The leaked draft of Labour’s manifesto, which seems unlikely to be much different from the real thing when it is published in the coming days, contains several pledges of particular relevance to London and Londoners. A number of them raise interesting questions about any near-future Labour government’s attitude to the capital. Here are the main themes and a few initial observations.
Shadow Chancellor John McDonnell, the MP for Hayes and Harlington, has made a few mildly anti-London remarks in recent months. These tuned in to the common complaint that the capital (and the south-east) take the lion’s share of public investment at the expense of the rest of the country. Of course, it isn’t quite that simple. Nonetheless, the draft manifesto echoes the McDonnell line:
Historic under-investment in infrastructure is a major barrier to productivity and growth, and a major contributor to the disparity between the south-east and the rest of the country. Unlike previous governments, we will ensure that investment is fairly shared around every region and nation of the UK [my emphasis].
But what does “fairly” mean? Would a Labour government led by Jeremy Corbyn put less money into the capital which, after all, produces nearly a quarter of national wealth and generates nearly one third of its taxes? Well, not if you look at some of the draft pledges, which tick off several big items on the London government wish list. For example:
National headlines have been grabbed by Labour’s promise to re-nationalise the railway system and “freeze fares”. But below this is a pledge to “devolve responsibilities for running the commuter trains lines to the Transport for London authority”. The handing of control of all suburban rail services to TfL is something every London Mayor has lobbied for, supported by London politicians from across the party spectrum.
Labour also promises to “build Crossrail 2”, the long-discussed north-east to south-west link across the city that has started to look stalled under Theresa May’s Conservative government. No one in City Hall would grumble about that promise being kept either. Labour also says it would “complete the HS2 rail line”, connecting the capital to big cities to its north. That too would go down well with most, though not everyone in Camden will be overjoyed.
Footnote for long-suffering users of Southern services: Labour say they would end “driver only operation” of trains, which has been a central issue in the tortuous dispute between Southern and rail unions.
It’s the big London issue. Labour says that nationally it “will invest to build over a million new homes” and that “by the end of the next parliament we will be building at least 100,000 council and housing association homes a year for genuinely affordable rent or sale”. That sounds good, though it doesn’t specify where those homes would be built. How many would London get?
The use of the term “genuinely affordable” raises questions too. It’s the one Sadiq Khan deploys to differentiate the price range of affordable housing he is prepared to support from types termed “affordable” by the government that are beyond the reach of even quite well-paid households in the capital and sometimes aren’t much cheaper than homes sold at the full market price. What will “genuinely affordable” mean in the Labour manifesto when it is officially launched and how will it affect London?
Champions of homes for social rent, the cheapest kind of “affordable”, will be pleased by the commitment to building council housing, which is let at social rent levels. London has lost a lot of council housing at a time when it need more. The document says: “We will end government restrictions that stop councils building homes”. Does this mean restrictions on what councils are allowed to borrow in order to pay for building homes? It doesn’t actually say so. But if it does mean that, here’s another policy to add to those London politicians of every stripe would, outside of election periods, almost certainly applaud. London’s boroughs have been lobbying for it for years. Boris Johnson himself backed it when he was mayor.
Elsewhere, it says that Labour would “give councils new powers to build the homes local communities need”. Tantalising. Might those be powers in addition to greater freedom to borrow? But here’s another point on social rent. The term itself does not appear in the housing policy section of the Labour document (the heading “council and social tenants” is the closest it gets). Housing associations build the majority of affordable housing in London. They too used to build homes for social rent, but the Conservative-led coalition government obliged them to switch to the more expensive “affordable rent” tenure, which can be be very close to social rents but also rise to 80% of local market rent levels.
The absence of the term “social rent” from the draft manifesto suggests that Labour does not intend to do away with “affordable rent”. This might disappoint some on what might be called the Corbyn Left. So might the section on that most contentious legacy of Margaret Thatcher, the Right-to-Buy. The wording is very measured: “Labour will suspend the Right-to-Buy to protect affordable homes for local people, with councils only able to resume sales if they can prove they have a plan to replace homes sold like-for-like”.
What about private renters, a fast-growing group that now accounts for more than a quarter of London households? “We will end insecurity for private renters by introducing controls on rent rises, more secure tenancies and new consumer rights for renters”. It isn’t clear how similar this would be to what Labour offered under Ed Miliband two years ago. Those were modest proposals that might have helped, but “rent control” is not the panacea some believe. As the London Assembly has learned, there is a danger that, particularly in the capital, it could end up helping the relatively well-off at the expense of more vulnerable people.
This paragraph, though, would be less contentious: “Labour will make new three-year tenancies the norm, with an inflation cap on rent rises. Given the particular pressures in London we will look at giving the Mayor of London the power to give renters in London additional security.” More detail would be useful.
Now, let’s step back a bit. How much difference would Labour’s policies make to a fundamental problem with with increasing housebuilding in London, especially of “genuinely affordable” homes – the supply and cost of land. The draft says: “We will prioritise brownfield sites.” Fine, but the problem in London is that there aren’t many such sites going spare. Other things usually have to be knocked down first, which doesn’t make everyone happy, especially if it is existing housing on land already owned by local authorities (and which therefore doesn’t have to be paid for).
Under a PM Corbyn, those estate regeneration tensions would not just go away. The draft also pledges to “protect the green belt”, which many housing experts believe must be thought about anew if London is to stand any chance of meeting its housing needs.
BBC London political correspondent Karl Mercer has pointed out that the word “Heathrow” does not make an appearance. Why might that be? As Mercer observed, Mayor Khan doesn’t want Heathrow expanded, preferring an additional runway at Gatwick, and neither does John McDonnell. Unions, though, are keen on the idea, notably Unite. Ah-ha.
Labour promises that only people paid more than £80,000 a year would pay more tax under a Labour government. Note that there is a greater percentage of people in London in that top 5% income bracket than elsewhere in the country. Note also that someone on 80 grand a year with pre-school age or university age children, a partner who doesn’t work and a big London mortgage might not feel particularly wealthy. The draft manifesto also says: “Labour will also legislate to reduce pay inequality by introducing an excessive pay levy on companies with high numbers of staff on very high pay.” You get a lot of those in London too.
Devolution and London government
As we change our constitutional relationship with Europe we must also adjust our own arrangements. Just as many felt that power was too centralised and unaccountable in Brussels, so many feel that about Westminster. A Labour government will establish a constitutional convention to examine and advise reform of the way Britain works at a fundamental level.
Could this mean a bolder embrace of devolution to the UK’s nations, cities and regions than those of recent Conservative governments or even those of “New Labour”? It’s hard to tell, though City Hall and the boroughs would surely be keen on having one of the “regional development banks” the document describes. And here’s another relevant passage:
Labour believes in devolving power to local communities, but that requires [that] the necessary funding follows. You cannot empower local government if you impoverish it. Labour is the party of devolution and we believe in handing back power to communities. We will devolve powers over economic development, complete with the necessary funding.
Again, London boroughs of all political complexions will like the sound of that, but especially those Labour ones that continue to endure the most savage reductions in their grants.
All in all, not a bad bunch of pledges that particularly apply to London and Londoners, despite a certain amount of anti-London positioning by some Labour politicians in recent times. Several, though, are rather vague. Maybe they will become a bit clearer by polling day. Read the full draft manifesto here.