Disparity In London

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A key cause of unaffordable housing in the South East and London, and regional inequality in the UK, is that both the UK’s politics and finance sectors are based in London. It could therefore be argued to eliminate regional disparity and the inflated property market, we must separate parliament from the finance sector. Moving parliament to a city in the North of England such as Manchester would cause thousands of high skilled workers to migrate to the North, stimulating the local economy. General government spending, fiscal policy and monetary policy, have favoured the South East and London in recent years, and this has counteracted the impact of previous regional policies employed by government; the moving of parliament from London would cause…show more content…
If access to London is improved the need to live there is diminished and subsequently demand for property would decrease. Hence, it could be argued improving transport links between London and Northern England would successfully reduce the strain on the London housing market, as well as stimulate the regional economy. The government is already planning on implementing schemes doing exactly this, such as HS2: a high-speed railway linking London, Birmingham, Manchester and Leeds. Although, similarly to subsidies improving transport links is highly costly, as demonstrated by HS2, which is projected to cost £50.1 billion. One of the main causes of economic success is the ability for people and their ideas to be connected easily; bringing the North of England closer to the action of London through improved transport links would enable the region to share in the economic successes of…show more content…
Subsidising job creation in the North would stimulate the regional economy through mechanisms such as the local multiplier effect, and decrease the strain on the London property market, making housing more affordable. However, a drop in London house prices could significantly dampen future economic growth due to the wealth effect causing a fall in aggregate demand. This could be offset by economic growth in Northern regions, but this is difficult to foresee. Nevertheless, strong sustainable economic growth with little regional disparity is superior to an unsustainable yet greater rate of economic growth supported by an overly inflated housing market. It should be considered, subsidising job creation is not the only method of reducing the regional disparity across the UK: the case for improving transport links between the North and South is compelling, an essential factor of economic success within regions is the ability for people and their ideas to be connected easily; improving transport links between the North and London would do this, creating an excellent environment for economic success across the nation, while reducing the necessity for
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