London is home to some of the world’s biggest businesses and its richest people, its most highly-rated restaurants and art and music and sport. It is the world’s pre-eminent financial centre, contributes over a fifth of the UK’s GDP and produces more than Switzerland. It is – according to many – the greatest city in the world.
Yet a third of our children grow up in poverty. The richest Londoners can live up to 25 years longer than the poorest. Our highest-paid executives earned more by January 8th than the average Briton will earn all year. The average house price increased by twice the average wage last year.
The greatest city in the world, perhaps, but for whom? And at what?
This paper argues that London’s next Mayor should be clear: a growing gap between rich and poor – increasingly between rich and the rest – is not merely the unfortunate by-product of progress in London; it is the antithesis.
How would London look if re-engineered around the interests of all Londoners?
We suggest four guiding principles:
Having enough to live on should be an entitlement in a rich city, not a privilege
The Mayor should push for a living wage in the lowest-paying sectors and properly enforced London and sector specific minimum wages, stronger trade unions, more support to improve skills and lower living costs, and routes into decent jobs particularly for our young people.
Remuneration distorted beyond the dreams of avarice is no more useful here and no more welcome than abject poverty.
The Mayor should campaign for company pay ratios and greater transparency on executive pay, workplace democracy and higher taxes on wealth.
Businesses of good character are defined not by shareholder return or contribution to GDP, but by the difference they makes to the lives of Londoners.
We need a Mayor’s Pledge, which employers are encouraged to sign, setting out our expectations of a good London employer:
- To pay at least the Living Wage so every London worker has enough to live on
- To pay highest-paid staff no more than 75 times the median, to publish the company pay ratio, and to introduce an employee onto the board to constrain excessive pay
- To willingly pay the taxes government expects to receive
- To ensure fair opportunities for young Londoners by offering apprenticeships and paid internships.
The Mayor should show their support for London’s biggest business by buying a share in each and asking them to commit to the Pledge at their AGM.
Houses in London are for people to live in and there must be enough for everyone. They should no longer be mistaken for investment vehicles.
We need a London Housing Challenge, with senior representatives from across the sectors led by the Mayor, to agree the most ambitious housing plan for London since the 60s, and set about building it.
Telling a story
The Mayor doesn’t have executive power over the most obvious routes to tackling inequality – tax rates, wages, social security. But – as we have argued in the previous two London Papers – the Mayor enjoys a voice, a visibility and a capacity to convene which is unparalleled in British politics.
The role lends itself to that of an activist – bringing their profile and pressure to bear, speaking with democratic legitimacy on areas over which he or she lacks executive responsibility. An activist and a convener, a campaigner and an advocate, a thinker and at all times a leader, telling a new story about our city. They would say:
To our poorest citizens, poverty is not your fault but we must work together to tackle it. Know that London is unashamedly on your side.
To our wealthiest citizens, we are all citizens of London and share our streets, our services and our communities. We ask not that you give more – although charity is important – but that you take less in the first place.
To our businesses, thriving businesses are vital for the success of our city; We respect the importance of the executive pay packet, the share options scheme and the size of your balance sheet but we do not revere them. We value businesses which employ their staff well, pay taxes willingly, look after the environment diligently, and fairly distribute their profits.
To all London’s citizens, we do not judge success by the size of our financial district or the ‘competitiveness’ of our corporate tax regime but by the power we all wield, the opportunities we all enjoy and the wealth we all share.