Autumn statement: The levelling down of London continues

Autumn statement: The levelling down of London continues

Let’s look on the upside. Jeremy Hunt’s autumn statement promised to end the freeze of local housing allowance imposed in 2020. London Councils says the benefit, which helps private-renting low-income households, has put a squeeze on one in seven of Londoners in the sector and threatened to make a further 60,000 homeless.

Relief. But don’t get carried away. The Office for Budget Responsibility notes that a fresh freeze is scheduled from 2025-26 which, should it stay in place, would erode the shift announced by Hunt if rents continue to rise. For its part, London Councils underlined that one on 50 Londoners live in temporary accommodation. The cross-party body’s acting chair Claire Holland described this as “a critical risk to town hall budgets”.

The capital’s business bodies sounded as upbeat about the statement as they plausibly could. The London Chamber of Commerce & Industry welcomed changes to National Insurance and business expense taxes and BusinessLDN praised a “serious attempt to take the handbrake off the economy”. Yet they and others, such as the Heart of London Alliance, were once again left to regret the lack of a long-term capital funding arrangement with Transport for London and the refusal to bring back VAT-free shopping for international visitors.

Why might that be? Just maybe because nothing must be done that might be seen as taking care of London, as a city, as an electorate and as a target for “red wall” grievance with a general election not far off and never mind that without a thriving, productive London economy, low-growth Britain will continue.

The most recent Office for National Statistics figures for regional economic performance tell the same old story: London with the largest increases in growth; London generating by far the largest net “fiscal surplus”, meaning each Londoner on average contributing well over £4,000 a year in taxes to the cost of services in almost every other part of the UK.

But, of course, the populist cry is that “London gets everything”, which means London must get nothing special, whatever its needs and however much that hurts everywhere else.

Last week, Conservative mayoral candidate Susan Hall stood next to roaring traffic in Hendon exulting with her new party chairman, “proud Northerner” Richard Holden, about the £325,804 million allotted to London allocated by the Department for Transport for mending potholes, .

Neither mentioned that it is scheduled to be dished out over an 11-year period, and represents less than three per cent of the government’s £8.3 billion of “additional highways maintenance” cash for a region that produces 22 per cent of UK GPD and has seen less than a pittance from the £500 million of Vehicle Excise Duty collected from its motor vehicle owners each year spent on their own roads.

Perhaps Hall has forgotten that in January 2021 Sadiq Khan accepted the offer of her London Assembly Conservative colleague Keith Prince to join forces in lobbying the government to have that £500 million devolved to the capital for its own use as part of rebuilding Transport for London’s Covid-ravaged finances. Seen in that context, the £325,000 million over 11 years is peanuts – a soundbite sum – for which others have argued harder than the struggling Tory City Hall pretender.

Meanwhile, TfL must revisit its business plan, the West End economy goes on lagging behind those of overseas rivals, and the capital’s housing problems keep deepening. The “levelling down” of London continues.

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Categories: Analysis

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