London: for the City or for the citizens?

London politics has become dominated by a business-oriented vision of what the capital needs to be – London the World City, rather than London for its citizens and communities. Michael Ward, former deputy leader of the Greater London Council, proposes a new vision for the capital.

The establishment of a directly elected mayor for Greater London in 2000 was a turning point for London government. The role survived a change of party in 2008: by the time of the next mayoral election, Labour and Conservative will each have held the position for eight years. The mayoralty promises to outlast its predecessor, the Greater London Council (GLC), as a permanent structure.

Other English city regions can learn from the success of creating an elected mayor for the whole conurbation, rather than just the city or district mayors that have been on offer elsewhere.

Nevertheless, the 2016 election promises to be a turning point: neither Ken Livingstone nor Boris Johnson is likely to stand again. Already at least one candidate for the Labour nomination has declared.

But before the parties pick their runners, there needs to be a debate about where London is going. Has the mayoralty become too close to the business lobby in general and the finance sector in particular? Is it not time to reclaim London for its citizens and communities, time to reclaim London from the neo- liberal agenda of deregulation and cuts in corporate taxation?

From 1986 to 2000, London was the only English region without a strategic planning framework. Now it is the only region with one. I have experience of both the old, pre-1986 structure of London government, and the new system, led by the directly-elected mayor. I am quite sure that the new system is an improvement – a lean, strategic authority, with executive agencies for fire, transport and police, answerable to the mayor, and strong strategic planning powers.

I also believe that Labour’s record in power in London from 2000 to 2008, during Ken Livingstone’s two terms as mayor, was a strong and effective one. Introducing the congestion charge was an act of political courage – and the charge remains in force. Winning the right to stage the 2012 London Olympics was a huge achievement. London has changed dramatically since the abolition of the GLC. In particular:

• The long decline in population has been reversed;

• The finance and business services sector has come to dominate the London economy more than ever.

For more than thirty years after the second world war, there was a consensus between central and London government: London was too big, too congested – its jobs and its people should be dispersed. London should be decentralised. Government took statutory controls over the location of factories – and, later, offices too – to make this happen. From a high point of over 8 million in the 1930s, Greater London’s population declined steadily, reaching a low point of 6.6 million by 1981. After that, it began to rise again, passing the 8 million mark once more in the 2011 census. It is forecast to reach 9 million by 2026.

At the same time, the role of business and financial services in London is more important than ever. The Thatcher government’s abolition of exchange controls, followed by the deregulation of the City in the ‘Big Bang’ of 1986, led to fundamental changes in the finance sector. The City of London, with New York and Tokyo, is one of the three main global financial centres, and the dominant European centre. The financial sector is increasingly dominated by international companies, rather than UK ones, and recruits its key staff in a highly mobile global labour market. Back in 1971, there were 1 million manufacturing jobs in London – by 2000, there were only 326,000, and this figure is forecast to fall to only 89,000 by 2031. Business and financial services jobs are forecast to rise from 1.56 million in 2007 to 1.98 million in 2031.

During London’s long interregnum, London’s business lobbying moved up a gear. The City Corporation, the mediaeval municipality that runs the Square Mile of the old financial district, argued effectively for action to boost London’s role as a financial centre. A new lobbying organisation, London First, appeared alongside the long established London Chamber of Commerce and the regional committee of the CBI. And the new financial district, Canary Wharf, emerged as a substantial force in its own right.

These changes were reflected in a major report, published by the borough-led London Planning Advisory Committee in 1991, on London as World City. It seems extraordinary now, but London’s international role was virtually ignored in the major planning documents of the post war period – the County of London Plan (1943), the Herbert Report (1960), and the various iterations of the Greater London Development Plan (1964-86).

The World City Report changed the framework through which London problems were viewed, comparing London with its international peers – Paris, New York, Tokyo, Hong Kong and Shanghai. London strategic planning was reinstated in 2000. The first two mayors have used their London Plans to respond to these changes. The 2002 plan made a commitment to accommodate the growth of population and jobs within London’s existing boundaries, with massive investment in housing and transport infrastructure – the opposite of the old policy of planned dispersal. This approach has been retained in subsequent plans – the latest, the 2011 Plan, concludes that ‘the only prudent course is to plan for continued growth’.

Boris Johnson’s 2010 economic development strategy goes further. Its first objective is ‘to promote London as the world capital of business’, and its second is ‘to ensure that London has the most competitive business environment in the world’. This had led him, in turn, to oppose the idea of a European financial transactions tax.

The business agenda will continue to be important for London. But it cannot the only perspective for London’s future.

The London Plan exists in a vacuum: there is no national strategy for land use or economic growth – no national framework for where new development should take place. Both private and public investment are concentrated in the south east. The coalition has expressed the hope that the economy will be rebalanced between the south east and the rest of the country, but has no policy instruments to make this happen.

It is certainly the case that London is a world city. Jobs in finance and business services are central to London’s future prosperity. It was the great achievement of both New Labour and Ken to see this; the change of mayor in 2008 led to no change in this approach

The business agenda will continue to be important for London. But it cannot the only perspective for London’s future. The key task for London government is to set a proper balance between the needs of the finance sector and the needs of London’s communities – between the City and the citizens.

Now is the time for a wide ranging debate on the policy issues, before the general election and the 2016 mayoral election, and the 2014 London borough elections.
Here are just a few examples:

HOUSING. The combined impact of cuts to the housing programme, and to benefits, is precipitating a housing crisis in London. Large areas of inner and central London are destined to become ‘no-go’ areas for the poor, including the working poor. Boroughs are rehousing homeless people far from London. The coalition has redefined ‘affordable’ housing to mean homes let at 80% of the open market rent. The government is weakening the obligations on developers to provide affordable homes. Relying on developers to provide affordable housing on the back of profit making developments is unsatisfactory. It is vital to restore a major programme of new home building, by the Greater London Authority, the London boroughs, and housing associations.

LAND USE. For how long will it be realistic or sensible to contain London’s growth within London? The Urban Task Force called for high density, high quality urban development. Densities went up slightly – but recent new development did not manage to create quality environments with good leisure and cultural facilities. But the London Plan housing targets can only be achieved by using employment sites (indeed, using almost any vacant sites) for homes. Is it time to look again at new communities in the wider urban region, beyond London’s boundaries?

COMPETITIVENESS. Business and financial services jobs are important for London. But it does not follow from that undoubted truth that London’s mayor must be a cheerleader for the whole deregulation, low-tax lobby. The public interest is that there should be a responsible, regulated financial sector – not a free for all.

TRANSPORT AND INFRASTRUCTURE. London’s tube and rail network is old, intensively used, and expensive. It needs new investment, and with Thameslink 2000, Crossrail and the tube upgrade some of this is happening. For the future, there will need to be a new balance struck, between new lines and improved services that improve access to the centre of London for excluded communities, and improvements to London’s international access, as well as a balance between revenue subsidy and new investment.

AIRPORTS. Airports policy has bedevilled London politics since the 1960s. Heathrow generates major noise and air pollution problems. Communities under the flight path are no longer prepared to tolerate these. But business is concerned that London’s role as an international aviation hub is critical for its economic future. Boris has proposed an airport in the Thames Estuary – but this is very costly, and carries its own set of environmental problems with it. Either the economic arguments are valid or they are not. But if London does need to remain a European centre for aviation, then some way of compensating for the environmental problems needs to be found. What is needed is a joined up approach, looking at economic and environmental issues together, not separately.

LONDON AND THE REST OF BRITAIN. Ever since the establishment of the London County Council in 1889, London has pointed out that its taxes are spent in the rest of the country. The central London business rate, which gave the LCC and the GLC a powerful independent tax base, is now shared across the whole of English local government. As long as London is the richest region in England, it is inevitable that its wealth will be used for the benefit of the country as a whole. But what is the right way of sharing this wealth? And how could a Labour mayor build alliances with other cities and regions?