Why Channel 4’s luvvies should stay in London

Channel 4 logo outside Leeds Corn Exchange © Channel 4
Channel 4 is heading up north – its staff aren’t

The idea of spreading Channel 4 staff around the country is well meant, but the regions have their own ideas.

It probably sounded like a good idea at the time. Last year Channel 4, which is owned by the government but funded privately, decided to move its headquarters to Leeds, as well as opening “creative centres” in Bristol and Glasgow. According to its chief executive, Alex Mahon, the relocate out of London would mean the channel was “even more open to new talent and new voices from underserved areas” and would “better reflect the diversity of all of the UK”.

The only trouble is, no one seems to have bothered to ask the staff. When the moment to pack up their desks and start house-hunting came, nine out of ten staff members decided to stay in London and look for new jobs instead. All its senior executives ducked the opportunity to lead by example and decided to stay put as well.

Channel 4 has revenues of nearly £1bn, so it is a sizeable business, and it can probably survive that. But it is hard to believe the exodus won’t have an impact on performance, and recruiting all the new people it needs could be very difficult in a city with no ready-made pool of talent in the broadcasting industry. It would be hard to think of a more catastrophic management decision in the last decade.

For years, the government has been trying to rebalance the British economy. But Channel 4 is making the same mistake as government planners – to try and force people to move out to the regions. There are two problems with that. The first, as the station has just discovered, is that they just don’t want to. Any firm making a move out of the capital risks losing not just its best people, but also the nebulous yet crucial network of contacts and suppliers that made it successful in the first place. The second is that the major cities are doing really well all by themselves, and they don’t need a lot of reluctant London television “luvvies” suddenly turning up on their doorstep.

According to a report last year by the Centre for Cities, the fastest-growing cities in the UK between 2002 and 2015, in terms of population and jobs growth, were Manchester, Leeds, Birmingham and Liverpool. London came in 20th place. Growth has been so sustained in some of the growing cities that the issue has been how to find enough space for people and businesses. Regional cities have been growing organically – by creating new businesses, not by uprooting companies from London and plonking them down elsewhere. Manchester has been expanding in sport, leisure, travel, logistics and design. Bristol has been developing its own tech industry. Liverpool has developed in life sciences and education; Birmingham in financial services and manufacturing.

How to encourage more growth

We need more policies to encourage that growth. Regional corporate-tax rates might help, and possibly income taxes as well. Both Scotland and Wales now have powers to vary their tax rates and have started to use them. If firms in Hull or Middlesbrough paid lower rates of corporation tax, they would have more money to expand and could grow a lot faster. We could launch tax-free enterprise zones to stimulate business in run-down areas. A lot of start-ups might decide they liked the look of Sheffield, or Lincoln, or Swansea if it meant they paid a zero rate of capital-gains tax if their business was successful. It has worked in the US and it can work over here as well. More infrastructure would help too. Thriving airports with connections around the world have helped Manchester and Birmingham claw their way back to prosperity. We need more airports across the country, and better rail and road links.

The UK’s regional cities have been doing really well in the last decade, restoring much of their former vibrancy and prosperity. The gap with London on wages and house prices is starting to close. There are plenty of ways that trend can be encouraged. What they don’t need to do is import Londoners.