GaWC Research Bulletin 145

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Capital Needs, Capital Growth and Global City Rhetoric in Mayor Livingstone's London Plan

I.R. Gordon*


Capital cities such as London face in an exaggerated form the common urban problem of lacking autonomous control over the resources required to maintain their economic roles and satisfy the social needs of their citizens. Coping effectively with this situation demands of their leaders a governance strategy which weaves together the management of both internal and external political relationships. As an issue in political economy, this paper explores the issue in relation to the representation by London's first executive Mayor in his London Plan of the city's 'global' role as key to its future. This is taken to be not simply a statement of fact or of inevitable trends but a strategic choice requiring explanation. Three such explanations are considered, in terms of: hard economic reality; interest representation and local coalition-building; and manoeuvring for central government support to meet infrastructure needs. The last of these is argued to be the most plausible - with the implication that if, there is a pro-(global) business regime operating in London, it is not simply because of political preferences or local pressures, but because of links to potential resources for a rather powerless capital city, heavily dependent on the goodwill of national government.


As a category 'capital cities' have clearly lost ground within geographic writing over the last couple of decades - casualty both to fashionable enthusiasms for 'global cities' as against national centres, and to a shift in interest toward less formal and monolithic kinds of institution than those which were the staple of political capitals during the last century (if not before).

Although standard reference books provide helpful listings of national capitals, reflecting their formal status (unlike that of global cities), neither these listings nor dictionary definitions of their position as the head city in a country completely resolve the question of what capital cities are. In centralised states such as Britain, France or Spain the answer has seemed quite plain, and only marginally complicated by recent moves to regional devolution or recognition of national minorities. Even in such cases, however, there can be complicated divisions of functions between formal capitals and the seat of government. And in federal states, where governmental capitals have often been located in deliberately neutral territories rather than the most important centres, it seems quite natural to consider whether quite different places might not be identified as the economic, cultural and/or religious capital. Similar arguments could be raised for example about the position of Milan within Italy. It could be argued that such moves to qualify and divide the capital city role, awarding part at least of the status to places which are not the seat of national government demonstrate the inadequacy of the concept, and perhaps point to its obsolescence. And clearly there is a danger of simply identifying as 'capital' the place which has emerged as most successful in competition for investment and market share, irrespective of whether it is in any other sense 'head' among a nation's urban centres.

Campbell (forthcoming), in a full review of both the common features of capital cities and the sources of differentiation between them, makes the point that a capital serves not only practically as the seat of national government, but also symbolically as a representation of national power and culture. For reasons of size, role and/or international orientation it is unlikely to be representative of the nation, however, and is liable to have:

'an aberrant culture that is both unappealing and unsavoury to the rest of the nation' (op. cit., 14).

And, more specifically, we would argue, it cannot be counted on politically to conform to the prevailing ideas and loyalties of the national government. Together with the fact that government bodies themselves have material interests in how the capital is run, these are reasons why:

'(its) local government typically operates in the shadow of the national government, with more restricted powers and resources than those enjoyed by other cities. Sometimes collaborating with the larger and more powerful national governments when interests coincide, the municipality usually loses battles when local and national interests conflict' (Campbell, forthcoming, p. 16).

In this paper we explore some of the consequences of this uneasy relationship for the joint problem facing capital city mayors who simultaneously need to manage relaions with the centre, relations with local interests, and the functional requirements of their.cities. The case on which we focus is that of London, with a newly restored city-wide government, a dual identity as capital and global city, and choices as to the balance to be struck between them.

The following sections look in turn at the evolution of relations between capital and central government in Britain, at the relative economic significance of global city, capital city and other functions in London, the emphasis placed on the global aspects in Mayor Livingstone's draft London Plan, and then at explanations for this focus.


London governance has been a controversial issue for central government, as well as in the city, since at least the mid-19 th century. The issue then stemmed from the tension between the concern of radicals with (social and infrastructural) issues arising at the scale of the metropolitan economy and conservative desires to regulate and protect distinct residential environments, particularly middle class suburbs - in the context of an exceptionally large city, where socially segregated areas were unusually extensive. Creation of a London County Council (the LCC) in 1889 extending across the then built up area (now identified as inner London) rapidly led to expressions of horror from a Conservative Prime Minister at the 'megalomania' of its Progressive administration, and introduction of a division of powers between the LCC and a set of boroughs (Young and Garside, 1982). Significantly and uniquely, there was no local control over the Metropolitan Police - a situation which persisted until very recently, with bad consequences both for its management and for community relations.

A century later, when the Greater London Council (GLC) , established in the LCC's stead in 1965 to cover a more extensive built-up area, eventually fell into the hands of a 'new urban left' regime led by Ken Livingstone, after a coup within the Labour group, another Conservative prime minister voiced very similar concerns, but acted more decisively to resolve these. In this case the grounds for concern were more fundamental, since the GLC leadership was engaged in a political project designed not simply to rebuild the base of London Labour Party, historically dependent on skilled manual workers who were now disappearing from the city, but also to demonstrate on a small scale the potential of an Alternative Economic Strategy which could be pursued nationally by a Labour government. The means required for this project (as well as its ends) directly conflicted with the Thatcher government's own political project, of reconstructing the base of the Conservative party around an agenda focused on low taxes, entrepreneurialism and private provision. This new urban left challenge to government was amplified a Conservative popular press which went out of its way to find 'loony left' excesses, particularly in London authorities (Gordon and Harloe, 1992). Prominent display during the early 1980s recession of unemployment totals for London on the GLC's County Hall roof, across the river from the Houses of Parliament, was also an irritant, symbolic of the political divide between the government and its capital. This time the PM's response (in 1986) was to abolish the metropolitan authority - along with those for other major conurbations, though it was the London case which seems to have been the crucial provocation for this sweeping act.

Over the next 14 years the capital's government was principally in the hands of the 32 boroughs (plus the City of London corporation, representing the financial district), with strategic planning powers being reclaimed by central government, while both.parties were aided and abetted by a complex array of committees and quangos. These included a London Planning Advisory Committee (LPAC) comprised of borough representatives plus a small technical staff, responsible for preparing strategic advice for central government's planning guidance statement. In retrospect the outcomes of this 'system' were less chaotic than might have been expected, and it encouraged some significant changes in processes of London governance, several of which are of continuing relevance. Among these were:

  • the development of a consensual cross-party approach to planning issues (in LPAC);
  • the emergence of a 'network mode of governance' as a means to reconcile a strategic approach with local autonomy, and recognition of the city's inherent complexity;
  • commissioning and publication by various bodies of an unprecedented series of reports from academic/commercial consultants on strategic issues in relation to the London economy; and
  • the effective rehabilitation of the City of London as a welcomed (and well -endowed) partner/patron in these enterprises, after a very long period in which it had been viewed with deep suspicion by other London authorities.

Of course these developments did not occur in a vacuum. The perception (by LPAC and the City initially) that London faced crucial issues about its competitive position vis-à-vis other international centres was clearly linked to the imminent 'completion' of the Single European Market in 1992. Partnerships and networks were springing up everywhere (not just in London) under the influence of a 'new conventional wisdom' - espoused by OECD, the EU and (in the UK) the Major-Blair administrations of the 1990s - which emphasised the complementary virtues of competitiveness, cohesion and responsive governance, particularly in an urban context (Gordon and Buck, 2003). More particularly, it was the Major government's first Competitiveness White Paper in 1994 which spawned both a Cabinet committee on London and a London Pride Partnership to provide an (independent) focus for London networks and produce a Prospectus of priorities from which central government could select investment and regeneration projects1.

Despite these developments there was a widespread sense of fragmentation and duplication, and the lack of either democratic accountability or a single 'voice for London' (Newman and Thornley 1997, Hebbert 1998). Even the more consensually-oriented post-Thatcher Conservative government was set firm against any re-creation of the GLC, however. When the 'New Labour' government was elected in 1997, with constitutional reform including devolution in its agenda, London could not reasonably be excluded. The model which they came up with was very different from the GLC, however, involving a strategic authority with limited executive responsibilities and resources, headed by a directly-elected Mayor, subject to scrutiny (only) by an elected Assembly. The idea of an elected Mayor was entirely novel in the UK, as was that of freedom from a continual need to attend to the views of other elected representatives. The expectation was clearly that the position would be filled by a person of some status and a degree of independence from active party politics, perhaps a business-person, though presumably one loyal to New Labour's modernisation project..From the government's perspective, however, the process of selection and election went badly wrong. The successful candidate was Ken Livingstone, an apparently unreconstructed symbol of Old (socialist) Labour as well as of the former GLC which the government was struggling not to recreate, since it no more wanted a thorn in its side than had the Thatcher administration. In practice, it can be argued that as Mayor Livingstone has proved to be pretty much the model of a Blairite politician (Kleinman and Hall, 2002), with one significant exception2 - a determined opposition to use of public-private partnership (PPP) as the means for upgrading London's inadequate underground transit system. Partly because of a refusal to accept a party/government authored manifesto, he was denied the Labour party candidacy, went on to stand as an independent (leading to his expulsion from the party) and triumphed with a substantial majority over the party candidates. The legacy of this victory was, however, a more difficult relation with central government than even a Conservative Mayor would have experienced, and an initial two years in which a large proportion of his efforts were devoted to fighting the PPP, without any success despite strong support from London opinion and interests of most kinds.

The simple fact, however, is that the basic position of the Mayor and the GLA as a whole is very weak, both formally and in terms of resources. The Authority has no responsibility for any of the traditional high budget local services - education, housing, social care or infrastructure provision - and its own staff number just 400. The (new) Metropolitan Police Authority (MPA), London Development Agency (LDA), and Transport for London (TfL) with memberships appointed by the Mayor do have rather larger resources, but much of the LDA budget has been committed to delivering national programmes, while the London underground is only now being handed over to TfL, as and when the PPP contracts for particular parts of the system are signed. Hence an early study of the system concluded that "network governance with no centre" had been replaced by "network governance with a weak centre" (Kleinman and Hall, 2002; Travers, 2003b, ch. 8). Crucially, for strategic items of infrastructure the city remains reliant on a combination of central government and private sector funding (with the former being key). There is no power to issue bonds to fund projects secured on future tax revenues - though the government is now considering this in relation to a London bid for the 2012 Olympics, as a means of off-loading risk from central government. Strategic plans for London are thus very largely contingent on the ability to persuade central government to underwrite key items of investment, about which the present government has been very hesitant.


For the strategic authority itself, a fundamental issue is to understand (or decide) what kind of city is it that they are responsible for guiding, if not actually managing. As Campbell (forthcoming) points out, capital cities are no more limited to governmental functions than 'global cities' are to functions operating on a global scale. London is identified with both of these roles, but also represents the type of 'multi-function capital' which Hall (2000, 8) characterises as 'combining all or most of the highest national level functions' - with most of these national functions being only very loosely linked to central government. In this combination of roles it seems only to be matched by Tokyo, though it is a matter of argument whether Tokyo is actually a global city in the sense that London is.

Such distinctions provide a starting point (along with other factors that Campbell identifies) for understanding of some of the considerable differences among capital cities. But they are of more than academic interest, since different representations of a city's role can be mobilised in support of alternative political strategies and claims for resources. At one level - as has been argued, from different theoretical positions, by both Molotch (1976) and Krugman (1996) - strategies advanced to promote a city's economic development commonly reflect a quite particular combination of private interests, which seek benefits while imposing (often greater) costs on others within the community. Typically these are underpinned by some suitable but partial claim about the key drivers of the urban economy. At another level, city representatives seeking external resources from national or supra-national authorities will naturally invoke parallel claims about the city's strategic contribution to wider national/continental concerns. In different circumstances either the national capital or the international standard bearer/global city role might be used in this way.

Currently the fashion is to characterise London as, first and foremost, a 'global city'. Sometimes this means that its population and workforce have become (particularly since the late 1980s) remarkably cosmopolitan, by most international as well as British standards. More often, however, 'global' refers to the significance of transnational command, control, financing and service-providing roles which it undertakes within an increasingly integrated world economy (as predicted by Friedman, 1986 and recorded by Sassen, 1991). These do represent London's most distinctive functions, particularly in relation to the scale of third party business transacted in the city, i.e. business undertaken purely for overseas clients, rather than wholly/partly on behalf of a UK-based business. In this respect, London is clearly much more of a global city than Tokyo, and probably also than New York, both of which tend to act more as the international agents of Japanese/US-based corporations.

However, these global functions do not represent the major element in London's economic base (i.e. the set of activities bringing external income into the city-region), nor even the main driver underlying the city's growth since the 1980s. Rather, as Table 1 shows, it is the UK national market (outside the London/South east region) which still plays the dominant role within the city's economic base. Among those establishments with a main market outside South East England, 71% of jobs are in ones with a main market in the rest of the UK, as compared with 20% in 'global' businesses (with main markets beyond the EU) and 10% in 'European' businesses. On an income basis, the 'global' share would be rather higher, since workers in the 'City' finance centre typically earn half as much again as the London average - but the point about the dominance of the national market still remains. Estimates based on the share of exports within sales, as reported by survey respondents, even suggest that the volume of exports generated by London establishments whose main market is domestic match that of the 'global' and 'European' sectors together - since though export rates are lower they apply to much greater aggregate sales (Buck et al., 2002; Gordon, 2002). Wider processes of globalisation - including the financial and labour market deregulation which it has provoked - have clearly had pervasive, and economically favourable, effects on London since the early 1980s, when the established downward trend in London employment was at least stemmed. But the narrower process of 'globalcityisation' does not seem to have contributed disproportionately to this shift, despite large swings in 'global' sector employment.during successive booms and busts. Even within the City's 'wholesale' financial services, rising domestic demand has been a factor of comparable importance, over a period when people have been encouraged/required to take much greater financial responsibility for their own housing, pensions, health care and education (Buck et al., 2002; Gordon, 2002).

Table 1

Turning to capital city functions, on a narrow definition - including command and control of economic assets and social relations in the UK - these currently employ about 250 thousand workers in London. This represents a quarter of those shown in Table 1 as in establishments mainly serving 'rest of the UK' markets (or their public sector equivalents). Within this total, about 150 thousand involve headquarters of private firms, 15 thousand or so work for representative organisations and 80 thousand in the policy and central administrative units of national government or its executive agencies. The public sector element in this seems surprisingly small, but it reflects a 40% shrinkage of civil service jobs in London over the past 25 years, principally through the devolution of responsibilities to agencies which were not direct answerable to parliament or (hence) constrained to have bases in London (Buck et al., 2002). To this extent, London's role as political capital has become less significant, although that as economic and cultural capital has not only been maintained but also grown, with hegemony being retained over a wide range of specialised services whose markets have steadily expanded.

Despite the near disappearance of mainstream London manufacturing over the past forty years - and the recent concentration of growth in non-financial business services, the city's economy remains extraordinarily diverse in both sectoral and market terms. Almost all marketed services (together with those publishing activities which are classified as manufacturing) are significantly over-represented in London, and confirm their competitive advantage with export rates that are twice those achived by comparable activities elsewhere in the UK. Their variety is rather obscured in aggregate statistics using categories such as 'financial and business services' (often misleadingly abbreviated to 'financial services') and 'other community services', together with the involvement of many establishments in multiple kinds of activity. But this variety, and the flexibility which it offers for businesses seeking and responding to new opportunities, is absolutely central to the agglomeration economies on which high order, specialist producer and consumer services in the city depend. Complexity is the essential characteristic of the London economy, and it is this rather than any specific segment of demand which deserves to be seen as its key driver. But it is a very hard picture to represent, so there is a continual temptation to focus in on the most distinctive activities as though they were representative.


The GLA is a strategic authority in the most obvious sense in that a major part of its job is to prepare strategies on a range of themes. The Mayor is actually required to prepare eight such documents and has volunteered to take on two more. But of these the three most important are clearly the Spatial Development Strategy (SDS), the Economic Development (EDS) and Transport strategies. In practice the SDS's importance is substantially greater, since it is seen as fulfilling an integrative role with respect to the other strategies, a status reflected in its relabelling by the Mayor as 'The London Plan'. Personally he has also become more directly identified with the SDS than with the other strategies which, though bearing his name, were prepared under the aegis of the LDA and TfL, both appointed by him but with members from varied backgrounds. Work on the Plan started with a team largely drawn from the staff of the old London Planning Advisory Committee, led by the Deputy Mayor who had been its last Chairperson. As its significance was more fully recognised, however, a much stronger input was provided from the Mayor's Office, and the Plan came to be much more closely identified with the elected Mayor's personal 'vision' for the future of the city. This marks it out from both the predecessor plans for Greater London, the 1944 Greater London Pla n, bearing the stamp of a visionary professional planner, Patrick Abercrombie, and the 1969 Greater London Development Plan (or GLDP) which was the product of County Hall bureaucracy and political compromise.

In the bite-sized version, the Mayor's and the Plan's vision is:

'to develop London as an exemplary sustainable world city'

explained as involving:

'three interwoven themes:

  • strong, diverse long term economic growth;.social inclusivity to give all Londoners the opportunity to share in London's future success;
  • fundamental improvements in London's environment and use of
  • resources' (MoL, 2002, xii).

These three headings reflect a consensus, embodied in the legislation establishing the GLA, about the need to balance concerns of economy, equity and environment, in order to secure any of these on a sustainable basis. Each thus should contribute to the overall vision. In one respect, however, the overall vision seems to be more specific than (one of) the themes, and even possibly in tension with it: the vision refers specifically to London as a 'world city' whereas the first theme qualifies long term growth as needing to be 'diverse'. How far these are compatible depends on whether 'world city' is seen as referring to a place with a portfolio of activities, all or most of 'world class', and with a sub-set genuinely serving the world, or whether (as many would read it) it refers specifically to a focus on development of these particular 'global' activities. At the least, this is an ambiguity.

In the body of the Plan - though as ever a multitude of ideas are touched on and buttons pushed - the key, distinctive elements of the strategy are:

  • to provide (within Greater London) for large scale population and employment growth, seen as being more or less inevitable, but also desirable;
  • to achieve this through:
    • an eastward shift in the direction of development to areas underexploited in the last forty years or so; and
    • intensification of land-use, both in residential areas and (through encouragement of tall buildings) in the central business districts; and
  • very large scale investment in new public transport infrastructure, to secure both the feasibility of the eastward shift and the continued competitiveness of London business.

Global city functions then come to the fore, both as underpinning the expectation that (against trends in London before the 1980s) large scale employment growth within Greater London will continue through the next 15 years, and a specific emphasis on growth in the central areas, which justifies both tall buildings and a basically radial pattern of transport investment. Arguably neither of these actually requires a 'global city' emphasis, since substantial growth in CBD-based office services has actually resulted from a growth in domestic UK demand and firms which primarily serve this. Equally, the case for much of the planned additional transport infrastructure could be made in terms of the competitiveness and quality of life needs of those already in the city, quite irrespective of whether there is further large scale growth in Central London - though admittedly arguments of this kind have not proved very successful in recent years.

The emphasis on global functions was actually greater in the preliminary consultation document Towards a London Plan (MoL, 2001) where the 'fundamental strategic choice' was cast entirely in terms of how London should respond to the boost which it had received as a consequence of globalisation since the late 1970s. This was said to have focused growth on capital cities as 'key gateways to national economies', with an additional boost to the world's three major financial centres. Other economic.centres, such as Paris, Berlin and New York, were said to have more correctly understood the effects of globalization, and been able to respond to these because they were fiscally better placed than London. The strategic choice for London now was between attempting to rein back this growth - which would 'compromise its future development as a world class city in the era of globalisation' and involve displacements elsewhere conflicting with the government's compact cities strategy - or to accept and provide for the rapid growth caused by globalization that is crucial for the success of both London and the UK'. The national impact arises since for these functions no other UK city could match London's place in the world economy (op. cit., pp 2-3).

These arguments are moderated in the full draft Plan, where the equivalent passages now talk more generally about the impact of an increasingly open world economy in heightening the UK's (and especially London's) comparative advantage in high-value added activities. In explaining the need for infrastructure and a strategy to keep London as 'a decent place in which to live, work and invest', the point is made explicitly in relation to:

'The long term prospects for London's globally focused financial and business services economy are formidably good' (MoL, 2002, 3).

Later (p. 27), in explaining the sources of growth it is noted that finance and business services have accounted for more than 100% of net job growth in London - for eight reasons, of which four explicitly referring to global financial markets and international competition, the others involving more general claims about skills, infrastructure, flexibility and innovativeness. (p. 27)

In relation to the required policies, it is said that:

'World cities have very distinct strategic needs.. This plan will facilitate the continuing attractiveness of London to world business with a phased supply of appropriate floorspace for international business activities, and the specialist services that supply them, especially in the Central Activity Zone, where many will need and wish to locate' (p. 38)

Similarly, among the key policy directions for achieving an objective of making London a more prosperous city with strong and diverse economic growth are:

  • 'create and maintain an adequate infrastructural base for London's financial and business services sector, which will remain its chief engine of economic growth and jobs creation'; and
  • 'enhance London's world, European and national role through attracting industries and tourism, improving strategic transport links, collaboration and collaborating with other world cities, European and regional neighbours'.

To repeat, these are not the only themes of the Plan, and other sectors of the economy are discussed - while most of the Plan seems not to be about economic issues. But these are the most convincing and specific economic references. In this respect the impression that it conveys is quite different from that of the EDS - significantly titled Success through Diversity - which more convincingly addresses issues of economic.balance, potential strength in other sectors, and the additional policies required to deliver inclusion, and full employment (LDA, 2001) This is appropriate to the different kinds of policy remit that the EDS has to cover - whereas the Plan remains primarily a spatial development strategy, with principal interests in where growth is to be accommodated and what this requires in terms of property, infrastructure and planning. Nevertheless, the economic message of the SDS is rather clear: London's new growth is strongly associated with its 'global city' role, which is of national benefit, and not in competition with the development of other cities, but needs appropriate support if it is to be sustained.


In order to account for the Mayor's emphasis in the draft Plan on 'global city' based growth there seem to be three available lines of argument:

  • a belief on the Mayor's part, whether fully justified or not, that large scale growth of this kind is indeed inevitable - or (as a fall back) that, if substantial growth is both desirable and to be achieved, it would have to be on this basis;
  • that the Mayor has been co-opted to support a particular set of 'global city' business interests through effective lobbying on their behalf and/or an institutional structure which is particularly receptive to such sources of influence. In a strong version this would involve the operation of a 'global city' political regime around the GLA; or
  • that this emphasis, and other key elements in the draft plan have been strategically chosen in order to maximise the chances of securing central government backing and resources for the major elements of infrastructure investment (notably in public transport) that Londoners and London business vitally require (whether projected growth is actually achieved or not).

We shall discuss each of these in turn in relation to the relevant evidence.

The Centrality of Global City Functions

Although, as we have argued earlier in this paper (and in successive commissioned reports on the London economy), global city functions are not a dominant element either in income generation or growth within the London economy, they are quite widely believed to be - with a particular weight being placed on the role of international financial services. In part this reflects the glamour and publicity which these activities attracted especially during the post-Big Bang boom of the late 1980s, in the press, the sector's own public relations, and in a wave of academic publications. But it also reflects what psychologists call the availability heuristic, involving the memorability of conspicuous but unrepresentative examples (Tversky and Kahneman, 1973), since City/global financial services are indeed the largest and most spatially concentrated of London's identifiable specialisations3 - the largest among many, we would argue.

In relation to the Mayor's function of acting as 'a voice for London', there is an obvious problem of identifying what the city economy is that he is supposed to represent, given its diversity - to which the global city functions offer a short cut. This tendency is well captured in the reported observation of the Mayor of Denver to a pre-GLA seminar in London that:

'Elected mayors inevitably come to see their city through the warped crystal of its Central Business District - and the airport'.

As a key GLA insider put it:

'it's hard to be the mayor of a city that's 30 miles by 30 miles, that encompasses everything from the entertainment areas to the industrial areas to the suburbs. Now he doesn't really represent the suburbs, he represents the 'symbols of London' that the rest of the world identifies with. But the suburbs are where the people live' (Buck et al., 2002, 349).

Persuasive though these arguments seem, however, it is inherently implausible that a Mayor who has spent all his political life in London - including time as MP for an inner suburban area and as leader of the GLC when its industrial strategy emphasised many sectors other than finance - could simply have a one-eyed perception of its economic base. There must be other reasons for his Plan's focus on the global dimension.

Representation of Business Interests

The most obvious such reason is that pressure has been brought to bear unevenly because of the way that institutions, networks or political resources are structured. And certainly there is evidence that business in general and 'global city' interests in particular have had preferential access since the GLA was created - against all prior expectations of how 'Red Ken' would function as Mayor. In their careful study of interest representation during work on the economic and spatial development strategies, Thornley et al. (2002) draw a qualitative distinction between the channels through which business interests got represented and those used to connect with diverse sets of other interests covered by the Mayor's 'Big Tent' approach to participation. Substantial efforts were devoted to pursuing the broader forms of participation, but these were either poorly structured and ineffective (as with the spatial 'policy commission') or reactive to documents already incorporating the main elements of the strategy. By contrast, business interests benefited from more or less continuous opportunities for consultation, and responsive intermediaries among the Mayor's immediate circle of advisers. Most conspicuously there were the business appointees to the LDA Board, though their presence simply followed the statutory requirements. But additionally, one of key Cabinet members, sharing responsibility for economic issues with the LDA Chair, was Judith Mayhew political head of the City of London (until stepping down to deputy in late 2002). And, crucially, John Ross, the Mayor's personal economic adviser and a member of the trusted group in his private office supplying much of the effective policy co-ordination in the GLA, provided a regular channel of access for business groups. Key officers elsewhere in the GLA were also instructed by the Mayor to 'give over a substantial part of their time' to relations with outside business bodies. These relations were facilitated by the fact that business interests themselves were rather well co-ordinated, with a new London Business Board bringing together representatives of 3 bodies covering different sectors of the economy (the Chamber of Commerce, the Confederation of British Industry, and the CBD-focused London First) in order to 'speak with a single voice to the GLA. This body had bi-monthly meetings with the Mayor, while a large number of ad hoc meetings or interactions occurred between specific groups and John.Ross or others guiding work on the strategies - 'weekly if not daily' according to one representative. As Thornley et al.conclude:

'(the) focused approach meant that business access was established right into the centre of power through regular and confidential discussion' (2002, 7).

The issue as to what influence business interests in general were able to exert over the process of strategy formation is not, however, quite the same as that of the particular emphasis on global city functions, which (as we have shown) involve only a small minority of the business community. Nor does the pattern of access, established from the outset of the Mayor's reign, evidently explain why the Economic Development Strategy (prepared through a Board with strong business representation) seems to give a much less central role to global city functions. For example the opening pages of the strategy headline on opposite pages these two balancing passages:

'With New York and Tokyo, London is one of the three financial centres. Within Europe, only Paris compares with London as a global city' and

'Alongside the global city lies another city: a city of suburbs and factories. Supporting the breadth of the London economy is not an alternative policy choice to building upon London's established strengths but a complementary one' (LDA, 2001, p. 10 and 11)

Part of the explanation for this difference may well lie the way that business interests are represented in the two contexts. Thornley et al. (2002) find that the effort of consulting business interests (as distinct from other classes of interest) had been greatly eased by establishment of the Business Board which often meant that the Mayor, or his adviser, only had to deal with four individuals, three from the organisations on the Business Board and one from the City Corporation - of these, two (the City representative and that from London First) would be closely identified with the 'global' sector, which a third party (the Chamber) also has some interest in. On the other hand, the business members of the LDA Board sit there as individuals not representatives, and include as well as two strongly identified with the City, and two others from CBD business services, people from a range of other sectors, sitting alongside politicians, trade unionists, higher education representatives and small business advisers.

But as important as this may be the job that the strategies are intended to do, and the role that representations of the London economy in it are required to fill. In the EDS these are directly linked to the range of business and labour market interventions required to secure progress toward a broad set of identified economic and social targets. In the SDS the role is primarily to provide a basis for forecasts of growth in jobs, their spatial distribution and the types of spatial provision - and infrastructural - support that they require. And to a much greater extent than with the EDS they are expected to meet a need to persuade readers with control over those key resources and decisions which will be required to implement those many elements of the Plan outside the Mayor's control that its forecasts are solidly based and that the identified needs are both real and salient to them. This is the basis of the third kind of explanation of the SDS's 'global' colouring.

The Plan as Investment Prospectus

One striking feature of the draft Plan, probably reflecting the fact that it is 'really' a spatial development strategy, is that it lacks any cost estimates even for well known projects for which there are already published figures (if ones that have been subject to upward revision). However, major transport investment projects are clearly vital to the planned opening up of residential and commercial areas beyond docklands in east London, and also probably to achieving expected levels of employment growth in the CBD without finally crossing thresholds of acceptability in congestion levels. And there are also substantial extra public expenditure implications in the levels of affordable housing which are being planned for, as the most tangible 'social' benefit offered by the Plan. London First's (2002) estimates of capital expenditure requirements for London total £110 billion over the 15 year period of the Plan, including £28-29 bn. of public investment in transport, £6-10bn. and £9.5-11 bn. in Education. Overall this is estimated to involve a doubling of the current rate of public investment in London (Gordon et al., 2002). Four key rail projects in the Plan - Cross-Rail 1 and Cross- Rail 2, the East London line and Thameslink2000 (sic) - are estimated to cost between £10.5 and £17.5 bn., while there is a fifth of comparable scale (OrbiRail) currently lacking any serious cost estimates. These are not unprecedented items of investment - indeed London benefited from half a dozen major transport investment projects during the interregnum period between the GLC and the GLA. But current prospects of central government support seem much weaker: planning for three of the projects has been stalled, and various pieces of evidence, including a much less favourable grant settlement for London local government, suggest that the Treasury in particular are not favourably disposed towards London (Travers, 2003a). Beyond the remaining prejudices about the Mayor's 'disloyalty' to his party and his resistance to the Treasury's flagship PPP scheme, there is also the factor that a large proportion of the government represent peripheral areas where London and its hinterland are perceived as having been over-indulged4. Lacking formal power, the Mayor's influence within London (designedly) relies upon his ability to deploy visibility, image, personality and patronage power in the tasks of publicity and persuasion (Kleinman and Hall, 2002). In relation to central government, a future Mayor who had not only direct endorsement by more electors than any other UK politician but also standing within the governing party could well exercise very substantial power, through leadership of a more independent London Labour (or conceivably Conservative) Party - though this seems not to have been foreseen by the GLA's progenitors. But Mayor Livingstone is not in that position, and almost his only available strategy is to mobilise a coalition of influential non-political interests behind his claim for resources.

Without success on this front the London Plan must fail. But, as the draft Plan itself points out, London's need for most of the items of infrastructure investment does not hinge solely on either the accommodation of further large scale growth, nor the east ward shift of development:

' There is already excessive strain on transport, under-supply of certain business premises, shortage of affordable housing and deficiencies in key skills. Even if growth proves weaker than anticipated - which is unlikely given the long established character of the trends - the strategy of improving.London's services and infrastructure would remain necessary'. (MoL, 2002, para. 13, p. 3)

Given a government which is apparently unsympathetic to London's needs or demands - and which seems to have become less so, since the city acquired some formal autonomy again - and a wider view among its supporters that the South East region as a whole is over-heated and in need of restraint, what the Plan requires are arguments which indicate that:

  • growth in London is different in kind from that in other Uk cities, and hence not competing with them, only with foreign cities; and that
  • additional infrastructure investment is required in London in order to sustain growth in the goose which lays national golden eggs.

This we suggest is the unique function of global city arguments, relating infrastructure provision in London directly to the achievement of national economic growth and a healthier balance of trade.


From a viewpoint in the New York Major's office, Yates (1977) identified three factors which together he judged to make (major) cities ungovernable:

  • the immediate face to face exposure to dissatisfied service users;
  • entrenched, fragmented and unresponsive service bureaucracies;
  • and a lack of control over the required resources.

In the case of the current London Mayoral system, the first two faces of this problem are mitigated, or at least displaced by the fact that he has hardly any direct involvement in service provision, but the third factor is present in an aggravated form. In part this is probably the case because London is a capital city, and because of inherently uneasy relations with national government, as well as current tensions relating to this Mayor's political pedigree and differences with the Treasury over PPP. As in the New York case, means of dealing with the lack of control over finance and seeking to mobilise external financial support intersect with internal issues of political management. It is for this reason that we suggest that the global city focus of the Plan cannot simply be attributed to institutional biases which expose the Mayor differentially to a certain kind of business pressure. This is an important part of the picture, and one which owes a lot to the superior ability of CBD and city interests to mobilise around an unusually homogeneous set of concerns, by the standards of this very heterogeneous economy (Gordon, 1996; Gordon, 1999). But we suggest that it also has to be understood in terms of external relations and how the city and the Mayor presents themselves in order to establish legitimate claims to resources controlled to central government. For this 'the global city' looks the nearest thing to a trump card available to London. But playing it in the Plan, and bolstering this through a credible pattern of interaction with the relevant business interests has important implications for how London itself develops, and real strategic choices which are made. If, as Thornley et al. (2002) argue, there is a pro-(global) business regime operating in the GLA, it is not simply because of political preferences or local pressures, but also because of links to potential resources for a rather powerless capital city, heavily dependent on the goodwill of national government.


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* Ian Gordon, Department of Geography and Environment, London School of Economics, Email:

1. As with the abolition of metropolitan authorities, London was not alone, similar City Pride Partnerships and Prospectuses being created for Birmingham and Manchester, but in this case also, the prime target was London.

2. Public opposition to the war on Iraq became another obvious point of difference from the Prime Minister if not from all Blairites.

3. This may also be true of readings of the draft Plan, from which references to global city functions are more memorable than those which it does make to London's other roles, including that of national capital.

4. Despite a continuing net export of £10-20 billion a year in taxes from London alone, and a comparable amount from the rest of the South East (Gordon et al., 2002).

Edited and posted on the web on 7 th June 2004