on the verge of a new trade war? In light of competition from elsewhere, the drawbridge is being pulled up to shelter local industry from these malevolent foreign forces. And that, argue some policy makers, is going to help keep money in the economy and create jobs.

I’m not talking about Donald Trump, steel and whiskey. I’m talking instead about the idea of councils buying their goods and services locally, an idea that has been dubbed ‘Corbynomics’ and has Preston as its poster child. But the parallels are striking.

In recent years Preston City Council in particular has been active in increasing its spend on local businesses, giving them preference over suppliers from elsewhere. This has brought both curiosity from some policy makers and strong support from others, with John McDonnell describing this brand of ‘municipal socialism’ as the kind of radicalism needed across the country.

What is curious though is how differently policies promoting protectionism are viewed at the local and national level. The lines against international trade barriers are well rehearsed, and Donald Trump has been roundly criticised for his approach, with even his economic advisor quitting over it. And yet paradoxically protectionism is welcomed at the local level, somehow viewed as a defence for small businesses rather than the same politics of populism.


The same applies to the idea of local currencies. There are a number of local currencies in the UK, such as the Exeter and Bristol (tagline “Our city. Our money”) and pounds. The principle is that they support independent businesses by encouraging people to shop locally – in a war of David (local independents) versus Goliath (big national or multinational companies), it is argued that these policies help level the playing field. Of course, this is exactly the argument that Trump makes about US steel (David) and China (Goliath).

The struggles of the US steel industry are unlikely to be down to unfair trade practices, nor the deluge of cheap Chinese products. (Chinese steel accounts for just 2 per cent of all steel imports into the USA.) Similarly, the challenges that weaker city economies face have little to do with local authorities spending their budgets with companies outside their areas, nor people choosing to buy from Amazon rather than their local high street. Instead these struggles are caused by the ability of places to attract high-skilled investment into their economies, and the ability of these businesses to ‘export’ their wares to a regional, national or international market. This is caused by a number of issues, of which low skills of the workforce is chief amongst them.

So as US trade tariffs have been criticised by many, we must also view protectionist policies at the local level in light of the same criticism. Successful cities are ones that are open to business, irrespective of where these businesses are based. We should be encouraging them to increase trade, not shut it down.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.

You can hear him discuss these issues on a recent episode of Skylines, the CityMetric podcast.

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“The enabling authority”: What explains Warrington’s economic boom?

Warrington’s Georgian Town Hall, behind its Victorian gates. Image: Racklever/Wikimedia Commons.

The latest instalment of our series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities. 

When you’ve spent a couple of years trawling a database, you start to notice patterns. Here’s a map of GVA per worker, a measure of productivity, across the main British urban areas. Darker colours mean higher numbers:

Image: Centre for Cities.

That darker, green blob about halfway between Liverpool and Manchester, is Warrington. It’s by far the most productive city in the north west of England.

Another map. This one’s welfare spend per capita: you’d probably want your blob to be as light as possible, to represent that everyone is doing alright without government support. And once again: Warrington sticks out like a sore thumb.

Image: Centre for Cities.

Last one. This one’s wages. It’s less obvious here, because Warrington’s weekly wages are roughly on a par with those of Liverpool and Manchester (in fact, they’re slightly lower). But you’d expect wages to be highest in a region’s big cities, and lower in the smaller, nearby towns. And yet Warrington, unlike the other cities of the north west, is competing with the big boys.

Image: Centre for Cities.

The obvious question is: how?

History and geography

Context first. Warrington started out as a market town, on the Lancashire bank of the Mersey, by this point little more than a stream, although it swiftly spread across the river into Cheshire, the county it’s now part of. Half a century ago, it had a lot in common with the other smaller, industrial settlements of the north west: it was a centre for brewing, distilling and, most notably, wire manufacture. (The number of things in the town still nicknamed “The Wire” – a football team, a rugby team, a radio station – is faintly unsettling to any fan of the work of either David Simon or Doctor Who.)

Warrington in context. Image: Google Maps.

In 1968, though, Warrington was designated as one of the government’s final wave of new towns. Land left vacant by the closure of the munitions factory at ROF Risley was purchased by the Warrington Development Corporation and redeveloped as the new residential estate of Birchwood. Other sites – notably that of an airbase, RAF Burtonwood – have since also been repurposed as housing. Over the last half century, the population of the town has roughly tripled, to over 210,000: in the ‘70s and ‘80s, the decades when many northern industrial cities were in decline, Warrington’s population boomed.

The Village Hotel: a very ’80s vision of the future. Image: Jonn Elledge.

You can see this dual history – part ancient market town, part post-war boomtown – in the fabric of the place. The main thing I knew about Warrington before I visited it that it was a new town, so I was expecting a sort of northern Milton Keynes.

That wasn’t entirely wrong: the majority of the housing is relatively recent. And one of my meetings took me to a combined hotel bar/café/health club which offers something called “Inspiration Suites”, and whose enormous brick-surfaced car-park surrounds a fountain spouting extravagantly dyed water, like a vision of the future, c1986.

But there’s another Warrington: the covered market square, where there’s a pub dating from 1561; the grand Georgian and Victorian buildings on Sankey Street and Palmyra Square. The town hall is the Grade I-listed Bank Hall, which dates from 1750; its grand gates, at the foot of its long lawn, were created as a gift for Queen Victoria. She declined them, but nonetheless: Warrington was and is a real place in its own right, not merely an overflow for people who wanted to escape the big cities on either side.

The market square. Image: Jonn Elledge.

Economics

So why is Warrington doing so well, when so many similar sized northern cities are doing so badly? Why is it attracting the knowledge intensive service businesses that a modern western city needs to boom?

Image: Centre for Cities.

Geography is clearly a factor. The town lies within relatively easy reach of both Liverpool and Manchester, via train and motorway and, should you fancy it, canal. It lies on the main north-south routes (the West Coast Main Line; the M6), too. Whethe you’re a commuter or a business, it’s a good place to be based.


That doesn’t explain why it should have done so much better than Wigan, 10 miles to the north, which shares many of these advantages, however. So here’s another theory: Warrington’s success is the legacy of its history. Its new town status meant it had a lot of land, ready and hungry for development. It also gave the town what Steve Parks, managing director of Warrington & Co., terms an “enabling authority”: a council that saw economic development as a key part of its role.

The development corporation responsible for the new town closed its doors in 1989. But today Warrington & Co. essentially continues its mission, by providing business support, and leading local development and regeneration schemes. It creates the infrastructure necessary to unlock new developments; helps developers get planning permission; and manages the council’s property portfolio, providing it with a handy revenue stream.

Technically, Warrington & Co.’s staff are council officers; but their email addresses suggest otherwise, and they were largely recruited from the private sector. “When an investor thinks they’re talking to Warrington Borough Council, they think they’re all about car parking and grass cutting and so on,” Parks says. The impression of a private company was created intentionally, “to drive a different dynamic”.

“To some extent,” he goes on, “it’s a northern post-industrial town. We’ve had out of town development and the new town, but there’s a donut effect: the donut has done well, at the expense of the demise of the town centre.”

So the priority at present is correcting for that. Its big scheme of the moment is Time Square, a new chunk of town centre including a cinema, offices, eight new restaurants and two new bars. The council, through Warrington & Co., is taking on the development risk itself. Other schemes are in the pipeline, too. “We’ve broken the town centre into seven quarters,” Parks notes. “But we’re doing them all at the same time so we don’t just chase the blight around the own.”

A hoarding for the new development. Image: Jonn Elledge.

There’s much still to do. The first thing many visitors see when they arrive at Warrington Bank Quay station is the town’s biggest remaining patch of industrial decay, a spit of land between the river and the railway, which the counc il fears shapes perception of the place: a new road is needed to unlock its re-development. There are plans to bring residents back to the town centre, too: the council has planning permission for another 500 extra homes; James Peacock Developments has already created a chichi apartment block next to Central station. Parks talks, perhaps optimistically, of attracting tech business to a local digital hub, too.


All sorts of factors have contributed to Warrington’s success, but one of them must surely be this: a council willing and able to do the things necessary to push the town forward, and with the land, and cash, to do it. It’s the same attitude that led it to create a second arms-length company, Warrington’s Own Buses, which does what it says on the tin. It’s like a Victorian municipal corporations, still running in 2018.

Most of the factor that enabled Warrington’s boom aren’t replicable. But with some thought and some investment, this one, perhaps, could be.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites