Wanted: A leadership that understands London’s problems

Ken Livingstone writes exclusively on the problems facing London's economy under the ConDem cuts and why he is the man who can best deal with them.

Our guest writer is Ken Livingstone, Mayor of London 2000-2008 and candidate for the Labour nomination for 2012

In politics, as in life, in order to deal with a problem it is first necessary to acknowledge that the problem exists. But the ConDem coalition, abetted by the current Mayor, almost seems to believe that there are no economic problems afflicting London, or that it is an oasis of economic prosperity amid the current slump.

So, Vince Cable, the new Secretary for Business in launching his Strategy for Sustainable Growth, recently argued:

“For the last 40 years, London and its surrounding regions have consistently grown faster than the rest of England, with the recent recession increasing unemployment in those areas where it is already highest.”

There are a string of inaccuracies and incorrect assumptions contained in just that one sentence. Since 1989 the London economy has experienced 14 years when it has grown faster than the rest of England, and five years when it has grown more slowly. (There is no consistent data going back 40 years; the current data from the Office for National Statistics only goes back to 1989 , and it seems the business secretary may be using data that was discontinued in 1996).

There is therefore nothing consistent or inevitable about London’s relatively stronger economic performance. It is a function of economic policy and its ability to shape global and national economic trends.

In two terms of office as Mayor my administration focused on turning London outwards to face the world economy, opening links with fast-growing economies, boosting transport, infrastructure and housing and supporting the poorest in society through our fares policy, increasing social housing and the campaign for the London Living Wage.

A key aim was also to make London a Greener city. It was this combination of policies that began to take effect in the second half of my first term and the whole of my second term, 2002 to 2008, and contributed to sustained economic outperformance, accounting for seven of those 14 years when London grew at a faster pace than the rest of England.

But while the business secretary is mistaken on London’s growth, the ConDems’ misconceptions about unemployment are even more grave. Vince Cable says that those areas where unemployment was already higher have been hardest hit. Quite true. But London is one of those areas.

London actually has a significant unemployment problem, chronically higher than the rest of England [see graph below].


In the recent June 2010 data, London’s unemployment rate was 9 per cent compared to an English average rate of 7.9 per cent. More than half-a-million jobs have been lost in the whole economy since December 2008 and of those over 100,000 have been Londoners’ jobs. This is a return to the status quo ante.

Since the inception of the data in 1992, London has had a persistently higher unemployment rate than the average for both England or the UK, of by 2 per cent or more. It only narrowed that gap during periods of persistently higher growth. Yet the coalition partners seem wholly unaware of this crisis on their doorstep, and will receive no reminders from the current Mayor. Instead he boasts of lobbying central government for tax relief on the foreign earnings of multi-national corporations and rate relief to landlords of empty properties – both of which further reduce revenues when there is a crisis of funding for investment.

Overall the Mayor’s office has failed to respond proactively or with any clear strategy to cope with the challenges of recession across the Mayor’s responsibilities. The lack of a serious strategy means London is losing out winning thousands of new jobs for the future. The government needs to be made aware of these problems, and challenged to meet them.

And what London needs is a Mayor who will stand up for Londoners.

• This article appears ahead of the publication later this week of a document from Ken this article appears ahead of the publication later this week of a document from Ken on London’s economy – more information from www.kenlivingstone.com

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