25 February 2020

Why ‘get on your bike’ may be the right message for the Blue Wall

By

Migration is unfashionable. Not only from outside the UK, but within it, too. Norman Tebbit’s famous mantra “Get on your bike” is being replaced with “Stay where you are.” Your family, your community needs you. And you shouldn’t have to get on your bike, anyway. The right job should come to you. If capitalism won’t do it, Government must.

Of course, in many traditional manufacturing and mining communities, people never did what Tebbit said anyway. And nor do their children. A report from the Resolution Foundation finds that in the so-called “blue wall” constituencies in the North of England, the Midlands and Wales – the Labour Party’s “lost heartlands” – people are much less likely to move to another part of the country for work. They stay where they are.

“Staying where they are” doesn’t only mean staying close to where you were born, it also means working close to your home. The average commuting time in blue wall constituencies is short compared to other places, at only 24 minutes.

This low labour mobility seems to be associated with poor job prospects and low pay. Blue wall constituencies have relatively high unemployment (5.0% in 2018-19, against 4.0% for the UK as a whole). Real weekly pay has fallen by 2.1% since 2010, compared to 1.5% across the whole UK. And as average pay is below the UK median, people in blue wall constituencies are also disproportionately likely to be claiming working-age benefits.

Low labour mobility in these areas could indicate that younger people have left and all that remains is a rump of baby boomers approaching retirement. But the average age in these constituencies is 41, close to the national average. It’s no longer Gary the Lad doing odd jobs to earn some brass while he waits for good jobs to return, it’s his son Nate, now 46 and scraping a living mending cars in Stocksbridge.

Few people leave these places, and few people move there, either. The lack of good, well-paid jobs makes these places unattractive to people from other places in the UK. And these places are also unattractive to foreign migrants. Blue wall constituencies have substantially lower net immigration rates than Labour constituencies, and slightly lower rates than other Conservative constituencies. The proportion of their population that is born abroad is significantly lower than average, at only 9.2% – although this proportion has nearly doubled since 2004, which perhaps explains why many residents of blue wall constituencies complain about immigration.

Since inward migration is low, there is little upwards pressure on house prices or rents. Blue wall constituencies are relatively inexpensive places to live. And as house prices are low relative to average incomes, a higher proportion of people own their own homes than in more expensive places. But homeowners have lost out on the house price boom of recent years, and household wealth is consequently on the low side. And those on low incomes who are renting receive much less in Universal Credit than people in adjacent cities, because their rents are lower. This might objectively seem fair, but to people in the blue wall, it is yet another indication that they are losing out relative to the cities.

Low house prices and rents help to explain why there is little outward migration from these places. People who have low rents – and even more, people who own houses that aren’t worth very much – can find it difficult to move for work. Housing costs tend to be much higher where there is a lively jobs market. They have too much to lose.

But the short commute times are less understandable. Why are the good folk of Keighley or Burnley unable or unwilling to travel longer distances to work? Since 98% of them travel to work by car, improving public transport connections between towns and cities would seem to be a high priority, for environmental reasons if nothing else – though the Resolution Foundation observes that upgrading public transport might not encourage people unused to buses and trains to give up their cars.

People with good skills can move to where good jobs are without having to accept a large reduction in their standard of living. And they might be willing to travel longer distances for well-paid work. But the Resolution Foundation also notes that skill levels in these places are low. Only 20% have degree-level education, compared to 32% across the country as a whole. This is despite large, vibrant university sectors in cities such as Sheffield and Manchester, which are within easy reach of many blue wall constituencies.

Something seems to be preventing young people in blue wall constituencies from entering higher education. Does “stay where you are” impede access not only to well-paid jobs, but also to the skills needed for them? If so, then those who criticise young people who move away from ageing parents in search of work or education are promoting lower skills and poorer job prospects.

The ONS’s recent research on regional productivity also shows that productivity not only in the blue wall itself, but in adjacent towns and cities, is far below the national average and falling. Manufacturing and retail are still important employment sources; but big retail is losing out to internet firms, and jobs in labour-intensive manufacturing are no longer well paid, because the labour markets with which they compete are in China and India, where pay is much lower. Meanwhile, productivity in high-tech industries is collapsing, probably due to low investment. Lack of fast broadband might be partly to blame, but I suspect this is mainly a skills problem. Why would a company set up a high-tech industry in a blue wall town, when they could locate themselves in a well-connected city full of highly-skilled people?

These “left-behind” places are now calling the shots politically. The Labour Party is desperately trying to find policies that will attract back its lost voters. So far, controlling immigration and bringing back manufacturing seem to be their main ideas. But further restrictions on immigration won’t help places that already have low labour mobility. And nostalgic though people in Northern towns may be for their lost manufacturing industries, bringing them back won’t help either. They need 21st-century high-tech industries, not 20th-century dinosaurs.

Meanwhile, the Conservative government, which understandably wants to hang on to the constituencies it gained in the 2019 election, is talking about “levelling up”, though it has yet to define exactly what this means. Upgrading public transport, broadband and skills will be crucial. But equally important will be encouraging people to move, or at least travel, for work.

Unfashionable though it may be, “Get on your bike” is the right message for today’s left-behind places. “Stay where you are” is the mantra of stagnation and despair.

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Donate

Recurring Payment

Thanks for your support

Something went wrong

An error occured, but no error message was recieved.

Please try again, or if problems persist, contact us with the above error message. We apologise for the inconvenience.

Frances Coppola writes about economics and finance.