“London & UK: Strengthening ties between capital and regional cities”

Opening

Ichikawa

Currently in Japan, there continues to be an overconcentration in Tokyo. Under the name of Chihou Sousei, or ‘local creation’, the government enacted policies 5 years ago that aimed to address this issue by activating regional areas. However, while Japan’s population decreases, Tokyo’s population is increasing, and the city’s overconcentration is accelerating. In any case, how is the situation in the UK? London also faces overconcentration while regional cities are experiencing decline. In order to consider what policies and countermeasures Tokyo could take, Mr. Richard Richard Brown will discuss the circumstances in London, along with those of core regional cities such as Manchester and Liverpool. Likewise, we will hear from Professor Kudo regarding Japan’s regions and what direction and activities they should be aiming towards.

Richard Brown　Special Lecture

Richard Brown

There exists a significant sense of detachment between London and regional cities in the rest of the UK, typically based on the feeling of being ‘left behind’ and not prospering to the same level as London, which has in turn influenced Brexit debates as well. And yet, London itself also faces significant challenges internally, with growing problems of congestion, air quality, and a dire lack of affordable housing. Local residents must also compete in the job market with talented professionals not only from the UK, but worldwide. What created this frayed relationship and how might it be addressed?

First, an overview of the country’s administrative context. The UK maintains a very centralized government, based in Westminster, where power, including taxation among other functions, is concentrated. Alongside that, there are the devolved administrations, including Scotland, Wales, and Northern Ireland.

In London, since 2000, there has been an elected mayor and assembly with a devolved administration for the mayoralty, as well as 33 London boroughs who provide day-to-day services. Outside London, rural areas usually have two tiers of local government – counties and districts. In cities, there tends to be one tier of local government, but most recently, combined authorities and metro mayors have been introduced, elected to fulfill similar roles in different cities to that of the Mayor of London.

Demographically, London depopulated dramatically during and after the second world war, partly from people being evacuated and not returning, and partly from slums being cleared. The effects of deindustrialization and regional policy also led to employment opportunities disappearing, with London experiencing a steep decline from 1939 through to the 1980s. In the 1980s and the early 90s, the city experienced a regeneration stemming from a build-up of financial services as well as a cultural revival that made London the pre-eminent European city, attracting newcomers from around the world. After exceeding its previous population peak of 8.5 million in early 2015, it is now forecasted to reach 10 million over the next 15 to 20 years.

London's position now is a combination of Washington, New York, and Los Angeles all in one city. There is a government capital, a commercial capital, and a cultural capital. The UK Parliament is in London, and half of the senior civil services are there, while the city has around 13% of the UK’s population, but around 25% of the economic output. In some sectors, for example, Financial Services, Legal Services, and Head offices, the percentage of output is much nearer to 50% or higher.

In other areas, it resembles New York, as it faces the same housing problems and transport problems, as well as similar environmental challenges. However, in terms of its cultural offerings, London is further ahead, which has contributed to London’s position as a leading center for global inward investment in recent years. This is especially evident when considering the total number of investments in terms of headquarters, where the city ranks first.

How does London fit within the UK in terms of population? London’s demographic profile has become more internationalized over the past 20 years, going from 78% UK-born population to 54% UK-born population. This shift is happening at a scale and speed far more intense than the rest of the UK. While this diversity is strengthening the city, it is likewise, alienating it from other domestic cities.

Socially, and in terms of economy, the disparity between London and the rest of the country can be seen through GVA per head, where London scores far above the UK average. This gap has been widening considerably in recent years, from 60% to 80%.

Productivity in other UK cities has also been declining while increasing in London, which is increasingly focused on high value-added globally traded services such as financial and business services, professional services, information, and communication technology services. Central London currently has 40% of its economy in those services. Whereas outer-London and other UK cities have nearly 15 to 20% at most within these sectors. This transformation to the high-value services sector is occurring in other UK cities as well, but it’s not taking place at the same speed or in the same concentration as it is in London.

While London is excelling in terms of productivity and economic composition, this isn't necessarily benefiting average Londoners. Londoners have higher incomes, but when accounting for housing costs, specifically the rent levels and the cost of mortgages, the level is much closer to that in parts of Northern England than the rest of Southern England. London is very productive and offers high salaries, but London is also relatively poor in terms of people’s actual disposable income.

These conditions hint at how London relates to the rest of the country and how the rest of the country relates to London, creating a north-south divide. Traditionally, the north is a lot poorer, while the south is a lot richer. These are the areas that predominantly voted heavily for Brexit.

Challenges also exist between London and surrounding regions. London’s wider functional urban area has been extending further out towards the towns located beyond the green belt that encloses the city. One specific problem in Southeast England relates to London exporting wealth, which then creates pressure for local housing markets and makes it difficult for local residents to rent or buy homes. This is different from the problem in the north, where areas around cities are being left behind with little prosperity.

This sets up quite a tense discussion along several different dimensions within the UK, which is covered in our London, UK report regarding attitudes in London and the rest of the country. It was noted that Londoners sometimes say that “the city is the fairytale ‘goose that lays the golden eggs’ as it drives the UK economy and is the primary focus for tourism and investment. The rest of the country should just be grateful.”

An alternative view sees London as a ‘dark star’, a black hole that sucks in talented young people, investment, and all the cultural light and life out of the rest of the country. Perhaps a better narrative is preferable, relating to what London and the rest of the UK share, rather than focusing on differences.

In terms of the two forms of debate previously mentioned, the ‘golden goose’ is represented by tax transfers from London to the rest of the UK, where the tax gap has been growing. London is contributing an increasing amount to the rest of the UK’s public finances, now around £3000 per head per year in taxes transferred from London to the rest of the UK. This is creating tension among Londoners who feel the city should be spending this revenue on its own challenges.

At the same time, London spends a lot more public money, particularly in transport, where it spends, roughly three times as much as the rest of the UK. Of course, London being a large urban area, supports a much larger ridership, and requires more extensive public transport, but from the perspective of those outside London, it seems as if the already rich city is receiving more and more funding.

This feeling of contention and disconnect is evident in several polls carried out where people were asked what they thought of London. Close to 77% recognized that the city was economically valuable to the country, though actual benefits realized locally were less perceptible. One area that brought people together was a general ‘pride’ felt for London, with close to 70% expressing such feelings in the past. And yet, even this number has recently fallen from highs seen during the 2012 Olympics, down to 60%. Geographically, pride in London decreases as you move north, with 67% showing positivity in the South of England, but only 39% showing the same in Scotland. Delving deeper into specific impressions of London, while many note ‘expensive’ and ‘crowded’ as negative descriptions, there are far more positive descriptions such as ‘cultural’, ‘diverse’, and ‘lively’.

You can see in these trends, both the economic data and some of the perception data, a growing gulf between London and the rest of the UK. People are less convinced of the value of London. They are less proud about London than they used to be. And at the same time, the politics of Brexit is opening up a new urban-rural split. There is a challenge in terms of continuing divergence of productivity, of economic growth, and of wealth. What policy interventions, then, have been applied over the past years to address these issues?

First, after the Second World War, there was a focus on diverting investment and people from London and trying to move them elsewhere. In addition to that, through the 1960s to the 1980s, there was a process of industrial relocation. Civil service departments and industries were moved out of London. Generally, though, development moved elsewhere in Southeast England, not transferring to former industrial cities in the north or to the West Midlands.

From the 1980s, there was a drastic decline in cities worldwide. This was countered with a process of in-the-city regeneration programs. In the UK, we had a series of development corporations set up in the former industrial areas. But perhaps it's telling that the one that was most effective was the one in London, the London Docklands Development Corporation which established the infrastructure for Canary Wharf, now London’s second big financial center. Other cities also redeveloped and beautified, but they didn't attract that level of inward investment that London did.

Through the Labour government in the 1990s and the 2000s, there was a focus on regional development agencies, set up with local business leadership to try to develop their local economies in a way that fit local circumstances. Again, there was some partial success with reinvestments in the city centers, but overall, rural and semirural industrial towns still declined.

Since 2010, we’ve had a new set of focal points such as the establishment of mayors and combined authorities, which provide other cities the type of powers that London has, through the process of negotiation with the central government. Those mayors are starting to act as powerful advocates for their cities, creating a strong network of city mayors and city governments within the UK.

One of the things we asked in our surveys was whether people want to see more relocations of government departments, or the Parliament. Could these institutions and departments move elsewhere in the UK? Should financial services also move out of London through incentivized development in other cities? However, there was little appetite for this anywhere. People didn't think it would make a huge difference moving any of these functions. It would seem that people prefer to develop their own, locally-derived growth, rather than receive handouts from London. The challenge is to find and develop that local growth.

In terms of infrastructure investment, HS2 and HS3 are very important projects in the UK. A high-speed train connecting Birmingham and London in the first phase, and then going on to connect out with Manchester and Leeds and possibly further north in due course will aid in connecting those cities through a stronger regional network.

The Mayor of London argues very strongly that London and the rest of the UK are both each other’s largest trading partners, and so trying to push London’s economy down in order to boost economies elsewhere would likely be to the detriment of the whole country. Instead, the focus should be on more devolution and more investments in infrastructure in terms of trains, but also in terms of other things such as high-speed broadband and upgraded local transport services within other UK cities.

The conclusions we came up with from our report were along these lines. We argued that the narrative of London seeing the rest of the UK as depending on handouts, and the rest of the UK seeing London as an arrogant suction machine of talent and money, needed to change. Also, the discussion around devolution needs to be pushed further. We need to devolve power to London as well as the rest of the country to allow cities and regions to take control of their own futures.

London, though, could do more to show that it cares about the rest of the country, as the city often seems more focused and engaged on the outside world, rather than the UK. Since the Brexit referendum, the Mayor of London, Sadiq Khan, launched a program called ‘London is Open’ to express to the world that regardless of the UK’s economic situation, London would still remain open, cosmopolitan, and ready for the world to visit, study, and work. Perhaps London also needs to have a ‘London is Yours’ campaign to engage with people across the UK, bring them into the city, and make them feel that it is their capital.

We need strong connections, including social connections between the cities, political connections between the mayors lobbying for more power and for the investment they need, as well as connections through businesses. When inward investment comes in London, how can that be shared, and used to boost services and supplies outside the capital? Could trade missions be joined between London and other cities? Could there be a brokerage service that helps investment not just going to the hub, which is London, but out to the spokes that are individual cities?

Lastly, we need to continue to invest in infrastructure. We have a huge infrastructure gap in the UK at the moment. High-speed rail needs to be pushed forward, as does high-speed broadband access, which is quite poor in many parts of the UK, as well as some parts of London. Housing also needs to be a target for investment, as there is a shortage in both London and other cities.

Shogo Kudo　Short Presentation

Shogo Kudo

The total population of Japan reached its peak at 128 million in 2008, and is now in decline, with an expected fall of 30% by 2055. Japan built its social systems at a time when the population was growing and predominantly young, but it now faces a transition towards an aging and shrinking demographic. We need to question once again what development means to us at the societal level? In Japanese, what is yutaka-sa, perhaps in English, ‘social wellness’? This is the question currently being posed to the whole of Japanese society.

To address this question, we must find the alternative values that help us to guide and think about this social transition and define the specific actions that should be taken. This seminar aims to learn from the experience of London and the UK, despite a slightly different demographic situation.

Conventionally, the challenges of the urban and rural areas have been discussed in a separate manner. For example, in academia, we have a field called ‘urban studies’ and ‘rural studies’, as well as urban planning and rural planning, but they don't really communicate with each other. We see the systems of urban areas and rural areas as independent systems, whereas in reality, it is clear that they are closely linked. When we talk about energy, or any type of resource, urban systems need support from the countryside, and yet the countryside doesn't exist for the sole purpose of sustaining urban areas.

The key perspective we need to introduce is to consider the urban and rural system as one integrated system. It is evident that people, identity, and information, as well as various kinds of resources go back and forth between rural and urban areas. This rural-urban tie perspective seems very critical to our society, and also perhaps in the UK’s society.

Questions to Richard

Shogo Kudo

Q.1

What kind of social and economic ties exist between London and peripheral cities? In the Japanese context, the chihou sosei, regional revitalization scheme, seems not so successful in terms of bringing the population back to the countryside or boosting the local economy in rural areas. So, can we learn anything from the experience of London in terms the rural-urban connection between London and peripheral cities?

Q.2

What has been the role of diversity and culture in the development of London? What was the contribution? And what can we learn and apply to the case of Tokyo?

Q.3

What is your view on the future state of UK society towards 2050, especially on the next transitions of London, peripheral cities and the countryside?

Live Interview

Richard Brown

What you said about the inseparability of urban and rural systems is really interesting, as in previous centuries both functions were shared within the city due to a lack of transportation. The advent of railways enabled this separation of functions, and we are still living with the implications of that. In terms of London's economic and social connections with the rest of the UK, many residents grew up in the countryside, went to a provincial university, and then journeyed to London in their 20s for employment. These residents eventually leave again in their 30s or 40s.

People moving to a commuter town often develop a relationship with the locality of simply sleeping there, not really becoming part of the community, or bringing any economic contribution. This is something we need to challenge, by encouraging people to participate more locally. One thing that could be done in the UK is to promote flexible work patterns like having people work out of their commuter neighborhoods 1 or 2 times a week—using local services and contributing to the economy.

There are also good examples of firms that have moved into London, and actually had a wide regional impact. JP Morgan has its European headquarters in London, but they have a large data and back-office center in Bournemouth on the south coast. Brighton also has an American Express processing operation. Presenting London along with other regional cities as a package for investment could be emphasized more. One reason London tends to be the focus for promoting inward investment is that global firms are more likely to relocate to other major European cities rather than regional UK cities, if London cannot meet their needs. London, in this sense, competes globally rather than domestically.

Shogo Kudo

What is the general perspective of young generations in the countryside? Do they see London as a source of a bright future? For example, in my case study area, children are taught that a better life is ‘out there’. So, parents actually encourage them to go to cities. The consequence is that they attend university in Tokyo, and then they get a better paid, more stable job. Back home, they only have the choice of being a farmer or fishermen, paid very poorly, or engaged with the service industry. So, do you have something similar like this, like a structure almost embedded in their perception towards London, or larger cities?

Richard Brown

If you drive through any English rural town, you will see teenagers loitering around the bus stop, looking bored and smoking cigarettes. People feel that they need to get out of rural areas, whether it be to London, or even local provincial cities. In general, agricultural work is very poorly paid with very bad conditions, while the service sector in small towns also offers low wages. Therefore, there is an attraction away from the countryside.

Shogo Kudo

I wanted to emphasize the type of diversity and culture we can talk about in the case of London, because the city is very international and cosmopolitan.

Richard Brown

There are always two levels to diversity which we need to distinguish slightly—ethnic diversity and country-of-birth diversity. Those two levels are very different in the UK because ethnic diversity is more widely spread through the cities due to significant waves of immigration from former colonial countries of the UK. Many of these people and their families are now second or third generation British people. There is a diversity of culture there, but it's not about internationalism.

In terms of migration, London does tend to attract more new migrants, particularly because the city already boasts a significant number of international communities in which familiar food, religion, and culture can be found. This diversity has been a cultural boon for the UK, for example with popular music of which Black British influences can be seen in Grime, house music, and other styles all driven by diversity. English cuisine is hugely enriched by Indian cooking, and other flavors from around the world—evident in a recent survey which placed chicken tikka masala as Britain’s favorite dish.

The influence of culture as an attractive force cannot be understated, and this was on display in London’s Olympic bid video which was very different than most, as rather than simply displaying popular London cultural sites, it started with a picture of a young child sitting in a shantytown, somewhere in the developing world, watching TV. The message was that everyone was welcome. That worked for the International Olympic Committee, as it did for international companies who came and felt welcomed in London.

Shogo Kudo

How, then, would devolution be influenced or affected by the diversity that exists in London and other cities? With 53% of Londoners being UK-born, that means roughly half aren’t from the UK. So, how does this affect the devolution aspect?

Richard Brown

The idea of devolution is to allow local governments to commit money to what they individually need. If London, for example, has lots of refugees who need training in English as a second language, London can tap the resources to fund that training. It's about being able to adapt to local circumstances.

One thing we’ve suggested which is slightly controversial is to devolve immigration policy to cities. For example, London could control its own immigration levels, with new immigrants receiving a visa specifically to work in London. Parts of the UK that are more worried about immigration would be able to reduce their intake, whereas the areas where it's welcomed would be able to continue attracting immigrants. One of the challenges for London is that if we do slow down immigration—around 25, 30% of London’s workforce is born overseas—the city would face a real problem. It would lose not only highly-skilled workers, but a large portion of the medium to low-skilled service sector.

Shogo Kudo

Let’s talk about 2050. Can we hear your personal view on the future state of the UK?

Richard Brown

We are just starting a piece of work about the future state of London for 2050. In London, we have accumulated challenges such as the challenges of inequality and of housing affordability, and of congestion, but there are new issues on the horizon, such as climate change as well. We are expecting significant levels of migration from Southern Europe to Northern Europe over the next century due to climate change. Will that lead to a greater concentration of population in cities like London? How will it adapt? At the same time, the growth in automation is perceived slightly differently in the UK, from Japan, and now people are quite worried about automation, especially regarding the loss of jobs.

In terms of automation, it will be important to note how lower-skilled labor adapts to the new economy. Will a very highly paid professional class emerge, with an increasingly sidelined, lower-skill population. Aging is also a challenge for the future. It's a little less immediate than it is in Japan, but it's definitely there. In London, the ‘over 65’ group is forecasted to be the fastest growing segment in the next 10 years. In general, London needs to consider what sort of city it wants to be. A very open trading economy, trading globally in services with perhaps higher state intervention to build more housing and provide infrastructure, but also possessing very competitive tax laws and a very open trading system. That's one possibility.

There is another future which is perhaps being more engaged within the UK, with London performing more as a capital city, actively promoting trade with other UK regions, and becoming more self-sufficient, less globally connected perhaps. This would be a so-called ‘Vienna option’, as Vienna was once one of the most powerful cities in Europe, and now is an incredibly beautiful city with a great quality of life, renowned museums, excellent galleries, strong heritage. However, it’s no longer the global power player it was when it was the head of the Austro-Hungarian Empire. In either case, the hope is that London would be better integrated with peripheral cities—cities which through restructuring will begin to find new roles.

Q＆A Session

Due to the Olympics, do you feel that there is an overconcentration in London?

Richard Brown

There is some risk of that, though according to the International Olympic Committee, hosting the Games in the UK would only be viable in London. Manchester and Birmingham submitted bids previously, and both of those lost. However in preparation for the London Games, we did quite a lot of work during the bid period and during the games period to actually connect the nations and regions around the country to the games through running regional programs in other cities and in rural areas. The focus of the opening ceremony in the cultural festival is very much not on London. It showcased the UK in significant ways, though people do still tend to have a stronger opinion about London. If you talk to investors, if you look at global opinion surveys, they tend to focus on London, and that global focus on the city will likely remain. Instead, London needs to promote the distribution of that focus to other areas as well.

How can governments encourage the decentralization of economic centers, more effectively dispersing population?

Richard Brown

We’ve been talking in the UK for many years about the Internet enabling people to work from home, enabling much more decentralized working patterns. Now, however, that level of dispersal has yet to materialize. Contrarily, we’ve had more and more agglomeration of economic activity into main centers. With environmental awareness and the impacts of climate change, there is an opportunity to actually encourage people to work more flexibly, perhaps not commuting into London 5 days a week, but only 1 or 2 days. They would still have that level of engagement and human contact, but would also spend time in other cities, which creates economic growth. This would be an effective way to decentralize economic activity without moving away from the agglomerative force that concentrates a lot of big businesses in the capital.

Regarding the concept of “London is Yours”, is there also a similar need for a “Regional cities are Yours” program to connect Londoners to outside regions?

Richard Brown

Yes. I think that's a good idea actually – I know quite a lot of Londoners who quite happily spend the weekend in Paris or Berlin or Barcelona, but wouldn't consider going to Leeds or to Liverpool or to Manchester. There is a need to promote the regional cities to Londoners, particularly to newcomers, who should understand that the cities outside are welcoming, interesting, and are good places to visit. Sometimes, particularly for people from minority groups, rural or provincial cities can feel quite uncomfortable as opposed to London which has this great melting pot in diversity.

Shogo Kudo

I think we have a similar discussion in Japan as well because we are now talking about the possibility of living in two places, registering yourself as a resident in – for example, Tokyo and Akita, and paying tax in two places. So, you receive all the public benefits from the areas and so on. The trend in Japan is very similar to London, like the economic activity being steeply concentrated in Tokyo. But when it comes to people’s perception, the parents’ generation prefers a better life in the cities.

Richard Brown

The dynamics of modern capitalist enterprise, it is pushing against any attempt to decentralize.

In Japan, it is quite common to move to Tokyo in your 20s and start a family, and then remain there for the rest of your life. However, in London, young people leave London for outside cities to start a family--why is that? Can people maintain careers in places outside London?

Richard Brown

London is attractive to people in their early 20s for many reasons. Partly, it's the opportunity to boost your career, as working professionally in London is seen as a positive. In recent years, some of the big banks have been opening more branches, or central offices, outside London. HSBC moved its UK headquarters to Birmingham, for example. But, as long as London remains the area with the largest pool of locally and globally talented human capital, that's where firms will tend to concentrate. It would be excellent if we could encourage these talented individuals to take their expertise back to outside cities, and start new enterprises there.
At the moment, people leave London, largely to commute back in. If people move back to Bristol, Birmingham, or Manchester rather than relying on staying in London for a career, perhaps commuting in some days each week, it could be similar to rural entrepreneurs. They are using London as a marketplace, or a meeting place, but actually basing their enterprise in Manchester or Birmingham. This could have many benefits.

Shogo Kudo

Regarding rural entrepreneurs in Japan, their first career is always in big cities like Tokyo or Osaka. Many work in consultancy firms, developing the skills and knowledge to start their own businesses. Then, those businesses take advantage of the opportunities in the countryside. These rural areas are often deemed resourceless, but this is not the case. In this sense, I agree with you that starting a career in cities is a fast-track, and that exposure allowed them to realize the latent value in the countryside.

If provincial cities offered better work than London, strong cultural attractiveness, and a complete lifestyle, then people would accumulate there. But the reality is that business development and infrastructure are concentrated in large cities, so people gather there. I would like to know more clearly about changing the narrative in these circumstances.

Richard Brown

Perceptions of quality of life and what you value change as one ages. When you are in your 20s, you value going somewhere with clubs and bars and fun places. The amount of space or the type of flat you live in is less important. This might change as one moves into the 30s or 40s. You certainly want to have a bit more green space, a garden, access to a park. Different cities can make different offers to people in different times of their life. For example, if you like living in a small space in an exciting city, paying high rent, and traveling in a very crowded tube, then London is the place for you. But, there are periods in your life where that doesn't seem quite so much fun. Changing the concentration of business conditions though, is more difficult. What businesses look for, from our research, is access to talent, good connections, to customers, to markets, to other global cities. Economic reasoning related to agglomeration effects also enters the equation. Businesses will always find these conditions in larger global cities. But they are still also operating within the national economy, and still need to work with people across the country.

Shogo Kudo

In Japan, we don't really have strategies to structure cities as offering different lifestyles that fit generational needs. Although, there have been some discussions particularly focusing on the elderly population, and encouraging them to go to the countryside, these discussions have mostly stopped.

Japan and the UK have radically different approaches, or attitudes, on immigration. What is the future of global cities in terms of reliance on newcomers to fill funds and sustain the city?

Richard Brown

I think London will continue to have a significant dependence on newcomers. To take away newcomers in London would mean a significant drop in economic activity, in quality of life, in the character of the city. As I said earlier, global climate change may actually drive more migration, driven out of necessity, not choice, to cities of the north. But London should ensure that it doesn't become over-reliant, and it should continue to ensure that it can find jobs, as well as opportunities for its own local population.

　

In terms of moving away from the capital and promoting regional cities, which of the following do you think is most effective—the transfer of businesses, human capital, or tax revenue?

Richard Brown

I think we’ve tried the transferring of companies, which had limited effects certainly on the northern cities. The one thing you can transfer is civil service departments, but in the case of London, it's generally been the lower grade civil servants who have been moved. And there is a debate about London losing young workers, with media often portraying this movement negatively, but it should be considered a positive in terms of supporting a constant churn of people to London and back out to outside cities.
I don't think that London should deliberately attempt to price people out of the city, since due to the changing priorities of different generations, residents would naturally leave. There is an extent to which London’s constrained housing supply and higher housing prices are moving people out. Tax transfers are a major factor, but it's perhaps the type of tax transfers that is important. At the moment, most of those tax transfers are about paying for public services, social security payments, and are not particularly productive. In particular, we pay huge amounts of money to private landlords in terms of housing benefit subsidies. Fiscal transfers for investment, I think are extremely valuable, because those provide the bed upon which everything else can grow. Fiscal transfers just to maintain people’s lives in an area with low economic activity, are not particularly helpful. A roundabout way of concluding – company transfers don’t work very well, people transfers will always be a part of the story, and we need to keep that mobility going between capital and country. But I think fiscal transfers to invest in infrastructure will draw in new business, draw in new vitality, and are probably the most effective.

A question related to the infrastructure. Do you know any example where not the government or public sector have helped to rural areas but rural cities have been helped by the private sector? Is there a way a private company can help cities rather than relying on government?

Richard Brown

In some provincial cities, companies tend to get more civically involved simply because they are the focus of civic life. This is particularly the case as you may have one or two or three companies who are the biggest company in town and very visibly so. For example, Brighton has American Express’s UK headquarters there. They also support the local football team. Not so recently, there was a tradition of companies like Cadbury’s, the chocolate company, in Birmingham, actually building a whole town for its workers, creating a sort of idealized community. We’ve also had in the UK, things called business improvement districts, which we imported from the US, where local companies get together and fund environmental improvements, programs to make the streets cleaner, or help tourists in local areas. One of the best ways they can help though is by continuing to work as part of the local economy, continuing to employ people, and train people. We sometimes look at the US where regionally based companies seem to have a lot more civic engagement. We don't have that sort of big regional civic engagement in the UK, and I think we could do a lot more of it.

Shogo Kudo

My takeaway from your talk today is that people value things differently at different times of life. I think, in UK society, somehow it is very well structured. The typical family moves out from London as they need a bigger family space. And there is a structure available for those families to do so. But maybe, for the case of Tokyo and Japan, we don't have that yet. Or maybe that's a type of lifestyle that’s not popular yet. Maybe, that's something I can bring back from this particular session. How it's going to be implemented? What actions need to be taken?

Ichikawa

When looking at the capital region in Japan, in a 50km radius, it is clear that Tokyo and London are similar in many ways, including population, GDP, and the fact that the number of employed is roughly half of the country's total. The challenge is that as we expand further out to include the Greater Tokyo Region which includes 1 metropolis and 3 prefectures, or in London's case Greater London and the South East regions, we see a huge accumulation. Finally, what will happen in the target year of 2050? As Richard mentioned, one issue is climate change which has had many effects, including heat waves in Europe, and another is Brexit. One final question regarding those in their 30-40s who decide to leave London; where are they going? Not necessarily Manchester, but for example, are they commuting from the South East Region?

Richard Brown

Traditionally, the majority has been to the southeast of England, but there are more moving out to Manchester and Birmingham and other cities as well. That's been a trend in recent years. I think, because people want something more affordable, they want something with a bit more space, but they don't want to completely abandon the urban lifestyle. People’s dreams are not necessarily what they used to be. “Let's move out to the countryside and have a garden and a car and 2.4 children and the dog and the cat.” It’s more “Let's move to another city where we can have maybe a bigger flat or townhouse, but we still don't want to have a car, we are still happy cycling and using public transport.” I think that's a generational change, and people’s aspirations, as they hit middle age, are slightly different.