To revive towns, you also have to consider cities

Eight years of Tory austerity have hamstrung the growth of our towns.

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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, the 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 told across many towns and cities, 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 understands 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: one in five 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 that 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 that 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 and devolution and the MP for Oldham West & Royton.