buses and trams, carrying some 5 million passengers a year. Buses could get into the centre of London and carried higher earners, while trams ended at the city fringes and were for working men, who started work earlier than those in the buses.
However, it is the train that we have to thank for the geography of most of London today. It is not too much of a stretch to contend that the train was the key invention that made the industrial revolution a worldwide phenomenon. It made it possible to connect cities and countries in an utterly different way, and to transport goods more widely and more easily than ever before. People were latecomers to train use – most lines were originally built for freight – but from the 1830s on, the commuter railway made possible the outer suburbs, and subsequently the Underground connected all the railway termini and the inner suburbs in new ways too.
The year 2013 marked 150 years of the Underground in London. Compared with now, in 1863 the Underground was not a very pleasant experience. The trains were pulled by steam engines and the coaches had no lighting systems. Electric lighting systems were only introduced in the 1880s and the first Act of Parliament to control this was passed in 1882, with the first power station built in Deptford in 1891. Electrification of the transport system came later, with electric trams appearing in Hammersmith in 1901, running from Shepherd’s Bush to Acton. The Lots Road power station became operational in 1905 to power the Piccadilly line – following a construction period that only started in 1901. It is hard to imagine how quickly things were both planned and built in this period.
The London Underground had a second power station at Greenwich but that has since closed, with the system now supplied through the National Grid. Electric trams and electric trains changed the face of the city, paving the way for the retirement of the horse, and making possible the Clean Air Act in due course after the war. However, power stations initially meant coal and smoke. At least eighteen power stations have been constructed in London over the years. The earliest, in Deptford, Woolwich, Shoreditch, Croydon and Kingston, were developed to provide lighting, while the next tranche – in Barking, Brimsdown, Neasden and West Ham – powered trams and the new Underground. The biggest expansion was in the Edwardian period, with stations at Greenwich, Hackney, Kingston, Stepney and Taylor’s Lane, Willesden. These were all coal fired and are all now closed, though newer gas-fired stations operate at Taylors Lane and Brimsdown (Enfield). Newer stations appeared during the 1930s and 1940s at Bankside, Battersea and Brunswick Wharf, while Bulls Bridge in Hayes appeared as a gas-fired site in the 1970s. All have since closed. Bankside is now the Tate Modern art gallery, while Battersea is a listed structure still seeking love and attention (and investment). The others have been swept away completely. Power generation in London still happens in Barking (at a gas-fired site), Enfield, Croydon (also at a gas-fired site some half a mile from the original station, where one remaining chimney now marks the IKEA store), and at the Combined Heat and Power incinerator in Bermondsey. Greenwich remains as back-up capacity.
Power, transport and public health are the core infrastructure for any city, as the Romans perhaps knew better than we do. They founded London where it is because Southwark is the easiest place to cross the Thames when arriving from the south. However, London was abandoned when the Romans left. Its stone buildings would have fallen into disrepair and the city would have been a frightening place. Certainly the Saxons did not want it: they formed a settlement just up river and called it Lundenwic. It was used as a trading post and possibly not even regularly settled. Aldwych is the old market and part of the Saxon town. The Fleet River marked the boundary between the two cities and, over succeeding centuries, it remained the demarcation between the trading city, run by its aldermen in the City of London, and the administrative city in Westminster. The Fleet River became the drain for both and a huge risk to public health.
The ability for people to move around safely is essential to the well-being of a city, as is the creation of a healthy environment. In Chapter 4, I use the redevelopment of King’s Cross and St Pancras as an example of how transport improvements and public realm investment can change a location and generate economic growth as well. Transport may not be sufficient to generate growth, but it is certainly necessary.
The international dimension
There is a comic song (by Michael Flanders) that explains the laws of thermodynamics, the refrain of which goes:
‘You can’t pass heat from a cooler to a hotter,You can try it if you like but you’d far better notter Cos the cold from the cooler will get hotter as a ruler, and that’s a physical law!’
I have always found this useful in remembering the second law of thermodynamics, but I wish that there was anything half so clear in economics. I have spent a considerable proportion of my career trying to develop models and results that do not depend on incorrect assumptions or on a belief that using the word ‘perfect’ in a description means that such a world would be either desirable or achievable. In the process of considering how economic analysis actually works, however, one thing stands out as a rule: trade creates growth. Trade makes it possible to divide labour, exploit scale, use raw materials and transfer knowledge. The benefits of trade may not always be distributed as we would wish, but they are always there.
Trade can, of course, happen at many levels – between individuals, between communities and regions, and between countries. International trade has been a feature of all wealthy civilizations. The ancient Greeks decorated their temples with colour from Asia, the Mediterranean and the Caucasus. Rome traded across its known world. The discovery of the Americas opened up new trade opportunities and created what is currently the world’s richest country. China, on the other hand, closed its borders for several centuries and lost its technological advantage. It is now catching up. The inter-war period saw a diminution of trade, reflecting growing protectionism of home industry and jobs. This reduced employment and prosperity rather than increasing it, however. Trade shifts activity and employment, but this can be part of what Schumpeter called the waves of creative destruction. London’s jobs are centred where trade happens: central London, Heathrow, Docklands and around subsidiary centres such as Croydon (Figure 1.3).
Figure 1.3. London employment density map, 2003. Darker colours are areas of higher employment density. (© Greater London Authority.)
Technology can drive such waves of restructuring. This could be the technology that harnessed steam power, that which produced electric motors, or cars, or it could be the technology now giving us cloud computing, and which enables me to research this book almost entirely while sitting at my laptop.
London has always been a fulcrum in Britain’s trade with the world. Though the west coast ports of Bristol and Liverpool grew rich on trade with the Americas, London was still participating. Bristol had the slave trade, but more slaves were traded in London, just less obviously. Whether with ships or aeroplanes or via the airwaves, London trades. The meridian line at Greenwich does not of itself put London at the centre of the world’s time zones, but merely reflects London’s importance in trading relationships when those zones were established in 1851. But the time zones still reflect reality. New York is five hours behind, Delhi five hours ahead. London is the location where working hours in all these zones overlap. This is a huge advantage, as is the global use of English as a business language.
However, to be a centre of world trade, communication of all kinds must function effectively. I will examine this in relation to our love–hate relationship with Heathrow, to aviation and to our policymaking mechanisms in Chapter 5.
Chapter 2
Finance and other services: Docklands
London’s Docklands, dominated by the towers of Canary Wharf, stand as a symbol of the role of financial services in the capital’s
