I can’t stop thinking about it. The joy they took from us. The glowing, awe inspiring, mesmerising ball of life and light - snatched from our fingertips just as it was so cruelly and tantalisingly dangled before us.
Yes, this is another post about The Sphere.
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The front page of today’s Evening Standard reads Khan: my green light to transform London » Mayor’s vows for young Londoners after historic election victory.
There our re-elected mayor stands, on the famously wobbly Millennium Bridge, beckoning Evening Standard readers towards him with hands outstretched, clad in a brand new green linen suit, tailored for him by Percival in Hackney, and Francesco’s in Soho.
This is a green light mayor - a modern mayor who says yes, the paper practically screams at you.
Now, while some journalists expressed their fury at the mayor’s viridescent outfit choice (“he's gone and bought the exact green Percival suit I have been saving up for all spring” wrote the i’s Harry Robertson), green wasn’t the colour I saw. I simply saw red.
Of course my mind immediately went to The Sphere. The $2 billion of foreign direct investment vetoed by London Mayor because it might mean 61 flashy new Skyscraping flats, along with 177 student rooms in Stratford, may need to install blackout blinds.1
Sadiq had shown a red light to this and so many other growth boosting, pro-young Londoner projects that over his eight years as Mayor.
🚨 He showed a red light to Heathrow expansion, crippling the UK’s largest hub airport.
🚨 He campaigned for the Labour Councillors who showed a red light to al fresco dining in Soho.
🚨 He helped show the red light to the OceanDiva party boat on the grounds that “docking the boat at Swan Pier would cause adverse impact for local residents.”
Whether its the early closing times and lack of outdoor dining enforced on Soho businesses by the local Labour Council supported by Sadiq, or the blocking of new venues whether they be innovative stadia or even just a temporary docking point to pick up and let off customers for a boat party, London shows red light after red light after red light.
But this newsletter isn’t about how strong the anti-growth coalition is in Sadiq Khan’s London, it’s about something far wider and much more insidious. The Sphere has revealed a deeper truth about how too many Brits think of big spending.
Variously the now cancelled East London project has been described to me as “a hideous waste of money”, “a colossal money pit”, “a ludicrous white elephant”, along with complaints about “energy prices”, and the question “how many loss making attractions should the city have?”
All of these questions appear to rest upon the assumption that this is money that would be better spent on schools, hospitals, or affordable housing.
The assumption that it is the government’s money to spend.
What all these points fail to recognise is that the choice facing politicians here isn’t “spend lots of money on the sphere” vs “spend this money on social goods”. In reality the choice is “allow this foreign direct investment, and the tax revenue that comes with it”, or “block this foreign direct investment.”
Allowing economic development isn’t zero sum, it expands the options available to all of us. The Madison Square Garden Company spent $2bn on the Las Vegas Sphere. That money didn’t disappear, it was spent in Las Vegas: on high tech jobs and long construction supply chains. Every dollar spent added to the Las Vegas economy: more jobs, more tax revenue.
The decision to turn away that same investment in London is also a decision to turn away those jobs and that tax revenue.
The choice isn’t ‘Sphere or schools’, it’s ‘Sphere AND schools’ or no Sphere and fewer schools.
It’s a little like the common banal refrain that ‘footballers are paid too much, they should pay nurses and teachers more instead’ as if the state funds footballer salaries, or as if driving talent away from the Premier League would somehow boost tax revenues associated with football. On the contrary, high footballer salaries means more tax revenue to fund nurses and teachers.
The $2bn that the Madison Square Garden Company was ready to invest in London’s economy will now simply go somewhere else in the world. Rather than ‘wasting their money’ in London, they may choose to ‘waste’ it in Berlin or Tokyo instead.
Why is it a bad thing if London is a colossal money pit for some overseas investors? If an American company wants to pour its money into a colossal pit in London (full of tech jobs, management jobs, construction jobs, PLUS hefty corporation tax, income tax, business rates, and VAT receipts too) then who on earth are you to want to stop them?
Given land values in London if The Sphere was built at huge expense and was a total failure… (highly unlikely given the $167.8 million the Las Vegas Sphere made in its first full quarter this year, but hey, maybe a small group of Stratford residents know far more about how The Madison Square Garden Company should spend its money than the company itself) … it just wouldn’t matter.
In that situation, this would simply have been a cool but failed investment, with the risk entirely falling on a foreign company. The money they spent on jobs and construction and tax in Britain would have simply served a huge foreign subsidy for East London, and that’s it. To recoup some costs the company would likely sell the site on to someone else, and something else would be done with it - all with private capital. No risk to the taxpayer.
Decrying something as expensive is not an argument against that thing, unless the government is building it with your money.
I can understand how people would be angry or upset about the government spending a huge amount of money on a music venue like this, that would be absurd. The government funding any sort of commercial music venue is absurd.2 But that’s not what’s happening here.
Sadly, since the ability to build things was ‘nationalised’ by Big Bad Clem in 1948, politicians both local and national have had a say on individual projects, dragging their involvement into the whole process. It can make it seem as if every big building project is effectively HS2, with government making the plans and spending the cash.
I’m often asked why am I not as enthusiastic about HS2 as I am about the Sphere. The answer is simple, they are completely different things and the cost falls on completely different people. HS2 is being built with my money. Consequently I am furious that the government managed to treble the cost in a vain attempt to appease unappeasable nimbys.
By 2012, the government had announced numerous very expensive adjustments to appease people who don’t want to see any trains on the chilterns. “HS2 will see 79 miles of the 140-mile line between London and Birmingham running in tunnels or cuttings. The 22.5 miles in tunnel announced today is a 55% increase in the amount of tunnelling in the consultation route” boasted one bonkers press release. This was somehow meant to be a good thing.
Honestly I would not be at all incensed if private cash was doing all of that mad pointless tunnelling (out of choice rather than mandates). I’d think it were bonkers, I’d be bemused, but if they thought that’s the best way to make a return on their capital, that’s up to them.
It’s not the role of the government to tell large companies what is and what isn’t good business practice, and what to or not to spend their money on. And it certainly isn’t the role of government to bail out a bad business when it messes up. That risk falls on the shareholders.
And if very rich people want to pour their money into the United Kingdom, risking their wealth in pursuit of new marvels for everyone to enjoy, creating jobs and revenues along the way, then let them risk it.
Time to take a chainsaw to the Arts Council.