Annual Conference: Reflections from our Chief Executive John Dickie
I was delighted to see so many people join us at BusinessLDN’s Annual Conference yesterday at the start of a year that will be critical for our capital.
Mayoral and national elections are looming, at a time when, as we heard during our first panel session, it is uncertain as to whether any of the main political parties are really focused on Londoners or London’s competitiveness.
The economic context is at best difficult: high taxes, low growth and stretched public services. As we brace for the upcoming political turbulence, I highlighted three key challenges that need to be met to secure London’s position as the best city in the world to live, work and play.
At the very core of this mission is our transport network.
It is critical for all of us to get to our jobs; for our businesses to have access to a broad pool of talent; and for visitors and locals alike to go out and enjoy all our city has to offer.
So, the first challenge that we need to meet is planning for, and funding, a public transport network that can support sustainable growth.
We cannot afford to stand still. And yet we do not have a multi-year funding agreement with the Government for Transport for London’s capital expenditure.
The constant uncertainty surrounding transport investment is undermining London’s reputation as a place to do business — while also damaging the country’s wider supply chain, as medium, let alone long-term, spending commitments cannot properly be made.
It is a false economy to make artificial savings today, only for taxpayers to be forced to pay out more in the long run.
This has been vividly illustrated in recent weeks by the images of literally crumbling schools, built with aerated concrete. Concerns have been in the public domain for decades, acutely so for years: but the can has been repeatedly kicked down the road.
There is a pattern here.
Coinciding with yesterday’s conference, the Government announced it was pushing back some green targets. And following on from the suspension of work at Euston earlier this year, we’ve seen reports that HS2’s second phase, from Birmingham to Manchester, may now be scrapped.
Every such handbrake turn on long-term investment leads to higher costs, poorer services or both. This British disease of short-termism, constantly changing decisions over long-term, vital infrastructure capabilities, must be cured, and cured now.
My second challenge is that we need to build more homes to make London affordable and keep our city competitive.
Average asking rents in the capital hit record highs this summer and are expected to reach £2,700 a month next year. It’s all very well for the ONS to tell us that London wages are outstripping those in the rest of the country. Not, for most people, after housing costs they’re not.
Tenants in the capital are now paying a third more than they were pre-pandemic. For some, this will be a tipping point that drives them away from living in, and working in, London.
The housing crisis is hitting recruitment and retention at a time when businesses across the capital are facing severe skills shortages.
Meanwhile housebuilding is going into reverse gear. High cost inflation, high interest rates and increasingly uncertain regulations are, unsurprisingly, dramatically slowing new housing starts. That is why – as our Place Commission set out earlier this year – an ambitious plan to accelerate housebuilding is urgently needed.
This should include greater policy support to get private investment into affordable housing, alongside more long-term funding from government.
It means the proper resourcing of local planning authorities. And it means reviewing policies around the so-called green belt, to get land which currently has no civic or environmental value used for much needed homes.
And to return to my previous point, investing in transport can also unlock housing development. There are shovel-ready projects – like extending the DLR to Thamesmead – that could swiftly deliver tens of thousands of new homes.
My third challenge is ensuring that Londoners have the skills we need to succeed in the fast-changing world of work.
The labour market has been transformed by hybrid working, rapid technological advances and the first steps on the road to net zero.
Londoners must be equipped to seize these new opportunities. Yet a BusinessLDN survey earlier this year found that three-quarters of firms are reporting open vacancies, and, of those, two-thirds are struggling to fill them.
The London Local Skills Improvement Plan we published last month sets out a blueprint to get the city’s skills system fit for the future. It includes steps to reform the complicated bureaucracy that is holding businesses and people back, as well as ways to boost training capacity, in areas such as digital and green skills, that are in high demand.
This will support London’s transition to net zero, drive growth and act as a bridge to a better, fairer city that offers opportunity for all.
There is nothing we can do to take the politics out of politics over the next year; nor to calm the macroeconomic headwinds. But we can act where we have agency.
It is our job, as London businesses, as Londoners, to work together to ensure that we remain the best city in the world in which to do business, for the benefit of the whole UK.