Give booming London more control of tax to create a virtuous circle of new homes and better transport
For decades, transport has been at the top of Londoners’ list of concerns. Weary commuters reading their copy of City PM on today’s commute will know all too well how delays and congestion can make travelling in the morning peak draining.
But as a result of the sustained efforts of successive mayors, borough leaders and government agencies, improvements and money have been delivered to the system at some scale. Tube delays are down. New buses work the streets. Cycle lanes have sprung up. Pavements renewed. Further upgrades (sometimes the cause of today’s delays) are well underway. The newly renamed Crossrail/Elizabeth Line, which will undoubtedly be busy from the day it opens, will add an estimated 10 per cent to rail capacity. Further projects such as a north to south Crossrail 2 and extending the Bakerloo Line are in the pipeline. These will all be needed. The city’s population is growing by around 1m every decade. And most of that growth is not from immigration; Londoners are living longer and having larger families. Just to keep up, we will need an eye-watering 50 per cent increase in public transport capacity over the next 30 years or so.
A booming population has big implications for housing too. As the GLA infrastructure plan has highlighted, there is a need for around 50,000 new homes to be delivered every year – that’s nearly six homes every hour. Last year 25,000 were built. Fuelled by declining rates of home ownership, concerns over affordability and chronic undersupply, housing rather than transport is perhaps the hottest topic on the doorstep in this year’s mayoral race.
Recent reports from the charity Shelter and the think tank IPPR have highlighted that housing presents particularly complex challenges for policy-makers. Bricks and mortar are about far more than places for us to live. Home ownership has provided generations with financial security. With no capital gains tax, our castles are a tax-efficient form of saving. And while Londoners want to see the value of their properties rise (prices are up more than 50 per cent on pre-crash levels), they don’t want friends and family priced out of – often up and coming – neighbourhoods. Overseas buyers are another area of public concern. They are seen as fuelling the supply of empty properties and driving the poor out of central London. But properties sold to foreigners make up less than 3 per cent of London’s total housing stock. And they help to fund social housing that local authorities would otherwise struggle to build.
Although many city dwellers are in favour of more homes being built, few want them right next to where they live. From our Home County cousins, there is often opposition to building on the Green Belt. And among Londoners, there is sometimes noisy opposition to building towers in the city.
To address London’s housing problems a raft of measures are being proposed. There is widespread political consensus that more homes need to be built. All the leading mayoral candidates are committed to trying to achieve a doubling in new build numbers. Transport for London is mobilising with developers to provide thousands of homes on its sites across the city. And the GLA and boroughs are having some success in co-ordinating housing delivery onto so-called brownfield sites often on government-owned land.
These initiatives will help. But without increased local government powers – particularly over the taxes Londoners pay – they may have only a modest impact. Strengthening local government control over property taxes – including council tax (heavily regulated by Whitehall), stamp duty and business rates – is required. This would create a virtuous circle linking councils and development. More development would mean more resources for local authorities. This in turn could be used to help fund affordable and social housing. Improvements to schools, open spaces and other facilities used by Londoners would follow. Town centre improvements might go ahead. Crucially, further enhancements to transport infrastructure could be delivered on a lasting and financially sustainable basis. Londoners might then feel less wary about new development. And they may just end up with an easier journey into work.