Levelling up and London

Levelling up and London

Photo by Fallon Micheal

This week’s Queen’s Speech – which set out the Government’s legislative agenda for the coming Parliamentary session – has started to flesh out what ‘levelling up’ means in practice.

Much of the focus appears to be on closing gaps between London and other regions, including through ‘creating new good jobs, boosting training and growing productivity in places that have seen economic decline and the loss of industry’. There is a compelling case for action here; the UK has among the highest levels of regional inequality among advanced economies, with many areas suffering from entrenched disadvantage. But as we focus on levelling up, both the needs of Londoners and the role of London must not be forgotten.

First, whilst London is a wealthy city, it is also an unequal one, with far too many Londoners not sharing in the capital’s prosperity. On the eve of the pandemic, 2.5 million Londoners were living in poverty, a higher proportion than any region or nation of the UK. In many ways, London is a tale of two cities, with immense wealth living alongside entrenched poverty and disadvantage. If – as the Prime Minister states – levelling up is about improving livelihoods and opportunities throughout the UK, then we must focus on how we improve conditions and opportunities for disadvantaged Londoners too.

Second, London has been hit hardest by the coronavirus jobs crisis, and the recovery in the capital looks set to be slower. The number of people claiming unemployment related benefits in London has increased by 174% in London in the past year, compared to an increase of 101% in the rest of the UK. While both consumer spend and job vacancies have recovered to pre-pandemic levels in many parts of the UK, the recovery in London has lagged far behind. A focus on national recovery must not leave behind the communities that have been hit hardest.

Third, London’s economic recovery matters not just for Londoners, but to the whole of the UK. On the eve of the pandemic, central London hosted around 3.5 million jobs – one in every ten across the country, and the capital paid in an almost £13 billion a year more in taxes than it received in public spending. The 12 local authorities that make up Central London Forward alone account for 26% of business rates collected in England. The capital is not separate from or in competition with the rest of the UK. A strong and inclusive recovery in London will help drive the national recovery, support investment across the UK, and repair our public finances.

In terms of the legislative content of the Queen’s Speech itself, there are some welcome measures, some causes for concern, and a couple of big gaps.

The focus on lifelong learning is very welcome. While London’s population as a whole is relatively highly qualified, nearly 1 million residents across the central London sub-region don’t have a degree level qualification, and 105k have no qualifications at all. These Londoners face particularly large employment and earnings gaps compared with those with higher level qualification.

We have concerns around the proposed planning reforms. London is already building, with nearly 70,000 homes granted permission in the year to September 2019, higher than the target in the London Plan. The changes to planning would represent a significant and flawed centralisation of the planning system, which would reduce local accountability, and do little to boost supply. The increased use of ‘permitted development’ could lead to a loss in vital commercial space – which could slow the economic recovery –without producing the high-quality and affordable homes we need.

There were also two big gaps in the Queen’s Speech.

First, we are yet to see plans to reform the creaking social care system. The pandemic highlighted both how important our social care system is, and the very real challenges it faces. Rather than the comprehensive plan to fix the system, the Queen’s Speech contained just nine words, promising that proposals will be brought forward. Central London Forward is working with councils, health and social care providers and training providers at the local level to develop a health and social care outcomes framework which aims to improve skills and job quality in the sector. But in the absence of legislative reform and sufficient funding, what we can do locally is limited.

Second, it was disappointing not to see the planned Employment Bill. According to the TUC, 11% of Londoners – over half a million workers – are in some form of insecure work. In addition to tackling the Coronavirus jobs crisis, building back better must mean ensuring good work for all, and addressing the epidemic of insecure and low paid work.

In the coming months, Central London Forward will be working with our member boroughs, with the newly re-elected Mayor of London, and with Government to support an inclusive economic recovery in the capital. We look forward to seeing the planned Levelling up White Paper, which must focus on improving livelihoods and opportunities for all, irrespective of where they live.

Joe Dromey is Director of Central London Forward –  14.5.2021