0:00:03 > 0:00:07More than ever before, one city is dominating our lives,
0:00:07 > 0:00:11our economy, our culture, our politics.
0:00:11 > 0:00:16London is now, basically, evolving into the capital of the world.
0:00:16 > 0:00:20It's the place where people want to live, if they possibly can,
0:00:20 > 0:00:23and want to have some kind of investment.
0:00:23 > 0:00:27Money, companies and people are pouring into London
0:00:27 > 0:00:29like never before.
0:00:29 > 0:00:33London is one of the great, iconic cities of the world
0:00:33 > 0:00:37and we can attract people from New York, from Tokyo, from Paris.
0:00:38 > 0:00:42Our capital is generating more than a fifth of Britain's income
0:00:42 > 0:00:45and it's pulling away from the rest of the country.
0:00:46 > 0:00:49The danger is that while London congratulates itself
0:00:49 > 0:00:51on global economic success,
0:00:51 > 0:00:56the rest of the country feels left out of getting any share in it.
0:00:57 > 0:01:00It seems crazy that we're centralising it in one place
0:01:00 > 0:01:05and actually building a huge suburb that's stretching north
0:01:05 > 0:01:07rather than spreading it out properly.
0:01:07 > 0:01:11While much of Britain still struggles after the crash,
0:01:11 > 0:01:14London is going from strength to strength.
0:01:15 > 0:01:18It's a great time to start thinking about
0:01:18 > 0:01:20why cities are so important,
0:01:20 > 0:01:23why London is so important
0:01:23 > 0:01:26and what is going on underneath that.
0:01:27 > 0:01:32In this series, I'll be asking, what is the London formula?
0:01:32 > 0:01:35Competition is fierce, definitely, but it also drives you.
0:01:35 > 0:01:38Better, better, better, every year.
0:01:38 > 0:01:43Is London's growing success good for the rest of Britain or bad?
0:01:43 > 0:01:45This will sell for just under £40 million.
0:01:45 > 0:01:50If you had 120 million, the property just a few doors down is for sale.
0:01:50 > 0:01:52And what should the rest of the country do?
0:01:52 > 0:01:56This is the story of the economic forces polarizing Britain,
0:01:56 > 0:01:59the story of London Versus The Rest.
0:02:10 > 0:02:14If you want some evidence of the way London and the area around it
0:02:14 > 0:02:17is pulling away from the rest of Britain, here it is.
0:02:19 > 0:02:21Just 30 miles east of the centre of London,
0:02:21 > 0:02:26we're driving across land reclaimed from the Thames Estuary so recently
0:02:26 > 0:02:28it doesn't show up on GPS.
0:02:29 > 0:02:34This is London Gateway, a brand-new port complex.
0:02:36 > 0:02:39You might have thought that London had given up on its docks
0:02:39 > 0:02:43and had subcontracted out the tricky task of handling containers
0:02:43 > 0:02:45to other parts of the country.
0:02:45 > 0:02:48Nope. London's not just getting a new port,
0:02:48 > 0:02:50it's getting one on a grand scale.
0:02:56 > 0:02:58This ship has come from South Africa,
0:02:58 > 0:03:00carrying wine and other goods
0:03:00 > 0:03:03destined for supermarkets in London and the South East.
0:03:05 > 0:03:06This investment equals jobs
0:03:06 > 0:03:10and I'm getting a lesson in one of the more intricate ones.
0:03:10 > 0:03:12Forward is lower off.
0:03:12 > 0:03:18- Forward is lower and pull back, then, is to raise up?- Exactly.
0:03:18 > 0:03:20This crane, built in China,
0:03:20 > 0:03:23is one of the biggest of its kind in the world.
0:03:23 > 0:03:26- OK. I think we can lower a little bit now.- I think you can.
0:03:26 > 0:03:28So that's forward on the right-hand lever.
0:03:28 > 0:03:32- Yeah. A little bit more?- Yeah, you're all right. That's good.
0:03:32 > 0:03:35- So, can I lock on? - We can lock on. Success.
0:03:35 > 0:03:37- So, now I'm going to lift. - Now you can lift.
0:03:37 > 0:03:39- Which is back.- That's it.
0:03:39 > 0:03:42This is just a baby port now.
0:03:42 > 0:03:45Eventually, there'll be 24 of these cranes.
0:03:45 > 0:03:48Operating one is harder than it looks.
0:03:48 > 0:03:50- Trolley forward.- That's it.
0:03:53 > 0:03:56- Ooh, it's swinging a little bit. - That's all right.
0:03:56 > 0:03:58Just ease off of it.
0:03:58 > 0:04:00That's good. That's really good.
0:04:00 > 0:04:05- OK.- Lowering is forward. This is actually very nerve-racking.
0:04:05 > 0:04:09La-de-da. Go on, little thing.
0:04:09 > 0:04:11Bash. Upsy-daisy.
0:04:14 > 0:04:18Excellent. That's it and you've loaded on the box.
0:04:18 > 0:04:21- Phew.- Was that stressful?
0:04:25 > 0:04:28My job is in jeopardy! EVAN LAUGHS
0:04:31 > 0:04:36This port is a 50-year bet that London continues to thrive.
0:04:37 > 0:04:40What's attracted this £1.5 billion investment...
0:04:42 > 0:04:45..is the market of 17 million prosperous consumers
0:04:45 > 0:04:48in London and the South East.
0:04:50 > 0:04:54This is where the primary mix of headcount and spend
0:04:54 > 0:04:58has created the biggest economic zone in Europe.
0:04:58 > 0:05:00So, to keep supply chains as tight as possible,
0:05:00 > 0:05:03we need to have the ships coming as close as they can
0:05:03 > 0:05:06to the biggest point of consumption. It's not rocket science.
0:05:06 > 0:05:09It was the Romans who first did this 2,000 years ago,
0:05:09 > 0:05:11establishing London as our national hub port.
0:05:12 > 0:05:15The key word is that London is a hub
0:05:15 > 0:05:18and hubs are really important.
0:05:18 > 0:05:22We need to unwrap that concept to understand the London formula.
0:05:22 > 0:05:26Now, this isn't the place to do it. It's all rather sparse around here.
0:05:26 > 0:05:30We have to head to the centre because a really good starting point
0:05:30 > 0:05:34is to think of London as an invention for cramming
0:05:34 > 0:05:37the maximum number of talented people
0:05:37 > 0:05:39into the smallest possible area.
0:05:48 > 0:05:51To see that in action, you have to get up pretty early.
0:05:53 > 0:05:56It's quarter to six in the morning and London is stirring.
0:05:59 > 0:06:03200 miles away, Glynn Britton is starting his commute,
0:06:03 > 0:06:05just like he does most weeks.
0:06:11 > 0:06:13Glynn lives near Stockport,
0:06:13 > 0:06:17but he helps run a marketing agency in London.
0:06:21 > 0:06:24It's frustrating to leave his family behind,
0:06:24 > 0:06:27but he knows the best careers are to be found in the capital.
0:06:27 > 0:06:30For me, the train journey's the most productive time of the week.
0:06:30 > 0:06:33It's early enough in the morning that there's no calls,
0:06:33 > 0:06:36very few emails, so I can really concentrate on writing something
0:06:36 > 0:06:39or really thinking something through.
0:06:39 > 0:06:41You see, London sucks,
0:06:41 > 0:06:43by which I mean it's successful
0:06:43 > 0:06:48because it sucks in so many people like Glynn from around Britain.
0:06:48 > 0:06:52The simple fact is that London flourishes
0:06:52 > 0:06:54on the back of the talent it attracts,
0:06:54 > 0:06:57the people who come here.
0:06:57 > 0:07:01It isn't Londoners who built this city into what it is today,
0:07:01 > 0:07:03it's the whole country.
0:07:03 > 0:07:04It's a national asset.
0:07:10 > 0:07:13It does mean, of course, that London has more than its share
0:07:13 > 0:07:15of the most qualified people.
0:07:19 > 0:07:23Across the country, graduates make up 38%
0:07:23 > 0:07:25of the working-age population.
0:07:25 > 0:07:29But amongst London's workers, they make up 58%.
0:07:33 > 0:07:36With more qualified workers than other regions,
0:07:36 > 0:07:39London hosts more of the top jobs.
0:07:39 > 0:07:41I work as a consultant in the City.
0:07:41 > 0:07:43I work in marketing for a TV company.
0:07:43 > 0:07:47I am a knowledge manager. I kind of lead collaboration programmes.
0:07:47 > 0:07:49I have to go to where the work is.
0:07:49 > 0:07:52So, at the moment, I'm working in London. I live in the Midlands,
0:07:52 > 0:07:54so I have to commute.
0:07:54 > 0:07:56I live out in Lincolnshire. Obviously, if London were
0:07:56 > 0:08:00half-an-hour away and house prices were cheaper, brilliant, sign me up.
0:08:02 > 0:08:05Sucking in talented people is half the formula,
0:08:05 > 0:08:08but then London does something to them -
0:08:08 > 0:08:10it squashes them together.
0:08:10 > 0:08:13Just before Edmonton Green. Is it up by the police station? Over.
0:08:13 > 0:08:19Each day, more than 800,000 people from outside pack into London.
0:08:19 > 0:08:21Most commute in from the suburbs
0:08:21 > 0:08:25as there isn't room for everyone to live in the city itself.
0:08:25 > 0:08:28Some, like Glynn, travel from much further.
0:08:28 > 0:08:30I did live in London for 15 years
0:08:30 > 0:08:33and we came to that inevitable point of life
0:08:33 > 0:08:34where you want to get out of town
0:08:34 > 0:08:38and we looked at the train journey up to Stockport, two hours,
0:08:38 > 0:08:40it seemed doable.
0:08:40 > 0:08:44Packing people in is key to what London does to Glynn
0:08:44 > 0:08:47and his fellow commuters. They all benefit
0:08:47 > 0:08:51from working in the vicinity of nearly 4.5 million other people.
0:08:54 > 0:08:57Just look at how the density of workers in London
0:08:57 > 0:08:58rises in the rush hour...
0:08:58 > 0:09:02the City more than anywhere else.
0:09:02 > 0:09:04When it comes to cramming workers in,
0:09:04 > 0:09:07London towers above the rest of Britain.
0:09:09 > 0:09:13What's interesting is how the hustle and bustle of packing workers in
0:09:13 > 0:09:16appears to foster productivity.
0:09:16 > 0:09:22London's workers produce 29% more per hour worked than the UK average.
0:09:22 > 0:09:25If we compare each area's productivity to that average,
0:09:25 > 0:09:27Cornwall comes out worst.
0:09:27 > 0:09:30Berkshire, Oxfordshire and Buckinghamshire do well.
0:09:30 > 0:09:34But inner London comes out way ahead
0:09:34 > 0:09:38and London overall generates more than a fifth
0:09:38 > 0:09:40of the country's income.
0:09:43 > 0:09:46Glynn and the other workers of London make up
0:09:46 > 0:09:49just 15% of the country's workforce.
0:09:51 > 0:09:56But together, they produce more than Scotland, Wales,
0:09:56 > 0:09:59Northern Ireland and the West Midlands put together.
0:10:04 > 0:10:09So, how has London created such a nice niche for itself,
0:10:09 > 0:10:11attracting top talent?
0:10:11 > 0:10:15And why does it seems to work, cramming people in?
0:10:15 > 0:10:18To answer that, I've come to one of the biggest developments
0:10:18 > 0:10:21in the capital, King's Cross.
0:10:23 > 0:10:27This small piece of London is filling up
0:10:27 > 0:10:31with the world's best in art, in science and in technology.
0:10:31 > 0:10:36It is the kind of development the rest of the country would kill for.
0:10:36 > 0:10:38And it raises the question,
0:10:38 > 0:10:43of all the counties and cities in the land, why has it arrived here?
0:10:46 > 0:10:49Understand what's happening in King's Cross
0:10:49 > 0:10:51and you'll understand why London dominates.
0:10:51 > 0:10:54It's all to do with networking.
0:10:57 > 0:11:01King's Cross has always been a hub
0:11:01 > 0:11:04at the heart of our national railway network.
0:11:04 > 0:11:06Recently the station's had a makeover
0:11:06 > 0:11:09and they're scrubbing up the whole neighbourhood.
0:11:10 > 0:11:14Today, King's Cross is becoming a different type of hub.
0:11:19 > 0:11:23Now, this whole development offers you three lessons
0:11:23 > 0:11:27in networking economics, in what it is that allows London
0:11:27 > 0:11:29to attract talented people
0:11:29 > 0:11:32and then to make the best use of them.
0:11:37 > 0:11:40First stop, this vast new building.
0:11:40 > 0:11:43This will be the Francis Crick Institute,
0:11:43 > 0:11:46one of the largest scientific research centres in the world.
0:11:48 > 0:11:51The Nobel Prize winning biologist Sir Paul Nurse
0:11:51 > 0:11:53will run it when it opens in 2015.
0:11:55 > 0:11:58And lesson one is that proximity fuels productivity.
0:11:58 > 0:12:02You get more from people by putting them close together.
0:12:02 > 0:12:04These labs are particularly open.
0:12:04 > 0:12:07There's not walls in-between different groups.
0:12:07 > 0:12:10It's a sort of science equivalent or as close as you can make
0:12:10 > 0:12:12laboratories to open-plan, really.
0:12:14 > 0:12:17Around 1,250 biomedical scientists will work
0:12:17 > 0:12:20in labs clustered tightly together...
0:12:20 > 0:12:25and it's all meant to improve the chances of making a breakthrough.
0:12:26 > 0:12:30What's good about it is that if you're working in, say,
0:12:30 > 0:12:33one of these laboratories and you're surrounded by other groups
0:12:33 > 0:12:35doing somewhat different things,
0:12:35 > 0:12:37you'll come across people with different expertise,
0:12:37 > 0:12:41different technologies, different interests
0:12:41 > 0:12:44and you'll meet them in that sort of core space in the middle.
0:12:49 > 0:12:52Top-level research - it's just what every region of every nation
0:12:52 > 0:12:55wants to be a leader in.
0:12:55 > 0:12:59But being in London gives the Crick's scientists an advantage -
0:12:59 > 0:13:01connections to the world of business.
0:13:04 > 0:13:06If you're going to translate scientific discovery
0:13:06 > 0:13:10into useful applications, you need all sorts of skill sets.
0:13:10 > 0:13:15You need access to finance, access to legal advice,
0:13:15 > 0:13:19you need entrepreneurs and that's all here in spades.
0:13:23 > 0:13:26There is quite a simple principle at play here
0:13:26 > 0:13:27and at work across the capital.
0:13:29 > 0:13:33In some industries, two people working next to each other
0:13:33 > 0:13:35are more than twice as productive
0:13:35 > 0:13:38as the same two people working further apart.
0:13:39 > 0:13:43Now, economists have a word for all of this.
0:13:43 > 0:13:45It would have to have five syllables.
0:13:45 > 0:13:49They talk about economies of agglomeration,
0:13:49 > 0:13:52how you copy, collaborate
0:13:52 > 0:13:55and compete intensely with people nearby.
0:13:55 > 0:13:59London has agglomeration economies in spades
0:13:59 > 0:14:01and that is just one part of its formula.
0:14:04 > 0:14:09Agglomeration economics explains why businesses are coming here.
0:14:09 > 0:14:12But there's something else going on at King's Cross
0:14:12 > 0:14:14and it's something rather important.
0:14:17 > 0:14:18The second lesson -
0:14:18 > 0:14:20good neighbours matter.
0:14:20 > 0:14:22In this case, a leading art school.
0:14:25 > 0:14:29King's Cross has attracted Central Saint Martins, CSM,
0:14:29 > 0:14:31at the University of the Arts London.
0:14:36 > 0:14:39Many of these art students have come from all over the world
0:14:39 > 0:14:41to study here.
0:14:41 > 0:14:44Every weekend, you have something related to your course
0:14:44 > 0:14:46or something related to art and design
0:14:46 > 0:14:50which is constantly happening here. That kind of exposure,
0:14:50 > 0:14:54I don't know whether you would get it in other cities.
0:14:54 > 0:14:57In Switzerland, people are quite closed-minded,
0:14:57 > 0:15:00even in big cities.
0:15:00 > 0:15:03Here, I think it's like you are really free.
0:15:04 > 0:15:08Covent Garden, the CSM students are clubbing every night there
0:15:08 > 0:15:12and I can see Picasso's painting in Tate Modern.
0:15:12 > 0:15:17It's like really exciting for me. It's like a new whole culture here.
0:15:18 > 0:15:22The fees the foreign students pay certainly boost exports.
0:15:22 > 0:15:25But the important feature of these students
0:15:25 > 0:15:28is that other people will pay to be near them.
0:15:31 > 0:15:34I don't know what you make of the art students
0:15:34 > 0:15:36and their funny ways, but I'll tell you this -
0:15:36 > 0:15:41the most sought-after creative people in the world, like it or not,
0:15:41 > 0:15:43happen to want to live and work
0:15:43 > 0:15:46next to other creative sought-after people
0:15:46 > 0:15:49and London offers lots of opportunities for that.
0:15:53 > 0:15:57But there's a third lesson about networking economics here too.
0:15:57 > 0:16:01Once you've attracted good neighbours, more want to come.
0:16:01 > 0:16:03It's a virtuous circle.
0:16:03 > 0:16:07And to see that in action, just look at stop number three,
0:16:07 > 0:16:11a new building running alongside the station and railway lines
0:16:11 > 0:16:15that's going to be the British headquarters for Google.
0:16:15 > 0:16:18The building is going to be long, as long as The Shard is high,
0:16:18 > 0:16:22about 700,000 square feet and we're just working through the designs now.
0:16:22 > 0:16:24We want to make it friendly.
0:16:24 > 0:16:27And they want to make the building even more flash
0:16:27 > 0:16:29than these early mock-ups.
0:16:29 > 0:16:33Google are spending £650 million on new offices here
0:16:33 > 0:16:37partly because they like the neighbours.
0:16:37 > 0:16:39Now, the fact that you're going here
0:16:39 > 0:16:42and the university is just over there, just next door,
0:16:42 > 0:16:47- that was part of the reasoning, right?- That was a big factor, actually, in us coming here.
0:16:47 > 0:16:49Aside from the size of the floors, having 3,000 students
0:16:49 > 0:16:51of art and design walking past your door every day
0:16:51 > 0:16:54means that this is a vibrant and very mixed community.
0:16:54 > 0:16:58It's the same idea, mixing ideas up and creating new innovation.
0:17:00 > 0:17:01But Google are also here
0:17:01 > 0:17:05because London attracts the kind of people they'd like to employ.
0:17:08 > 0:17:11Now, why does it have to be London?
0:17:11 > 0:17:15Why couldn't you make a building as big as the one you're building
0:17:15 > 0:17:18- in a Birmingham or a Manchester? - I think the attraction of London,
0:17:18 > 0:17:21of course, is it's by far the biggest city in the UK,
0:17:21 > 0:17:24it's where most people are and therefore we've got the biggest
0:17:24 > 0:17:27talent pool to draw from.
0:17:27 > 0:17:31So, in the new King's Cross that's replacing the old,
0:17:31 > 0:17:34Google's coming to find the right people,
0:17:34 > 0:17:37the right people come to find the Googles of the world.
0:17:37 > 0:17:39It's self-fulfilling.
0:17:39 > 0:17:42That and everything else we've seen in King's Cross
0:17:42 > 0:17:45is going on throughout the capital.
0:17:50 > 0:17:53Now, why did this all take off in London?
0:17:53 > 0:17:56To answer that, we need to go back to the 19th century
0:17:56 > 0:18:00to see how much the geography of our economy has changed.
0:18:04 > 0:18:09Back then, you could say Britain had two economic engines,
0:18:09 > 0:18:14one in London and the other centred here in northern England.
0:18:14 > 0:18:18Our cotton mills - this one's near Hebden Bridge in West Yorkshire -
0:18:18 > 0:18:21were hugely important to Britain's economy and to the world.
0:18:23 > 0:18:26In the 1870s, well after the Industrial Revolution,
0:18:26 > 0:18:29both London and the North were booming.
0:18:29 > 0:18:33London, as the hub of global commerce, was then, as now,
0:18:33 > 0:18:35producing around a fifth of Britain's income.
0:18:35 > 0:18:39But the north's economy, with most of the new manufacturing,
0:18:39 > 0:18:41was producing more.
0:18:43 > 0:18:46Back then, the big industries, mining, manufacturing,
0:18:46 > 0:18:49they were where the natural resources were.
0:18:49 > 0:18:5219th-century mills like this, for example,
0:18:52 > 0:18:56built next to the rivers that could give them power.
0:18:57 > 0:19:00But by the 1960s, the rest of the world
0:19:00 > 0:19:03was cottoning on to manufacturing
0:19:03 > 0:19:06and Britain could no longer expect to dominate world markets.
0:19:08 > 0:19:11Other countries were competing on our terrain.
0:19:11 > 0:19:14Those old industries went into decline
0:19:14 > 0:19:17and Britain moved on to new things.
0:19:20 > 0:19:22From the 1970s, the North fell back
0:19:22 > 0:19:27as high-skilled service jobs sprang up in London and the South East,
0:19:27 > 0:19:31not just in finance, in a host of business services.
0:19:31 > 0:19:35The gap with the rest of Britain widened and it's still growing.
0:19:37 > 0:19:41Today, we're experiencing a change in the geography of our economy
0:19:41 > 0:19:45as dramatic as anything we've known since the Industrial Revolution,
0:19:45 > 0:19:48new industries, new locations,
0:19:48 > 0:19:50with London dominating like never before.
0:19:55 > 0:19:59What we seem to have now is a two-speed economy
0:19:59 > 0:20:03and don't think they haven't spotted that here in Yorkshire.
0:20:03 > 0:20:06In the North, we do like to go at something a little bit
0:20:06 > 0:20:08beyond our reach and see what we can do.
0:20:09 > 0:20:13Kenton Robbins helped bring one of the world's biggest sporting events
0:20:13 > 0:20:19to Yorkshire this summer - the first two stages of the Tour de France.
0:20:19 > 0:20:22It really is going to showcase the region at its absolute best.
0:20:22 > 0:20:25- They're going to be coming down here.- Are they going to be
0:20:25 > 0:20:28- coming down right here?- They will. There'll be 300 vehicles ahead
0:20:28 > 0:20:30of them which takes two and a half, three hours,
0:20:30 > 0:20:34then an hour or so of the Tour flying by.
0:20:34 > 0:20:36It's going to be quite magical.
0:20:37 > 0:20:40As a prominent figure in the business world here,
0:20:40 > 0:20:42he tells me things are made harder
0:20:42 > 0:20:45by all the attention that London gets.
0:20:45 > 0:20:48Everybody shouts about it being the place to be
0:20:48 > 0:20:50and everybody thinks it's the place to be,
0:20:50 > 0:20:52but actually, there's no real reason for that.
0:20:52 > 0:20:56A lot of it is hollow. It's not based on any real thing.
0:20:56 > 0:20:58It's just a feeling.
0:20:58 > 0:21:01We lose out as a result of that feeling.
0:21:01 > 0:21:05He would happily see London lose growth to get more elsewhere.
0:21:05 > 0:21:09If I said to you we could have 3% growth in London
0:21:09 > 0:21:15or 1% growth out of London,
0:21:15 > 0:21:18- which would you take? - If we could have a greater spread,
0:21:18 > 0:21:20I'd rather have 2% across the country.
0:21:20 > 0:21:24And yeah, that may be a politics answer, but I would.
0:21:24 > 0:21:27I'd rather a greater spread of the population of the country
0:21:27 > 0:21:30felt the benefit of economic growth,
0:21:30 > 0:21:34rather than this consolidated group of people in London.
0:21:34 > 0:21:37The UK isn't London.
0:21:38 > 0:21:42You might ask, if success comes so easily to London,
0:21:42 > 0:21:45why don't other parts of Britain just copy the formula?
0:21:45 > 0:21:49Well, as I see it, the difficult truth for everywhere else is...
0:21:49 > 0:21:51there is no formula.
0:21:51 > 0:21:54London's success is the result of millions of individual choices
0:21:54 > 0:21:57by people to come here or invest here.
0:21:57 > 0:21:59It isn't due to a master plan.
0:21:59 > 0:22:02Far from it.
0:22:06 > 0:22:10You see, the trouble is, London grew up without any plan or order.
0:22:10 > 0:22:14It's a typical picture of muddle and overcrowding.
0:22:14 > 0:22:17There have been successive attempts to sort of rebuild London
0:22:17 > 0:22:21along more organised, logical, sensible lines,
0:22:21 > 0:22:24like Paris and some of the great continental cities.
0:22:24 > 0:22:29After the Great Fire, they said, "At last! We can rebuild London now
0:22:29 > 0:22:33"with wide boulevards and logic dictating where everything is."
0:22:33 > 0:22:36And while they were sort of drawing up the blueprints,
0:22:36 > 0:22:39London had already been rebuilt on the higgledy-piggledy lines
0:22:39 > 0:22:41that had existed before.
0:22:41 > 0:22:44We saw beyond all the suffering and destruction
0:22:44 > 0:22:47a great opportunity to build a new London.
0:22:47 > 0:22:50And then after the war, of course, Abercrombie, the great planner,
0:22:50 > 0:22:53thought we could zone everything and organise London.
0:22:53 > 0:22:57All those bad and ugly things that we hope to do away with
0:22:57 > 0:23:00if this plan of ours is carried out.
0:23:00 > 0:23:04The London we have today is nothing like
0:23:04 > 0:23:07Sir Patrick Abercrombie's grand, orderly vision.
0:23:07 > 0:23:09His plan was never implemented.
0:23:09 > 0:23:14Somehow London has succeeded without the logic of the planners.
0:23:14 > 0:23:19What about all those homes in the shadow of railway viaducts
0:23:19 > 0:23:25and those blocks of offices built right alongside factories?
0:23:25 > 0:23:29All these bad things must go
0:23:29 > 0:23:31and the sooner, the better.
0:23:41 > 0:23:43Just look at what's been happening here,
0:23:43 > 0:23:46around this roundabout in Old Street.
0:23:49 > 0:23:52Once run-down, these higgledy-piggledy streets
0:23:52 > 0:23:55turn out to be great for networking,
0:23:55 > 0:23:58and they've now become where it's at for tech firms.
0:23:59 > 0:24:02Saul Klein is a tech-savvy venture capitalist
0:24:02 > 0:24:05who helped put Silicon Roundabout on the map.
0:24:05 > 0:24:09The key ingredients, the most important ingredient,
0:24:09 > 0:24:11are the entrepreneurs.
0:24:11 > 0:24:13And they started to come, and then more came.
0:24:13 > 0:24:15You obviously then need capital.
0:24:15 > 0:24:19Er, you then need access to talent.
0:24:19 > 0:24:22But no one of those ingredients - I think,
0:24:22 > 0:24:24you can't design an ecosystem, it evolves.
0:24:27 > 0:24:30No-one can be sure how many tech firms are even here -
0:24:30 > 0:24:32hundreds, it's thought.
0:24:33 > 0:24:37What's interesting is, nobody told any of them to come.
0:24:37 > 0:24:41I think kids have these incredible creative imaginations, and...
0:24:41 > 0:24:46All this bottom-up growth is now attracting government support.
0:24:46 > 0:24:49The government I think did something that, you know,
0:24:49 > 0:24:52they...they can do, which is to say,
0:24:52 > 0:24:56this is happening, and we're going to sort of shine a light on it.
0:24:56 > 0:24:59And I think that's also helped to accelerate the ecosystem.
0:24:59 > 0:25:03But the government role was to kind of nudge it
0:25:03 > 0:25:06once it was happening, rather to click its fingers and say,
0:25:06 > 0:25:08- "Let's make it happen." - Yeah, it's...
0:25:08 > 0:25:10You know, the bandwagon was there.
0:25:11 > 0:25:14If it's hard for the rest of Britain to compete now,
0:25:14 > 0:25:17it seems London's advantage will only grow.
0:25:17 > 0:25:19Because it's here, around Old Street,
0:25:19 > 0:25:23that you find new businesses whose trade is ideas -
0:25:23 > 0:25:26precisely the sort our country wants.
0:25:26 > 0:25:28And funnily enough, they more than any
0:25:28 > 0:25:33yearn for old-style, face-to-face human interaction.
0:25:33 > 0:25:34Coffee up!
0:25:35 > 0:25:38Get this - I'm on a 4G-enabled mobile phone
0:25:38 > 0:25:41talking to you via a 4G-enabled tablet.
0:25:41 > 0:25:45I can be anywhere, you can be anywhere - it's brilliant, isn't it?
0:25:45 > 0:25:50Except, it really is nicer to speak to people face-to-face.
0:25:50 > 0:25:54Even a pane of glass between us is a...pain.
0:25:54 > 0:25:56It's just innately human
0:25:56 > 0:26:00to want to be in the same room as the other person.
0:26:00 > 0:26:02And I'll tell you who understands that better than anybody -
0:26:02 > 0:26:05it's the techie people who invented all of this stuff.
0:26:05 > 0:26:07That's why they all like to be near each other.
0:26:11 > 0:26:15We were told technology meant location wouldn't matter,
0:26:15 > 0:26:18but in fact, it seems to matter more than ever.
0:26:18 > 0:26:20This old tea warehouse near Old Street
0:26:20 > 0:26:23is home to dozens of creative companies,
0:26:23 > 0:26:26including a marketing agency called Albion.
0:26:26 > 0:26:28I'll cover that in a minute...
0:26:28 > 0:26:32Remember Glyn Britton? He commutes 200 miles from Stockport
0:26:32 > 0:26:34to network here.
0:26:34 > 0:26:37And then we need a thing that says, why us...
0:26:37 > 0:26:40As a business whose product is ideas,
0:26:40 > 0:26:44Albion finds it needs to get the right people into one room.
0:26:44 > 0:26:47I think creativity is a group activity.
0:26:47 > 0:26:50It's always building on other people's ideas.
0:26:50 > 0:26:52We should push the meerkat thing, like...
0:26:52 > 0:26:56There's no time for Glyn to relax in this client meeting
0:26:56 > 0:26:58with Comparethemarket.com.
0:26:58 > 0:27:01It went on for more than an hour-and-a-half,
0:27:01 > 0:27:03with everyone standing up.
0:27:03 > 0:27:06Have you claimed your toy for the insurance you just bought...?
0:27:06 > 0:27:09When you're together physically, you've just got a greater bandwidth
0:27:09 > 0:27:12for those connections that you're trying to make. You can pick up on
0:27:12 > 0:27:14very intangible little bits of body language,
0:27:14 > 0:27:16the glint in someone's eye.
0:27:17 > 0:27:21Unless the rest of the country can find some of that London buzz,
0:27:21 > 0:27:25the capital will only become more important to our economy,
0:27:25 > 0:27:26not less.
0:27:31 > 0:27:33Everywhere I go in London,
0:27:33 > 0:27:37I see signs the city's success is becoming entrenched.
0:27:37 > 0:27:39It's a feature of network economics
0:27:39 > 0:27:42that one virtuous circle leads to another.
0:27:43 > 0:27:45Think about this...
0:27:46 > 0:27:50So, London lucked out by having the right industries at the right time,
0:27:50 > 0:27:53but what's really allowed it to hit the jackpot
0:27:53 > 0:27:57is the consumer economy that's built on top of everything else going on -
0:27:57 > 0:28:00the services that serve the service workers.
0:28:00 > 0:28:03Because London's not just a great place to earn money -
0:28:03 > 0:28:06it's a very good place to spend it as well.
0:28:09 > 0:28:12To help us understand why, come inside The Shard -
0:28:12 > 0:28:14western Europe's tallest building.
0:28:18 > 0:28:21It's ten in the morning. On the 32nd floor,
0:28:21 > 0:28:25lunch is being prepared at Oblix, one of three restaurants here.
0:28:28 > 0:28:30And I'm here to help, if I can.
0:28:31 > 0:28:34We have a string here, which, obviously, it's quite hot,
0:28:34 > 0:28:37and we shouldn't use the fingers as much.
0:28:37 > 0:28:40Rainer Becker is preparing one of his signature dishes.
0:28:40 > 0:28:43They always say that duck fat is actually good for you, don't they?
0:28:43 > 0:28:46I've always been a bit sceptical!
0:28:46 > 0:28:49Yeah, I'm sceptical, too! My doctor says, "Don't eat too much, er..."
0:28:50 > 0:28:53Rainer is a superstar German chef,
0:28:53 > 0:28:58who runs his global restaurant empire, Zuma, from London.
0:28:58 > 0:29:01Can you put a bit of mango chutney where you find some space?
0:29:01 > 0:29:04- On the plate here?- So, a little bit of the sauce over the duck,
0:29:04 > 0:29:06- over the meat.- Little bit of sauce over the meat...
0:29:06 > 0:29:08La-di-da.
0:29:08 > 0:29:10The presentation matters quite a bit, doesn't it, Rainer?
0:29:10 > 0:29:13You don't want to... do it like I'm doing,
0:29:13 > 0:29:15- spilling drops on the plate. - Yeah, you know, it's natural.
0:29:15 > 0:29:17- It's got to look sort of smart. - And then we put
0:29:17 > 0:29:20a little bit of coriander...
0:29:20 > 0:29:21Fantastic.
0:29:22 > 0:29:27'It was back in the '90s. There were customers for good food in London,
0:29:27 > 0:29:30'so, the city learned to provide it.'
0:29:31 > 0:29:34I didn't want to come to London when I was a young chef.
0:29:34 > 0:29:36But then, suddenly, London came on the map,
0:29:36 > 0:29:40and more people tried new things out, became successful,
0:29:40 > 0:29:43- and that's why I wanted to come here as well.- Mmm.
0:29:43 > 0:29:46But here's the thing - London's diners have a lot of choice,
0:29:46 > 0:29:50which drives competition, and drives up standards.
0:29:50 > 0:29:53135 top-end restaurants opened here last year,
0:29:53 > 0:29:56and 75 restaurants closed.
0:29:57 > 0:30:00- So, you have Darwinian restaurant competition...- Winning and losing,
0:30:00 > 0:30:03- yes, yes.- ..going on all the time. - Competition is fierce, definitely.
0:30:03 > 0:30:06- But it also drives you.- You get better, better, better, every year.
0:30:06 > 0:30:08Yeah. You can't rely on your success.
0:30:08 > 0:30:11You know, every day, you need to be on top.
0:30:12 > 0:30:15Now, I didn't just come here for the food.
0:30:15 > 0:30:18I've arranged to talk to a particular Londoner about the
0:30:18 > 0:30:22impact the capital's pull on talent is having on the rest of Britain.
0:30:23 > 0:30:28We chose to conduct the conversation in elaborate metaphors.
0:30:29 > 0:30:32It is a great suction machine, isn't it? It is, because
0:30:32 > 0:30:35the talent is sucked out. If you're the best lawyer in Sunderland...
0:30:35 > 0:30:37- I think suction machine... - ..you want to come here!
0:30:37 > 0:30:40I think it's not so much a suction machine as a gigantic,
0:30:40 > 0:30:44undersea coelenterate, that takes in
0:30:44 > 0:30:48and then expels. And so there are two motions -
0:30:48 > 0:30:51there's... In the respiratory process,
0:30:51 > 0:30:53there's the ingestion and then the expulsion.
0:30:53 > 0:30:56But I think message at the moment is that the great sucking-in
0:30:56 > 0:30:59is somewhat more powerful than the thing that's spilling out.
0:30:59 > 0:31:01I think that's wholly... Obviously, if I look
0:31:01 > 0:31:05at the sheer quantity of tax exported,
0:31:05 > 0:31:08the number of jobs that London drives
0:31:08 > 0:31:10in the rest of the UK economy...
0:31:10 > 0:31:12London is the gateway. Let me give you one example.
0:31:12 > 0:31:15With banking, would there really be
0:31:15 > 0:31:18a financial services industry in Edinburgh,
0:31:18 > 0:31:21were it not for London's global preponderance?
0:31:21 > 0:31:25Of course not. So, London is the flywheel that drives it all.
0:31:27 > 0:31:30It seems to me, London has both good
0:31:30 > 0:31:32and bad effects on the rest of Britain.
0:31:32 > 0:31:36It sucks people in, but serves those people well,
0:31:36 > 0:31:38and makes them very productive.
0:31:39 > 0:31:41So, what's the net effect?
0:31:41 > 0:31:45Is London giving or taking more from the rest of the country?
0:31:49 > 0:31:50This is a great place to come to
0:31:50 > 0:31:54think about London's relationship with the rest of Britain.
0:31:56 > 0:31:59Most of the post sent to and from the city
0:31:59 > 0:32:01passes through this sorting office.
0:32:03 > 0:32:05Where better, then, to ask -
0:32:05 > 0:32:09what does London's huge success look like from where you live?
0:32:10 > 0:32:13We wanted to know what the public thought.
0:32:13 > 0:32:16Is there London pride or anti-capital prejudice?
0:32:19 > 0:32:21So, we carried out a national poll.
0:32:21 > 0:32:24Nearly a quarter of people across Britain felt
0:32:24 > 0:32:28London's success was damaging the wider UK economy.
0:32:28 > 0:32:34But over 60% thought it benefited the wider economy.
0:32:35 > 0:32:39There's a certain amount of nonsense in the media about how, you know,
0:32:39 > 0:32:41the economy is like a...
0:32:41 > 0:32:45a great big...tadpole, where the head has got
0:32:45 > 0:32:48too colossal. And I think this is the point that your poll reveals,
0:32:48 > 0:32:51and I think the public understands this -
0:32:51 > 0:32:54the better London does, the better the UK does.
0:32:56 > 0:32:59However, there is an extra dimension to the London story
0:32:59 > 0:33:01that I have to mention -
0:33:01 > 0:33:04it is no longer just a UK hub.
0:33:04 > 0:33:06The very things that have given London
0:33:06 > 0:33:08a gravitational pull in Britain
0:33:08 > 0:33:12are now sucking in foreign people and their money.
0:33:12 > 0:33:15Like here, Battersea Power Station -
0:33:15 > 0:33:19it's finally about to be "regenerated" - by foreign money.
0:33:19 > 0:33:21And there you are -
0:33:21 > 0:33:23one of the chimneys!
0:33:23 > 0:33:25Can't believe you could actually touch one!
0:33:25 > 0:33:28They're going to come down and be rebuilt.
0:33:31 > 0:33:34Malaysian investors recently bought this place
0:33:34 > 0:33:36for £400 million.
0:33:40 > 0:33:42Building it originally was a challenge -
0:33:42 > 0:33:45rebuilding it will be even harder.
0:33:48 > 0:33:51When it opened in 1933,
0:33:51 > 0:33:53one newspaper described it as
0:33:53 > 0:33:56"the flaming altar of the modern temple of power".
0:33:58 > 0:34:00But those days are long gone.
0:34:01 > 0:34:03This was the manager's entrance.
0:34:06 > 0:34:08'To understand why this place
0:34:08 > 0:34:10'is attracting so much foreign investment,
0:34:10 > 0:34:12'we need to delve a little further.'
0:34:12 > 0:34:14Wow.
0:34:14 > 0:34:16It's Flash Gordon.
0:34:16 > 0:34:18Look at this.
0:34:18 > 0:34:19Crumbs.
0:34:20 > 0:34:23Carnaby Street, names of the roads.
0:34:26 > 0:34:30This control room is a glorious mixture of analogue technology,
0:34:30 > 0:34:34fine Italian marble and an Art Deco ceiling.
0:34:35 > 0:34:38It's incredible to have a piece of history like this
0:34:38 > 0:34:41right in the centre of London.
0:34:41 > 0:34:44One of the things that appeals particularly to foreign investors
0:34:44 > 0:34:46is this combination you find in Britain
0:34:46 > 0:34:50of history and modernity juxtaposed.
0:34:50 > 0:34:52It's all part of the brand, really.
0:34:54 > 0:34:58All that, Central London and the other things we've talked about,
0:34:58 > 0:35:00it adds up to a global attraction
0:35:00 > 0:35:03in the eyes of Battersea's largest investor.
0:35:04 > 0:35:07Where can you, in the world, you come and buy something like this
0:35:07 > 0:35:09and you're instantly well known?
0:35:09 > 0:35:11So everyone in London...
0:35:11 > 0:35:13You'd be surprise and most parts of Asia,
0:35:13 > 0:35:16they know about Battersea Power Station.
0:35:16 > 0:35:19The son of a rubber tapper, Tan Sri Liew Kee Sin
0:35:19 > 0:35:23is one of Malaysia's most successful property developers,
0:35:23 > 0:35:24and its 38th richest man.
0:35:25 > 0:35:29The key point for us to gain the support of the local people
0:35:29 > 0:35:31is that we have to make sure the four chimneys
0:35:31 > 0:35:34are replaced to its original form.
0:35:35 > 0:35:37The developers say the whole Battersea project
0:35:37 > 0:35:39will be worth £8 billion.
0:35:40 > 0:35:45When finished there'll be offices, shops and around 3,500 new homes.
0:35:46 > 0:35:50They'll range from studios costing around £350,000
0:35:50 > 0:35:53to penthouses expected to go for upwards of £18 million.
0:35:55 > 0:35:58This is all your flats around here, all the ones with the lights.
0:35:58 > 0:35:59All here, yeah, here.
0:35:59 > 0:36:01Really a lot of flats there, my goodness.
0:36:01 > 0:36:04Well, if you don't have this quantity of flats,
0:36:04 > 0:36:05you can't pay for the restoration.
0:36:05 > 0:36:07- Right.- So it's a give and take.
0:36:09 > 0:36:12What's good about foreign investment?
0:36:12 > 0:36:14Well, the power station closed in 1983
0:36:14 > 0:36:19but we British somehow didn't manage to redevelop the site ourselves.
0:36:19 > 0:36:21We talked about it, but never did it.
0:36:22 > 0:36:26There's something that Malaysia has, perhaps we've lost it a little bit,
0:36:26 > 0:36:29it is a bit of sort of entrepreneurial flair.
0:36:29 > 0:36:32Maybe because here is a very structured society.
0:36:32 > 0:36:35Everybody follows a particular structure.
0:36:35 > 0:36:39Whereas we, as a developing country, we must be a go-getter.
0:36:39 > 0:36:41If not you won't survive in a country like Malaysia
0:36:41 > 0:36:42or anywhere in Asia.
0:36:44 > 0:36:48The first 860 flats here have been sold
0:36:48 > 0:36:51before a single floor to ceiling window has been put in.
0:36:53 > 0:36:54Now Britain needs investment -
0:36:54 > 0:36:56so it's great London attracts it.
0:36:58 > 0:37:00But what about the rest of the country?
0:37:00 > 0:37:03Manchester, Sheffield, Birmingham, are these places you've looked at,
0:37:03 > 0:37:06thought about, or is it London for foreigners?
0:37:06 > 0:37:09Well, my shareholders, they won't reinvest yet.
0:37:09 > 0:37:13Everything is in place before we look at any other part of the UK.
0:37:13 > 0:37:15So for now, no.
0:37:15 > 0:37:19We'd all love to think, wouldn't we, that having spent money on things
0:37:19 > 0:37:21like this, foreigners would get tired of London
0:37:21 > 0:37:24and look elsewhere in the UK to invest?
0:37:24 > 0:37:25But it doesn't quite work like that.
0:37:25 > 0:37:28There's a curious back-to-front economic rule
0:37:28 > 0:37:31that the more money that's spent in London
0:37:31 > 0:37:34the more money wants to come to London.
0:37:35 > 0:37:38I guess there can only be so many global cities in the world
0:37:38 > 0:37:39at any one time -
0:37:39 > 0:37:42if you are one you get all the spoils.
0:37:44 > 0:37:47I confess to some concern there is less to all of this
0:37:47 > 0:37:49than meets the eye.
0:37:49 > 0:37:51Maybe the foreign money is flowing in too fast.
0:37:51 > 0:37:54It's easy come, what if it's easy go?
0:37:55 > 0:38:00The biggest worry I have, about everything I'm saying,
0:38:00 > 0:38:02is that in five or ten years' time we'll look back on this
0:38:02 > 0:38:06and say, "Ah, it was all a bubble."
0:38:06 > 0:38:08I think a lot of people think there's froth here
0:38:08 > 0:38:10and there is some froth.
0:38:10 > 0:38:13But I think there's something more substantial here too.
0:38:14 > 0:38:19If the jobs go, the Russians leave, and the Chinese and Malaysians,
0:38:19 > 0:38:24I suspect London has the innate capability of reinventing itself.
0:38:24 > 0:38:27So it won't be a dud city or a failure city,
0:38:27 > 0:38:31it'll just be a city with a cyclical downturn
0:38:31 > 0:38:33and then will be back on its way.
0:38:33 > 0:38:36Could be wrong, um, but I...
0:38:36 > 0:38:38I don't think I am.
0:38:44 > 0:38:47Right now, London's appeal to foreigners, though, is only growing.
0:38:49 > 0:38:52It's on trend for the world's super rich,
0:38:52 > 0:38:54here to buy handbags and houses.
0:38:55 > 0:38:58I said earlier, neighbours matter.
0:38:58 > 0:39:01Well, the rich like to cluster together, in Mayfair for example.
0:39:03 > 0:39:06A world unto itself. A slightly mad world.
0:39:06 > 0:39:08Look at this place.
0:39:10 > 0:39:12This house has been entirely gutted and rebuilt.
0:39:15 > 0:39:17It has eight luxurious bedrooms.
0:39:17 > 0:39:19Three high-spec kitchens.
0:39:21 > 0:39:24And three basement floors, of course,
0:39:24 > 0:39:26including the must have swimming pool.
0:39:28 > 0:39:30And that is very far from all.
0:39:32 > 0:39:37These plates are actually all hand gilded here in Stoke
0:39:37 > 0:39:38or in the potteries.
0:39:38 > 0:39:42We still have luckily a few businesses still alive
0:39:42 > 0:39:44and they're all hand painted in gold in gold leaf.
0:39:44 > 0:39:46They come with the house the plates?
0:39:46 > 0:39:49They come with the house and each plate is about £4,000,
0:39:49 > 0:39:51just to let you know, yes.
0:39:51 > 0:39:54Just pop that... Pop that back.
0:39:55 > 0:39:58This house is pitched at foreigners, not Brits.
0:39:59 > 0:40:02How much time might a buyer spend here?
0:40:02 > 0:40:05Do you think it's going to be a sort of 300 days a year
0:40:05 > 0:40:06or 30 days a year?
0:40:06 > 0:40:09I would probably think its 30 days a year.
0:40:09 > 0:40:12In Mayfair we have a large amount
0:40:12 > 0:40:16of Middle Eastern families residing here.
0:40:16 > 0:40:20You normally find that the patriarch or the head of the family
0:40:20 > 0:40:25has the larger house, the siblings perhaps the son or daughter,
0:40:25 > 0:40:28who may be a prince or princess, will have the slightly smaller house.
0:40:28 > 0:40:30And I think this will be for a prince or princess
0:40:30 > 0:40:31rather than the principle himself.
0:40:34 > 0:40:37Like it or not, serving wealthy foreigners
0:40:37 > 0:40:39is an important British export.
0:40:39 > 0:40:40Just think of all the work
0:40:40 > 0:40:43that goes in to the fixtures and fittings here.
0:40:44 > 0:40:46The doors themselves are American walnut,
0:40:46 > 0:40:49made by British craftsmen.
0:40:50 > 0:40:51That's very nice.
0:40:52 > 0:40:56All this foreign money flowing in to pockets of London like Mayfair
0:40:56 > 0:40:58is driving up property prices.
0:41:01 > 0:41:05The unmodernised house was on the market for £17.5 million
0:41:05 > 0:41:07after the crash.
0:41:07 > 0:41:09Listen to what it's advertised for now.
0:41:12 > 0:41:14This will sell just under £40 million.
0:41:14 > 0:41:17It's on the market for £39.5 million,
0:41:17 > 0:41:21which is a lot of money as a capital sum.
0:41:21 > 0:41:22It's probably a...
0:41:22 > 0:41:26It's point something of a percent of the amount of population
0:41:26 > 0:41:27who can afford it.
0:41:27 > 0:41:29But at the same time,
0:41:29 > 0:41:32it is the only property of its type in Mayfair for sale.
0:41:38 > 0:41:43What we're seeing in London is the curious effect of a global hub city
0:41:43 > 0:41:46sucking people in then struggling to fit them.
0:41:46 > 0:41:49You see it in house prices above all, not just in Mayfair.
0:41:50 > 0:41:53Rich people come potentially pushing ordinary people out -
0:41:53 > 0:41:57a danger well illustrated by what's been happening here
0:41:57 > 0:41:58in Elephant and Castle.
0:42:00 > 0:42:03This is a part of London that's actually very central,
0:42:03 > 0:42:05but it's often felt like a world away.
0:42:07 > 0:42:11But now the forces that are shaping the rest of the city
0:42:11 > 0:42:13are imposing themselves here.
0:42:18 > 0:42:19For much of the last century
0:42:19 > 0:42:22the Elephant was an area of high inner city poverty.
0:42:23 > 0:42:29This is a tale of two cities - the old London and the new.
0:42:29 > 0:42:31It was first redeveloped in the 1960s.
0:42:32 > 0:42:36It is one of the biggest single pieces of urban renewal in London.
0:42:36 > 0:42:38But it soon lost its sparkle.
0:42:38 > 0:42:40Up here on the second floor,
0:42:40 > 0:42:43it's clear that spaciousness is in fact emptiness.
0:42:45 > 0:42:48Today there is a lot of new development going on here.
0:42:51 > 0:42:53This tells you everything you need to know
0:42:53 > 0:42:56about how London's demography has being changed
0:42:56 > 0:42:57by rising property prices.
0:42:59 > 0:43:05Built in 1974, the Heygate Estate housed around 3,000 people -
0:43:05 > 0:43:06most were council tenants.
0:43:12 > 0:43:15Today the empty estate is being slowly demolished.
0:43:17 > 0:43:20Developers are going to build modern apartments here.
0:43:20 > 0:43:23But there's more going on than the glossy images suggest.
0:43:32 > 0:43:35The plan is to take down about 1,000 flats,
0:43:35 > 0:43:40to add more than that number and probably nicer ones as well.
0:43:40 > 0:43:43So it is a net improvement in London's housing infrastructure.
0:43:45 > 0:43:46I dare say in 30 years' time,
0:43:46 > 0:43:51the new estate will seem like just part of the fabric of the place.
0:43:51 > 0:43:56But within that upgrade, there are big winners and losers.
0:43:56 > 0:43:59It's like so much economic progress it's brutal.
0:43:59 > 0:44:02It's a much more brutal process than most of us would like.
0:44:05 > 0:44:08179 flats here were privately owned.
0:44:10 > 0:44:12One belonged to Jimi Payne,
0:44:12 > 0:44:15who feels pushed out by the redevelopment here.
0:44:18 > 0:44:21- When were you last here? - Over five years ago.
0:44:21 > 0:44:23This is the first time I've been back here.
0:44:23 > 0:44:25What does it feel like?
0:44:25 > 0:44:28It feels weird, it feels...like home.
0:44:28 > 0:44:31- Feels like home? - It really feels like home.
0:44:31 > 0:44:34Um, how a piece of concrete can...
0:44:36 > 0:44:37..grip your heartstrings.
0:44:37 > 0:44:40It, um, it really does. It's, um...
0:44:40 > 0:44:44I mean, up there, that's where I lived for 11 years.
0:44:44 > 0:44:48Jimi bought his three-bedroom flat, for £50,000 in 1997.
0:44:50 > 0:44:53When Southwark Council sold the estate to the developers,
0:44:53 > 0:44:56they bought all the flats that were privately owned.
0:44:56 > 0:44:59Jimi got £163,000.
0:45:00 > 0:45:04Now when you think of that in figures, from 50 thousand to 163
0:45:04 > 0:45:07people go, "What's he moaning about?"
0:45:07 > 0:45:09He's made, he's made £110,000.
0:45:09 > 0:45:11Yeah, but you've got to buy another place with that.
0:45:11 > 0:45:14That's what people don't think, that's what people don't think.
0:45:14 > 0:45:17When Jimi started looking for a new place nearby
0:45:17 > 0:45:20he found himself locked out of London's booming property market.
0:45:22 > 0:45:24Looking round here was just drawing a blank.
0:45:24 > 0:45:26So I decided to look in Walthamstow
0:45:26 > 0:45:28and going that little bit further out,
0:45:28 > 0:45:30I managed to buy a one-bedroom flat,
0:45:30 > 0:45:34albeit I was selling a three-bedroom flat to buy a one-bedroom flat
0:45:34 > 0:45:36and um, I bought that for 187.
0:45:37 > 0:45:41Jimi wasn't the only owner to move out of the centre of London.
0:45:41 > 0:45:47Of the 120 who lived on the estate, 35 stayed in the borough.
0:45:47 > 0:45:5225 moved to other parts of London and 30 moved out altogether.
0:45:53 > 0:45:55It's not known where the rest went.
0:45:58 > 0:46:00What's happening to the Heygate Estate
0:46:00 > 0:46:03is part of a bigger plan to regenerate the Elephant and Castle.
0:46:06 > 0:46:08To Fiona Colley from Southwark Council,
0:46:08 > 0:46:10it will bring much needed improvements to the area.
0:46:13 > 0:46:16What we'll have here, where we're standing right now,
0:46:16 > 0:46:21is a brand-new park, surrounded by new homes, private homes,
0:46:21 > 0:46:25shared ownership homes, social rented homes for residents,
0:46:25 > 0:46:27all kinds of Londoners to live in.
0:46:27 > 0:46:30It's going to be a great new area with new shops and cafes.
0:46:30 > 0:46:32Going to be a lovely place to live.
0:46:32 > 0:46:35Would you call the process by which the progress that
0:46:35 > 0:46:39you're describing arrives, would you call it brutal?
0:46:39 > 0:46:41No, I don't think I would call it brutal,
0:46:41 > 0:46:43but I do accept that it's particularly difficult
0:46:43 > 0:46:47for people who owned homes on this estate.
0:46:47 > 0:46:48Their homes, the sad truth is,
0:46:48 > 0:46:52they're not worth as much as new homes, not by a long stretch,
0:46:52 > 0:46:53and they are worth less
0:46:53 > 0:46:57even than similar homes on better quality estates,
0:46:57 > 0:47:00so we do accept that it is difficult for leaseholders.
0:47:02 > 0:47:06A brand-new three-bedroom flat here will go for around £700,000.
0:47:07 > 0:47:11Homes in the new development are already being advertised abroad.
0:47:12 > 0:47:18Somehow it feels like Londoners are being pushed out of their own city,
0:47:18 > 0:47:19and I can see why it's happening
0:47:19 > 0:47:22because this is a very popular place in the world,
0:47:22 > 0:47:23a lot of people want to come here.
0:47:23 > 0:47:25But we need to preserve it for Londoners as well, don't we?
0:47:25 > 0:47:28It has to have a mixed ecology, balanced ecology?
0:47:28 > 0:47:31Yeah, I have no doubt that when the new area is occupied
0:47:31 > 0:47:33it will be occupied by Londoners.
0:47:33 > 0:47:34London is a very diverse city.
0:47:34 > 0:47:38Some people are born here, like me. Others coming from overseas.
0:47:38 > 0:47:39I'm sure we'll have a very mixed community.
0:47:41 > 0:47:43It's the paradox of success.
0:47:43 > 0:47:46The economic vitality every city craves
0:47:46 > 0:47:48brings with it its own headaches.
0:47:50 > 0:47:53Given the chance, I mean, I would still be here today.
0:47:53 > 0:47:55If I didn't have to move, I would still be here today.
0:47:57 > 0:48:01Great cities can't survive on rich people alone.
0:48:01 > 0:48:04We can't all be digital marketers, or entrepreneurs.
0:48:04 > 0:48:07Cities need all types - bosses and bus drivers.
0:48:08 > 0:48:10Do we want a London that looks like Monaco on Thames?
0:48:12 > 0:48:16The worst and most dangerous development of the last 20 years,
0:48:16 > 0:48:20and the growth of London, is that it's becoming too expensive,
0:48:20 > 0:48:22for a lot of people from around Britain
0:48:22 > 0:48:23to spend part of their life here.
0:48:23 > 0:48:25So I think London has to watch it,
0:48:25 > 0:48:29it has to make sure that it is a place open to the nation.
0:48:30 > 0:48:33It's going to be tragic if someone from Staffordshire thinks,
0:48:33 > 0:48:35"I can't come to London and get a job in London
0:48:35 > 0:48:37"cos I can't afford to live there."
0:48:42 > 0:48:46For a country that so relies on the success of this one city,
0:48:46 > 0:48:48there's another worrying side to London's growth.
0:48:50 > 0:48:52The impact on the city's transport system.
0:48:54 > 0:48:56Paper tickets, ladies and gents, go straight through, please.
0:48:56 > 0:48:58Oysters, you need to touch out.
0:48:58 > 0:49:00Ooh, never stops, does it?
0:49:00 > 0:49:02It's the evening rush hour.
0:49:02 > 0:49:05Victoria underground station is bursting at the seams.
0:49:05 > 0:49:07I'm on the ticket line.
0:49:08 > 0:49:09Paper tickets, straight through.
0:49:09 > 0:49:11Euston, you want to go down to the Victoria line
0:49:11 > 0:49:13take the Victoria line northbound.
0:49:13 > 0:49:16- Pay as you go. - Go straight through, paper tickets.
0:49:17 > 0:49:20You can go through now, but you need to top up the Oyster, yeah?
0:49:20 > 0:49:24I'm not actually, no. I'm just work experience.
0:49:24 > 0:49:28I've said London's density is one of its strengths,
0:49:28 > 0:49:29but you can have too much a of a good thing.
0:49:32 > 0:49:33It's quite stressful, isn't it?
0:49:33 > 0:49:35I can feel the adrenaline running.
0:49:35 > 0:49:37A bad day, you basically have to close the station
0:49:37 > 0:49:41- and stop people coming in. - We don't look on it as a bad day.
0:49:41 > 0:49:43It's a regular occurrence.
0:49:44 > 0:49:46Oh, my God, so you've got a lot of people backing up now.
0:49:48 > 0:49:52Recently, London's population has been growing at an astonishing rate,
0:49:52 > 0:49:55from just over seven million in 2001
0:49:55 > 0:49:59to just over eight million a decade later.
0:49:59 > 0:50:02That's a 12% rise - faster than anywhere in Britain.
0:50:03 > 0:50:07No wonder London's transport system is feeling the pressure.
0:50:09 > 0:50:12Now I show you this not to impress you with the miracle
0:50:12 > 0:50:15by which the system copes with so many people,
0:50:15 > 0:50:19nor to make you feel sorry for the commuters and their daily grind.
0:50:19 > 0:50:22I'm showing it to you to make you think about vulnerability -
0:50:22 > 0:50:24the vulnerability of London to overcrowding,
0:50:24 > 0:50:27to becoming too successful for its own good.
0:50:27 > 0:50:32A vulnerability for a nation which relies on London working well.
0:50:37 > 0:50:40Work is going on to expand Victoria underground station.
0:50:40 > 0:50:43But you can see the danger -
0:50:43 > 0:50:46a city being gummed up by its own success.
0:50:46 > 0:50:48The hassles of getting around
0:50:48 > 0:50:51driving the very people who make the city successful elsewhere.
0:50:55 > 0:50:58A surging population, a growing economy,
0:50:58 > 0:51:01a widening gap with the rest of the country.
0:51:01 > 0:51:05London's success raises a final conundrum for Britain -
0:51:05 > 0:51:08to build on it we have to keep feeding the beast.
0:51:09 > 0:51:11This is the food it needs -
0:51:11 > 0:51:13investment in new transport infrastructure.
0:51:15 > 0:51:17These works in London's old docks
0:51:17 > 0:51:22are part of Europe's largest infrastructure project - Crossrail.
0:51:26 > 0:51:29Wherever you go in London, even the oddest of places,
0:51:29 > 0:51:33you can find evidence of the insatiable appetite of the city
0:51:33 > 0:51:38to expand, whether it is up or down or sideways.
0:51:38 > 0:51:41And a huge amount is being invested in infrastructure.
0:51:41 > 0:51:44Now it won't escape your attention that every pound
0:51:44 > 0:51:47spent in London can't be spent elsewhere
0:51:47 > 0:51:50and it's no wonder people all over the country think,
0:51:50 > 0:51:54"Why on Earth does Britain throw everything it's got
0:51:54 > 0:51:56"at this one city - the capital."
0:51:59 > 0:52:04This is the biggest current example of throwing everything at London.
0:52:05 > 0:52:08Crossrail is the capital's newest train line.
0:52:08 > 0:52:10HORN SOUNDS
0:52:13 > 0:52:15When it's finished it should be a lot quieter,
0:52:15 > 0:52:17quite a bit faster
0:52:17 > 0:52:19and it'll certainly be a great deal more crowded.
0:52:21 > 0:52:25This is Britain's first transport project built explicitly
0:52:25 > 0:52:28with agglomeration economics in mind.
0:52:28 > 0:52:3226 miles of tunnels will put 1.5 million extra people
0:52:32 > 0:52:34living east and west of London
0:52:34 > 0:52:37within 45 minutes of the centre of the city.
0:52:37 > 0:52:39HORN SOUNDS
0:52:39 > 0:52:42What it'll do is create new journeys,
0:52:42 > 0:52:44suck people off existing transport
0:52:44 > 0:52:48and generally create capacity for growth in the capital.
0:52:52 > 0:52:56London's passengers and businesses will pay two thirds of the cost.
0:52:59 > 0:53:02But £5 billion is coming from the national taxpayer.
0:53:04 > 0:53:06It's a large sum for local transport.
0:53:08 > 0:53:09This is my stop.
0:53:10 > 0:53:12It doesn't look like much.
0:53:12 > 0:53:13But don't be fooled.
0:53:15 > 0:53:18I'm 30m below ground
0:53:18 > 0:53:21under one of London's most densely populated business districts.
0:53:24 > 0:53:28Welcome to the new Crossrail station at Canary Wharf.
0:53:34 > 0:53:36It's cavernous, isn't it?
0:53:36 > 0:53:40Amazing to think that when this is all done in five years' time,
0:53:40 > 0:53:41services are running,
0:53:41 > 0:53:45in just the three peak hours each day 7-10am,
0:53:45 > 0:53:48this platform, or double platform,
0:53:48 > 0:53:51is going to be used by 32,000 people.
0:53:53 > 0:53:55RECORDED MESSAGE: Mind the gap.
0:53:57 > 0:54:00All this new infrastructure will, in effect,
0:54:00 > 0:54:03expand the size of Greater London.
0:54:03 > 0:54:05It will allow more people to come in,
0:54:05 > 0:54:07which will enable London's economy to grow.
0:54:08 > 0:54:11But that growth will mean London will soon need more infrastructure.
0:54:13 > 0:54:16This is going to be a wonderful public roof garden.
0:54:17 > 0:54:19But people won't be coming here
0:54:19 > 0:54:21just because there's an attractive new station.
0:54:23 > 0:54:27I said London has an insatiable appetite for this kind of thing
0:54:27 > 0:54:30because you build a Crossrail, it allows more people in,
0:54:30 > 0:54:35that creates new pressures, more demand, yet more building -
0:54:35 > 0:54:36the cycle goes on.
0:54:36 > 0:54:39But the crucial thing about it is
0:54:39 > 0:54:43that there's an underlying force for expansion.
0:54:43 > 0:54:46So by building you are not creating the growth -
0:54:46 > 0:54:48you are simply allowing it to happen.
0:54:48 > 0:54:50It was already there.
0:54:53 > 0:54:55One man is very familiar
0:54:55 > 0:54:58with that underlying force for expansion in London.
0:54:59 > 0:55:02Richard Di Cani is responsible for planning
0:55:02 > 0:55:04the city's future transport needs.
0:55:05 > 0:55:08You couldn't call it the easiest job in the world.
0:55:10 > 0:55:15We see in London a tube train's worth of people a week,
0:55:15 > 0:55:17either being born or arriving in the city.
0:55:17 > 0:55:20So a thousand people a week adding to London's population.
0:55:22 > 0:55:26London's success is a magnet to people from everywhere else,
0:55:26 > 0:55:29so much so it's been hard for the transport planners to keep up.
0:55:31 > 0:55:34When the plans for Crossrail were being drawn up,
0:55:34 > 0:55:36everyone thought London would grow to be a city
0:55:36 > 0:55:39of nearly nine million by 2031.
0:55:40 > 0:55:42But according to the most recent census,
0:55:42 > 0:55:47London is growing faster and will be a city of ten million by then.
0:55:48 > 0:55:50It's no mere statistical blip.
0:55:52 > 0:55:56So Crossrail is all built on the old population projections.
0:55:56 > 0:55:58- Yes, it is.- You hadn't even taken into account...
0:55:58 > 0:56:00Yeah, which is why we're looking at Crossrail Two now,
0:56:00 > 0:56:03so we need to continue to look at these kind of projects
0:56:03 > 0:56:04that support London's growth...
0:56:04 > 0:56:07to catch up with the population increase.
0:56:09 > 0:56:12So before they've even finished Crossrail One
0:56:12 > 0:56:15they're already chomping at the bit for Crossrail Two.
0:56:16 > 0:56:20Now if the money spent on Crossrail makes you...well...cross,
0:56:20 > 0:56:23think about what would happen if the money wasn't spent.
0:56:23 > 0:56:26Eventually people would be choked out of London, wouldn't they?
0:56:26 > 0:56:27They would go elsewhere.
0:56:27 > 0:56:28I think some people would.
0:56:28 > 0:56:30But in terms of investment and employment,
0:56:30 > 0:56:34I think we have to accept that there are certain industries,
0:56:34 > 0:56:36certain sectors where they're choosing between
0:56:36 > 0:56:38London, New York or Paris.
0:56:38 > 0:56:40For them it's not a choice between London and Manchester
0:56:40 > 0:56:43or London and Sheffield, they're looking internationally
0:56:43 > 0:56:45at a range of cities.
0:56:45 > 0:56:46If we don't get it in London,
0:56:46 > 0:56:49we don't get it in the UK and that's a loss to the UK economy.
0:56:51 > 0:56:53Crossrail enables London to grow,
0:56:53 > 0:56:55but a growing London means an economy
0:56:55 > 0:56:57that continues to move south.
0:57:00 > 0:57:06Whether it's Kings Cross, Battersea, or the port,
0:57:06 > 0:57:09London is attracting investment and growth like never before.
0:57:10 > 0:57:13For anyone hoping to even out Britain's lopsided economy,
0:57:13 > 0:57:16London's success is a huge challenge.
0:57:19 > 0:57:21It leaves Britain in a bind.
0:57:21 > 0:57:23We want growth...
0:57:23 > 0:57:25but we'd love it most outside London
0:57:25 > 0:57:27in the regions lagging behind.
0:57:29 > 0:57:32You don't need to take the jam in London
0:57:32 > 0:57:35and try and spread it over the rest of the Ryvita, right?
0:57:36 > 0:57:38The jam will naturally spread
0:57:38 > 0:57:42the more jam you pile up in London.
0:57:42 > 0:57:43That is the way to do it.
0:57:45 > 0:57:48But so far it's London where you find most growth -
0:57:48 > 0:57:51the very place that's straining under the weight of it.
0:57:53 > 0:57:56At what cost do you want to expand the South further?
0:57:56 > 0:57:59Where are you going to put the next airport?
0:57:59 > 0:58:00What's the cost of doing
0:58:00 > 0:58:03those huge, large scale infrastructure projects?
0:58:03 > 0:58:05There's plenty of space around here to grow.
0:58:05 > 0:58:07We've got to think about the land that we live in
0:58:07 > 0:58:10and the benefits to us for the future.
0:58:10 > 0:58:11Not just for the now.
0:58:12 > 0:58:16We don't want to stop London, but we don't want to leave the rest behind.
0:58:19 > 0:58:20And here's the important question -
0:58:20 > 0:58:24if London is one of the world's great hubs
0:58:24 > 0:58:26sucking in all those resources,
0:58:26 > 0:58:28what does the rest of Britain do?
0:58:31 > 0:58:34Next time in Mind The Gap -
0:58:34 > 0:58:37how far can Britain's other cities learn from London,
0:58:37 > 0:58:39and which one has the best chance
0:58:39 > 0:58:41of becoming Britain's second economic engine?