London ‘suction machine’ having negative effect

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  By Anne-Marie O’Donnell

Jimmy Reid Foundation director Robin McAlpine warned the Economy, Energy and Tourism Committee meeting on Wednesday that the UK focus on the London economy has turned the city into a “suction machine”.

Mr McAlpine told the Committee that London was “far too powerful” and the growing problem was fuelling inequality throughout Britain.

“It’s really important that we are clear here, this is not really a Scottish problem, this is a Britain problem,” he said.  “There was a period when London City, the economy of London City grew by 35 per cent and during the same period the economy of South Wales grew by three per cent, now that is not a United Kingdom, that is a massive inequalities problem and it occurs in Cornwall, occurs in the Midlands, occurs in the North of England and its largely about how the economy is structured.”

He added:  “London is a suction machine, and as long as we’re tied to a purely City of London financial model of the economy it will keep sucking.”

The comments follow a similar warning earlier this year from Professor Tony Travers of the London School of Economics, who told the Financial Times that London was behaving like a black hole “inexorably sucking in resources, people and energy” that nobody knows how to control.

The UK government has invested heavily in London in projects such as the 2012 Olympics, and house prices in the region have grown by 15 per cent in the last year. Since the 2008 financial crisis, the economy in London and the south-east has expanded nearly twice as fast as the rest of the country.

SNP MSP Marco Biagi said the imbalance in the UK economy can no longer be ignored.

“The disproportionate effect that London has on the UK economy as a whole is undeniable – even UK Business Secretary Vince Cable has branded London a ‘giant suction machine’ that is ‘sucking the life blood out of the rest of the country’,” said Mr Biagi.  “As Robin McAlpine stated today, staying tied to the City of London means ‘it will keep sucking’.

“The Jimmy Reid Foundation’s written submission to the committee pointed out that there is ‘little evidence’ of change at UK level. Westminster has had its chance. With a Yes vote, we can make real progress toward rebalancing our economy and making Scotland fairer.”

Also submitting evidence to the Economy, Energy and Tourism Committee meeting were Institute of Directors Scotland chairman Ian McKay and Garry Clarke, head of policy and public affairs at the Scottish Chambers of Commerce, who both warned that uncertainty over the UK’s position in the European Union was worrying businesses.

Mr Clarke said Scottish Chambers of Commerce members would “certainly not want to, in the main, leave the EU”, while Mr McKay advised that the “vast majority” of businesses were concerned about the effect of the planned EU membership referendum on their businesses and trades.

“Both the Institute of Directors and the Scottish Chambers of Commerce highlighted the uncertainty being caused by Westminster’s obsession with ripping the UK out of the EU – both pointed out the negative impact this would have on business,” Mr Biagi added.

“The only threat to Scotland’s EU membership comes from Westminster. With a Yes vote in September, an independent Scotland will continue to be a member of the EU – making our voice heard around the top table for the first time.”

The Scottish Government has pledged its commitment to remaining a part of the EU if Scotland becomes independent after the referendum in September.