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WSWS : News & Analysis : Europe : Britain
Poverty, homelessness and the London Mayoral elections
By Keith Lee
13 April 2000

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It has become a common feature of elections that, despite all the airtime and
newspaper coverage devoted to various candidates, the concerns of working
people are barely addressed. If by chance they receive a mention, it is only in
the most distorted way—witness how worries over increasing social dislocation
have become channelled into demands for draconian law-and-order measures.

The campaign for the May election of a London mayor and 24 members of the new
Greater London Assembly is no exception. The mayoral contest has generated more
media coverage than most elections, due to the crisis for the government of
Tony Blair following the decision of former Labour MP Ken Livingstone to stand
as an independent candidate. But one could be forgiven for thinking that the
only constituency that really matters is the capital's corporate executives and
stockbrokers.

London is a city of two halves. The City of London (home to the stock exchange
and the headquarters of major banks, insurance companies and pension funds) is
the richest wealth-generating region in Europe, with a gross domestic product
23 percent above the national average. As the number of millionaires and high-
flying executives has increased, fuelled by rising share prices, so have
property prices. In nearby Canary Wharf, Margaret Thatcher's monument to
"poplar capitalism", even a parking space can cost upwards of £50,000.

Great wealth exists alongside dire poverty. The "new" wealth referred to so
admiringly in the media and political circles is confined to an extremely
narrow layer. The capital is home to 13 of the 20 most deprived areas in the
UK. Some 46 percent of London's unemployed have been jobless for more than a
year—10 percent above the national average. Infant mortality is higher in the
capital than the rest of the country.

Such differences are found in all major cities. They express the fact that over
the last two decades, successive governments have presided over a significant
redistribution of wealth away from working people to the rich.

Opinion polls conducted during the mayoral contest have revealed that most
Londoners consider the issues of poverty and homelessness to be the most
important. Yet these have received scant attention.

It is estimated that some 50,000 young people are homeless in London, over 81
percent of these being forced out of the family home through poverty, abuse or
family breakdown. At Centrepoint homeless refuge, half the new homeless were 16
to 17 years old and 61 percent were female. Jobless 16-17 year olds are not
entitled to any state benefits. The availability of social housing has been
drastically reduced through a combination of the previous Conservative
government's "right to buy" legislation and cuts in Local Authority house
building programmes.

Whilst the situation is particularly extreme amongst the young single
homeless—who are not regarded as a priority and do not benefit from homeless
legislation—it is encompassing broader sections of the population. The lack of
affordable and decent housing in London is now so acute that employers complain
they are unable to find the workforce necessary to run public transport, clean
offices and teach in schools.

Health campaigners estimate that there are around 5,000 nursing vacancies in
the capital. A recent study by the government's Teacher Training Agency
reported that more than 40 percent of London's teachers are planning to leave
the capital in the next five years because of high house prices. Professor
Alistair Ross, co-director of the research project, said, "if you are on
£22,000 a year you face the choice of living in rented accommodation for the
rest of your life or moving outside the capital where you can actually buy
somewhere to live.” So sensitive was the report that the agency refused to
release copies to the press in advance of its publication.

The disparity between the small pay packets of many London workers and the high
cost of living in the capital is so great that in order to deal with the labour
shortage the Blair government is considering offering interest-free loans to
some public sector workers to enable them to buy a house.

The government claims that the main vehicle for regenerating the
city—supposedly bringing increased living standards to all—will be a newly
created London Development Agency (LDA). Its remit is to compete for both
international and intra-regional investment. Labour's Green Paper outlined that
the LDA "will play a key role in co-ordinating a London wide approach to
economic development regeneration. The LDA will work closely with the voluntary
and public sector organisations alongside the private sector.”

Labour holds this up as representing a new consensus between the private and
public sectors. In reality, there is nothing new to this approach. The process
whereby funding for social services is secured from private corporations and
financial concerns by offering concessions to those which located into an area
of social deprivation was begun 20 years ago by the then Conservative
government. Its first prototype was the London Docklands Development
Corporation (LDDC), set up by Thatcher in 1981, supposedly to "sweep away
inertia and red tape" and produce tangible results fast to tackle social
deprivation.

The Docklands area comprises Tower, Wapping, the Isle of Dogs and Royal
Docks—spreading up to Tower Bridge along 35 miles of Thames waterfront. Under
the LDDC this area was declared an enterprise zone; generous tax breaks were
offered and planning controls relaxed to induce businesses to relocate.
According to David Widgery's book Some lives — A GP's [doctor's] East End
(Simon and Schuster), "the LDDC has proved to be a highly secretive engine of
corruption, a government-financed estate agent which has done to the Docklands
what the Highland Clearances did to the North of Scotland. Its set up has a
startling simplicity. A line was drawn round the perimeter of the riverside
area, which excluded the residential centres like Canning Town but included the
docks and dock buildings themselves, a total of 150 acres. The LDDC was the
sole planning authority and landowner able to purchase vast tracts of land at
artificially low prices. Having made some basic improvements in amenities
little more than levelling and decontamination of sites under the impetus of
the 1970s property boom, it was able to sell on to speculators at prices which
were still attractive."

The Canary Wharf tower, Britain's tallest office building, was a symbol of this
speculative bonanza; built by the Canadian property speculator Paul Reichmann
in 1986 at a cost of £4 billion. The site was purchased cheaply and Reichmann
was given generous tax breaks, so much so that he could build plush offices and
still let them out at half the rate of the City of London. Its construction has
done nothing to alleviate the crushing deprivation of workers in the
surrounding area.

In total, nearly £4 billion of public money was poured into LDDC's ventures.
Most of the 14,000 homes built were aimed at attracting businessmen,
stockbrokers and other high flyers—their prices being way out of reach for most
people. Social deprivation has increased over the same period in London's East
End, recalling the images portrayed by Dickens, Jack London and others. The
east London borough of Newham is the poorest in the UK and has the highest
incidence of tuberculosis in the country—79 cases per 100,000 of the
population. A shortage of the BCG vaccine has meant that a programme of
immunisation has been recently suspended. London-wide figures have doubled to
6,200 cases.

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