London'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 Westminster 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, Greenwich and Not only did the Tories strengthen their Labour raised domestic rates by 63% in Bermondsey. 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 Greater London 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 City of London 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- England 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.