London has a poverty problem that doesn’t hurt hard-up Londoners alone. The latest study to quantify the paradox of a city routinely characterised as rich having one of the highest poverty rates in the country puts it at an unacceptable 24 per cent, with children especially badly hit.
That matters most profoundly to those struggling to make ends meet. But it matters too – or ought to – to all of the capital and all of the country. London’s economy, like it or not, makes the United Kingdom’s world go round. Imagine how much better that world could be if the least well-off in London were better-off and making everyone else better-off too.
The London Growth Plan, the work of City Hall, London Councils and many others unveiled last week includes among its key ambitions raising the “real household weekly income” of the lowest-earning 20 per cent of Londoners by 20 per cent within ten years.
Appearing on Politics London on Sunday, Howard Dawber, Sir Sadiq Khan’s Deputy Mayor for Business and Growth, spoke of this, calling it a poverty reduction target that is linked to another target in the Growth Plan – boosting London’s productivity. “We’re looking at a revolution in adult skills,” Dawber said, “and a real focus on matching people to jobs”.
“Too many Londoners are excluded from contributing to and benefiting from growth,” the plan itself says. “This blights their lives, reduces London’s productive potential and undermines social cohesion.”
How is this exclusion to be reduced? The plan sets a ten-year goal of raising the disposable income of London’s lowest-earning households by an average of £50 a week, after they’ve met their housing costs. How will that be achieved?
London government, regional or local, cannot do this by itself. Neither can growth alone, as the Growth Plan itself acknowledges. It points out that national government commands the “most powerful tools” for tackling poverty, such the tax and benefits system, setting minimum wage levels, enforcing employment rights and – the one so often forgotten – bringing down the cost of childcare.
However, better health, skills and jobs, more affordable housing and nurturing small businesses can be brought about by government bodies closer to Londoners’ homes. Where housing is concerned, getting anything built at all is difficult right now, thanks largely to interest rates and the costs of materials, but also to shortages of labour. That has been a problem for at least ten years. And it’s not just the construction sector.
A London Chambers of Commerce and Industry survey of its members, published in late 2022, identified a widening “skills gap” despite the city’s unemployment rate being low. Everything from advanced digital programming and web design to written or verbal communications abilities were in low supply, contributing to companies’ growth being held back, less productivity and low employee morale, partly caused by overwork.
Getting more Londoners in better shape for securing and retaining better-paid and more fulfilling jobs is therefore picked out in the Growth Plan as a big priority. It pledges that an “inclusive talent strategy” will enable London’s careers, skills, employment and health systems to work together more effectively and “link the work and career ambitions of Londoners to a truly employer-led skills, careers and employment offer”.
The health part is deeply serious: new figures from City Hall economists show that around 920,000 working-age Londoners, about 15 per cent of the city’s working-age population, say they have a long-term health condition that limits the amount of work they can do, or how much. That’s up from around 720,000 pre-pandemic.
The plan picks out as a success the delegating in 2019 of London’s Adult Skills Fund (previously the Adult Education Budget) to City Hall – one of the few examples of the Tories giving the Mayor of London additional autonomy. This has meant the roughly £320 million made available each year being spent in ways better tailored to local need than Whitehall civil servants might have achieved – evidence to back the case for more and deeper devolution.
The ideals of the Good City can never be lived up to while a quarter of its people are living from hand to mouth, and in too many cases only just. Some parts of Greater London experience far more poverty than others, notably in the east and in Tottenham, but it exists in the most prosperous suburbs too.
Whose interests does that serve? Not London’s, which pays a price in crime, illness and hopelessness and pressures on schools and services and loss of human potential. And not the UK’s, whose nations and regions find it harder to solve their own problems if London is burdened by too many of its own. Every tool in the box should be used to lessen poverty in London, and the more of them in the hands of London government, the better.
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