UK
US
December 22, 2024 - 1:00pm
London is unquestionably one of the most important cities in the world. But for all its international, cultural, financial, legal and political prowess, the city’s Mayor, Sadiq Khan, resembles little more than a flaccid, uninspiring blancmange, limping towards the end of his third mayoral term with little legacy of which to speak.
Few things typify the Khan mayoralty’s lack of ambition more than the 2020 decision to move the global city’s assembly building from the riverfront and centrally-located “glass gonad” — guess which former mayor gave it that moniker — to the far outskirts of the city, in the Newham Docklands. Rather than being a representation of the capital’s power, it instead provided a metaphor for the mayoralty’s decline into comfortable lethargy.
How fitting that the mayoralty moved to the Docklands, closer to one of its biggest failings. It was revealed this week by London Centric that the Greater London Authority’s registered subsidiary for property investment and development had missed six years of repayments on a £300 million loan, and that it had failed to keep adequate records of its finances and decision-making. As a result, it may now need a bailout — funded by taxpayers.
The firm is the freeholder of 635 hectares of prime brownfield development land centred around the Docklands next to London City Airport. With good transport links into the City and Canary Wharf, it is a suitable site for mass housebuilding in a city famed for its astronomically high rents and property prices.
Given the cost of housing has consistently been an issue at the top of London voters’ minds, and has been identified by Khan himself as a huge drag anchor on London’s economy, the last eight years should have been characterised by a righteous crusade on the impact of low-quality, expensive housing on Londoners. Much less poor management accountability at the arms-length property development firm of the Greater London Authority itself.
Meanwhile, hampered by high commercial rents, local authority licensing restrictions and stagnating disposable incomes, the capital’s night-time economy is in steep decline, despite eight years of a “night czar” — employed by the Mayor on a healthy £132,846 salary — until her resignation in October this year.
Critical for the safety of a night-time economy, the Metropolitan Police, whose chief reports to the mayor as well as the home secretary, has taken repeated batterings following a series of scandals. These range from the heavy-handed policing of the vigil for Sarah Everard, herself murdered by a serving Met police officer, to findings of institutional homophobia, racism and sexism.
Where the likes of Michael Bloomberg and Rudy Giuliani changed New York City, and even the controversial Parisian mayor Anne Hidalgo had a transformational impact on the City of Light’s cycling and urban infrastructure, Khan has done little to move London forward. At the core of this failure is the nature of the mayoralty itself. Britain is constitutionally allergic to devolving money and power to its regions, because His Majesty’s Treasury likes to control the purse strings. In holding power over how money is spent, it dictates the direction of regional politics, when really the mayoralty should be given more power to raise and spend taxes, making the mayor truly accountable to Londoners for how money is spent and policy is made.
Granting the mayor additional powers on transport and planning would regionalise both, enabling decisions to be made on a London-wide basis rather than on the narrow and local interests of individual councils and wards. As things stand, all are pitted against one another in a race to avoid being the borough which has to meet the needs of the whole city, its employers and underhoused denizens.
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SubscribeI just don’t believe that anyone, in any Western country facing similar issues (and certainly not in mine, in Canada), will ever do anything meaningful about housing. Truly addressing the problem would require prices to come down significantly – and our more established generations have far too much invested in the market to allow that. They’ll do just about anything to prevent it. The only way we’re likely to see any real change is if something like a major crash forces it, creating the kind of de facto generational wealth redistribution we need to even begin considering forward-thinking solutions. I’ve written more about this at https://www.mustardclementine.com/p/we-need-a-crash-for-a-past-due-new-economy for anyone interested in a deeper dive.
Well, the crash already came in 2008. But instead of seriously reforming the financial system, central banks essentially reinflated the Ponzi once again. Now, all of sudden building new proporties is next to impossible for any number of excuses. Meanwhile the Chinese built them like it is nothing – too many in fact. In 2024 you would think providing everyone with adequate housing should not be so hard if we really want to.
So it seems you are right, they’ll do just about anything to keep the Ponzi going. Including driving people into homelessness. Technically a violation of human rights under UN Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR). In fact, some so-called first world countries have already been reprimanded by the UN for their housing problems.
Crashes solve nothing, they happen during major recessions , economic turmoil with high unemployment. The problem with housing is that most cities have reached the limits to growth, there is very little vacant land in most cities, so development is mostly in the suburbs causing urban sprawl and all the associated problems like transportation and congestion. Vacant land is very expensive and so are construction costs of materials and labor , and the shortage of skilled labor is huge problem. And municipal governments have their own issues with permits, nimby problems with locals opposing more development for all kinds of reasons. A huge problem in Canada was the mismanagement of immigration by the liberal government which caused rents to go through the roof, that is a fiasco that has caused most of the current problems. Unfortunately the solutions will take alot of time, there are no magic solutions. A recession is possible, could bring prices down temporarily, but with unemployment going to 10% or more, house prices will be the least of many people’s problems. I finished school in 1982 when interest rates were at 21% and unemployment at 12% in Canada, not only you could not get a job, no interviews either. So don’t wish for a depression.
Back at the time of the 2008 crash I remember the people on the telly telling us that we had to pump the economy back up because, amongst other reasons, those leaving school/university in those years would be forever scarred by a depression. That cohort would suffer high levels of unemployment their entire lives.
This might well have been true. But I wonder, if it was explained to them that by pumping the economy back up a far larger number of them, plus those that came after, would never be able to own a house, or start a family, or retire, they might have chosen to take their chances with a depression.
One of the problems some heterodox economists identified is dat the policy after 2008 did not affect the economy as expected. It was not foreseen that much of the printed money would not end up in the real economy in the first place. And it is really that discrepancy between asset prices and incomes that is the main problem. Contrary to what Dave Canuck says I think this might just get worse than the 80s. If working full time does not provide you with decent shelter anymore that is very demoralizing. Maybe even worse than being unemployed and on food stamps.
Another question is of course if it will crash anyway since we have not solved anything. What is essentially happening is that banks thrive when they sell debt. The more they lend out the more asset prices go up and the more asset prices go up the more they can lend out etc. That sounds a lot like a Ponzi and it is frustrating the market everywhere.
Did economists expect QE to end up in the economy (I’m talking primarily about the UK here)? Given that at the time banks already had a preference to lend into property rather than business. At that time I was reading economics forums that meanly dealt with the housing market and the landlords on there had no doubt at all where the money would end up. I do sometimes find it rather hard to believe they expected a different outcome, even if I am aware just how powerful groupthink can be.
Not sure about the UK situation specifically but the G7 monetary policies seemed pretty coordinated. In any case, Steve Keen has argued that Ben Bernanke failed to understand the actual accounting of QE when Ben believed QE would be inflationary. Though, it was inflationary, just not so much in the real economy.
The central banks were definitely coordinated. What I was getting at with my comment about the UK was not that QE was specifically different here, just that we (and our banks) are obsessed with the housing market and it should have been obvious to the BoE and Govt that that was where the banks would direct the additional lending.
As long as the Open Door Mass Migrating supporting Globalists are in charge they won’t as it is the easiest way to inflate the economy. Howeve illusory.
Seems particularly pronounced in the Angosphere.
There’s something of a contradiction in enquiring why the UK can’t devolve more local political and financial clout to (for instance) the London Mayor yet excoriating the ineptitude of the same.
Had Khan been granted greater powers, i’ve no doubt he’d have squandered them, and the well-being of Londoners, on waste, bureaucracy, DEI and probably supporting terrorist organisations in far flung places. Good riddance when he finally departs.
I suppose the counter-argument might be that greater powers might attract higher quality of candidates; that hardly worked for the office of PM, did it?
Well that seems to be an argument against democracy itself! Ok, there are quite a lot of good arguments against democracy. But we need to decide which way we want to go on this. The people often want contradictory things and make poor political decisions. But the alternatives involve even less political accountability. Perhaps China will finally “beat” the West, but the jury is still out. A society where only yesmen are rewarded isn’t likely ultimately to prosper.
It would be an argument against democracy, except i’m not making it; simply pointing up the same systemic failings, individual and collective, as you appear to be doing.
Successive governments promise to fix the problems of the planning system, building trade apprenticeships, infrastructure finance, etc. Despite fanfares when presenting new legislation and changing guidance the problems remain. Finding a solution requires joined-up thinking, which no government seems capable of producing. Changes need to involve economics, social norms, legal clarity, welfare, education, transport, etc. but all these are overseen by different departments and ministers, each with their own agenda. Governments could do better although, to be fair, this complexity makes it a nightmare! I just wish they would all stop promising solutions that are doomed to failure because they are too simplistic and isolated from the other required elements.
We have to stop propping up the University Ponzi scheme and reduce numbers going by 20% and direct them towards value add trades
An interesting and brief survey would be to find where the Lord Mayor isn’t failing Londoners
There will never be another English Mayor of London.
Define English?
I consider myself English as I was born here, pay good money watch England play cricket and football, support St George’s Day as a national holiday etc.. Think contributions to science, arts and sport have been magnificent for centuries. The UK is the only country in history to vote out their most popular Prime Minister.
My parent’s were not born her and described themselves nationality wise as their country of their birth even though they lived in England for 70-80% of their lives.
My spouse is from a totally different part of the world and off spring are mixed race and mixed nationality although due to residence support England over her home country when there is a ‘clash’. Zero English or British grandparents.
Would you consider me or children English or British?
That said I disagree with Khan in that there are significant emerging disbenefits to multi-culturalism tending towards sectarianism in Leicester, parts of Brum and West Yorkshire.
Wouldn’t worry about what others think. If you are english in your mind you are english.
I am not worried just interested in a definition from the OP.
Point of order lots of people are women or men or neither in their own mind. They aren’t always right.
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Politics depends upon the quality of the politicians. Talent has been leaving Britain since the late 1870s and being killed in wars.
Yeast may only be 2% of a loaf but if a few grammes less are used , the bread will not rise so much. One can change the amount of flour far more than the amount of yeast and not reduce the ability of the bread to rise.
The days when Britain had MPs of the calibre Murdo Macdonald , one of the world’s best civil engineers, specialising in hydraulics and a Colonel of Engineers serving under Allenby in Palestine in WW1, are long gone .This was a man whom designed railways in Scotland, dams in Egypt and irrigation systems in India.
Genius recognises talent, mediocrity sees itself and is spiteful towards genius: well in fact anyone who is better than themselves.
Mediocrity feels inferior, insecure in the presence of those of superior ability; a result of being tempered by adversity and knowing they stood up to the test.
Khan can’t. Khan can’t do any better but he is good selecting people similar to him in ability and imbued with resentment and spite.
Hence Khans dislike of Elon Musk.
Off hand, can anyone name any aspect of Londoners’ lives that have been enhanced by Khan’s Mayoral sinecure?
The Tories have a lot to answer for on this to be fair.
Khan was there for the taking in 2021 although even a really good candidate probably would have fallen short.
However, this year they could have won and decided to pick someone truly dreadful.
“…baffling candidate choices by the Conservative Party…”
so the “baffling” bit is that person liked Enoch Powell posts. As if Enoch had been wrong
The housing situation isn’t just Sadiq Khan’s fault. The market was inflated by ludicrous levels of credit and things like interest free mortgages which are coming back. George Osborne disgracefully promote help to buy – a clear attempt to make new build prices inflated. He did help a bit by adding an additional dwelling rate of stamp duty but overall stamp duty stops high end baby boomers from downsizing – downsizing from a £2.5 million house to a £1.5 million retirement flat is over £90,000 in stamp duty, who would bother?
The problemstarts in the early 1970s s. Prior to this time, one had to save with a building society for five years, provide a 10% mortgage and maximum of 3.5 times a single persons salary was lent. Once one can lend 4 four times combined salaries, one does not have to provide a 10% mortgage and save with a building society for 5 years, then there is more money chasing homes, so prices rose.
…the modern Left will always fail…because they expect to get elected by being better, more moral and more decent people than we unwashed and unenlightened “gammons”…so they have no real programme nor beliefs beyond forcing their sanctimonious and saintly righteousness on the rest of us. Whatever the cost…to us, of course…not them…