Confessions of a Political Animal

September 15, 2008

Coal sacks and the city

Greenwich's semi-industrial, semi-touristic skyline

Greenwich's semi-industrial skyline

Exemplary local blog The Greenwich Phantom (every borough needs a phantom…) has an interesting post about the place of industry in areas that are subject to rapid regeneration and gentrification, such as Greenwich. The Phantom’s post arises from rumours, as yet unconfirmed, that one of the few remaining factories on the Greenwich peninsula, which produces a range of odours for which the area has been, er, famous, could be about to close, inevitably to make way for riverside apartments, even if the current market conditions somewhat slows that process.

Living just seven miles from Charing Cross, the Animal encounters a surprising amount of heavy industry and its consequences: the aforementioned smells are a not infrequent accompaniment to my wait for the bus, twice a day the house vibrates slightly as a heavy trainload of aggregates tackles the incline from Angerstein Wharf and the walk to purchase hay for this blog’s mascots means braving the dust created by a quarry product recycling works. And for me, that’s all part of the gritty charm of the place, a minor consideration alongsidethe local employment that these industries provide. None of it causes any real inconvenience to me, and a quick glance at local house prices suggests that no-one else much cares either.

But not everyone agrees with me that a nearly inner London borough (Greenwich was covered by the Inner London Education Authority, but for some reason has since become an ‘outer’ borough) is the place for heavy, manual industry. The rightly much-derided report from Boris Johnson’s favourite thinktank, Policy Exchange, ‘Cities Unlimited: Making Urban Regeneration Work’ (aka ‘Close down the North’) singles out Greenwich for particular mention in this regard:

The scale of the subsidy to industrial, warehouse and other commercial uses is large. In Greenwich, for example, industrial land is typically valued at £2.1 million a hectare, whereas land for houses is worth £6.5 million, and land for flats or maisonettes £8 million. This is a hidden subsidy of around £5 million a hectare, or £500 a sq m. With 224 hectares of such land in Greenwich, the planning system has reduced the value of land in Greenwich alone by over £1 billion.

The implication of this quote is clear: the dirty lefties running Greenwich council, no doubt in cahoots with the dangerous previous regime in City Hall, is deliberately zoning its valuable land for industrial uses in order to shore up a form of smoke-stack socialism and bolster its working class voter base. Is that how right-wingers think? I’ve always imagined so, but maybe I’m wrong.

Joking aside, the fact that such a simplistic assertion of a £1bn hidden subsidy ever found its way into a paper written by an academic is nothing short of astounding. Leaving aside the fact that the land zoned for industrial use amounts to just 4.4% of the borough’s total area, we have to question why the Policy Exchange authors have failed to ascribe any social or financial benefits to the existence of industry within the borough.

According to 2001 census data, 6,609 individuals in Greenwich were employed by the manufacturing sector. A further 7,297 were employed in transport, storage and communications. Based on the average gross manufacturing sector wage, then the wages of those individuals would be worth around £345 million to the local and national economies annually. This is before the profits of the firms concerned are factored in, or the cost of paying Jobseekers Allowance or other benefits to those employees who would otherwise be out of work. Thus, even if we accept Policy Exchange’s premise of a ‘hidden subsidy’, its level is likely to be at most half that suggested.

The implication of what Policy Exchange have said is basically that local authorities should be embracing social and economic segregation: if you work in a low-value industry that has a neutral or negative effect on land values, then you have no business in a better off area. Areas such as Greenwich should be given over in their entirety to high-value housing, presumably for people filling the fast disappearing jobsacross the river at Canary Wharf. Presumably, those seeking jobs in the manufacturing sector will be required to migrate northwards, passing the stream of people from northern cities who have followed Policy Exchange’s suggestion that they get on their bikes and relocate to London, Oxford and Cambridge.

As well as having the potential for vast social and economic damage, the proposal to economically cleanse the south of manufacturing industry fail even to make ideological sense. As a socialist, I obviously oppose social and economic apartheid being implemented in the UK. But as free marketeers, the Policy Exchange-influenced neo-liberals should be equally opposed. After all, those heavy industries that have brazened out the high land values, operating costs and wages that come with locating in London haven’t done so for the fun of it, or because they have been compelled to do so by a government diktat. Rather, they have done so because of the economic advantages of being close to the centre of the UK economy. The aggregates processing facility at Angerstein Wharf for example, in an area of high land values near to the Dome and North Greenwich underground station, remains there because it is convenient for the cement-hungry London construction sector and has good river, rail and road transport links. If Greenwich Council were to de-zone that land as an industrial area, the  costs of having to relocate the facility and transport materials and products further could easily outweigh the savings of not being in London. Not great economics, from the ‘business-friendly’ right.

So because I want those who work in a wide range of sectors to be able to share the privilege of living in Greenwich and its equivalents and because I don’t think that land values are the be-all and end-all of land use and economic planning, I am more than happy to put up with the occasional industrial smell or heavy freight train. It is perfectly possible for a limited amount of industry to sit perfectly happily alongside residential areas, obviously dependent on the appropriate regulation of environmental impacts. Nevertheless, in a city on the scale of London, these tend to be proportionatly small: in 2003, only 9% of particulate matter emissions in London arose from industrial processes (see page 53 of this GLA report).

I once lived on some residential moorings in the Thames that the neighbouring land residents objected to the prescence of, despite the fact they had brought a flat by a major river. I would be similarly incredulous of anyone complaining about the presence of industry in Greenwich: it is part of the fabric of the place, as it is of so many similar places. If you can’t buy into it, time to sell up and ship out.

Update 17/09: more information on the future of the Greenwich Peninsula sugar (etc.) works here.

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