THIS blog often makes the argument that Britain's planning laws all too often restrict and prevent investment which might create economic growth. It is worth remembering occasionally that things were once much worse. For proof of that, see this fascinating post on Birmingham's economy in the 1950s and 1960s, by Henry Overman, of the LSE's Spatial Economics Research Centre. It's worth reading the whole thing, but a cut down version of the post is copied below:

Birmingham itself was second only to London for the creation of new jobs between 1951 and 1961. Unemployment in Birmingham between 1948 and 1966 rarely exceeded 1%, and only exceeded 2% in one year. By 1961 household incomes in the West Midlands were 13% above the national average, exceeding even than those of London and the South East. Declaring the growth in population and employment within Birmingham to be a "threatening situation", the incoming Labour Government of 1964 sought "to control the growth of office accommodation in Birmingham and the rest of the Birmingham conurbation before it got out of hand, in the same way as they control the growth of industrial employment". Although the City Council had encouraged service sector expansion during the late 1950s and early 1960s, central government extended the Control of Office Employment Act 1965 to the Birmingham conurbation from 1965, effectively banning all further office development for almost two decades.



Up until the 1930s it had been a basic assumption of Birmingham's leaders that their role was to encourage the city's growth. Post-war national governments, however, saw Birmingham's accelerating economic success as a damaging influence on the stagnating economies of the North of England, Scotland and Wales, and saw its physical expansion as a threat to its surrounding areas – "from Westminster's point of view was too large, too prosperous, and had to be held in check". A series of measures, starting with the Distribution of Industry Act 1945, aimed to prevent industrial growth in the "Congested Areas" – essentially the booming cities of London and Birmingham – instead encouraging the dispersal of industry to the economically stagnant "Development Areas" in the north and west. The West Midlands Plan, commissioned by the Minister for Town and Country Planning from Patrick Abercrombie and Herbert Jackson in 1946, set Birmingham a target population for 1960 of 990,000, far less than its actual 1951 population of 1,113,000. This meant that 220,000 people would have to leave the city over the following 14 years, that some of the city's industries would have to be removed, and that new industries would need to be prevented from establishing themselves in the city. By 1957 the council had explicitly accepted that it was obliged "to restrain the growth of population and employment potential within the city."

In the post-war era, there was a strong sense among British politicians that cities were slightly unpleasant things like mushrooms that ought not be allowed to grow too fast. Inspired by utopian city planners such as Ebenezer Howard and Le Corbusier, they decided that urban metropolises had to be cut back. Without much consultation, enormous numbers of people were "decanted" from inner-city slums to grey suburban council estates, where loneliness and crime thrived. Meanwhile, the city centres themselves were strangled with great elevated roads intended to get people in and out of the "commercial" zones. Birmingham probably suffered the worst of anywhere. Even Joseph Chamberlain's grand Council House was surrounded by roads.

The result was the doughnut city: a tiny commercial core, cut off from the rest of the city by ringroads and by a vast belt of derelict Victorian properties. In repopulated London, I have never felt unsafe walking home late at night. Even today, Birmingham's inner city has quite a different, emptier feel. Perhaps most outrageously, the restrictions on development didn't even save the city's architecture. The beautiful Victorian New Street Station was knocked down and replaced with a grim, urine-soaked box; the Edwardian shopfronts on New Street were replaced with plastic and concrete. Over time, that helped to turn Birmingham from the country's most successful big cities into one of its least.

Much of the damage has now been undone. Birmingham's city centre has been transformed in the last thirty years. But in many respects, the British government's mind set is much the same. Big cities—even including London—have even less power over their own futures. Under Labour, national and regional plans forgot cities. Even under the Coalition, cities are at best marginally freer—and now crippled by budget cuts. In London, Boris Johnson, the mayor, and Tony Travers, the director of the Greater London Group at the LSE, are making a strong case for the capital to have more power over taxation. London keeps just 7% of the taxes raised in the city; in New York, the figure is 50%. Central planning has never worked in boosting cities; perhaps it is time they had a little freedom.

Update: a reader sent over this documentary about the (thankfully failed) plan for London. It is extremely funny, which is not what you expect for a programme about town planning. London escaped much of what Birmingham suffered. I expect that their diverging economic fortunes ever since are at least partly the result.