21 March 2022

A Hull of an idea: how remote working can shift the UK’s economic geography

By Mike Crowhurst

If asked to guess which city could show us the future of work, most people would probably think of London, Manchester or Edinburgh.

But last week Hull launched its bid to become the co-working capital of the UK, providing a fascinating insight into the way that a shift to working online could change the country’s economic geography.

Led by local MP Emma Hardy, the ‘Work Hull, Work Happy’ initiative encourages people to live in the city but work elsewhere. It hopes that a combination of fast internet – Hull was the first city in the UK to be entirely connected to full fibre broadband – dedicated co-working space, a thriving cultural scene developed since its time as UK City of Culture, and low living costs can entice workers to relocate or return, as well as helping the city keep more of its local graduates.

Hull is the first place to launch this kind of campaign. But it’s far from the only one that could benefit. In fact, favourable geographies and lower labour costs means many towns and cities across the north and Midlands are due to be connected to full fibre broadband before large parts of the south-east.

This ought to be seen as a genuine ‘levelling up’ success for the Government. Whilst people may have to wait decades to see improvements to their public transport and other types of infrastructure, better connectivity is something the Government’s gigabit rollout programme is delivering for them now.

It could also be a major economic opportunity. Combined with the way the pandemic has turbo charged a move towards remote and hybrid working, it’s now far easier for businesses and employees to make the choice to relocate than even a few years ago. Why rent a tiny flat in a gritty London suburb when you could buy a house in Hull or Derby, be closer to family or the countryside, and visit the office a few times a month?

But, somewhat surprisingly, the Government has been reluctant to seize the moment. The recent Levelling Up White paper made better digital connectivity a clear aim but offered little concrete thinking on how to help the north and Midlands turn their head start into an economic advantage.

Without further action, this risks squandering a chance to boost levelling up in a way that would never have seemed possible back when Boris Johnson coined the phrase.

Of course, relocation is happening anyway: estate agents talk about seeing the largest movement out of London in a generation. But the property markets suggest it is Cornwall and other rural beauty spots that are benefiting, rather than the northern towns and cities that the Government is focusing much of its levelling up agenda on.

As it stands, we are likely to see remote working leading to some of the hollowing out in large cities that worries Treasury officials, but few of the benefits flowing to the places that need them most.

That isn’t just a missed economic opportunity, but a political one too. Spreading spending power across the country could help revive struggling town centres and high streets – a top priority for ‘Red Wall’ voters. And Public First’s polling shows that people are twice as likely to think young people having to move to find a good job is ‘unfair’ than ‘fair’. The Hull campaign’s slogan that ‘nobody should feel forced to leave the place they love to get the job they want’ would have popular appeal across the country.

Perhaps the Labour Party have spotted an opening here. It was interesting to see Shadow Chancellor Rachel Reeves at the Hull campaign launch event, rather than a minister.

So, how should the Government respond? A proper strategy for how to get the most out of a shift to remote working would be a good start. The Irish government has already published one, including proposals such as public investment in co-working spaces and a review of how remote working is treated in the tax system.

A strategy doesn’t need to propose nationalising WeWork or spending huge amounts of new money. But it should consider how local initiatives such as the campaign in Hull or Stoke-on-Trent’s bid to become ‘Silicon Stoke’ could be better supported. It could also look at how government programmes, such as the proposed £1.5bn investment in town and city centre redevelopment, can be joined up to promote more hybrid working. And it could explore how the legal framework around flexible working could be updated to fully support people to relocate.

Just a fraction of the projected underspend from the government’s £5bn Project Gigabit programme, or a modest extension of its excellent 5G testbeds and trials programme could provide plenty of incentives to kickstart this agenda.

Back in Hull, local leaders aren’t waiting for the Government to come up with a plan. But if Whitehall is serious about levelling up, it should be thinking now about what to do with the connectivity it’s put in place. Much of what we need is there. Now it’s time to use it.

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Mike Crowhurst is Director of Public First’s Levelling Up practice and a former special adviser in No10, DCMS and the Cabinet Office

Columns are the author's own opinion and do not necessarily reflect the views of CapX.