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A Brexit bonus?

Tom Forth,

I think that voting to leave the EU was a huge mistake. Britain will be less prosperous, less important, and less fun to live in than if we had voted to remain. But we voted to leave and I can’t see a way around it.

So we’ll be leaving.

I, like most people I know, have been getting on with doing my job, running my business, and living my life. I’ve cancelled some planned investments, gone ahead with others, and changed direction on a few more. Things are fine.

Despite my twitter negativity, I’m always looking for reasons to be positive and seize the opportunities that change can bring. I am grateful to the few leave voters I know who seem to have honest, considered, and positive motivations. I try to join in with their optimism where I can.

But the consensus seems to be that the places where I live and work will do poorly from Brexit. Most forecasters are predicting that adaptable and dynamic London will be fine, while places that voted for Brexit (like Birmingham where I live now and West Yorkshire where my businesses are based) will do less well.

I have no issue with these forecasts. They are the best guesses that we can make at the moment and they are being proved more correct by the month. But it is important to keep in mind that they can only model what we expect to change.

I think that Brexit makes some changes that we cannot model more likely — changes that will benefit our country and make up some of the ground that we have sacrificed.

Competition for talent.

One such change stems from changes to skilled labour supply in the UK.

The data already shows that the UK is becoming a less popular place for EU citizens to live and work. We see this in net migration figures, in associations for professions like nursing, and in new data sources such as LinkedIn’s Workforce Report.

The latter is the most interesting to me.

I had hoped for a career in science and now work in technology. I work on the issues holding back the North of England. I have helped to identify key challenges that keeps my region significantly poorer than most of the rest of Europe. Relevant to this blog post I have looked at centralisation of government investment in R&D, centralisation of government digital services, and the depletion of skills that both misallocations lead to.

The LinkedIn finding that “fewer international professionals are moving to the UK” and “London is the region most impacted by the Brexit vote” fit with my experience and the data that I collect and analyse at The Data City. Crucially, LinkedIn’s data suggests that “domestic migration is not filling the gap left by the reduction in international talent”. Let’s look at some big employers of international talent.

Nearly half of employees at The Crick Institute in London are not British. These are fantastic researchers from all around the world who allow the institute to operate in London, despite what friends of mine working there say are struggles to recruit people from within the UK.

The government digital services team in London are also struggling to recruit; today their Director said that they are “2000 to 3000 people short”.

And in AI, an area of significant government interest and investment with The Turing Institute and more in London, it seems that the government is struggling to find and hold on to the talented people it needs.

This sounds bad, but I see an opportunity.

Moving work to the people, not people to work.

The UK government invests heavily in London, without good reason, and with poor results. The Crick Institute and The Turing Institute were placed in London for the same as The British Library and dozens more national institutions have been placed there over many years — because the people deciding where to put them live in London. Data did not back these decisions, and data now suggests that these were expensive and inefficient allocations of capital. Yet nothing changes. Just today a new government agency was announced for Reading — a city which, once Crossrail opens, may be even more accessible to West London than London itself.

Government Digital Services is more complicated. It was mostly created to modernise existing London-based national government department websites. But local government cuts have been so severe that the role of GDS has expanded to cover much more. As local government competence has faded it has often been replaced by GDS, often with poor results as in the case of voter registration. Even where local government competence remains it is influenced and shaped by national guidance, “help” from London, and a national debate increasingly shaped there. It is a less obvious, but not much less effective, version of the British specialism in government centralisation.

But what if a Brexit related talent shortage in London makes these centralisations increasingly difficult to sustain? If The Crick, The Turing, and GDS cannot recruit easily now, will they be able to recruit at all if London’s international talent exodus continues?

My suspicion is no. Especially not since people like me, and many like me, have cultural reasons to be less willing to move to London than people who have already decided to move country.

I have long argued for national institutions in London to move to where business is investing, and where the best talent to do the job and engage with the country can be found. I’ve invited GDS to fund us to work on local services in Leeds, and heard very little back. I’ve challenged Nesta to host something with us and do more outside of London, and seen no change. I’ve long argued that GDS should be doing much less, and local government should be doing much more — but we’re moving in the other direction.

The government-led centralisation of the UK’s economy on London has seriously damaged our country and lowered our quality of life. Despite talk and promises of devolution for decades, centralisation is deepening.

We could have reversed centralisation without the damage that Brexit will do, but we chose not to. I hope that Brexit will be the catalyst that makes decentralisation of the UK state not just the best option for the UK, but an option that decision-makers in London can no longer afford to overrule in line with their own biases.

In a completely unpredictable way, Brexit may finally force Britain to make better decisions. That would be a nice silver lining.

 

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