A London Blog

As I was someone who held an equivalent post, in all but title, to Ian Clement for eight years during Ken Livingstone's term as Mayor I cannot help but make some personal observations on what the latter's resignation reveals about Boris Johnson's administration.

Boris Johnson's administration has now suffered the enforced resignation of three Deputy Mayor's and two senior policy advisers in only a little over a year in office. It is worth recalling the reasons for each of their departures.

• Deputy Mayor Ray Lewis was forced to resign for allegations of financial and sexual misconduct and then because he was proved to be lying about being a magistrate.
• Deputy Mayor Ian Clement was forced to resign over misuse of a Greater London Authority corporate credit card – the extent of this misuse is still being looked at.
• First Deputy Mayor Tim Parker, only a few weeks after assuming office, resigned after a power struggle in City Hall – in reality, to attract Tim Parker from business, he had been misled to believe he would have greater powers than he was actually granted and he quit when the reality became appaent.
• Deputy Chief of Staff James McGrath was forced to resign for suggesting people from the Caribbean who did not like Boris Johnson as Mayor could go back there.
• David Ross, was force to resign as Olympics adviser for not having declared that he had used £162 million of company shares as security for personal loans.

One could add, not it should be said for fraud but for politically misleading claims, Barclay's Capital head Bob Diamond – he was highly publicised during the Mayoral election as being in charge of the Mayor's Fund, and soon after the election departed for the US.

In contrast for eight years Ken Livingstone's office was subject to a relentless campaign in the Evening Standard declaring its officers to be 'cronies'. Boris Johnson, who has carefully deleted his Manifestos and other campaign material from the internet, joined in such claims. In that entire eight years there was only one enforced resignation of anyone of equivalent seniority to those who have resigned from Boris Johnson's administration. Just to complete the picture, after Ken Livingstone left office his Mayor's Office was investigated by a totally biased kangaroo court, masquerading as an 'independent investigation', headed by Tory Patience Wheatcroft who found… nothing.

Given the comparative records of these two administrations (five enforced resignations in fourteen months versus one forced resignation in eight years) it would be personally pleasant to receive an apology from the journalists who wrote such articles but naturally I do not expect it – people who were prepared to be the instruments of such a campaign in the first place are not the type of people to let their views be disturbed by facts. Anyway politics in London has become a somewhat more hygenic business with the change in ownership of the Evening Standard – so we may pass on at the personal level.

But the record should be made clear politically. Compared to what has been shown about Boris Johnson's administration Ken Livingstone's office was one of the cleanest administrations to have been seen – Patience Wheatcroft was not looking to exonerate people when she carried out the investigation which found nothing!

There were, and are, big differences in policy between Ken Livingstone's administration and Boris Johnson's which are not invented but real. But the campaign carried out by the then owners of the Evening Standard, and Boris Johnson, against Ken Livingstone's office was one of the dirtiest seen in politics. As more and more wheels keep falling off Boris Johnson's administration that fact stands out more and more clearly.

I don't care about the personal aspect. Setting the political record straight is important.

PS A story has just been published on the Evening Standard website stating that Ian Clement falsely claimed for meals with political figures while in fact entertaining a lover. If true this of course places the Ian Clement matter in a still more serious light. Making such false claims would be fraud.

The Greater London Authority stated
that London's offices in the key emerging markets of India and China
will stay open despite Boris Johnson's earlier pledge to close them. The present blog has commented on this enforced U-turn, including references to Boris Johnson's and the Tories demagogic and damaging campaigns to close these offices during the Mayoral election. Boris Watch has now carried an excellent summary of additional parts of this Evening Standard and Tory campaign which can be read here. 

The Greater London Authority has announced that London's offices in the key emerging markets of India and China will stay open despite Boris Johnson's earlier pledge to close them. This is reported in blogs by Mayor Watch, Dave Hill, and Boris Watch (and a short report in the Evening Standard). The present author has posted the following comment on these blogs.

This issue
is no small one as it symbolises perfectly the backwardness of the
Johnson administration. Johnson himself went on the Nick Ferrari programme to pledge these offices would be closed. The first point on the election addresses of Tory candidates for the London
Assembly was a pledge to close down London's representative offices
abroad. They were absurdly labeled 'embassies', when they are small
offices, precisely to appeal to the most backward.and ignorant
sentiments.

The first of the major international outdoor cultural events to be abandoned by Boris Johnson is the Russian Winter Festival – which should have taken place this weekend. This open air celebration, staged at the time of the New Year according to the old Russian Orthodox Calendar, that is in mid-January, had become a major annual London event.

The Russian Winter Festival was highly recommended by the national press, frequently on ‘choice of the weekend’ lists, was of high artistic quality, and attended every year in Trafalgar Square by well over 50,000 people.

But, in addition to being a good time for Londoners and their families, it also had a very serious economic purpose by being the major annual event in London’s promotional drive in Russia – a market becoming of great importance to London’s economy and therefore for Londoners incomes and jobs.

Russia became the single most important foreign section for foreign listings on the London Stock Exchange. In 2007 CIS (former USSR) companies raised over $19 billion in Initial Public Offerings (IPOs) on the London Stock Exchange. Trading volumes in 2008 for CIS companies were $477 billion. London had completely out competed New York in this market, with New York not floating a single major Russian company in recent years.

Russian tourists have become one of the most rapidly growing source of customers for London’s West End – with annual rates of growth of increase in spending, which can be calculated from VAT refund returns, of over 40 per cent.

Russia’s three votes on the International Olympic Committee were decisive in winning London the Olympic Games against Paris.

The positive consequences of this for London’s financial, business services, tourist, and retail sectors is evident – all of which translates into incomes and jobs for Londoners.

The Russian Winter Festival generated large scale TV coverage in Russia – over 30 pieces of Russian TV coverage in 2007 alone for example. A few pieces of the coverage are put as videos at the end of this post. The equivalent advertising value to London in Russia of the TV coverage was several million pounds.

Given that no other city staged such a prestigious event it helped make London a welcoming natural home for Russian business people and tourists whose combined spending is worth hundreds of millions of pounds a year to London and is growing in importance. Whatever the ups and downs of political relations with the Russian government Londoners jobs depend increasingly on such international markets.

The Russian Winter Festival, in short, was an extremely smart piece of marketing – generating the equivalent of huge advertising for London in a key market and simultaneously giving Londoners a good time. Given the international financial crisis, and the fall in the exchange rate of the pound which makes London a still better value destination, London should be stepping up, not cutting, its international marketing efforts.

It is, therefore, typical of the Johnson administration’s inability to judge the value of money for most things that it has abandoned the Russian Winter Festival.

Given Russia’s importance in its three votes securing London the Olympic Games this will be dealt with separately – again because it shows how the international promotion of London under Ken Livingstone’s administration secured huge economic benefits for London and why the present administration is incapable of winning any comparable major prize for London precisely due to both its economic incompetence, its complete failure to understand the nature of the modern international economy, and a consequent inability to understand what constitutes serious value for money.

Video – Coverage of the launch event of the Russian Winter Festival January 2008

Video – Russian coverage of the Russian Winter Festival in Trafalgar Square January 2008

Photo – Launch of the Russian Winter Festival 2007

Video – TV coverage of the Russian Winter Festival 2006

Video – An Example of Russian TV Coverage of the 2006 Russian Winter Festival

At the core of the differences in policy between Ken Livingstone's administration and Boris Johnson's was a wholly different perspective on the future of the world and therefore of London's place within it.

Ken Livingstone understood that the globalisation of the world economy is a genie that can never be put back in the bottle. It has unleashed gigantic forces which, simultaneously, have the potential to create a better future but which will also overwhelm anyone who does not recognise them and attempts to remain in a narrow, purely national. economic, social, cultural and environmental framework.

Within the internationalised economy that has developed huge new economic powers were also being created in China and India that would fundamentally change the world in which London had to make its living.

Those changes, simultaneously, gave London an opportunity to prosper and to create for Londoners a future in which they had more choices and a better quality of life than ever before. London was the most international city in the world – a decisive advantage in an internationalised economy. If it used that card to be the world's greatest international economic and business centre it would prosper and simultaneously the range of choices of Londoners would expand. But that process of globalisation would inevitably be not only economic, it would have deep social and cultural implications. London would gradually absorb new elements into its traditional culture, creating something which had never existed before - the world's most internationalised culture which. in turn. would give London outstanding creativity and cultural life.

This was the vision of the city as riding the wave of globalisation – not that globalisation would bring no problems, but that these problems could only be solved in the framework of the increasing internationalisation of London in all areas. 

If London tried to go down another route, to retreat into a narrow national framework, the economy of the city would be deeply damaged, Londoners prosperity would lessen, their choices would be less, and London's cutting edge creativity and culture would decline.

That latter route is the one Boris Johnson has chosen. While verbal adherence is given to the implications of developing London as the world's greatest international city in practice the strategy that brought London such success is being systematically undermined and a quite different strategy embarked on.

A planning regime is being introduced which undermines London's ability to compete with the huge development in the new Asian financial centres. All representatives of London's ethnic minorities, who are the social side of globalisation, have been purged from the highest management levels of the Greater London Authority. London's budgets for marketing itself abroad have been cut by nearly one third and the integrated body for promoting London abroad abolished. Grants to ethnic minority and minority national cultural projects are being cut. A director of culture has been appointed who is openly opposed to multiculturalism - resulting in an increasingly banal and backward looking character of the GLA's cultural policy which adds nothing to the city's cutting edge culture. London's offices abroad have been kept open only because of the total hostility of the business community to their closing, Boris Johnson's contemptuous behaviour when in China for the Olympic Games, symbolised at the closing ceremony and his ridiculous 'ping pong' speech, damaged London in what is probably the most strategically important market in the world. London has been removed from the leadership of the international group of C40 cities combating climate change.

In short, while a camouflage in maintained in words in what really counts, that is actions, London is being progressively removed from the cutting edge of international development. A London that one year ago was ranked ahead even of New York as the number one city in the world, even in US media, is gradually at first, and then more rapidly, declining from its previous standing.

No one more symbolises that shift than the Mayor's Director of Policy Anthony Browne. Here is what Browne had to say in total contrast to the real trajectory London needs for success:   

'The eternal human urge for self-segregation — surrounding yourself with people like you — is likely to triumph over the more ephemeral economic and political incentives to leave what you know…  Few in Japan are remotely bothered that, outside a couple of districts of Tokyo, you never see any whites or blacks, and the Ghanaians are unperturbed that white people there are as rare as snow.

'It is not Hackney that is the future of the world, but Japan… The Japanese like being in Japan because they can speak Japanese, measure their flats in tatami mats, and eat raw pilot whale intestine (it’s as disgusting as it sounds). And they don’t have to catch a plane to visit relatives. Sharing the same language, culture and values as the people you come into daily contact with may not be excitingly multicultural, but it means you end up with deeper relationships, a sense of community, belonging and security.

'From the English in the south of France and the Canaries to the Bangladeshis in Tower Hamlets to the Jews in Israel to the African Americans in Harlem to the whites in South Africa, self-segregation is one of the most powerful forces in human communities. The white flight — or white self-segregation — which is such a feature of US cities is now endemic in the UK, with hundreds of thousands of white Briton’s fleeing the effects of the government’s open border policy on London each year. Self-segregation is apparent all around us, but there is a reluctance to accept it because it mocks multiculturalism… We are a world of stick-in-the-muds.'

Of course, while Anthony Browne vividly reveals his own narrowness what he doesn't mention is that Tokyo is the greatest symbol of a financial disaster in the modern world.

Tokyo had all the financial resources which London and New York possessed to emerge as a leading international business centre rivaling them. And it totally failed to do so. Tokyo has remained a narrow, essentially national, market as compared to the international development of New York and London. That narrow national inwardness has created the greatest financial decline in history – with the fall in the value of the Japanese stock market now being even worse than New York's after 1929. Japan has suffered almost 20 years of virtual economic stagnation.

That Anthony Browne considers that this financial disaster in Tokyo represents a model London should follow shows he his completely out of touch with the modern world. Not to mention that even his statistics on London are wrong and demographic studies show London is becoming less not more ethnically segregated.

To understand why the backward looking perspective of Browne/Johnson is quite unable to stand up to the forces of the modern world readers might like to watch the following video. Entitled 'Did You Know'  it is on the subject 'Globalisation and the Information Age'. There is more information on it on the blog Key Trends in Globalisation.  Those who believe that humanity can be pushed back into its narrow national boxes should watch this – it only takes six minutes. The silly backward looking culture of Johnson and Browne will simply be swept away by the forces which are at work in the world. All they will achieve is that instead of London working with the grain of the leading economic, social, cultural forces in the modern world, and reaping all the benefits of this, instead London is adopting the strategy of a backwater. The only question that follows is how much damage Johnson and Browne will do to the city. 

The damaging consequences of Boris Johnson's administration's attacks on the agencies for promoting London to tourists, foreign investors, foreign film makers, and foreign students continues.

One of the administration's first actions was to abolishthe integrated agency for promoting London – London Unlimited. All its staff were sacked and its budget eliminated. Now, however, after deliberation the administration has decided that London needs… an integrating body to co-ordinate marketing in different fields and has decided to set one up. A pity that was not thought of before the old one was  summarily abolished.!

For readers who want a taste of London's previous level of professionalism in large scale integrated marketing the blog Key Trends in Globalisation carries videos of examples of London's promotion in the key new emerging markets of India, China, and Russia. These are economies, in particular the first two, whose weight in the world economy will be greatly increased following the international financial crisis.  

Regarding Visit London, the city's tourism promotion agency, this blog has notedthat its budget was cut by £1.5 million and then an 'increase' by £750,000 announced – leaving in reality a cut of £750,000. James Bidwell has worked out his period before leaving as Chief Executive but no successor has been appointed – leaving Visit London with no permanent head during a period when London's tourism economy is supposed to be boosted in light of the international financial crisis.

This blog will note carefully how long until the appointment of a new Chief Executive and who it is – finding someone of the first rank is going to be no easy task given the damage Boris Johnson's administration has done to London's marketing. London's international  competitors will simply gain from the way the city's marketing machines has been damaged.

Having cut £6.5 million a year from the budgets to promote London abroad in the fields of tourism, inward investment, filming and attraction of foreign students Boris Johnson's administration has now been hit over the head by events and forced to restore £750,000 of these cuts in the area of tourism. The administration, however, is now falsely claiming it is boosting spending to promote London's tourist industry when all it has done is restore part of the damaging cuts it had previously made!

A press release put out by the Mayor's Office last night states: 'The Mayor of London has announced an increase of nearly £750,000 to Visit London campaigns, aimed at stimulating visits to the capital in the build up to Christmas and into 2009.'

Any such increase in spending to promote abroad London is welcome for reasons that have been outlined several times in this blog. The problem is that the £750,000 'increase' follows a £1.5 million a year cut to Visit London's budget made earlier by the same Mayoral administration. So, therefore, far from boosting spending to promote London's tourism industry in fact the budget to promote London's tourism industry has been reduced by £750,000 this year – and the body for the integrated strategic promotion of London, London Unlimited, has been entirely abolished with a budget cut of £5 million a year. Meanwhile, the result of these damaging cuts has been the departure of Visit London's CEO James Bidwell – a highly respected figure in the tourism industry.

The reasons that led Boris Johnson's administration to the new partial, and unacknowledged, U-turn are evident, The press release notes: 'The Mayor made the announcement to an audience of tourism leaders at the Visit London Awards at the Royal Albert Hall and follows a meeting with industry figures this week.' In other words tourism industry leaders informed Boris Johnson that his cuts to Visit London were deeply damaging to London and he had better do something about it – particularly in an economic downturn. This follows the extremely unsubtle hint given by the Tourism Society, the organisation of tourism industry professionals, earlier this year when it decided to award its prestigious prize for services to the tourism industry to… Ken Livingstone.

But the damage done to London's tourism promotion by Boris Johnson's administration still hasn't been undone. In addition to the budget cuts Boris Johnson's administration humiliated Visit London, despite expert opinion in the GLA, by for months refusing even to meet its chief executive – this contemptuous attitude was undoubtedly a further reason for Bidwell's decision to depart.

James Bidwell was the second absolutely top rank of the marketing profession CEO Visit London had attracted. His predecessor, David Campbell, is now head of the O2 which, in addition to his earlier career successes, has become a roaring success as the most visited arena in the world. So far the head hunt for James Bidwell's successor goes on. But it will be extremely difficult to attract anyone of equal talent or standing to the two previous CEO's to an organisation whose budget was slashed, which was humiliated by the Mayor's Office, and whose strategic role, and great value, to London is clearly not understood by the Mayor's Office as shown by the various U turns on the issue. Meanwhile the entire staff of the body responsible for integrated promotion of London, London Unlimited, which set an example which cities such as New York have since followed, have been sacked. In short the damage done by Boris Johnson's administration to tourism and the promotion of London is far from having been undone.  

This whole fiasco, however, has important lessons for those who want to reverse the damaging policies of Boris Johnson's administration. The tourism industry did not lie down and pretend to be dead when confronted with policies by the new administration that were deeply damaging to London. Nor did it rely purely on quiet 'insider' lobbying. It mounted a loud and vociferous campaign to reverse policies that were damaging to London and it has gained a first success.

The reason for this is that Boris Johnson's administration is best imagined as a sort of sack of potatoes with a voice. The strategic direction it would like to follow, 'small government', simply won't work because London is undergoing rapid population growth and requires huge investment both to get out of the current economic downturn and prepare itself for competition from other international business centres. Therefore the administration is directionless and not knowing where it is doing – as not merely many of those who interact with it, and innumerable GLA Group officers, who cannot get any sense of direction or even any decisions on many matters out of it, know every day.

The best thing therefore is to go up and hit it with a stick and the resulting cry of pain may get you some money. Try to reason with it quietly and its own lack of direction and incompetence will lead to no result. That is the lesson that others should draw from the fiasco of Boris Johnson's policies around tourism.

Note

For those who want further details the press release contains the following empty claims and revealing facts.

First, it disingenuously states: 'The additional public/private funding will take the total amount spent on promoting the capital at home and abroad to £3.25m over the next four months.' The trouble is that this is actually less, even after restoration of the £750,000, than would have been spent before Visit London's budget was cut by £1.5 million this year by the same Mayoral administration.

Second, it states that this £3.25 million promotion campaign will result in: 'an amount that is expected to deliver £70m in economic benefit to the city'. That is right. Studies show that tourism marketing campaigns result in about £20 of economic benefit to London for every £1 spent – which is why they are such good value for money. And why the cuts that were made were so damaging.

The polemic on delivering value for money versus wasting money started by my post today on the cuts in the tourism budget for London has continued on Dave Hill's Guardian London Blog. I posted earlier here my comment on this thread. This evoked a response by the associate editorof Autocar which can be read on Dave Hill's blog. This is my reply, which contrasts the investment in tourism promotion by Ken Livingstone when he was Mayor, which yielded real benefits for Londoners, with the extraordinary waste of money carried out by the present administration. It illustrates also the wider differences between the two administrations

'The intervention of the Associate editor of Autocar (Newsed1) gives an excellent opportunity to explain the difference between what is value for money, policies which were pursued by Ken Livingstone's administration, for example the budget spent on promoting tourism, and what is a waste of money – the ‘new Routemaster' promoted by Autocar, supported by the present administration, and which will waste over £100 million a year of Londoners money.

The budget for tourism and promoting London was excellent value for money because the money spent was exceeded by a huge amount by the money got back in spend by extra visitor numbers – as illustrated in my previous post. That high return translated into incomes and jobs for Londoners. That is, it was an investment for London – an example of the way Ken Livingstone's administration really delivered value for money and why the cuts to the budgets for the promotion of London are so short sighted and damaging.

The waste of money by Boris Johnson's administration has been quite extraordinary. First £50 million a year for the public transport system in London was given up by canceling Ken Livingstone's £25 a day CO2 congestion charge on gas guzzlers – the £50 million a year lost being good news for drivers of gas guzzler but bad news for everyone else. Then £22 million a year, at current exchange rates, was lost by canceling the cheap oil from Venezuela deal. Then, announced today, a minimum £14 million a year (even on the Evening Standards figures) has been lost for public transport by abandoning the Western Extension of the congestion charging zone. So, therefore, so far £86 million a year has been wasted by the present administration on public transport.

However this is exceeded by the more than £100 million a year that all independent studies show would be the cost of the ‘new Routemaster project promoted by Autocar, the Evening Standard, and the present administration.

As a result of these huge losses Londoners are paying far more for their public transport system than they need. And as a result of the cuts in the tourism promotion budget Londoners are going to have less income from visitors and therefore less jobs.

'Both the unnecessary waste of £million a year on transport, and the loss to Londoners of the cuts in the budget for tourism promotion, are examples of how not to run the economic policy of an administration and will be particularly damaging to London in a recession.'