Socialist Worker

London's working poor

The capital's wealth comes at a huge cost to workers and their families, writes Simon Basketter, but neither New Labour nor the Tories offer any real solutions

Issue No. 2096

London is home to 49 billionaires – the greatest concentration in Europe – and is one of the most expensive cities in the world to live in.

Labour's indulgence of the ultra-rich has brought huge wealth to the few. Some 40 percent of the world's foreign equities are traded in London, alongside over 30 percent of the world's currency transactions.

But one of the richest cities in the world also has some of the highest levels of poverty in the country – and it is not confined to those without jobs.

At least one in seven London workers is earning below the poverty wage level. Thousands live in a permanent state of insecurity, debt and stress. This has a devastating impact on health and life expectancy.

For the working poor life is a struggle to survive, with low wages forcing many to take on second jobs or to work longer hours as the rich gamble billions on the stock market.

Low wages mean that it is impossible for many workers to make ends meet. A couple with two children, both working 38 hours a week in London earning the minimum wage of £5.73 an hour would be £160 per week short of earning the minimum cost of living in London, according to figures from the Greater London Assembly.

If the couple both earned £7 per hour they would still be £75 short at the end of the week.

The estimated cost of living in London used in the calculations is far lower than the reality. For instance, the rent in the example above is estimated at £150 a week, when for many people it is much higher. The huge food and fuel price rises in the last year are not included in the calculations.

The Labour government argues that benefits for people in work lift them out of poverty. But the survey found only a third of workers claimed the child benefits or child tax credits they were entitled to.

Families in London face deeper poverty traps than elsewhere because of extortionate housing costs.


Rising house prices have had the effect of pricing less well off people out of some areas of London.

Over 60 percent of workers in eight boroughs in inner west and outer north London are unable to buy a property in the borough in which they currently live.

The average income of house buyers in London stood at £82,357 last year, an increase of a third in two years.

Inequality in London is so stark that life expectancy falls by one year for each stop that is travelled east from Westminster on the Jubilee Line.

Across London as a whole, life expectancy is lower than the national average by 0.2 and 0.4 years for men and women respectively. In inner London the disparity rises to 1.8 years for men and 0.8 years for women.

A child born in one of the more deprived areas of London is likely to die nearly six years earlier than one born in an affluent part of the capital.

At the same time unemployment is on average 2.3 percentage points higher in London than the rest of Britain.

Last year unemployment levels in inner London boroughs were almost three points higher at 9.2 percent compared to 6.3 percent in outer boroughs.

Among ethnic minority groups the unemployment rate is 6.2 percentage points higher than that for the white population.

When gender is taken into account, Pakistani and Bangladeshi women stand out as having a particularly low employment rate, at just 24 percent.

While the rest of Britain has seen a limited narrowing of the gender pay gap over the past decade, in London it has widened.

The princess... and the paupers

At a mere £17,000 a house that's called 'the Grand Victorian', with stained-glass windows, a fireplace, a loft space and brass door knockers, sounds as if it is the one affordable house left in London.

The downside is that it is nine feet high and is a children's play house – and the credit crunch notwithstanding, there is a waiting list to buy them.

For the little princess who has everything, there is the handcrafted wooden Cinderella coach bed, by Mark Wilkinson Furniture, on sale at £25,620.

The complete bedroom – which costs about £70,000 – comes with a themed walk-in wardrobe, dressing table, chair and hand-painted murals.

Robert Bailey, founder of Robert Bailey Property, a buying agency, says, 'The most outrageous thing I have seen is a house in Holland Park where the owner took out an entire floor and created a huge padded climbing frame with a slide for his little darling.

'When you think that property in the area sells for £2,000 to £3,000 per square foot, and an entire floor would be about 2,000 square feet, that's about £4 million for a climbing frame. That must be a pretty extravagant indulgence.'

In stark contrast, in the 13 boroughs that make up inner London – an area with a population similar in size to that of Wales – children are more likely to be living in poverty than not.

The majority of children in inner London are living in poverty, compared to the national average of 28 percent.

Child poverty rates in London for black, Pakistani, Bangladeshi and mixed race children are higher than in the rest of Britain, by between 9 and 12 percentage points.

White children in London are also more likely to be in poverty than in the rest of Britain.

No solutions from the Tories

Perhaps not surprisingly, Tory Boris Johnson believes that 'there must always be winners and losers'. He attacks the idea of raising taxes to spend on tackling poverty, believing that 'overzealous' attempts to tackle inequality lead to 'trouble'.

He opposed the national minimum wage and full pension rights for part time workers, and believes that the public sector, upon which millions rely, 'is growing at too fast a rate'.

Johnson should not be a credible contender for mayor. But because Ken Livingstone has turned his back on ordinary people, he has seen his support fall.

Increasingly, Livingstone has adopted the neoliberal agenda of New Labour and celebrates London as a 'dynamic' city of business for the rich. That is why the Left List is standing in the 1 May London elections.

Both main parties show more concern for London's wealthy few than for the mass of ordinary people. It's clear that to tackle the poverty and insecurity that blight the lives of millions of Londoners, we need to build an alternative.

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Article information

Tue 8 Apr 2008, 19:57 BST
Issue No. 2096
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