A case study of one London borough exposes the lie peddled by politicians – usually seeking to divide us – that the north is poor and the south is rich...

The affluent South East? Take a closer look – the real world is rather different

WORKERS, APR 2012 ISSUE

People are often bemused by the difference between what they experience in their everyday lives and what politicians tell us is happening. The problem for politicians is that we work and live in the real world, so we’re not easily fooled. And good statistics can tell us a truth that politicians would rather ignore or hide.

The term “affluent London and the southeast” trips off the tongues of politicians and is used sloppily in the media, usually in an attempt to divide us and foster resentment. Alex Salmond is fond of the term. And it’s true that average incomes are highest in London and the South East, but this fact covers another reality.

Old housing stock, multiple occupation: affluent London?
Photo: Workers

The east London borough of Tower Hamlets has one of the highest average incomes for those in work yet is one of the poorest local authorities in the country, with 27 per cent of its children living in poverty. Consider its high level of unemployment together with the presence of Canary Wharf (with many highly paid employees living in the borough during the working week) and a picture emerges of huge discrepancies in incomes. This picture is replicated to a greater or lesser degree around London.

In Britain as a whole, the picture painted by statistics is grim. A 2011 index, which mapped health and social problems against income gaps between the highest paid and the rest in 20 developed countries, showed Britain as having the third worst record.

Problem factors

It is no surprise that countries with the biggest gaps have the worst problems. The problem factors included life expectancy, infant mortality, murder rate, imprisonment, mental illness and obesity. The US “leads” the field by a long way (interesting when we are constantly encouraged to emulate the way they do things), followed by Portugal, then Britain (Greece comes fifth). Within Britain, London is home to the richest and some of the poorest people in Western Europe, and it has the biggest income gap in the EU.

Britain’s youth and adult unemployment is among the highest in Europe. Incomes here fell 3.5 per cent in real terms in 2011, with inflation 5 per cent or higher during the year. Many lower paid professionals effectively had sizeable falls in pay, while senior managers and directors had massive rises. There is a trend towards part-time working due to high unemployment levels. For those in work, incomes are often too low to live on and are “topped up” by working tax credit – a direct subsidy from the people to poverty-wage employers. In London, 20.7 per cent of children live in households where nobody works.

A dramatic rise in the population of young children in parts of Britain is leading to an acute shortage in school places. Based on government data, it is estimated that half a million new primary places will be needed by 2015 – the equivalent of over 2000 new primary schools. The spurt in child population is particularly acute in some outer London boroughs, where old school buildings are bursting at the seams.

Housing in Waltham Forest

Of 98,180 registered domestic residential dwellings, 21,280 are social rented (council or housing association), 22 per cent of the total.

The private rented sector increased from 18 per cent in 2001 to 32 per cent in 2011. The average stay in the private rented sector is 4 years – this has a significant impact on the turnover of borough residents and communities.

The average joint household income is just under £29,000. At that income housing in the borough is unaffordable. The waiting list for social housing is long and growing, particularly as people are driven out of central London by new rules governing social rents.

Private rents are rising rapidly, making them unaffordable for many, particularly for family-sized homes.

Council rents are to rise by an average of 6.9 per cent from April 2012, with some much higher.

There are 3,910 registered houses in multiple occupancy, 5 per cent of the total. The true figure is likely to be much higher, with small Victorian terraced housing in the private sector sometimes unofficially housing a family in each room. Changes in Housing Benefit will bring greatly increased demand.

Waltham Forest now has the highest levels of homelessness in the country. Of every 1,000 inhabitants, 2.55 are homeless. A local soup kitchen reports a steep rise this year in nightly visitors, with a significant proportion being from eastern Europe. ■

London has a high proportion of the population living in overcrowded accommodation; 7.2 per cent of households compared with 2.3 per cent in the rest of England. It also has one of the lowest levels in the country of under-occupation (households having two or more bedrooms more than they need). And every space is likely to be grabbed for building. The average density of new build in London in 2009/10 was 121 dwellings per hectare, three times the next highest region in Britain and the England average.

The Greater London Authority estimates that at least 380,000 undocumented migrants live in London, about 5 per cent of the population. An additional 3-4 per cent have been awarded refugee status. In 2008 about a third of all arrivals in England intending to stay stated London as their destination – around 160,000 people. There is a high rate of people moving in and out of London boroughs – called population “churn”. In nine boroughs over 10 per cent of the resident population moved in or out in 2008. This makes the planning of services very difficult.

Consider the situation of one outer London borough, Waltham Forest in the north east of the capital. The Central and Victoria tube lines both run through the borough, so housing is at a premium and the population has traditionally been mixed, with professional, semi-skilled and unskilled workers living side by side. But conditions in the borough for workers are now deteriorating rapidly, as this case study shows.

Jobless London

The Claimants to Vacancy Ratio (Office of National Statistics) listed the ratio of registered Jobseekers to available jobs in 206 regions of Britain and northern Ireland in 2011. London contained most of the worst 40 ratios. Travelling from west to east London on the Central Line life expectancy decreases dramatically: at Notting Hill Gate in the west it is 84.3 years for men and 88.9 for women; at Leyton in Waltham Forest it is 76.5 for men and 81.2 for women.

Youth unemployment in Waltham Forest rose by 3 per cent in 2011 alone, the biggest rise in the country. 12.6 per cent of 18-24 year-olds claim Jobseekers Allowance – one of the highest rates in Britain.

National trends affecting schools in Waltham Forest include the rapid conversion of local authority schools to academies and the creation of free schools, both of whose funding is removed from the local authority education budget by government, and to reductions in local authority expenditure and in support services for schools. The axing of the Building Schools for the Future programme has affected schools badly, as it has left many schools in poor buildings at a time when medium- and long-term capital funding is seriously in doubt.

In addition to all this, there has been a significant rise in the population in the borough, leading to an increase in demand for school places. In London as a whole a rapidly rising population means an estimated shortfall of 70,000 primary school places by 2015, with a funding shortfall of £1.76 billion. In Waltham Forest each year brings crisis planning of new reception places (for 4- and 5-year olds). Now the local authority is seeking space in existing schools for a further 22 reception classes from this September. There can be no new local authority schools to cope with the crisis – the government only permits new academies and free schools now.

It is common for local primary children to have to eat their dinners in the classroom because of lack of space in school canteens and halls. PE, dancing and music are difficult to manage with the increased numbers, and school libraries and ICT suites are becoming fast-disappearing luxuries. A number of primaries are to take an additional 60 children starting from this September. In an already overcrowded borough there is no space to expand, so other buildings are being taken over as “annexes” for additional classes. In one case, Portacabins on a car park behind a bookmaker in a local shopping centre 15 minutes walk away is a solution being considered. The situation is desperate.

This case study does not deal with other aspects of life in Waltham Forest, such as health, social care and social services, the pressure on infrastructure, and so on, with their own crises. Of course, many of the problems affecting Waltham Forest so acutely are mirrored all over Britain. But let’s stop allowing politicians et al to refer unchallenged to “the affluent South East”. ■

Sources of statistics:

Focus on London 2011 Housing: a growing city. Greater London Authority
London’s poverty profile. Trust for London and New Policy Institute
The impact of recent immigration on the London economy. London School of Economics 2007