Jim McMahon: “The Tories have no plan to grow the economies and cultures of our towns and cities”

Oldham High Street. Image: Wikimedia Commons.

Most people agree that the vote for Brexit was in part driven by the economic and political disenfranchisement of many communities across the country, which for too long have been overlooked by Westminster. That’s particularly true of small towns in the Midlands, North and on the coast. These places have lost their traditional industries and the same areas have been hit badly by the Tory government and the austerity over the past eight years.

The sense of pride and purpose felt by towns, though robust, has been expected to deal with too many blows. This sense of loss has paved the way for political apathy, a growing mistrust in our institutions and a feeling of powerlessness, especially over the economy and the decisions taken by central government.

In my home town of Oldham, central Government’s answer to industrial decline was to grow the public sector, which by 2005 had overtaken manufacturing as a source of the town’s economic output. This is the same story across many towns and cities will tell, as nationally the number of manufacturing jobs fell from 5.7m in the 1980s to just 2.6m by 2017. 

Meanwhile eight years of Tory austerity and disjointed or non-existent policy making have hamstrung the growth of our towns.

Labour understand much better now that these conditions sowed the seeds of the Brexit vote in many towns, and it’s a live and active debate about rebuilding Britain. 

For example, my colleague Lisa Nandy MP, through the Centre for Towns think tank, is working to highlight the social, political and demographic challenges facing our towns and small cities.

The Labour Towns group, led by Yvette Cooper MP, is also campaigning diligently on behalf of towns and communities across the country, and to champion new ideas and plans for Labour councils and MPs in these places.

And the Labour leadership has set out its plans to revive and reprogramme our economy, so that it works and creates jobs for every town, city and village in the country. This reflects Labour’s values of ensuring that all our communities can prosper and move forward together, and that no place is left behind.

The importance of those values is reinforced by a new report published today the Centre for Cities think tank with Core Cities, which looks at the economic relationship between our towns and cities, and how we can ensure that both can thrive.

The new report reveals that towns and cities are in fact inexplicably linked: 1 in 5 people living outside cities commute into one for work. The flip side of this is that people living in towns and beyond are crucial to the success of cities.

But the economic ties between towns and cities run deeper than jobs. The report shows that when our city economies thrive, so too do the economies of nearby towns, as reflected in their success in attracting more high-skilled, high-paying business investment. In contrast, towns which are close to less successful cities have lower employment rates, and have also struggled to attract high-paying firms and jobs.

There are a number of important conclusions to draw from this. Firstly, to help struggling and towns to prosper we also need our cities to be thriving.

Secondly, many of our cities are struggling, just as towns are – and we can’t afford to lose sight of this if we are serious about Britain achieving its full potential.

Thirdly, whilst the relationship between towns and cities must be allowed to flourish, this shouldn’t be the single-track approach for how government revitalises towns now and in the future, and where power sits and how makes decisions is critical to this.

Devolution is key to success, but it must be built on a foundation of fair funding and the powers to do what’s right for their areas – not just relying on the economic pull of large metropolitan areas.

This is critical. As the current government move to self-financing they will rely almost exclusively on the ability of councils to raised funds from a localised tax base; fine for areas which see growth and are robust, but a serious concern for areas with low property values and weak demand.

There is also increasingly a case to consider business rates as part of a holistic review of business taxation which addresses multinational corporations, the rocketing growth in online sales and its impact on high streets and town centres.

Regardless, we must ensure that we get maximum impact of public sector spending. Local government have a critical role to play here, for instance with the establishment of local public accounts committees councils can hold the ring on public spending in their areas.

And finally, we can’t ignore the importance of people and their relationship with ‘place’, which is harder to measure. In Oldham, there is a recognition of the importance of Manchester as an economic hub. But there is also a deep rooted nostalgia, not just for steady local employment, but for the rich culture and unique identity our town centres can offer – but which too often seems to have faded along with the local industry, again ignored by government as High Streets suffer and become a barometer of the general confidence in the future.

The Tory Government has failed to grasp this complex picture. It also has no plan to deal with these issues. Its Industrial Strategy, which it hopes will improve productivity and prosperity across the country, is incoherent and fails to recognise the different challenges that different place face.

Moreover, both these initiatives wilt in significance in the context of continued Tory austerity, which has devastated communities across the country and decimated public services. Essential neighbourhood services have vanished in the places where they are needed the most.

Only a Labour government will commit the funding and investment needed to bolster transport and infrastructure with empowered local, sub regional, regional and pan regional co-operation to thrive now and in the future.

None of this is about pitching our towns against our cities. That approach creates an unnecessary distraction and misses the real prize: for every community to be part of a new settlement in a fairer and more prosperous Britain.

Jim McMahon is the Shadow Minister for Local Government & Devolution and the MP for Oldham West & Royton.


A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.

Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.