's Turning The 'London effect' threatens to undermine Labour's performance at the next election. Chris Hamnett argues that it is mainly caused by the vast demographic changes that have taken place in the capital over the last 20 years.

Desirable residence: Gentrification changes the political structure of the capital he May 1990 local govern- and may reflect satisfac- of 1983. In the 1987 general election, for ment elections saw major tion with the lowest poll taxes in Britain example, Labour's vote rose by only gains for Labour across the (£148 and £195 respectively), combined 1.7% in London compared to 3.2% country. There was a national with a fear that Labour control might nationally and Labour lost the inner- Tswing of 11% to Labour compared with lead to an increase. The Tory gains in London constituencies of Fulham and the 1987 general election. But in London Brent and Ealing are partly explicable Battersea following the previous losses the gains were much less - 4% to 5%. in terms of previous Labour policies. of Woolwich, Dulwich, and Not only did the Tories strengthen their Labour raised domestic rates by 63% in . control of the flagship boroughs of Ealing in 1987 and staggered from one It has been common to blame the Lon- Westminster and Wandsworth, they political crisis to another in Brent. don 'Loony Left' for this sequence of also wrested control of Ealing from La- But the low swing to Labour in London defeats and there is no doubt that the bour and gained large numbers of seats was not just a feature of the 1990 elec- image of the Left in London has gen- in the inner boroughs of Hammersmith tions. The 'London effect' has a longer erally been a negative one. But, as Ken and Fulham, and Brent. pedigree. From the 1974 general elec- Livingstone has argued, the Labour Why did Labour do relatively badly in tion onwards, swings to Labour in Lon- GLC commanded considerable support compared to the rest of don have been less, and swings to the during the early 1980s for its policy of Britain? Several reasons can be put for- Conservatives have been greater than cutting public-transport fares and im- ward. The Tory gains in Wandsworth the national average, with the exception proving services. Also, the London ef-

26 MARXISM TODAY JULY 1990 people live. The 'gentrification' of large corporate dominance. parts of inner London by young, up- London has always been the centre of wardly mobile managerial and profes- British financial activity, but in the sional workers and the disappearance 1970s its role as a major financial centre of large parts of the traditional working was enhanced with the development of class has changed the social and politi- the Eurodollar market. And with the Big cal complexion of inner London to Bang of the 1980s, London established Labour's disadvantage. its dominance as one of the big three world financial and business centres, London's economy has experienced rapid along with New York and Tokyo. de-industrialisation. Until the early The employment growth has not just 1960s London was still a major manu- been in financial services, but also in the facturing centre but from then onwards related areas of law, accountancy, adver- manufacturing jobs disappeared very tising, management consultancy, survey- rapidly, a decline which was only partly ing and valuation which are crucial for offset by the growth of service jobs. the corporate sector. London is now one The figures are clear (Table 1). Be- the world's major centres of accountancy tween 1961 and 1981 London lost and legal expertise, and the number of 800,000 jobs. But the losses were very jobs in financial services in the City has unevenly distributed. In 1961 London increased from 186,000 in 1981 to 206,450 had 1.45m manufacturing jobs, rep- in 1984 and 254,500 in 1987 - an increase 'Depending resenting 33% of all jobs; by 1981 it had of 23% in jut three years. on the only 680,000, 19% of the total. London The conclusions are clear. At the same theory, lost half its manufacturing jobs in 20 time that London has been de- years through closures, job shedding or industrialised it has reinforced its role London is industrial migration. as a key centre of financial and business becoming The number of service jobs in London services in Britain. London has been a more in 1981 was only slightly higher than in dominant world city for centuries, but 1961. But because of London's overall the form of its dominance has changed politicised, job losses, service jobs accounted for from manufacturing and trade to corpo- more 75% of jobs by 1981, compared to 59% rate control and global finance. polarised in 1961. In just 20 years London became or more a services-dominated city, and these Accompanying the changes in London's profession- trends have continued. From 1981 to economic structure have been changes 1987 London lost a further 164,000 in its occupational structure. As manu- alised. manufacturing jobs and gained 159,000 facturing industry has declined, so have Clearly all service jobs, most of which were in the skilled and semi-skilled, predomi- three cannot insurance, banking and finance. nantly male, factory jobs which went be correct' The 1960s and 1970s also saw major with it. And, as the financial and busi- changes in employment within the ser- ness service sector has grown, so has vice sector. The number of jobs in the the number of managerial and profes- traditional service sectors of transport, sional jobs and the routine office jobs, retail and wholesale distribution de- many of which are filled by women. clined sharply as did personal service Changes in occupational structure are jobs in catering and hotels. But the important because they shape the socio- number of public-service jobs in educa- economic and income distribution of tion, health and social welfare in- cities. But they cannot simply be read creased by almost 50% from 600,000 to off from changes in industrial struc- 890,000. The 1960s and 1970s were a ture, not least because people do not golden age of public-sector employ- always live where they work. Large ment expansion in London. Jobs in numbers of commuters work in London financial and business services also but live outside it, and in the last 30 grew rapidly in the 1960s and 70s from years London has seen a net loss of 462,000 in 1961 to 593,000 in 1981. But population by out-migration of about they have increased even more rapidly 1.5m people. As the out-migrants are in the 1980s to 722,000 in 1987. Many of generally more skilled than non- these new jobs were concentrated in the migrants, this has led to fears that the and the West End - the occupational structure of London's resi- big growth centres of financial and dents is shifting downwards. fect was detectable before the Left took business service employment - and There are in fact three rather different control of the GLC in 1981. To explain they are crucial to understanding what views of what has happened to the occu- the London effect it is necessary to look has happened in London in the 1980s. pational structure of London. The first to some of the profound changes which The City of London has been a major view, the 'proletarianisation thesis' put have reshaped London's economic and centre of financial and business activity forward by the GLC in the early 70s, social structure over the last 20-30 since the 19th century - a reflection of was that London was seeing the loss of years. its role as the capital of trade and em- both the top and middle strata of its The deindustrialisation of London since pire. Lloyds insurance, the Baltic residents through migration to the rest the early 1960s and the growing domi- Exchange (shipping), the Bank of of the southeast. This, it was believed, nance of service employment have rad- and the Metal Exchange are all was leaving London with a bottom- ically changed its economic structure. based in London, as are most of the heavy occupational structure com- This in turn has lead to major changes major company headquarters. In the prised of the less skilled, less well- in its occupational structure - the kinds early 1970s, 532 of the biggest 1,000 educated and lower paid. This was what of jobs that people do. And the changes British industrial companies had their happened to some older North Ameri- in occupational structure have also head offices in London, followed by Bir- can cities in the 1960s. been linked to changes in the tenure mingham with just 66. And this concen- The second theory - the 'polarisation structure of London's housing market tration has increased over time as thesis' - was that inner London was and its social geography - where takeovers have reinforced London's becoming a city of the very rich and the

27 MARXISM TODAY JULY 1990 very poor, with intermediate non- black proletariat. The real risk for inner tiple occupation have been upgraded manual and skilled manual workers London is that it might well be gentri- once again... Once this process of "gen- migrating out in search of affordable fied with a vengeance, and be almost trification" starts in a district it goes on home ownership. In this interpretation, exclusively reserved for a selected rapidly until all or most of the original the middle of the occupational struc- higher-class strata.' working-class occupiers are displaced ture was disappearing, leaving a con- This is the 'upward shift' or profession- and the whole social character of the centration at both the top and bottom. alisation thesis, and with it we have district is changed.' oth these theses can be three radically different interpreta- In identifying the class-based nature linked to the changes in tions of what is happening to London's of gentrification, Glass put her finger London's employment struc- occupational structure. Depending on on a crucial link between the changing ture as well as to differen- the theory, London is becoming more occupational structure of London and tial out-migration. In the polarisation proletarianised, more polarised or more the changes in its housing market and thesis it is argued that the concentra- professional. Clearly all three cannot be its residential geography. Central Lon- tion of corporate and financial service correct. So what does the occupational don has long has its middle and upper- jobs in London needs a supporting cast evidence show? The census of popu- class areas such as , South of low-paid service workers - mes- lation (Table 2) shows that London had Kensington, Belgravia and Mayfair. sengers, security guards, waiters, 3.82m economically active residents in But as the numbers of middle-class cooks and kitchen workers, office 1971. By 1981 this had fallen to 3.37m - households grew and sought good hous- cleaners and the like. a decline of 455,000 of 12%, reflecting ing close to the jobs and social attrac- Together with the loss of skilled manu- London's population losses during the tions of , the traditional facturing jobs, it is argued that these 'Although decade. middle-class residential areas proved trends are leading to growing occupa- But the losses were unevenly distri- too small and too expensive and the tional and income polarisation in the geographic- buted across the occupational spec- demand began to push outwards into capital. This is the world captured in ally close trum. The number of professional and adjacent, but hitherto uncolonised Tom Wolfe's novel Bonfire Of The Vani- to the managerial workers fell by 4% and areas. ties where New York's new 'masters of gentrified other non-manual workers by 11%, but Large tracts of inner London's tra- the universe' - wealthy bankers, the manual groups all declined by far ditional private rented housing stock, brokers, traders and corporate lawyers terraces, more. The number of skilled manual often in multiple occupation, have been - are matched by a growing underclass they are and self-employed non-professional sold for up-market home ownership. In of low-paid service workers who are socially and workers fell by 22%, the semi-skilled the process, the older working-class needed to staff the restaurants and wine economically and personal service workers by 14% residents have been displaced. This pro- bars and clean the offices of the new and the unskilled by 29%. cess has expanded steadily outwards elite. a world away As a result of these differential losses, from central London. This is a convincing thesis, and re- from the the professional and managerial group It started in Chelsea in the 1950s, search has shown that it holds true in affluent grew from 14% of the total in 1971 to which is now very expensive, but was New York and Los Angeles. Some think home 17% in 1981. The share of the other then seen as a socially marginal bohe- it is also true of London. Writing in The non-manual group grew by 0.5%, while mian enclave. And in the mid-1960s, Observer in 1986 Neal Ascherson ar- owners' manual groups showed corresponding aided by the opening of the Victoria gued: 'Under the surface of London, losses. Viewed in isolation from the tube line and encouraged by the archi- there are strange tremors. Something is changes in the rest of the southeast, tectural potential of the Georgian rising to the surface... That something where the professional and managerial houses, gentrification spread to the is middle-class money. London is ceasing group grew more rapidly than in Lon- Barnsbury area of . Other to be a city with a large, organised fac- don, the occupational evidence suggests areas such as Primrose Hill, Camden tory proletariat and is reverting towards that the trend is one of upward shift Town, Kentish Town, Notting Hill and a capital in which a huge, under- rather than proletarianisation or polari- Holland Park, all close to central Lon- employed proletariat works to service a sation. There were fewer semi-skilled don and with good tube links, quickly wealthy minority. London is slipping and unskilled manual workers in Lon- followed in the late 1960s and early backwards in time and becoming a ple- don in 1981 than there were in 1971 and 1970s. Camden Town was the setting for bian city, a restless mass no longer to be their share of the total has decreased, Marc Boxer's 1970s' Times cartoon regimented and organised by union or rather than grown. It is highly likely strip 'Life and Times in NW1'. by class-party. This is more like Paris in that these trends have continued, even n the mid-1970s, gentrification the 19th century than the working-class accelerated, during the 1980s. began to spread further afield, London of Herbert Morrison 40 years down the Kings Road into Ful- ago.' Ruth Glass also suggested that the upward ham, into Ealing and North Ken- Ascherson's argument is extremely shift of London's social structure was singtoIn and across north and east Is- evocative but is it correct? There is no linked to the process of gentrif ication - lington into the more attractive part of doubt that he is right in terms of the a term she coined to characterise the Hackney. And gentrification has conti- polarisation of income distribution. In social and geographical expansion of a nued in the 1980s. Southern Hackney his book Poverty And Labour In London, new 'gentry' into the old working-class has been colonised by urban 'space in- Peter Townsend shows that there was residential areas of inner London. The vaders' and Stoke Newington and growing income polarisation in London reason is that although the numbers of beyond are the new frontiers. But what between 1979 and 1985, and that it was professional and managerial workers has happened east and south of the City more marked than in Britain as a whole. declined slightly during the 1970s, the is even more remarkable. But according to Ruth Glass, a pio- trend towards smaller households Ten years ago the Isle of Dogs was still neering urban sociologist who died meant that the number of middle-class an impregnable bastion of the East End earlier this year, both the proletariani- households increased, as did their de- working class. A few early pioneers, sation and polarisation theses are mand for housing. As she graphically including , had moved into wrong. In an article written almost 20 put it: 'One by one, many of the working- the period houses lining the river in years ago, she argued that the changes class quarters of London have been in- Limehouse and Wapping, but in 1981 in London's occupational and social vaded by the middle class - upper and home owners accounted for only 10% of structure meant that: 'London is now lower - and shabby modest mews and households in Tower Hamlets and coun- being renewed at a rapid rate - but not cottages... have been taken over when cil tenants for no less than 85%. But on the model about which we are often their leases expired, and have become since of the London warned. Inner London is not being elegant, expensive residences. Larger Docklands Development Corporation in "Americanised": it is not on the way to Victorian houses, downgraded in an 1985, the Big Bang in the City in 1987 becoming mainly a working-class city, a earlier period, which were used as lodg- and the rise of the new monied elite, "polarised" city, or a vast ghetto for a ing houses or were otherwise in mul- home ownership in Tower Hamlets has

28 MARXISM TODAY JULY 1990 risen to 40% and Docklands has become a synonym for luxury housing for the new rich. Gentrification has also spread into other areas of the old East End such as Mile End Road and south of the Thames into Battersea, Vauxhall and Southwark, long seen as the home of an entrenched working class. But while the traditional working class have shrunk in number, they have not disappeared. Instead they have become increasingly concentrated into the high- rise and deck-access council estates which have replaced those parts of inner London's private rented sector which have not been gentrified. The figures are remarkable. In 1961, 64% of households in inner London still rented privately. By 1981 this had fallen by over half to 30% while the proportion of home owners rose from 17% to 27% and the proportion of council households rose from 19% in 1961 to 43% in 1981. By 1981 council housing had replaced private renting as the single largest tenure. Meanwhile, home ownership strengthened its domi- nance in where council housing expanded much more slowly than in inner London. The consequences of this shift have not gone unnoticed. Gillian Tindall com- mented in 1971 that, 'the turn of the century seems likely to see the whole of inner London parcelled out either into council blocks or into highly expensive and inevitably exclusive owner-occupied property.' Her prediction has been pro- ved correct. Even though the population of London has not become polarised in occupational terms, it has become socially polarised by tenure. The less skilled, the unemployed, the low paid and single-parent families and some ethnic minority groups have become increasingly concentrated in council housing over the last 20 years. Although geographically close to the gentrified terraces, they are socially and econo- mically a world away from the affluent home owners.

So what has been the political impact of all this restructuring? Given the link be- tween social class and voting, the gra- dual replacement of the Labour-voting working class by a new class of home- owning professionals and managers in the 1970s and 1980s suggests that politi- cal change may have followed on the heels of social change. Now the political impact of these changes was arguably less marked in the 1960s and early 1970s than in the 1980s because of more of the profes- sional and managerial expansion at that time was made up of public-sector workers, who have a greater propensity to vote Labour than private-sector workers in the same occupational class. But public-sector expansion came to an abrupt halt in the late 1970s whereas private-sector professionals now account for a much larger slice of the occupa- tional pie. This may lie at the root of the London effect - and its geographical expansion into the London commuting

30 MARXISM TODAY JULY 1990 area. tenure and social mix of the area. against demands for better services But while the London effect may have Wandsworth has also pursued a policy and a more imaginative vision of the made some safe Conservative seats in of social and political restructuring future. the southeast safer still, it has been through the housing market. Herbert But reclaiming inner London for La- most strongly felt in the Labour- Morrison once said that Labour would bour will not be an easy job. The old controlled ring of inner- 'build out the Tories' in inner London. working-class Labour bastions have where gentrification has been most The policy in Wandsworth is to reduce crumbled and the new gentry are not marked. And it has been strongest of all Labour support through a massive sell- automatic Labour voters. They will in those inner south and off of the council stock to a new class of need convincing that Labour offers an constituencies such as Fulham, Ber- home owners. This is council-encouraged attractive and efficient alternative to mondsey, Battersea, Dulwich and Green- gentrification, and 17,000 (40%) of the Tories in London. Part of the answer wich where the private-sector profes- Wandsworth's 42,000 council homes 'Reclaiming lies in Labour's ability to treat residents sionals have concentrated. have been sold - to sitting-tenants or to inner London as customers who want a cost-effective, here appears, indeed, to be a developers for conversion into luxury for Labour efficient service rather than clients distinct cultural and political apartments. The chair of Wandsworth's who accept what they have given. Some geography of gentrification. property sales committee was quoted in will not boroughs, such as Lewisham, have In Camden, Islington and (June 19,1987) as saying be an easy already realised this, but others are still Tother parts of , the legacy that, 'I don't think any of us have ever job' locked in a statist model of service of the liberal Hampstead intelligentsia tried to hide the fact that we have provision. seems to linger on. Whereas Docklands, sought not just to run Wandsworth more But important though this is, Labour Fulham, Battersea and Wandsworth efficiently, but to change Wandsworth also needs to devise imaginative seem to attract Sloane Ranger into a Conservative borough that will employment, housing, transport and en- Conservatives, and the City . stay Conservative irrespective of vironmental policies for London. The This is speculative however, and the national swings.' GLC achieved this in part with their idea of distinct class cultures of politics The result of this policy was seen in the successful Fares Fair policy, but La- within London needs more detailed ana- 1987 election when Alf Dubbs lost Bat- bour in London during the 1980s was lysis. tersea, a once-safe Labour seat, to the often more concerned with gestural Gentrification and political change Tories. Dubbs thinks he can reclaim politics than it was with a vision of have taken place in inner London as a Battersea for Labour in the next elec- London's future. But London's transport result of employment and occupational tion if the Labour lead holds up. This is is steadily worsening and what Labour changes. But in Wandsworth and Dock- not impossible, and it should not be needs is a strategic plan for the future lands it has taken place partly as a assumed that because many of inner of London in the 1990s and beyond. This result of the deliberate manipulation of London's new class voted Conservative will be difficult without the GLC, but the housing market to produce social in the last three general elections that the Association of London Authorities change. In Docklands the goal has been they will continue to vote Conservative could be the co-ordinating body for such to foster up-market home ownership to come what may. Although the Tory po- a plan. What is certain is that without a the almost total exclusion of new social licy of limited services and low rates plan Labour could only provide a dis- housing in order to redress the housing has worked so far, it may be running connected set of local policies.

31 MARXISM TODAY JULY 1990