My at the LDA Conference: London’s economy to 2012, 26 April 2007

  1. I want to start by thanking the London Development Agency and the Mayor of London for inviting me to speak here today.
  2. As the title of this conference suggests, the next five years will be a critical period for the future of our capital and our country.
  3. Our shared challenge is to make the most of the opportunities before us, to sustain and enhance London’s rising prosperity to the benefit of London and Britain – but also to ensure that all Londoners can share in this economic success in the coming decades.
  4. And whether we rise to this challenge will depend critically on decisions we are already making and are set to make in the coming months. First, preparations for the huge opportunity and challenge that is the 2012 London Olympics are well under way as we move to the “Demolish, Dig and Design” phase and towards the formal handover to London as the next host City after the Beijing Games.
  5. We also face the challenge of implementing the GLA Bill, now moving into the Lords, and ensuring that the devolution of powers to the city level works to the benefit of London’s economy.
  6. This year we will also be finalising the Comprehensive Spending Review which will set the spending envelope for public services in London for the three years to 2011, and shape the priorities and spending plans for our capital – including on important infrastructure projects.
  7. And lastly – and as the Treasury minister for financial services you would expect me to say “last but not least” – our High-level Group on City Competitiveness will be working hard to ensure this global and dynamic industry rises to growing international challenges and maintains its place as the global financial centre of the world.
  8. These are big opportunities, big challenges. But after the past decade of rapid change and development for this city – now a true rival to New York as the leading city in the world – these are challenges we can rise to by working together.
  9. Indeed, in each of these areas – the Olympics, devolution, spending and infrastructure, and financial services – the close partnership between the LDA, our Mayor and the Government at Westminster is vital.
  10. I am proud of our decision to create the Greater London Authority and the position of Mayor of London. The Mayor has personally driven much of the change bearing fruit around us in the capital – not just in transport, housing and economic development but also in restoring London’s pride in its achievements and destiny.
  11. And importantly, the creation of this city-wide tier of governance has provided legitimate, democratic space for robust debate centred on both the objectives we are seeking, and the ways and means of achieving them. Debate that I believe is leading to better decisions and policy outcomes.
  12. Of course, we have had our disagreements. But increasingly I believe we agree on the way forward.
  13. Indeed over the past year, in my new role at the Treasury, I have been struck by how much the Treasury and the Mayor are in agreement on areas of common interest and concern.
  14. On the Olympics, Ken has shown great leadership in both helping win the bid for the Games and putting the delivery arrangements in place.
  15. On the City, he has been a strongly supportive member of our High-level Group and an international champion for UK financial services in both China and India.
  16. On the Tube, the challenge now is to ensure that the investment we are making delivers a network fit for London’s needs in the twenty-first century.
  17. And no-one rivals Ken in their determination to champion sustainable economic growth and fairness for Londoners, whether this is through promoting job creation, tackling climate change, delivering affordable housing or ensuring Londoners are able to develop the skills they need.
  18. There are still important debates to be had. And we will not always agree. And of course, while the Mayor is rightly London’s champion, we at the Treasury have to look at decisions on spending, regulation and tax impact across the UK as a whole.
  19. But we know too that – on the whole – what is good for London is good for Britain. And we will take whatever action is necessary to preserve and enhance the international competitiveness of the City and of London.
  20. There are many issues I could talk about in much greater detail. But today, I want to focus on four specific areas where the Treasury, the LDA and the Mayor share a common agenda and must work together in the coming months.

The City and UK financial services

  1. First, on financial services, we cannot afford to be complacent. The Mayor is right to point out – following New York’s report on the competitiveness of the US financial market – that success can quickly go into reverse.
  2. So we must continue working together to retain and strengthen the position that so many have worked so hard for.
  3. That means defending London’s proportionate and risk-based regulatory approach, and continuing to attract the best talent from around the world to live and work in our city.
  4. We must also ensure that our tax system stays competitive, that our infrastructure is world-class and that we engage positively and effectively with our European partners to take forward the single market in financial services across the EU, and maintain London’s position as the established financial services gateway between Europe and the rest of the world.
  5. I know from my discussion with the Mayor, London First and the High-level Group that our infrastructure – and Crossrail – is a key concern for the City – and for London. We recognise the significant benefits of the scheme and are taking forward the Crossrail Bill in Parliament. You all know that the cost represents a significant challenge and that we will not take risks with our long-term stability. We will consider Crossrail funding and financing issues further in the context of Sir Michael Lyon’s recommendations and wider spending pressures and priorities. As I have said, the affordability challenge represented by the scheme remains significant. But I understand the case and why this matters for London.
  6. The second area where Ken and I agree is on the need to strengthen the connection between the City, financial institutions and employees, and their customers and local communities.
  7. The financial services industry has a special role to play at the heart of the economy, but also in society more generally. This important position means that our financial services businesses must work with us to tackle financial exclusion and be leaders in corporate citizenship, recognising the impact they have on people’s lives.
  8. Companies that are making investments in communities – whether through corporate giving, supporting employee volunteering, in developing partnerships with local schools and community organisations, in working with social businesses in their supply chains and in integrating the highest environmental and social standards within all business practices – understand that reputation and success depend not just on the success of the business but on serving the community. To pick just two of numerous examples:
  • The Tower Hamlets Education Business Partnership is working with companies such as Merrill Lynch to provide pupils in Tower Hamlets with opportunities to improve their work related skills, through staff volunteering, mentoring and work placements; and
  • Lydian Asset Management is supporting Whizz-Kidz, a charity providing customised mobility equipment such as wheelchairs for disabled children. I recently attended the launch of a pilot initiative, supported by Lydian, where Whizz-Kidz is working with Tower Hamlets PCT and the local business community to provide disabled children and young people with access to customised mobility equipment, wheelchair skills training, and specialist advice and support.
  1. These companies, and many more, are coming to the modern view that corporate social responsibility is not an add-on, or incidental, but integral, and at the heart of what the best businesses do: a recognition that in the modern world, the good economy and the good society go together. But nor is it a reason for Government to abdicate its responsibilities or to make business and charities responsible for fixing all of our social problems.
  2. Which takes me to my third point of common concern: we know that the challenge of delivering rising prosperity and tackling inequality is a particular challenge for London.
  3. London reflects, even magnifies, some of the extremes in opportunity and wealth of the nation as a whole. Compared to the rest of country London has:
  • The highest incomes but the highest levels of child poverty;
  • The highest house prices but also the highest levels of homelessness;
  • The fastest job creation but the highest levels of worklessness;
  • A higher tax contribution but also the highest level of public spending;
  • Lower car use than other parts of Britain but still rising carbon emissions;
  • The most universities, but the highest number of working-age people lacking basic employability skills; and
  • The most ethnic diversity, but the highest levels of unemployed people of ethnic descent.
  1. My strong conviction is that tackling these inequalities by delivering prosperity and fairness can only be met by strong local leadership. Local decision-makers in London – whether at a city-wide level or at more local level – are best placed to decide what is the most appropriate path for the locality, maximising and balancing the benefits across the city. They have the ability to bring together different agendas, using local information to tackle complex issues in a way that Whitehall departments are simply unable to do. This also gives them a greater ability to focus on the needs of users and local people.
  2. Where they are empowered to deliver change, localities can attract the right people and teams to drive improvements – there are no better examples of this than the London Development Agency and Transport for London. And by making best use of resources and synergies between different areas, local decision-makers are also able to deliver efficiencies, providing more funds for front-line improvements.
  3. That is why we continue to devolve power to the Mayor:
  • In transport, where the Mayor has pursued and delivered real innovation, such as congestion charging, bringing tangible improvements, and overseen the substantial upgrading of the capital’s once decrepit public transport system;
  • In economic development, where the London Development Agency, working in partnership with the City and the Boroughs, delivers growth and regeneration across this diverse city;
  • In policing, with the re-introduction of visible policing through neighbourhood teams in each and every Ward;
  • In housing, with the Mayor’s commitment to the provision of more affordable housing and mixed residential developments;
  • In climate change, where the Mayor has led the way, setting targets to cut carbon emissions supported by practical policies across the board;
  • In skills and employment, where the new Board, directly supported by so many of you, now has new powers to make local decisions, backed by our greater London focus in employment policy with measures such as an increase in the In Work Credit for London lone parents moving into work from £40 to £60 per week; and
  • In planning, where it is crucial for the Mayor to be able to take decisions of strategic importance for the whole capital.
  1. It is also why we want to see strong and effective boroughs – working with the Mayor and with each other – to tackle specific problems facing individual areas of London. And it is good to see that London now has some of the most efficient and well run local authorities in the country, actively engaging business in the local problems they face.
  2. And the fourth area where I believe we must work closely together to grasp long-term opportunities is, of course, the Olympics.
  3. I have no doubt that the Olympics are going to be an amazing celebration.
  4. But as well as the opportunity for a display of sporting and cultural excellence, we at the Treasury look forward to the opportunity for genuine, long-term regeneration.
  5. Of course the costs must add up. And it was absolutely right that our initial focus was on getting a taut, but realistic, funding package in place. They were difficult discussions.
  6. But the decisions that were taken and the funding package Tessa Jowell set out put the Olympic Delivery Authority on a firm financial footing – and years earlier than previous Games.
  7. We will – of course – remain vigilant on costs. But the Treasury’s interest does not end there.
  8. We are all agreed that if these Games are to be remembered as the most successful ever – as the head of the Sydney Games has suggested they can be – we must not only win more medals for Britain; there must also be long-term, positive change for London and for the UK, including for the most deprived communities.
  9. Today I wish to set out three challenges that we must meet – three areas where we must work together in full agreement to realise the potential of the Games.
  10. First, we must ensure a cast-iron grip is maintained on costs. That is why DCMS is recruiting new expertise – to support the ODA in its overall aim to deliver the Games to time and on budget.
  11. Second, the long-term regeneration of the Lower Lea Valley must be at the heart of the planning decisions we are taking now for the Olympics. This is what we promised the people of East London that the Games would deliver. The ODA, the LDA and the five Olympic Boroughs are delivering change for future decades, not simply for a summer of sporting achievement. This is about new and affordable homes, new and improved transport links, and a revitalised local area. And it is about new business premises offering lasting employment opportunities to local people.
  12. Which takes me to my third challenge. These Games must drive genuine inclusion – throughout the UK, but particularly in London. We must find ways to use the powerful ideals of the Games to draw in people from all ethnic backgrounds – to make a reality of the powerful vision that the Prime Minister, the Mayor and Lord Coe laid out for the IOC in Singapore. The cultural Olympiad has a special role to play here. And the provision of jobs, accessible by local people, is crucially important. The redeveloped Lower Lea Valley could be supporting 50,000 jobs within the next 20 years. Local people need to be supported in developing the skills to enable them to compete for these opportunities.
  13. So we must use the opportunity of the Olympics to make a decisive improvement in the skills and employment opportunities for local people. Unemployment is at nearly 10 per cent in the host boroughs, and nearly eight per cent across London. We fully support the Mayor and the LDA in the creation of the London 2012 Employment and Skills Taskforce. It has made an excellent start with – for example – the £11m funding from the Opportunities Fund providing support to 14,000 Londoners and 1500 businesses over the next three years in skills relevant to the Olympics – sports, catering, hospitality, tourism, construction. And the pre-volunteering programme is providing basic vocational training and opportunities to volunteer at the Games, ensuring that a proportion of the 70,000 required volunteers will be people who previously have had few opportunities.
  14. We must all work together to seize these opportunities and drive delivery. Because it is only if these challenges are met, that will we truly be able to claim that we have delivered the greatest Olympic Games ever.


  1. So there is much to do to ensure London’s continued success and we must continue to deliver together. The strength of partnership between the London Mayor and the Government is good for the City and good for London – and it will be the foundation on which a successful Olympics can be delivered in 2012. Our task is no less than to make our capital city the most dynamic and opportunity-rich place to live in the world. I believe that, working together, it can be done.
  2. Thank you.
Posted November 26th, 2015 by admin