London is the world’s true megalopolis. It has a unique footprint. London is not just the most important financial centre in the world, but also has the world’s most dynamic financial markets. London by any international standard is an economic powerhouse. This economic power is matched by a cultural and artistic vitality that no other city in the world can match. The two are connected. The wealth generated by London’s financial markets and the services that depend on them help to support the arts and cultural institutions. And London’s cultural scene contributes to the cosmopolitan environment that attracts talented people to work in London and helps to ensure that London is the place where the world’s banks want to be.
This has combined to create an incredibly exciting and diverse metropolis. London’s challenge is that it does not have public services that match its international status as a capital city. There is, moreover, little connection between the wealth that is generated in London and the investment that London needs. Where money is spent it has yielded disappointing results, because it has not been accompanied by the public service reform necessary if public money is to achieve results. Over the last seven years spending on budgets signed off by the present Mayor has roughly trebled from £3.5 billion to over £10 billion. The lion’s share has gone on higher spending on Transport for London and the Metropolitan Police. But these services do not appear to have improved in a manner proportionate to the amount spent on them.
I have been involved in London politics as a borough councillor for twenty years. In my professional work I am an economist and I have held two of the top advisory jobs at the Department of Employment and the Treasury. I recognise that London needs more police on our streets, and that will cost more money. But there is no point in making that investment unless we improve the management of the Metropolitan Police. This will involve a review of the operation of the Police Act, along the lines set out by David Cameron in his speech to the Police Foundation last year.
As a former Treasury official I also recognise that the Private Finance Initiative does not work. It makes public investment more expensive, more complicated and fails to transfer risk form the public to the private sector. London’s investment in Crossrail and the other rail infrastructure such as the Hackney Chelsea line that we need has to be funded by the Treasury. From tax revenue generated by the London economy. These are projects that plainly meet objective investment criteria and should be funded properly.
The lesson from the collapse of Metronet and the failure of Gordon Brown’s PPP is that we have got the worst of all worlds. Investment projects are financed more expensively than they need to be and overly complicated. They are paid for by very high user fares such as the London Oyster Card, and still the risk is not properly transferred to the private sector. As Mayor of London I will make the case for investment in London and spell out the fact that this investment can only be sensibly made with the Treasury footing the bill.
When you travel around London it does not always feel as if you are in one of the world’s richest cities. London has Britain’s highest rate of unemployment and communities with the lowest rates of employment. As Mayor I will work to ensure that all Londoners share in the opportunities and the new jobs that are being created.