Unequal City

London in the Global Arena

Chris Hamnett

• Publisher: Routledge
• Year: 2004
• eBook ISBN: 9781134371389
• Edition: 1
• Topic: Naturwissenschaften
• Subtopic: Geographie

Unequal City examines some of the dramatic economic and social changes that have taken place in London over the last forty years. It describes how London's changing industrial structure, particularly the shift from an industrial to a services-based city, and the associated changes in occupational class structure and in the structure of earnings and incomes, have worked through to the housing market and the gentrification of large parts of inner London. Unequal City relates to the literature on global cities. The book has a wide sweep and summarises a wide range of literature on occupational and industrial change, earnings and incomes and the housing market and gentrification. It provides a wealth of original data, figures, maps and tables and will be a valuable reference for anyone interested in the changes that have reshaped the social structure of London in recent decades.

Chapter 1
Introduction
The remaking of London

This book is concerned with the transformation in the economic, social and physical structure of London which has taken place over the last 30–40 years. It examines in detail the nature of this transformation (or rather the set of linked transformations), its scale and extent, causes and consequences, and puts forward an explanation focused on the changing economy of London and its global role, which tries to account for it. There can be little doubt that London has changed dramatically over this period. If we start with a summary overview back to the early 1960s, London was still a city with a large manufacturing base and a large working-class population. The physical structure of Inner London was dominated by Victorian terraced houses and its housing market was still overwhelmingly privately rented with few council blocks and limited owner-occupation. The docks were a vital part of the economy of the East End, along with the furniture and printing industries, the City of London financial area was relatively small scale, Covent Garden was still London’s fruit and vegetable market, much of the riverside was run down and Canary Wharf did not exist. Ethnic minorities were small in scale and extent, and outside the traditional middle-class residential areas of South Kensington, St John’s Wood and Hampstead, most of Inner London was still the preserve of the traditional Labour voting working class, most of whom lived in poor-quality terraced rented housing. Notting Hill was a run-down residential area with a small West Indian population, and Aldgate and Whitechapel, immediately to the east of the City of London, still had a relatively large Jewish population. The ring of districts surrounding the City—Clerkenwell, Shoreditch, Hoxton and Bethnal Green—were dominated by light industry and resolutely working class. Bermondsey, south of the river, was still a tough docklands community, as was the Isle of Dogs and much of Tower Hamlets. Islington, Camden Town and Kentish Town were run down inner-city districts, and upper Holloway had some of the worst housing conditions in London (see Figure 1.1). A little of the flavour of this rundown London is captured in the early 1980s film The Long Good Friday, with Bob Hoskins as the traditional, but completely out of his depth, East End gang boss trying to move into the new world of international finance and property development.

This traditional London began to change dramatically in the 1960s and early 1970s as manufacturing industry declined, as new council estates replaced poor-quality private renting and as the occupational structure of London began to change. In retrospect, and according to Time Magazine (1969), the advent of the ‘Swinging Sixties’ marked the start of a transformation from the old to the new London. Today, the face of London is very different from that of even thirty years ago. The Docks and old warehouses have been replaced by an imposing financial centre in Canary Wharf and by luxury waterfront apartments. Manufacturing industry has all but disappeared, as has manufacturing employment, and the vast majority of London’s workforce now works in the service sector with a large proportion in financial and business services. Covent Garden is now one of London’s fashionable shopping areas. Notting Hill and Islington are among London’s most desirable and expensive residential areas, and much of those parts of Inner London which do not consist of high-density and high-rise council estates have either been gentrified or are in the process of being so. The City Fringe districts of Clerkenwell, Hoxton and Shoreditch are being converted into luxury loft apartments and Brick Lane, Whitechapel and Bow are being gentrified. The old East End is gradually being turned into expensive residential districts for City workers and the traditional working class is in retreat. Ethnic minorities now account for a third of the population of Inner London and London as a whole is becoming increasingly ‘multi-ethnic’. It is possible to still find the traditional white working-class London of yesteryear but, increasingly, it is necessary to look to some of the suburban areas like Barking and Dagenham or to some of the inner-city council estates. In the space of less than forty years London has been transformed from an industrial to a post-industrial city, with a large proportion of its labour force working in financial and business services. The London of The Long Good Friday has given way to the London depicted in the films Notting Hill and Sliding Doors. The scale of the transformation was captured by a Newsweek cover story in 1999, headlined ‘London: coolest city on the planet’. Even allowing for some journalistic exaggeration, it is clear that there have been major changes in the social and cultural life of the city since the 1960s.

London has also changed politically. With the exception of middle-class areas such as Kensington and Westminster, most of the working-class Inner City used to be strongly Labour, and the political map of London consisted of a small Conservative core, a large Labour inner ring, and a Conservative suburban periphery (Johnston et al., 1988). This pattern changed substantially during the 1980s and 1990s, with many once-Labour-dominated inner-city areas shifting to Conservative or Liberal Democrat control as the social composition of the electorate changed and the previously solidly working-class inner areas were gentrified and became more socially mixed. Although Labour’s sweeping General Election victory in 1997 increased the number of London Labour MPs, the class composition of Inner London has irrevocably changed.

Figure 1.1 Map of Greater London, showing Inner and Outer boroughs and
LCC.
Source: Chris Hamnett.

Last, but not least, the long-term population decline of London seems to have finally halted and reversed. From its peak of 8.6 million in 1939, Greater London’s population fell sharply during the 1960s and 1970s, particularly in Inner London, as a combination of local authority redevelopment and gentrification led to the replacement of multiply-occupied overcrowded houses with single-family occupancy (Hamnett and Randolph, 1982). By 1981 Greater London’s population had fallen to 6.8 million. But during the second half of the 1980s the population began to grow and the 2001 census suggests that it is now back to 7.2 million and is growing by 50,000 per year. If current trends continue it is projected to rise towards 8 million by 2020 (Greater London Authority, 2002). London has grown by the equivalent of a city the size of Frankfurt over the past fifteen years and could do so again in the next fifteen. Whether this will happen, or whether London’s growth will be choked off by its growing housing shortage and increasing housing costs, remains to be seen (Economist, 2002). A great deal also hinges on the continued success of the City of London and its allied business service sector, now, arguably, the key motor of London’s economy. If this seriously falters, the attraction of London as a place to live and work could take a serious dent.

Interpreting the changes

How are we to understand and interpret these changes. There are a number of possible approaches. First, it could be argued that the transformation which has taken place in London reflects its unique and specific history and bears little or no relation to changes in other cities. This argument is both theoretically and empirically untenable. Many of the changes which have taken place in London bear a close similarity to those in other major international cities, though they are not identical. Second, it can be argued, after Toulouse (1992), that the changes are primarily political in origin, a result of the rise of Thatcherism and the policies which were pursued by Conservative governments from 1979 to 1997. While there is some validity in this argument, it is argued that it is too limited, accords too much importance to politics and ignores the third explanation—namely, the fundamental importance of changes in the role and structure of London’s economy in generating a set of related transformations in the structure of occupations, earnings, household incomes and the housing market. The argument of this book is based on three underlying propositions. First, that in order to understand the basis of these changes, we need to understand London’s changing role in the global economy and financial system. During the 1970s, 1980s and 1990s London has strengthened its role as one of the major control centres for the global economic and financial system. It functions as one of the major ‘world cities’ (Friedmann, 1986) or ‘global cities’ as Sassen (1991) prefers, and exercises a leading role in the organisation and control of the world’s economy, trade and financial flows. Second, it argues that the dramatic changes that have taken place in London over the last forty years are not isolated but are, instead, closely interrelated. The transformation in the industrial structure of London has been important in generating related changes in its occupational structure, its earnings and incomes structure, its housing market, social and ethnic composition, its geography, and its physical landscape. Third, it is argued that the changes are, to a significant extent, linked to the transformation of London from an industrial to a post-industrial city, whose economy is no longer dominated by manufacturing industry but is, instead, based on finance, business services and the creative and cultural industries (Greater London Authority, 2002).

London in the global economy: from industrialism to post-industrialism

Until the mid-1960s London was a major centre for light manufacturing. Although the City of London was an important financial centre, and the majority of the labour force worked in services, transport, construction and utilities, 1.4 million people (almost a third of the labour force) worked in manufacturing industry, with more working in the docks and in the port-related processing industries. But, since the 1960s, London has ceased to be a major manufacturing city. In 1967 London’s docks were paralysed by the dock workers’ strike. Today, it has no dock workers left to speak of and four times as many people work in the financial and business services sector broadly defined, as in manufacturing industry. London has become a post-industrial, informational, city. The notion of ‘post-industrialism’ initially derives from Daniel Bell’s pioneering book The Coming of Post-Industrial Society (1973) which argued that modern societies are undergoing a shift from an economy based on the production of physical goods to one based on the provision of services, in which the role of information and knowledge is central. As a consequence of this, Bell argued that education is becoming increasingly important, and that it gives rise to the emergence of a ‘new class’ of highly educated professionals, managers and technical staff who work in the knowledge industries. Although the idea of a post-industrial economy and society has received considerable criticism since the publication of Bell’s book (see Kumar, 1978), the concept of post-industrial or ‘informational’ cities has become widely accepted (Ley, 1980; Simmie, 1983; Castells, 1989; Hall, 1992; Savitch, 1988). Although there is a debate over the class, social and political structure of post-industrial cities (Walker and Greenberg, 1982), the shift from manufacturing industry towards tertiarisation of the economy, based on services and information processing, has proceeded apace (Noyelle, 1983). Not surprisingly, London’s occupational and earnings structure and housing market reflect these changes. The rapid decline of manufacturing industry and the growth of financial and business services has been accompanied by a decrease in the size and importance of its working classes, and a sharp increase in the size and significance of its middle classes and their consequent impact on the housing market.

But while London has become a wealthier and more prosperous city during the last thirty years, with a much larger and prosperous middle class, it has also become a much more unequal city. There is a large and growing divide between the earnings, the incomes and living conditions of the prosperous expanded middle class and those of the economically inactive, the less skilled, the low paid and unemployed who have fared far less well. These changes have been linked to a shift in the structure of the housing market and in the geographical distribution of different social groups within the city. As a result, the social geography of Inner London has changed dramatically in recent decades with major implications for the lives and life chances of different groups. London has become a more ethnically diverse city and the gap has widened considerably between rich and poor.

There have also been dramatic changes in the landscape and built environment of London and other global cities, as the structure of their economy has changed (Ley, 1980; Knox, 1991). As the importance of manufacturing industry has declined so the physical infrastructure of industrial production and goods distribution developed in the nineteenth century and the early twentieth has become increasingly redundant. At the same time, the requirements of post-industrial production and consumption have led to a demand for new types of space, both commercial and residential.

As Savitch notes:

Post-industrialism can be seen as a transformation of the built environment: factories are dismantled, wharves and warehouses are abandoned, and working class neighbourhoods disappear. Sometimes there is replacement of one physical form by another—the growth of office towers and luxury high-rises or refurbishing of old waterfronts. Cafés and boutiques arise to feed and clothe the new classes.

(Savitch, 1988, p. 5)

Overall, suggests Savitch, post-industrialism

encompasses a change in what we do to earn a livelihood (processing or services rather than manufacturing) as well as how we do it (brains rather than hands) and where we do it (offices rather than factories).

(Savitch, 1988, p. 5)

In this book the focus is firmly on London and on the set of linked transformations which have made it a very different city from that of forty years ago. But London is not unique and insofar as what is happening in London is similar too or different from what is happening in other major cities, it sheds valuable light on a much wider set of processes and debates. In recent years there has been considerable intellectual debate over the nature and direction of the changes which are believed to be restructuring the major ‘global cities’ such as New York, Tokyo, Paris, Los Angeles. While most of these cities have undergone major deindustrialisation in recent decades, along with the growth of the financial and business services sector, the implications of these changes for the structure of occupations, earnings and incomes are less clear cut. Although all global cities have become more unequal and socially divided in recent decades, the precise form of the divisions, and the processes generating them, have been disputed. Sassen (1991) argues that New York, London and Tokyo have ‘undergone massive and parallel changes in their economic base, spatial organisation and social structure’ (p. 4), and she suggests that ‘transformations in cities ranging from Paris to Frankfurt to Hong Kong and São Paulo have responded to the same dynamic’. While there is no doubt that some world cities have indeed ‘responded to the same dynamic’, and share a number of characteristics in terms of the structure of their economy, occupations, earnings and housing markets, Sassen’s claim is arguably too sweeping in its range. Different cities respond in different ways to the dynamics of globalisation, depending on their existing economic structure, their level of development, their history, position in the global economic and financial system, their social and ethnic composition, and the nature of specific national and local government policies on matters ranging from immigration, labour-market regulation, minimum-wage legislation and wage controls to housing and planning policy. It is not possible to see all cities in any way as clones from a single model. Consequently, their experiences of, and responses to, underlying processes of globalisation and economic restructuring are likely to display a number of similarities and marked differences (Fainstein and Fainstein, 1987; Knox, 1995). This is one reason why we cannot accept the claims of Soja (2000) that Los Angeles represents the leading edge of contemporary urban change. It is one form of many.

Social change in global cities

One major theoretical debate concerning these developments has been associated with the growth of what has been termed ‘social polarisation’ (Friedmann and Wolff, 1982; Sassen, 1991) and the rise of what have been termed ‘dual cities’ (Mollenkopf and Castells, 1991) in which the growth of the highly skilled and highly paid financial and business services sector has been paralleled by growth of a low-skilled, low-paid service sector and the decline of the skilled middle-income groups in manufacturing industry. There is little doubt that the size of the professional and managerial groups in global cities has increased in recent years. This is a reflection of the changes which have taken place in the growth of financial, business and other services. The question, however, is whether the growth at the top of the occupational and skill spectrum has been paralleled by major growth at the bottom end, with rising demand for less-skilled service workers to staff the hotels, restaurants, bars, shops, and the host of cleaning and security jobs which have emerged in recent years, or whether the growth at the top end has been paralleled by an absolute contraction across the rest of the occupational structure. In other words, there is a question as to whether London and other global cities have become more middle class or more polarised between, on the one hand, a growing professional and managerial group and, on the other, a large and growing group of less-skilled service workers. There is also an important related question of what is happening to the distribution of individual earnings and household incomes. Are they also becoming more polarised, with more individuals or house-holds at the top and bottom end of the distribution, and fewer in the middle, or are they becoming more unequal, with an increasing gap between rich and poor?

The implications of these two interpretations of what is happening to the occupational class and earnings structure are very different. On the one hand, there are those like Glass who argued that London is becoming more middle class, and that the working classes are thus being squeezed out via the operation of the job and housing markets. On the other, Neil Ascherson (1986) suggests, like Sassen, that while London is undoubtedly witnessing growth at the top, this is in turn causing growth at the bottom end with a growing army of casualised workers. While this could be seen as a narrow academic debate of little relevance or interest to the wider world, this view would be profoundly mistaken. The nature of the changing socio-economic and income structure of London has implications for the structure of economic and social opportunities, the housing market, social segregation, education and for the future of the social order and social conflict. If London is becoming increasingly ‘professionalised’, and is becoming a city increasingly dominated by the middle classes and high-income groups, it faces a very different future than if it were becoming dominated by increasing numbers of the less skilled and low paid. It is likely that an increasingly ‘professionalised’ London will be one characterised by substantial increases in demand for owner-occupation in the more attractive areas, rising housing prices, with a spillover into more peripheral areas, which puts more pressure on what remains of the low-income housing market. The analysis put forward in this book of what is happening to the social structure of Inner London is much more closely aligned to that of Glass than to any of the other commentators. It argues that the class structure of London has been characterised by the growth of an increasingly affluent professional and managerial middle class and by the decline of other groups.

Inequality in London

What are the implications of these changes in in...

Table of contents

• Cover Page
• Unequal city
• Title Page
• Copyright Page
• Plates
• Figures
• Tables
• Acknowledgements
• Chapter 1: Introduction: The remaking of London
• Chapter 2: The economy of London: From industrial to post-industrial city
• Chapter 3: The transformation of London’s occupational structure and the rise of the new middle class
• Chapter 4: Widening inequality: Earnings and incomes
• Chapter 5: Multi-ethnic London: Migration, race and ethnicity
• Chapter 6: The transformation of the housing market
• Chapter 7: Gentrification and the middle-class remaking of inner London
• Chapter 8: Deprivation, social exclusion and its consequences
• Chapter 9: Remaking the landscape: From industrial to post-industrial city
• Bibliography