Reading’s GVA of £7.3bn in the third quarter of 2020 was greater than cities such as Sunderland, Leicester and Swansea. And with a population of 166,000, Reading is larger than many of the UK’s small cities.
A tale of no cities
Yet lacking a cathedral, historically the requirement for city status in the UK, and unsuccessful in modern campaigns to have its status upgraded, Reading remains merely a very large town just 50km west of London.
“Not being a city hasn’t held us back,” says Nigel Horton-Baker, executive director of Reading UK, a partnership between public and private sector organisations to promote the town. “We were one of the fastest-growing towns or cities in the UK pre-Covid. We were one of the first towns or cities to come out of recession ten years ago after the last recession too.”
[Keep up with Investment Monitor: Click here to subscribe to our weekly newsletter]
Catching the right train at rush hour will take a commuter from Reading to central London in just 25 minutes. Its close proximity to the UK capital city has made Reading an attractive location for businesses and commuters who want connectivity to London but don’t want to pay London prices for real estate.
Reading was named the best place for first-time house buyers in the UK in 2019 by the Times newspaper, which noted average house prices of £406,000 at the time compared with £636,000 in the capital.
Not being a city hasn’t held us back. We were one of the fastest-growing UK towns or cities pre-Covid. Nigel Horton-Baker, executive director of Reading UK
Average gross weekly pay in Reading was £667 in 2020, compared with £608 in the wider south-east region and just £587 nationally.
Various multinational organisations have offices in Reading, with a particularly strong presence of IT companies and professional services firms offering office jobs that have been largely protected from the worst of the pandemic’s economic impact.
Yet Reading is still often thought of as somewhere people pass through, rather than spend a lot of time in. Its retail, leisure and hospitality offering is largely indistinct from many other market towns around the country.
Covid-19 has made the future of office-based work uncertain, and the long-term impacts that will have on commuter towns is still hard to predict. With professionals increasingly able to work from anywhere, will they want to be based in Reading?
Reading, you may have heard of it?
For non-residents, the Berkshire town of Reading is unlikely to evoke strong emotional responses, or bring many famous facts. There is a long history of it being maligned in public discourse.
In the hugely popular 1889 book Three Men in a Boat, Jerome K Jerome’s light-hearted account of a boating holiday along the River Thames, the town is described as “dirty and dismal… one does not linger in the neighbourhood of Reading”. Not quite the literary assassination of “come friendly bombs and fall on Slough!” but not far off.
If pushed to name something Reading is famous for, one might mention the annual music festival, or comedian Ricky Gervais. But as Jerome points out in his book, Reading is in fact “a famous old place”, at least, for anyone interested in ancient English monarchs.
King Ethelred and his brother, the future Alfred the Great, fought and lost to an invading Danish Viking army in Reading in 871. The British Parliament convened in the town to escape the plague several times during the Middle Ages, and King Henry I is buried at Reading Abbey, the ruins of which were repaired and reopened to the public in 2018.
Come the Industrial Revolution, and Reading became famous for its ‘three Bs’ – beer, bulbs and biscuits – which were produced in the town, respectively, by H&G Simonds, Sutton & Son and Huntley & Palmers. By 1980 all three businesses were no longer located in Reading, and as manufacturing disappeared from the town, it was replaced by less romantic economic activities.
Thames Valley Park, a business park developed on the outskirts of the town in the 1990s, attracted technology giants Oracle and Microsoft to open multi-building campuses. Cisco, Symantec and Verizon are other technology companies to have since opened offices in and around the town.
The information and communications sector accounted for 15% of jobs in Reading, according to data published by Nomis in 2019, a sector the wider UK economy has become increasingly dependent on, particularly during a period of large-scale remote working during the Covid-19 pandemic.
With its history of computing technology and software development, Horton-Baker believes Reading can capitalise on economies of agglomeration. “You have a core tech sector that has been developed over many years and those businesses can expand and develop into new businesses, which will then help to attract other new businesses,” he says.
When is a city not a city?
Reading applied unsuccessfully to become a city in 2000, 2002 and 2012, when Queen Elizabeth II held special competitions to mark the millennium, her golden jubilee and her diamond jubilee, respectively.
In the last competition it was beaten by Chelmsford in Essex, which has a population of roughly 169,000, but does city status really make a difference when attracting investment?
“From a marketing perspective it helps to put you into a different bracket, alongside global cities, and could provide us new opportunities,” says Horton-Baker. “But we talk about ourselves as a city quite often already.”
Instead Horton-Baker argues that connectivity to London is still the biggest draw for businesses. “The single factor investors and developers have talked to me about over the past four or five years, and has led to massive investment growth in real estate, is the Elizabeth Line and that link to London.”
The Elizabeth Line is a new underground route that will connect Reading to Shenfield in Essex via multiple tube stations dotted through central London.
The Crossrail project, as the development is called, was originally due to be completed in 2018 and cost just under £15bn. The latest delay announced in August 2020 estimated completion in 2022 at an additional cost of £4bn, although some trains are already running from Reading to west London along the route.
Reading train station is a major regional transport hub providing routes to all corners of mainland UK. A major £1bn renovation of the station was completed in 2014, in part to prepare it for more traffic volume ahead of Crossrail.
A new train station at Green Park, another business park on the outskirts of town, is now due to be completed in 2021. Green Park is near to the stadium of Reading Football Club and houses the offices of international companies such as Bayer, Thales, Huawei, Nvidia and PepsiCo.
Josie Dent, managing economist at the Centre for Economics and Business Research (CEBR), says that Reading has benefitted from its core sectors being largely sustained through the pandemic, and may also have benefitted from people working from home.
“You have people living in Reading and commuting into London because of the good rail links,” says Dent. “Those people are now staying in Reading [due to Covid-19] and contributing more to its economy rather than London’s.”
As well as its tech cluster, Reading has also attracted professional services firms Grant Thornton, EY, PwC and Deloitte, while Swedish telecoms company Ericsson relocated its UK headquarters from Guildford to Reading in 2018.
Reading is predicted to see employment growth of 10% by the final quarter of 2021, according to Irwin Mitchell. While the law firm’s research predicts employment surges in several cities in late 2021, in anticipation of the end of the pandemic, Reading is expected to see faster growth than any other UK city. Meanwhile, the effects of Brexit on the town are forecast to be moderate in the New Statesman‘s Brexit Vulnerability Index, with Reading ranking 164th out of 379 local authorities in the UK.
The future of commuter towns
However, when much of its recent success can be attributed to commuting, what does the future hold for Reading if most office workers never return to the office post-pandemic?
Dent of the CEBR thinks this scenario unlikely and doesn’t think commuter towns such as Reading will overly suffer due to changing working habits.
What might have seemed too long a commute to complete every day may seem more appealing just twice or three times a week. Josie Dent, managing economist at the CEBR
“The attraction of cities is not just from a work perspective but also from leisure and other opportunities,” she says. “Some people just like to be near a big city.”
Dent continues: “We are still expecting that most companies will want employees to come to the office, just not as often. In which case, somewhere like Reading could potentially be attractive to more people. What might have seemed too long a commute to complete every day may seem more appealing just twice or three times a week.”
Even so, Horton-Baker acknowledges that Reading can still improve its hospitality and leisure offering to boost the town’s appeal further.
“We have really built strengths in the arts and cultural sector because we know it is an important part of attracting young professionals to the area,” he says.
A year of culture in 2016 saw a range of events take place in Reading, and Horton-Baker says the intention is to maintain that momentum with new events every year.
The old Reading Prison, most famous for having once held Oscar Wilde captive, is now lying vacant. Reading Borough Council hopes to redevelop the Victorian building as a cultural space. It was initially outbid in a tender held by Her Majesty’s Prisons by a private property developer, but that deal subsequently fell through in November 2020. There are hopes that plans for an arts centre at the prison can be revived.
If successful, this initiative could be another reason why people may choose to linger rather than just pass through Reading. It may still not be officially a city, but it is certainly proving one of the most economically robust urban centres in the UK.
This article forms part of Investment Monitor’s ‘Future of British Cities’ series. Other UK cities and regions covered are:
Jon Whiteaker is a senior editor at Investment Monitor focusing on FDI in the energy sector.