La Belle France

The unrelentingly grim tone of political and economic announcements recently led me to read about the French Revolution to cheer myself up. I've always had a fascination with the upheavals of 1789-94. In just five years (the usual gap between elections now) the whole country was turned upside down, torn apart, and built back up by war, terror, and astoundingly prescient ideas. Paris must have been a simultaneously horrifying and astonishing place to be during those years of upheaval.

The tenuous link that this has to UK housing policy is found in the demographic layout of Paris, focal point of the revolution centuries ago. Unlike London, which has pockets of social deprivation in close proximity to the richest areas of the central business district, Paris has a donut of deprived suburbs around a wealthy centre. With housing benefit cuts and changes to social housing, this structure will be rapidly replicated in London. Although given the scale of benefit cuts, those reliant on them in central London may need to move much further afield than the still-costly outskirts, and/or resort to deliberate overcrowding.

Minister of Decentralisation (surely one of the most oxymoronic titles ever) Greg Clark mentioned this in his recent speech to launch the government's White Paper on 'local growth'. He said:

'...even in the wealthiest areas, there remain significant pockets of unemployment and deprivation. Whatever the differences in economic performance between broadly defined parts of the country, the differences between different towns and neighbourhoods are also often great. Tower Hamlets, in the shadow of Canary Wharf, has three quarters of children growing up in low-income families.'

Mr Clark has successfully identified the problem of inequality, which has many complex economic & social causes, and without sustained and significant intervention perpetuates itself. However, he then veers into a character-assassination of Regional Development Agencies followed by a massive plug for their successors, the Local Enterprise Partnerships. Both RDAs and emerging LEPs focus on economic development, and I very much doubt that reducing poverty within areas the size of Tower Hamlets falls within their remit. Which is not to say that the government is doing nothing to tackle poverty in the shadow of Canary Wharf. The changes to benefits and social housing will move this poverty outside central London so that those working in the City won't have to look at it anymore.

You might wonder why London shouldn't become more like Paris. Unfortunately, confining poverty to the outskirts of the city hasn't always worked out well. The 2005 riots were centred on the poor suburbs of Paris, expressing frustration at high levels of unemployment, entrenched poverty, and racial tensions. That unrest had been simmering for decades before violence erupted. In London there will be huge internal migration of those in poverty over the next three years; the low-paid, unemployed, elderly, disabled and carers forced to uproot and resettle elsewhere. This will inevitably cause some tension, although historical comparison suggests that we have a much more sanguine approach to displeasure with the government on this side of the channel.

More seriously, the reason that housing benefit cuts will bite hardest in London is that it's disproportionately economically successful and lacking in housing supply, resulting in extremely high housing costs. The government's rhetoric is entirely focused on reducing the deficit, brushing aside the ideological questions at stake. Should the public sector subsidise people so that they can live in London, or let the market lock all except the highly paid out? What are the social benefits to communities with mixed levels of wealth; economic dynamism due to ease of recruiting for lower paid jobs, less wasted time and energy commuting, improved social cohesion as different groups mix? What are the disadvantages of London as it is; dissatisfaction stemming from the proximity of poverty and wealth, perceived unfairness of housing benefit, potential driving up of rents? Although replicating Paris' donut model would reduce housing benefit costs, would it increase public expenditure in other ways by moving people away from jobs, requiring greater spending on Job Seeker's Allowance and transport?

Have the government silently dropped their responsibility to try and alleviate poverty, or at least not make it worse? It really concerns me that they don't seem to be acknowledging any of these questions, let alone trying to answer them.

Strangely enough, given the choice I'd prefer to live in Paris than London. Not for any rational, statistically-supported reason - I just like it more.