Individuals should be given the freedom to fulfil their potential, rather than being trapped by government policies in towns and Cities that hold them back. Having vast numbers of workers in the wrong place weakens the economy by reducing productivity and wealth creation.

In a free society, successful cities and regions can rapidly expand in population, while failing locations can rapidly decline. This process of geographical change is critical for rapid economic growth and big increases in living standards.

Cities in the North of England expanded rapidly during the industrial revolution – and this was vital for their development.

However, the reasons northern cities were centres of wealth creation in the 18th and 19th centuries no longer apply. These days, their economies are largely dependent on government handouts in various forms.

Their predicament is amplified by their location – on the edge of a continent in rapid relative economic decline. High labour, energy and transport costs – and suffocating bureaucracy and red tape – also create a difficult environment for business to prosper.

However, the UK’s geographical disadvantages can be counteracted by exploiting the agglomeration benefits of a very large city. In other words, the “economies of scale” created by a huge conurbation can help to overcome the problems associated with a semi-peripheral location.

Mega cities promote clusters of expertise and innovation. A high degree of specialisation is possible, with a wide range of niche services.  Deep and complex labour markets allow better matching of jobs to skills and talents, which in turn attracts the skilful and talented.

Specialist high-end services combined with high “human capital” attract entrepreneurs and investors from around the world. Providing certain conditions are met – i.e. reasonable tax rates, light-touch regulation and relative political stability – a very large city can create a virtuous economic circle, leading to high levels of productivity and high living standards.  

London should therefore be allowed to grow as large as possible. With state-imposed constraints removed, it could conceivably become the largest city inside Europe.

The administrative area of Greater London currently has a population of around 9 million. The Greater London Built-Up Area, which constitutes the continuous, joined-up conurbation, has around 10 million people. And the wider “London Metropolitan Area” is estimated at approximately 15 million.

In the absence of state-imposed restrictions, these figures (for the sake of illustration) could perhaps grow to 12 million, 15 million and 22 million respectively. However, there should not be fixed population targets or timescales. The outcome should be the result of the voluntary choices made by individuals.  

The main policy change required is liberalisation of the planning system and building regulations. Development should be allowed in London’s green belt. Property owners should also be allowed to “densify” existing neighbourhoods with the minimum of red tape – by building on gardens, adding floors, converting houses into flats, and so on. Under-used land such as parks, playing fields and warehouses could be developed too. A dramatic increase in supply would of course put powerful downward pressure on rents and house prices.

Inadequate transport infrastructure is no longer such a major constraint on the capital’s growth. The shift to working from home (often part-time) means London can accommodate a far bigger population without putting undue pressure on its public transport system (for example by spreading the peaks). And road capacity can quickly be increased by removing various anti-car measures imposed over the last few years (such as barely used cycle and bus lanes etc.).

Furthermore, where appropriate, the capacity of rail corridors could be increased enormously by converting them into busways, which allow higher passenger flows at far lower cost than railways (meaning reduced fares and commercially viable, subsidy-free services).

Water supplies are also frequently cited as a constraint. But a short Severn-Thames link and expanded reservoirs – perhaps combined with desalination plants if absolutely necessary – would resolve this issue.

Of course there should not be state-imposed constraints on the growth of northern cities either. But the chances of say Manchester evolving into a ten-million-plus mega city are slim. London has a first-mover advantage, inertia, a better location closer to Europe’s “core” and already possesses much of the required infrastructure.

_{Image: Wikimedia Commons.}