Only devolution can save the 'real England' from incestuous London

IMAGINE that London and the Home Counties had been the heart of British heavy manufacturing; that Surrey was a British Ruhr and that, from Clapham Common to Kentish Town, a great arc of rusty engineering plants, car manufacturers, steelworks and chemical works pressed in on the Government and the posher squares. Question: would the pound be as high as it is today?

Put more generally: to what extent does London deform policy-making? Because a capital which is dominated, at least publicly, by traders in stocks and currencies, lawyers and media people, will produce different political priorities from those of a capital of manufacturers.

Labour's recent desertion of Blackpool as a fit place for its annual conference was, for many, yet another example of the southern tilt - the tilt from the real world of making to the unreal world of talking, the bias against trade in visibles and towards ''invisibles''; the betrayal of struggling decency by smug liberal elitism. Phil Redmond, creator of Brookside, said last month that it wasn't a North-South struggle, but ''a battle between the London clique and the rest of us''. Politicians and media chiefs ''wine, they dine, they woo and schmooze each other, and all within a 12-mile radius of Westminster''.

This is the latest version of an argument about London's power that has waxed and waned for centuries. The Scottish political writer Fletcher of Saltoun was comparing London to the swollen head of an ill body, draining life and energy from the English provinces, even before the Act of Union. From then on, endless non-London dissidents, from anti-Corn Law reformers, to Rudyard Kipling, to Yorkshire socialists have blamed the metropolis and its effete self-absorption for leading the nation astray.

Today the gulf between the capital and ''the real Britain'' is probably bigger than it has ever been before - despite a national broadcasting network. Admittedly, Scotland is reclaiming her power, but the English provinces and once-proud Northern cities of Victorian times have little political autonomy. The shrinking of manufacturing and a shifting population have removed self-confidence and leverage from the north. The BBC is, undeniably, metropolitan-biased.

The South is getting more ''southern'' in its economic specialisation. Financial services matter even more than they used to. The London engineering companies, Kent mines and East End docks that linked London labour with the smoky North have shut down, to be replaced by computer software, film, music, fashion and design.

That is only the beginning. London is multicultural in a way that most of Britain isn't: the capital may have only seven million of the country's population (about 12 per cent), but it has nearly half of Britain's citizens from ethnic minorities. It is blacker, browner and more Chinese than anywhere else. It is a major Irish city, and an important Scottish one too. It also has sizeable populations of Australians, Americans, Japanese: in my local Waitrose, French and German are spoken regularly.

So, when newspapers like this one celebrate the power, complexity and richness of cosmopolitan Britain, they are often describing a social milieu that is foreign to readers in outer, whiter, parts of the country. The cultural shifts occuring in London because of assertive and powerful non-white groups are heavily reflected in the media - though less so in politics - but are outside the experience of millions of non-metropolitan watchers.

London is younger, too, and more single, than Britain as a whole. Four in 10 Londoners are aged between 20 and 44, against 36 per cent in the rest of the country; and central London has the highest proportion of all. That, perhaps, matters even more than the race gap, certainly as it affects policy. Take interest rates: rate rises are always described in gloomy terms on TV news bulletins, often with the reporter standing in front of an estate agent's office - while for millions of older people and savers, a higher interest rate is actually very good news. Yes, interest rate rises directly affect businesses of all kinds, but the spin reflects the fact that many metropolitan journalists are young, and saddled with mountainous London mortgages.

Similarly, the above-average salaries paid to national journalists in London, helped sustain the upper rate of income tax as a hotter pre-election topic than it was in ''real Britain''. Closures or scandals in the City - the workplace of the spouses and friends of politicians and hacks - receive closer scrutiny than the same problems in other businesses.

But the imbalance affects more than money and work. For a lot of incomers, London is an escape from Britain. Gays escape to London. So do tens of thousands of the rest of us: if you want to have a wild time away from your parents, or work in a cutting-edge job, or forget something about your social background, then London is the magic hatch that leads away from the rest of England, the great dissolver of the past.

This can lead to tragedy - ''Your sons and your daughters are beyond your command/ Living in boxes just off the Strand'' - but it can also liberate and release the energies of people who would otherwise feel stuck and hemmed-in. At any rate, as a direct result of that youth migration over several decades, London political culture is more classless and fluid, and more liberal about almost everything, than the generality of British opinion.

Not every effect of the London-Britain divide tends to the progressive. The harsh class division of schools in the capital has injected a persistent hysteria into discussions of education policy that millions of families, living near a perfectly good, well-ordered comprehensive, must find baffling. When it comes to green issues, the green belt and commuting by car drown out equally important problems, such as agricultural pollution, or the degradation of the Midlands.

But the general effect of metropolitan influence is liberating, not demeaning. London makes the whole country more liberal than it would otherwise be. And that liberalism, now fully unleashed by the arrival of New Labour - itself a strongly metropolitan movement - curls into everything from social legislation to film censorship, from the choice of prize-winning novels to the characters and story-lines of TV comedies.

In general, if London's leading Britain by the nose, that's not an absolute bad. Without the luck of having a great, hyperactive world city at one end of them, these islands would be greyer and less outward looking, less rich in possibilities. But this will not be a well-balanced nation so long as the power and influence continues to gurgle south without countervailing forces. A Britain without a self-confident Yorkshire, or a powerful North- east, will be a lesser place: the Victorians knew that.

This takes us back to the politics. Britain's reform agenda is still too timid. The devolution of power which is beginning in Scotland and Wales must spread to the English North, West and Midlands. The proper response to the huge and growing power of London, the global city, is not to shrink into provincial bitterness but to start to plan for devolved assemblies in the English regions, and elected mayors in the big cities. I love London, but this town needs a few pushy siblings.