London’s Economy

I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on securing this debate. He rightly highlighted issues of housing, skills and transport as key to the future of London’s economy. Most of us would agree with most of the comments made by the hon. Member for Cities of London and Westminster (Mr. Field), who gave such a clear exposition of London’s economic position from his unique position as a representative of the heart of London’s economic and financial centre. I want to highlight not only what London contributes to the UK but, as the hon. Gentleman intimated, the fact that it has a much wider role internationally. In London, productivity is 20 per cent. higher than in the UK as a whole. In inner London, which includes my constituency, productivity is 38 per cent. greater than in the UK as a whole. London provides 15 per cent. of the UK’s work force with jobs and nearly 20 per cent. of UK output. We need to consider London in the international context; it really is a world city in every sense. As the Member for Hackney, South and Shoreditch, in which the Olympics will partly be based, it is important that I should mention investment in the Olympics, a significant contributor to the future and regeneration of part of east London, which we hope will create hundreds of thousands of jobs and housing places—in fact, we know that it will; the finances were pinned down last week. There will be investment in housing, jobs and skills for my constituents and many others in London and the UK. Although it is true that my constituents have benefited particularly from the Olympics, given that every £1 that they spend will be matched by £3 of taxpayers’ money and general investment in the area, business up and down the country will also receive a huge boost, as other sites are chosen to become training centres for the Olympics and other businesses up and down the UK get ready to bid for the many contracts that come out of the Olympics. When we bid for the 2012 Olympics, it was clear that during previous Olympic bids there had been a debate about whether Manchester or Birmingham should also be allowed to bid. The International Olympic Committee made it clear that only a bid from London would be considered. That is a living example of the pull of London and reflects its position among other world cities. I do not decry the cities represented by other hon. Members, present or not. Other cities clearly have a role to play, too, but nothing can replace the pull of London. Sadly, my hon. Friend the Member for North-West Leicestershire (David Taylor) left before he heard me say that; perhaps I have saved myself some grief. Much is rightly made of London’s financial clout and its role as a financial centre. The hon. Member for Cities of London and Westminster said everything that needed to be said on that. However, London’s creative businesses have not been mentioned so far, and they are a huge area of success and growth in our city and the country. My constituency is a hub of creative talent for individuals and businesses. We believe, although it is difficult to prove, that we have more artists in Hackney than in any other European local authority area. Some of the artists I deal with, both as a trustee of SPACE and otherwise, have suggested that there should be a tax break for artists. The mayor of Hackney, knowing the number of artists in Hackney, was not keen to reduce the local council tax and I am sure that the Government would not want to follow that route. However, there are other ways in which we can support creative businesses, which all add to London’s value-added status, as mentioned by the hon. Member for Cities of London and Westminster. I refer the Economic Secretary to a report by the Mayor of London’s economic think tank, which was called ““Creative London””. It highlighted a wedge from Shoreditch, in my constituency, out towards west London and Oxfordshire that shows all the things that make a creative city. I refer hon. Members to the work of the US academic Richard Florida and to his book ““The Rise of the Creative Class””, which highlights the ingredients that are needed to make a fully creative economy. London has those ingredients. It has diversity—in my constituency, more than 300 languages are spoken. It has tolerance built on that diversity across the city. My hon. Friend the Member for Hendon can speak about that in his constituency, where he plays such an important role in community relations. London has 43 centres of academic excellence, which are also a major contributory factor. Good transport links, through airports and other means, help to make London that hub. Whatever other cities want to achieve, they will not take a long time to catch up with London’s regional status. However, London needs to remain internationally competitive if it is to remain a cash cow for the UK economy. London is growing. By 2016, an additional 500,000 will live in London and it will be home to 8.1 million people. We are living through that growth. When we have difficulty getting on a tube or a crowded bus, that shows the strain on our infrastructure that the growth that we are trying to house in the London boundaries creates. If we want to see London retain its status as an international city, competing with New York, Frankfurt and other centres, we need the investment in housing and transport to continue. I want to touch particularly on transport and talk a little about housing. Transport for London has proved to be one of the best elements of governance of London by Londoners. Investment in buses has seen London as the only city in the UK where bus use has increased at the same time as car use has decreased. It is important for the Economic Secretary to recognise that TFL has an AA rating and is a prudent financial manager. It is a body that has proved by its track record that it can invest and can raise finances to invest, as well as spend public money wisely. TFL’s 2025 plan—I shall not go into it in detail, as my hon. Friend the Member for Hendon has done so—has projected the impact of population growth in London. Under its current investment plan, which runs to 2010, we will see London going only so far. Thereafter, we must have a seamless transition to the next wave of investment, both from the Treasury and from private markets, as TFL has proven capable of obtaining such funding, or we will go backwards. When I go to get on the tube in the morning, I often have to let three trains go past. That is because we are living through growth. That cannot continue if we want to see London compete.