We vote in May for Mayor and for the London Assembly. Today I did a letter to the Evening Standard and a piece for the election blog of the London Civic Forum where Deirdre McGrath had asked me to do something on the economy. Difficult to think what to be demanding where the Mayor/Assembly can do so little.
Letter to the Evening Standard
Terry McGrenara (letters 12 March) is right that housing should be a major issue in the Mayoral and Assembly elections.
At the public examination of Boris Johnson’s new London Plan a year ago many organisations argued that he should be making urgent plans to cope with the displacement of low- and middle-income people from expensive parts of London by the benefit caps and he did undertake to do a new needs assessment as soon as the Plan was finalised. Now he is proposing to delay that until 2015 or 2016 despite the fact that schools in some boroughs are already beginning to loose children because their families are being forced to move out. The situation is being made even worse by the coalition’s decision to create the new category of “affordable rent” which is really the exact opposite: rents at 65-80% of open market private rents. As this policy begins to bite many low- and middle-income Londoners who pay their rents without support from benefits will be excluded. It really does threaten to transform London from the mixed community which so many people (including Boris) claim to value to a highly segregated city.
Rather than devising counter-measures, the Mayor is now trying to change the London Plan so that the provision of housing at these new (un)”affordable” rents will satisfy the requirements for affordable housing delivery. Consultations on that close on 23 March so there is still time for concerned Londoners to object.
[ Next day: they didn’t print it. ]
[ link to what you can do about it ]
Piece on the Economy for LCF Election blog [ here ]
Here we are in a new phase of economic crisis and we need to know how our candidates would propose to handle it.
There are two major economic issues causing severe pain and suffering to London communities: the exclusion of more and more people from the opportunity to earn a living and the huge and widening gap between what people can afford to pay for housing and what it would cost them to house themselves decently. Unless we can crack these two problems we should stop waffling about being an ‘exemplary global city’ or a ‘sustainable’ city.
More and more people are becoming aware of the craziness of the situation we confront. The debates opened up by the Occupy movement are testimony to that. We are the same people with the same productive capacities and the same needs as a few years ago. The capital needed to employ us still exists—machines, vehicles, buildings—but is mothballed waiting for a recovery while firms and governments use all the money they can get to reduce their debts. Citizens, in contrast, are further impoverished and in many cases getting into worse debts as they try and keep life going.
The craziness of it all is partly an international problem, partly a national problem and things will have to change at all levels if sanity is to be recovered. But that does not mean that London is powerless.
In the early years of the recession it was widely noted that London was escaping the worst effects of the recession. It was manufacturing regions and places with lots of government back-offices which suffered the worst unemployment while London was protected by its reliance on relatively buoyant service sectors, the bail-out of banks (which are based in London) and by the continued inflow of money from even less stable parts of the world—much of it going into luxury housing and other property projects like the Shard. On top of that, London and the south east were propped up by getting the lion’s share of state investment in infrastructure, the Olympics and social housing, all programmes from previous governments which continued to run.
Even then, however, some Londoners and London employers were being battered by falling demand, closures and cancelled investment projects. Youth unemployment has reached very alarming levels, Londoners’ travel, energy and (except for established mortgage-payers) housing costs continue to rise while the real value of salaries falls. Retailing was an early casualty with large numbers of jobs lost; now we are getting the beginning of the redundancies in public service jobs imposed by the austerity regime – with more to come. In the last 3 months of 2011 London lost 28,000 public sector jobs, and gained only 15,000 private sector jobs.
So what should we be looking for our Mayor and Assembly to do?
For a start they need to accept that there is an emergency and that low- and middle-income people are worst affected – whether they are living on wages or benefits and pensions or a mixture. We therefore need measures to protect jobs, extend the London Living Wage across more of the economy—including to firms to which public services have been out-sourced—and work with unions.
Secondly we need a very strong priority to be given to reducing inequality in education and training which, in Britain, does so much to reproduce our shocking class system. Reinstating the Education Maintenance Allowance is just a start. Within that we must reinstate low-cost English language courses which have been decimated in recent years, reinforcing the economic and social exclusion of recent migrants.
These measures are all interlinked: while wages remain so low (down to zero in the case of the government’s workfare scheme) there is no incentive on employers to improve productivity, working conditions and safety. No wonder that Gross Value Added (GVA) per worker is so low in retailing and care homes compared with sectors where pay is higher. An imaginative local government can intervene in this cycle of impoverishment by setting an example, by exhortation and perhaps by giving prizes for good performance and shaming the worst offenders.
A further innovation we should be demanding is that the GLA pay serious attention to the needs and potentialities of the whole economy – all sectors, not just finance, business services and real estate. A sphere where a lot could be done is the retrofitting of energy conservation measures in our worn-out but much loved building stock. That’s an activity which is bound to be labour-intensive because every house is different so it could employ a lot of people, provide good career development linked with good training while it contributes to emissions reduction.
But the main things we should be demanding of our Mayor and Assembly are to do with the economics of housing. The problem is distinctively a London problem and there are things which can be done. Measures are needed to stop or discourage the further attrition of the council housing stock through the Right to Buy and other sales and to bring every available dwelling back into use – including the thousands of flats (no-one knows the number) which have been emptied in preparation for ‘regeneration”—unlikely to happen acceptably any time soon—and are just sitting there. We have 1200 of them on the Heygate Estate in Southwark and they are an eyesore and an insult to the homeless everywhere you go in London.
Alongside those measures we need a revival of housing construction and here public money will have to be found to do much of it. Even if we do reduce the severe inequalities of income in London we shall have high proportions of people whose needs will never be met by private market production. During the recent boom we did manage to secure some thousands of new affordable units per year (or at least the land on which to build them) through planning agreements with private developers. But that source is drying up and we’ll have to use compulsory purchase powers to acquire sites (or buildings) to meet housing needs.
These are all short-run measures. They do, of course, raise longer-run issues like the desirability of “growth”. The orthodoxy—still not dead—is the unquestioned pursuit of ever more GDP. Dozens of reports by consultants, think-tanks and public bodies focus on London’s very high levels of GDP and GDP per capita and then go on to discuss ways of achieving even more: by adding to airport capacity, relaxing limits on skilled immigration, preserving the lax regulation which makes us a tax haven and so on. On the opposite side are some campaigners who simply argue against “growth”.
What we need is a Mayor who is a bit more sophisticated, able to see that growth of some things is essential—of low incomes, of secure employment and housing, of care services for the infirm, of new energy systems—while growth in other areas can be truly damaging—carbon emissions, luxury consumption, avoidable travel. This kind of thinking is a challenge to established orthodoxy but it is surely what we need and must vote for.
The economy should be our servant, not a tyrant. In the words of Doreen Massey, we should be asking ‘What is the economy for?”
Further reading links???
Michael Edwards
UCL and Just Space network, but writing in a personal capacity.
michael edwards 