The London mayoral contest is in full swing. The IoD co-hosted a debate to give leading candidates a chance to say what they will do for the business community
In March, national and London-based business groups came together to host a debate between leading candidates in the London mayoral contest. The IoD, alongside the CBI, London First, the FSB and the London Chambers of Commerce, hosted the event at the KPMG head office in Canary Wharf.
While the contest has always had two frontrunners – the Labour and Conservative candidates – all parties with seats on the Greater London Assembly (GLA) were represented on the panel. The debate was hosted by James Ashton, columnist at the Evening Standard.
Sadly, there’s consensus that the London mayoral contest has been overshadowed by the EU debate. It’s certainly true that candidates in London, alongside those standing in elections for 128 English local authorities, the Scottish Parliament, the Welsh Assembly and Stormont, are all peeved at the prime minister’s choice of timing for the referendum.
They may have a point. For all the importance rightly placed on the referendum debate, it is dominating a year of almost unprecedented democratic activity in the UK, and conversations that should be playing out on much bigger platforms are being squeezed from view.
Against this backdrop, mayoral candidates are having to shout twice as loud to make their voices heard.
The property problem
The dominating theme of this London mayoral contest has been soaring property prices in the capital, and it is as much an issue for businesses as anyone. Escalating costs and big foreign investment into the London housing market have combined to push out first-time buyers and leave a generation of working Londoners at risk of becoming lifelong renters.
This reality is not lost on any of the candidates, most of whom are committed to a target of 200,000 new homes over the next mayoral term. Building many of these new properties, as well as making genuinely affordable commercial space available to London’s entrepreneurs, will require the next mayor to make much greater use of brownfield sites and TFL land.
It will also mean working alongside policy makers in Whitehall to ensure that central government plays a role, using its own assets to reduce some of the pressure.
This is a big part of Zac Goldsmith’s pitch. The Conservative candidate made much of his friendship with the government during the business debate and, in particular, his access to the chancellor.
However, Sadiq Khan remains content to point at the current Conservative incumbent’s record on investing in affordable homes and talked up his own plans for a new team at City Hall, ‘Homes for Londoners’, that would be dedicated to building and fast-tracking affordable homes.
Liberal Democrat Caroline Pidgeon, upbeat despite trailing heavily in the polls, would implement a similar system, although it would involve the creation (by the GLA) of a special company to oversee the construction of 50,000 homes.
Travel – are we there yet?
The problem of capacity extends well beyond housing and commercial space issues, however. Airport expansion in the south-east has been one of the key sticking points of this debate for business and the IoD has consistently called for the government to stop sitting on its hands.
All candidates in the London mayoral contest have said they’re against the expansion of Heathrow, but the real breath of fresh air in the whole conversation are the Greens, who’ve come out swinging with the bold assertion that businesspeople do not really fly for work anymore, so no expansion is needed. No question, this will be a tough sell to London’s business community.
At the same time, the need for a new river crossing in the east has also been highlighted again and again by businesses. Within Greater London, there are 23 fixed road crossings of the Thames to the west of Tower Bridge and just two to the east.
It doesn’t take a genius to recognise that this is unsustainable. Again, there is broad agreement between the two frontrunners in the contest that something should be done to relieve the situation, but inevitable concerns over the effects on air quality will continue to hamper the decision-making process.
Start it up
Another key debate in the London mayoral contest is the question of how the next mayor will successfully nurture London’s growing start-up community in the face of escalating overhead costs, intense competition for skills and continued worries over the ease of accessing finance.
The IoD is already playing its part, and the IoD 99 group of young entrepreneurs is rapidly becoming a natural home for start-ups, both in the capital and across the UK.
But an increasingly global city will inevitably be caught in increasingly unpredictable global headwinds. While it’s not the job of the mayor to shield business from those headwinds, London’s next political leader should make sure entrepreneurs are equipped with the tools to navigate the choppy waters ahead.
This will mean ensuring London attracts the best and brightest to fill the ranks of its ambitious start-up community. Businesses that cannot access a decent pool of skills will fail to compete in the global marketplace; a recent survey of the IoD 99 indicated that 42 per cent of start-ups are struggling to hire the right people.
It will also mean highlighting the diverse landscape for finance now available to entrepreneurs. Bank loans were in short supply in the wake of the financial crisis and too many still rely on the ‘bank of Mum and Dad’ to fill the void.
More than half of IoD 99 members have relied on the generosity of family members to get their businesses off the ground. With generous reliefs such as the Enterprise Investment Scheme and Seed Enterprise Investment Scheme available to investors, the number of organisations and individuals willing to invest in new businesses is growing rapidly.
The mayoralty is a phenomenal platform for broadcasting these opportunities, and candidates will have little excuse not to shout them from the City Hall rooftop.
With less than 50 days to go, the London mayoral contest is beginning to hot up. The next mayor will see the city increasingly need to compete with accelerating urban growth in emerging markets.
Equally, the pool of cities driving global economic growth is predicted to become smaller and smaller. If London is to continue leading the world as a centre for business, the next mayor will need to take bold decisions and quickly.
The IoD view on the London mayoral contest
The IoD has set out a full list of priorities for the next mayor in its manifesto, Working Capital, which can be downloaded here (pdf).