In 1989, I took my first-ever trip to Manchester from London. My first impression? It was absolutely dire. I may have been missing something, but as far as I could see, there was nowhere decent to eat.
Later, in Newcastle, I did manage to locate a bap, only to be scolded for not calling it a “stottie”. A few months on, I found myself in Sheffield with colleagues, close to missing the last train back to London. Thinking we might have to stay overnight, we asked our client, “Where’s the best place to stay in Sheffield?” He pondered for a second before replying, “Leeds.”
Fast-forward to today, and things have changed dramatically. When I travel to Manchester, Newcastle, or Sheffield, I often find myself experiencing something unimaginable back then—Northern envy. Their cars are flashier, the bars and restaurants are buzzing, and the people? Better looking and better dressed.
A significant portion of economic life in the North now seems dedicated to the admirable pursuit of enjoyment. Nights out involve lively conversations with sociable strangers, surprisingly lightweight clothing, and a taxi ride home that doesn’t cost an arm and a leg. The North is many things—but it’s not grim.
London’s problem in five words: The rent Is too high
To understand why the North has become so attractive, one must study three overlooked economists—Bernard de Mandeville, Thorstein Veblen, and Henry George—before throwing in a dash of Gary Stevenson from YouTube. Eliza Filby’s Inheritocracy also makes for enlightening reading. But to save you the trouble, let me summarise London’s issue in five simple words: The Rent Is Too High.
Take the debate around flexible working, which focuses on whether remote or office-based work is more productive. I agree that certain jobs thrive on in-person collaboration. But in my 36 years of working, I’m yet to be convinced that the best place for this magical synergy is necessarily an open-plan office. More often than not, it’s a pub, café, or Indian restaurant.
For this to happen, young professionals—the very people who benefit most from networking—must be able to afford a pint, a latte, or a peshwari naan. In London, the answer is increasingly no. As payday approaches, the “no” becomes even more resounding.
A large city should provide two distinct advantages over smaller places:
- Economic agglomeration—where industries cluster together, creating higher incomes.
- A broad range of opportunities.
Both of these benefits are now undermined in London.
The property market’s unforgiving grip
Higher incomes in London are entirely wiped out by housing and transport costs. And meritocracy? That’s been replaced by a property-based caste system. Your overall wealth depends less on your talent or work ethic and more on if, when, and where you (or your parents) entered the property market.
London was once a city where you could become a millionaire through hard work. That’s still technically true. But it’s also a city where you can be a millionaire while struggling to afford a one-bedroom flat—a flat you bought from a librarian who paid pennies for it in 1983.
The double tax on Londoners
The so-called economic benefits of dual-income households have already been swallowed up by soaring property prices. What was once a choice—“If we both work, we’ll have more money”—has become a necessity: “Unless we both work, we can’t afford to live anywhere.”
This problem is reflected in the absurd number of two-bedroom flats being built. These properties are practically useless for raising a family but are ideal for buy-to-let investors and overseas buyers.
Meanwhile, our tax system disproportionately benefits the wealthy over workers. The older generation, who bought property at bargain prices, enjoy generous tax breaks, while a deputy headteacher is taxed at a marginal rate of 40%.
At 59, my financial adviser constantly tells me to take advantage of various pension-related tax reliefs. My response? “Where were these tax breaks when I was 36, had twins, and actually needed the money?” Compared to wealth inequality, income inequality is a minor concern.
The North’s affordable alternative
Without the property market acting as an anti-gravity force, your chances of accumulating wealth through work alone are practically zero.
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There are two ways to make London employees richer:
- Pay them more.
- Let them live somewhere cheaper.
Henry George pointed this out a century ago. When an industry depends on a specific location, the financial gains don’t go to the businesses or workers—they go straight into the pockets of landlords.
London workers pay twice:
- First, through sky-high office rental costs.
- Second, through crippling housing costs.
So, should businesses allow employees to work remotely? That’s up for debate. But would British businesses as a whole be better off if workers were free to live elsewhere? Absolutely.
Far too much of London’s earnings end up in the hands of landlords, rather than flowing into the productive economy. To put this into perspective, I know Londoners whose houses are worth 500 times more than their cars. That never happens up North.
London: Great if you inherited a house… but better if you leave
Don’t get me wrong—London still offers a fantastic quality of life… for those who own property.
All you need to do is inherit a house there—then move somewhere else.
