State of the London Economy

MQT on 2013-03-20
Session date: 
March 20, 2013
Question By: 
Valerie Shawcross
Labour Group
Asked Of: 
The Mayor


Of the £231 million you currently have to invest in London's local places and infrastructure , £112 million is available to the London Enterprise Panel via the Growing Places Fund . However, despite the potential of the Fund, it has not been clear how it is planned to be spent or what benefits it will provide to London's economy . So much so, that two Government Ministers - Business minister Michael Fallon and housing minister Mark Prisk - have been forced to write to City Hall expressing 'serious concern' over the your failure to invest these funds and the slow progress being made by London's mayor to help the capital's economy. This criticism follows a 'furious' letter you sent to George Osborne in April 2012 in which you claimed London had been 'excluded from serious consideration by the [Regional Growth] Fund' and arguing that you were reluctant to encourage your partners to submit application to the Fund 'if the roulette wheel will never spin in our favour'. London's economy is being let down. You blame the Government, the Government's ministers blame you. What are you doing to resolve this issue?


Answer for State of the London Economy

Answer for State of the London Economy

Answered By: 
The Mayor

Boris Johnson (Mayor of London): Thanks, Val. This question relates to the operations of the London Enterprise Panel (LEP) and what we are doing there. I have made it perfectly clear to ministers that we have an ambitious pipeline of investments that have so far awarded £47 million,and a further £44 million is currently in the pipeline. The difficultly is that some of those are the subject of commercially confidential negotiation but they relate to such areas of the London economy as the film industry, better broadband, information and communications technology (ICT) improvements and particularly live sciences but I do not necessarily want to get into too much detail obviously.

Valerie Shawcross (AM): Thank you, Mr Mayor. Good morning.

Boris Johnson (Mayor of London): Good morning.

Valerie Shawcross (AM): Actually it is not a good morning because we have just heard since January there has been another 5,000 Londoners who have started to claim job seekers allowance, so unemployment is going up on London. I think those people and the struggling businesses in London want to know that you are doing everything you can to boost the economy in London and get some growth. As I understand it, we have three big regeneration funds which are under question in London at the moment. We have the Regional Growth Fund, which even you have said from which we have only been allocated a paltry £9 million out of a huge £2.4 billion Government fund. There is the Growing Places Fund that this question refers to, £110 million, which the Government is now publically criticising you for not getting on with spending. We also heard at the Budget Monitoring Sub Committee last night that there are two major European structural funds, over £500 million probably, over the next seven years, which we are in danger of losing out on unless the Government decides to give us control of that money.

Just on the LEP, you have known since last budget day in March last year, that we had £110 million to spend on growth in London, but so far not one project funded, not one big idea, not one job created.

Boris Johnson (Mayor of London): That is completely untrue.

Valerie Shawcross (AM): How is it possible for you not to get on with spending that money when we have an urgent crisis in London?

Boris Johnson (Mayor of London): Thank you. First of all on unemployment and what is actually happening to the London economy, I think you should be aware that actually the position in the city is comparatively strong. Nobody denies that there has been a serious downturn over the last four years, but the unemployment rate actually fell in the most recent quarter.

Valerie Shawcross (AM): Sorry, Boris, I know you will not have seen them but they were Office for National Statistics statistics released at 9.30am this morning.

Boris Johnson (Mayor of London): We now have 70.3% of Londoners in employment, which is 2.8% more than last year. That is the highest figure since January 2009.

Valerie Shawcross (AM): What are you doing to help the people who are unemployed then with this funding?

Boris Johnson (Mayor of London): As you know, we have a massive programme of apprenticeships. We have done more than 100,000 so far. We are well on target to deliver our 200,000 increase in employment as a result of the investments that we have secured and that we have made. These projects that you attack are extremely beneficial to Londoners. I have mentioned the areas that they are in. What I will not do is go back to the approach of the old London Development Agency (LDA). It became a by-word for waste and profligacy, in which money was fire-hosed away, often by members sitting there on projects that had no conceivable economic value. We will not go back to that approach. We will use taxpayers' money in a prudent and thrifty way to generate the maximum returns and that is what Government would expect.

Valerie Shawcross (AM): The Government would rather prefer that you got on spending that money. It says it is important, 'That this as with the other LEPs, that the Panel starts to have an impact on growth through the allocation of Growing Places Funds'. You have had that money for a year. You have been in post now for five years. You ought to know how to use regeneration funds.

Boris Johnson (Mayor of London): Oh come on. I think the figures speak for themselves.

Valerie Shawcross (AM): You have failed to capitalise on the funds you have for economic growth in the capital. We want to hear how you are going to rectify this situation, but possibly more importantly how are you going to --

Boris Johnson (Mayor of London): We have got the biggest programme of investment in transport this city has ever seen. We have built a record number of affordable houses in my mayoralty and we will spend our funds on regenerating London and delivering the job.

Valerie Shawcross (AM): Mr Mayor let me just finish my question. I know you like talking over the top of Assembly Members, but can I just get to the point here? Chair, can I finish my question? I do have a question I would like to ask.

Jennette Arnold OBE (Chair): Can you just put the question that you want an answer for, Assembly Member Shawcross?

Valerie Shawcross (AM): Right. The question is: What are you going to do to stop the Government deciding against allowing the GLA to have managing authority status for European funds? It is a massive amount of funding that they have to make a decision about now. They have clearly shown a lack of confidence in you, both in the Regional Growth Fund allocations and by what they are doing now- publicly criticising you in writing about not getting on with spending the Growing Places Fund. It is really important that London gets this money and they need confidence in you to get it.

Boris Johnson (Mayor of London): I think, Val, have a look at what comes out in the budget today and you will see a measure of the Government's confidence in this place to deliver jobs and growth and to deliver Londoners the housing that they need. We have been entrusted with the biggest ever programme of investment in transport that this city has ever seen. We have delivered a record number of affordable homes. We have secured huge funds, in spite of the financial difficulties that the country is facing, to regenerate both inner and outer London. Under this mayoralty it is now a fact that London forms a larger share of the United Kingdom economy than at any time in history. That is partly because of the investments that we have been able to make and we will continue to make.

Valerie Shawcross (AM): Mr Mayor, thank you very much for that. I wonder whether or not unemployment would have gone up by 5,000 if that Growing Places money had actually been spent.

Boris Johnson (Mayor of London): Thank you. I am sorry, if I can just repeat we have unemployment now down by 2.8% on the year.

Valerie Shawcross (AM): Thank you, Chair.