1. Governance
August 27, 2014

"The London Problem": 7 things we learnt from Danny Dorling’s essay in this week’s NS

By City Monitor Staff

When this week’s New Statesman is published tomorrow, you’ll find within it a rather good essay by the Oxford geographer Danny Dorling, under the headline “The London Problem”.

The problem, as he defines it, is how to manage both London’s growth, and its insane level of dominance of the UK’s national economy. At the moment, he argues, politicians are in denial about quite how much that growth needs to be planned for and managed. Here’s the key quote:

“London will grow; the only question is by how much, and how well-planned that growth will be. Government rhetoric suggests that nationally we will soon be building 200,000 homes a year but will have zero net migration. Given recent trends, both claims insult the voters’ intelligence.”

Dorling has made a career out of rummaging around in data looking for stories about inequality, so it’s no surprise that there are some great stats and charts in the piece. Here are our favourites.

1) London dominates the national economy more than any comparable capital

Except, apparently, Moscow. This chart shows the percentage of each country’s population who live in its capital, and the proportion of GDP they represent.


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Tokyo may represent a bigger chunk of the Japanese economy – but it also holds a lot more people. London’s dominance is entirely out of proportion to its size.

2) London is the only bit of the UK that consistently generates jobs

Between 1997 and 2010, according to the Centre for Research on Socio-Cultural Change, 45 per cent of all extra full-time jobs created in the UK were based in London. Between 2010 and 2012, says the Centre for Cities, that number went up to 80 per cent. In other words, London grew; nowhere else did.

Or, to put it another way: oh, bloody hell.

3) The government isn’t helping

Between 2010 and 2012, the government slashed public sector jobs in most part of the country. In London, though, the number of state-funded jobs actually increased in London, by 66,300. That should sort everything out.

4) The green belt needs to change

This isn’t news, of course, but Dorling puts it beautifully, and it’s always worth restating:

“Greenbelts don’t prevent urban sprawl; the sprawl just hops over them, increasing commuting times outside them and house prices inside. Good-quality, high density living prevents sprawl.”

5) The UK has more than one housing crisis

Nationwide, 8 per cent of homeowners with mortgages are in negative equity. In Northern Ireland it’s 41 per cent. In London, it’s just 1 per cent. Here’s a map:

Percentage of borrowers in negative equity


In other words, while Londoners watch house prices get ever further out of reach, parts of the country are still suffering from the crash.

6) Ever-inflating house prices are not inevitable

During its 80s boom, property prices went nuts in Tokyo, too. Here’s what happened next:


Average residential land prices in Tokyo (000s yen per M2). Data for 2005-11 not available.

But wasn’t this a disaster? Didn’t this lead to 20 years of economic crisis? Well, no, argues Dorling:

“Life as they knew it did not end in Japan when the value of land in Tokyo plummeted. The following two decades weren’t actually “lost”. It just became easier and cheaper to live, and far more obviously necessary to plan.”

7) London may be more fragile than we think

The essay identifies a number of things that could finish the city’s 30 year boom. A run on sterling; another banking crisis; a major flood.

The most immediate threat, though, is a “yes” vote in the Scottish independence referendum next month. “How will Londoners explain why, if being attached in some way to London is so beneficial, the Scots chose to leave?” Dorling asks. Look upon my works, ye mighty, and despair.

Dorling’s article, “The London Problem”, will be published in this week’s edition of the New Statesman, out tomorrow.

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