Young people in the UK are less keen to live in London as they are frustrated with the sky-high house prices and buoyed by attractive employment opportunities in other cities, renowned UK economist Jim O’Neill said.
O’Neill is a former chief economist at Goldman Sachs and former commercial secretary to the UK Treasury. He has been focusing on city growth and geographical imbalances of the British economy since he left Goldman Sachs in 2013 and has also contributed to the launch of the Northern Powerhouse strategic rail project.
O’Neill, who grew up in Manchester, said in a recent exclusive interview with Xinhua, that most people of his generation thought they would spend the rest of their lives in London after graduation from university, but younger people don’t think they need to do so.
“Most young people in London have never been able to afford to buy their own place. So if you want to own your own property, and if you have a reasonable income and a reasonable job, you can do it in Manchester, Newcastle, Liverpool,” O’Neill said.
He said this mentality shift was the result not only of the considerably lower house prices in these cities but also of a sense of excitement and opportunity, which was not there 40 years ago. Young people realize that “it’s not just I’ve got to be in London to make a future.”
Despite the recent drop, London property prices remain prohibitively high at 463,000 British pounds (585,840 U.S. dollars) on average, while the average price in the North West stands at 160,000 British pounds, according to data released by the Office for National Statistics.
Many young people in their 20s flock to the city to attend university or to work, while some in their 30s and 40s are leaving because they want to start a family or improve their quality life.
O’Neill believes that by attracting young people, the industrial city of Manchester has embarked on a virtuous circle. The city’s vitality attracts the young, who are followed by older generations and businesses, eventually creating the need for the city to improve traffic flows and make bolder decisions.
Manchester, a pioneer of the industrial revolution, underwent a catastrophic process of deindustrialization following World War Two, which led to a decline in population and jobs.
During the transition period, Manchester seized the opportunity to develop creative industries. For example, MediaCityUK in Salford has attracted media organizations, including the BBC, to move jobs there. Home to world-renowned football teams Manchester City and Manchester United, the city has also given full play to its sports industry. Now a leading financial hub outside London, Manchester has also promoted science and technology development with the University of Manchester at the heart of these activities.
“Manchester started to decline because the cotton industry in the UK had peaked out in the past,” O’Neill explained. “The reasons why big old industrial cities decline are quite logical in terms of economic forces. And these are very powerful forces not easy to reverse.”
O’Neill said the revival of Manchester has not been easy, giving credit to the ambition and genuine fore-sight of civic leaders, who managed to persuade private businesses and national policy makers to support the city.
Asked how other declining old industrial cities could be revived, O’Neill said “they obviously need to have some pride in what the city was, but they need to stop focusing on it in their future,” stressing that the future must be radically different from the past.
“The civic leaders have to specify what we have to offer our country and the world in the future that might be different. If the answer is ‘no’, nothing, then actually you are not going to be able to stop the decline,” he said.
O’Neill believes it is more important to frame productivity-enhancing policies in terms of geographic location than in terms of specific industries or sectors. In 2014, then Chancellor George Osborne and O’Neill launched the Northern Powerhouse project, convinced that key cities in northern England are close enough to each other to be united into a single market similar in size to that of the London metropolitan area so that the UK will become home to two globally competitive city-based commercial hubs.
“Five years ago, London was the only place in the UK that was important in the world,” O’Neill said, but being part of the large single market of the Northern Powerhouse helps raise the profile of smaller cities like Manchester, Liverpool or Sheffield.
Manchester Airport markets itself as the Northern Powerhouse airport, describing itself as a gateway for a broader area, a single market of 8 million connected consumers and producers, O’Neill said.
“That’s what Manchester realized: the Northern Powerhouse project is a game-changer. That’s really what I think Manchester has excited the world about,” he said.
O’Neill also praised the role the University of Manchester has played in the city’s revival.
“When you talk about strategy in Manchester, you cannot tell the difference between what the vice chancellor of the university says and what the city council’s leaders say. It’s all like a single coherent philosophy, which is why it’s so impressive,” he said.