Rising to the Challenge

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					                        Rising to the Challenge:
                       London's Economic Future
                                          9 July 2009

                                     Session Two
                                        George Osborne
                            MP, Shadow Chancellor of the Exchequer

I.     Opening Remarks
Thank you very much, and it is a great pleasure to be with you here today. I am sorry I missed the
Boris and Mandy show earlier, although I have seen quite enough of both of them in the last year.
Do hold them to the promise of that bike race across London, because that will be the second-
greatest sporting event to be held in this city over the next three or four years. I would personally
back Boris, by the way.

It is good for me to be here, in one of my favourite buildings in London, this wonderful Floral Hall,
which is a sign of the development of the city over the last 20 years or so. For me in particular it is
good to be here, because I was born, brought up and educated in this city, and I feel passionate
about it.

II.    London's History
The other day, my six-year-old daughter had her birthday party, and one of the presents she received
was a wonderful picture book which showed the development of London from an iron-age
settlement to a Roman fort, to an abandoned ruin, then an Anglo-Saxon port, and then the thriving
London of Shakespeare and Pepys and Dickens, and then the great imperial capital that it became in
the late 19th century. Then, in the 1940s, it became the beacon of the Western world, standing
against tyranny. In recent years, it has turned into what I think can safely be called a super-city – a
global super-city that the rest of the world has looked to as a home of culture, finance, business and,
in due course, sport as well. I think all of us who are connected with this city can be proud of that.

III.   Recent Problems
We have to keep it that way, because, frankly, this city, like other parts of the UK, has taken quite a
knock in the past few years. People around the world look at the financial problems and the
problems in our regulatory system. They look at the growing debts of this economy, and the
problems with parliamentary scandals in recent months, and they look to the changes in the tax
system announced in the Budget. They look, if I can make this point, to the lack of political
leadership from the Government, and they ask if we are ready, in this city and in this country, to rise
to the challenge and see off those who say that London’s best days are now behind us. I want the

Rising to the Challenge: London's Economic Future

message from this conference, from our Mayor, and the message, I hope, that a change of
government will bring, to be this: our best days are not behind us – they are ahead of us, and this
city is open for business.

IV.     London's Future
It is to the Mayor’s great credit that he has assembled such an important audience today to discuss
the future of London and to talk about what the LDA and he as Mayor can do to support London's
economy through the recession. One of the challenges of opposition in Westminster is to prove that
you can deliver in government. You can change your party and you can try to show that you
understand and stand up for modern Britain. I believe, of course, that we have done that. You can
make policy proposals, and some of those then are copied by your opponents in government and
implemented, and that is, in its own way, a measure of your success. However, in the end, it comes
down to words and promises.

However, in councils, not just in London but throughout Britain, we are changing that and showing
that it is not just in words but in actions that we can deliver on the things that we promise and we
can deliver the change I think this country needs. By getting a grip on wasteful spending, by
holding down the council tax, by bringing innovation and fresh thinking to the delivery of public
services and by supporting the economy and protecting jobs in this most difficult of times, I think
that here in London a Conservative Mayor and administration is proving they can do that.

In the space of just one year, Boris has removed £1 billion of waste from the London budget. He
has used that to freeze the London precept of the council tax, keeping money in Londoners' pockets
when they need it most, and he has brought transparency to spending by publishing every item of
spending worth over £1,000 online, since the day he arrived at City Hall. That is something we will
replicate at a national level if we form the next government. These are concrete achievements,
delivered for the people of London by a Conservative Mayor.

However, as Boris said this morning, when I read his remarks, despite the actions of the Mayor,
London’s economy has been hit hard by this recession. Obviously the financial sector has been
particularly affected by the financial crisis, but London's economy is far more than the City of
London. If it were a country, London would be the ninth biggest economy in the EU. It leads the
world in legal services – we are home to four of the top six international law firms. It leads the
world in higher education, with more that 100 top universities and higher education establishments
in this city – more than any other city in the world. It leads the world in retail, with more overseas
retailers than any other European capital. In tourism, it is the world's top city destination for
international travel. The creative industries – here we are at the home of the Royal Opera House –
are a particular growth area for London, creating high-quality jobs, and helping to make London
one of the most vibrant and creative cities in the world. All of these sectors have been affected by
the recession but, with the help the Mayor and the LDA are giving, I am confident London will
once again prove itself to be resilient and bounce back even stronger.

The Mayor's Economic Recovery Action Plan is a great example of how Conservatives would
provide real help to businesses and families struggling with the recession. It provides more support
for small businesses, help with cutting fuel bills and reducing carbon emissions, marketing London
to the rest of the world, helping the unemployed with training and advice, investing in
apprenticeships and supporting childcare and, of course, as I mentioned, freezing the GLA precept
on the council tax for the first time ever. In the longer term, I am confident that the Mayor and the

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LDA will continue to invest in the skills and infrastructure that London needs. As Chancellor, I
would work closely with them to do exactly that.

Let me just take head-on Peter Mandelson’s accusation that somehow we would get rid of LDA.
That is simply not true. He must know it is not true. We have published policy documents
explaining exactly what our policies are on the development agencies. The reason we support the
LDA is because, uniquely among Britain's regional development agencies, it is democratically
accountable through the office of the Mayor, and we have no plans to interfere in what is a matter
for the Mayor of London. Of course, financial services is one of the most important areas where
central government needs to get it right to support the London economy, and I hope you will excuse
me if I focus now, for the rest of my remarks, on financial services, because of the big white paper
produced yesterday.

V.      Regulating Financial Services

1.      Threats From Europe

London's financial services must be well regulated in a strong framework, so we avoid the
catastrophic failure that I think the regulatory regime created in 1997 allowed to take place. I want
to work with the Mayor of London to deliver that framework and to stand up for London – stand up
for British finance. Boris was right when he said earlier that the biggest current threat to London's
financial-services industry is now emerging from the European regulation in this area.

This is not knee-jerk anti-Europeanism. Of course we need to cooperate internationally so that we
prevent a repeat of the financial crisis. I was in the Netherlands at the end of last week, talking to
their finance minister and their leading regulators about what we could do together to deal with
some of the problems that we collectively face. The cooperation needs to happen at an EU level as
well, with national regulators working together under the auspices of the EU. However, the
evidence so far is that the legislation being drafted by the Commission is ill-conceived and ill-
targeted. It does not show an understanding of London's wholesale financial markets. As Boris
said this morning, the proposed directive on alternative investment fund managers is a classic
example. Yes, of course we want to improve and extend the oversight of hedge funds, to make sure
that they are not part of any future crisis, but, left unchanged, this directive will do unnecessary
damage to important industries in which London currently leads not just Europe, but the whole of
the world.

2.      Changes to the European System of Supervision

The next threat could be to the over-the-counter market here in London. Any new European
clearing house for directives must be based here in London, where the vast majority of the market is
based. Structural changes to the European system of supervision threaten to undermine our ability
to regulate the British banks that are implicitly underpinned by all British taxpayers, including
everyone here today. It was reported yesterday that the European Commission is considering
changing the voting process of the three supranational bodies that oversee banking, insurance and
securities – three crucial industries for London – from qualified majority voting to a simple
majority. That would make it much harder to build coalitions against badly thought-through
regulation. It would mean that Malta would have the same voting weight as Britain on European
legislation about wholesale financial services issues.

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I think, sadly, the Government has been totally wrong-footed on these issues. The Chancellor and
Treasury have been almost entirely absent from the debates, to date, in Brussels, and now they are
rushing to catch up. They have been asleep on the job, and as a result they have let the City down
and they have let the British economy down. We will need to work much harder to defend
London's financial services industry and the broader economy here in this city and across Britain
that depends on it.

3.      The British Regulatory System

To do that, I think we need to make two very important changes. The first is, we have to get our
house in order. The international reputation of the tripartite system of regulation, created in 1997,
is frankly in tatters. The whole world saw the queues outside Northern Rock early on in the crisis,
but they have also seen the lack of communication, the institutional rivalries and jealousies, ever
since. The world has watched as two of the largest banks in the world had to be bailed out because
of failures in the British regulatory system. Yes, there were failures elsewhere, in other countries,
but not in all countries, and it does not excuse our need to look at the British regulatory system.

I think Britain's authority to speak on financial issues in places like the European Commission has
been badly damaged, and it will not be restored until we address the fundamental flaws in our own
system of regulation. The white paper that the Government published yesterday is a totally
inadequate response to that challenge. It contains almost no serious analysis of what went wrong,
and ducks every difficult question. That is why I announced yesterday that that next Conservative
government will abolish that tripartite system of regulation. We will put the Bank of England, right
in the heart of this city, in charge of the prudential supervision of our banks, our building societies
and other significant financial institutions. Sitting alongside it will be a powerful focused consumer
regulator, looking at the products that these institutions sell. We have learned from this crisis the
old truth that you cannot separate central banking from the supervision of the financial system.
Sound regulation – and this applies to areas outside financial services as well – is not just a
checklist of rules. It is about the authority to exercise judgement and to see the bigger picture.
More regulation, more box-ticking, more rules, is not by itself going to stop a future financial crisis.
We need strong supervision which challenges the banks' business models, understands where the
risks are building up and has the authority to take that to the banks' boards. We have to ensure that
we support the pursuit of long-term gain in our financial services, not just short-term profit-taking,
and that applies to the pay and bonus structures of the banks. We will set out these details in our
new system in our own alternative white paper later this month.

4.      Shaping the EU Regulatory Agenda

Once we have our own house in order and have restored the reputation of Britain's financial
architecture, we will make the second change that London also needs. That means engaging
actively in Brussels to shape the EU regulatory agenda and not allow our economy to be shaped by
it. As Boris put it, although he used the brilliant example of flat-packed furniture and the Swedish
government, but I will use a more classic example, if there were ill-considered regulations being
proposed by the Commission on, for example, wine-making or luxury cars, then the French or
German governments would be in there, fighting tooth and nail to deal with it. Yet British Treasury
ministers appear to be entirely passive in the face of the current regulatory threat to London and its
financial services. Given the continuing importance of those financial services, I would expect a
British government to be fighting for a much more sensible approach. As I say, at the moment
those Treasury ministers are absent.

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That will change if there is a Conservative Treasury – we will not walk away from European
debate. We will engage in making sure that European regulation is appropriate for London and the
wider British economy. Instead of constantly fighting rearguard actions against badly though-
through proposals, we will work to shape them at their inception. Indeed, members of my own
team in Parliament, Mark Hoban, the Shadow Financial Secretary, and Sir James Sassoon, who
used to work for the Treasury and now works with me, have just been in Brussels to explain our
priorities, to begin that dialogue. Under a Conservative government, the Treasury would be at the
heart of that debate on financial regulation. Treasury ministers, including the Chancellor, would be
very active at Ecofin meetings and in discussions with the Commission. We will have to be, if we
are to stop real damage being done, not just to London, not just to the UK, but to Europe in general
as a centre for wholesale financial services, through ill-drafted and ill-considered directives. We
should be making sure the EU agenda is genuinely about protecting EU taxpayers and consumers,
and getting financial services focused on long-term value and not about a none-too-subtle attempt to
take business from the City and diminish Britain's place as the predominant location in Europe for
financial services. With a Conservative chancellor and a Conservative Mayor, speaking with one
voice, we will set out clear priorities to promote London's interests. By coordinating closely with
the large number of new Conservative MEPs who have been elected to the European Parliament,
we will shape the EU debate at all stages of the legislative process.

VI.     Working Together
I have focused on financial services, but this approach of working together, fighting for Britain's
interests, sending a clear sign that this city and this country is open for business, will shape all that
we do in the early stages of a Conservative government. We will work with the very large number
of elected Conservative councils around the country. We will work, of course, with the Mayor of
London and the other elected city mayors who are Conservatives, and we will make sure that, for all
the difficulties this country has been through, we send that signal to the rest of the world that we are
back in business and that London is open for business. Thank you very much.

Closing Session: What Remains The Same, What Is Different?

I.      London's Business Future

Stuart Popham, Senior Partner, Clifford Chance and Chairman, CBI London

We had a very positive, wide-ranging discussion, so it is something of a challenge to the Chairman
to be able to come up here and, in two minutes, tell you all about it. What I should say is that there
was a noticeable sense of rising confidence in London and as to how London would look to the
future, and that was very positive. We are not saying the recession is over, but I think we can get
over it.

Let me give you five points, very briefly. The first is that business would like to have a clear, single
pitch that we could use as a message to sell London and make sure that we build on the reputation
we already have internationally of world-class activity.

Second, can we do some more longer-term planning, please? I know it is not, historically, the
British way of doing things, which has been rather more ad hoc or a quick reaction. We think we

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should be taking a 20-year view. I will give you two examples, one on infrastructure, what we are
going to need and can we plan for it and build for that in the future. The other is education and
skills. We thought there was a real role here for business and the providers of education to get
together to spot the emergent businesses, the emergent business skills needed, not to look for
winners but for sectors, and to be able to plan for that in the future, and we think we can do
something more there. London is about a very wide range of business, not just professional and
financial services. We need to recognise the importance of manufacturing and a wide range of
activities, often in small businesses. Please can we not overlook that.

We would like to see a more coordinated approach by business when dealing with government,
when looking at future regulation and legislation. We should work towards that. At the same time,
we would like the various agencies around London to come together, coordinate, and have a clearer
focus in what they are doing.

Finally, I think we all recognise that public expenditure will have to be cut, but we would ask that,
when public services look at their reduction in expenditure, they take some the lessons that business
has learned through this recession and cut cost, not value, and, rather than just go for the largest
project and cut that, they do it intelligently and sensibly.

II.     The Low-carbon Economy

Isabel Dedring, Mayoral Advisor on the Environment, Mayor’s Office

Our session was on the low-carbon economy. We had a discussion, focusing on what all the
rhetoric around it means, specifically for London. What are the specific opportunities? We are not
going to be building wind turbines in the Thames Gateway, but there are clear opportunities for

I have to say, the first half of the discussion was slightly depressing, because people were giving a
lot of examples where the low-carbon economy is not taking off. A number of people were
commenting that, particularly in the business-to-business sector, business is not willing to pay and
is basically interested in green-washing. As soon as push comes to shove, there is not really a
strong interest in pushing beyond that. Michael Rea from The Carbon Trust commented that, if you
look at the businesses' plans that are in place, this is UK-wide, but London is probably no
exception, not only are we are not going to get to the 450 parts per million that scientists talk about,
but we should expect to get to about 1,000 parts per million, which is an increase of many degrees
in global temperatures. There is a lot of language around this, but not a lot of real change.

The second half of the discussion, though, was much more positive. It just naturally evolved that
way. There are clearly specific areas where things are changing. One example we discussed quite
extensively was electric vehicles, where people were saying that this is the first threat the utilities
seem to taking seriously, because they see what Bernie Bulkin called 'demand destruction'. They
see an actual in-road into the demand for fossil fuels. That is the first time they have really seen
something that they think can challenge them at any serious level.

The positive thing was that consumers are still quite willing to pay for greener products through the
recession, despite the fact that they are watching what they are spending more carefully. There
were four central opportunities that came out of the discussion for London specifically, where, if we
do not take advantage of those opportunities then we will not be able to really take advantage of the
overall low-carbon economy. One is being able to translate the research that comes out of the

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academic institutions many of us have been talking about today into commercial reality, and how
we get over what is often called the 'valley of death' between idea and commercialisation which
intuitively should happen in London the way it happens in Silicon Valley, given the presence of
financial institutions, but we simply do not have that vibrancy here. What can we do to overcome
it? It has been a problem for a while, across the board on R&D, but obviously very specifically a
problem for the low-carbon economy.

The second opportunity: London is a big city, there is a lot of momentum behind some of these
things, so there is an opportunity for roll-out at scale and trials at scale, and that is one of the areas
where the GLA group particularly is trying to play.

Thirdly, there is a big opportunity for skills. There is not yet a good link between sustainability and
skills, but we all agree that is something we need to work on. This is an opportunity, very easily, to
create many thousands of jobs in retrofitting buildings in particular.

The fourth opportunity was the financial institutions, and this link into structuring business models
and financing them, which is the only way we are ever going to get the double-digit billions of
pounds of up-front investment to deliver not only the carbon savings but also the energy savings
and, hence, cash savings that are going to come out of some of these interventions.

III.    London as the Commercial Capital of the World

Anthony Browne, Mayoral Policy Director for Economic Development, Mayor’s Office

 My group was about London as the commercial capital of the world, which to many extents
it already is, but what can we do to promote that and also to preserve that position? There
was underlying optimism about the strength of the London economy – a lot of what we have
heard earlier today: the English language, the geographic location but, above and beyond
that, the openness, the innovation, the highly skilled workforce, the fact that it has this
virtuous circle of being a magnet for talent and innovation. That leads to a lot of strong
sectors – not just financial services but, as George and Boris were saying, universities, higher
education, the health sector, science, the creative industries and so on.

There was one question that united the panel, which was whether we should try and shrink financial
services and rebalance the London economy; whether they were too bloated in the past and
therefore we should try and restrict them somehow. Uniformly, they all said absolutely no. It had
been a very valuable sector in the past and will be so in the future, and it would be somewhat
perverse to actively try to reduce the growth in what has been and will continue to be a very
significant contributor to the economy. That does not mean it will not have a bit of a setback, but
that should not be part of any public-sector policy to try and shrivel a very important part of the

There were, however, across the panel and in the room, fears expressed about the direction of
London, in terms of long-term policy, summarised by the fact that, in many ways, London is turning
its back on the world. London has been incredibly successful over the centuries by being open to
the world; by being open to new ideas and people, by being very dynamic and encouraging new
thoughts and so on. There was a lot of concern about the new immigration rules – the points-based
system – stopping companies from being able to hire new people, as well as being damaging for
universities and private schools who cannot get students in. There were concerns about the tax

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regime, both the tax on multinational corporations, but also things like the 50p tax and the
non-domicile tax. They might all be small measures in themselves, but they are changing the
message London gives to the world, saying that we do not want wealth-creators here and we do not
want people to come here. Also EU regulation – there has been enough about that today so I will
not mention that any more. There were some concerns from small businesses and manufacturers
about bureaucracy. On the skills side, the system in London is way too fragmented, so it is very
difficult for manufacturers to access. There is a lot of red tape around setting up small businesses
and problems with the planning system – how can we speed up planning? As the lead on economic
policy for the Mayor, we absolutely take that on board, and it is a long, slow process, but we are
trying to simplify the skills system and reduce bureaucracy to help businesses.

IV.     The Recession and Beyond

Martin Wolf CBE, Associate Editor and Chief Economics Commentator, Financial Times

The group I was chairing was very carefully chosen to guarantee the complete absence of
consensus, and it duly achieved its objective. Any impression I am giving that what I am now
saying is an agreed position is false. I am exercising the Chairman's privilege to tell my panel what
they agreed, although they did not.

There are a few points we did agree on. We all agree that London has a future – how could we
possibly turn up to such a session in such a place and not agree on that? There was a pretty strong
consensus, as Will Hutton stressed, that the basis of this is in the knowledge economy and, of
course, the openness to the world, to the population of the world; the extraordinary global nature of
the population, the language and history and traditions. These remain a valid basis for London for
the next 1,000 years or so – at least the next 10. The Mayor probably is not very interested in the
next 1,000.

There are three areas that we clearly all agree are very important. One is investment in
infrastructure. We would second the suggestion that it might not be such a terrible idea to plan, but
it seems such an unnatural activity for this country and for London that I cannot believe this will
ever happen. The one thing we are planning is the Olympics, and look at that. Finally, there is a
very strong view that openness to immigration, and particularly skilled, entrepreneurial
immigration, is really important and essential for the country.

There was, let us say gently, some disagreement on the future on the financial sector. Perhaps we
can distinguish the 'is' and the 'ought'. Two of our participants clearly thought that the financial
sector should go onwards and upwards to ever-greater things; one of them thought the exact
obverse. On the level of what they thought would happen, and I think there was more consensus
that, at least in the medium term, the next four or five years, there was going to be retrenchment and
London would have to assume that it would not be back quite to business as usual tomorrow or
even the day after.

Finally, at least two participants would echo the themes that regulation and tax regimes should be
appropriate. What does appropriate mean? I think it means 'allow us to do whatever we were doing
without blowing up the world'. I think I completely support that position; people should be allowed
to do whatever they were doing without blowing up the world. If somebody could tell me how to
do that, please send the answers on a postcard, and I think George Osborne would like that too.
There was certainly a consensus with these two participants that Europe was becoming very
dangerous, and they had all sorts of wild and insane ideas to stop people from doing utterly

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harmless activities which should be encouraged. I think that is pretty close to the consensus of our
panel. There is a future, we just do not know quite what it is. Personally, I think, we are all
believers in the market economy, the market economy will find out.

V.      Getting People Back Into Work

David Freud, Nominated Shadow Spokesman for Welfare Reform in the House of Lords

Unlike Martin's vicious in-fighting panel, we had a very agreeable session, and we came out with
some clear messages, which were obviously completely consistent with each other. There were five
main points. First, we spent some time discussing whether the issue was around the demand side of
the economy or the supply side, and I think we basically came to the view that the problems we
have on the supply side, the structural problems of getting people into work, particularly the people
who have been excluded from work, have not fundamentally changed because of the recession. The
kind of solutions that we need to introduce remain the same.

The number of organisations created to try and help in this soup of problems between skills, finding
jobs, housing and other issues, and the number of agencies, has now become so confusing that
people find it very difficult to find their way through, and in fact you need specialists to find your
way through the system. The request was, and again this is easy to want but difficult to do, we
should find much simpler conduits for people through the system. Clearly we need to put a lot of
work into that.

Like a number of other panel sessions, the implication of what everyone deemed to be an austerity
regime in terms of public spending led people to talk about the importance of getting the systems to
work and deliver. I think this is connected to the previous point. We have had the luxury of being
able to chuck money around in these different systems. As you get into an austerity regime, we
really must get smarter and focus on how we spend the money. That led us to the importance in this
area of outcome-based commissioning, where you have very clear targets for what you are trying to
achieve, and then reward the providers and the intermediaries for achieving them. That is a
response to the structural problem we have, and there seemed to be consensus in the room around

A final and slightly to the side point, but an important point that came up, was support for
entrepreneurs, in particular the problems they have with increasing levels of regulation and
increasing difficulties of working their way through that process. It is not just about money to
invest; actually you do need quite serious mentoring to get your company up and running. Those
were the conclusions of our panel.

VI.     Infrastructure

Steven Norris, Chair, Jarvis Plc, Board Member, LDA, and Board Member, Transport for

A couple of people have already referred to infrastructure, so if I had to characterise our session it
was incredibly unsatisfactory and enormously frustrating. The problem is that you could probably
fill a hall like this just to talk about the big rail projects that London so obviously needs – Crossrail,
the East London Line, the Thameslink upgrade, the Tube upgrades, and then, in the future, things
like the Chelsea-Hackney Line or Crossrail Two, as Ken dubbed it. These huge projects are

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perfectly capable of being planned. As one or two people have already suggested, a plan is a rather
obvious place to start, but the issue that was raised by more than one participant is that when you
are looking at infrastructure investment of that sort, it is ultimately how you pay for it that is the
issue. One thing is very clear: the sources of funding for this kind of project are tenuous to say the

In my own personal, bitter experience as a government minister in a spending department, it is
pretty tough at times like this to cut health, education or welfare, because it does not take long
before you are talking about people – making people redundant, putting people out of jobs – and
ministers are instinctively very reluctant to do it. Sadly, in the case of infrastructure, they are
enormously enthusiastic about doing it. If you want 5% savings in a department like Transport, it is
actually very easy, and it is almost entirely politically painless. You just move projects six months
to the right, and in a stroke you have saved six months' worth of spending in that year. Of course,
the temptation then is to slip them another year and another year and another year, and that has been
the history of infrastructure, not just, dare I say it, in London but, frankly, in our country as a whole.
I think there is a much more systemic issue there about how we plan and finance infrastructure
nationally, but I think it is a very clear warning sign for every one of us in this room that we have do
everything we can to convince either those in power now or those like George Osborne who aspire
to power, that just cutting infrastructure spending, where at the end of whatever recessionary period
you are in you actually do have an asset to the national economy for generations to come, is not a
very intelligent thing to do. Cut waste by all means, reform huge spending machines like the NHS
or welfare, but, in terms of infrastructure, please do not let us throw the baby out with the
bathwater. That lesson came very strongly out of our meeting this morning.

What was interesting, though, is the acceptance by our group that infrastructure is not just about big
rail projects. It is about how we integrate London's existing airports, and about their future. I think
there is fairly common consensus that, given the state of the economy and, in particular, BAA's own
internal issues, we are not likely to see a great deal of movement there in the short term. There is
some interest, of course, in the river as that great highway through the centre of the city and why we
cannot make more use of that, although there is some good progress being made. It is clearly still
something that Londoners are frustrated to engage with. They sense there is more potential there
than perhaps we currently develop. I think that is something we do need to spend some more time
looking at. Buses are an essential part of the infrastructure, and there was clear frustration that the
bus routes currently operating in London are pretty much identical to those operating in 1909 and
probably 1859. There was a suggestion there must be some holy writ, some tablet, buried deep in
the bowels of 55 Broadway, which tells us what the bus routes in London have to be, and a
suggestion that perhaps now, in the 21st century, we might revisit the network and try to plan it
more intelligently.

There was also a discussion about infrastructure that we perhaps recognise less readily is, for
example, the provision of decent housing in a city like London, where demand still far outstrips
supply. We are all very aware of the current economic issues around a greater degree of take-up of
affordable housing, but ensuring that we continue to look for the needs of those who do not have
decent accommodation in London remains a very high priority for us. Stuart Lipton made an
important point about the significance of public realm, when you talk about infrastructure. So
much of a city's infrastructure is about the village-green feel that you get in the 47 town centres
which go to make up a great city like London. On our panel was Will McKee, who is heading the
Outer London Commission, which is a constant reminder that London is not just about Zone 1 – it
is about these wonderful buildings and this incredible heritage which is essentially the kind of
Zone 1 of London, that people who say they have been to London tell you they have visited without

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Rising to the Challenge: London's Economic Future

recognising that London is actually a city of 660 square miles. We have issues in terms of so many
of the millions of people who spend hours of their day commuting to a honey pot of jobs in the
centre, when actually there is enormous potential in those outer suburbs to anchor people more
locally, to breathe more life back into that infrastructure of London and to really change the way
that we move and work in a city like this, in a positive way. That sense of public realm in a
poly-centric city, and putting quality of life into the infrastructure equation, came out very strongly
in a group who clearly recognised that, in all of the debate we have in the course of the day, the
word that keeps on repeating is infrastructure. If we do not get that right, an awful lot of the
desirable things do not follow.

                                         Closing Remarks

                                            Harvey McGrath
                                  Chair, London Development Agency

Steve, thank you very much and, indeed, ladies and gentlemen, please join me in thanking all of the
chairs of the seminar panels.

My take-away for this morning can be summarised in three words. I think there is confidence,
despite the challenges that we have in the short term and in the medium term. I think there is
confidence and I think, talking to many of you and listening to many of you, that comes through
very clearly. Secondly, there is real engagement. That is what brought you here today. I would
like to welcome that, recognise it and build on it, because it is ultimately the engagement by all of
you, from your vantage point, from your business, from your organisation, that will enable us
collectively to better address some of the issues we have been grappling with. The third word is
vocal. Some of us have been standing with microphones today, talking about some of the issues
that concern us, but I would encourage all of you to shout loudly about those things that you care
about, because we do collectively have an opportunity to influence some of the significant
outcomes that we have been outlining and talking about today.

In terms of next steps from today, I would first of all encourage all of you to participate in the
formal consultation that is running on the Mayor's economic development strategy. Your input, as I
have said, is important. Make sure that you provide it. Secondly, from an LDA point of view, we
are going to take away much of what we have heard about complexity, timeliness, layering and
de-layering and feed that into our ongoing review of how this agency focuses, and we will be
putting up material from today's session on the LDA website, so there will be a record there for you
to access.

Thank you, once again, for taking time out of your busy lives. I hope you found it worthwhile. We
look forward to seeing as many of you as can stay for lunch. Thank you.

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