Stoke and Northampton: A tale of two cities. Tim Leunig

Transcription

1 Stoke and Northampton: Tim Leunig

2 Why Stoke and Northampton? Stoke needs realistic aspirations It is not about to be Chelsea or Cambridge Some similarities with Northampton Overhead 2

3 Similarities Midlands towns with a manufacturing background (Shoes in Northampton) Medium sized Neither in the core London commuter orbit (Northampton season ticket > 5,000) Northampton is richer so the question is: Is Northampton a reasonable aspiration for Stoke? Overhead 3

4 Economic similarities Economically active: Stoke: 116,100 Northampton: 116,000 Full time wages: Stoke: per week Northampton: per hour Overhead 4

5 Differences Lack of employment Labour demand In-vs-out commuting Skills Housing costs House price expectations Overhead 5

6 Economically inactive working age /number of workers 35% 30% 25% 20% 15% 10% 5% 0% Stoke Northants Overhead 6

7 Local jobs / local working age pop 120% 100% 80% 60% 40% 20% 0% Stoke Northants Overhead 7

8 VAT registered businesses/1000 pop Stoke Northants Overhead 8

9 Net new VAT registered businesses /1000 pop Stoke Northants Overhead 9

10 Local wages/wages of locals 110% 108% 106% 104% 102% 100% Stoke Northants Overhead 10

11 High skills: NVQ4+ (HND etc) 100% 80% 60% 40% 20% 0% Stoke Northants Overhead 11

12 No qualifications 100% 80% 60% 40% 20% 0% Stoke Northants Overhead 12

13 Ratio: High quals/no quals 200% 150% 100% 50% 0% Stoke Northants Overhead 13

14 Ratio: Good jobs/poor jobs 200% 150% 100% 50% 0% Stoke Northants (Mgt+Prof+Assoc Prof) / (Routine and Elementary) Overhead 14

15 Ratio: Full time/part time 300% 250% 200% 150% 100% 50% 0% Stoke Northants Overhead 15

16 Qualitative assessment Prices are not clearing wages are relatively similar, employment is not In all likelihood, skilled workers are in employment in both places, the big difference is in unskilled worker outcomes There are too many unskilled workers in Stoke, and since the unskilled labour market does not clear, there is higher unemployment etc in Stoke Overhead 16

17 Prospects for Stoke are poor Manufacturing remains important 16.1% of employment (cf 9.5% in Northampton, and 10.2% in GB). Vulnerable to China, etc Public sector is big 31% (cf 25.7% in Northampton and 27% in GB) and we have run out of money Overhead 17

18 Crowding out is a myth Although the proportion of workers employed in the public sector is higher in Stoke than Northampton, the Stoke public sector is NOT crowding out the private sector. Relative to population it is actually smaller 13.5% in Stoke cf 15.7% in Northampton. Overhead 18

19 House prices suggest decline Impressionistic (globrix) comparison of rents and house prices for inner urban pre terraces suggests gross rental yields of 7.6% in Stoke and 5.9% in Northampton. Implies Northampton prices will rise 30% more than Stoke s over the next decade Northampton houses currently 50% dearer, will be 100% dearer by Overhead 19

20 Not everything is bad The average job in Stoke pays 24 a week less than in Northampton. A mortgage on the average house is more than 50 cheaper in Stoke provided you are in work Overhead 20

21 What can be done? (1) Can Stoke create a USP to attract middle class residents? Build fuck off houses with fuck off garages for fuck off 4x4s next to fuck off golf courses? Education? Trees? Relies on trickle down if we want to help local people Overhead 21

22 What can be done? (2) Attract firms but how? No clear USP Release so much land that it is cheaper to build in Stoke than anywhere else? Overhead 22

23 Industrial land prices Overhead 23

24 What can be done? (3) Build enough houses in Northampton so that prices fall to Stoke levels, allowing greater migration, particularly by those priced out of Northampton Will lead to more equal distribution of skills across places Still relies on trickle down, but is more plausible (see distribution of immigrants for evidence that unskilled work is not evenly available) Overhead 24

25 What can be done? (4) Educate Stoke kids very well indeed. Many will leave, but at least Stoke will have given them a better future Not all will leave, and that will give Stoke a better human capital basis in order to attract people Overhead 25

26 What can be done? (5) Educate adults? Pretty poor record of success Overhead 26

27 What can be done? (6) All inward investment work should concentrate on work suitable for people with no qualifications, since a large number of unemployed people without qualifications is what differentiates Stoke (and many other places) from Northampton (and many other places) Call centres, distribution, etc. Overhead 27

28 Comments? Questions?