(1 day, 12 hours ago)
Westminster HallRead Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Joe Powell (Kensington and Bayswater) (Lab)
I beg to move,
That this House has considered London’s contribution to the national economy.
It is an honour and a privilege to serve under your chairship, Mr Western, for this important debate on London’s contribution to the Government’s national growth mission. I am proud to be a London MP, and of the contribution that our great city makes to our country, and to the world. It is disappointing that, in some quarters, London-bashing has come back into fashion. People want to talk down our city for their own political agendas or—dare I say it—play vigilante for likes on social media. I hope that today we can instead focus on the mutual benefits that a strong London economy brings to the UK.
We all know that the problems inherited by this Government are far bigger than London alone. For too long, our country has missed opportunities to unlock growth and potential for all our people and places. Since the global crash in 2008, productivity has flatlined. Stagnation has taken hold, hurting not just London’s prospects but the prosperity of every community across the UK. Regional divides were allowed to deepen, potential was wasted, and growth was squandered. The promise of levelling up proved nothing more than a gimmick: more hanging baskets than a genuine effort to tackle regional inequality. It is welcome that we have a Government determined to change that with their relentless focus on tackling regional inequality by delivering good jobs, putting more money into people’s pockets and giving local communities real power over the decisions that affect them.
The Green Book review and the commitment to place-based growth are important steps forward because every community deserves a fair chance to thrive, but we should be clear that tackling regional inequality must never mean holding back our greatest national economic asset. That has never been a strategy for success. London is one of the most successful cities in the world, a gateway for global talent, investment and trade, and an economic engine that drives prosperity far beyond the M25. We finally have a Labour Government working hand in hand with a Labour mayor to deliver, for example, the London growth plan that I know the Minister recently helped to launch, which is a blueprint to boost productivity and build the infrastructure that matches that ambition. It aims to ensure that London contributes an extra £27.5 billion in tax revenue by 2035. That is money for our NHS, our schools and our public services everywhere in this country.
To unlock London’s full potential, we need to be clear about what more needs to be done. I know that colleagues will talk in this debate about ensuring that our streets are safe, with properly funded policing, and that our councils have the resources they need to deliver basic services to some of the most deprived communities in the country. I will cover three areas at the outset: first, ensuring that London remains a magnet for global talent, attracting the skills that we need to lead the industries of the future; secondly, delivering the homes that the capital needs, which means social and genuinely affordable homes that support strong, thriving communities and provide the foundation for growth; and thirdly, a transport system fit for a world-leading city.
Let me start with talent. The recent immigration White Paper offered some welcome signs, by recognising that the global race for talent is accelerating and Britain must compete in that race. We want a controlled immigration system with democratic consent, and the Government are right to prioritise that, but we must not let that system become a barrier to attracting the people who will drive our future growth. Many businesses in Kensington and Bayswater tell me that they are struggling to hire the people they need. I believe that we need urgent reform of how we attract talent. That means the global talent visa, of which only 4,000 were issued last year. I think we should aim for at least 10,000 a year, to send a clear message that Britain and London are open for business, and for talent. We should also introduce a credible investor visa—not a return to the failed pay-to-play schemes of the past and the golden visa fiasco, which was tainted with corruption, but a genuine pathway for entrepreneurs in high-growth sectors like biotech and clean energy.
The west London tech corridor, for example, is ready for exponential growth, but it needs capital, talent and leadership, and world-leading institutions like Imperial College London rely on international talent to stay globally competitive. The proposed UK-EU youth experience scheme is therefore an important step forward. I know that businesses welcome it, including those in hospitality, where cost pressures have been acute. We should build on it, because if we want Britain to lead in the industries of the future, we must be a country that welcomes talent.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for rightly bringing this forward. For the record, I wish to see London doing extremely well, because if London does well, I think we all do well. In 2024, 264 foreign direct investments arrived in London, which indicates not only the importance of London but the potential that people see for investment. Does he agree that when it comes to encouraging foreign investment, there has to be a spin-off for Belfast, Cardiff and Edinburgh as the three regional capital cities? The Minister may have committed to this, but perhaps he can build on it: London does well, and the spin-offs are for the rest of us.
Joe Powell
I agree with the hon. Member. Before this debate, I was looking at the Transport for London budget. It contributes £11 billion to the UK-wide economy through the construction of what we hope will be new trains on the Jubilee line, the DLR and hopefully the Bakerloo line, and supports 100,000 high-quality jobs across the country. Transport and manufacturing are sectors that have huge spin-off potential across the country.
Another such sector is housing. It is a huge relief that we now have a Government who recognise the true scale of the challenge and are prepared to put serious investment and policy change behind it. In my constituency, there are 3,000 families on the social housing waiting list and more than 2,000 people living in temporary accommodation. The housing crisis is not a victimless problem. Many colleagues see it every week in their surgeries and inboxes.
Ben Coleman (Chelsea and Fulham) (Lab)
Does my hon. Friend recognise that London has the highest housing costs in the whole country and a quarter of Londoners live in poverty? Coming down the track towards London is the Government’s fair funding review, under which local authorities in London could lose up to £700 million in funding. This comes after hundreds of millions of pounds were cut from local councils under the Conservatives’ austerity programme. It could hit my boroughs of Hammersmith and Fulham, and Kensington and Chelsea, which we share, particularly hard. Does he agree that the Government’s funding review should measure deprivation after housing costs so that the level of deprivation in London is accurately captured?
Joe Powell
I thank my neighbour for his intervention. We all welcome a fair funding settlement that recognises the huge levels of regional inequality in this country, but it is correct and fair for it to be based on accurate and up-to-date data and for that data to include the very high proportion of Londoners’ incomes spent on housing, which pushes up the poverty numbers. We have some of the most deprived communities in the country, often hidden within quite wealthy boroughs, so we also need to capture the geographical areas of deprivation. I also suggest that the Government include the daytime population, because lots of commuters come in and use council services but are not necessarily captured in the census.
Temporary accommodation, as we know, costs London councils £4 million a day. Obviously, the long-term solution is to build the houses that we need, but in the short term we should not hit everyday services that people need on the back of that budget.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
I thank my hon. Friend for securing today’s debate. It is timely, both in terms of London’s potential and current contribution to growth and the fair funding review. He mentioned the £4 million per day that London local authorities spend on temporary accommodation. My own local authority, Westminster city council, spends £66 million over and above what it would be expected to spend on temporary accommodation. These costs are a function of the long-standing failure to build the genuinely affordable homes that we all know are so desperately needed. Does he agree that the additional temporary accommodation costs that London local authorities face should be recognised in funding settlements, and in the capital funding assessments of the affordable homes that are built? Does he also agree that the systemic problems that we have with homelessness in London need to be recognised in order for us to really fulfil our potential?
Matt Western (in the Chair)
Order. I remind hon. Members to keep interventions short.
Joe Powell
My hon. Friend is right. There is obviously no quick fix to this problem. It takes time to build new housing and ramp up the pipeline for it, but the current situation is not tenable. London boroughs compete against each other for increasingly expensive temporary accommodation with very low levels of quality. First and foremost, that hurts families and residents, affecting their life chances and preventing them from playing a full role in the economy. It is an urgent issue. I know the Government are working on a temporary accommodation plan—we have discussed that in the Housing, Communities and Local Government Committee. We hope to see more detailed proposals of how to fix this problem in the short run while we build the housing that we need.
The target of 1.5 million homes in this Parliament hugely depends on building in London. Of that 1.5 million, London’s target is to deliver 88,000 homes a year in this Parliament, so the spending review announcement is critical. The £39 billion in the affordable homes programme, including £11.7 billion for London, the 10-year rent deal and the new low-interest loans will make a real difference.
I was also pleased to see something that I have been calling for, which is equal access to the building safety fund for housing associations. Many housing associations have been putting more capital into remediation and not into building new homes. My strong belief is that the legacy of Grenfell must be that everyone, no matter where they live, can access a safe and healthy home. We should not have a false choice between building the homes that we need and building safety.
Deirdre Costigan (Ealing Southall) (Lab)
I congratulate my hon. Friend on securing this important debate. He mentions the need to ensure that the legacy of Grenfell is kept in mind and that building safety is at the forefront of building homes in London, but has he noted that, in the last quarter, there were zero starts on housing in 23 out of 33 London boroughs? Much of that was not because of a lack of funding—there is huge investment from the Government—or because of planning issues, but because of the Building Safety Regulator being very slow in agreeing to applications. Does he agree that the Government might need to look at the resourcing of the Building Safety Regulator? Keep the regulation, but put more resourcing in.
Joe Powell
My hon. Friend is right. It is welcome that the Building Safety Regulator will be getting 100 new staff, and that Andy Roe has come in to chair it. I am sure the Minister can give more detail. We also need to see faster progress on remediating buildings in London. The new London remediation board, co-chaired by the Greater London Authority and central Government, is really important for that too. The reason this is important for growth is because it is sucking time and capital out of the system to build the new homes that she talks about.
I agree that the statistics on new starts have to be turned around. Everyone in this city, including the key workers who will not always access social housing allocations—the teachers, nurses and police officers—need different housing options, including different affordable housing products. Those are the people we are increasingly pushing out of central London, and out of London altogether, which is a huge challenge for our city.
Housing and transport go hand in hand, and both are fundamental to delivering growth. Without modern, reliable public transport, we cannot unlock the new homes that London needs, or drive the business growth that will power our city’s future. For too long, the Conservatives held back Transport for London with short-term and inadequate funding that prevented it from planning for the future. That is why I really welcome this Government’s commitment to a long-term funding deal. Sustainable investment of £2.2 billion over, I think, four years will deliver things like new trains on the Piccadilly line and the docklands light railway—the Bakerloo line, too, I hope—as well as new signalling on 40% of the tube network and a new tram fleet. As I mentioned to the hon. Member for Strangford (Jim Shannon), the TfL supply chain is critical across the country, supporting high-quality jobs everywhere, but we must go further.
It was pleasing that in the spending review the Chancellor recognised, for example, the potential growth and housing benefits of the DLR Thamesmead extension, and committed to working with TfL to explore all options for its delivery. I ask the Minister to keep up the momentum on that project and look into alternative financing that might be able to come in and get it moving as soon as possible. I am sure hon. Members will talk about other vital projects such as the west London orbital.
Deirdre Costigan
I thank my hon. Friend for giving me an opening to mention the west London orbital, which is another important project in connecting up west London and opening up opportunities for both employment and housing. Does he agree that both TfL and the Government should look at innovative and creative funding options such as tax increment funding as a possibility for such initiatives?
Joe Powell
My hon. Friend is absolutely right. A combination of financing instruments was used to fund the Elizabeth line. That approach has huge potential for big infrastructure projects in London, including the proposal for a new St Mary’s hospital. It cannot be right that we are reliant on the Treasury capital budget for projects that we know will pay back over and above in the long term. There is a strong appetite to explore how different financing mechanisms could get these projects moving.
We should harness London as one of our greatest assets, not at the expense of other regions or of tackling regional inequality but for the benefit of the whole country. We should tackle regional inequality head-on, and I believe that London is part of the solution to that problem.
Matt Western (in the Chair)
I remind Members that they should bob if they wish to be called in the debate. Just a gentle reminder please to speak through the Chair —so “you” is me, as Members will appreciate. At this juncture, I do not think that we need to put a time limit on speeches.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to serve under your chairmanship, Mr Western. I thank the hon. Member for Kensington and Bayswater (Joe Powell) for securing this important debate. London is an economic powerhouse, which generates revenue for the entire country. The capital city’s contribution to the economy is nearly 25% of the UK’s entire GDP.
While redistribution of revenue across the UK is important, it should be noted that London has some of the highest rates of poverty. In particular, it has the highest rate of child poverty, at 35%, compared with a national average of 29%. Disparate income bands and living standards are more evident in London than anywhere else in the UK, but the cost of living is also greater in London than in any other area. The average London house price is more than double that in the rest of the country.
I raise those points because the Government’s changes to local authority funding will mean that London councils face a funding shortfall of an estimated £500 million. Consequently, most London boroughs will have to raise council tax by the maximum amount each year to raise revenue for the funding of key statutory services. It also means that some councils will be threatened with bankruptcy.
Redistribution of wealth across the UK is important, but the absence or poor use of measurements in the Government’s fair funding formula will produce unfair results for Londoners. The index of multiple deprivation is being used as a need driver in the fair funding formula, but, as the hon. Member for Chelsea and Fulham (Ben Coleman) pointed out, that index does not include a measurement of deprivation after housing costs. London residents pay the highest average rents in the country, so excluding that statistic will result in an unfair measurement of deprivation, and London residents will lose out unfairly.
Natasha Irons (Croydon East) (Lab)
The hon. Member is making excellent points. On deprivation and the cost of housing, does she agree with me that when we factor in London’s housing costs, London becomes the poverty capital of the country? Without vital funding for housing in London, London does not grow. If London does not get the funding it needs for housing, it holds the rest of the country back.
Sarah Olney
I thank the hon. Lady for making that point. She is exactly right. Housing costs in London are far above the average for the UK as a whole. The average Londoner has to pay these costs out of an income level that is on average higher than across the country as a whole, but not to the same magnitude. Measuring deprivation based only on income before housing costs is a key unfairness for Londoners, because their housing costs are so much greater. She is absolutely right that if we underfund London, as will happen if the measure of deprivation after housing costs is not used, London will be underfunded and that will threaten the economic development and growth of the UK as a whole, because London is so essential to what happens across the UK.
The number of visitors that an area receives is also being used as a factor in the funding formula, but the review is using figures from the 2021 census. We were still coming out of the pandemic when those figures were collected, so London had significantly fewer visitors than in an average year. As somebody who has regularly travelled from outer London to inner London over the last few years, from 2021 to 2025, I can assure the Minister that the number of people on our tubes and trains has grown significantly. My data is anecdotal, but I am sure my impression is shared by many Londoners who made similar journeys in that period. If visitor numbers are to be used as a measure to feed into the fair funding formula, it is vital that up-to-date figures are used. I urge the Government to review the formula with updated figures to ensure that it does not produce inaccurate results, which will again result in unfair distribution of Government grants.
I and Liberal Democrats in general very much welcome the Government’s announcement of a 10-year infrastructure plan—a clear vision for housing, the economy and social infrastructure, which is required to drive growth and investment—but I am disappointed that the Government have yet to announce whether the £1 billion provision from the structure fund will be allocated towards the repair of Hammersmith bridge in my constituency, which, as I am sure the Minister knows, has been closed to motor traffic for six years. We remain uncertain about whether the Government intend the bridge to be repaired and whether they will commit to providing the funding for those repairs. Any indication of their position from the Minister will be welcomed by my constituents.
The closure of the bridge has affected local residents and commuters, particularly disabled and elderly residents, who have been cut off from the other side of the river, and emergency services remain unable to cross. It has also had a massive impact on businesses just south of Hammersmith bridge that relied on the passing trade. We look forward to the announcement of what the structures fund pot will be used for, and hope very much that some funding towards Hammersmith bridge will be included. I urge the Government not to miss that opportunity.
The bridge itself is a tourist attraction in my constituency. It is one of London’s oldest bridges—there has been a bridge on the site since the 1820s, and the current structure dates from the 1870s—and I dare say the fact that it is a museum piece is one of the many issues that has prevented funding from being allocated for its repair until now. It is one of many wonderful tourist attractions in my constituency. Kew Gardens was the second most visited paid-for attraction in the country last year. We also have the wonderful wetland centre just south of Hammersmith bridge and many other wonderful tourist sites, not least the park after which my constituency is named.
London as a whole is visited by more than 20 million tourists every year, who bring with them significant contributions to our economy. A key factor for tourists is to feel safe when choosing London as a destination, but the capital’s reputation as a safe city to visit is on the decline. It is vital that London has visible and sufficient policing to tackle crime and keep visitors and residents safe, but the Chancellor’s spending review did not include additional funding for the Metropolitan police, despite their commissioner warning that “eye-watering cuts” would have to be made if funding were not provided.
The cuts will be felt in my constituency. The disbandment of the dedicated royal parks police unit is of great concern to my constituents. The parks police serve Richmond park diligently, ensuring that crime and antisocial behaviour are kept to a minimum. Their removal will mean that our already stretched safer local neighbourhood teams have to take on additional responsibilities in their absence.
The Richmond Park constituency used to be home to three police stations, but after years of cuts not a single one remains, even though Barnes is one of 72 wards in London that are more than a 13-minute drive away from the nearest police station. These cuts cannot continue, and I urge the Government to stick to their commitment of increasing the police presence in London and across the rest of the UK. I receive daily emails from my constituents expressing their concerns about theft, violent crime and the lack of visible policing. Will the Government be able to provide assurances that my constituency will not have fewer officers serving it at the end of this year than before Labour took power?
Investment in London can and does boost economic growth, which provides investment for other regions. I urge the Government to understand and acknowledge the significant contribution that London makes to our national economy. London must not be short-changed by the Government. I encourage them to review the criteria for their fair funding formula, to invest in the repairs to Hammersmith bridge and to release more funding for the Met to ensure that residents and tourists feel safe walking our streets.
Dawn Butler (Brent East) (Lab)
It is a pleasure to serve under your chairship, Mr Western. I congratulate my hon. Friend the Member for Kensington and Bayswater (Joe Powell) on securing this vital debate.
If we are serious about national growth, we must invest in London. That should not be in dispute after what we have heard today. London is the UK’s top global city. It is home to more than 9 million people and generates almost one quarter of our entire economic output. Its net contribution to the Treasury now stands at a record £43.6 billion. That is why we need to invest in London—because London invests in the UK. It is essential.
On the way to this debate, I was talking to—or, more correctly, arguing with—a non-London MP, who was saying, “It’s about time we got some of that money out of London.” This is the environment that is being created when we talk about taking from London instead of saying that we need to invest in London and in the regions. We have heard how much tourists spend in London —a whopping £16.3 billion, even while still recovering after the pandemic. If the Government introduced a VAT exemption for tourists, that figure would be boosted, and an overnight accommodation levy of just £1 would bring in some more money, which could be used for the development of London by the Mayor of London. We need to stop the narrative that London is somehow separate from the rest of the UK and that we take from London to invest elsewhere. That was the attitude of the last Government, and it is the wrong attitude; it should not be carried over to this Government.
Let us take as an example the Bakerloo line, which my hon. Friend the Member for Kensington and Bayswater mentioned and which I travel on regularly. It is the oldest train service in the UK, and by gosh, when we are on it we can feel that. It very much needs to be upgraded. It runs right through my constituency of Brent East. If we invested in the Bakerloo line, not only would that make my life easier—although I know this is not about me—but the project would add £1.5 billion to the UK economy and support 150,000 jobs and more than 100,000 new homes. What is there not to like about investing in the Bakerloo line? In addition to that, two thirds of TfL’s suppliers are outside London—the new trains are built in Yorkshire—so that economic wealth is spread right across the regions. This is not London versus the regions; it is London working with the regions for the betterment of the UK. We can and must grow together.
The same applies to our safety and infrastructure. A safe and functioning London not only supports residents and businesses here, but ensures that our capital remains open to global investors, visitors and institutions. As we recently read, people now see London as the place to be and invest in. Companies are moving from the US to the UK: they want to invest here because of our infrastructure and our diversity, which we are proud of.
The reality is that after a decade of Conservative cuts and neglect, our emergency services are under huge pressure and are struggling to survive. The Fire Brigades Union had a lobby here yesterday. Ten or 20 years ago, there was talk of reducing the fire service because we had so few fires. Now, with the advance of electric cars, mopeds and bikes, we have more and more fires, so we need to invest. The Metropolitan police has delivered £1.2 billion in savings since 2012-13, and there is now talk of frontline cuts. We just cannot have that in London. That is a threat not just to London’s safety, but to our economic stability.
Past investment has delivered. To those who say, “That’s not the case,” I would point out that the Elizabeth line unlocked 55,000 homes, created tens of thousands of jobs across the country and added an estimated £42 billion to the economy. This is how we invest and make money. Not only that: the Elizabeth line has the best air-conditioned trains in the city—I think everyone appreciates that right now. We need to repeat that success, not retreat from it. We need to praise London.
Productivity in London has fallen since 2008. The Conservatives created funding formulas that pushed funding away from the areas that needed it the most. The then Prime Minister talked about that during the election—quite embarrassingly so. Since 2010, my borough of Brent has been forced to cut a whopping £222 million in funding due to the Tory austerity measures, and we still need to deliver. We need to stop cutting and start investing.
We are now behind cities such as Paris and New York in productivity. That should concern every single one of us in London and elsewhere. We need to work with London. I am concerned about the local government funding reforms, because although we are rightly introducing a new focus on deprivation, not including housing is a skewed way of looking at it. Often in my constituency, 70% of people’s earnings goes on housing.
I am always proud to see our London MPs—they are some of the best MPs in the House. I urge the Minister to reconsider the reforms and ensure that they reflect the unique, pressing challenges that London is facing. We should not shy away from that; we should be proud of what London brings to the UK. This is about not special treatment but sound economic judgment. A thriving capital fuels a thriving country. We do not have to choose between London and the rest of the UK. In fact, choosing London is choosing national growth, so let’s invest in our capital, our transport, our safety, our housing and our skills. Let’s back London, and let’s all love London.
Danny Beales (Uxbridge and South Ruislip) (Lab)
It is an honour to serve under your chairmanship, Mr Western. I too thank my hon. Friend the Member for Kensington and Bayswater (Joe Powell) for securing this important and timely debate.
Often, when people think about London’s economy, they think about the City banker at the Bank of England or the towers at Canary Wharf, but London’s economy is so much more than that. The value of London’s economy is dynamic and diverse, and it is visible in outer as well as inner-London boroughs such as Hillingdon, which my constituency lies in.
Uxbridge and South Ruislip is central to London’s economy and our industrial landscape. We are home to major manufacturers such as Coca-Cola Europe and General Mills, which makes everyday products that hon. Members might know, such as Green Giant sweetcorn, Old El Paso and many other good—but perhaps not good for the waistline—products. They are key contributors to the UK’s food sector, which the Government are rightly elevating in their new national food strategy. We are also home to key transport and logistics businesses, with two airports—Heathrow and RAF Northolt—and major freight routes linking up the rest of the country.
We are home to key life sciences organisations and institutions. I recently had the privilege of meeting AAH Pharmaceuticals, which distributes huge amounts of pharmaceutical products just in time to local community pharmacies across the country. There is also our contribution to the defence sector, which the Government are rightly backing with increasing proportions of GDP to rebuild our armed forces. We are home to armed forces industry businesses making parts for our submarines and frigates, our RAF Northolt base, and our service personnel and other associated contractors. The care and health sector also features prominently in our borough, and provides jobs for thousands of residents. The economic case for the role of care is clear, and it is a key growth sector for our economy in London, as well as the country more broadly.
In Uxbridge and South Ruislip we are not just delivering today’s jobs, but tomorrow’s economy. I have had the privilege of meeting with Brunel University, a national leader in engineering and life sciences with a recently opened new medical college. Uxbridge college, our further education institution, has just agreed a partnership with MIT in the United States on engineering, which shows the future-facing nature of our education sector, underpinning the UK’s goal to become an innovation superpower. It is vital that we invest in further and higher education and our skills sector if we are to grow.
London’s economy contributes £500 billion annually to the UK economy. That is both central and outer London. Although we do not agree on much, I am sure the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) would agree that industrial clusters in outer-London boroughs such as Hillingdon are important in their own right, and are exactly the sort of regional engines of growth that our industrial strategy should back. The strategy talks clearly about supporting city regions and clusters with key industries, and Uxbridge and South Ruislip, and Hillingdon more broadly, are perfectly fitted to that model.
There is a growing view that London should take a back seat in investment compared with other parts of the economy, but that is a false economy. When London grows, other regions grow too. The links between regions and nations in the United Kingdom are clear in terms of jobs, tax revenues, exports and supply chains. I remember being the cabinet member for the economy and regeneration in Camden for seven years, when I was involved, to my pleasure, in the knowledge quarter developing around life sciences, tech and AI, with huge multinational businesses, spin-outs and start-ups. It was not just a story about the growth of London and King’s Cross; businesses there were connected to the Cambridge and Oxfordshire arc, and places such as Leeds and other northern cities. Growth in the knowledge quarter benefited the whole UK economy. That is true of so many of London’s economic growth clusters.
Growth in London is not automatic, and it cannot be taken for granted. It needs fostering and investment. That has not always happened effectively over the last 14 years. Issues such as energy grid constraints, particularly in west London, are holding back growth, house building and the expansion of key institutions and organisations. It is vital that we deal with grid connectivity if we are to support London’s growth. Transport investments are key to growth not just in central London, but outer London too. Freight infrastructure needs investing in and we need to support workforce mobility. I concur with my hon. Friend the Member for Brent East (Dawn Butler) when she praises the value of the Elizabeth line, and not just because I take it to work four days a week here in Parliament; it has generally transformed so many parts of our city and other growth towns along the way to Reading and Maidenhead too.
I recently visited the CLIP project, the Central line improvement programme, and it talked directly about how new trains for the Piccadilly line were being built in places such as Derbyshire. There were huge links with jobs, skills and growth through the investment that TfL is making. We need to go further and faster to keep our city moving. The Elizabeth line, particularly the Maidenhead and Reading branch which serves West Drayton, is nearing capacity due to its success. It needs extra trains quickly, and I hope the new stock that this Government have supported financially will serve the Reading and Maidenhead branch. We also need investment. It is a shame, having completed Crossrail 1, that Crossrail 2 is still just an idea and there is not a spade in the ground. Ideally, spades would have continued to move and the digging machines would have moved forward in building Crossrail 2, and we would now be planning Crossrail 3 and 4 to meet the city’s needs and unlock growth potential for the UK economy.
As hon. Members have mentioned, policing and crime is not just a safety issue; it is an economic issue too. Business growth and confidence depend on public safety and people being able to invest, open businesses and go to businesses and high streets with the confidence that they will be free from crime and disorder. Policing in London performs two roles—a local policing role, and vital central and national roles too. That was not always considered when funding was allocated. As hon. Members have mentioned, we vitally need investment in the Met to ensure that it can do both those things to the best of its ability.
Deirdre Costigan
I thank my hon. Friend, and almost constituency neighbour, for giving way. Does he agree that it is important that we have more police on the ground in London, which I believe this Government are ensuring, but also important that those police have powers —which has not happened over the last 14 years? Therefore, would my hon. Friend welcome this Government’s new Crime and Policing Bill, which will bring in respect orders and will also ensure that police can take action against shoplifters who were getting away scot-free under the last Government?
Danny Beales
I completely concur. I have recently been visiting shops, including Sainsbury’s, in my constituency, and have been told of the awful situation over the last 14 years, with theft and shoplifting skyrocketing, and people having a licence to shoplift with the £200 rule under the last Government. Staff in those shops welcomed the news when I told them about the protections for shop workers and the scrapping of the £200 rule. Lots of other measures in the Crime and Policing Bill are strongly needed and much overdue. I completely concur with that point.
Housing has also been mentioned and is vital. I welcome this Government’s record commitment and investment into housing. I believe around £11 billion of that investment will come to London; that is crucial. We have huge amounts of stalled sites, some half-built, in Hillingdon. In Uxbridge, at the St Andrew’s site, the concrete core is up, but the cranes went a number of years ago due to the Liz Truss mini-Budget chaos. A number of other sites, including at the former Master Brewer, have planning permission for hundreds of homes which could make a vital contribution to solving our housing and temporary accommodation crisis. They need bridging capital, investment, loans and investment in affordable housing. I welcome the Government’s commitment to move forward on that agenda.
The industrial strategy is clear that the UK’s prosperity depends on long-term strategic investment in the places and sectors that deliver. Uxbridge, South Ruislip and Hillingdon are among those places that are delivering in food, logistics, care, science, innovation and skills. If we want Britain to grow, we must back London—and Hillingdon—not just its banks, but its factories, freight depots, research hubs and colleges.
Luke Taylor (Sutton and Cheam) (LD)
It is a pleasure to serve under your chairship, Mr Western. I thank the hon. Member for Kensington and Bayswater (Joe Powell) for securing this debate.
London is not where I was born, but for so many of us who come to our great city, it is where our life begins. As a wide-eyed, bushy-tailed teenager arriving to study at Imperial College—as has been mentioned already—in the early 2000s, I felt the visceral sensation of my life changing. London is, and always has been, a melting pot, smorgasbord, tapestry and every other cliché you can find to describe the world’s greatest city—as I am sure all of us present in Westminster Hall agree. That is why it is the honour of my life to be the Liberal Democrats’ Front-Bench spokesperson for this city, which I love so dearly.
As I sat in St Paul’s cathedral earlier this week for the commemoration of the 7/7 attacks, I reflected on what makes London so special: everyday heroes and ordinary working people, who face unbelievable challenges in a city that stands astride hemispheres and cultures, but who get up every day and carry on.
It is often tempting to separate economic progress from cultural pride, but I think they are one and the same. It is the hard work and energy of Londoners that make this city contribute so much to the nation’s economy and society. Yet they face immense challenges: some of the highest rates of child poverty in the nation; crumbling hospitals; crimes such as knife crime and tool theft that destroy lives and livelihoods; profound infrastructure problems that hold back growth and cut off opportunities, not least for the disabled or disadvantaged; and lingering environmental problems, with pollution thick above some of our major roads and dense in our great river.
I cannot pass up this opportunity to ask the Government not to leave London behind or simply continue to tack to the record of the last Conservative Government in failing to take steps to keep London as a world city, and a liveable one too. Yet I fear they are veering dangerously close to that path. Let me start with the hike in employers’ national insurance contributions. If we were looking for a way to actively stymie London’s innovation and business environment, which is already dealing with global shocks and Trump’s tariffs, that misguided tax policy would be right up there.
If Britain is an island of shopkeepers, London is its longest high street. Our economic activity makes up more than a quarter of the nation’s annual GDP. Were it simply the case that such growth was generated just by the hands of a few financial institutions in a glass tower above the City, that would be less impressive. However, it is in the enterprising small businesses—the family-run restaurants that punch above their weight—and the world-leading research institutions, big and small, that London’s real economic powerhouse sits. London’s care workers, bus drivers and street cleaners, who keep our city liveable for ordinary people, despite the rising cost of housing, are the fuel that keep the engine going. To hammer them with what turns out in practice to be a jobs tax is totally misguided.
The Office for Budget Responsibility has shown that the £25 billion a year the hike is supposed to raise is far too optimistic, and the figure seems to be much closer to £10 billion. Indeed, that figure could be more readily and justly raised by reversing Conservative tax cuts for big banks, increasing the digital services tax on the largest multinationals or the remote gaming duty for online gambling firms, reforming capital gains tax to make sure that the super-rich pay their fair share rather than hard-working Londoners being hit by the tax because of the ballooning housing market, or funding His Majesty’s Revenue and Customs to collect the tax that is owed and currently dodged by companies and individuals wealthy enough to afford the best advice.
Governing is about choices, and the Government have made the wrong choice for Londoners and the whole country with the NICs hike. Will the Minister outline whether a review of the policy, or at least exemptions, will be considered at the autumn Budget?
The Government have also chosen not to seriously grip the mantle of the reform that would turbocharge growth most of all: fixing the Conservatives’ botched Brexit deal that has left London languishing outside the European market in so many meaningful ways. It is good that they have begun some of the work of normalising our relationship with our biggest neighbour and trading partner, but they will not budge on the most critical issue of all, which is a new customs union with the EU that would boost growth and, by extension, tax receipts.
Nobody wants to return to the Brexit wars of the last decade, but the Government would do well to remember that nobody voted to make themselves poorer on that day in June 2016. Whether Londoners or the British people, remainers or leavers, nobody wanted to be worse off—and we were all promised by both sides that we would not be. There is a significant opportunity to right that wrong as we normalise our relationship, and the Government are just not taking it.
In much the same way, the Government are failing to invest in the infrastructure that London needs to deliver its share of the growth that Britain needs. Even though we welcome the 10-year infrastructure plan, many of us noted that there was no commitment in the spending review to the capital funding needed for the Bakerloo line extension. As my hon. Friend the Member for Richmond Park (Sarah Olney) so vividly explained, Hammersmith bridge—such a vital artery not just in her constituency but across west London—remains shut, with no commitment to a proper funding agreement to get it permanently reopened. Parts of outer London, like in Sutton in my constituency, remain in effect cut off from the TfL network, because of either poorly performing bus and national rail services or the complete absence of tram or tube infrastructure in the borough. To be absolutely correct about that, we have half a tram stop in Sutton, but we tend not to count that.
London is not just Soho and Chelsea: it is places like Sutton, Hillingdon, Hornchurch and Enfield—proud boroughs with combined populations of millions that must play their part in growing the pie, and that need commuter transport investment to do that. Where infrastructure projects happen, they seem either to be delivered at great delay and overspend, like the new Piccadilly line trains, or to be unimaginative white elephants, like Mayor Khan’s Silvertown tunnel. The new four-year deal for TfL outlined in the spending plan presents a chance to change that. I invite the Minister to outline whether the Government will now look at finally delivering progress on reopening Hammersmith bridge, on the Bakerloo line extension and on the DLR extension to Thamesmead.
It is just not good enough. Many Londoners are left asking why London’s contribution to the nation does not mean that its voice is heard. Compared with its peers around the world, London does not have anything like the appropriate devolved powers. In the patchwork of devolution that has been woven in this country this century, London’s settlement is looking increasingly threadbare and outdated.
The Greater London Authority has nowhere near enough power to shape the mayor’s agenda and hold them to account, and the mayor’s powers are themselves too limited. Not enough money raised in the city can be spent in the city. Local councils, the bedrock of London’s governance, are ignored, prevented from working strategically across the city, and powerless to stop year after year of funding cuts. How else can we explain the actions of a Government who are pushing ahead with a new funding settlement that could leave some councils losing 70% of their spending power? That is particularly foolish at a time when councils are doing great work to boost London’s growth, with superb research and development schemes such as the London cancer hub in my borough of Sutton, which could create thousands of new jobs locally.
Perhaps the most pertinent question is: who really speaks for London? It certainly isn’t Sadiq Khan, who promised us that with
“the winds of a Labour Government at our backs”
he would be able to deliver for Londoners, but on the day of the spending review made himself completely unavailable for media comment. Where was the voice that London needed on that day? He is evidently not as affective, and this Government not as receptive, as we were led to believe. As a result, I fear Londoners are being sidelined in respect of the industrial strategy and fiscal policy.
Why, for instance, is London excluded from the new £150 million creative place growth fund, and from the British Business Bank’s new nations and regions investment fund? Why have the Government not listened to calls, from not just the Liberal Democrats but the private sector, to replace the apprenticeship levy with a skills and training levy that is properly integrated with devolved powers over skills, to give businesses the flexibility they need? Why have the Government not even listened to our calls for lifelong skills grants? I hope the Minister can explain.
We must level up all parts of Britain. There are regional imbalances in this country that are totally unjust—I know that more than most, having come here from rural Lincolnshire—but there is no path to growing Britain without a strong, dynamic, self-governing London. As I stand here having recounted so many of the challenges that London faces in continuing to contribute to the nation’s economy, I wonder again in frustration why, in my role of Liberal Democrat shadow London spokesperson, I am not able to shadow a Minister for London—although I mean no slight on the Minister who is here. There has been one, on and off, for 30 years, and the Government’s decision not to appoint one is a gross oversight for all the reasons brought up in this debate.
Dawn Butler
It is actually not unusual that when there is a Labour Government and a Labour mayor—like when there was a Tory Government and mayor—there is not a Minister for London. Also, on the hon. Member’s comments about our Mayor of London, Sadiq Khan has been the biggest business mayor London has seen. He has been a better advocate for London than any Tory or previous mayor. It is a little bit unjust to refer to him in the way the hon. Member did.
Luke Taylor
The hon. Lady gives a stirring defence of the Mayor of London. We are trying to make the point that there is no cross-Government holistic view of London’s priorities. Londoners need a voice inside the Government: our interests ought to be not divided out across Departments and responsibilities, but co-ordinated and addressed holistically. That is the point about a Minister for London who would be able to co-ordinate Departments and responses.
There needs to be conflict with the Mayor of London—somebody fighting for London and against the Government, whether that is a Labour Government, a Conservative Government or, heaven forbid, a Liberal Democrat Government. We need that conflict, challenge and alternative view, because their goals often do not align perfectly. There has to be that champion, and I do not believe that the voice of the Mayor today is loud or clear enough in that regard. I take the hon. Lady’s points in the positive way that I am sure they were intended.
We deserve the attention, investment and confidence of greater devolution—even more powers for the Mayor to do as he sees fit, as the London regions and councils should direct. We need to keep on doing our bit to drive the economic value and contribute to our great country.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to speak for the official Opposition in this debate, and congratulate the hon. Member for Kensington and Bayswater (Joe Powell) for having secured it.
Although there will always be a degree of party political difference—I am sure the hon. Member for Sutton and Cheam (Luke Taylor) achieved some cross-party consensus when he said “heaven forbid” the idea of a Liberal Democrat Government—what came across clearly in every Member’s contribution, including from the hon. Member for Strangford (Jim Shannon), was the sense of valuing the success of our capital city, and understanding the contribution it makes not just to the people who live here and choose to make it their home, but to our country as a whole. That is my starting point.
In preparing for this debate we will all have been sent a lot of information from many organisations that represent different aspects of life in our capital, but is clear that the contribution of London’s economy to the rest of the country is vital. It is vital because it is the biggest income earner for our country, because it makes a huge net contribution to tax receipts, which support public services across the whole country, and because it is the one genuine world city that places the United Kingdom in an internationally competitive economic league. That is why it has such an incredibly diverse population. In my constituency alone, which is not by any means one of the most diverse in London, well over 100 first languages are spoken by local residents, yet they all have in common the essential fact of being Londoners.
As we consider the decisions that the Government will have to make, and the policies they are considering, I would like to highlight a number of points that arise partly from the views brought forward local authorities and business organisations, but also from the day-to-day concerns we hear from Londoners.
A number of Members highlighted the challenges around housing, which is an important place to start. We recognise the nature of our city: housing remains in huge demand and, as several Members highlighted, is significantly more expensive than it is in the rest of the UK. In Greater London, 300,000 new homes already have planning permission. However, we have to acknowledge that there has been a 66% reduction in new home starts in the last two years, and in the last 12 months a 92% reduction in new home starts through our housing associations, which are the main provider of social housing. There has also been a 27% rise in the last 12 months in the number of people sleeping rough on the streets of our capital city. There is, then, a rapidly accelerating challenge around housing and, overall, a collapse in London’s delivery of house building in recent years, compared with the ambitions that the Government have set out and many London boroughs have enshrined in their housing targets.
We need to ensure that the aspiration the Government set out in their Planning and Infrastructure Bill is reflected in the actions that take place in the market. The very significant loading of that additional housing funding towards the tail end not of this Parliament, but of the Parliament after means that many of those London boroughs are asking when they can expect to see the additional resources that will help them to deliver that aspiration. Decisions that have been made, for example, to further ringfence the ability of local authorities to spend homelessness funding that they already have further constrains their ability in particular to address issues around rough sleeping.
We also need to recognise that, although many have made reference to the challenges of the local government funding formula, the NHS funding formula also creates very significant variations in the levels of funding, particularly within the capital. Just as, on the whole, inner London boroughs under governing parties of all colours have enjoyed significantly better per capita levels of funding than those in outer London—reflected in widely differing levels of council tax—we know that certain parts of our London NHS are significantly better funded.
The Minister will have been in the Chamber and heard many of his colleagues talk about their hope that the new 10-year plan for the NHS will see the further development of walk-in services and urgent care centres to keep people out of A&E. The NHS, because of its funding pressures, is looking to close those services at Mount Vernon Hospital in my constituency, creating further pressure on an already hugely pressured A&E in the constituency of the hon. Member for Uxbridge and South Ruislip (Danny Beales), who will be aware of this already, as the hospital is under the same NHS trust.
We need to make sure that not only local government, but the national health service are thinking about how they can deploy their resources in the interest of Londoners across the capital. We also need to reflect on the diversity of London’s economy. As a number of Members have mentioned, when we talk about London we tend to think of glass towers in the City inhabited by billionaire international bankers. However, 44% of the London borough of Havering is farmland, as is 23% of the London borough of Hillingdon and 35% of the London borough of Bromley. As well as attracting international capital and the cutting-edge technology industries, London also remains significant through the contribution that agriculture makes to the life of people in our capital.
Those of us in outer London, where most of those farms are located, will have heard loudly and clearly from local farmers—whose land is often not just farmland, but often a crucial part of the green belt, which maintains and supports the environment of our city—how concerned they are about the impact of measures such as the family farm tax. The family farm tax has a disproportionately large impact on London, because that farmland is of significantly higher value than equivalent sites in other parts of the country, due to its location in Greater London.
Danny Beales
I thank my constituency neighbour for giving way. Does he agree that, although the farmland and the farmers of London are deeply important, that is one crucial measure—alongside a number of others that the Opposition have not supported—that will raise billions of pounds to invest in our NHS? Hillingdon hospital now has £1.4 billion, after only getting £70 million from the last Government, to be actually built after 14 years. Is it not the case that every constituent in Hillingdon will benefit from that and every constituent in London will benefit from billions of pounds more in our NHS and in education?
David Simmonds
I am glad to hear my neighbour express his strong, vocal support for the family farms tax. I am sure his constituents at Goulds Green farm, Maygoods farm and other such places will be listening attentively to the position he takes as they reflect on the impact that will have on their businesses and the contribution they make to the local authority.
Given the wealth it generates and the contribution that it makes, London needs to have those world-class services funded correctly. The hon. Member will know, as he was a by-election candidate before becoming a Member of Parliament, that Governments of all parties, broadly speaking, have made commitments. We need to make sure those are delivered and that some of the changes made, particularly on London’s fringes, do not have a detrimental impact. I suggest to the Minister that it is worth having a consultation going across Government on what the impact of some of those decisions around the London fringes will have on the provision of NHS services in the capital.
The fact that London is not immune to those worldwide trends means that issues around crime and personal safety remain very significant, and particularly salient in their impact on our tourist industry. All of us work in this city and will be very aware that, in the good weather as the summer holidays get going, our public transport is full of people from all over the world coming to stay in London hotels, spend money in London restaurants, go shopping, and take their children to see London museums. Making sure that we live in a capital city that is safe, and where the traditional reputation of the United Kingdom as a safe reputation is maintained, is incredibly important. I pay tribute to the work that one of my local councillors, Susan Hall, the Conservative leader at the GLA, has been doing to make sure that those issues remain active and at the forefront of mayoral thinking.
We know that Mayor Khan was the only police and crime commissioner in the whole country to give back to the previous Government the money that he was given for extra police officers in the capital, because he chose not to spend it on that. That has left a deficit in our police numbers across the city. We need to ensure that our police have not just the resources but the connections with other local public services that enable them to do an effective job of cracking down on crime. That is a process of long-term change. In the past, many retailers asked for and were granted additional powers, via the Security Industry Authority, to enable their in-house staff to, for example, carry out arrests of people who are shoplifting. The cost of insuring those staff has run well above what any of those businesses contemplated. We must recognise that we are therefore facing a new policing paradigm, around shoplifting in particular.
In conclusion, although this is not just about the Minister’s Department, we need to hear from him that the Government are sighted on the value that London adds to this country. There has sometimes been a sense, particularly in the debate about the local government funding formula, that any formula that does not extract significant resources from London and redeploy them elsewhere will not find favour with this Government. I appreciate that the Minister is under pressure from colleagues across the country who want the deployment of additional resources, but a 27% rise in rough sleeping in the capital and the collapse in the delivery of social housing under this mayor is putting acute pressure on London’s local authorities. The levels of deprivation in some parts of this city are especially acute, given that London’s median income is around £10,000 a year higher than that of the rest of the United Kingdom, which means the dynamic around housing costs is particularly powerful.
We need to ensure that this city can continue, from its thriving economy, to contribute 22%—although the figures are debated, and it depends which lobby group you ask, it is between a fifth and a quarter—of our country’s GDP, or around £12 billion net, after public expenditure, to the wider Exchequer of the United Kingdom. That is £64,000 a year GDP per capita against a UK average of £37,000 a year. That economic competitiveness is living proof of the effectiveness of trickle-down economics. We know that, from the international billionaire who decides to build a new business headquarters in the city, to the trades, the workers who deliver it and maintain it, everybody benefits from the success of London. This is, and must remain, a city where people from all over the world and all over our country want to come to live and work, to study, to make a home or to raise a family. As this debate has showed, we all recognise the stake that we have; for all of us, as Members of Parliament, London is not just a place where some of us choose to live, but the place where all of us spend our working lives.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Alex Norris)
It is a pleasure to serve with you in the Chair for the first time, Mr Western. I congratulate my hon. Friend the Member for Kensington and Bayswater (Joe Powell) on securing this important debate. He set out a compelling case for important things that he wants to see with regards to housing, attracting the best talent and transport. I will seek to mirror those points, make a couple of points of my own and cover other points that hon. Members have raised.
This debate is timely for a couple of reasons. I will not wave a prop—not knowing your tolerance for such things in the Chair, Mr Western, I dare not test your mettle—but I speak 90 minutes after my hon. Friend the Minister for Local Government and English Devolution introduced the English Devolution and Community Empowerment Bill in the Chamber. That Bill will make the Greater London Authority an established mayoral strategic authority, which will mean the Mayor of London will benefit from a right to request powers to add to the devolution framework, or to pilot them in London where he thinks they will help him to deliver growth. It is also timely because multiple colleagues have sought to tempt me on the fairer funding formula, and I will cover those in my remarks as well. That consultation is under way; I think colleagues have probably contributed to it in what they have said today, and there will be opportunities to do so until 15 August.
I am sure it is no surprise to hon. Members to hear me say that economic growth is the No. 1 mission of this Government. For that to be successful, we must have a successful London. It is the world’s greatest capital city—no Nottingham, perhaps, but a peerless global city. I was resisting going to Huddersfield, for the benefit of the Parliamentary Private Secretary, my hon. Friend the Member for Huddersfield (Harpreet Uppal); but I think I have laboured that one enough.
London’s success is Britain’s success, exactly as colleagues have said, and we, as the Government, are committed to playing our role in that. I was really pleased to be with the Mayor of London and with London councils as he set out his long-term vision for local growth in the recent London growth plan, and we will play our role in that success. I know Mayor Sadiq Khan does not need garlands from me, but he is an outstanding example of how values-led, progressive leadership, sustained over time, can really drive change. I will talk about some of that economic success, but I think it speaks to his work.
As hon. Friends and the Opposition spokesman, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds), have said, London’s success powers the country’s prosperity. It represents nearly a quarter of UK GDP and 8.6 million jobs. I think too of its cultural power and all those things colleagues have talked about, the tourists during the day and what they will be doing tonight in the night-time economy.
Mr West, you may forgive me if my mind wanders about three and a half miles north of here to Lord’s today, as England bat against India; again, that is an example of how—every weekend, it seems—huge global events take place in this city. We have world-leading educational institutions; multiple colleagues have mentioned Imperial College. We have thriving creative clusters such as the East Bank, and pioneering innovation districts such as the knowledge quarter, as my hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales) said. All of those are good—good for London, good for Londoners, and good for all of us in the country.
It was impossible not to be struck by what my hon. Friend the Member for Uxbridge and South Ruislip said about all that is going on in Hillingdon, alongside his constituency neighbour, the hon. Member for Ruislip, Northwood and Pinner. In one borough alone, there is an extraordinary contribution to Britain’s story—not just to its economy as a whole, but to its contribution across the world as well.
Making the most of that talent, those assets and those opportunities means that the Government and London’s leaders, including the Mayor, must work together to realise the city’s full potential. I want to talk a little, in the spirit of my hon. Friend the Member for Kensington and Bayswater’s speech, about how we can contribute in areas such as housing, talent and transport, and to touch on regeneration as well.
Starting with housing, it is no secret, as the Opposition spokesperson mentioned, that we are committed to historic levels of house building, both to tackle homelessness and rough sleeping, as colleagues have said, and as a fundamental for unlocking economic growth. The hon. Member for Richmond Park (Sarah Olney) talked about housing affordability. It is hard not to be struck by research from the GLA that indicates a 1% increase in housing affordability in London could yield a £7.3 billion boost in economic output over a decade. There is a clear return there, a point my hon. Friend the Member for Kensington and Bayswater also made.
We are working in partnership with the Mayor of London to unlock and maximise London’s contribution to the 1.5 million homes target, including through the establishment of a City Hall developer investment fund. We are also keen to support strategic site development through the new homes accelerator, working with local authorities and other stakeholders to overcome regulatory obstacles and provide on-the-ground support for high-potential sites such as Beam Park, High Road West and Billet Road. In addition, the Euston Housing Delivery Group is committed to transforming the Euston area into a vibrant and inclusive neighbourhood, in collaboration with Camden council, and delivering thousands of new homes, including a range of affordable housing options.
That of course links to something that I was very proud of: the Secretary of State for Housing, Communities and Local Government, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), announced at the spending review a new £39 billion social and affordable homes programme. That will run from 2026 to 2036, and we will allocate up to 30% of its funding—nearly £12 billion—to the GLA for delivery in the capital. The hon. Member for Ruislip, Northwood and Pinner made important points about social housing; I hope that addresses those to some degree.
There are important points still around housing. My hon. Friend the Member for Ealing Southall (Deirdre Costigan) made an important point about the Building Safety Regulator—one than has been raised with me by the GLA, the Mayor’s office and beyond on multiple occasions. I want to be clear that this Government believe that safe buildings are a moral imperative. No one knows that better than the constituents of the hon. Member for Kensington and Bayswater. It is a moral imperative that people have housing. I think every day of the 6,000 children in bed and breakfast accommodation across the country. There are 180,000 in temporary accommodation, and that is before hidden homelessness. We have a moral duty to them to ensure that houses get built.
We have worked closely with the BSR to help it resolve some of its operational challenges. We have put more resources in and, as my hon. Friend the Member for Kensington and Bayswater said, injected fresh leadership through the excellent Andy Roe, who is widely accepted to be brilliant in the safety space and as an operational leader. I look forward to the impact that will make. My hon. Friend mentioned the London remediation board, which I co-chair with the excellent deputy mayor for housing, Tom Copley. That is crucial to ensure that people are living in safe homes and that those who are out of their homes, in many cases for a long time, are able to be in those homes. That board has my full commitment.
My hon. Friend the Member for Kensington and Bayswater mentioned access to Government schemes for remediation. I am delighted that, through the spending review, we have been able to equalise access for social housing. That is a two-for-one benefit: it will get buildings fixed faster and more social homes built. I look forward to that kicking in and seeing its impact.
My hon. Friend the Member for Kensington and Bayswater mentioned talent. We have to be aware that, in a global economy, the race to attract the strongest talent is fierce—that might speak to your beloved Arsenal’s struggle to find a centre forward, Mr Western. That global race is hotly contested. It is about getting the tools right and, as my hon. Friend knows well from his outstanding work on economic crime before he came to this place, about making sure that the routes are effective and deliver what we want, which is getting talented people through.
We offer a number of different routes: the innovator founder route for entrepreneurs; the global talent route for leaders and future leaders in key fields; the high potential individual route for those at an early stage who have high potential; the Government-authorised exchange scheme for short periods of work experience; and, for overseas businesses, assigning workers through the global business mobility route. My hon. Friend the Member for Kensington and Bayswater made further suggestions—I will make sure that he gets a response from the Minister for Migration and Citizenship.
On transport, as multiple colleagues have mentioned, we cannot unlock the housing we want to deliver without proper infrastructure. We do not want to build homes that people cannot get to and from. That is why we recently announced the almost £2.2 billion multi-year capital funding settlement for TfL, which covers the spending review period. That is the largest multi-year settlement for London for over a decade and gives TfL the funding certainty to improve and enhance the quality of the capital’s transport infrastructure. That investment is crucial to delivering economic growth.
We recognise that, as the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Brent East (Dawn Butler) and for Uxbridge and South Ruislip said, funding for London helps to grow the economy across the country and supports UK industry in the supply chain. Two thirds of TfL’s UK supply chain is money spent outside London, so there is benefit for everyone.
Natasha Irons
I want to highlight the local impact of that £2.2 billion, which means that my community in Croydon will finally get new trams. Croydon is not the only place in London that has trams, but we have the oldest trams in the country, and the sustainable, multi-year funding settlement means that my outer London borough will get the transport it needs for the people in my community to access the opportunities of central London. Does my hon. Friend agree that a Labour Government and a Labour Mayor working together with long-term funding and a grown-up conversation leads to prosperity for everybody?
Alex Norris
As my hon. Friend says, the evidence is there. With the spending review, we talk about billions of pounds here and hundreds of millions of pounds there, but I always think that these things have to be real in people’s lives, and that will be very real in the lives of the people in her community. The impact of the shared vision is so important. As I said, we will feel that across the country through the supply chain. TfL has procured Piccadilly line trains from Yorkshire, supporting up to 700 skilled jobs: 250 in construction and 1,700 in the onward supply chain. What an outstanding bit of investment that is.
Hon. Members made multiple different points on other transport infrastructure, and indeed offered the Treasury and the Department for Transport a future list for more to do. The Government are providing £25 billion for the delivery of HS2 phase 1, including the Euston terminus, which will improve connectivity to the south-east. Emulating the success of King’s Cross, that will help to transform Euston into a destination where people live and work, not just a gateway for travel, although it is an outstanding one.
My hon. Friend the Member for Kensington and Bayswater mentioned DLR Thamesmead, as did other colleagues. We are committed to working with TfL to explore opportunities for delivery in that space. I want to link it just briefly to the industrial strategy, because that was a very important national document showing where our country’s economic future lies. All the things in the industrial strategy—even the most national, even the most global, even the most profound, whether it be an employer, a sector or a cluster—are all local somewhere. Of course, I would say that as the Minister for Local Growth.
London has a really important part to play in that. As the Minister responsible, I am pleased that the industrial strategy zones action plan has set out enhanced support for the Thames freeport, focusing on clean energy, added-value manufacturing and advanced logistics. The freeport has unrivalled global connectivity to more than 130 ports in 65 countries. The Thames freeport includes the ports at Tilbury, London Gateway as well as Ford’s Dagenham plant, and will create 21,000 jobs, building on London’s deep maritime history. When we put national flags in the sand, we of course make sure that London is a core part of that.
I would like to turn to the subject of Hammersmith bridge. I did not have anywhere else I could fit it into my speech, Mr Western; from a port to a bridge, it is not so far away. I want to assure the hon. Member for Richmond Park that central Government are committed to working closely with TfL and with the London borough of Hammersmith and Fulham on that restoration project. There is that sign of good faith: central Government have committed £17 million so far to it, including £4.7 million for repair of the bridge hangers. I will make sure that Ministers have heard the hon. Lady’s plea for greater progress and certainty in the future. Her points were well made.
Similarly, I will turn to the fair funding formula, which has been a consistent feature of the debate. Hon. Members have made their points and made them strongly. I want to say very clearly that we are in the middle of a consultation, which runs to 15 August. I know that Members’ local authorities will be making contributions. I have no doubt that London Councils will and that the Local Government Association will. Members also can and should contribute to it themselves. Their points have been made very well and I will make sure that the Minister for Local Government hears them.
I may be slightly less forthcoming, I am afraid, for the Liberal Democrat spokesperson, the hon. Member for Sutton and Cheam (Luke Taylor), on tax policy ahead of the Budget, because he invites me to cause some serious trouble. I am afraid, even though my instinct in life normally is for a degree of jeopardy, that is a degree of jeopardy too far for me.
I want to turn to the issue of regeneration and speak to the point that my hon. Friend the Member for Brent East made about global competition with New York and Paris. We should always be seeking to win those competitions, and that is part of our important work as a Government, with the Mayor of London, on the regeneration of Oxford Street. Oxford Street is one of those great beacon locations in the world. It has 120 million visitors a year, and I suspect all Members present have visited at some point. In 2022, it contributed an estimated £25 billion to the economy, but there are challenges. There are things that all high streets are facing, such as competition from online shopping, but there are also things that are peculiar to Oxford Street, such as congestion. That is why the Mayor of London and the Deputy Prime Minister have announced proposals to regenerate and pedestrianise Oxford Street to ensure its continued success, and that includes the establishment of a mayoral development corporation. We know that that is a good way of co-ordinating delivery, and I have no doubt that that will help us in the global competition to attract more visitors and more investment, to create more jobs and to drive more growth.
I hope that I have been able to give colleagues that clear commitment from the Government that we understand that London’s success is Britain’s success, as well as give that clear sense that it is no one’s interest, whether that is those in Nottingham or anywhere else in the country, to try to pull London down in the hope that that might in some way be successful for the rest of us. That has never been my version of politics or life. I have never thought that my neighbour’s success is my detriment. In fact, I think the evidence shows exactly the opposite. We need a thriving London, and having a thriving London is part of having a thriving country. We can do both things at the same time: have a capital that remains and continues to be the greatest global capital and have growth across all our nations and regions. Those are twin prizes that are common across all parties and all of Parliament, and we can achieve both of them.
Joe Powell
I thank you, Mr Western, for chairing this debate, and all the non-London Members for sitting through a discussion about London’s economic growth potential. I will not go over all the great contributions from hon. Members from across the House, but I will summarise a few areas in which there has been quite a high degree of consensus.
I thank the Minister for his reassurance that this debate will, in itself, contribute to the fair funding consultation, and in particular, that there will be an emphasis on accurate and reliable data that fairly captures the diversity of London’s challenges and opportunities. Whatever decision is made, London councils would appreciate an appropriate transition period to ensure that that can be worked in. Whether it is a combination of reserves and whatever else that will be needed to make it work, the transition period will be key in that fair funding review.
On transport, similarly, there have been lots of suggestions for great projects to build the pipeline. I would emphasise the analogy my hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales) gave with Crossrails 1, 2 and 3. It takes time to get these projects up and running, even beyond the spending review that has just been agreed. Even projects that were not in the spending review will need a bit of pump-priming to get started, because planning permission and raising private finance alongside public money takes time. We need to build that pipeline for those projects of the future; they will not come overnight.
A number of hon. Members talked about policing and the need for both reform and investment. I think the Met have indicated their openness to future reform. In fact, the Met commissioner published an opinion article just a few days ago about what some of those reforms might be. In real terms, funding for the Met is going up by 2.3% over this spending review, but—I hate to say it—they had £1 billion taken out of their budget over the last 14 years. It will take time to catch up, but reform alongside investment is crucial for the Met.
On housing, we look forward to the Government’s long-term housing strategy and the temporary accommodation plan. That is an issue clearly hitting both inner and outer London. Temporary accommodation may once have been more of an inner London problem, but it is now spreading across the country, as boroughs increasingly compete against one another. There are other pressures on that type of housing as well, which I will not go into.
I will end where the Minister arrived, with his Department’s big new Bill. I agree with the Minister that it provides an opportunity to cover some of the points hon. Members have made about governance. We have talked about whether to have Ministers for London or not, and powers or not. Given that London had the first devolution deal with the Greater London Authority Act 1999, many other parts of the country have now overtaken London in terms of the sophistication of the governance arrangements and what powers are devolved. My hon. Friend the Member for Brent East (Dawn Butler) made great points about whether there should be an overnight visitor levy. It is great that we will have devolved powers to tackle dockless e-bikes in that Bill. That is a big win for many of our constituents, who write regularly about that issue, but it should not just be about dockless e-bikes. Our ambition can be greater than that. I hope that in the course of the Bill, we can have an ambitious London section that addresses some of the governance questions that could help unlock growth.
Question put and agreed to.
Resolved,
That this House has considered London’s contribution to the national economy.