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Five questions about the future of East London

Geoff Mulgan

The director of the Institute of Community Studies discusses economy, poverty, diversity, politics and people: the five pressing issues for London’s eastward turn.

I want to share with you some thoughts about where east London is now heading—there will be more questions than answers, but that simply reflects where we are.

The place where I have been for the past few months – the Institute of Community Studies (ICS), now renamed the Young Foundation—has an interesting history in relation to East London. It was formed 50 years ago by Michael Young, at a time when he thought universities were becoming very inward-looking, full of jargon, and not sufficiently relevant to the real world. So he set up in Bethnal Green to try to study the way people were living in real urban communities.

One of the first projects produced the book Family and Kinship in East London, which is still in print, and was a path-breaking piece of social analysis, based, like most of the Institute’s work, on actually talking to people about their real lives. It involved a day-to-day engagement with people that is missing from a lot of social science.

A few years ago the ICS was taken over by Sir Peter Hall, who has probably done more than anyone else to promote the idea of an eastward turn by London. He was the originator of thinking about the Thames Gateway 40 years ago, and he has also worked as an adviser to successive governments and may eventually see his visions realised. He is continuing to work with us.

One of the other virtues of being based where I am is that we have on our bookshelves Charles Booth’s survey of east London from 100 years ago, which I’ve been re-reading in the last few weeks. It is fascinating to compare some of the places he describes with how they are today. His descriptions are very moralistic, very colourful; he talks about Hoxton being full of criminals. And he says the people of Bethnal Green do actually have day jobs, but he quotes the vicar saying that it’s the poorest parish in London and the poverty is entirely caused by drink.

He also quotes a clergyman saying that whenever they have weddings they descend into orgies, and the vicars have to suspend proceedings until people can pull themselves together.

For me, coming out of central government into East London, this is an absolutely extraordinary time, unparalleled in the recent history in London—and in some ways unparalleled in any other city in Western Europe or North America. There are so many things potentially happening at the same time, from the Thames Gateway to Crossrail to the Olympics.

So there is a great deal of possibility in East London—very different from 10 or 20 years ago—but all sorts of questions, which, in my view, haven’t yet been adequately answered.

The first question is very simple: What will the economy be based on? What will people’s jobs be, and where will their wealth come from? East London in the nineteenth century grew up around Empire and trade and the docks; it had a pretty subordinate role in the hierarchy of that economy. And I think we’re still not quite clear what its position will be in this century.

We know that there have been huge changes in the global economy and the economy of cities, which I think you can most easily summarise as a shift from an economy where production was centralised and services were distributed to one where production can be very distributed—it can be done anywhere—but where some services have become much more concentrated. So if you look at the economy of London, you see a succession of highly concentrated, high-value service industries forming right along the river, from museums in Kensington to media in the West End, to government in Whitehall, higher education in other parts of the West End, law, accountancy, through to finance in the City and Canary Wharf.... But then it stops.

All of those industrial districts have become more concentrated, more globalised, there are higher rent prices, and so on. They have also created vast numbers of jobs, including in culture—London now has half a million people working in culture and it’s rising very rapidly, and many people work in services like finance. But these services and industries are quite hard to grow, and at the moment it seems that East London will be a provider of people, commuting in, hopefully, along some suitable transport lines (though not always). And essentially we’re still where we were a hundred years ago, with East London in a relatively subordinate position, in the lower echelons of the hierarchies—with individuals bussing in and training in each morning to clean the offices and do the clerical jobs.

I am still not clear where the more ambitious vision for economy in East London will come from. Some of it will depend on cultivation of spaces; some of it will depend on transport. In an ideal world, we would do what Peter Hall proposed last year: close down Heathrow airport and rebuild it out in the Estuary. If you did that, it really would change the dynamics. But in the absence of some really radical moves like that, there is a question mark over the economic base of East London.

The second question is about poverty and social exclusion. One of the striking features of all the cities that are doing best in this high-value economy—and London is probably the top city in that respect worldwide—is that they are producing new kinds of poverty, new kinds of insecurity, and new kinds of exclusion. And that is certainly the case across East London.

I still think we don’t have very credible strategies for turning that around: we know some things about how to regenerate the worst estates; we have some school performances beginning to rise faster in this area; we are improving health services; and unemployment is coming down as the overall economy improves people’s prospects. But the strategies that will work in London are going to be very different from elsewhere, for all sorts of reasons, including much higher levels of migration, much higher costs, much bigger barriers to things like childcare and transport. More creativity is going to be needed in East London if we’re not going to see, essentially, those patterns of exclusion and poverty continuing.

Just one example of that: if you go to any other poor part of a city around the world, the first thing you look for is: where are the assets that can be used to drive growth? The striking thing across East London is that the most valuable assets are locked in to either local authority or social housing and play no role economically in driving growth. There is £60 billion in social housing in inner London, yet it plays almost no role in wider economic strategies.

The third question is about diversity and social harmony. This half of London includes the areas that now have more diversity than any others in the world; we are a laboratory, in all sorts of ways, for how people from different backgrounds and often holding different values can live peacefully and prosper in the same geographical space. So far East London is not doing so badly; some of the ways in which minorities have been integrated into the political system have worked better than in other cities in the UK. Particular groups have progressed very rapidly. We haven’t had the riots and disturbances seen in the north west of England in recent years.

But still, there are all sorts of worrying trends to do with exclusion and self-exclusion—at the top, gated communities for the very rich, and elsewhere potentially worsening divisions in inner London. And one of the things that the Young Foundation is publishing next year is an update of that 1950s report, Family and Kinship in East London, looking at the relationships between the Bangladeshi community and the white working-class community, and showing a pretty complicated and messy picture of misunderstandings and resentments, which do pose a challenge for the future.

The fourth question is to do with politics. Not unlike most big cities in the UK and quite a lot around the world, we have a pretty decrepit political system in East London, if we’re honest, in terms of people’s engagement with it, the calibre of leadership, the extent to which the political parties really do represent large numbers of people. I think this has come out over the Olympics, and also in the problems of public engagement around the Gateway. It is also why initiatives like TELCO are exciting and fill a space that the orthodox institutions aren’t filling.

One of the things perhaps that might be possible in the next few years, if East London does grow and carry on eastwards, is to innovate in terms of engagement, just as we have the potential to innovate in lots of other fields.

The fifth question is the one that seems to take up the most time in policy discussions, which is the question of how to organise the right balance between new build, transport infrastructure links, jobs, development and so on. An enormous volume of consultants’ reports has been produced in the past few years about London moving eastwards—which might be a horrendous waste in terms of time and money if it doesn’t all happen.

But I think we are still pretty unclear about some of the fairly basic questions. One is the numbers. We are now generally operating, in the London Plan and so on, on pretty straight-line predictions of the numbers of people in London and the numbers of jobs in London. This is justified by the very high levels of migration; there is much more migration now coming into London than into the rest of the UK. But in the past, there have been many times when all the experts thought those numbers would go up, and instead they went down.

So I am a little wary of optimistic predictions. There are good reasons for some people to say ‘let’s build our new towns where there are old towns, let’s try to shift growth as much as possible to where there are clear, existing dynamics of growth and clear desires on the part of people to live in these places’.

But there is another angle to this, which makes it more complicated: the single biggest problem with the London Plan and most of the eastward expansion plans is that they require a hell of a lot of money, at a time when the tax base for local government and London is thin. It is thin because central government over many years has taken over tax-raising powers. I have absolutely no doubt that that has to reverse. London needs to be re-given the power to raise taxes and to borrow against tax receipts. If it can do that on anything like the scale that other big cities have done, then it makes sense to be pretty ambitious in terms of your vision, of moving eastwards, what you lay in terms of new rail, new roads, and new public services. If, however, those tax changes do not happen, then we have to be realistic and look for much more organic and much more incremental growth.

A final point: my first job was in the Greater London Council, just before Mrs Thatcher in her wisdom decided to abolish it. At that time, we basically assumed that we were managing decline. We saw that London, and most other British cities, had been completely knocked by the shocks of the 70s and the early 80s—by deindustrialisation, whole industries collapsing, mass unemployment, and physical dereliction. I don’t think many of us really believed that we could do much more than contain that decline. We thought the centre of gravity of the world’s economy was moving elsewhere, to California or Shanghai or Japan or Berlin.

It’s remarkable, looking back 20 years, how wrong we were. From a mixture of luck and guile and various other things most British cities have had a much better 20 years than we expected—partly from canny leadership, partly from policies that freed things up in telecoms, infrastructures, airports, labour markets, financial services, partly from the luck of having strong institutions like universities. These were all essential in giving London the position it has now, as almost the only city in Europe pulling people in, pulling multinationals in, dominating internet traffic, and so on.

But at the same time, the huge turnaround of public investment was equally important—it collapsed in the 80s, but then came back through a combination of lottery funding, and then under this government a big increase in spending on health, schools and other public services. This public investment, alongside the freeing up, appears to have put British cities on a much stronger growth path than seemed possible 10 or 20 years ago.

Very finally, I would like to warn of the lesson I learned while in government. People in government usually overestimate how much we can achieve in the short run; we think everything can be changed and then often get disappointed when things don’t change. However, we also underestimate how much can be changed in the long run, over 10 or 20 years, if there is a clear vision, persistence, and the buy-in of a whole community committed to making that change. We shouldn’t shy away from an ambitious vision of what is possible—because you never know, it might even happen.

Geoff Mulgan is the former head of policy in the Prime Minister’s office and director of the Government’s Strategy Unit. He is now director of the Young Foundation, formerly the Institute of Community Studies.

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