Blog Post

What London needs from the new government

Throughout the Conservative Leadership campaign, Boris Johnson regularly referred to his eight years as Mayor of London as one of his key credentials to be Prime Minister.

Though his record as Mayor is hotly debated, what is sure is that the new PM knows London government and understands our city’s challenges well.

While forming his top team, the PM has kept former City Hall colleagues close at hand, with Sir Edward Lister joining No 10 as Chief of Staff, who is expected to serve about eight months to a year overseeing the transition. Former Deputy Mayor for Education and Culture Munira Mirza has also joined No 10 as Director of Policy, helping to shape the new government’s policy programme beyond Brexit. With these two, joined by Ben Gascoigne who worked in the Mayor’s private office at City Hall, the capital should be at the forefront of the new PM’s mind.

Of course, the PM and his team have one or two other things on their mind, including Brexit – the biggest challenge the country has faced since the Second World War. And while Boris Johnson is a London MP, electoral politics may point his attention elsewhere: as a heavily Remain city, London may look like a bit of a lost cause, struggling for attention with the need to win over Brexit voters in the North.

But despite the politics, and the anti-London sentiment that has developed through much of the country since the financial crisis, London has a good call on the government’s attention.

Local government services are under increasing pressure. Housing supply has fallen below need, contributing to a growing affordability crisis. Congestion is on the rise – the capital is now the most congested city in Western Europe. Migration to the capital from the EU and across the country has stuttered, and there are some signs of a slowdown in inward investment. Meanwhile the devolution debate has been on pause.

As a former London Mayor, the PM will understand the value of the capital’s economy to the UK as a whole, so will want to introduce changes that work for both capital and country. His new Ministers will be looking to establish themselves, crowdsourcing new ideas and revisiting some old ones too.

Against this background, here’s what the new government should prioritise for London:

1) Devolution

The UK is a highly centralised state. Though some powers have been handed over to London, the city still lacks powers that New York, Paris, Tokyo and other world cities take for granted.

As Mayor, Boris was an advocate of devolved government and we’ve already seen positive signs that he’s set to continue that agenda as Prime Minister. At a recent speech in Manchester, the PM had positive words:

“We are going to give more communities a greater say over changes to transport, housing, public services and infrastructure that will benefit their areas and drive local growth.”

We believe the new government must devolve more power to the UK’s cities and towns, including London, enabling decisions to be taken as close to those who they affect as possible. It should also commit to a major review of where power lies in the UK and appoint a Cabinet Minister for Devolution to oversee the process.

2) Maintaining London’s position as an economic hub

London’s success and contribution to the UK economy depends on it being open to business, and able to access a large and diverse talent pool, as well as train a new generation of workers who can adapt to the changing nature of work.

The government should start by ensuring visas are as easy as possible to obtain at all skill levels, and consider introducing a regionally managed migration system, to enable different regions to take control of their own labour needs. As City Hall takes control of London’s adult education budget in September, the government should also prioritise commitments to devolving responsibility for post-16 further education, as well as early years education and childcare to cities.

3) Tackling two of London’s biggest challenges: housing and transport

London’s success has brought with it many challenges, including rising housing costs and increasing pressure on its transport system.

One of Johnson’s first announcements as PM was to pledge funding for the Northern Powerhouse Rail project. This is an important step towards resetting the debate over regional transport funding in the UK, but the ‘lock-step’ arrangement for Crossrail 2 and Northern Powerhouse Rail must mean the government commits to both. It’s also high time for the government to devolve powers over the operation of the suburban rail network to Transport for London, something even the new Transport Secretary seems in favour of – at least he did last year.

Tax is also an area that we believe needs revisiting; in particular vehicle and fuel taxes, and property taxes. As outgoing Mayor, Johnson recognised that his successor would have to increase the Congestion Charge or introduce “smart charging” – and sooner or later, the government is going to have to recognise it needs to overhaul Vehicle Excise Duty and Fuel Duty and replace them with distance-based charging.

The government should accelerate devolution of property taxes and enable City Hall to experiment with reforms, as recommended by the London Finance Commission that Boris Johnson set up as Mayor, from creating a more progressive and up to date council tax regime to exploring the impact of land value taxation in London. This would help London to respond to its changing economic and social needs, support the rest of the UK economy, and address its dysfunctional housing market

To unlock housing supply in the capital, we need reform across a number of other fronts. This includes earlier and more positive forms of public engagement in the planning process, strengthening local plans and creating a more prescriptive and predictable planning system and empowering local councils to take a more active role in housing delivery.

After three years of stasis and distracted government, towns, cities and regions up and down the country are desperate to take back control, tackle their problems and realise their potential. Let’s hope having a former Mayor of London as Prime Minister works in both the capital’s and the country’s favour.


Blog: Will Mr Johnson champion devolution as Prime Minister?

Ben Rogers is Director of Centre for London. Follow him on Twitter.