Rishi Sunak’s plans for Darlington and Teesside

BEN HOUCHEN, the Tees Valley Mayor, is a persuasive man. For more than a year he lobbied the chancellor of the exchequer to create a low-tax “freeport” in his bailiwick and move lots of civil servants there. On the eve of Rishi Sunak’s budget speech he ratcheted up the rhetoric. “The question is,” he wrote in the Northern Echo, a local newspaper, “does Rishi have the strength to stand up to the Whitehall mandarins that have held our region back for so long?”

The answer is yes. On March 3rd Mr Sunak announced that many civil servants from business-oriented departments will move to a new campus in Darlington, west of Teesside. Mr Houchen will get his freeport—a zone where normal customs rules and tariffs are suspended. The mayor (a Conservative like the chancellor, who faces re-election in May) got everything he asked for. But what is good for Mr Houchen is less good for Britain.

Moving civil servants to an area tends to boost its economy. Giulia Faggio, an economist at City, University of London, estimates that a dispersal programme under the last Labour government created 11 private-sector jobs for every ten public-sector workers who arrived in an area. But the effect is localised. Private-sector employment swells in a small ring around the relocated civil servants and diminishes slightly a few...