ooking back from the mid-21st century it’s striking that, even after the post-Brexit wobble, there was still underlying confidence about London’s long-term outlook. Belief in London’s capacity to grow and expand was etched into the city’s identity. That confidence did not, however, extend to the question of how fairly that growth would be distributed. The nature of poverty and disadvantage certainly changed over time — gains were made, new problems emerged — but the city’s deep divisions remained.
Wages, housing and childcare
The accelerating cost of living in London spurred on the Living Wage campaign and resulted in a major reboot of the popular and voluntary London Living Wage. London’s Mayor Sadiq Khan rightly took pride that under his watch — and with powerful use of the bully pulpit — the real Living Wage increasingly became the accepted benchmark in some mass-employing sectors like retail and hospitality. In the early 2020s, during his second term, the Mayor received the power to set a higher legal minimum wage than the rest of the country. After an initial row with business, a higher wage floor was introduced (following advice from the Low Pay Commission). It quickly became uncontentious and no party ever proposed reversing it.
But London’s poverty problem went far beyond the issue of hourly pay. For a start, the weekly earnings of low-paid Londoners continued to oscillate far more than those in other parts of the country over the economic cycle due to big shifts in hours worked (the 20% fall experienced in the years following the 2008 financial crisis wasn’t recovered until the mid-2020s). This meant that during difficult times Londoners needed to rely heavily on in-work welfare support and housing benefit, which continued to be scaled back by national government.
Above all else there remained the towering issue of housing costs. For some years inner London’s poor, who lost out the most from benefit retrenchment, stayed put facing rising housing costs which pushed them into deeper disadvantage. But eventually there was a big shift in the make-up of inner London as more poor families moved to the outer fringes of London and beyond — both East and West.
Homelessness continued to rise and the rash of scandals concerning the plight of families living in overcrowded housing stock eventually become a major political issue. London’s ‘favelas with Wi-Fi’, as they became dubbed, together with the work of newly formed London Tenants’ Movement — which became the most powerful lobby group in the capital during the early 2020s — led to new tenant rights and the creation of a city-wide powerful regulator for the private rented sector. Progress of a sort, but the capital’s underlying issue of chronically inadequate housing supply amidst steady population growth continued — and continued to hit the poor hardest.
Consequently, relative poverty rates in London continued to outstrip the rest of the UK (after housing costs). The capital’s poverty problem was compounded by its strikingly low levels of maternal employment (again, the worst in the UK), which dragged down family incomes. Among other things this reflected a decades-long failure to address exorbitant childcare costs, as well as the city’s lack of decent ‘midlevel’ part-time jobs. Eventually, however, childcare made its way up the city’s priority list, establishing itself as an essential form of social infrastructure (after some powers transferred from boroughs and Whitehall). Predictably, though, it took London’s first female Mayor, not elected until 2028, to achieve this.
As well as continuity in the nature of these challenges and responses, there were surprises too. One was that London — with its weak trade unions representing under 10% of the private sector workforce in 2016 — became the city where the first inklings of a new politics of work emerged. It started with the rise of a vibrant freelancers’ union, echoing the experience in New York. Founded in 2020 by a diverse mix of London’s self-employed — by then more than one in five of the workforce — it became a magnet for those who wanted to share some costs, risks and networks but who were priced-out of the glitzy highend co-working office spaces that had become such a feature of the fashionable parts of the city. New pro-worker associations emerged focussing on particular sectors ranging from couriers to care workers, designers to doormen. This reinvented twenty-first century version of craft unionism didn’t, of course, provide anything like the collective muscle of their mid-twentieth century industrial forebears. But for growing strands of London’s workforce it offered an important counter to the atomised work culture that dominated from the 1990s through to the 2020s.
Another unexpected shift came in the form of tax and housing. In the early 2020s, Whitehall — having finally given up any hope of ever leading on the reform of Council Tax — gave London (and other cities) similar powers to Scotland to overhaul its own system. Political caution, and a haggle over the share of the revenue London could keep, meant that at first these powers remained dormant. Eventually, however, the need for funds, and the unprecedented ferocity of the debate about access to housing in the capital, put them to use. To the surprise of many, in the early 2030s — a full 40 years on from the last Council Tax revaluation — high-value London led the way in England, shaking-up its council tax system: new bands were introduced at the top to help boost spending on new housing for key workers.
A city for neither young nor old?
London’s experience over these decades led to a mixed picture on social mobility. For starters, it was striking that it wasn’t until the 2020s that the fog really lifted on the extent to which birth was destiny in London compared to the experience in other cities; metropolitan comparisons became the norm after it was revealed that the variation within nations were at least as large as those between them.
Great pride was taken in the fact that the earnings of ‘the London Challenge generation’, now approaching middle age, were less determined by their parents’ status than their predecessors. This was warmly received across the political spectrum though it was notable that some prominent commentators — on left and right — couldn’t come to terms with writing positive pieces about rising social mobility. But the good news was tarnished by the finding that a large chunk of the school-age gains had been eroded due to a mixture of weak post-school college performance and London’s still deeply stratified jobs market, particularly for those from black and minority ethnic backgrounds.The city’s policy elite lamented that more hadn’t been done to sustain the great strides made by that early 2000s generation of working-class children.
As the country as a whole became far greyer, inner London largely bucked the trend. As the home-owning baby boomers start to fade out in the 2030s, the next generation of retiring Londoners on modest incomes — many more of whom were tenants relying on housing support — were forced further out.
An imbalance of a different sort concerned the growing dependence of a wide array of the city’s small charities and community organisations on a handful of vast philanthropic foundations created by the big tech and financial corporations, who had all developed close ties to City Hall. Questions about their governance and accountability rose to the fore.
Looking back, there was a sense of genuine pride in the progress alongside bitter disappointment about missed opportunities. Sure, there were also big constraints — the balance of powers with central government, the global slow-growth context and the post-Brexit chill to name a few.
Yet the opportunity was there. After all, London had unparalleled civic resources with which to tackle its social evils. Large numbers of high-skilled jobs continued to be created. People with talent continued to want to come and work here. Money could be borrowed at rock-bottom rates. Our schools further outstripped the national average — a few boroughs even made history by removing altogether the stain of the class attainment gap at age 16. Civil society was ever more active and innovative. And the capital’s model of city governance gradually, if haphazardly, acquired more powers alongside a broader tax-base. During those decades of the early twenty-first century London had scope to bear down on the poverty and lack of opportunity in its midst.
This essay was first published as part of The Future of London by Bright Blue and Localis. It can be found here.