Alexander Jan: To secure London’s future we need to look abroad

Alexander Jan: To secure London’s future we need to look abroad

It is more than 30 years since a now little-known local authority body called the London Planning Advisory Committee commissioned a report called London: World City. Its launch in 1991 with pomp and ceremony at the Guildhall by the capital’s great and good was a seminal moment. After the abolition of the Greater London Council in 1986 following many years of decline, London – left with a more rudderless, complex and disjointed system of government than at any time before the creation of the London County Council in 1889 – had turned a corner.

For the first time since the war its population had started to grow. Public transport demand was on the up. The “big-bang” deregulation of the City of London financial sector had taken place and the European single market was on the horizon, along with freedom of movement for European Economic Community citizens. London had gone from fretting about decline to wrestling with the consequences of growth. Fuelled by a heady mix of population increase, technological change, inward investment and globalisation, this sleeping giant of a city was stirring for the first time in five decades.

Fast forward three decades and there has been enormous change – much of it for the good. There are now nine million Londoners, up from 6.8 million in 1990. Employment has increased by around 1.4 million jobs – a  rise of about 40 per cent. Housing numbers, the economy and the provision of transport infrastructure have all grown. But some things have changed for the worse. Brexit has rocked the position of the City and other sectors. The ending of free movement has cut London off from many of the working people who made or would have made it their home. And our relationship with the rest of the country has, at least in some quarters, soured.

Then there is Covid, of course, with its enormous effects here and globally. The pandemic has meant huge disruption to Londoners’ working and commuting patterns and demand for tourism and business travel. Footfall, particularly in central London, has at times collapsed. How much of a scar Covid will leave on London is yet to be seen. But at the very least the virus has accelerated changes that were already “in the system”. At worst, combined with the insidious effects of Brexit and antipathy towards London from central government, it might leave lasting damage to the economic vitality and sustainability of London.

That risk demands a coherent and comprehensive policy response from national and London government. One way to understand what that response should be is to look at how the capital is faring in relation to its real rivals – other cities across the globe with a claim to world city status.

As a contribution to this, the London Property Alliance has launched a quarterly global cities survey, with research undertaken by leading think tank Centre for London. These analyses will compare the capital with Paris, Berlin, Hong Kong and (of course) New York using indicators of economic growth, employment, office vacancies and rents, transport, retail, aviation demand, the cost of living, crime and the building of new homes.

The first survey report shows that although in economic and employment terms London is doing comparatively well, the city is struggling by many other measures. It is in third place out of the five cities in retail and hospitality and scores poorly on Google measures of mobility associated with key city centre economic activity. Hong Kong, despite its political troubles, and Berlin lead the pack on many indicators, while New York often occupies the lowest league table position. London’s office vacancy rates are the second highest and it lags behind on aviation too – only Hong Kong has seen a greater fall in passenger demand at its airports.

London’s roads are more congested than before the pandemic – only Paris is worse off – and London was seeing a slower return to the office than all other cities apart from New York even before the Omicron variant. With its high level of farebox dependency, Transport for London’s finances have been put under enormous pressure. Yet the government has still not concluded a lasting financial settlement for the agency, threatening the long-term viability of the public transport system in London. Contrast this with Paris and even New York, where central government revenue support been forthcoming and major capital renewal and expansion programmes are being drawn up.

In the fight for talent, investment and visitors London’s competition is primarily at an international level. In order to allow the city to thrive, central government, which holds so much power over the metropolis, should surely be focused on how London fares on the world stage and policies to help it prosper. Thirty years ago, that was an emerging theme. Today, it is crucial to our collective success.

Alexander Jan is chief economic advisor to the London Property Alliance, the umbrella organisation for the Westminster and City property associations. He is also chair of the Central District Alliance and Hatton Garden business improvement districts. Follow Alex on Twitter.

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