Episode 1 Mind the Gap: London v the Rest

More than ever before, one city is dominating our lives,

our economy, our culture, our politics.

London is now, basically, evolving into the capital of the world.

It's the place where people want to live, if they possibly can,

and want to have some kind of investment.

Money, companies and people are pouring into London

like never before.

London is one of the great, iconic cities of the world

and we can attract people from New York, from Tokyo, from Paris.

Our capital is generating more than a fifth of Britain's income

and it's pulling away from the rest of the country.

The danger is that while London congratulates itself

on global economic success,

the rest of the country feels left out of getting any share in it.

It seems crazy that we're centralising it in one place

and actually building a huge suburb that's stretching north

rather than spreading it out properly.

While much of Britain still struggles after the crash,

London is going from strength to strength.

It's a great time to start thinking about

why cities are so important,

why London is so important

and what is going on underneath that.

In this series, I'll be asking, what is the London formula?

Competition is fierce, definitely, but it also drives you.

Better, better, better, every year.

Is London's growing success good for the rest of Britain or bad?

This will sell for just under £40 million.

If you had 120 million, the property just a few doors down is for sale.

And what should the rest of the country do?

This is the story of the economic forces polarizing Britain,

the story of London Versus The Rest.

If you want some evidence of the way London and the area around it

is pulling away from the rest of Britain, here it is.

Just 30 miles east of the centre of London,

we're driving across land reclaimed from the Thames Estuary so recently

it doesn't show up on GPS.

This is London Gateway, a brand-new port complex.

You might have thought that London had given up on its docks

and had subcontracted out the tricky task of handling containers

to other parts of the country.

Nope. London's not just getting a new port,

it's getting one on a grand scale.

This ship has come from South Africa,

carrying wine and other goods

destined for supermarkets in London and the South East.

This investment equals jobs

and I'm getting a lesson in one of the more intricate ones.

Forward is lower off.

-Forward is lower and pull back, then, is to raise up?

-Exactly.

This crane, built in China,

is one of the biggest of its kind in the world.

-OK. I think we can lower a little bit now.

-I think you can.

So that's forward on the right-hand lever.

-Yeah. A little bit more?

-Yeah, you're all right. That's good.

-So, can I lock on?

-We can lock on. Success.

-So, now I'm going to lift.

-Now you can lift.

-Which is back.

-That's it.

This is just a baby port now.

Eventually, there'll be 24 of these cranes.

Operating one is harder than it looks.

-Trolley forward.

-That's it.

-Ooh, it's swinging a little bit.

-That's all right.

Just ease off of it.

That's good. That's really good.

-OK.

-Lowering is forward. This is actually very nerve-racking.

La-de-da. Go on, little thing.

Bash. Upsy-daisy.

Excellent. That's it and you've loaded on the box.

-Phew.

-Was that stressful?

My job is in jeopardy! EVAN LAUGHS

This port is a 50-year bet that London continues to thrive.

What's attracted this £1.5 billion investment...

..is the market of 17 million prosperous consumers

in London and the South East.

This is where the primary mix of headcount and spend

has created the biggest economic zone in Europe.

So, to keep supply chains as tight as possible,

we need to have the ships coming as close as they can

to the biggest point of consumption. It's not rocket science.

It was the Romans who first did this 2,000 years ago,

establishing London as our national hub port.

The key word is that London is a hub

and hubs are really important.

We need to unwrap that concept to understand the London formula.

Now, this isn't the place to do it. It's all rather sparse around here.

We have to head to the centre because a really good starting point

is to think of London as an invention for cramming

the maximum number of talented people

into the smallest possible area.

To see that in action, you have to get up pretty early.

It's quarter to six in the morning and London is stirring.

200 miles away, Glynn Britton is starting his commute,

just like he does most weeks.

Glynn lives near Stockport,

but he helps run a marketing agency in London.

It's frustrating to leave his family behind,

but he knows the best careers are to be found in the capital.

For me, the train journey's the most productive time of the week.

It's early enough in the morning that there's no calls,

very few emails, so I can really concentrate on writing something

or really thinking something through.

You see, London sucks,

by which I mean it's successful

because it sucks in so many people like Glynn from around Britain.

The simple fact is that London flourishes

on the back of the talent it attracts,

the people who come here.

It isn't Londoners who built this city into what it is today,

it's the whole country.

It's a national asset.

It does mean, of course, that London has more than its share

of the most qualified people.

Across the country, graduates make up 38%

of the working-age population.

But amongst London's workers, they make up 58%.

With more qualified workers than other regions,

London hosts more of the top jobs.

I work as a consultant in the City.

I work in marketing for a TV company.

I am a knowledge manager. I kind of lead collaboration programmes.

I have to go to where the work is.

So, at the moment, I'm working in London. I live in the Midlands,

so I have to commute.

I live out in Lincolnshire. Obviously, if London were

half-an-hour away and house prices were cheaper, brilliant, sign me up.

Sucking in talented people is half the formula,

but then London does something to them -

it squashes them together.

Just before Edmonton Green. Is it up by the police station? Over.

Each day, more than 800,000 people from outside pack into London.

Most commute in from the suburbs

as there isn't room for everyone to live in the city itself.

Some, like Glynn, travel from much further.

I did live in London for 15 years

and we came to that inevitable point of life

where you want to get out of town

and we looked at the train journey up to Stockport, two hours,

it seemed doable.

Packing people in is key to what London does to Glynn

and his fellow commuters. They all benefit

from working in the vicinity of nearly 4.5 million other people.

Just look at how the density of workers in London

rises in the rush hour...

the City more than anywhere else.

When it comes to cramming workers in,

London towers above the rest of Britain.

What's interesting is how the hustle and bustle of packing workers in

appears to foster productivity.

London's workers produce 29% more per hour worked than the UK average.

If we compare each area's productivity to that average,

Cornwall comes out worst.

Berkshire, Oxfordshire and Buckinghamshire do well.

But inner London comes out way ahead

and London overall generates more than a fifth

of the country's income.

Glynn and the other workers of London make up

just 15% of the country's workforce.

But together, they produce more than Scotland, Wales,

Northern Ireland and the West Midlands put together.

So, how has London created such a nice niche for itself,

attracting top talent?

And why does it seems to work, cramming people in?

To answer that, I've come to one of the biggest developments

in the capital, King's Cross.

This small piece of London is filling up

with the world's best in art, in science and in technology.

It is the kind of development the rest of the country would kill for.

And it raises the question,

of all the counties and cities in the land, why has it arrived here?

Understand what's happening in King's Cross

and you'll understand why London dominates.

It's all to do with networking.

King's Cross has always been a hub

at the heart of our national railway network.

Recently the station's had a makeover

and they're scrubbing up the whole neighbourhood.

Today, King's Cross is becoming a different type of hub.

Now, this whole development offers you three lessons

in networking economics, in what it is that allows London

to attract talented people

and then to make the best use of them.

First stop, this vast new building.

This will be the Francis Crick Institute,

one of the largest scientific research centres in the world.

The Nobel Prize winning biologist Sir Paul Nurse

will run it when it opens in 2015.

And lesson one is that proximity fuels productivity.

You get more from people by putting them close together.

These labs are particularly open.

There's not walls in-between different groups.

It's a sort of science equivalent or as close as you can make

laboratories to open-plan, really.

Around 1,250 biomedical scientists will work

in labs clustered tightly together...

and it's all meant to improve the chances of making a breakthrough.

What's good about it is that if you're working in, say,

one of these laboratories and you're surrounded by other groups

doing somewhat different things,

you'll come across people with different expertise,

different technologies, different interests

and you'll meet them in that sort of core space in the middle.

Top-level research - it's just what every region of every nation

wants to be a leader in.

But being in London gives the Crick's scientists an advantage -

connections to the world of business.

If you're going to translate scientific discovery

into useful applications, you need all sorts of skill sets.

You need access to finance, access to legal advice,

you need entrepreneurs and that's all here in spades.

There is quite a simple principle at play here

and at work across the capital.

In some industries, two people working next to each other

are more than twice as productive

as the same two people working further apart.

Now, economists have a word for all of this.

It would have to have five syllables.

They talk about economies of agglomeration,

how you copy, collaborate

and compete intensely with people nearby.

London has agglomeration economies in spades

and that is just one part of its formula.

Agglomeration economics explains why businesses are coming here.

But there's something else going on at King's Cross

and it's something rather important.

The second lesson -

good neighbours matter.

In this case, a leading art school.

King's Cross has attracted Central Saint Martins, CSM,

at the University of the Arts London.

Many of these art students have come from all over the world

to study here.

Every weekend, you have something related to your course

or something related to art and design

which is constantly happening here. That kind of exposure,

I don't know whether you would get it in other cities.

In Switzerland, people are quite closed-minded,

even in big cities.

Here, I think it's like you are really free.

Covent Garden, the CSM students are clubbing every night there

and I can see Picasso's painting in Tate Modern.

It's like really exciting for me. It's like a new whole culture here.

The fees the foreign students pay certainly boost exports.

But the important feature of these students

is that other people will pay to be near them.

I don't know what you make of the art students

and their funny ways, but I'll tell you this -

the most sought-after creative people in the world, like it or not,

happen to want to live and work

next to other creative sought-after people

and London offers lots of opportunities for that.

But there's a third lesson about networking economics here too.

Once you've attracted good neighbours, more want to come.

It's a virtuous circle.

And to see that in action, just look at stop number three,

a new building running alongside the station and railway lines

that's going to be the British headquarters for Google.

The building is going to be long, as long as The Shard is high,

about 700,000 square feet and we're just working through the designs now.

We want to make it friendly.

And they want to make the building even more flash

than these early mock-ups.

Google are spending £650 million on new offices here

partly because they like the neighbours.

Now, the fact that you're going here

and the university is just over there, just next door,

-that was part of the reasoning, right?

-That was a big factor, actually, in us coming here.

Aside from the size of the floors, having 3,000 students

of art and design walking past your door every day

means that this is a vibrant and very mixed community.

It's the same idea, mixing ideas up and creating new innovation.

But Google are also here

because London attracts the kind of people they'd like to employ.

Now, why does it have to be London?

Why couldn't you make a building as big as the one you're building

-in a Birmingham or a Manchester?

-I think the attraction of London,

of course, is it's by far the biggest city in the UK,

it's where most people are and therefore we've got the biggest

talent pool to draw from.

So, in the new King's Cross that's replacing the old,

Google's coming to find the right people,

the right people come to find the Googles of the world.

It's self-fulfilling.

That and everything else we've seen in King's Cross

is going on throughout the capital.

Now, why did this all take off in London?

To answer that, we need to go back to the 19th century

to see how much the geography of our economy has changed.

Back then, you could say Britain had two economic engines,

one in London and the other centred here in northern England.

Our cotton mills - this one's near Hebden Bridge in West Yorkshire -

were hugely important to Britain's economy and to the world.

In the 1870s, well after the Industrial Revolution,

both London and the North were booming.

London, as the hub of global commerce, was then, as now,

producing around a fifth of Britain's income.

But the north's economy, with most of the new manufacturing,

was producing more.

Back then, the big industries, mining, manufacturing,

they were where the natural resources were.

19th-century mills like this, for example,

built next to the rivers that could give them power.

But by the 1960s, the rest of the world

was cottoning on to manufacturing

and Britain could no longer expect to dominate world markets.

Other countries were competing on our terrain.

Those old industries went into decline

and Britain moved on to new things.

From the 1970s, the North fell back

as high-skilled service jobs sprang up in London and the South East,

not just in finance, in a host of business services.

The gap with the rest of Britain widened and it's still growing.

Today, we're experiencing a change in the geography of our economy

as dramatic as anything we've known since the Industrial Revolution,

new industries, new locations,

with London dominating like never before.

What we seem to have now is a two-speed economy

and don't think they haven't spotted that here in Yorkshire.

In the North, we do like to go at something a little bit

beyond our reach and see what we can do.

Kenton Robbins helped bring one of the world's biggest sporting events

to Yorkshire this summer - the first two stages of the Tour de France.

It really is going to showcase the region at its absolute best.

-They're going to be coming down here.

-Are they going to be

-coming down right here?

-They will. There'll be 300 vehicles ahead

of them which takes two and a half, three hours,

then an hour or so of the Tour flying by.

It's going to be quite magical.

As a prominent figure in the business world here,

he tells me things are made harder

by all the attention that London gets.

Everybody shouts about it being the place to be

and everybody thinks it's the place to be,

but actually, there's no real reason for that.

A lot of it is hollow. It's not based on any real thing.

It's just a feeling.

We lose out as a result of that feeling.

He would happily see London lose growth to get more elsewhere.

If I said to you we could have 3% growth in London

or 1% growth out of London,

-which would you take?

-If we could have a greater spread,

I'd rather have 2% across the country.

And yeah, that may be a politics answer, but I would.

I'd rather a greater spread of the population of the country

felt the benefit of economic growth,

rather than this consolidated group of people in London.

The UK isn't London.

You might ask, if success comes so easily to London,

why don't other parts of Britain just copy the formula?

Well, as I see it, the difficult truth for everywhere else is...

there is no formula.

London's success is the result of millions of individual choices

by people to come here or invest here.

It isn't due to a master plan.

Far from it.

You see, the trouble is, London grew up without any plan or order.

It's a typical picture of muddle and overcrowding.

There have been successive attempts to sort of rebuild London

along more organised, logical, sensible lines,

like Paris and some of the great continental cities.

After the Great Fire, they said, "At last! We can rebuild London now

"with wide boulevards and logic dictating where everything is."

And while they were sort of drawing up the blueprints,

London had already been rebuilt on the higgledy-piggledy lines

that had existed before.

We saw beyond all the suffering and destruction

a great opportunity to build a new London.

And then after the war, of course, Abercrombie, the great planner,

thought we could zone everything and organise London.

All those bad and ugly things that we hope to do away with

if this plan of ours is carried out.

The London we have today is nothing like

Sir Patrick Abercrombie's grand, orderly vision.

His plan was never implemented.

Somehow London has succeeded without the logic of the planners.

What about all those homes in the shadow of railway viaducts

and those blocks of offices built right alongside factories?

All these bad things must go

and the sooner, the better.

Just look at what's been happening here,

around this roundabout in Old Street.

Once run-down, these higgledy-piggledy streets

turn out to be great for networking,

and they've now become where it's at for tech firms.

Saul Klein is a tech-savvy venture capitalist

who helped put Silicon Roundabout on the map.

The key ingredients, the most important ingredient,

are the entrepreneurs.

And they started to come, and then more came.

You obviously then need capital.

Er, you then need access to talent.

But no one of those ingredients - I think,

you can't design an ecosystem, it evolves.

No-one can be sure how many tech firms are even here -

hundreds, it's thought.

What's interesting is, nobody told any of them to come.

I think kids have these incredible creative imaginations, and...

All this bottom-up growth is now attracting government support.

The government I think did something that, you know,

they...they can do, which is to say,

this is happening, and we're going to sort of shine a light on it.

And I think that's also helped to accelerate the ecosystem.

But the government role was to kind of nudge it

once it was happening, rather to click its fingers and say,

-"Let's make it happen."

-Yeah, it's...

You know, the bandwagon was there.

If it's hard for the rest of Britain to compete now,

it seems London's advantage will only grow.

Because it's here, around Old Street,

that you find new businesses whose trade is ideas -

precisely the sort our country wants.

And funnily enough, they more than any

yearn for old-style, face-to-face human interaction.

Coffee up!

Get this - I'm on a 4G-enabled mobile phone

talking to you via a 4G-enabled tablet.

I can be anywhere, you can be anywhere - it's brilliant, isn't it?

Except, it really is nicer to speak to people face-to-face.

Even a pane of glass between us is a...pain.

It's just innately human

to want to be in the same room as the other person.

And I'll tell you who understands that better than anybody -

it's the techie people who invented all of this stuff.

That's why they all like to be near each other.

We were told technology meant location wouldn't matter,

but in fact, it seems to matter more than ever.

This old tea warehouse near Old Street

is home to dozens of creative companies,

including a marketing agency called Albion.

I'll cover that in a minute...

Remember Glyn Britton? He commutes 200 miles from Stockport

to network here.

And then we need a thing that says, why us...

As a business whose product is ideas,

Albion finds it needs to get the right people into one room.

I think creativity is a group activity.

It's always building on other people's ideas.

We should push the meerkat thing, like...

There's no time for Glyn to relax in this client meeting

with Comparethemarket.com.

It went on for more than an hour-and-a-half,

with everyone standing up.

Have you claimed your toy for the insurance you just bought...?

When you're together physically, you've just got a greater bandwidth

for those connections that you're trying to make. You can pick up on

very intangible little bits of body language,

the glint in someone's eye.

Unless the rest of the country can find some of that London buzz,

the capital will only become more important to our economy,

not less.

Everywhere I go in London,

I see signs the city's success is becoming entrenched.

It's a feature of network economics

that one virtuous circle leads to another.

Think about this...

So, London lucked out by having the right industries at the right time,

but what's really allowed it to hit the jackpot

is the consumer economy that's built on top of everything else going on -

the services that serve the service workers.

Because London's not just a great place to earn money -

it's a very good place to spend it as well.

To help us understand why, come inside The Shard -

western Europe's tallest building.

It's ten in the morning. On the 32nd floor,

lunch is being prepared at Oblix, one of three restaurants here.

And I'm here to help, if I can.

We have a string here, which, obviously, it's quite hot,

and we shouldn't use the fingers as much.

Rainer Becker is preparing one of his signature dishes.

They always say that duck fat is actually good for you, don't they?

I've always been a bit sceptical!

Yeah, I'm sceptical, too! My doctor says, "Don't eat too much, er..."

Rainer is a superstar German chef,

who runs his global restaurant empire, Zuma, from London.

Can you put a bit of mango chutney where you find some space?

-On the plate here?

-So, a little bit of the sauce over the duck,

-over the meat.

-Little bit of sauce over the meat...

La-di-da.

The presentation matters quite a bit, doesn't it, Rainer?

You don't want to... do it like I'm doing,

-spilling drops on the plate.

-Yeah, you know, it's natural.

-It's got to look sort of smart.

-And then we put

a little bit of coriander...

Fantastic.

'It was back in the '90s. There were customers for good food in London,

'so, the city learned to provide it.'

I didn't want to come to London when I was a young chef.

But then, suddenly, London came on the map,

and more people tried new things out, became successful,

-and that's why I wanted to come here as well.

-Mmm.

But here's the thing - London's diners have a lot of choice,

which drives competition, and drives up standards.

135 top-end restaurants opened here last year,

and 75 restaurants closed.

-So, you have Darwinian restaurant competition...

-Winning and losing,

-yes, yes.

-..going on all the time.

-Competition is fierce, definitely.

-But it also drives you.

-You get better, better, better, every year.

Yeah. You can't rely on your success.

You know, every day, you need to be on top.

Now, I didn't just come here for the food.

I've arranged to talk to a particular Londoner about the

impact the capital's pull on talent is having on the rest of Britain.

We chose to conduct the conversation in elaborate metaphors.

It is a great suction machine, isn't it? It is, because

the talent is sucked out. If you're the best lawyer in Sunderland...

-I think suction machine...

-..you want to come here!

I think it's not so much a suction machine as a gigantic,

undersea coelenterate, that takes in

and then expels. And so there are two motions -

there's... In the respiratory process,

there's the ingestion and then the expulsion.

But I think message at the moment is that the great sucking-in

is somewhat more powerful than the thing that's spilling out.

I think that's wholly... Obviously, if I look

at the sheer quantity of tax exported,

the number of jobs that London drives

in the rest of the UK economy...

London is the gateway. Let me give you one example.

With banking, would there really be

a financial services industry in Edinburgh,

were it not for London's global preponderance?

Of course not. So, London is the flywheel that drives it all.

It seems to me, London has both good

and bad effects on the rest of Britain.

It sucks people in, but serves those people well,

and makes them very productive.

So, what's the net effect?

Is London giving or taking more from the rest of the country?

This is a great place to come to

think about London's relationship with the rest of Britain.

Most of the post sent to and from the city

passes through this sorting office.

Where better, then, to ask -

what does London's huge success look like from where you live?

We wanted to know what the public thought.

Is there London pride or anti-capital prejudice?

So, we carried out a national poll.

Nearly a quarter of people across Britain felt

London's success was damaging the wider UK economy.

But over 60% thought it benefited the wider economy.

There's a certain amount of nonsense in the media about how, you know,

the economy is like a...

a great big...tadpole, where the head has got

too colossal. And I think this is the point that your poll reveals,

and I think the public understands this -

the better London does, the better the UK does.

However, there is an extra dimension to the London story

that I have to mention -

it is no longer just a UK hub.

The very things that have given London

a gravitational pull in Britain

are now sucking in foreign people and their money.

Like here, Battersea Power Station -

it's finally about to be "regenerated" - by foreign money.

And there you are -

one of the chimneys!

Can't believe you could actually touch one!

They're going to come down and be rebuilt.

Malaysian investors recently bought this place

for £400 million.

Building it originally was a challenge -

rebuilding it will be even harder.

When it opened in 1933,

one newspaper described it as

"the flaming altar of the modern temple of power".

But those days are long gone.

This was the manager's entrance.

'To understand why this place

'is attracting so much foreign investment,

'we need to delve a little further.'

Wow.

It's Flash Gordon.

Look at this.

Crumbs.

Carnaby Street, names of the roads.

This control room is a glorious mixture of analogue technology,

fine Italian marble and an Art Deco ceiling.

It's incredible to have a piece of history like this

right in the centre of London.

One of the things that appeals particularly to foreign investors

is this combination you find in Britain

of history and modernity juxtaposed.

It's all part of the brand, really.

All that, Central London and the other things we've talked about,

it adds up to a global attraction

in the eyes of Battersea's largest investor.

Where can you, in the world, you come and buy something like this

and you're instantly well known?

So everyone in London...

You'd be surprise and most parts of Asia,

they know about Battersea Power Station.

The son of a rubber tapper, Tan Sri Liew Kee Sin

is one of Malaysia's most successful property developers,

and its 38th richest man.

The key point for us to gain the support of the local people

is that we have to make sure the four chimneys

are replaced to its original form.

The developers say the whole Battersea project

will be worth £8 billion.

When finished there'll be offices, shops and around 3,500 new homes.

They'll range from studios costing around £350,000

to penthouses expected to go for upwards of £18 million.

This is all your flats around here, all the ones with the lights.

All here, yeah, here.

Really a lot of flats there, my goodness.

Well, if you don't have this quantity of flats,

you can't pay for the restoration.

-Right.

-So it's a give and take.

What's good about foreign investment?

Well, the power station closed in 1983

but we British somehow didn't manage to redevelop the site ourselves.

We talked about it, but never did it.

There's something that Malaysia has, perhaps we've lost it a little bit,

it is a bit of sort of entrepreneurial flair.

Maybe because here is a very structured society.

Everybody follows a particular structure.

Whereas we, as a developing country, we must be a go-getter.

If not you won't survive in a country like Malaysia

or anywhere in Asia.

The first 860 flats here have been sold

before a single floor to ceiling window has been put in.

Now Britain needs investment -

so it's great London attracts it.

But what about the rest of the country?

Manchester, Sheffield, Birmingham, are these places you've looked at,

thought about, or is it London for foreigners?

Well, my shareholders, they won't reinvest yet.

Everything is in place before we look at any other part of the UK.

So for now, no.

We'd all love to think, wouldn't we, that having spent money on things

like this, foreigners would get tired of London

and look elsewhere in the UK to invest?

But it doesn't quite work like that.

There's a curious back-to-front economic rule

that the more money that's spent in London

the more money wants to come to London.

I guess there can only be so many global cities in the world

at any one time -

if you are one you get all the spoils.

I confess to some concern there is less to all of this

than meets the eye.

Maybe the foreign money is flowing in too fast.

It's easy come, what if it's easy go?

The biggest worry I have, about everything I'm saying,

is that in five or ten years' time we'll look back on this

and say, "Ah, it was all a bubble."

I think a lot of people think there's froth here

and there is some froth.

But I think there's something more substantial here too.

If the jobs go, the Russians leave, and the Chinese and Malaysians,

I suspect London has the innate capability of reinventing itself.

So it won't be a dud city or a failure city,

it'll just be a city with a cyclical downturn

and then will be back on its way.

Could be wrong, um, but I...

I don't think I am.

Right now, London's appeal to foreigners, though, is only growing.

It's on trend for the world's super rich,

here to buy handbags and houses.

I said earlier, neighbours matter.

Well, the rich like to cluster together, in Mayfair for example.

A world unto itself. A slightly mad world.

Look at this place.

This house has been entirely gutted and rebuilt.

It has eight luxurious bedrooms.

Three high-spec kitchens.

And three basement floors, of course,

including the must have swimming pool.

And that is very far from all.

These plates are actually all hand gilded here in Stoke

or in the potteries.

We still have luckily a few businesses still alive

and they're all hand painted in gold in gold leaf.

They come with the house the plates?

They come with the house and each plate is about £4,000,

just to let you know, yes.

Just pop that... Pop that back.

This house is pitched at foreigners, not Brits.

How much time might a buyer spend here?

Do you think it's going to be a sort of 300 days a year

or 30 days a year?

I would probably think its 30 days a year.

In Mayfair we have a large amount

of Middle Eastern families residing here.

You normally find that the patriarch or the head of the family

has the larger house, the siblings perhaps the son or daughter,

who may be a prince or princess, will have the slightly smaller house.

And I think this will be for a prince or princess

rather than the principle himself.

Like it or not, serving wealthy foreigners

is an important British export.

Just think of all the work

that goes in to the fixtures and fittings here.

The doors themselves are American walnut,

made by British craftsmen.

That's very nice.

All this foreign money flowing in to pockets of London like Mayfair

is driving up property prices.

The unmodernised house was on the market for £17.5 million

after the crash.

Listen to what it's advertised for now.

This will sell just under £40 million.

It's on the market for £39.5 million,

which is a lot of money as a capital sum.

It's probably a...

It's point something of a percent of the amount of population

who can afford it.

But at the same time,

it is the only property of its type in Mayfair for sale.

What we're seeing in London is the curious effect of a global hub city

sucking people in then struggling to fit them.

You see it in house prices above all, not just in Mayfair.

Rich people come potentially pushing ordinary people out -

a danger well illustrated by what's been happening here

in Elephant and Castle.

This is a part of London that's actually very central,

but it's often felt like a world away.

But now the forces that are shaping the rest of the city

are imposing themselves here.

For much of the last century

the Elephant was an area of high inner city poverty.

This is a tale of two cities - the old London and the new.

It was first redeveloped in the 1960s.

It is one of the biggest single pieces of urban renewal in London.

But it soon lost its sparkle.

Up here on the second floor,

it's clear that spaciousness is in fact emptiness.

Today there is a lot of new development going on here.

This tells you everything you need to know

about how London's demography has being changed

by rising property prices.

Built in 1974, the Heygate Estate housed around 3,000 people -

most were council tenants.

Today the empty estate is being slowly demolished.

Developers are going to build modern apartments here.

But there's more going on than the glossy images suggest.

The plan is to take down about 1,000 flats,

to add more than that number and probably nicer ones as well.

So it is a net improvement in London's housing infrastructure.

I dare say in 30 years' time,

the new estate will seem like just part of the fabric of the place.

But within that upgrade, there are big winners and losers.

It's like so much economic progress it's brutal.

It's a much more brutal process than most of us would like.

179 flats here were privately owned.

One belonged to Jimi Payne,

who feels pushed out by the redevelopment here.

-When were you last here?

-Over five years ago.

This is the first time I've been back here.

What does it feel like?

It feels weird, it feels...like home.

-Feels like home?

-It really feels like home.

Um, how a piece of concrete can...

..grip your heartstrings.

It, um, it really does. It's, um...

I mean, up there, that's where I lived for 11 years.

Jimi bought his three-bedroom flat, for £50,000 in 1997.

When Southwark Council sold the estate to the developers,

they bought all the flats that were privately owned.

Jimi got £163,000.

Now when you think of that in figures, from 50 thousand to 163

people go, "What's he moaning about?"

He's made, he's made £110,000.

Yeah, but you've got to buy another place with that.

That's what people don't think, that's what people don't think.

When Jimi started looking for a new place nearby

he found himself locked out of London's booming property market.

Looking round here was just drawing a blank.

So I decided to look in Walthamstow

and going that little bit further out,

I managed to buy a one-bedroom flat,

albeit I was selling a three-bedroom flat to buy a one-bedroom flat

and um, I bought that for 187.

Jimi wasn't the only owner to move out of the centre of London.

Of the 120 who lived on the estate, 35 stayed in the borough.

25 moved to other parts of London and 30 moved out altogether.

It's not known where the rest went.

What's happening to the Heygate Estate

is part of a bigger plan to regenerate the Elephant and Castle.

To Fiona Colley from Southwark Council,

it will bring much needed improvements to the area.

What we'll have here, where we're standing right now,

is a brand-new park, surrounded by new homes, private homes,

shared ownership homes, social rented homes for residents,

all kinds of Londoners to live in.

It's going to be a great new area with new shops and cafes.

Going to be a lovely place to live.

Would you call the process by which the progress that

you're describing arrives, would you call it brutal?

No, I don't think I would call it brutal,

but I do accept that it's particularly difficult

for people who owned homes on this estate.

Their homes, the sad truth is,

they're not worth as much as new homes, not by a long stretch,

and they are worth less

even than similar homes on better quality estates,

so we do accept that it is difficult for leaseholders.

A brand-new three-bedroom flat here will go for around £700,000.

Homes in the new development are already being advertised abroad.

Somehow it feels like Londoners are being pushed out of their own city,

and I can see why it's happening

because this is a very popular place in the world,

a lot of people want to come here.

But we need to preserve it for Londoners as well, don't we?

It has to have a mixed ecology, balanced ecology?

Yeah, I have no doubt that when the new area is occupied

it will be occupied by Londoners.

London is a very diverse city.

Some people are born here, like me. Others coming from overseas.

I'm sure we'll have a very mixed community.

It's the paradox of success.

The economic vitality every city craves

brings with it its own headaches.

Given the chance, I mean, I would still be here today.

If I didn't have to move, I would still be here today.

Great cities can't survive on rich people alone.

We can't all be digital marketers, or entrepreneurs.

Cities need all types - bosses and bus drivers.

Do we want a London that looks like Monaco on Thames?

The worst and most dangerous development of the last 20 years,

and the growth of London, is that it's becoming too expensive,

for a lot of people from around Britain

to spend part of their life here.

So I think London has to watch it,

it has to make sure that it is a place open to the nation.

It's going to be tragic if someone from Staffordshire thinks,

"I can't come to London and get a job in London

"cos I can't afford to live there."

For a country that so relies on the success of this one city,

there's another worrying side to London's growth.

The impact on the city's transport system.

Paper tickets, ladies and gents, go straight through, please.

Oysters, you need to touch out.

Ooh, never stops, does it?

It's the evening rush hour.

Victoria underground station is bursting at the seams.

I'm on the ticket line.

Paper tickets, straight through.

Euston, you want to go down to the Victoria line

take the Victoria line northbound.

-Pay as you go.

-Go straight through, paper tickets.

You can go through now, but you need to top up the Oyster, yeah?

I'm not actually, no. I'm just work experience.

I've said London's density is one of its strengths,

but you can have too much a of a good thing.

It's quite stressful, isn't it?

I can feel the adrenaline running.

A bad day, you basically have to close the station

-and stop people coming in.

-We don't look on it as a bad day.

It's a regular occurrence.

Oh, my God, so you've got a lot of people backing up now.

Recently, London's population has been growing at an astonishing rate,

from just over seven million in 2001

to just over eight million a decade later.

That's a 12% rise - faster than anywhere in Britain.

No wonder London's transport system is feeling the pressure.

Now I show you this not to impress you with the miracle

by which the system copes with so many people,

nor to make you feel sorry for the commuters and their daily grind.

I'm showing it to you to make you think about vulnerability -

the vulnerability of London to overcrowding,

to becoming too successful for its own good.

A vulnerability for a nation which relies on London working well.

Work is going on to expand Victoria underground station.

But you can see the danger -

a city being gummed up by its own success.

The hassles of getting around

driving the very people who make the city successful elsewhere.

A surging population, a growing economy,

a widening gap with the rest of the country.

London's success raises a final conundrum for Britain -

to build on it we have to keep feeding the beast.

This is the food it needs -

investment in new transport infrastructure.

These works in London's old docks

are part of Europe's largest infrastructure project - Crossrail.

Wherever you go in London, even the oddest of places,

you can find evidence of the insatiable appetite of the city

to expand, whether it is up or down or sideways.

And a huge amount is being invested in infrastructure.

Now it won't escape your attention that every pound

spent in London can't be spent elsewhere

and it's no wonder people all over the country think,

"Why on Earth does Britain throw everything it's got

"at this one city - the capital."

This is the biggest current example of throwing everything at London.

Crossrail is the capital's newest train line.

HORN SOUNDS

When it's finished it should be a lot quieter,

quite a bit faster

and it'll certainly be a great deal more crowded.

This is Britain's first transport project built explicitly

with agglomeration economics in mind.

26 miles of tunnels will put 1.5 million extra people

living east and west of London

within 45 minutes of the centre of the city.

HORN SOUNDS

What it'll do is create new journeys,

suck people off existing transport

and generally create capacity for growth in the capital.

London's passengers and businesses will pay two thirds of the cost.

But £5 billion is coming from the national taxpayer.

It's a large sum for local transport.

This is my stop.

It doesn't look like much.

But don't be fooled.

I'm 30m below ground

under one of London's most densely populated business districts.

Welcome to the new Crossrail station at Canary Wharf.

It's cavernous, isn't it?

Amazing to think that when this is all done in five years' time,

services are running,

in just the three peak hours each day 7-10am,

this platform, or double platform,

is going to be used by 32,000 people.

RECORDED MESSAGE: Mind the gap.

All this new infrastructure will, in effect,

expand the size of Greater London.

It will allow more people to come in,

which will enable London's economy to grow.

But that growth will mean London will soon need more infrastructure.

This is going to be a wonderful public roof garden.

But people won't be coming here

just because there's an attractive new station.

I said London has an insatiable appetite for this kind of thing

because you build a Crossrail, it allows more people in,

that creates new pressures, more demand, yet more building -

the cycle goes on.

But the crucial thing about it is

that there's an underlying force for expansion.

So by building you are not creating the growth -

you are simply allowing it to happen.

It was already there.

One man is very familiar

with that underlying force for expansion in London.

Richard Di Cani is responsible for planning

the city's future transport needs.

You couldn't call it the easiest job in the world.

We see in London a tube train's worth of people a week,

either being born or arriving in the city.

So a thousand people a week adding to London's population.

London's success is a magnet to people from everywhere else,

so much so it's been hard for the transport planners to keep up.

When the plans for Crossrail were being drawn up,

everyone thought London would grow to be a city

of nearly nine million by 2031.

But according to the most recent census,

London is growing faster and will be a city of ten million by then.

It's no mere statistical blip.

So Crossrail is all built on the old population projections.

-Yes, it is.

-You hadn't even taken into account...

Yeah, which is why we're looking at Crossrail Two now,

so we need to continue to look at these kind of projects

that support London's growth...

to catch up with the population increase.

So before they've even finished Crossrail One

they're already chomping at the bit for Crossrail Two.

Now if the money spent on Crossrail makes you...well...cross,

think about what would happen if the money wasn't spent.

Eventually people would be choked out of London, wouldn't they?

They would go elsewhere.

I think some people would.

But in terms of investment and employment,

I think we have to accept that there are certain industries,

certain sectors where they're choosing between

London, New York or Paris.

For them it's not a choice between London and Manchester

or London and Sheffield, they're looking internationally

at a range of cities.

If we don't get it in London,

we don't get it in the UK and that's a loss to the UK economy.

Crossrail enables London to grow,

but a growing London means an economy

that continues to move south.

Whether it's Kings Cross, Battersea, or the port,

London is attracting investment and growth like never before.

For anyone hoping to even out Britain's lopsided economy,

London's success is a huge challenge.

It leaves Britain in a bind.

We want growth...

but we'd love it most outside London

in the regions lagging behind.

You don't need to take the jam in London

and try and spread it over the rest of the Ryvita, right?

The jam will naturally spread

the more jam you pile up in London.

That is the way to do it.

But so far it's London where you find most growth -

the very place that's straining under the weight of it.

At what cost do you want to expand the South further?

Where are you going to put the next airport?

What's the cost of doing

those huge, large scale infrastructure projects?

There's plenty of space around here to grow.

We've got to think about the land that we live in

and the benefits to us for the future.

Not just for the now.

We don't want to stop London, but we don't want to leave the rest behind.

And here's the important question -

if London is one of the world's great hubs

sucking in all those resources,

what does the rest of Britain do?

Next time in Mind The Gap -

how far can Britain's other cities learn from London,

and which one has the best chance

of becoming Britain's second economic engine?