Andrew Dismore

Economy Assessment

Oral Answer

Jennette Arnold (Chair):  The next question is in the name of Assembly Member Dismore, question number 1547, Economy Assessment. 

1547/2012 – Economy Assessment

Andrew Dismore

Have you made a recent assessment of the effect on London business confidence of the economy entering recession?

Boris Johnson (Mayor of London):  Thank you, Andrew.  No, over the last few months there have been plenty of studies about the state of business confidence in London and I would commend particularly one a couple of months ago, that was the London Chamber of Commerce, and the industry’s quarterly survey, which showed paradoxically business confidence was at its highest since 2007, although patently there are real challenges at the moment, not least from the uncertainty in the eurozone. 

Andrew Dismore (AM):  I am surprised that you have not done your own assessment of this because we know that in the last quarter the recurring fell back by 2.6%, which is a significant impact on the economy throughout the country and inevitably would have fed through intoLondon.  The study you are talking about predates some of that.  Could I put to you what the British Chamber of Commerce said in response to the double dip recession, which was this,

“Tough austerity measures are squeezing domestic demand.  While the economy remains fragile businesses should be given the support they need to drive recovery.”

Could I ask you this; what support are you going to give businesses inLondonto drive that recovery inLondon?

Boris Johnson (Mayor of London):  I think I said at last month’s Mayor’s Question Time jobs and growth are the priority for us and we are doing a huge amount of work to encourage the creation of jobs in the capital, the investments in transport infrastructure, the investments in housing will be of great importance and benefit to London business.  There are funds available through the Outer London Fund, through the Regeneration Fund, a new Revolving Fund.  We are setting up to helpLondon business and of course we are there to support the creation of new jobs, particularly for young people through apprenticeships.  Additionally, and I think you have another question on this, I believe it is my role to campaign, to militate against measures that I think make life tougher for business: excessive bureaucracy, regulation, directives from the European Union that I think may be ill thought-out.

Andrew Dismore (AM):  I really want to see more jobs and growth but what you have just answered is a very vague and woolly response, and I would like to hear some specifics. 

Boris Johnson (Mayor of London):  All right.  Come on then.  Here we go.

Andrew Dismore (AM):  I mean what the British Chamber of Commerce said is this,

“There is a big black hole when it comes to aiding businesses to create enterprise, generate wealth and growth.”

So let’s have some specific detail.

Boris Johnson (Mayor of London):  All right, here you go.  Crossrail will generate 14,000 jobs over a four-year period.  The Tube upgrades will generate 18,300 jobs over a four-year period.  The housing programme will generate approximately 100,000 jobs.  TheGreenwichPeninsula scheme, we think there will be about 4,000 jobs created over four years.  In the Royal Docks and in that area will be 1,500 jobs over four years and about 11,200 thereafter.  Through foreign direct investment inLondon, throughLondon and partners, we reckon about 14,000 jobs will be created.  Jobs from the Olympics Game area will total about 10,000 and we think that European Regional Development Fund funding will help us to secure a further 4,700.  The jobs from the Mayor’s Regeneration Fund, notably in the Haringey area we think will produce about 3,400.  The Outer London Fund about 700 jobs over four years.  In the Retrofitting programme, which we discussed earlier on, which is of great importance for all sorts of reasons, the environment to the quality of people’s homes, we think will produce 4,300 over four years.

And of course these jobs and these investments are only the direct employment, and this is very, very important because I know to understand, the knock-on benefits to the economy in competitiveness, in creating the right conditions for business will be very significant.  Crossrail, the indirect jobs just from Crossrail we think will be about 40,000 over a four-year period.  Once we get the Vauxhall Nine Elms project going, we get the Northern line in at Battersea, we unlock the power station, which I think is on the cards, you will see about 25,000 jobs.  We have a —

Andrew Dismore (AM):  These figures —

Boris Johnson (Mayor of London):  You are asking for detail and the level of my ambition.  If I may say so, you know, you take a very caustic and sceptical tone and I am trying to give you what we are doing.

Andrew Dismore (AM):  My scepticism comes from this, Mr Mayor, in that you give us a nice long list of aspirational figures —

Boris Johnson (Mayor of London):  It is not complete, by the way.

Andrew Dismore (AM):  I am sure your aspirational list is not complete but the point about it is this, the essential question is how — naming a project and the numbers that come with it is not saying how you get from A to B. 

Boris Johnson (Mayor of London):  I will tell you how you get from A to B.  You get from Maidenhead to Shenfield by something called Crossrail.  That is how you get there.

Andrew Dismore (AM):  Crossrail is a project and you gave a list of other things as well, but you have not explained how you get from A to B.  We have all together a quarter of Londoners at working age economically inactive.  All we ever hear from you are things that are going to support rich, wealthy people inLondon, like the cutting of tax, we have seen an increase of 10% in pay —

Boris Johnson (Mayor of London):  Try harder, come on.  Go back to the House of Commons.

Andrew Dismore (AM):  — of Financial Times Stock Exchange chief executives. 

Boris Johnson (Mayor of London):  Go back to the House of Commons

Andrew Dismore (AM):  You are part of the bureaucracy, so you know what we are talking about with these people.

Jennette Arnold (Chair):  Can I have a question from you?

Andrew Dismore (AM):  The question is a simple one: how?

Boris Johnson (Mayor of London):  Rich lawyer, fat cat, former MPs.

Andrew Dismore (AM):  You are the one with quarter of a million, not me.

Jennette Arnold (Chair):  Mr Dismore, will you stop for a moment and we get quiet so we can get the question.  Can I have a question?

Andrew Dismore (AM):  The question is a simple one: how?

Boris Johnson (Mayor of London):  As I say, you ask how we get from A to B and I have pointed out there is a scheme from getting from Maidenhead to Shenfield, it is called Crossrail.  It will give 14,000 jobs directly, and about 40,000 indirectly.  What we were able to do over the last four years was to secure massive levels of investment in transport infrastructure, massive levels of investment in housing, there is a huge benefit to Londoners on all incomes. 

Andrew Dismore (AM):  You do not know that.

Boris Johnson (Mayor of London):  There is a huge benefit to fat cat Labour lawyers who may or may not get contracts to advise.  They are of huge benefit to people in the construction industry, they are of huge benefit to homeowners.

Andrew Dismore (AM):  You do not know that.

Boris Johnson (Mayor of London):  I do not think I can really elaborate on it to say — I can give you a much longer lecture about growth in the economy if you want.

Jennette Arnold (Chair):  Mr Dismore, do you have any more questions because there are other Members waiting to come in.

Andrew Dismore (AM):  I will repeat the same question because we have not had an answer.  I am asking you how you actually do it —

Boris Johnson (Mayor of London):  With great respect —

Andrew Dismore (AM):  — rather than giving an aspirational figure on a project.  How do you actually create jobs?

Boris Johnson (Mayor of London):  With great respect to you, I think I have given you about as parcel an answer as you can possibly —

Andrew Dismore (AM):  You have given a list.

Boris Johnson (Mayor of London):  — and the way to create jobs in London is to create the platform for growth through infrastructure investment, which we have secured, and I think that is visible, and palpable and tangible.

Jennette Arnold (Chair):  Mr Dismore, you are going to have to come back another day.  I am sorry, no.

Boris Johnson (Mayor of London):  The second you have to do is create the right fiscal and regulatory environment in which business can flourish —

Andrew Dismore (AM):  So you want to make it easier to fire people at will?

Boris Johnson (Mayor of London):  I think Mr Dismore is now moving on to another question he has.

Jennette Arnold (Chair):  Can we hear his question?  Assembly Member Dismore, I want a question from you that we can all hear so that it can go on the record.  Can you repeat that question please?

Andrew Dismore (AM):  Do you agree with the Beecroft Report that makes it easier to fire people at will?

Boris Johnson (Mayor of London):  It is a separate question on the one on —

Andrew Dismore (AM):  It is not, it is part of the economic —

Boris Johnson (Mayor of London):  I will certainly answer that question now.  On the so-called “no fault” dismissal issue, I think it is an interesting point.  I have to say it is not something a great many businesses have raised with me or indeed the London Chamber of Commerce and Industry has raised with me.  It is not the top of the list that has been put to me.  I know it is out for consultation.  I will be interested to see what the reaction is.  I mean some people seem to be in favour of it, some people seem to be more hostile.  Personally I do not see why you should not offer some sort of explanation as an employer in the course of a dismissal, but there is no doubt at all that one of the biggest inhibitors to employment inLondon is excessive rigidities in the labour market.  We have a culture now that leads almost every — a huge proportion of dismissals to tribunals to very lengthy procedures of one kind or another.  I can understand the frustrations of employers and I think it is absolutely right that the coalition should look at it and that they should try to liberalise where possible and where it is humane.

Andrew Dismore (AM):  We have the third most least regulated labour market in the developed economic world.  How can you say that it is right for people to be sacked at will, which is effectively what the Beecroft Report is saying?  Well, I think that is the implication of that.  What is your response going to be?

Boris Johnson (Mayor of London):  I hesitate to —

Andrew Dismore (AM):  That is what it said.

Jennette Arnold (Chair):  Mr Mayor, just hold on a minute.  Assembly Member [Andrew] Dismore, we have got a way forward because you have brought on to the floor your question regarding Beecroft Report and indeed you have had an answer to that because your question there at number 1547 is, Do you support the Beecroft Report on “no-fault” dismissal and would this benefit the labour market?”  I believe I have heard an answer to that question from the Mayor.  Do you have a supplementary now to the Beecroft Report and can Members then come in if they want any supplementaries to that question, and that will then move us forward.

Andrew Dismore (AM):  I was raising the context of business confidence and it seems to me that the Mayor has a rather peculiar view of business confidence when we have one of the least regulated labour markets in the world.  The point simply is there is zero empirical evidence as the former Bank of England Monetary Policy Committee (MPC) member said that this actually makes any difference.

Boris Johnson (Mayor of London):  As I say, there are mixed signals coming out of business about their levels of confidence.  There is some encouraging stuff from the London Chamber of Commerce and Industry.  I thinkLondon continues to show impressive resilience and an amazing ability to create jobs.  Just to go back to the serious work of this place, what we have to do is get young Londoners able, ready and willing with the right mind-set to get the jobs thatLondon creates.  There is no earthly point in me reciting a litany of a huge long list of the big schemes that we are promoting and investing in that will create jobs unless Londoners are able to take those jobs.  A huge amount of work is now being done on that.  I am sure that you would encourage that.

Andrew Dismore (AM):  Which is the point I made to you last time that you did not answer.