Episode 2 Mind the Gap: London v the Rest

'Britain is changing, becoming one country with two economies.

'There's one called London, and then there's the rest.'

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.

London is generating a fifth of Britain's income,

dominating our economy like never before.

It's not rocket science.

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

establishing London as our national hub port.

While London sometimes has more growth than it can handle,

the rest of the country struggles to get enough.

There's that odd idea

that everything happens in London, and that somehow,

if it's not happening in London, then it's not important.

So how should our great cities,

once powerhouses of the global economy, cities like Liverpool

over there, now respond to our lopsided, London-centric economy?

'In this programme,

'I'll argue that our biggest cities offer the best hope for growth.

'I ask whether we could create a supercity of the North

'with the pull of London.'

It's an inverted city with a green belt centre, beautiful

scenery and lots of suburbs with quaint names like Manchester,

Leeds, Bradford, Sheffield, Preston, Liverpool. That's a big city.

And if ever-larger cities are going to drive our economy,

what becomes of our small cities and towns?

You can't build West Bromwich on a football team and shopping alone.

It's not good enough. It deserves more than that.

This is the story of the economic forces polarising

Britain, of London versus the rest.

And what, if anything,

we can do to make sure the whole country gets a piece of the action.

'I've come to the National Cycling Centre in Manchester to find out

'how Britain became the world leader in track cycling.'

Holy Moly!

It's almost vertical!

This is an ideal place to learn about the forces

that are shaping the economic geography of our country.

Hi, Charlie. I'm Evan. Lovely to see you.

Hi, Evan. Good to meet you.

So what am I going to do?

So we're going to introduce you to track cycling.

Got a bike for you here. This is a track bike, fixed wheel.

Absence of brakes, I notice!

Absence of brakes. Yup. Don't need those!

Um...

And we've got some pedals to match your shoes.

So we've got some clip-in pedals,

so on the bottom of your shoes, you've got cleat there, and that.

-So you fall off, basically?

-We're not going to fall off.

Key thing for me is I want to know you can stop.

You want to know I can stop? I tell you, I want to know I can stop!

OK. Right, off you go, Evan.

Right.

OK.

It is a bike and it's upright.

'What this centre illustrates is the power of clustering the very

'best in one place, the Bradley Wiggins

'and Chris Hoys, raising each other's game.'

One more lap at jogging pace? Yeah, one more lap.

Yeah, this is OK. It's all right. It's actually... It's fine.

'I could clearly do with more practice.

'But improvement is actually about more than that.

'It's about training with others.'

Build the pace, Evan, and join the track!

That's it! Lift the pace nicely!

'Picking this one national centre of excellence brought

'the best of Britain's cycling talent together in Manchester.'

Black line now.

'And it's allowed them to take on the world.'

RAPID COMMENTARY FROM OLYMPIC GAMES

'..Who's going to get it? Chris Hoy gets the gold medal

'here in the Keirin! That's his sixth gold medal.

'He becomes the greatest achievement ever...'

HE PANTS

It's not too bad, actually. Just not too bad.

It's a real hub of cycling activity,

and all the athletes are based in and around Manchester,

so it's that... It's really that cluster of people who,

again, are working together, learning from each other, pushing

each other, and trying to develop each other as individuals.

This cycling hub is a great national asset.

It's also a fantastic example of the power of bringing resources

close together.

Economists refer to this as the economics of agglomeration.

And it's what you see here.

And the forces that make it work in cycling and sport,

they also make it work in business and other areas of the economy,

and they explain why hubs can have such a peculiar gravitational pull.

The mother of all hubs in Britain is, of course, London.

Last time, we saw how the capital sucks in money, business

and, above all, talent.

It's bagged more than its share of graduates. It has the top jobs.

What it brings together is the agglomeration of talent,

very, very bright people, people who meet each other

and who spark off each other as they do, I believe,

in a cyclotron or some kind of nuclear device.

And that's when you get the explosion of innovation,

and that's what takes things forward.

Hubs, like London, with their agglomeration effects and critical

mass, have lots of advantages but they also create lopsided economies.

The more people in them,

the more want to come to benefit from proximity to the rest.

And London's economic success has spread to the region around it.

It's pulling the whole of Britain south.

'Here's an example of what I mean -

'the decision by a large drugs company to move key

'jobs from one end of Britain to the other.

'It was one of the scariest announcements I've

'heard from a business since the crash.'

'£4.5 billion. That, we're told, is

'the value of AstraZeneca to the Northwest economy, so the bombshell

'news that they are closing all research

'and development in Cheshire,

'with the loss of 2,000 jobs, will cost the region dearly.'

Here I am, 40 minutes south of Manchester.

Now, this may not look like it, but it's one of Britain's most

historic centres of drug discovery.

The site, which bizarrely contains its own farm,

was designed in the '50s, when we thought scientists worked best

if they had peace and quiet, privacy and isolation.

Was there a sort of mentality about isolating

the staff in order to keep the secrets?

We know that secrecy

and patents have been a big part of life in the pharma industry.

We were very secretive, quite closed about our work,

wanting to get things in but not be so forthcoming with our information.

If I look at how we're working as a company

and how we want to work going forwards, we do want to be much

more open, much more transparent, much more collaborative.

Drugs that were discovered here are still in common use,

including beta-blockers and, more recently, hormonal

treatments for breast and prostate cancer.

But today, AstraZeneca has a problem. It's been off the pace.

The patents on some of its most important drugs are running out.

And so, bosses think the answer is a move to a hub already packed

with medical research facilities - Cambridge.

I think it could be absolutely game-changing for us.

If you think about the inventiveness, the entrepreneurism,

the fantastic science I think is happening in Cambridge,

and if we can open our doors to that, make it accessible, make

ourselves accessible, cos we're doing fantastic science, too, and

bring those two things together, I just think it ups our game totally.

Hard to believe, but AstraZeneca say

they would forgo all of this in order to be better

plugged into a network, somewhere crowded, lots of other researchers,

a kind of safety in numbers.

And I'll tell you this - you hear that same message again

and again from different companies in different industries.

And perhaps what makes it most frustrating is that it's

the high-end activities, the brainiest work, that seems to

benefit most from the networking. And it means that the hubs,

those southern hubs, end up getting the very best jobs.

'And that pull is re-shaping Britain.

'In the popular, boom towns, growth begets growth

'and growth begets headaches all round.'

Here in Cambridge, for example.

This city could grow as fast as builders can concrete over

the countryside.

Externally, the striking, contemporary design is

a modern interpretation on traditional Cambridge

architecture and takes inspiration from numerous local landmarks.

This development is located next door to the new AstraZeneca site.

A three-bedroom apartment costs £425,000.

In the property market, you have cold spots

and you have hot spots. It's hard to predict where they'll be,

but you certainly know which is which when you meet them.

And in terms of hot spots, this is positively scorching.

-Right. This is the master suite.

-Master suite.

So it comes with wardrobes built in. Built-in wardrobes.

En-suite bathroom.

-En-suite shower room.

-Shower room. Yup. There we go. Very nice.

How easy is it to sell the apartment?

Very, very easily.

Basically, as fast as they can plan and build them, you can sell them?

Yes, we can. And we're very pleased to do so.

SHE LAUGHS

'Cambridge has a difficult choice.

'Many want to preserve the countryside around the city.

'But if the economic geography of Britain is changing, letting

'the successful cities expand has a certain logic.'

You hear people say, "We need more jobs."

You hear people say, "We need more homes."

Well, one way of getting both would be to say,

"Let's have more Cambridge."

Let the city build even more, break through all those boundaries.

Wouldn't be an easy decision. People like their green belt.

But if you want more opportunity, growth

and income, a good start would be to allow it.

Why shouldn't Cambridge be a city of two million?

'It is hard for cities to be flexible in size.

'While some cities have growing pains...

'..others have to confront the question of how to shrink.

'At different points in history,

'different parts of the country have had their moment to shine.

'Economic forces build places up and then knock them down again.'

Take Liverpool.

It was once a global shipping hub,

with more millionaires than any city outside London.

'But in the last 50 years, it's been an example of the pains

'an area suffers as the economic tide turns.'

Wow.

I don't think you'll find a better statement of Liverpool's

illustrious history as a great global city than this.

Liverpool was, of course,

the gateway to the Atlantic and to the Americas.

And this, in fact, was the check-in area

for the passengers on those ocean liners,

the first-class passengers.

But what you have to remember is that time passes, things change,

industries fade.

What did it for the ocean liners was the arrival of the aeroplane.

And it's not just industries that fade.

The tide of history can turn against cities, too.

In the early 20th century, houses were being thrown up to

accommodate Liverpool's growing population,

as in Cambridge today.

'But Liverpool's old industries faded, the city lost jobs

'and lost people.'

Today, it contains just under half a million. It was once 850,000.

Going to take you to the suburbs of Liverpool and

show you some of the places made famous by The Beatles

and other bands from the 1960s.

'For Liverpool, a great history is an asset in the tourist trade,

'but it is also a burden.

'The city has too many buildings which are interesting

'historically, but surplus to requirements.

'Vacant housing is a planning issue which can't be

'hidden from the tourists.'

Now, you might notice, as we move through the Dingle,

the fashion accessory for this season -

the metal curtains, a new design by Laura Ashley.

'There's a special house here,

'a one-time home of a well-known local musician -

'a certain Richard Starkey.'

All right. Thanks very much. Thanks, guys.

So the birthplace of Ringo Starr is somewhere down this street.

It's a beautifully rickety little street, actually.

The houses almost look a bit wobbly.

I think you can tell that it's this one

because there's lots of graffiti here.

What a funny old place!

On the one hand, of course, you can see you want to preserve

something like this, what a piece of heritage.

On the other hand, you can

also see, you don't want to let a property like this

kind of obstruct any redevelopment of the whole neighbourhood.

Liverpool is wrestling with the problems left by its diminished

population, even though it's now returned to growth.

These boarded-up streets are the subject of bitter rows.

Should they be preserved

or should they be demolished to make way for fewer, newer homes?

Liverpool City Council wants to demolish most of these houses

but they're up against a national campaign to save them.

'Many residents want these houses pulled down,

'even the ones they live in.'

You've got "demolish" on your window there, Sharon.

Why do you want to demolish?

Because the houses are not fit to live in. They're slums.

And this whole area is being ruined by people poking their noses in.

When you say poking their noses in,

you're talking about the national campaign groups...

-Yeah, it's ridiculous.

-..who are saying, "Keep the houses"?

-It's got nothing to do with them.

They don't live round here. They come from down south.

You must have known Ringo Starr. He lived in this area, Irene.

I mean, there's... So people do...

There are tourists buses, tourists coming

from all over the world to visit the heritage of the Welsh Streets,

your streets. What do you say to the idea of pulling them all down?

I want to be on the bulldozer when it comes in!

That's what I say about pulling them down!

And as for Mr Starkey...

..the house he lived in,

he was only there till he was four.

It's not just a couple of months they've been

talking about this. It's well over a decade.

It's as though we're paralysed

when it comes to these kinds of decisions.

Our changing economy creates painful choices, opposite problems

evident in Liverpool and in Cambridge.

And these are examples of a national issue

because the migration of business seems to be in one direction.

This graph shows how economic output has shifted between North

and South from the 1970s on.

Our economy is more white collar and with that, it's more London-centric.

'These days, the trend feels inevitable.

'But history tells us that London's dominance is not set in stone.'

We're standing in the Grand Midland Hotel,

now the Renaissance Hotel, in St Pancras Station in London, and

this was built in the 19th century as a symbol not of London's

power, but of the commercial and cultural might of the North.

This was the wealth creators of Derby and Sheffield

saying to the people in London, "Look what we have created in the

"North of England - the bricks, the rail, the glass, the steel.

"And we're going to come down to London

"and we're basically going to plonk an embassy of northern

"industrial might right in heart of the capital."

But our industries changed and London became the place to be.

The lesson from London is that today's economy, more than ever,

favours hubs, places that are globally connected.

'And that means cities, big cities.'

'And here's the thing -

'Britain is a bit weird in its distribution of cities.

'Urban economists have observed a common

'pattern in the size of cities in countries.

'It's been labelled Zipf's law.

'Take Britain's largest urban areas - London, Manchester,

'Birmingham, Glasgow, Newcastle and Durham,

'Liverpool, Bristol and Leeds.

'If Britain followed the pattern seen elsewhere, we'd see them

'line up by population size, like this.

'The biggest city would be roughly twice the size of the second

'city, and three times the size of the third, and so on

'down the line.

'But here is what we actually have.

'We see London at the top, then

'Manchester, Birmingham, Glasgow, all below that line.

'Some economists have concluded that Britain is unusual not because

'London is so big, but because our second tier cities are too small.'

In fact, we seem to be missing our second city altogether.

All this implies that if you were redrawing the map of this country,

you probably would channel

more resources into fewer big centres and you'd hope the

economic benefits would spread out to the regions around them,

just as has occurred with London and the Southeast.

But there is a particular peculiarity of the UK.

We've taken our capital, we've turned it into a global hub

and we've let that distract from the effort of developing

our national ones.

'So how can we rectify that?

'I've come to Birmingham,

'long recognised as Britain's second city, to search for answers.

'Its recent past offers a lesson -

'a lesson, in fact, in what not to do,

'in what happens if you try to hold a successful city back.'

Right up to the 1950s, Birmingham had a diverse economy

with lots of thriving small firms.

And with wage levels high and jobs plentiful, there was

a matching confidence and cockiness about the place.

I found the city exciting.

The modern buildings reflect its position as the nation's

industrial powerhouse.

You feel as if you've been projected into the 21st century.

This promotional film was voiced by Telly Savalas,

who actually never went to Birmingham.

But by the '70s,

the city he describes had suffered a reversal of fortune.

Yes, it's my kind of town.

It was partly thwarted by policy-makers keen,

as they are now, to distribute success around the country,

back then, from Birmingham to the North.

They passed laws, like the 1965 Control of Office Employment Act.

So, so long, Birmingham. Here's looking at you!

Activity was curtailed. Some firms left, and here is the story of one.

'This is the historic site of the Bird's Custard factory.

'Eggless custard, invented by a chemist called Alfred Bird.'

Where's that recipe book from Bird's?

Ah, here we are!

Now, what does it say?

-Take three dessert spoons full of...

-Ah! Thank goodness for Bird's!

The guests won't be disappointed after all.

-There we go. All right. Thanks very much.

-Oh, thank you very much indeed.

Lovely!

Mm. It actually isn't bad.

Eggless custard powder probably isn't Birmingham's greatest

ever innovation, but it's certainly up there.

Goodness knows how many pints of this stuff I had as a child,

but the story of Birmingham's custard actually carries

an important lesson for those who hope that you can control

the flow and location of economic activity

and usefully constrain some cities to help grow others.

Patricia Byrne was married to a Bird's Custard worker

when rumours began to circulate that the jobs would have to leave

the city altogether.

This is, what, early 1960s?

Er...'64. '63, '64.

-Oh, OK. Look. Yeah, here's a...

-It started off.

-Here's a letter...

I think that was '62, that... It was mentioned first in '62.

Ah. Oh, he's talking here about false rumours.

"I must remind you that, up to the present, no decision to leave

"Deritend..." That's the Birmingham one?

That's right. Well, they'd all denied it to start off with.

"No decision has been taken.

"A large number of our people are working out the cost,

"savings, disadvantages and advantages."

-Lovely(!)

-Then it gradually does come true.

The company packed up everything for the move

and it brought its employees and their families with it.

It was the 3rd February, nice, frosty morning.

He got the day off.

The youngest one cried all the way. She cried all the way.

Bird's considered a move to Merseyside.

They'd be given incentives to help set up there.

But in the end, they decided it would be too disruptive.

So Britain had a new custard capital, but here's the thing -

the factory didn't move where the government had hoped,

up north to a development district, where they needed the jobs.

No! It headed south

to the county of Oxfordshire, the town of Banbury.

Patricia still lives in Banbury, all these years later.

Are you like a Southerner now, rather than a Midlands person?

Not really.

I think, actually, your life really is only what you make it, anyway.

And it's what you've got and what you treasure is up to you.

But there is a positive lesson to draw from this tale.

And it tells us about the innate strength of Birmingham -

the power of cities and hubs.

So Birmingham lost its factory,

it didn't move to the parts of the country that needed custard

production more badly, but there is one last chapter to this tale.

It's what happened to Alfred Bird's old plant - and it's still in use.

It's called Custard Factory.

But the chemistry being practised is very different.

It's the human chemistry of new smaller businesses.

You see, the big cities have a big capacity to reinvent themselves.

After 20 years of dereliction,

and decades of decline in Birmingham,

the site was developed for small business use.

Today, over 2,000 people are employed here.

It seems cities are irrepressible -

ideal as centres for new businesses,

with support networks on tap - you simply can't beat them.

And that offers a clue as to one way the rest of Britain could

respond to London.

Try to be more like London.

London's got the size, the scale and the impact.

So it's not just a cluster of businesses,

it's a cluster of clusters, a cluster squared.

And the rest of the country needs to get a piece of the action.

And I think it does that by taking a leaf out of the London book.

It builds up the urban centres, the big cities, and it's

a point that, in the past, hasn't been properly understood.

This all suggests we need a counterweight to London.

A proper, big second city.

But that is the opposite of what we've been trying to create.

From Birmingham, to West Bromwich. It's just a short hop.

But it's a jump from a big city to a town.

And it raises the question - where should the money go?

Is it better to invest more in the main city or to spread it round

to places like West Brom?

For example, ten years ago,

this arts centre was built to boost West Brom's economy.

Did it work?

The man who designed it is going to show me around.

-Will.

-Hi, welcome to The Public.

Well, it's fantastic, isn't it? I've not been here before.

So, Will, what is it?

I describe it often as a box of delights,

because it's a big, blackish box with funny windows,

and inside there's lots of stuff going on.

So, I mean, I am impressed - it is quite hi-spec, isn't it?

All rather nicely done.

Well, we worked very hard to make a very tight budget work.

-TV:

-'It looks like the end of the line for a project that's cost'

tens of millions of pounds of taxpayers' money -

The Public arts centre in West Bromwich.

My visit to The Public

coincided with its last week as an arts centre.

It's closed down because the council couldn't afford the running costs.

You can't build West Bromwich on a football team and shopping alone.

It's not good enough, it deserves more than that.

It does, of course, but it's always going to be in the shade

of the great hub next door, Birmingham.

I suppose my point about the big city is that the

rest of the country needs to learn something from the London

experience, which is, essentially, you just want to make these

bigger cities and not spread it too thinly, and not think of...

No, but the great disadvantage of...

And I have to see it from both sides, not just because I did this building...

Is that you put everything into a place like London, and it

becomes unaffordable for the people of West Bromwich even to visit.

But for me, this story could be summarised

"good building, wrong location".

If we'd used the centre to big up Birmingham instead, which is

after all just down the road, it might have taken off.

Ever since the northern Spanish city of Bilbao successfully

reinvented itself on the back of their spectacular modern art museum,

cities all over the world have been trying to pull off the same trick.

And it will work in some of them, but it can't work everywhere.

And the danger of trying it everywhere is you just

spread your resources too thinly.

Now, the more familiar argument in Britain is not Birmingham

versus West Brom - it is London versus the rest.

And there is anger about that.

We're entering a situation now whereby a government is

able to allocate £30 million of public money to

build a garden bridge across the River Thames.

Meanwhile, you have regional museums and theatres and galleries

turning the lights out.

So if you're a young designer in Huddersfield or Stoke on Trent

or Wakefield who needs access to culture, to museums, to grow as

an artist, you're being denied that at the same time as we can build

a nice bridge so that we get more visitors from Chongqing into London.

You can obviously see his point.

But you still might want to focus the non-London spoils,

meagre as they may be.

The people who should probably hate me most

for the argument I'm making are not the people running big cities

outside London, but it's the people running the secondary cities,

the ones that aren't going to be big, important centres in their region,

but are going to be sort of one or two spots down the league table

in their area. They're not going to be hubs -

they're going to be the spokes.

To see what this means, I've come to Wigan, lodged comfortably

between Liverpool and Manchester.

So this is it, Wigan Pier.

Orwell, he took the name and made it an unfortunate

byword for the grimness of industrial life in the Depression.

But today, if anything, it's just a testament to how far we've all come.

I mean, you can go and get a drink over there.

You can drink to the souls of the previous generations

who had it much harder than we do.

Wigan Pier is now a cliche of Northern England

and it's given the town an image it would like to shake off.

The plan was to redevelop a Wigan Pier Quarter, creating

hundreds of jobs.

And it started with £6 million of public funds

and the refurbishment of this vast cotton mill.

The building was completed in 2007.

Alas, most of the offices still lie empty.

It's another investment that placed hope above economic reality.

Sometimes it seems like every town wants its own media village,

tech hub, life sciences centre, but it's not going to happen.

These are industries far better concentrated

in a small number of centres.

Doesn't mean everywhere else has to be bereft of economic activity.

It's just a matter of them focusing on industries that serve

local residents or which can flourish in isolation.

And that's the positive message from another

site across the canal in Wigan.

So much mill, just look at it all.

All listed, of course, making it very hard

to know what you do with it.

But there is some hope. Here, follow me.

# So chic Freak out

# Ah, freak out... #

This business opened two years ago in what was a mill canteen.

None of it would have been possible, without the friends, and the

family, and the support, really, of the local people that wanted to

bring this back, and resurrect what they had in the '80s, really.

They discovered a gap in the market,

genuine demand in the local community.

So much so that the community stepped in

and helped prepare the site.

We had everybody in here, painting from six o'clock at night

till half 11 in the evening, seven days a week,

for about six months, to just try and get the place open.

But this is successful - you can make money out of this?

Yeah, we're making a living, we're employing,

we have 34 people that we employ, on a part-time basis.

-34?

-Yes, floor marshalls, snack bar staff, skate hire staff,

bar staff, accountants, marketing,

so, yeah, we do very well for the small business

that we started out to be.

Roller disco-ing is a great business here.

OK, it's not molecular biology or space science,

but it proves there is life in towns and smaller cities...if it fits.

Mind you, it's a tough message.

It means the best paid jobs are going elsewhere.

I test this argument with

Ian McMillan - a poet, broadcaster and professional Yorkshireman.

When I was a young man, people said, "If you want to make a living as

"a writer, you've got to move to London."

Somehow, London has got to be the place where you go,

and I've managed to make a living for 30 years without going there.

Somebody rang me up and said, "can you come on the television and talk about living in Barnsley?"

I said, "Yes". He said, "We'll send a car to your house."

I said, "Where do you think I live?"

He said, "Well, you obviously live in London."

I said, "No, I live in Barnsley,

"and you've got me on to talk about living in Barnsley."

He repeated the words one at a time and went, "You live in Barnsley?!"

Barnsley wouldn't, in this scenario, have big destination tourist

things - it might have a few niche places, you know.

But you can see its future very differently to seeing its past.

It would say we're not a kind of a great hub any more,

we are a spoke in the shape of the North of England.

I'd feel defeated by that, I really would.

I'd feel that we've sort of given up,

we've become Milton Keynes or we've become one of those new towns

where they're connected by roundabouts,

where all those people who live there were simply serving

the bigger place. I find that really distressing.

If I told you that we'd be more productive

if we kind of saw the big cities as where we put all

our effort, would that make you feel any better about it?

Well...don't you leave places as wastelands?

There's just a few little hotels

and a few tiny little am-dram things.

Doesn't that leave a lot of the country just sitting,

waiting for the telly to come on, or something?

It is surely a dilemma, but if we prefer our national cycling team

to cluster so its members can better copy, collaborate and compete

with each other, why wouldn't we encourage new industries

to organise in the same way in big urban centres?

Well, if you believe that message, then there is good news to report.

Britain's big cities are evolving, and evolving in the right direction.

And leading the pack, the city of Manchester.

You probably don't need me

to remind you that Manchester has football on its side,

but there's more to its renaissance than sporting trophies.

So Manchester scored on two fronts important to any ambitious city -

a growing international profile and a growing population.

And as a result, if Britain needs a second city, this is it.

Not my view. Yours.

We polled a representative sample of the British public by phone

and asked which city, outside London,

might be an alternative capital.

Here is how people responded -

Manchester the winner, over second-place Birmingham.

And it should be no surprise that here in Manchester,

more than in any other city outside London,

we can see the economic forces which favour big hubs in action.

I'm travelling to one of the UK's most high-profile industry

clusters - Salford Quays.

First, the BBC came. Now dozens of media companies have followed.

And here I find a rather strange construction site.

It may not look like it, but these streets are brand-new.

CORONATION STREET THEME

What's been happening in Coronation Street isn't just of interest

to soap fans.

No, it makes a valuable economic point as well.

'It's just the mean, sneaking, underhand way she does everything!'

-There you are, that's provocation!

-Now, look...

You sort out the physical side of this thing.

Physical side? I'll physical side you over that wall, you old bat!

Neighbours don't always get along,

but in modern businesses, locating right next door

to your closest rival - in this case the BBC - is seen as key to success.

And for ITV, it meant moving not just their offices

but risking a relocation of the Coronation Street set.

People talked about whether the soundscape of being

down in Salford would be different from the city centre.

You know, "Are there more seagulls?"

And a lot of us stood on a bare site,

listening to the birds for a lot of time!

So the fact that the BBC occupied several buildings here was

totally instrumental in you putting your building here?

A very important part of it.

You sort of build on other people's talent.

We train our own talent, people poach it,

other people train talent, we poach theirs.

Salford Quays is a classic story of agglomeration economics -

one company attracts another, attracts another.

And with them all, the jobs, the income, the growth, the people,

that elusive city buzz returns too.

Ian Simpson helped pioneer the return

to city-centre living in Manchester.

He built a huge tower block,

mainly residential, in the middle of the city.

It was designed to attract well-to-do residents

to the urban lifestyle.

So you kept the top floor for yourself?

The top two floors.

-THEY LAUGH

-Right.

-That is quite a front door, I have to say.

-It's a heavy door.

Today, Beetham Tower is fully occupied.

Just gives you an idea of the view that we get from the top, here.

Goodness, wow, look at that!

You certainly get a picture of Manchester.

And then this leads through into the olive grove, which is...

..a balcony space, effectively, but it's enclosed.

My goodness.

I wanted to be able to walk amongst the olive trees.

-These are real olive trees?

-Real Tuscan olive trees, yes.

'But while Manchester has found its mojo,

'it still has a long way to go.

'Ian Simpson lives here,

'but much of his work is in London. He knows just how big the gap is.'

The equation is so distorted

that you might be paying £2,500 a square foot

for somewhere in London, central, whereas in Manchester,

if you got £300 a square foot, you'd be doing well.

There's very little residential being built in this city

at this moment in time.

We need to see those values move forwards a little bit,

which prior to the previous recession we were...

They had improved but they've obviously gone off the edge

of the cliff now. The only viable place is London.

London has the size and the gravitational pull.

So how can Manchester close the gap?

Could we make it a bigger city?

A kind of London of the North?

Well, the answer is yes, quite possibly we could.

To show why I think that, I've come, perhaps surprisingly,

to a market town, 28 miles northeast of Manchester.

A small town that has succeeded in attracting big-city types.

It's a bit of a mystery, Hebden Bridge.

It was once declared the fourth funkiest town in the world.

It's popularly rumoured to have more lesbians per head

than anywhere else in the UK.

It's a buoyant mix of creatives, cooperatives, and entrepreneurs.

It has over 500 independent businesses,

and I find some of them more California than Yorkshire.

If I had the dog, what would you serve the dog?

We'd serve the dog one of our home-baked treats,

which you can see up here, such as carrot and banana.

-What, these are for dogs?

-Yeah.

-They look delicious. You're joking!

What happens if I have one of those, does it kill me?

It will turn you into a hairy dog!

HE LAUGHS

DOG BARKS

Oh, the dogs are here. Do the dogs really like the snacks here?

Yes, they do.

This is a wonderfully coiffured dog.

-This is a proper dog.

-This is Gomez.

You've been spoilt, I think, haven't you?

You've been spoiled with little cakes and things, haven't you?

Hebden Bridge was built on the back of the old weaving mills,

but they closed and people began to leave in the 1960s.

It looked like much of the town would be knocked down.

Instead, though, it reinvented itself as successfully as London

or any part of Britain.

David Fletcher did his bit to help the town turn around.

People working for larger companies in Leeds and Manchester,

and so on, begin to come in, buy property

at not absolutely rock bottom prices,

and start investing in those properties.

Bags of DIY going on, but more than that, a new creative spirit.

I mean, this was the first time that new residents

had moved into the town for a century, probably,

and, you know, things began to buzz.

And I think the lesson of Hebden Bridge lies in three words

you heard there...

Leeds and Manchester.

Its success is built on its convenient location

between the two.

Connectivity is key and you can see that at the train station.

-Lovely fresh bread.

-What have you got?

We've got white and we've got lavender.

-Oh, I'll try lavender, thank you.

-Right.

-Is that 2.50?

-3.50, yeah.

-You spotted the gap.

-Yeah.

Which is the commuter market in Hebden Bridge.

Absolutely, absolutely. They are our target market.

-Right.

-New Hebden, we call them.

One of the great things about Hebden Bridge is

it's sort of halfway between the two, isn't it?

I used to commute to Leeds and my partner commutes to Manchester.

We googled it and googled all the villages around here

and Hebden Bridge came up trumps.

What Hebden Bridge tells us

is the attraction of the Leeds/Manchester combination.

Hebden Bridge - you might not believe it -

is the second city in the country.

It's an inverted city, with a green belt centre,

beautiful scenery, and lots of suburbs with quaint names

like Manchester, Leeds, Bradford,

Sheffield, Preston, Liverpool...

The population living and being supported

within one hour's travelling time of here

is over seven million. That's a big city.

OK, so Hebden Bridge isn't our second city.

But its ability to attract urban professionals

suggests there is a big city struggling to emerge.

Take a look at this. The night-time population of the North.

Where people live. Already you can see the emergence of a super city,

stretching from Liverpool to Leeds.

But look what happens to the population in the morning.

Thousands of commuters have made their way

along transport lines to key hubs.

This city is a long spread-out one, a bit like Los Angeles.

At night, the prosperity generated in the centres of Manchester, Leeds

and Liverpool spreads out across the region,

filling the gaps in between.

Including towns like Hebden Bridge.

And with better East-West links,

the whole strip could surely serve as a single travel-to-work zone.

Research has shown that one big city

is more productive than two cities half the size.

But bigger cities require connections.

Connections that come at a cost.

Physical links. Rapid transport.

It's something which we seem to understand

when it comes to our capital.

In the last programme, I explored Crossrail.

26 miles of tunnel is being dug under London,

connecting more people to the centre than ever before.

London is paying for most of the £15 billion cost,

but not all.

And here's a stark contrast.

A relic of an age,

when the North of England was building connections, too.

God, I don't think I've ever driven through a three-mile tunnel

with no lighting of its own, no.

It's an unusual adventure, isn't it?

These are the disused Standedge Railway Tunnels under the Pennines.

Tell me about yourself a bit, Graeme -

you're a bit of a tunnel person?

It pains me to say it, but I am a self-confessed tunnel anorak.

Until the '60s, there were four train lines

running between Manchester and Leeds. Now there are two.

They are being upgraded, but it will still be two.

When the first tunnel opened in 1849,

most of the people hereabouts would never have left the valley.

Probably some of them had never left the village.

But suddenly you can drive social change -

you can get on a train at Marsden,

you can get to Manchester, Liverpool or Leeds.

You got to hand it to them. You got to hand it to them.

They certainly... They didn't lack ambition, did they?

That was the wonderful thing about the Victorians -

they didn't spend years and many, many, many millions of pounds

on consultation. They got on and did it.

So what has happened to our economic ambition for the North of England?

The amount of money, public and private,

which Britain has committed to spend on transport infrastructure

in London is getting on for £5,000 per person.

In comparison, if you live in an English region,

you can expect an average of £700.

If we want a Northern hub to enjoy the agglomeration benefits of London

and the South, then it will take some investment to make it happen.

But this country is in a bind when it comes to infrastructure spending.

London's growth means it always seems to have

pressing demands for transport and other investment.

So London ends up using up the available cash.

Since I've been Mayor,

we've added 600,000 people to London. We're growing at the rate

of 1,000 people a week, in our city. A Tube train full a week,

and we are going to need Crossrail 2,

it's going to be absolutely indispensable.

But does that give the rest of the country

enough of a shout at pulling more business its way?

After all, the rest wants to be able to modernise and adapt.

The biggest infrastructure project on the horizon

is High Speed 2, a North-South rail link.

But it won't improve the crucial East-West connections.

There is intense anger, not at London's success,

but the level of pump priming public subsidy that goes in here.

So is it really a matter of national priority

that we need a new Tube station in Battersea, which will cost a fortune?

Crossrail, Crossrail 2, High Speed 2.

Where's High Speed 2 beginning? Is it beginning in Manchester?

No, it's beginning round the corner from here, in Euston.

The truth is that if we're too relaxed about the gap

between London and the rest, if we fail to find a counterweight

to the capital, then we'll see the gap widen rather than shrink.

The clever ones leave and go to London.

I think it's because the perception, and probably the reality, is that

the good jobs are there, as you have said, connections are there,

the centres of cultural, social and economic power are there.

But that doesn't mean they always have to be -

that's what makes me cross. And you think, "Let's just stay here a bit,

"let's just try, let's just try. There's a great party going on

"down the street, but we can have our own party in this house."

The relationship between Britain, a compact country, and London,

its super-sized capital, may always be a somewhat fraught one.

We're not going to reshape this country any time soon.

But here's a suggestion for a deal.

The rest of Britain shouldn't resent London.

It's a great city. But Londoners mustn't resent attempts

to ensure the rest of the country gets a piece of the action.

The whole of Britain needs its investment, too.

If we can all just accept those two simple propositions,

we'd see that it doesn't have to be London versus the rest,

it isn't one or other -

we can surely allow ourselves a good deal of both.