London’s National Economic Contribution

Matt Western Excerpts

Thursday 10th July 2025 Westminster Hall

[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.

--- Later in debate ---

[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.