Blog Post

Poverty and deprivation are increasing: Is London in danger of going the same way as Paris?

The left-leaning think tank The Smith Institute has published a new report called: The unspoken decline of outer London; why is poverty and inequality increasing in outer London and what needs to change?”  The report is supported by the Trust for London.

Outer London is now in economic decline.

In the past, the popular view was that poverty in the capital was confined to the inner London boroughs and that the leafy outer Boroughs were full of affluent Tory voters.  That is no longer the case.  The report shows that poverty, inequality and deprivation are rapidly shifting from inner London to outer London.  60% of all Londoners living in poverty are now based in outer London, a total of 1.4 million people.  This figure has almost doubled in the past 15 years, from 32% in 2004.  If we don’t act now, London will end up like Paris.  In Paris, the arrondissements in central Paris are very affluent whereas the outer suburbs [the banlieues] are deprived and disadvantaged with all the tell-tale signs of deprivation ie poor housing, lack of employment opportunities, high crime and racial tensions.

Mayor needs to support the outer London Boroughs.

The report is a timely alarm call to the Mayor of London and all Londoners particularly as the Mayor is preparing the next London Plan at the moment.  The report warns that growth across London has already become unbalanced with employment opportunities increasingly located centrally.  Unemployment is higher in outer London that in inner London.  High rents have priced poorer Londoners out of inner London.  The report calls for a radical rethink to rebalance London’s economy and deliver inclusive growth for all Londoners.  Better paid jobs and affordable housing for local people are desperately needed in outer London.  A greater emphasis is needed on supporting the poorer London boroughs which have suffered from government cuts.

Paul Hunter, Deputy Director at the Smith Institute said:

“London is becoming a divided city.  The ‘trickle out economics’ of city centre growth and turbo charged house prices is not working for outer Londoners on low incomes, who struggle with housing affordability issues and access to good jobs.  That is why we are calling for a more balanced approach to economic development of the capital.  This would mean reassessing infrastructure and regeneration projects to help spread growth across the capital with a much greater focus on tackling poverty.”

Adverse effects of City Centralist policies.

The report suggests that the current ‘city-centralist’ approach to planning is changing the pattern of economic growth adversely particularly for people on low incomes.  The rise in housing costs together with the effects of the so-called ‘welfare reforms’ have driven more low income people into private renting in outer London.  Housing Benefit claims in the private rented sector are up 17% in outer London but down 13% in inner London.  One solution to this is that Mayor should support the introduction of rent controls or rent regulation throughout London.  Rent regulation is commonplace in large cities in continental Europe; Berlin is a very good example of this.  The report also calls for a step change in investment in outer London and that new funding and policies should seek to promote better paid, higher skilled jobs there.  The emphasis should be on local jobs to reduce the costs and stress of commuting.  On housing, the report suggests that the GLA and Boroughs should pilot ‘affordable housing zones’ using publicly owned land to create areas where housing is more affordable including new forms of low cost housing where costs are kept low in perpetuity.

Deputy Mayor for Outer London.

The report recommends that the Mayor of London should create the role of Deputy Mayor for Outer London to be a champion for outer London who would work with the GLA to deliver a new vision for outer London.  There is also a strong case that the now defunct Outer London Commission should be refashioned into an Outer London Inclusive Growth Taskforce with a remit which includes tackling poverty and inequality as much as securing economic growth.  A new vision for London’s suburbs and town centres is needed when strategic decisions are being made.

Axing Crossrail 2?

On transport policies, the report is more controversial.  It recommends that the GLA should review the £30bn of Crossrail 2 funding with a view to redirecting investment in outer London.  But Crossrail 2, like its predecessor Crossrail 1, is designed to improve rail links not only inside the metropolis but also for the Home Counties where a large part of London’s labour force lives.  Many of these work in the financial services industry.  Good transport links are important to maintain the City of London’s competiveness as a world wide financial hub.  It was largely pressure from the Corporation of London to improve London’s transport systems that persuaded policy makers at City Hall to support the development of Crossrail 1 and the Overground network.

If Crossrail 2 was axed, people would still have to commute into London.  But the existing suburban rail services cannot cope at the moment.  So much of the future commuting would be by road thus increasing urban congestion even further with its serious implications for air pollution.  Notably, there is no mention of the problem of air pollution anywhere in the report.  Also it is doubtful that if Crossrail 2 was axed that the money saved would be spent on London’s infrastructure.  It would simply go back to the Treasury.

Improving London’s orbital networks.

The report is right when it suggests that a much greater focus from the GLA and TfL on orbital transport networks in outer London would enable inclusive growth and create new jobs in outer London.  But increasing the number of buses on the roads would not be the solution; that would make the already serious problem with pollution even worse.  The London Borough of Croydon has shown the way forward; trams.  These street running vehicles are pollution-free and inexpensive to run.  With the development of new types of electric trams based on enhanced battery power, large disruptive and expensive civil engineering works would not be necessary to develop new routes.  The proposed West London Orbital Railway should also be supported.  This line would run from West Hampstead/Hendon to Old Oak Common on existing lightly used freight lines. On route, it would interconnect with the Tube and Overground services at Harlesden.  At Old Oak Common, it would interconnect with Crossrail 1, HS2 and the services to Heathrow airport.


Overall, the report is an important contribution to planning for the future of the metropolis.  Its arguments are backed up by detailed analysis and statistics.  I think that it should be given very serious consideration by policy makers at all levels.  Whilst I have some reservations about some of the public transport policies contained in it, I think that the report should be supported by those who have London’s interests at heart.  I recommend it to readers of Red Brick and hope that they will support its recommendations.

By Glyn Thomas, Chipping Barnet CLP

The Smith Institute is an independent think tank which provides a high-level forum for thought leadership and debate on public policy and politics. It seeks to engage politicians, senior decision makers, practitioners, academia, opinion formers and commentators on promoting policies for a fairer society. For more information visit: or @smith_institute