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London’s existential year

2020 has been, by most accounts, the most dramatic year in London’s history since the end of World War Two. Historians will surely look back on the coronavirus pandemic and view it as the end of an era. But when did the era begin and what characterised it? What has happened this year in particular? And what is likely to come next?

These are the some of the questions this blog sets out to address.

If we are at the end of an era, then it began in the late 1980s, as London became an exemplar of a new sort of city. These were years of major economic and political shifts, including rapid economic development in emerging markets and rapid acceleration in economic globalisation, market liberalisation, the beginnings of the digital revolution and a move, in advanced economies, from manufacturing to services.

London as a world city was well positioned to take advantage of these economic shifts. It had a strong business culture, a high quality of urban environment, great cultural institutions, and well-established economic clusters including banking and businesses services, creative industries, higher education and tourism. But the capital, supported by national government, also responded quite imaginatively, with the creation of a new set of London institutions and organisations, including the Mayor of London, the Greater London Authority, Transport for London and London’s first international promotional agency – today’s London and Partners – to name a few.

And a lot went right. London’s population grew and its workforce grew even faster.

And at the same time, we became a lot better qualified. Roughly three out of 10 Londoners have a degree, compared to only two in 10 nationally. After years of rising criminality, crime rates fell steadily. And even as migrants from around the world flocked to the city, cohesion went up. But even before the present crisis, the old mould was cracking. London came to suffer from a series of chronic ‘global city issues’ – problems stemming from its very success.

House prices mounted, both in real terms and in relation to house prices across the rest of the country, and so did the difficulty of getting a mortgage. Home ownership declined and renting in the private sector increased, with a big jump in poor families renting privately. In 2005 fewer than 3000 people were sleeping rough in London, but before the virus struck there were nearly 10,000.

Overcrowding increased – in fact it doubled in the private rented sector from six to 12 per cent – while under-occupation also rose. Income inequality also remained flat, contrary to popular assumption and so, broadly did poverty rates. These remained much higher in London than across the country as a whole, and wealth inequalities grew.

Both congestion and air pollution worsened, and we have been way behind where we need to be on modal shift. The Mayor’s target is for 80 per cent of journeys to be made by active travel or public transport by 2041, but recent trends suggest won’t hit that until after 2070.

The city has also sometimes felt like one big building site, with very uneven development. Successive mayors talked about the polycentric city, but the big job growth was in the centre, and so was much of housing growth.

And even as the chronic problems intensified, new problems appeared.

We made progress on climate change, but not nearly enough. Without a drive to eradicate gas boilers from our homes and work-places and petrol and diesel engines from our roads, we have no chance of meeting the governent’s 2050 carbon zero target, let alone the Mayor’s 2030 one.

Anti-London feelings erupted and were mobilised, first in the Brexit vote, and then in 2017 and 2019 elections. I have just been reading Deborah Mattison’s book, beyond the Red Wall, based on focus group work and interviews with former Labour voters in red wall constituencies that broke a habit of a lifetime and voted Tory. These areas have been on the losing side of almost every major change in British society and economy for the last 40 years. And a lot of their anger is focused on London – both as the national capital and the seat of national government but also as favoured child, when it comes to government spending and support.

Finally, London seems to be falling down international global city league tables. And it’s hard to believe, right now, that our response to coronavirus or Brexit is going to turn this particular trend around. As Catherine McGuiness from the City of London, argued last month, what is particularly concerning for London is that negotiations between UK and EU are focusing on goods, when services (and talent) are much more important to London and indeed the national economy.

And then there is coronavirus.

The pandemic has only been with us for less than a year, but its effects have been profound. It has exposed London’s inequalities – above all perhaps, in the way that some Londoners, particularly people of colour, have proved especially vulnerable to the virus, whether because of the nature of their work, housing conditions, underlying health issues or social status. We have seen something similar when it comes to the economic impacts of lockdown, with wealthier knowledge workers able to work remotely, and many quite enjoying the experience, while those working in or dependent on hospitality, where wages tend to be lower, losing work and income.

And the pandemic has, of course, upended essential parts of London’s business model. Large parts of the city’s economy, especially the centre, depended on international and national visitors, daily commuters and nightly thrill seekers. But these people have deserted, or been barred from the city, threatening the future of the hospitality and cultural sectors, as well of course as government taxes and Transport for London finances. We’ve also entered an Alice in Wonderland world, where public transport has become a mode of last resort.

This does feel like a bit of an existential crisis for all large global cities. These cities have enormous attractions and they are never going to collapse. It will be a long time before London looks like Detroit. But it also seems increasingly hard to believe that the city is simply going to bounce back – we are likely to see some sustained fall in the visitor economy and rise in ‘remote working’. Have we finally, perhaps, reached the point at which the ease and other advantages of digital connectivity outweigh the benefits of face to face interaction in determining how people live and work?

There are opportunities here as well as challenges. There was always something pretty irrational and unsustainable about the daily commute, the budget mini breaks and business frequent flyers. In the longer run we could end up with a greener and more efficient city. But it’s the challenges that feel more obvious and certainly more pressing. Unemployment, for example, has grown faster in London than elsewhere and that is before the job losses that are likely to follow the end of the current furlough regime or a second lockdown.

Other global cities, cities like New York and Paris, are facing similar existential questions, but the context is different for each and two features of London’s situation really stand out. First, Brexit as discussed above. Second, is the struggle between the central state on one hand, and regional and local government on the other.

There has been lots of talk about devolution. But if we look at spending or headcount, we can see that the general direction of travel has been a centralising one. Both the central and local state grew under Labour, but over the last decade the local state has gone into absolute decline, while the central one has grown dramatically.

Nevertheless there were some devolutionary moves, including of course self government for Scotland and Wales, the Greater London Authority in London, followed by the metro-mayors elsewhere. A third of England’s population can now vote for a directly elected Mayor. My colleagues Jack Brown, Richard Brown and Tony Travers are just about to publish a book on the Mayor’s first 20 years – and the verdict is a very positive one.

But even before coronavirus this government was showing surprisingly centralising tendencies – surprising because Boris was a big advocate of devolution when he was Mayor and it featured heavily in his manifesto. In March, Robert Jenrick issued a very tough letter to the Mayor, demanding he rewrite his draft London Plan in some very fundamental ways, including by minimising development in residential suburbs and allowing for more parking spaces in new developments.  This was unprecedented in the 20-year history of the Greater London Authority and the London Plan.

The Planning White Paper, which promised the most radical shake up of the planning system for 70 years, did not include a single signficant mention of the Mayor. It was as if the government had forgotten that this particular devolved institution existed. The Devolution White Paper, first promised in 2019, became the Devolution and Local Growth White Paper, and was then kicked into next year’s grass.

Coronavirus seems only to have intensified the government’s controlling instincts  – especially when it comes to London. Like train and bus operators up and down the land, Transport for London has seen its fare revenue plummet as a result of the pandemic. But whereas the government has provided more or less unconditional funding for train operators outside London, it has sought to make political capital out of TfL’s financial woes, blaming the Mayor and imposing tough conditions.

At the same time, it feels that the present crisis is testing Westminster-Whitehall centralism to destruction. Countries with a more federal structure like Germany seem to be doing much better on things like test and trace. And directly elected Mayors have been able to use their popular mandate – as well, outside London, as the language of ‘levelling up’ – to really get political leverage.

There is an increasingly apparent instability between the really big electoral mandate and soft power of the London Mayor and the other directly elected mayors and their very limited policy powers. It’s just not at all clear what will give. But it feels like something has to.

It feels then, like London is at a crossroads. In the first report from our once-in-a-generation strategic review of the capital, London Futures, we surveyed how London has developed over the last 30 years, explored how we compare to other cities, and looked at some of the big external factors that are likely to shape and constrain London in the future. We also set out possible futures for London through five scenarios, imaginable within the next 30 years or so. Each follows years of accumulated change all heading in a single broad direction, and each entail negative and well as positive consequences.

Of course the problem we keep running into when thinking about how we address London’s issues, plan for the future and create a fairer and greener city is the weakness of London government. But we should not underestimate our power either – especially if we work together.

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Ben Rogers is Director of Centre for London. Follow him on Twitter. Read more from him here