UK Economy (London)

Part of the debate – in Westminster Hall at 2:00 pm on 10th March 2004.

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Photo of Harry Cohen Harry Cohen Labour, Leyton and Wanstead 2:00 pm, 10th March 2004

The point is well made, and I will not add to it.

Failure to invest in London's transport infrastructure will result in losses to both the London and UK economies. For instance, if there were a failure to invest in Crossrail, the country would miss out on an increase in GDP of at least £19 billion. Analysts have suggested that Crossrail could support more than 20,000 additional jobs in central London by 2027. It would link the capital's major business centres, railway stations and Heathrow, and that would improve business opportunities throughout the country. I also urge the Government to approve the final funding scheme for the East London line extension. That will join up a significant proportion of the most deprived wards in London, bringing regeneration, new jobs and economic development.

I shall talk about poverty and worklessness. London is a city of great disparities. Inner London is by far the most deeply divided part of the country, with the highest proportion of rich and poor people anywhere; 48 per cent. of inner London children are poor, and ethnic minorities make up 29 per cent. of the population and have low employment rates. Women with children face particular problems in London's labour market. Policies to improve work incentives and opportunities for parents and people with relatively low skills are required. Increased availability of affordable child care and substantial skills training must be two key priorities for the Government.

The housing demands created by London's growing economy and population have not been matched by adequate supply. As a result, London's house prices have risen disproportionately. Between 1995 and 2002, the increase was 149 per cent. compared with 87 per cent. for the whole of the UK. High house prices create a need for affordable housing. The lack of affordable housing for intermediate and key workers has led to understaffing in our public services, which are important. That is a major problem. Increasing supply, such as at Thames gateway, takes time. For now, intervention should be focused on making housing supply more responsive to market conditions; for instance, social home providers should be utilised more effectively. The Government should also give the Mayor and the Greater London authority strategic control over public housing investment, as is the case in other regions.

I turn to public services, and in particular education and health. The key problem facing such public services in London is recruitment and retention of staff. London has a high vacancy and turnover rate for teachers and health workers. Research shows that in 2003 the cost of living in London was between 17 and 30 per cent. higher than in Edinburgh or Manchester. The cost of living in London is particularly high for the lowest income groups. The only effective way significantly to improve recruitment and retention of key workers is to compensate them financially for the relatively higher cost of living in London.

I move on to crime and community safety. Although significant progress has been made in tackling crime in recent years, London still suffers disproportionately from some of the crimes that are most costly to society, such as robbery and violence against the person. Levels of worry about crime and incivility—antisocial behaviour, street drug dealing and use, litter, rubbish and graffiti—are high in London. These fears have a worse effect in communities where there is economic deprivation, black and minority ethnic communities, women and homeless people.