Blog: In London’s fair city

Five months to go before London’s Mayoral Election, here are five ideas to make London more just and equal.

In this mayoral election year, let’s hope that London catches a cold from New York’s sneeze. The current Mayor of New York City Bill de Blasio has taken a strong stance against the massive and growing wealth gaps in the city. Whilst not all his policies have had the desired impact or defeated vested interests (as this terrific Atlantic article describes), the commitment seems genuine, and public support has sustained beyond the election promises.

With five months to go, all of London’s mayoral candidates are making detail-light noises about making London fairer, more equal, and more socially just. Anyone serious about this will have battles to fight. A fairer London would need to challenge orthodoxies of power, culture and resources. It will probably require a house price correction that might hurt those betting their pension or shorter term income prospects on the opposite continuing to happen. It might challenge the relatively trouble-free route to Russell Group universities that children like my own seem destined to enjoy, whatever school they go to. It would require a new deal with our important, innovative, but often rent-seeking Financial services industry.

Our forthcoming Inclusive Growth Commission will build on the successful City Growth Commission to explore some of these issues with the rigour required. In advance of this, here are some flightier ideas, sufficiently half-formed for all the mayoral candidates to play with. Whilst not comprehensive, they could help to turn the dial, so that London’s enormous riches, financial, social and cultural, are much more evenly distributed across the city, and greater equality becomes the route rather than the barrier to even greater prosperity.

1)     Create a highly punitive ‘empty homes’ tax

London’s housing crisis, a product of decades of poor policy, is at last at the top of every candidate’s agenda. Whilst only a small piece of a massive problem, the growing ‘buy to leave’ trend from largely foreign investors is both exacerbating rental shortages, and creating a visible symbol of the craziness. My Sunday canal run from Hackney through Canary Wharf passes hundreds of empty waterside properties. Marginal increases in council tax appears an insufficient disincentive. Instead:

Would it be possible to tax owners of empty homes 40% of the estimated monthly rental income – the tax they would have to pay had their property been rented (but probably even more, since no offsetting would be possible)? Discretion and resource might need to stay local, so the power could be given to London’s local authorities, with GLA stewardship. Owners might be given six months grace, and the valuation might be better linked to council tax bands, to avoid a whole new valuation system. Hypothecation would enable any revenue raised to be spent on local housing. Just as importantly, if successful, an increased supply of rental properties could help bring down rents overall.

2)     Use public procurement to reduce excessive pay

The Mayor’s public procurement role has high potential leverage, and is already being used to force the London living wage and other employment-related obligations on otherwise reluctant companies. Could public procurement make a difference at the other end of the scale, by depressing the excessive salaries and day rates of some contractors? Imagine if, say, a council's invitation to tender stipulated that no person in any proposed budget could be paid more than a certain daily rate - say, between £700 and £1,000 per day? My guess is that this will seem like a high cap to many, but low to those larger companies whose livelihoods depend on public procurement. Like various celebrities' reactions to the reintroduction of 50p tax rate, these highly paid experts might threaten to take their expertise elsewhere, but I'd suggest we call their collective bluff.

3)     Give London’s public servants the right to the city

From the failing boroughs of the 1990s, a combination of improved local authorities and a generally efficient (if not that visionary) Greater London Authority has supported significant improvements to public services. From reducing crime to improving schools, almost all of London’s citizens have benefited from a city that is less dysfunctional. Sustaining improvement in our good services, and turning around those who aren’t there yetrests on continuing to attract talented public servants to work and stay working in the city. The housing crisis renders this increasingly difficult andwhilst no panacea to this urgent issue, could London find other approaches to valuing and keeping its teachers, nurses and social workers? How about free weekend and evening travel and free or subsidized access to our cultural and other venues for all public servants?

4)     Give the GLA some real levers of power to help narrow attainment gaps in  schools and colleges

The improvement in London’s schools is a globally renowned success story, best told in CfBT’s excellent Interesting Cities report. Whilst London does better than anywhere in the UK in narrowing achievement gaps, those gaps remain stubbornly wide, and continue to widen as children grow older. London’s independent schools retain their hegemony on access to elite university places and graduate positions, and the numbers who are not in Education, Training or Employment remain high, especially in particular ethnic groups. With a national funding formula bound to hurt London’s school budgets, the Further Education sector facing its own crises, and national attention diverted towards schools in the North and the coast, recent improvements could prove fragile.

As well as a London-wide approach to skills, the Greater London Authority should demand from the Department for Education a London-wide commissioner, genuinely neutral about the relative efficacy of academies versus other kinds of state schools, and focused on improving equity across the city. In addition, the GLA should gain a greater handle on school admissions, possibly with devolved power from the current admissions adjudicator, and smoothing paths towards more equitable admissions systems, including favouring local lotteries over selection by catchment area.

5)     Legalise cannabis for medicinal use, and spend the tax receipts on young people’s mental health services

I know that this would currently require UK-wide legislation, but perhaps, after more than a decade of growing powers, London could lead the way in a trial that could be rolled out nationally - more than Devo-Max, you could call it Devo king-size. The arguments for legalization have been made elsewhere, and are proving trouble-free in various US states as well as EU countries such as Portugal. Hypothecating tax receipts gained with improved funding for young people’s mental health would provide urgently needed additional resources to an issue growing in importance and public concern. It would also tacitly recognise the link between heavy cannabis use and poor mental health in young people, a problem that legalization could, unless carefully handled, add to. Funding would be spent on targeted support on the most vulnerable, and more general awareness raising on the mental health risks of cannabis use.

Making London fairer and more equal will, of course, take more than policies, whether determined by town hall, city hall or Whitehall. It will need a collective attitude shift amongst London’s citizens, and a renewed mobilisation and targeting of all of London’s assets in pursuit of an ambitious social goal. London’s citizens have the creativity and spirit to turn London into a new global leader in inclusive, sustainable urban prosperity. Do our politicians?