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From The Socialist newspaper, 24 January 2004

London: Obscene Wealth And Abject Poverty

LONDON IS a microcosm of British capitalism, where the extremes of obscene wealth and abject poverty jostle within the city boundaries. 
With a population of 7.5 million and rising, health, education, housing and transport are cracking under the strain. This feature exposes what life is like for working class people in the capital. 
London Socialist Party members report.

Distorted economy

THE EMPLOYERS' neo-liberal drive in both the public and private sectors to drive down wages and impose intolerable working conditions has combined with rocketing prices for housing, transport and other essentials. This underlies the recent militant action taken by organised workers in London.

Pete Dickinson

These special pressures faced by workers in the capital are nothing new but show signs of intensifying, according to statistics from the Mayor's office. Also not new, and also deepening, are the huge differences between rich and poor revealed by the figures.

For example, London has a higher GDP/capita (total economic output per person) than Switzerland, one of the richest countries in the world and has the highest percentage of high disposable income households in the country. $637 billion flows through the foreign exchange market every day, making it the largest in the world and contributing to the finance and business services sector accounting for 40% of London's GDP.

However, alongside this vast wealth is abject poverty, shown by one million on income support and 43% of children living below the poverty line, when housing costs are taken into account. Also, 20 out of the 88 most deprived local authority districts are to be found in the capital.

The economic structure of London is becoming increasingly distorted, with the service sector now accounting for 83% of total activity compared to 55% nationally. Within services, the biggest employer is the state, which includes central and local government and the NHS.

In the private sector 'cultural and media' is by far the largest, employing 700,000 people, (20% of the total) with finance and business services second with a workforce of 300,000. These two areas were heavily involved in the bubble and when it burst three years ago there were swingeing job losses. For example 55,000 were made redundant in finance and business services.

The pain was not felt only in finance however, the collapse ushered in a general economic downturn in London that resulted in 30,000 job losses in manufacturing, 17,000 in construction and 21,000 in transport and communications.

This resulted in big rises in unemployment in the capital leading to an overall jobless rate of 6.9% in February 2001, compared to a national average of 5.2% and second only to the North East.

This figure, which contradicts the image of London as a boom city, is even more shocking when variations within the region are analysed. Unemployment in inner London is twice the national average. In the area classified as Inner East it was 13.8% in 2001, one of the highest in the country. A particular feature is that long-term unemployment is much higher than the national average and it is concentrated in the 18-24 and over 50 groups.

The distortion and contradictions of the London economy are shown by the chronic labour shortages that co-exist with these horrific levels of joblessness, in particular in teaching where vacancy rates are 3.5 times the average for England as a whole. Another aspect of the distortion of the local economy is the long-term decline of manufacturing which shows no sign of ending, with only about a quarter of a million still employed in the sector.

Within manufacturing the biggest employer is the print industry with 87,000 on the books, followed by electrical goods and food processing both with about 30,000 workers. Although these jobs are concentrated mainly in small firms, for example in the print only 2.5% of companies employ more than 100 people, there are still some significant big factories on the outskirts, such as Fords to the east and some large electrical and electronic goods manufacturers in north west London.

Housing conditions are rapidly getting worse, making life intolerable for millions due to overcrowding and sky-high costs, shown by average house prices at twice the national average. Private sector rents have gone through the roof, where for example a three-bed ex-council flat on a run-down estate in east London can cost about 1,200 per month.

More than half the severely overcrowded households in the country are in the capital. This will get much worse due to a rapid population rise and a collapse in the supply of social rented housing.

Livingstone capitulates

LONDON IS crying out for a radical alternative to the Tories and New Labour. Many workers saw Ken Livingstone as that alternative when he stood as an independent against New Labour in the London mayoral election in 2000.

Jim Horton

Now Livingstone is back in the New Labour fold and calling for increased seats on the Greater London Authority for New Labour as the only way to defend public services. He conveniently ignores Labour-controlled councils like Ealing, which are carrying out millions of pounds of cuts to services.

Livingstone's victory in 2000 was seen as a blow against Blair. It gave an opportunity to galvanise opposition to New Labour into a mass movement. But rather than set about the task of creating a radical left alternative Livingstone stuck to his promise to work with the government, professing no ideological differences with Blair.

Even on the one issue that separated Livingstone and Blair, tube privatisation, which was a key factor in his victory, Livingstone eventually capitulated, relying on legal manoeuvrings rather than a mass campaign involving tube workers and commuters.

The congestion charge has reduced traffic in central London, but along with increases in central zone tube fares, it means many workers cannot afford to travel there. The main aim of the congestion charge was to raise extra money for public transport. But it has raised only half of what was expected.

900 million is needed for London transport, yet the government intends to cut grants this year by 125 million. Now he is back with New Labour, Livingstone is even less likely to launch a serious campaign to get more funding for London's creaking public transport system.

Despite his radical stance against the war and tuition fees, Mayor Livingstone has courted London's business community. More recently he backed the defeated New Labour candidate in the Brent East by-election and condemned tube union RMT's strike action over the sacking of one of their members.

Socialists can no longer give Livingstone even critical support. Our task is to campaign for a new mass party of the working class to provide a mass political alternative to all the parties of big business.

Under capitalism, the conditions facing millions of workers in the capital can only get worse. Only socialism can set about the task of planning resources to meet the economic, social and environmental needs of all of London's population.

The London schools scramble

TONY BLAIR promised that education would be his top priority. For thousands of London parents and school students this is just another broken promise.

Martin Powell-Davies

New Labour have forced the Tory philosophy of the marketplace firmly into education. Teachers, pupils and schools are measured and graded through SATs and league tables. Schools compete with each other for the pupils that will give them the best results.

In London there are many schools in a relatively small area. This has made the scramble for places particularly sharp.

Labour politicians have led the charge, with supposed 'Left' MP Diane Abbott sending her son to a 10,000-a-year City of London school and Blair himself rejecting the local Islington secondary school.

Now Blair has launched the 'London Challenge', promising "radical structural reform" of London's secondary schools. Beneath the spin, this will mean more privatisation, more selection, more threats to the conditions of school staff.

Labour ignore the fact that private-sector involvement is already proving a failure. In Southwark, WS Atkins had to pull out of its contract to run education. 30 new 'Academies' are promised in London by 2006. Parents should not be fooled by the promise that this will mean proper investment in education.

This handful of schools may be well-resourced but, in return, they will be allowed to select pupils and will operate independently of local authorities.

School admissions could become even more of a free for all. Most schools will continue to suffer cuts. The little extra funding promised for 2004/5 may not even be enough to cover the shortfalls in existing budgets.

More jobs will be lost and more pupils will fail to get the support they deserve. With money tight, more schools will be tempted to follow the government's "remodelling" plans and replace qualified teachers with lower-paid support staff.

The London Challenge promises to "make sure London leads the way in remodelling its workforce". Of course, you can be sure Labour Ministers will be sending their children to schools where all classes are taught by qualified teachers.

It will be black and working-class youth who will lose out, once again. But Labour's attacks on education will be met with opposition. Parents, teachers and school students are all angry at the raw deal they are getting. What's needed is a clear lead - particularly from the trade unions.

A joint campaign between staff and the community over cuts, shortages, SATs or privatisation would be a real challenge to Blair's plans.

Workers' struggles

ON AVERAGE 150,000 people move into London from elsewhere in the country every year. In addition there has been rising immigration, especially from Nigeria, Bangladesh, South Africa and Sri Lanka. One third of London's population belong to an ethnic minority with the white population falling over the past ten years.

Jim Horton

With the scandalous underinvestment into London's public services, the potential exists for increased racial tension. But the main feature in London recently has been an upsurge of workers taking action over pay and other issues.

In addition to the long-running dispute by local authority workers, university and college staff and teachers over London weighting, strike action over pay, or in response to changes to terms and conditions or management bullying is a frequent occurrence.

Postal workers also took official strike action over London weighting and as a consequence also sparked national unofficial strike action in the autumn.

This followed unofficial strikes by check-in staff and baggage handlers at Heathrow airport, which has the biggest concentration of workers in Europe. Socialist Party members have played leading roles in many of these disputes, including leading a successful strike at Whipps Cross hospital over pay parity for privatised workers.

Victorian transport

NO-ONE SHOULD underestimate the importance of transport as a political issue in London. Many workers in the capital spend three hours or more a day commuting from the suburbs while soaring housing costs have driven many out of the city altogether.

Jared Wood

The frustration with signal failures, overcrowding and the highest fares in Europe, felt by London's workers, is now being shared by business leaders who recognise the competitive disadvantage faced by employers in a city that cannot move staff or goods efficiently.

The government has attempted to use this transport crisis to introduce PPP on London Underground. They argue that privatisation of infrastructure is the only way to pay for new track, signals, rolling stock and station repairs. But all PPP is achieving is a massive programme of corporate welfare for private contractors.

They include the infamous Jarvis construction, who recently announced a sharp increase in profits as a result of PPP and PFI projects. This announcement, soon after two derailments on the tube, has confirmed that privatisation is failing to even maintain the tube let alone renew it.

The PPP debacle comes on top of the experience of bus privatisation, which has left bus workers doing a six-day week to earn about half the salary of a tube driver. London has retained a degree of regulation over bus services, which has saved passengers from the worst excesses of private operators elsewhere.

Even with a new unitary transport authority under the mayor, lack of funds and reliance on private operators is severely hampering moves towards creating an integrated transport system that could coordinate tube, bus and rail networks.

What London commuters need most of all is reliability and new capacity. New high-speed rail services from the home counties and suburbs into central London would slash journey times and relieve congestion on existing tube lines. But this will cost huge sums of money.

How should it be paid for? The government must make investment possible from central funds. Government can borrow more cheaply than either private business or semi-independent quangos like network rail.

Much of the cost could be recouped from those who will benefit most, the City of London and financial services industry. London's business leaders are forever bleating that the annual cost of congestion in London runs to billions so let them pay now towards these future savings. Big business in London pays less tax than similar businesses in Paris, Frankfurt, Tokyo and even New York so it is about time they contributed to the 'world class city' they aspire to.

The quickest way to improve reliability is much more simple, more drivers. In order to save costs bus and rail operators try to run their services with the minimum number of staff. This means that when a signal failure or traffic jam interrupts the timetable they do not have the spare drivers to step in and restore a normal service.

A signal failure at 8am will still disrupt the tube ten hours later. But the nonsense will continue unless spare trains with drivers are ready to come into service in the event of problems.

In the longer term a wholesale investment in public transport infrastructure is required. Existing services must be updated and innovations like tram services explored. A responsive and democratic transport authority should be charged with consulting with transport workers and users to draw up a plan for London.

The alternative is to let London become a living museum of Victorian engineering and Victorian working hours, as Londoners continue to spend fifteen or more hours a week in conditions your average mill owner would have blanched at.

London's housing scandal

WHAT THEY'RE doing to housing is going for two-stage privatisation. They try to get council tenants to vote to go over to ALMOs - arm's length management organisations - to prepare for full-blown privatisation.

Louise Thompson, chair, Waltham Forest tenants' council

But tenants are clear they want the council to have the money to spend on council housing and they want to be council tenants.

In Waltham Forest the council says there's a 70-year waiting list. In other words you can't ever get a council house. Most of the good stock has been sold off anyway.

This means that overcrowding is massive. Single person flats are being used for families because there's nowhere else. And there's no possibility of a transfer.

Blair: "Cheap as chips"

SINCE NEW Labour came to power in 1997, public service workers have seen intensified privatisation and cuts. Agenda for Change in the health service or the School Workload Agreement in education, the basic ingredient of all these fancy titles is the same.

Nancy Taaffe

These initiatives are designed to downgrade the workers in these services whilst weakening the service as a whole. For all his talk about delivering first-class public services, Blair is as cheap as chips.

In the library service where I work, we've been through a misnamed 'best value' process. The council employed a consultant from Veredus, previously Price Waterhouse Cooper. They operate under a different name in local government because of the bad smell left behind by their role in the Enron scandal.

The consultant was paid 100,000 to drive through the 'best value' agenda. The process works like this - reduce the core of professionals whilst giving their work to less-qualified staff, without extra pay.

The whole service finds itself doing more work for less, or the same pay. Management, in cahoots with the consultants, pick one section of workers off and give them extra responsibilities without extra pay, whilst introducing casual staff. This contributes to an increased sense of insecurity amongst the workforce.

My workplace has fought back on numerous occasions over the last two years. We've had unofficial walkouts and meetings in works time. We've had official strikes and protests and meetings with the local community.

We have kept some of the worst excesses of 'best value' at bay. But what is desperately needed is a clear strategy nationally to back up the local flare-ups and protests.

London is a powder keg. There's a low-intensity war in the workplaces because of these attacks on our working conditions.

A clear call from the trade unions, coupled with a determination to win, would chime with the latent anger that exists right across the public services. Such a strategy must be built from below to pressurise the trade union leaders.

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In The Socialist 24 January 2004:

No Fees!

Top-Up Fees And Blair's Future In The Balance

Make Big Business And The Rich Pay

Australia: Fees Don't Work

Socialist Party workplace news

For a fighting leadership of the teachers' union

Strike Back Against Low Pay

Fighting Low Pay At Sainsbury's

Ealing's Financial Crisis

Support Francis Tienga Ngale

Karl Debbaut - Next Hearing 26 January

Socialist Party feature

London: Obscene Wealth And Abject Poverty

International socialist news and analysis

Iraq: Imperialism's Quagmire

NGOs Provide No Solutions For The Exploited


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