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A second example is in relation to London airports, which is an issue of major concern in my part of London. Many of my constituents are airport workers and many residents are concerned about the environmental side effects. I am always being told that continued and large-scale
expansion of London airports is essential to the London economy. Frankly, I doubt that. Slots for aircraft are allocated inefficiently and aircraft are often highly underutilised. Large numbers of people who pass through London are transit passengers and are not from other parts of the UK, but other parts of the world. It is obvious to me that such demand is as it is presented. There are massive environmental side effects such as noise, pollution and ground pollution. Most of the boroughsConservative, Labour and Liberal Democratin the relevant parts of London are actively campaigning against expansion. We need to bear that in mind when arguing for the constant expansion of infrastructure and facilities.
Thirdly, the hon. Members for Cities of London and Westminster (Mr. Field) and for Hackney, South and Shoreditch referred to the Olympics in positive terms. I do not disagree with that broad tone, but we have reached the point when the debate is becoming rather sour. One group of people are asking why we bothered with the games in the first place and another group are denouncing the others as professional cynics. That is not helpful. There are two propositions of which we need to be aware. The games could be a great boost to London or could be a disaster. It is not altogether clear that they will turn out positively and we need to focus in a practical sense on the difficulties. For example, it appeared this week that the London borough of Newham has produced a major report questioning many of the gains of regeneration, of which that area is supposed to be the main beneficiary. We need to consider what the problems are and why the design does not fit what was expected.
The other issue is that we made a bid for the Olympics on the basis of costs that were wholly unrealistic and that have been revealed to be much higher. Since the Economic Secretary is here, I will say that, at some point, the Treasury will have to explain why it signed off and gave a financial guarantee on the basis of such wholly unrealistic costs. We now have the real practical problemnot just general pros and consthat London taxpayers do not want to pay more council tax. People have a strong and entirely understandable resentment against paying more through the lottery. Another good example was the chairman of the National Opera saying yesterday that it will result in cuts in the arts and therefore in culture, which is central to London. Taxpayers in other parts of Britain are saying that it is not right for them either. So who is going to pay? It is a real bottleneck.
The one lesson that has to be learned is that a tougher approach must be taken on the question of funding and on the venues that are chosen, including the media centre. It may seem a trivial example, but I heard the other day of a proposalit is part of a packageto create a shooting range at Woolwich at a cost of £18 million that will be demolished three weeks later for a further £8 million, yet we have perfectly good international ranges within a few miles of London. Such extravagance is envisaged on a large scale. Someonethe Treasury is certainly involvedhas to get a grip on it; otherwise there will be a complete draining away of confidence. That will do great harm to London and to sport.
With those qualifications, I thank the hon. Member for Hendon for saying what many think. I speak not so much a national spokesman but as a London MP. I am proud of the city. It has achieved much, and we want it to continue to succeed.
Mr. Mark Hoban (Fareham) (Con): I congratulate the hon. Member for Hendon (Mr. Dismore) on securing the debate and on the way in which he opened it. I am the first Member representing a non-London seat to speak, so I may not seem so metro-centric as others.
I want to touch on some of the themes raised by hon. Members in this brief but important debate. The hon. Member for Hendon set the scene well when speaking about Londons transport problems. Its transport infrastructure is a constraint on the growth and development of London as a major employer and as a place to live. My hon. Friend the Member for Orpington (Mr. Horam) commented on some of the stresses on suburban rail services caused by the growth in passenger traffic into London. It has a ripple effect not only into and out of London, but even as far south, Mr. Hancock, as your constituency and mine. Long distance commuters from Portsmouth and Fareham travelling into London face increasingly cramped conditions because of transport developments and increasing demand in outer London as well as in the centre.
The hon. Member for Hendon was also right to mention Londons housing problems. Anyone who lives in London, even those like me who live here only part-time, is acutely conscious of the pressures caused by house prices and the affordability, availability and quality of housing stock. He also spoke about unemployment, which I shall return to later.
The hon. Gentleman highlighted a point which was also raised by my hon. Friend the Member for Cities of London and Westminster (Mr. Field). He spoke about the tremendous paradox that London has a high level of unemploymenthigher than any other part of the United Kingdombut also a high level of inward migration. Society faces the risk of polarisation with extreme wealth and extreme poverty living cheek by jowl. The hon. Member for Hackney, South and Shoreditch (Meg Hillier) has referred to the issues around social cohesion that flow from that.
My hon. Friend the Member for Cities of London and Westminster has rightly paid tribute to the work of the lord mayor of London and the City of London corporation in promoting Londons financial services sector. They promote not only the financial services sector in London, but the sector outside London, and they act as ambassadors for the sector on a global basis. It is important to recognise that London, as a global city, needs to build strong links with other parts of the world. We need to attract business into the UK as well as people into the UK. In debates about London, it is important to look outwards and to recognise that other cities and capitals are trying to attract the same business. We need to consider Londons competitiveness as a city and international financial centre and how it shapes up and compares with other centres in the world. I shall return to that subject in a moment.
First, however, I want to say a little more about unemployment in London. At 7.9 per cent. in the mid-point of last year, it exceeded the national average. It seems a contradiction that although Londons economy is growing faster than the UK economy, London is seeing such high levels of unemployment. Certainly we are seeing inward migration, as we heard from my hon. Friend the Member for Cities of London and Westminster, and
anyone who has spent time at any of the international banks based in the City or in Canary Wharf will have seen the rich and diverse pattern of employment.
We need to consider the causes of Londons unemployment. One factor highlighted by the report commissioned last year by the City of London corporation was the skill levels of people in London. It found that the proportion of graduates living and working in London is much higher than in the UK as a whole. It was also evident from the report that the proportion of Londoners with few or no qualifications also exceeded the national average. I suspect that that low level of skills underpins the high level of unemployment in the capital. If we are to tackle the mismatch between wealth and poverty in London, we need to consider the skills of the population as a whole.
The report also highlighted the fact that the number of adults receiving training in London was below the national average. We clearly need to focus on improving the skills set of people who work in London, but we must also raise the aspirations and attainments of young people there. I have visited the City of London academy in Southwark, and I am sure that its programme will play just as important a role as city technology colleges, the forerunner of academies, in raising levels of attainment in parts of London.
Mr. Love: Will the hon. Gentleman accept that one problem is the continual shedding of manufacturing and construction jobs in Greater London, and that the people who lose jobs in one industry desperately need to be retrained for the new jobs that are coming to the capital?
Mr. Hoban: It is a pattern that we see throughout the country, and it is not limited to London. We have seen a decline in the manufacturing sector, and if people are to find employment, they need to be retrained. That focus is particularly needed in London given the relatively high level of unemployment.
I return to the competitive position of London vis-Ã -vis other world capitals. It has been a long debate and most, if not all, speakers have touched on transport infrastructure. I am sure that, like me, the Minister has heard the lobbying of employers in the City of London and Canary Wharfand of hon. Members todayabout the importance of Crossrail to Londons transport infrastructure. However, my hon. Friend the Member for Orpington and the hon. Member for Twickenham (Dr. Cable) were right to point out the importance of relatively small projects that could help unlock transport capacity.
The other factor that we face in maintaining Londons competitiveness and its contribution to the UK economy is the competitive threat posed by other financial centres across the world. For example, in the run-up to the Budget a number of business organisations commented on the lack of competitiveness of the UK tax system. When businesses are wondering where to locate their international operations, they will consider the competitiveness of the tax system. We have among the longest tax codes of any developed country, second only to India. In 1997, we had the third lowest rate of corporation tax in the European Union, and we now have the seventh highest. Such factors have an impact upon peoples perception of London as a place to locate.
Another issue, which is close to my heart and that of the Economic Secretary, is the competitiveness of the regulatory system of the financial services sector in London, and how it compares with other sectors worldwide. We need to be continually vigilant, because there are territories and locations that offer advantages and attractions to financial services businesses, if those businesses locate outside London. To the extent that that happens, or to the extent that such businesses locate themselves outside the UK, there is a detrimental impact on the UK economy as a whole. We might not be able to redress all such differences, but unless we are vigilant as to the tax and regulatory risks posed by other jurisdictions that seek to attract financial services business, Londons premier role as a motor for the UK economy will be under threat. We should be conscious of the threats to Londons status as a leading economic powerhouse not only in the interests of Londoners but in the interests of people across the UK.
The Economic Secretary to the Treasury (Ed Balls): I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on securing the debate and I appreciate the wide range of points that have been made. A common theme has run through most speeches, perhaps with the exception of that by the hon. Member for Twickenham (Dr. Cable), from whom qualifications seemed to come across more strongly than support for the importance of the London economythough I may just have misheard him.
As has been said, London is vital to the UK economy as well as to the lives of people who live and work in it. It is right and proper that the Members of Parliament for London continue to make the case for it, but it is also right that the rest of the country appreciates its vital role both in job creation and investment and in its contribution to public finances, which I acknowledge.
It will be impossible in the limited time available to respond fully to all the points that have been made. I shall start with the comments made by my hon. Friend the Member for North-West Leicestershire (David Taylor), who gave some important context. We are indeed concerned with the national interest and with the jobs and prosperity of people across the country. In my view, the stability of the economy during the past 10 years has been an important contributor to the turning round of the employment situation throughout the United Kingdom. The narrowing of regional income differentials between London and the rest of the economy during the past year, as shown in the latest figures, is a strength for the economy and for society. The northern regions are catching up. However, an important part of the reason for that is Londons strength as a motor for growth and job creation, which benefits the rest of the country.
As a constituency MP in Yorkshire and as a former member of the steering group, The Northern Way, I acknowledge and support 100 per cent. the role of the London economy in the prosperity of the UK as a whole. As the Economic Secretary, I fully understand the important role of London and of the City in delivering jobs, investment and tax revenues. Like many MPs from different parts of the country, I have lived in London for more than 15 years, and I see myself in part as a
Londoner. I fully appreciate the diversity and dynamism that is London today. My children go to a primary school that has fewer than 200 children but at which more than 28 languages are spokena small fact that testifies to Londons huge variety.
We have a capital that delivers £180 billion of economic activitymore than the economies of Sweden and Russia. Median weekly earnings are £540 a heada fifth higher than for the UK in generaland the higher level of earnings is reflected in the job creation of the past decade, with 300,000 more Londoners in work, the biggest proportional rise in employment for any UK region. It is seen also in the growth of the City and in higher education in London. At the same time, as my hon. Friend the Member for Hendon pointed out, there is substantial disadvantage in London. It has the highest worklessness rate of any region.
Ms Buck: The borough of Westminster has the ward with the lowest proportion of people on workless benefits but also four of the wards with the highest proportion of people on workless benefits, in one of which a staggering 83 per cent. of children are in families on benefit. That is a mile or two from the west end. Whatever we are getting right, which is a lot, we are clearly not managing to get right all our employment strategies for families on benefit and in poverty in inner London. That needs urgent review, and I hope that the Economic Secretary will reflect on it.
Ed Balls: Given the shortage of time, I shall reflect on that point in detail after the debate. The point that I was going to make was related to the degree of worklessness, the fact that more children live in poverty in London than elsewhere in the country, the fact that there is more overcrowding, and the coexistence of those conditions alongside prosperity. That is a source of concern to any of us who care about cohesion and inequality. It is also partly an explanation for why London benefits disproportionately from public spending compared with other parts of the country. There is greater need, which results in greater delivery of public spending resources.
My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) mentioned employment policy. There is no doubt that our employment policy and our skills policy, which is now strategically directed by the Mayor, need to be more finely tuned so as to tackle the issues that she raised. I hear the concerns of the hon. Member for Cities of London and Westminster (Mr. Field) about employment, but he should reflect on whether the abolition of the new deal employment policy is really the right way. His rhetoric was probably genuine. However, if he wants a serious discussion on solutions, he should recognise that an active employment policy enables us to meet the concerns of my hon. Friend the Member for Regent's Park and Kensington, North.
The point that was made about housing is well taken. Building more social housing must be a priority for the spending review, as must tackling homelessness and lack of affordability, which have been mentioned by a number of hon. Members including my hon. Friend the Member for Edmonton (Mr. Love). It is also important to continue to invest in transport, as the Government have been doing over the past decade. Let me say to the hon.
Member for Orpington (Mr. Horam) that transport is not an area in which a quick fix is easy. Extending platforms and building new trains or lines takes a substantial time. Part of the reason why his constituents face overcrowding issues is that it will take time to turn round the substantial under-investment deficit with respect to the railways, the buses and the tube that existed for a number of decades. We have been trying, and we continue to try, to rectify that.
I recognise the points made on Crossrail by my hon. Friend the Member for Hendon. As the Minister with responsibility for the City of London, I have heard the arguments many times and I understand and appreciate them. The Government are committed to taking the Crossrail Bill forward and to doing everything we can to try to meet the challenge before us. My hon. Friend and others will understand that the project is a major one that will cost many billions of pounds. Finding a way to finance it that is affordable and sustainable is a challenge and would be so for anyone in government, including for us. Nevertheless, we take that challenge seriously and we understand the long-term consequences for London if the issues raised by Crossrail are not addressed.
My hon. Friend the Member for Hackney, South and Shoreditch (Meg Hillier) urged recognition of the important role played by Transport for London in meeting transport investment needs, and of the fact that TFL is now AA-rated. That is exactly why we are enabling TFL to borrow to such an extent to finance its transport plans. She is right to laud the Mayor for his leadership on transport, including public transport, and on the congestion charge. I was surprised that the hon. Member for Cities of London and Westminster criticised the congestion charge, given the achievements that I believe that the Mayor has delivered over the past few years.
As a former resident of Hackney, I agree with my hon. Friend about the dynamism and vibrancy of south Hackney and Shoreditch, which are well known. I am sure that they contribute to the productivity and performance of the London economy, both directly and indirectly.
I shall end by agreeing entirely with those hon. Members who stressed the importance of being vigilant in continuing to support the City of Londons competitiveness. The fact that in a recent survey from the City of London, London was ranked above New York as the financial centre of the world is not only a source of great pride for London and the UK, but a reason for us to be vigilant
Dr. Evan Harris (Oxford, West and Abingdon) (LD): I am pleased to have the opportunity to raise this important issue, which I have already raised briefly in oral Education questions with the Minister whom I am pleased to see will respond to this debate. It is my contention that there are more and more attacks on and, in addition, threats to academic freedom in our universities, including the freedom to research topics of ones choice, the freedom to lecture and give academic treatises on subjects of ones choosing within ones academic field, and the freedom of expression in and of itself on university campuses.
We have seen recently the incident at Leeds university, in which an academics speech was cancelled by the university. We have seen the personalised attacks on a professor at Oxford university, in my constituency, on the basis of his political views, and the calls for his tenure to be somehow affected by them. We read in TheTimes Higher Education Supplement that some tax-funded institutions of higher education that one would think were subject to the rules about academic freedom qualified their provisions on academic freedom by reference to religious ethos. Then there is the question, which I raised with the Minister in oral Education questions, of no-platform policies on university campuses.
What I want from the debate is an acknowledgement by the Minister that he recognises the importance of academic freedom and freedom of expression and that he supports the existing legislation, which was introduced by a previous Government and which I believe was steered through the House in part by previous political opponents of mine, but which has stood the test of time. I want the Minister to say that the Governments clear position is to respect freedom of expression and academic freedom, and I want him to say whether he will take action to make it absolutely clear that Parliament, the Government and the institutions that govern the way in which universities receive taxpayers moneythat is why we have a particular interest in this issueare interested and keen to ensure that there is no restriction on freedom of expression within the law in universities.
I do not argue that freedom of expression should be absolute. Clearly, we have, except in this place, libel laws. We have rules about matters that are sub judice. We have rules about incitement to violence and incitement to criminal offences. I support those rules. We also have rules about incitement to racial hatred even if those involved do not themselves incite criminal offences. So clearly there are limits, but beyond those limits, which I think should be limited and clear, we need to ensure that we protect freedom of expression, especially in the area of religious discourse. In fact, I would argue that it is incumbent on us to challenge religious views, whether that be in academia, in politics or in general speech.
It is also vital that we recognise the importance of academic freedom in the sense of freedom to research and publish without constraint from the funder of the research. I shall not go down that road, but I wanted to acknowledge those issues, and I am grateful to the University and College Union, a trade union, and to Universities UK, which represents vice-chancellors, for the briefings that they have given me for the debate.
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